NESTE

Neste Corporate Governance Statement

2020

NESTE

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We observe good corporate governance practices in accordance with the laws and regulations applicable to Finnish listed companies, our own Articles of Association, and the Finnish 2020 Corporate Governance Code.

Governance

Corporate Governance Statement 3

Risk management 18

Nestle Annual Report 2020 | Governance

NESTE

Corporate Governance Statement 2020

This Corporate Governance Statement has been prepared pursuant to the 2020 Corporate Governance Code, Chapter 7, Section 7 of the Securities Markets Act, as well as Section 7 of the Ministry of Finance's Decree on the Regular Duty of Disclosure of an Issuer of a Security. The Corporate Governance Statement is issued separately from the Review by the Board of Directors and it can be found at neste.com/investors.

Regulatory framework

Neste Corporation ("Neste" or the "Company") observes good corporate governance practices in accordance with the laws and regulations applicable to Finnish listed companies, the Company's own Articles of Association, and the Finnish 2020 Corporate Governance Code. The Corporate Governance Code can be found at egfinland.fi/en/. Neste also complies with the rules of Nasdaq Helsinki Ltd, where it is listed, and the rules and regulations of the Finnish Financial Supervisory Authority.

Neste's Audit Committee has reviewed the Corporate Governance Statement, and the Company's Auditors, PricewaterhouseCoopers Oy, has monitored that it has been issued and that the description of the main features of the internal control and risk management related to the financial reporting process included in the statement matches the Financial Statements.

Neste issues Consolidated Financial Statements and interim reports in accordance with the International Financial Reporting Standards (IFRS), as adopted by the EU, the Securities Market Act, as well as the appropriate Financial Supervisory Authority standards, and Nasdaq Helsinki Ltd's rules. The Review by the Board of Directors and the Parent Company's Financial Statements are prepared in accordance with the Finnish Accounting Act and the opinions and guidelines of the Finnish Accounting Board.

Governance Bodies

The control and management of Neste is split between the Annual General Meeting of Shareholders (AGM), the Board of Directors, and the President and Chief Executive Officer (President and CEO). Ultimate decision-making authority lies with shareholders at the AGM which appoints the members of

the Board of Directors and the Auditor. The Board of Directors is responsible for Neste's strategy and overseeing and monitoring the Company's business. The Board of Directors appoints the President and CEO. The President and CEO, assisted by the Executive Committee (ExCo), is responsible for managing the

Company's business and implementing its strategic and operational targets.

Neste's headquarters are located in Espoo, Finland.

Neste's Governance Bodies

Shareholders / Annual General Meeting
Shareholders' Nomination Board
Board of Directors
Audit Committee		Personnel and Remuneration Committee
President & CEO
Executive Committee
Oil Products	Renewable Products	Marketing & Services	Innovation	Functions
Renewable Road Transportation	Renewable Aviation	Renewable Polymers and Chemicals	NES	Finance
Renewables Platform				Human Resources, HSSEQ and Procurement
Assurance Functions				Sustainability and Corporate Affairs
Risk Management	Compliance	Internal Controls		Legal

Neste's businesses are grouped into four reporting segments: Renewable Products, Oil Products, Marketing & Services, and Others.

Neste Annual Report 2020 | Corporate Governance Statement 2020

NESTE

Annual General Meeting

Under the Finnish Companies Act, shareholders exercise their decision-making power at General Meetings of Shareholders, and attend meetings in person or through an authorized representative. Each share entitles the holder to one vote.

Shareholders at the AGM make decisions on matters including:

the approval of the Financial Statements,
the distribution of profit for the year detailed in the Balance Sheet,
discharging the members of the Board of Directors and the President and CEO from liability, and
the election and remuneration of the Chair, the Vice Chair, and the members of the Board of Directors and the Auditor.

The AGM is held annually before the end of June. An Extraordinary General Meeting of Shareholders addressing specific matters can be held, when considered necessary by the Board of Directors, or when requested in writing by the Company's Auditor or by shareholders representing at least one-tenth of all Company shares.

Under the Articles of Association, an invitation to a General Meeting of Shareholders shall be delivered to shareholders by publishing it on the Company's website neste.com no earlier than two months, and no later than three weeks prior to a meeting, but at least nine days before the record date set for the meeting under the terms of the Companies Act. In addition, the Company shall publish details on the date and location of the meeting, together with the address of the Company's website, in one or more newspapers within the same period of time.

Neste is not aware of any shareholders' agreements regarding the Company's shares.

2020

The 2020 AGM was held on 18 May 2020 at the Company's headquarters in Espoo and it adopted the Parent Company's Financial Statements and the Consolidated Financial Statements for 2019, and discharged the Board of Directors, and the President and CEO from liability for 2019. The AGM approved the Board of Directors' proposal regarding the distribution of the company's profit for 2019 to the effect that the first dividend installment, EUR 0.46 per share, was paid to shareholders registered in the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date for the first dividend installment, which was Wednesday, 20 May 2020. The first dividend installment was paid on Thursday, 28 May 2020.

In addition, in accordance with the proposal by the Board of Directors, the AGM authorized the Board to decide, in its discretion, on the payment of a second dividend installment in a maximum amount of EUR 0.56 per share (consisting of an ordinary dividend of EUR 0.46 and an extraordinary dividend of EUR 0.10). Based on such authorization, the Board decided on the payment of a second installment of the dividend in the amount of EUR 0.56 per share on 22 October 2020 to the effect that the second installment was paid to a shareholder who was registered in the Company's shareholder register on the record date for the payment of the second dividend installment, i.e. on 26 October 2020. The payment date of the second installment of the dividend was 2 November 2020.

The AGM also decided the composition of the Board of Directors and the remuneration to be paid to the members of the Board of Directors, and appointed the Auditor.

Shareholders' Nomination Board

Following the proposal by the Board of Directors, the 2013 AGM decided to establish a permanent Shareholders' Nomination Board to be responsible for drafting and presenting proposals covering the remuneration and number of members of the Company's Board of Directors and for presenting candidates as potential Chair, Vice Chair, and members at the Board to the AGM and to an Extraordinary General Meeting of Shareholders when needed. The Shareholders' Nomination Board shall also be responsible for identifying successors for existing Board Members.

The Shareholders' Nomination Board shall consist of four (4) members, three of which shall be appointed by the Company's three largest shareholders, who shall appoint one member each. The Chair of the Company's Board of Directors shall serve as the fourth member.

The Company's largest shareholders entitled to elect members to the Shareholders' Nomination Board shall be annually determined on the basis of the registered holdings in the Company's list of shareholders held by Euroclear Finland Ltd as of the first weekday in September in the year concerned. The Chair of the Company's Board of Directors shall request each of the three largest shareholders established on this basis to nominate one member to the Shareholders' Nomination Board. In the event that a shareholder does not wish to exercise his or her right to appoint a representative, the right shall pass to the next-largest shareholder who would not otherwise be entitled to appoint a member.

The Chair of the Board of Directors shall convene the first meeting of the Shareholders' Nomination Board, which will be responsible for electing a Chair from among its members, whereas the Chair so elected shall be responsible for convening subsequent meetings. When the members of the Shareholders' Nomination Board has been appointed, the Company will issue a release to this effect.

The Shareholders' Nomination Board shall serve until further notice, unless a General Meetings of Shareholders decides otherwise. Its members shall be appointed annually and their term of office shall end when new members are appointed to replace them.

The Shareholders' Nomination Board shall forward its proposals for the AGM to the Company's Board of Directors annually by 31 January, prior to the holding of the AGM. Proposals intended for a possible Extraordinary General Meeting of Shareholders shall be forwarded to the Company's Board of Directors in time for them to be included in the invitation to the meeting sent out to shareholders.

Composition of the Shareholders' Nomination Board prior to the 2021 AGM

On 14 September 2020, the following members were appointed to Neste's Shareholders' Nomination Board: The Chair, Director General Kimmo Viertola of the Ownership Steering Department in the Prime Minister's Office of Finland; Deputy CEO, Investments Reima Rytölä of Varma Mutual Pension Insurance Company; Director General Outi Antila of The Social Insurance Institution of Finland and Matti Kähkönen, the Chair of Neste's Board of Directors.

Activities

The Shareholders' Nomination Board makes proposals for the next AGM on the following:

the number of members of the Board of Directors,
the Chair, the Vice Chair and the members of the Board of Directors, and
the remuneration to be paid to the Chair, the Vice Chair, and the members of the Board of Directors.

The nomination process of the Shareholders' Nomination Board, its composition, and activities are detailed in its Charter.

Neste Annual Report 2020 | Corporate Governance Statement 2020

NESTE

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Shareholders' Nomination Board members

Kimmo Viertola

M.Sc. (Econ.), Chair of the Shareholders' Nomination Board since 18 September 2019.
Born in 1961.
Director General of the Ownership Steering Department at the Prime Minister's Office of Finland.
Member of the Board of Solidium Oy. Member of the Board of Municipality Finance Plc. Chair of the Shareholders' Nomination Board of Fortum Oyj.

