Emissions-free production is Fortum’s strategic choice
Fortum’s strategy fits very well within the frame of reference of measures mitigating climate change. Our purpose is to create energy that improves life for present and future generations. We provide sustainable solutions for society while delivering excellent value to our shareholders. We want to act responsibly, both in the short term and long term.
The cornerstones of our strategy are strong expertise in CO2-free hydro and nuclear power production, in efficient combined heat and power (CHP) production, and in operating in the energy markets.
Fortum's carbon exposure is among the lowest in Europe. The share of CO2 -free power production in EU was 97% in 2015 and in total Fortum, 64% of production was CO2 free.
Fortum's approach is sustainable
Competitiveness, security of supply and market-driven production enable long-term profitable growth. A company that is financially strong is able to shoulder its responsibility for the environment, take care of its personnel, oversee its supply chain, meet the expectations of customers and provide excellent value to its shareholders. At the same time it can develop sustainable energy solutions that benefit all of society.
For Fortum, economic responsibility means competitiveness, performance excellence and market-driven production, which create long-term value for our stakeholders and enable profitable growth. We manage our supply chain in a responsible manner. Fortum's goal is to achieve excellent financial performance in strategically selected core areas through strong competence and responsible ways of operating. The key figures by which Fortum measures its financial success include return on capital employed (target: at least 10%) and capital structure (target: net debt/EBITDA around 2.5). In addition, as of January 1, 2014, Fortum had used the applicable Global Reporting Initiative (GRI) G4 indicators for reporting economic responsibility.
Energy efficiency and climate change mitigation, and reducing environmental impacts are emphasised in our environmental responsibility. Our know-how in CO2-free hydro and nuclear power production and in energy-efficient combined heat and power production, our investments in solar and wind power as well as our solutions for sustainable cities play a key role in this. Fortum’s Group-level environmental targets are related to CO2 emissions, energy efficiency as well as major environmental, health and safety (EHS) incidents. At the end of December 2015, ISO 14001 certification covered 99.9% (calcalated in terms of sales) of Fortum's power and heat production worldwide.
We engage in an active dialogue with different stakeholder groups and we strive to find a balance between their various expectations. Fortum’s social responsibility emphasises the secure supply of electricity and heat, creating solutions for sustainable cities, operational and occupational safety, as well as ethical business operations and compliance with regulations. Fortum’s Group-level social targets are related to security of supply, occupational safety and personnel well-being. At the end of December 2015, OHSAS 18001 certification covered 99.9% of Fortum's power and heat production and distribution operations worldwide.
Fortum wants to conduct business with viable companies that act responsibly and comply with the Fortum Code of Conduct and the Fortum Supplier Code of Conduct. In 2015, Fortum audited altogether 9 suppliers in Poland, Czech Republic, Russia, Kazakhstan and India; our focus in India was on potential solar plant contractors.
Sustainability targets affect every Fortum employee
Sustainability targets affect every Fortum employee and are part of Fortum’s short-term incentive scheme. Fortum’s Board of Directors annually decides on the sustainability targets to be included in the incentive scheme. In 2015 the incentive scheme included an index measuring injury frequency for Fortum employees and for contractors, the number of serious injuries, the number of major environmental, health and safety incidents (EHS incidents), and Fortum’s ability to improve its performance in the Dow Jones Sustainability Assessment.
The injury frequency for Fortum employees and for contractors and the number of serious occupational accidents are included in the 2016 incentive scheme. In 2016, the weight of the sustainability index in the incentive scheme is 10% (2015: 20%).
Our targets for 2016
Our sustainability targets are based on continuous operational improvement and relate to Fortum's reputation and customer satisfaction and environmental and social responsibility parameters. Our most important goal is to cut the number of serious injuries by half. We are aiming for no serious injuries by 2020.
We believe that workplace well-being supports the achievement of our strategic goals, and for this reason a work well-being indicated as a percentage of sickness-related absences, was approved as a new Group target starting from 2016. Our target is to maintain our currently low rate of sickness-related absences (2.4% of working hours).
In terms of specific carbon dioxide emissions from our production (gCO2/kWh), we decided to focus on measuring Group-level specific emissions from our total energy production (electricity and heat production in all countries). Previously, we measured the specific emissions from electricity production also in the EU area, but this figure covers only about 10% of our carbon dioxide emissions, so its production-guiding impact is minor.
Fortum is listed in several sustainability indexes:
- Nordic Climate Disclosure Leadership Index (CDLI)
- STOXX® Global ESG Leaders indices
- OMX GES Sustainability Finland Index
- ECPI® Indices