Fortum is a significant purchaser of goods and services. We actively strive to reduce the environmental impacts caused by our operations and to improve economic and social wellbeing. We also manage risks related to our supply chain. The aim is that open and efficient collaboration creates value for both parties.
Fuel purchases and investments in a significant role
Fortum’s purchasing volume in 2015 was EUR 2.2 (2014: 2.6) billion. Fuel purchases, investments, and electricity purchased by the Electricity Sales business area from the Nordic wholesale electricity market for retail sales accounted for the majority of Fortum’s purchases. The purchasing figures for 2014 and 2015 do not include the sold Distribution business.
Fortum’s fuel purchases in 2015 totalled EUR 567 (2014: 782) million. We purchase fuels from international and local suppliers. Our fossil fuel purchases totalled about EUR 482 (2014: 689) million, biofuels about EUR 46 (2014: 55) million, and nuclear fuel about EUR 39 (2014: 38) million.
Of our purchases, EUR 527 (2014: 622) million targeted various investments. The biggest investments, EUR 285 million, were made in Russia. A large share of the investments are contracted out in full with materials, installation and other service as well as contractor work included in the total purchase.
The rest of our purchases, EUR 1,1 (2014: 1,2 ) billion, consist of other goods and services. The figure includes electricity purchased by the Electricity Sales business area from the Nordic wholesale electricity market for retail sales. The other goods and services purchases were related to operations and maintenance as well as to other functions, such as IT solutions, marketing and travel.
Purchases, EUR million
Half of purchases from Europe
About half, i.e. 48%, of the purchasing volume was purchased from suppliers operating in Europe, mostly in Finland, Sweden and Poland. This does not include electricity purchases from the Nordic wholesale market. 52% of Fortum’s purchases were from risk countries. The majority of these purchases were from Russia.
Violations related to work conditions and human rights are more likely in risk countries than in non-risk countries. Fortum’s risk-country classification is based on the ILO’s Decent Work Agenda, the Human Development index published by the UN, and the Corruption Perceptions index published by Transparency International.
In 2015 we had about 9,700 (2014: 10,500) suppliers of goods and services, 1,300 of them were in risk countries. Excluding the Russia Division’s local suppliers, there were about 270 suppliers in risk countries.
Purchases excluding investments in 2013-20151)