Holdings in Neste Corporation on 31 December 2020: no holdings/ 0 shares.¹⁾
Prime Minister's Office: 276,213,495 shares²⁾

Outi Antila

Master of Laws with court training, Member of the Shareholders' Nomination Board since 14 September 2020.
Born in 1957.
Director General, The Social Insurance Institution of Finland. Member of the Shareholders' Nomination Board of Outokumpu Oyj. Member of the General Assembly of Confederation of Finnish Industries. Member of the Advisory Council for Employment Matters of Diaconia University of Applied Sciences (Diak).

Holdings in Neste Corporation on 31 December 2020: no holdings/ 0 shares³⁾
The Social Insurance Institution of Finland: 7,945,272 shares⁴⁾

Holdings in Neste Corporation on 31 December 2020:
¹⁾ Own holdings and controlled entities.
²⁾ Shareholder's holdings represented by the member of the Shareholders' Nomination Board.

Reima Rytsölä

M.Soc.Sc, CEFA, AMP, Member of the Shareholders' Nomination Board.
Born in 1969.
Deputy CEO and Chief Investment Officer, Varma Mutual Pension Insurance Company. Member of the Board of Kojamo Plc. Member of the Board of Nordea Funds Ltd. Member of the Board of Ylva Services Ltd. Member of the Board of the Foundation for the Finnish Cancer Institute.

Holdings in Neste Corporation on 31 December 2020: no holdings/ 0 shares.¹⁾
Varma Mutual Pension Insurance Company: 10,450,615 shares.²⁾

Matti Kähkönen

M.Sc. (Engineering), Member of the Shareholders' Nomination Board.
Born in 1956.
Senior Advisor, Metso Corporation 2017–2019. Chair of the Board of Neste Oyj. Member of Board of The Research Institute of the Finnish Economy (EVA/ETLA) until 2020. Chair of the TT fund of the Confederation of Finnish Industries until 2020. Chair of the Supervisory Board of the Ilmarinen Mutual Pension Insurance Company. Chair of Neste's Personnel and Remuneration Committee.

Holdings in Neste Corporation on 31 Dec 2020: 12,310 shares¹⁾

The Shareholders' Nomination Board convened 7 times between its formation on 14 September 2020 and 29 January 2021, and the members of the Shareholders' Nomination Board attended such meetings as follows:

	Attendance
Kimmo Viertola	7/7
Outi Antila	7/7
Reima Rytsölä	7/7
Matti Kähkönen	7/7

Decisions on the proposals for the 2021 AGM were made by the members of the Shareholders' Nomination Board in a manner set out in more detail in the stock exchange release published on 29 January 2021.

Composition of the Shareholders' Nomination Board prior to the 2020 AGM

On 18 September 2019, the following members were appointed to Neste's Shareholders' Nomination Board: The Chair, Director General Kimmo Viertola of the Ownership Steering Department in the Prime Minister's Office of Finland; President and CEO Jouko Pölönen of Ilmarinen Mutual Pension Insurance Company; Deputy CEO, Investments Reima Rytsölä of Varma Mutual Pension Insurance Company and Matti Kähkönen, the Chair of Neste's Board of Directors. The Shareholders' Nomination Board convened 8 times between the 2019 AGM and 30 January 2020 and presented its proposal covering the members of the Board of Directors and the remuneration to be paid to them on 30 January 2020.

Board of Directors

In accordance with Neste's Articles of Association, the Board of Directors has between five and eight members, who are elected at the AGM for a period of office that extends to the following AGM.

Diversity of the Board of Directors

In planning the composition of a skilled, competent, experienced, and effective Board of Directors from the viewpoint of diversity, the Shareholders' Nomination Board also follows the following diversity principles defined by the Company. A cooperative and functional Board of Directors requires diversity for it to be able to respond to the requirements set out in Neste's business and strategic objectives and to support and challenge the company's operational management in a proactive and constructive manner.

Significant factors concerning the composition of the Board of Directors include a variety of competencies that complement the other members of the Board, education and experience in different professional and industrial fields and in business operations and management existing in different development phases, as well as the personal qualities of each member, all of which add diversity to the Board of Directors. The diversity of the Board of Directors is also supported by experience in industrial fields and markets that are strategically significant for Neste, experience and abilities in technologies and the international operating environment, and a diverse age and gender distribution so that both genders are always adequately represented in the Board of Directors. In considering the composition of the Board of Directors, it is important to pay attention to Neste's current and evolving needs, and to ensure that the Board of Directors, as a whole, enables the current and future business development of Neste, which diversity also supports.

Neste's 2020 Board of Directors was composed of 8 members, all of whom hold a university-level degree, and one of whom has a doctorate. All of these degrees are from different fields, with technical fields being in the majority. Each member of the Board of Directors has international work experience in different types of positions, and has worked or is working in the Board of Directors or management of listed or unlisted companies. Three members have worked in managerial positions at major international petrochemical companies. The Board of Directors is also diverse in terms of cultural backgrounds: its members come from five different countries and speak five different native languages. Women comprise 38% of all members of the

Neste Annual Report 2020 | Corporate Governance Statement 2020

NESTE

Board of Directors. With regard to age, the members of the Board of Directors are divided evenly between 49 and 64 years of age. The duration of the terms of office of the Board members is divided as follows: two members have been on the Board of Directors for more than four years, while six members have been on the Board of Directors for less than four years.

Activities of the Board of Directors

The Board shall have at least eight regular meetings annually, all scheduled in advance, with extraordinary meetings when necessary. Extraordinary meetings, if requested by a Board Member or the President and CEO, shall be convened by the Chair, or, if the Chair is prevented from attending, by the Vice Chair, or if deemed necessary by the Chair. The Board constitutes a quorum if more than half of its members are present. The Board is responsible for preparing an operating plan for itself for its period of office between Annual General Meetings, to include a timetable of meetings and the most important matters to be addressed at each meeting. The Board evaluates its performance annually to determine whether it is functioning effectively after the end of each financial year.

Duties of the Board of Directors

The Board's responsibilities and duties are defined in detail in the board-approved Charter. A member of the Board of Directors may not take part in decision-making in matters regarding (i) agreements between such member and any entity within the Neste Group, (ii) agreements between any entity within the Neste Group and third parties where such member has a material interest in the matter which may conflict with the interest of Neste or any other entity within the Neste Group, and (iii) agreements between any entity within the Neste Group and a legal entity which such member may represent, either individually or together with any other person; provided however, that this point (iii) does not apply where the party contracting with Neste is a company within the Neste Group. The term 'agreement' as used here includes litigation or other legal proceedings arising from or relating to such agreements.

2020

The 2020 AGM confirmed the membership of the Board of Directors at eight members, and the following were re-elected to serve until the end of the next AGM: Ms. Sonat Burman-Olsson, Ms. Martina Flöel, Mr. Matti Kähkönen, Mr. Jean-Baptiste Renard, Mr. Jari Rosendal and Mr. Marco Wirén. Mr. Nick Elmslie and Ms. Johanna Söderström were elected as new members. Mr. Matti Kähkönen was elected as Chair and Mr. Marco Wirén was elected as Vice Chair.

The Board convened 16 times in 2020. The attendance rate at the meetings was 94.5%. The Board focused in 2020 on the Company's long-term strategy by means of e.g. the continued scale-up of the Company's renewables businesses as well as the expansion of the Company's renewables feedstock platform and production capabilities, including the on-going Singapore expansion project. The Board also closely monitored the Company's performance during the COVID-19 pandemic, and a decision was made to restructure the Company's refining operations in Finland to secure the competitiveness of the Company's Oil Products business. In addition to the above and matters set out in the Board Charter, the Board also supervised strategy execution as well as evaluated the changes in the long-term operational environment and their impact on the Company's business operations from e.g. a sustainability perspective. The Board continuously monitored the Company's safety, financial and operational performance as well as risk management. The Board work has during the year been evaluated by an external consultant.

Board of Directors, 31 December 2020

	Position	Born	Education	Main Occupation	Independent of the company	Independent of major shareholders	Personnel and Remuneration Committee	Audit Committee	Attendance at meetings
									Board	Committees
Matti Kähkönen	Chair	1956	M.Sc. (Eng.)	Non-Executive Director	●	●	●		16/16	5/5
Sonat Burman-Olsson	Member	1958	M.Sc.(Econ), MBA	Non-Executive Director	●	●		●	15/16	7/8
Nick Elmslie	Member	1957	B.Sc. (Chem.)	Non-Executive Director	●	●		●	8/8	4/4
Martina Flöel	Member	1960	PhD (Chem.)	Non-Executive Director	●	●	(since 18.5.2020)	(until 18.5.2020)	15/16	7/7
Jean-Baptiste Renard	Member	1961	M.Sc. (Eng.)	Non-Executive Director	●	●	●		15/16	4/5
Jari Rosendal	Member	1965	M.Sc. (Eng.)	President and CEO of Kemira	●	●	(until 18.5.2020)	(since 18.5.2020)	16/16	6/6
Johanna Söderström	Member	1971	M.Sc. (Econ.)	EVP, Chief Human Resources Officer at Tyson Foods Inc.	●	●	●		7/8	3/3
Marco Wirén	Member	1966	M.Sc. (Econ.)	Chief Financial Officer at Nokia Corporation	●	●		●	15/16	8/8

The shareholdings of the members of the Board of Directors are presented below their CVs. The remuneration paid to the members of the Board of Directors is detailed in the Remuneration Report.

Neste Annual Report 2020 | Corporate Governance Statement 2020

NESTE

Members of the Board of Directors

Matti Kähkönen

(born in 1956)

M.Sc. (Engineering)

Chair of the Board since 2018

Member of the Board since 2017

Independent member

Senior Advisor, Metso Corporation 2017–2019.

President and CEO, Metso Corporation 2011–2017.

Executive Vice President and Deputy to the CEO, Metso Corporation 2010–2011. President, Mining and Construction Technology, Metso Corporation 2008–2011. President, Metso Minerals 2006–2008. President, Metso Automation, 2001–2006. President, Metso Automation, Field Systems Division, 1999–2001. Prior to 1999, various managerial and development positions in Neles-Jamesbury and Rauma-Repola. Member of Board of The Research Institute of the Finnish Economy (EVA/ETLA) until 2020. Chair of the TT fund of the Confederation of Finnish Industries until 2020. Chair of the Supervisory Board of the Ilmarinen Mutual Pension Insurance Company. Chair of Neste's Personnel and Remuneration Committee.

Holdings in Neste Corporation on 31 Dec 2020: 12,310 shares.¹⁵

Sonat Burman-Olsson

(born in 1958)

M.Sc. (Economics), Executive MBA, Strategic

Management Studies

Member of the Board since 2019

Independent member

President & CEO COOP Sweden 2014–2017. Deputy CEO, ICA Gruppen 2007–2014. Vice President Electrolux Group, Global Marketing Strategies 1995–2006. Senior Vice President Electrolux Europe Operational Development. Vice President Electrolux New Markets. Prior to 1995 Directorial positions within Siemens and BP. Member of the Board of ICC – International Chamber of Commerce, 2016–2018 and Swedish Trade Federation, 2014–2017. Chairman of the Swedish Food Retailers Association, 2014–2017. Member of the Board of Swedish National Pension fund, 2008–2016 and ICA Bank & RIMI Baltic, 2007–2014, iZettle 2018. Member of the Board of Directors of Lindab 2011–. Member of the Board of Directors of Postnord 2018– and Member of the Board of Directors of Lantmannen 2018–. Member of Neste's Audit Committee.

Holdings in Neste Corporation on 31 Dec 2020: No holdings.¹⁵

Nick Elmslie

(born in 1957)

B.Sc. (Chemistry)

Member of the Board since May 2020

Independent member

Chief Executive, BP Global Petrochemicals based in Shanghai 2011–2015. Controller, Head of Finance Function, BP Downstream 2006–2011. Various directorial positions at BP plc., including Chief Executive, Acetyls Business and Business Unit Leader, Head of Chemicals Strategy and CFO, Polymers & Olefins 1992–2006. Various positions at BP plc 1978–1992. Member of the Board and Investor at 3fbio Ltd 2017–. Member of the Supervisory Board of OTI Greentech AG 2017–. Member of the Board of Fosroc Group Holdings Limited 2009–. Member of Neste's Audit Committee.

Holdings in Neste Corporation on 31 Dec 2020: 2,000 shares.¹⁵

Martina Flöel

(born in 1960)

M.Sc. (Chemistry), Ph.D. (Chemistry)

Member of the Board since 2017

Independent member

CEO of Oxea 2007–2016. Managing Director and EVP, Europe of European Oxo in 2003–2007. Vice President Oxo Chemicals, Celanese Chemicals 2000–2003. Plant Manager Böhlen, Celanese Chemicals 1998–2000. Prior to 1998, various managerial and directorial positions in the Hoechst Group. Member of the Board of Directors of Sasol 2018–. Member of the Board of Directors of Carl Bechem GmbH 2019–2020. Member of Neste's Personnel and Remuneration Committee.

Holdings in Neste Corporation on 31 Dec 2020: No holdings.¹⁵

Neste Annual Report 2020 | Corporate Governance Statement 2020

Holdings in Neste Corporation: own holdings and controlled entities.

NESTE

Members of the Board of Directors

Jean-Baptiste Renard

(born in 1961)

M.Sc. (Eng.) and an engineering diploma in petroleum economics from the French Petroleum Institute (IPP)
Member of the Board since 2014
Independent member

Founder and CEO, 2PR Consulting, independent energy expert and consultant. Several positions at BP 1986–2010; Regional Group Vice President for Europe and Southern Africa BP Plc 2006–2010, Group Vice President, Business Marketing and New Markets, and Member of Downstream Executive Committee BP Plc 2003–2006. Non-Executive Director of Masana Petroleum Solutions (South-Africa); Supervisory Board Member of IPP Training (France); Non-Executive Director of CLH (Spain); Pro bono consulting for social entrepreneurs. Member of the Supervisory Board of Vendredi until the end of 2020. Member of the Supervisory Board of Entreprendre&+. Member of the Advisory Board of IPP School. Member of Neste's Personnel and Remuneration Committee.

Holdings in Neste Corporation on 31 Dec 2020: 22,950 shares.4)

Jari Rosendal

(born in 1965)

M.Sc. (Eng.)

Member of the Board since 2018
Independent member

President and CEO at Kemira since 2014. Various divisional President and Directorial positions, including Member of the Executive Board, at Outotec Oyj in 2001–2014. Various managerial and expert positions in the Outokumpu Group in Finland and the United States 1989–2001. Member of the Board of Directors, 2011–2020 and Chairman of the Board of Directors, Finnish Association of Mining and Metallurgical Engineers, 2017–2020. Member of the Board of Directors of Chemical Industry Federation of Finland 2015–, Chairman of the Board of Directors 2017–2018 and Vice Chairman of the Board of Directors 2019–2020. Member of the Board of Directors of CEFIC, 2014–. Member of the Board of TT fund of the Confederation of Finnish Industries 2020–. Member of Neste's Audit Committee.

Holdings in Neste Corporation on 31 Dec 2020: No holdings.4)

Johanna Söderström

(born in 1971)

M.Sc. (Econ.)

Member of the Board since May 2020
Independent member

Executive Vice President, Chief Human Resources Officer at Tyson Foods Inc. 2020–. Senior Vice President, Chief Human Resources Officer at the Dow Chemical Company 2014–2019. Vice President, Center of Expertise Human Resources at the Dow Chemical Company 2012–2014. Various directorial HR positions at Dow Chemical Company, Dow Europe GmbH and Dow Chemical Handels- und Vertriebsgesellschaft mbH 2007–2012. Head of Global Compensation & Benefits at Huhtamäki Oyj 2008–2007. Various specialist and managerial positions at Dow Europe GmbH, Dow Chemical Handelsund Vertriebsgesellschaft mbH and Dow Suomi Oy 1999–2006. Prior to 1999, various specialist positions at Oy L M Ericsson Ab. Member of Neste's Personnel and Remuneration Committee.

Holdings in Neste Corporation on 31 Dec 2020: No holdings.4)

Marco Wirén

(born in 1966)

M.Sc. (Econ.)

Vice Chair of the Board since 2020
Member of the Board since 2015
Independent member

Chief Financial Officer, Nokia Corporation 2020–.
President, Wärtsilä Energy & Executive Vice President, Wärtsilä Corporation 2018–2020. Executive Vice President and Chief Financial Officer Wärtsilä 2013–2018. SSAB, Executive Vice President and CFO 2008–2013. SSAB, Vice President Business control 2007–2008. Etel Networks, CFO and Vice President Business Development 2002–2007; NCC, Vice President Business Development and Group Controller 1995–2001. Member of the Board of Directors of Wärtsilä Finland Oy 2013–2020. Chair of Neste's Audit Committee.

Holdings in Neste Corporation on 31 Dec 2020: 3,000 shares.4)

Elizabeth (Elly) Burghout

Member of the Board until AGM 18 May 2020

(born in 1954)

B.Sc. (Chemical Engineering)
Member of the Board since 2018
Independent member

Willem Schoeber

Member of the Board until AGM 18 May 2020

(born in 1948)

Dr. (Chem. Eng.)

Member of the Board since 2013
Independent member

Neste Annual Report 2020 | Corporate Governance Statement 2020

4Holdings in Neste Corporation: own holdings and controlled entities.

NESTE

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Board Committees

The Board has established an Audit Committee, which has four members, and a Personnel and Remuneration Committee, which has four members. A quorum exists when more than two members, including the Chair, are present. All members are elected from amongst the members of the Board for a one-year term. The tasks and responsibilities of each committee are defined in their Charters, which are approved by the Board. The schedule and frequency of committee meetings are determined by the Chair and committee members. In addition, the Board of Directors can appoint committees as needed, for instance, for significant investment projects or other special tasks. Committees meet at least twice a year. Each committee reports regularly on its meetings to the Board. Reports include a summary of the matters addressed and the measures undertaken. Each committee conducts an annual self-evaluation of its performance and submits a report to the Board.

Audit Committee

Under its Charter, the Audit Committee shall consist of a minimum of three Board members that are independent of the Company and its subsidiaries, and at least one of whom shall be independent of Neste's major shareholders. Members are required to have sufficient knowledge of accounting practices and the preparation of financial statements and other qualifications that the Board deems necessary. The Audit Committee is permitted to use external consultants and experts when deemed necessary.

Duties

The responsibilities and duties of the Audit Committee are defined in detail in the Charter approved by the Board.

2020

Starting from 18 May 2020, the Audit Committee comprises Marco Wirén (Chair), Sonat Burman-Olsson, Nick Elmslie and Jari Rosendal. In 2020, the Audit Committee convened 8 times, and the

attendance rate was 96.9%. In addition to the tasks specified in its Charter, including those relating to external and internal audit, the Audit Committee supervised and reviewed the Company's financial and other reporting. The Audit Committee also focused on risk and compliance management, including in relation to financial, market and geopolitical risks but also certain other risk areas, such as IT systems, segregation of duties and cyber security. In such context, the Company's program for reforming its ERP system continued to be a specific focus area of the Audit Committee. Moreover, the Audit Committee also monitored e.g. legal, compliance and privacy matters.

Personnel and Remuneration Committee

The Personnel and Remuneration Committee consists of the Chair of the Board and at least two non-executive members of the Board.

Duties

The responsibilities and duties of the Personnel and Remuneration Committee are defined in detail in the Charter approved by the Board.

2020

Starting from 18 May 2020, the Personnel and Remuneration Committee comprises Matti Kähkönen (Chair), Martina Flöel, Jean-Baptiste Renard and Johanna Söderström. The Personnel and Remuneration Committee convened 5 times in 2020, and the attendance rate was 90.0%. During 2020, the Personnel and Remuneration Committee continued to focus on reviewing and developing Neste's remuneration and talent management and development to support the Company's operational and strategic targets. The EU Shareholder Rights Directive II compliant Remuneration Policy was published in March and was set for shareholder vote in the 2020 AGM in May. In line with duties coming

from its Charter, the Personnel and Remuneration Committee also followed up the ongoing performance period and outcomes of the rewarding based on 2019 results. To further drive our strategy and leadership in sustainability, a new performance measure of Combined Greenhouse Gas (GHG) impact was set into the Performance Share Plan 2021-2023. In addition, the Personnel and Remuneration Committee has followed up the personnel engagement level based on the Company's Forward survey and Pulse survey results. Following up the implementation of the Future OP program and the COVID-19 pandemic continuity plan were also in focus during the year.

President and CEO

Neste's President and CEO Peter Vanacker (B. 1966, M.Sc., Chemical Engineering, Polymers Engineering), manages the Company's business operations in accordance with the Finnish Companies Act and instructions issued by the Board of Directors. The President and CEO shall oversee the executive management of the company in accordance with instructions and orders given by the Board of Directors, and is responsible for ensuring that the Company's accounts are in compliance with the law and that its financial affairs have been arranged in a reliable manner. The President and CEO is appointed by the Board of Directors, which evaluates the performance of the President and CEO annually and approves his remuneration on the basis of a proposal by the Personnel and Remuneration Committee. Information on the remuneration of the President and CEO can be found in the 2020 Remuneration report.

Executive Committee

The ExCo assists the President and CEO in managing the Company and in the deployment of the Company's strategic and operational goals. Members are appointed by the Board of Directors. The ExCo meets regularly, on average once a month. Information on the remuneration of the members of the ExCo can be found in the 2020 Remuneration report.

2020

During 2020 the ExCo comprised 12 members. The ExCo had 12 meetings during the year, and also met outside such meetings in relation to specific themes. In addition to supporting the President and CEO in the fulfillment of his general duties, the ExCo continued during 2020 to work with the development and execution of the Company's strategy aiming at global leadership in renewable and circular solutions. In such context, the strategic focus areas included, among others, the continued scale-up of the Company's renewables businesses as well as the expansion of the Company's renewables feedstock platform and production capabilities, including the on-going Singapore expansion project. Development of the Company's innovation activities through the business platforms and the chemical recycling of waste plastic platform as well as formulation of the Company's climate roadmap were also closely followed by the ExCo. During 2020 the ExCo also focused on securing the competitiveness of the Company's Oil Products business in light of the effects of the COVID-19 pandemic, including by means of the restructuring of the Company's refining operations in Finland. In addition, a number of other matters were given special attention during the year, including people and talent development, development of M&A capabilities, the Company's operational excellence program, cash flow development and cost saving efforts, IT and cybersecurity matters as well as sustainability and compliance matters. The Company's safety, financial and operational performance were closely monitored by the ExCo.

Neste Annual Report 2020 | Corporate Governance Statement 2020

NESTE

Members of the Executive Committee

Peter Vanacker

(born 1988)

President and CEO, Chair of the Executive Committee

M.Sc. (Chemical Engineering, Polymers Engineering)

President and CEO since 2018

Joined the company in 2018. Served as CEO and Managing Director, CABB Group GmbH 2015-2018 as well as CEO & Managing Director of Treofan 2012-2015. Worked as Executive Vice President and Member of the Executive Board of Bayer MaterialScience (today Covestro AG) 2004-2012 with responsibility of the global Polyurethanes business and as Chief Marketing and Innovation Officer. Before that had several directorial and managerial positions in Belgium, Brazil, US and Germany at Bayer since 1990. Chair of the Advisory Board for the European Institute for Industrial Leadership. Member of the Supervisory Board of Symrise AG.

Holdings in Neste Corporation on 31 Dec 2020: 40,512 shares. $^{1}$

Mercedes Alonso

(born 1988)

Executive Vice President,

Renewable Polymers and Chemicals

M.Sc. (Chem)

Member of the Executive Committee since 2019

Joined the company in 2019. Responsible for the Renewable Polymers and Chemicals business unit. Previously served as Marketing Director Advanced Polymer Solutions Europe in LyondellBasell in 2019, Managing Director Eng. Composites Europe 2016-2019, and Global Director Corporate Marketing in A. Schulman Inc. 2013-2016, as well as Global Business Excellence Leader, Advanced Materials in Dow Chemical Inc. Europe GmbH 2010-2013. Member of the Board of The European Chemical Industry Council (Cefic) 2020-.

Holdings in Neste Corporation on 31 Dec 2020: 0 shares. $^{1}$

Panu Kopra

(born 1972)

Executive Vice President,

Marketing & Services

BBA, MBA

Member of the Executive Committee since 2016

Joined the company in 1996. Responsible for the Marketing & Services business unit. Previously served as Vice President in Oil Retail Sales in Finland and Baltic Rim 2014-2015, Vice President in Oil Retail Russia and Baltic Rim 2010-2014, General Manager in St. Petersburg Russia in 2009, Business Development Manager in Renewable Products 2007-2008, Sales Director in 2006, General Manager in Latvia 2003-2005 and in several other positions in the company. Member of the Board of East Office 2016-.

Holdings in Neste Corporation on 31 Dec 2020: 10,008 shares. $^{1}$

Thorsten Lange

(born 1963)

Executive Vice President,

Renewable Aviation

M.Sc. (Banking and Auditing)

Member of the Executive Committee since January 2020

Joined the company in January 2020. Responsible for the Renewable Aviation business unit. Previously served as Head of Fuel Procurement (global) at Lufthansa Group 2001-2019. Has also served as Product Manager, Automotive Lubricants at FUCHS DEA Schmierstoffe GmbH&Co KG 1999-2001, Director Industry Lubricants at DEA Mineraloal AG 1998-1999 as well as Marketing Manager and Pricing Groundfuels at DEA Mineraloal AG 1992-1997. Member of the IATA Fuel Steering Group. Previously as the Chairman of the IATA Commercial Fuel Group and Member of the IATA Fuel Working Group as well as a Member of the Star Alliance Fuel Advisory Group.

Holdings in Neste Corporation on 31 Dec 2020: 0 shares $^{1}$

Neste Annual Report 2020 | Corporate Governance Statement 2020

Holdings in Neste Corporation: own holdings and controlled entities.

NESTE

Members of the Executive Committee

Matti Lehmus

(born 1974)

Executive Vice President,

Renewables Platform

M.Sc. (Eng.), eMBA

Member of the Executive Committee since 2009

Joined the company in 1997. Responsible for the Renewables Platform. Previously responsible for the Oil Products business area 2014-2019. Has also served as Executive Vice President of the Oil Products and Renewables business area 2011-2014, Executive Vice President of the Oil Products business area 2009-2010, Vice President of the Base Oils business in the Specialty Products Division 2007-2009, Vice President of Oil Refining Business Development in 2007 and Gasoline Exports and Trading Manager 2004-2007 in the Oil Refining Division, Vice Chairman of the Board of the Chemical Industry Federation of Finland. Member of the Board of the Confederation of Finnish Industries (EK) until the end of 2020.

Holdings in Neste Corporation on 31 Dec 2020: 26,169 shares. $^{1}$

Carl Nyberg

(born 1979)

Executive Vice President,

Renewable Road Transportation

M.Sc. (Economics and Business Administration)

Member of the Executive Committee since 2019

Joined the company in 2005. Responsible for the Renewable Road Transportation business unit. Served in various positions at Neste, most recently as Vice President of Sales Scandinavia of the Renewable Products business area 2016-2019, Vice President, Supply, Oil Products at Neste Geneva 2014-2016 and Trading Manager, Crude Oil 2013-2014. Managing Director of Neste AB 2017-2019. Member of the Board of SPBI (Swedish Petroleum and Biofuels Institute) 2018-2019.

Holdings in Neste Corporation on 31 Dec 2020: 4,190 shares. $^{1}$

Marko Pekkola

(born 1969)

Executive Vice President,

Oil Products

M.Sc. (Energy Technology)

Member of the Executive Committee since 2019

Joined the company in 2018. Responsible for the Oil Products business unit. Previously served as Vice President, Production 2018-2019, Before joining Neste, held many leading positions in Stora Enso Oyj and M-real Oyj.

Holdings in Neste Corporation on 31 Dec 2020: 4,075 shares. $^{1}$

Minna Aila

(born 1966)

Senior Vice President,

Sustainability and Corporate Affairs

LL.M.

Member of the Executive Committee since April 2020

Joined the company in April 2020. Senior Vice President, Sustainability and Corporate Affairs. Served previously as the EVP Marketing & Corporate Affairs at Konecranes 2018-2020, VP, Corporate Affairs at Nokia 2015-2018, SVP, Marketing, Communications & Corporate Responsibility at Outotec 2012-2015 as well as Head of Communications, Federation of Finnish Financial Services 2010-2012. Various roles in global communications, investor relations, corporate responsibility and government relations at Elcoteq 2004-2009. Various roles at European Commission 1992-2004. Chair of the EU and Trade Policy Committee at the Confederation of Finnish Industries EK. Vice Chair of the Business at OECD Trade Committee. Member of the Board at Finland-China Trade Association and National Defense Course Association.

Holdings in Neste Corporation on 31 Dec 2020: 855 shares $^{1}$

Neste Annual Report 2020 | Corporate Governance Statement 2020

Holdings in Neste Corporation: own holdings and controlled entities.

NESTE

Members of the Executive Committee

Hannele Jakosuo-Jansson

(born 1988)

Senior Vice President,

Human Resources, HSSEQ and Procurement

M.Sc. (Eng.)

Member of the Executive Committee since 2006

Joined the company in 1990. Senior Vice President of Human Resources, HSSEQ and Procurement. Previously responsible for the Group's Human Resources and Safety corporate functions. Served as Vice President, Human Resources at Oil Refining (2004-2005) and Laboratory and Research Manager at the Technology Center (1998-2004). Member of the Board of Directors of Ahlstrom-Munkojö. Member of the Board of Directors of LUKE (Natural Resources Institute Finland) until the end of 2020.

Holdings in Neste Corporation on 31 Dec 2020: 30,284 shares.¹

Lars Peter Lindfors

(born 1964)

Senior Vice President,

Innovation

Ph.D. (Tech.), MBA

Member of the Executive Committee since 2009

Joined the company in 2007. Senior Vice President of Innovation. Previously responsible for Research & Development, Investment Management, Information Technology, Procurement, and Business Processes. Served previously as Senior Vice President, Technology and Strategy 2009-2012, Vice President for the company's Research and Technology unit 2007-2009, Member of the Executive Committee of the Perstorp Group 2001-2007, as Executive Vice President, Renewal and Development 2001-2004 and prior to that at Neste as R&D Manager and various other positions 1989-2001. Member of the Board of the Fortum and Neste Foundation and Tikkurila Oyj.

Holdings in Neste Corporation on 31 Dec 2020: 22,341 shares.¹

Jyrki Mäki-Kala

(born 1961)

Chief Financial Officer,

Strategy and IT

M.Sc. (Econ.)

Member of the Executive Committee since 2013

Joined the company in 2013. Chief Financial Officer and responsible for the Group's strategy, financial management, investor relations, and risk management. Served in various business and corporate financial positions at Kemira 2005-2013. Previously worked for Finnish Chemicals. Member of the Supervisory Board of Ilmarinen Mutual Pension Insurance Company. Member of the Board of Directors and Audit Committee of Altia Corporation.

Holdings in Neste Corporation on 31 Dec 2020: 26,500 shares.¹

Christian Ståhlberg

(born 1974)

General Counsel

LL.M.

Member of the Executive Committee since 2017

Joined the company in 2017. Responsible for the Group's legal affairs and compliance. Secretary to the Executive Committee, the Board of Directors, the Audit Committee, the Shareholders' Nomination Board and to the Stakeholder Advisory Panel. Served previously as General Counsel of Rettig Group Ltd 2015-2017, Director, Legal in Pohjola Bank plc 2011-2014, Senior Legal Counsel in Neste Oil Corporation 2007-2011 and Senior Associate in Roscher Attorneys Ltd 1998-2007.

Holdings in Neste Corporation on 31 Dec 2020: 1,948 shares.¹

Simo Honkanen

– retired in December 2020.

(born 1958)

M.Sc. (Econ.)

Senior Vice President,

Sustainability, Public Affairs and

Communications until April 2020.

Member of the Executive

Committee from 2009 until

31.3.2020.

Neste Annual Report 2020 | Corporate Governance Statement 2020

Holdings in Neste Corporation: own holdings and controlled entities.

NESTE

Company Auditor

The AGM elects the Auditor annually. The Auditor's term of office ends at the end of the next AGM following election.

The Auditor is responsible for auditing the Company's accounts, its financial statements, and Neste's administration. The Auditor's Report covers the Consolidated Financial Statements and the Parent Company's Financial Statements, and can be found in the Financial Statements section of the Annual Report.

2020

Audit Firm PricewaterhouseCoopers Oy served as Neste's Auditor until 18 May 2020, with Authorized Public Accountant Mr. Markku Katajisto as the principally responsible auditor. The AGM re-elected PricewaterhouseCoopers Oy as the Audit Firm on 18 May 2020, with Authorized Public Accountant Mr. Markku Katajisto continuing to serve as the principally responsible auditor, until the end of the next AGM.

Fees charged by the statutory auditor

EUR 1,000	2020	2019
Statutory audit	1,534	1,388
Tax advisory	9	23
Other advisory services	150	275
	1,693	1,686

Internal Audit

Neste's Internal Audit provides independent and objective assurance and advisory services designed to add value and improve the operations of Neste. As a component in the corporate governance process, it supports the organization by bringing a systematic approach to evaluating and improving the effectiveness of risk management and control and governance processes.

Internal Audit's activities encompass objective examinations for the purpose of providing assessments to the Neste's Board Audit Committee and management on the adequacy and effectiveness of governance, risk management and control processes at Neste. The scope of Internal audit assessments include, among others, evaluating that risk management practices are in place, significant risks are appropriately identified and managed, key policies and guidelines exist and are documented and effectively implemented, organizational structures and governance models enable efficient decision making and steering system, roles and responsibilities are clear, and results of operations and programs are consistent with established goals and objectives.

Internal Audit work is carried out based on an annual Internal Audit Plan. Neste's strategic objectives, key projects and identified risks are key elements in the audit planning process. The Vice President of Internal Audit reports periodically to the senior management and the Board Audit Committee Internal Audit's activities relative to the annual plan, including audit recommendations and action plans established by organisations aiming for the continuous improvement and mitigation of risks.

Internal Audit is also responsible for conducting special assignments on behalf of management or the Board Audit Committee. As a member of Neste's Investigation Group, the Vice President of Internal Audit participates in the investigation of suspected misconduct and breaches of Neste's policies, principles and applicable laws and regulations. To assure an effective, efficient and value adding process, Internal Audit cooperates actively with other Neste's assurance service functions (Corporate Risk Management, Internal Controls and Compliance) and top management and shares best practices from a process and governance point of view.

Internal Audit follows the mandatory elements of The Institute of Internal Auditors' International Professional Practices Framework, including the Professional Practice of Internal Auditing. The Internal Audit reports directly to the Board of Directors' Audit Committee and administratively to the President and CEO. The Board of Directors is responsible for approving the Internal Audit Charter and the Annual Audit Plan. Internal Audit Charter includes the determination regarding Internal Audit position, operational model, process and reporting lines. Internal Audit has at least annually a non-executive meeting with the Audit Committee members and the Audit Committee Chairman. The Vice President of Internal Audit is responsible for the internal audit activities specified in the Internal Audit Charter.

2020

Internal Audit performed internal audits set out in the Internal Audit Plan 2020 and special assignments assigned by the senior management and the Board Audit Committee. Internal Audit function continued to strengthen cooperation with other Neste assurance functions such as compliance, risk management and internal controls with an aim to integrate activities and reporting to the management.

Neste's key business processes, locations, projects and risk areas were in focus during the year 2020, including for example major investments (e.g. the Singapore expansion project), subsidiary governance, risk management and master data management.

Compliance function

Neste is committed to high ethical standards and conducts its business and operates in compliance with applicable laws, regulations and generally accepted practices for good corporate governance. Neste's Code of Conduct sets the framework for Neste's global business operations, and establishes core principles to guide Neste employees in their day-to-day business activities and decisions in the areas of ethical business practices, sustainable operations and protecting people's health and safety. Neste requires commitment to these principles from its suppliers and business partners, as expressed in the Neste Supplier Code of Conduct.

The purpose of Neste's Compliance function is to develop, establish, facilitate and oversee compliance procedures and programs aimed at ensuring that Neste's global organisations have effective systems and processes in place for identifying, preventing, detecting and correcting non-compliance with applicable laws, regulations and Neste's internal rules. The function supports Neste's management in their responsibility for overall compliance risk management, as well as Neste's business unit and function management in their responsibilities to identify and manage compliance risks related to their operations. The compliance function works in close collaboration with Neste's business units, functions and other internal assurance organizations, in particular the Risk Management, Internal Controls and Internal Audit functions.

The compliance function is headed by the Chief Compliance Officer (CCO), who reports to Neste's General Counsel. The CCO reports on compliance activities on a regular basis to the ExCo and to the Board of Directors' Audit Committee. Neste also has an Ethics and Compliance Committee, which oversees and steers the management of the ethics and compliance program in Neste. Reports on suspected misconducts received via the company's externally operated and other reporting channels are investigated in Neste's Investigation Group.

Neste has an externally operated misconduct reporting system, Ethics Online, available to all Neste's internal and external stakeholders, including various actors in its supply chains. Ethics Online serves as a grievance mechanism and enables Neste's stakeholders to raise concerns related to alleged misconduct in Neste's practices. Neste's Investigation Group is responsible for evaluating and investigating such reported cases. Neste has a non-retaliation policy for concerns reported in good faith. Neste's main principles and policy followed in internal misconduct investigations is described in the company internal Misconduct

Neste Annual Report 2020 | Corporate Governance Statement 2020

NESTE

5 < >

Investigation Standard issued in 2020. The possible irregularities or misconducts are reported regularly to the Board of Directors' Audit Committee.

Insider administration procedures

Neste complies with the EU Market Abuse Regulation (596/2014), including related regulation, as well as Nasdaq Helsinki Ltd's Insider Guideline as a minimum standard on insider matters. In addition, the Board of Directors has approved the Company's own Guidelines for Insiders on 9 June 2016.

The Company's General Counsel is responsible for the coordination and supervision of insider matters, along with the insider register manager, the insider communication manager and individuals responsible as heads of project-specific registers. All the above individuals have their own deputies. In addition, the head of each common function or business area is responsible for supervising insider matters within his or her organization. The Company arranges training related to the insider guidelines.

The creation and maintenance of a project-specific insider register is the responsibility of the head of such register, who is named in the relevant project-specific insider register.

The Company has defined, as persons discharging managerial responsibilities, the members of the Board of Directors and its secretary, the President and CEO, as well as the members of the ExCo and its secretary. These managerial persons and their closely associated persons must report their own transactions conducted with the Company's financial instruments or financial derivatives to the Company and the Financial Supervisory Authority without delay, and no more than three business days of completing the business

transaction. Reports to the Company and the Financial Supervisory Authority can be made by following the instructions on neste.com/trading.

The Company has also named certain other persons as core persons as they have better or more information about the Company than the market. These individuals are typically those who prepare the Company's Interim Reports and Financial Statements, persons responsible for the Company's finances, financial reporting or communication, or persons who have access to said information, as well as certain individuals in executive positions.

Persons discharging managerial responsibilities and core persons may not trade with or conduct business with the Company's financial instruments for themselves or a third party, directly or indirectly during the period from the closing date of an interim or annual accounting period to the date of publication of the interim report or financial statements for that period. The minimum period concerned is always a minimum period of 30 days prior to the date of publication of the interim report or the financial statements, including the date of publication ('closed window').

The Company also maintains a project- or event-specific list of insiders for all individuals that have access to insider information and that are employed by the Company or otherwise perform tasks that provide them access to insider information. Individuals who participate in the development and preparation of projects or events that involve insider information, such as mergers and acquisitions, are considered project- or event-specific insiders. Project-specific insiders may not trade or conduct other business using the Company's financial instruments during the project.

Neste Annual Report 2020 | Corporate Governance Statement 2020

Main features of internal control and risk management systems pertaining to the financial reporting process

Objectives

The objective of internal control over financial reporting at Neste is to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with applicable laws and regulations and internal requirements of control activities.

The system of internal controls at Neste Corporation is based on the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Management sets its level of risk appetite by defining the Group-level control objectives. Control Objectives set the Group's minimum control requirements for the control activities in financial and business processes in order to mitigate the underlying key risks and establish the desired level of assurance for correct financial reporting, adherence with the regulations and policies, and prevention of fraud. Group-level control objectives are endorsed by the Executive Committee and Audit Committee and reflect the top management guidelines, auditor reports, policies and regulations Neste complies with, as well as Neste Internal Control Principles and Control Requirements over Financial Reporting (COFR).

Control environment

Under the Finnish Companies Act, the Board of Directors is responsible for ensuring that there is adequate control over the Company's accounts and finances. Responsibility for arranging this control is delegated to the President and CEO, who is required to ensure that the Company's accounts are in compliance with the law and that its financial management has been arranged in a reliable manner.

The internal control at Neste is based on the corporate structure whereby the operations are organized into business units and common functions. The heads of business units and finance function are responsible for establishing and maintaining appropriate, up-to-date, effective and adequate controls over financial reporting. Operational management hence owns the risks and controls and is responsible that controls and deficiency related corrective actions are implemented.

In order to provide additional assurance, Neste has established an Internal Control function, which is responsible for coordinating the Group-wide internal control development and monitoring. Internal Control acts on the recommendations of the Audit Committee and expectations of the Executive Committee for improving the quality of the controls. Internal Control follows up and verifies that actions for remediation are taken by the respective operational management.

Neste has prepared and established its own Internal Control Principles in accordance with the COSO framework. Internal Control Principles emphasize the importance of internal controls and clarify the responsibilities of the Three Lines for establishing effective controls in business processes. Neste's values and management system containing the formal Code of Conduct are the foundation of the control environment. The President and CEO and corporate management are responsible for emphasizing the importance of ethical principles and correct financial reporting.

Risk assessment

As a prerequisite for risk assessment, the organization's objectives need to be established. With respect to financial reporting, the general objective is to have reliable reporting and ensure that transactions are recorded and reported completely and correctly. The assessment of risk includes risks related to fraud.

Additional information on risk management principles is available in the Risk Management section of the Annual Report.

Control activities

Neste control activities include instructions, guidelines and procedures to ensure that the actions identified by management to address the relevant risks are carried out effectively. The most important guidelines related to financial reporting systems and practices are documented in Neste Internal Control Principles, Access Risk Management Principles, SAP GRC AC, the Control Over Financial Reporting standard (COFR), Process charts, month end workflows and detailed Finance Instructions.

Key control activities are documented in a global control catalog covering each business or financial process. Group-level policies and guidelines are documented in the Neste Management System.

Communications

Neste corporate-level communication practices support the completeness and correctness of financial reporting. Neste personnel have access to adequate information and communication regarding accounting and reporting principles and guidelines. The main means of communicating the relevant matters for appropriate financial reporting consist of internal control training, detailed Finance Instructions containing accounting principles and guidelines for forecasting and reporting, info sessions, on-the-job training, process walk-throughs, and postings on internal channels and pages.

Neste business units prepare regular financial and management reports for the management review, including analysis and comments of financial performance. The Executive Committee receives financial reports monthly. Interim Reports are reviewed in Audit Committee meetings, and thereafter by the Board of Directors.

NESTE

5 < >

Monitoring

Management regularly monitors the effectiveness of the controls, as a control that was initially effective can become ineffective due to changes in the operating environment. Changes can also take place in the controls due to changed processes, IT systems or personnel.

The Board of Directors and the Audit Committee regularly review the financial performance including reviewing whether there is an adequate level of process to evaluate the risks and effectiveness of controls related to the financial reporting process at all levels of the organization. The Audit Committee oversees the Company's finances, financial reporting, risk management, as well as the Internal Control and Internal Audit functions, as part of the Company's corporate governance. Internal control deficiencies are communicated in a timely manner to those parties responsible for taking corrective action, and to management and the Board as appropriate.

Corporate Internal Audit assesses annually the operational model and practices of internal control over Neste's financial reporting as part of business- and process-level audits.

The Internal Control function also conducts separate tests to assess the adequacy of internal controls in business processes, recommends corrections and reports the gaps to the respective management teams.

2020

In 2020, the Internal Control team in close cooperation with business process owners has worked to further increase the organization's understanding of the importance of internal controls. Key controls and underlying risks have been revisited and new controls have been defined to mitigate risks in financial and commercial operations. Concrete initiatives have been taken to implement automatic controls and procedures that help accelerate commercial process execution.

The tone at the top by senior management has also encompassed topics on implementing the internal controls as a component of the successful execution of the strategy and business objectives. The Executive Committee is monitoring closely the status of internal controls company-wide.

Deep dives and cooperation with the external auditor, PwC, have been performed and analysis results are being followed up by the Audit Committee.

A phased roadmap for strengthening the Segregation of Duties controls in SAP has been identified. The first phases, including clarification of concepts, principles and processes, have already been implemented. The next phase, planned for 2021, will aim at role revision and simplification.

Neste will make an important investment in 2021 to implement modern internal control management and monitoring solutions that enable better visibility and faster corrective actions. The solution will aim primarily at continuous control monitoring and reporting capabilities. The preparations have already started in 2020 with the creation of a central repository of the controls and proof of concept.

Building Effective Internal Controls is an Ongoing Process driven by Strategy and Control Objectives

Remediation

Internal Control follows up and supports the implementation of management actions identified by its own testing or auditor findings and that relate to strengthening the control environment.

Monitoring, Testing and Reporting

Internal Control employs tools, such as RPA and SAP GRC, and it conducts separate tests, to assess the performance of the internal controls and to detect gaps and areas for improvement. Findings are reported to relevant stakeholders.

Scope

Defined based on Regulatory environment, Strategic Objectives, Assessment of Risks, Audit Committee priorities, change programs and Remediation actions.

Internal Control Activity

Focus on controls over financial reporting and prevention of fraud and financial losses

Control Development

In partnership with business and process owners, define and enhance the controls. Increase control automation and monitoring capabilities. Keep up-to-date control catalogs. Create and update requirements and guidelines.

Training and Communication

Clarify Control Requirements and tools. Support operational management and process owners in deploying controls in the organization. Perform an active role in communication with both personnel and stakeholders on important updates.

Neste Annual Report 2020 | Corporate Governance Statement 2020

NESTE

5 < >

Performance Management Process

Neste's Performance Management Process plays an essential role in helping the Group attain its strategic goals and reinforcing its performance-driven mindset. Neste has taken a step change in developing its performance leadership towards a more agile model supporting daily operations.

Performance management comprises daily leadership, through which individuals, teams, units and the Company can achieve selected strategic priorities and develop organizational capability. Performance leadership is used to ensure that everyone knows the values and objectives of the Company, and their short- and long-term objectives, and what kind of competence is needed and developed to achieve these objectives.

Individual and team objectives are based on Neste's strategy and way of working. There is a clear link between wellbeing at work and good leadership performance.

The key elements in the Neste daily performance leadership approach are:

setting challenging objectives and following them through
supporting the achievement of objectives with up-to-date feedback
evaluating one's own performance and results
developing ways of working and taking responsibility for one's own competence development
holding regular personal development discussions and check-in discussions that support day-to-day work.

From a financial outlook and reporting point of view, the Neste Performance Management Process consists of long-term financial projections based on the strategy and Performance Planning covering the midterm (3 years) outlook. During the year, performance is evaluated in weekly Management Reporting, the monthly Business Review, and the quarterly Common Functions Review.

Financials- and KPIs related, information in management reporting and reviews are compared to strategic goals and business plans, and to analyses and planned corrective actions throughout the year.

Leading performance in daily work

Coffee with team members – current topics

Target setting discussion

One-on-one discussions

Regular feedback

Forward discussion

Caring and intervening

Thanking and encouraging

Neste Annual Report 2020 | Corporate Governance Statement 2020

NESTE

Risk management

Risk management objectives and scope

Neste recognizes risk management as an integral part of sound management practice and an essential element of good corporate governance. Risk as an element of uncertainty (opportunity or threat) is an inevitable component of running the business. Systematic risk management practices are the means to ensure that Neste is successful in achieving the set strategic goals and business objectives and is able to maintain continuous operations in a changing business environment.

Neste's risk management practices can be characterized by the following statements:

The company emphasizes risk aware culture and proactive management of risks.
Risk management is a continuous process that is subject to improvement to reflect changes in the external and internal environment.
The purpose of risk management is to analyze and manage all opportunities and threats that the company may encounter. By exploiting opportunities and reducing threats, Neste gains a competitive advantage.
Risks are managed as an integrated part of planning, decision making, and operational processes with a defined structure of roles and responsibilities.
Sufficiency of risk treatment actions and controls is monitored systematically.

Risk management framework and principles

Framework and principles for risk management have been defined in the Neste Corporate risk management policy, which has been approved by the Board of Directors. The policy is supplemented by risk management principles, guidelines, and instructions for specific risk disciplines.

Neste's risk management framework and processes are aligned with the internationally recognized best practices for risk management (COSO: Enterprise Risk Management – Integrating with Strategy and Performance; and ISO 31000:2009 standard).

In Neste's risk model, risks are classified into external, strategic, and preventable risks that are more operational in nature.

External risks are exposures that cannot be fully influenced or controlled by Neste. The main risk classes are changes in the external environment and risks in the extended enterprise.
Strategic risks relate to strategic choices, strategy implementation, and risks in the planning and execution of major projects (e.g. refinery turnarounds). Strategic risks are not inherently undesirable as they typically contain both upside and downside risk potential.
The third category of risks, preventable risks, consists of various risk classes that arise within the organization and are mostly controllable. In general, Neste does not gain strategic benefits from taking these risks.

Neste Annual Report 2020 | Risk management

NESTE

5 < >

Risk governance

The Neste Board of Directors has the ultimate accountability for risk oversight. Among other duties the Board is in this role responsible for setting the Group's risk appetite and for approving the Risk Management Policy.

The practical implementation, development and monitoring of risk management processes is based on the three lines of defense model. The model distinguishes between:

1st Line of Defense

The first line of defense is responsible for setting the objectives, managing day-to-day performance and reinforcing risk responses in order to achieve the set targets. At Neste, the first-line actors include Business Units and Functions in their first-line roles. As a part of the first line of defense, Neste's President and CEO and the Neste Executive Committee have the overall accountability for appropriate risk management practices.

In practice, Business Units and Functions own and manage risks with the help of a dedicated network of risk champions and coordinators. The role of the risk champions/coordinators is to represent different risk disciplines and to ensure that risk discussions are embedded in everyday management routines.

2nd Line of Defense

The role of the actors in the second line of defense is to provide guidance, support, facilitation, and consultation for risk management. The second line of defense needs to have some degree of independence from the first line of defense in order to be able to challenge the first line in managing performance and making risk-informed decisions.

At Neste, the second line of defense includes Functions in their second-line roles and specialist teams (corporate risk management, compliance and internal controls). In addition, Neste has established a separate Ethics and Compliance Committee that aims at increasing management oversight of compliance- and ethics-related issues within the Group. The Committee also ascertains the adequacy of mitigation actions in higher risk compliance areas.

The corporate risk management team has the overall responsibility to confirm that risk management activities are carried out consistently throughout Neste Group and all risk classes. Corporate risk management also drives the overall development of risk management practices and tools. The team is supported by the network of risk champions and coordinators.

3rd Line of Defense

Internal Audit as an independent team evaluates the effectiveness and efficiency of the corporate-level risk governance model and related risk management processes, including the effectiveness of internal controls and other risk treatment actions in the scope of each audit. Internal Audit also provides recommendations for improvement areas.

Neste Annual Report 2020 | Risk management

NESTE

Risk reporting

Risk reporting aims at the transparent, consistent, and comprehensive communication of risk status in different areas. As a result of risk reporting, the Company's risk profile can be compared with the defined risk appetite and it can be concluded whether additional risk treatment actions are needed.

Communication regarding the most important risk issues takes place along the strategic planning and performance management cycle.

Formal risk reporting is directed to the Business Unit and Function management teams, the Neste Executive Committee, the Audit Committee, and the Board of Directors. The Corporate risk management team is responsible for aggregating risk information for reporting to different internal and external audiences.

Risks relating to Neste's business

In the pursuit of its objectives and targets, Neste is exposed to different risk factors that stem from the external environment, internal decision making, operating processes, and systems in use.

The most significant risk factors relate to the areas mentioned below. Any one of the risks, either singly or in the aggregate, may have a material adverse effect on Neste's business, financial condition, operating results, and future prospects.

External risks – Economic conditions, Geopolitics, Pandemic

Overall market volatility, geopolitical tensions and the risk of an economic slowdown may have an adverse effect on the market conditions for the supply of feedstock and sales of refined products. During 2020, uncertainty in the global economic and financial markets was amplified by the COVID-19 pandemic. The continuing COVID-19 pandemic could bring risks to oil product demand, in the form of slow economic recovery and reintroduction of local virus containment measures ("lockdowns"). This, in combination with ample global refining capacity could continue to pressure refining margins globally.

Continued sanctions on oil exports from Venezuela and Iran, as well as continued OPEC+ crude supply cuts, could continue supporting Urals crude prices relative to Brent crude, thus negatively impacting Neste's business.

Renewable fuels policies in the EU remained firmly in place in 2020, and planning for transposition of the Renewable Energy Directive II into national legislation next year kicked off in most Member States. In the United States, existing state-level policies like California's LCFS program and US federal-level Renewable Fuel Standard in combination with the Blenders Tax Credit adopted through 2022, made for a fairly stable regulatory environment for biofuels, with some risks to market sentiment linked to pending EPA decisions on how to handle small refinery exemptions going forward.

External risks – Environment

Neste's strategic ambition is to be the global leader in renewable and circular solutions. Growing pressure to combat climate change and reduce greenhouse gas emissions is therefore primarily a positive driver for Neste's business. However, political and societal focus on the low-carbon transition and the energy sector's carbon footprint also create risks. Indirect economic and political consequences from climate change may contribute to the general uncertainty in the business environment and hence have an adverse effect on Neste's business. In addition, changes in carbon emission trading schemes or similar initiatives on EU-, US- or individual Member State-level may have a significant effect on Neste's business.

External risks – Laws and regulation

Changing regulation presents both an opportunity and threat to Neste's business. Neste's refining operations and products are subject to extensive regulation (incl. environmental, health & safety, sustainability). General regulatory requirements in areas like commodity trading and data protection have also contributed to the formalization of operating procedures.

Neste's business units mainly benefit from increased support for biofuels and renewable fuels (for example requirements that relate to renewable content in diesel and gasoline). However, changes in regulation especially in the European Union and the United States also create uncertainties as these may influence the speed at which the demand for renewable products develops, and new raw materials sources are brought into use. For the renewable products, a significant source of uncertainty is fragmented regulation around the acceptability and use of waste and residue feedstock.

Risks relating to strategic choices and strategy implementation

The majority of strategic risks relate to the viability of strategic choices and risks in strategy implementation. Opportunities and threats may arise from changes in the competitive landscape or from internal decision making and use of technology.

Neste's competitive position in the selected key markets is good. Neste's proprietary NEXETL production technology is a proven technology for producing high-quality diesel from renewable raw materials. However, there is no assurance that this competitive position will continue as new players enter the market, current competitors develop their technologies or customer preferences for clean mobility change. In addition to the development of alternative feedstocks and production technologies for liquid fuels, the evolution of engine technologies and introduction of alternative powertrains can be faster than expected.

Staying ahead of competition requires continuous improvement, the ability to challenge current business models and a strong focus on innovations such as new production technology and feedstock platforms. In addition, Neste's products and services must continuously meet customer requirements relating e.g. to product quality and sustainability. Evolving customer requirements together with more complex sourcing and logistics networks and production methods increase the exposure to quality risks that need to be managed well in order to maintain the high-quality brand image. As risk mitigation, Neste has implemented systematic quality management measures both in its own operations and in partner networks.

Strong governance practices and the continued contributions of Neste's senior management, personnel and partners are vital for the company's success. Due to fierce competition for talent, there is a risk that Neste may not be able to recruit and retain the highly skilled employees that are needed for strategy deployment and successful operations in the future. There is also a risk that Neste will not be able to build and manage strategic partnerships that contribute to future success.

Project risks

Successful projects play a key role in Neste's strategy deployment, operational development, and the digitalization of processes. Significant delays in project planning or execution may reduce operational efficiency or impair Neste's ability to secure its competitive position.

Neste Annual Report 2020 | Risk management

NESTE

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Business continuity risks

Neste's business is dependent to a significant extent on its wholly owned fossil fuel refineries in Finland (Porvoo and Naantali) and its renewable diesel refineries in Singapore and the Netherlands (Rotterdam). Neste's conventional oil refineries are scheduled to have a major maintenance turnaround every five years. In addition to these, for example disruptions in the supply of utilities or breakdown of critical machinery may cause unexpected shutdowns that affect Neste's ability to fulfil demand for end products.

The vessels chartered to Neste or owned by Neste are subject to inherent risks like maritime disaster, damage to the environment and loss of or damage to cargo and property. Such events can be caused by multiple factors, such as adverse weather conditions or mechanical failures.

Neste has insurance in place to reduce the financial impact of property damage, business interruption, and maritime disasters. However, insurance does not cover all potential losses and Neste could therefore be seriously harmed by operational catastrophes or deliberate sabotage.

The extent of the disrupting impact that COVID-19 has had on the commodity and financial markets has challenged many industries and companies. In the oil & energy industry the pandemic has caused a global demand shock, increased the uncertainty with regard to the climate policies and targets and emphasized the need for Company-level business continuity arrangements. The economic and social impacts of the pandemic have also affected Neste's business environment and operating practices. During 2020 there has been an increased focus on business continuity both at Neste's own offices and sites and in the customer interface and supply chains.

Market risks

Commodity markets have been and are expected to continue to be very volatile. General market turbulence may result in unexpected swings in the market prices of crude oil and other raw materials. It is also expected that the high demand for different waste & residue feedstock streams continues as competitors are increasing their production capacity for renewable products.

The financial results of Neste are primarily affected by the price differential, or margin, between refined petroleum and renewable product prices; and the prices for crude oil, different vegetable oils and other feedstock used. Historically, refining margins have been volatile and they are likely to continue to be so in the future. The main factors that may affect the refining margins include:

Changes in aggregate demand for and supply of raw materials and products.
Changes in demand for and supply of specific raw materials and products.
Raw materials and product price fluctuations.
Evolution of worldwide refining capacity, and in particular development of refining capacity that relates to petroleum and renewable products similar to Neste.

As a part of risk management, Neste uses derivative instruments to protect its position against fluctuations in commodity prices.

Neste is exposed to foreign exchange risks because most of the sales are denominated in US dollars, whereas operating expenses (except the purchase of raw materials) are recorded in euros. Neste

limits the uncertainties relating to changes in foreign exchange rates by hedging its currency risks in contracted and forecasted cash flows and balance sheet exposures.

More information on market risks can be found in the Financial Statements Note 3 section of the Annual Report.

Credit risk

Credit and counterparty risk arises from sales, hedging, and trading transactions, as well as cash investments. The risk is linked to the potential failure of a counterparty to meet its contractual payment obligations, and is therefore dependent on the creditworthiness of the counterparty and the size of the exposure concerned. In order to manage the risk, Neste has implemented systematic controls for counterparty screening and monitoring.

Sustainability risks

The most significant sustainability risks that relate to Neste's own operations or to the extended enterprise have been reported in line with the requirements of the Non-Financial Reporting Directive as part of the review by the Board of Directors.

ICT and cyber risks

Digitalization and emerging technologies (for example the use of artificial intelligence and robotics) offer opportunities to automate dangerous or error-prone tasks and increase the efficiency of operations. At the same time, the increasing sophistication of cyber threats and generally rising frequency of attacks targeted at oil & gas companies is also a concern for Neste. Cyber risks multiply the impact of other risks and, individual risks, could also have a major negative

impact on Neste's reputation or continuity of business operations.

The reliability of the key IT systems and partnerships is essential for continuous business operations. Prolonged disruption in the availability of the key systems, data or interfaces could limit Neste's ability to conduct its business operations in a profitable, efficient and controlled manner.

Risk management focus in 2020

In 2020, special risk management initiatives focused on business continuity management practices, major investments and business model changes.

Neste Annual Report 2020 | Risk management

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Neste Oyj — Governance Information 2021

3230_rns_2021-03-03_98cf1e60-6177-489c-b6d9-44f7d63cc735.pdf

Neste Corporate Governance Statement

Governance

Corporate Governance Statement 2020

Regulatory framework

Governance Bodies

Annual General Meeting

2020

Shareholders' Nomination Board

Composition of the Shareholders' Nomination Board prior to the 2021 AGM

Activities

Shareholders' Nomination Board members

Kimmo Viertola

Outi Antila

Reima Rytsölä

Matti Kähkönen

Composition of the Shareholders' Nomination Board prior to the 2020 AGM

Board of Directors

Diversity of the Board of Directors

Activities of the Board of Directors

Duties of the Board of Directors

2020

Members of the Board of Directors

Matti Kähkönen

Sonat Burman-Olsson

Nick Elmslie

Martina Flöel

Members of the Board of Directors

Jean-Baptiste Renard

Jari Rosendal

Johanna Söderström

Marco Wirén

Elizabeth (Elly) Burghout

Willem Schoeber

Board Committees

Audit Committee

Duties

2020

Personnel and Remuneration Committee

Duties

2020

President and CEO

Executive Committee

2020

Members of the Executive Committee

Peter Vanacker

Mercedes Alonso

Panu Kopra

Thorsten Lange

Members of the Executive Committee

Matti Lehmus

Carl Nyberg

Marko Pekkola

Minna Aila

Members of the Executive Committee

Hannele Jakosuo-Jansson

Lars Peter Lindfors

Jyrki Mäki-Kala

Christian Ståhlberg

Simo Honkanen

Company Auditor

2020

Fees charged by the statutory auditor

Internal Audit

2020

Compliance function

Insider administration procedures

Objectives

Control environment

Risk assessment

Control activities

Communications

Monitoring

2020

Building Effective Internal Controls is an Ongoing Process driven by Strategy and Control Objectives

Remediation

Monitoring, Testing and Reporting

Scope

Neste Oyj Governance Information 2021