Fortum as a responsible and sustainable investment

Fortum is an energy company highly committed to sustainability. We strive to respond to the needs of our customers by generating and selling low-carbon electricity and heat and by offering energy-sector expert services.

Fortum strives for balanced management of economic, social and environmental responsibility in the company’s operations.  In our operations, we take into consideration climate and resource issues as well as our impact on personnel and society. The focus areas reflect not only the views of our personnel and stakeholders regarding our fundamental impacts, but also our values – curiosity, responsibility, integrity and respect towards each other and our stakeholder groups.

Sustainability priorities

We define our sustainability priorities together with our stakeholders. In 2020, sustainability materiality assessment combined results of the two companies, Fortum and Uniper. The assessment applied a two-dimensional approach. It considered the sustainability impacts of the company’s business activities on a number of sustainability issues as well as the impacts of these issues on Fortum. The issues analysed were those found as the most important ones in Fortum's 2019 sustainability materiality assessment

Fortum’s sustainability priorities are presented in the table below.

Climate and resources Personnel and society
Climate change and GHG emissions Employee wellbeing, health and safety
Emissions to air, land and water Business ethics and compliance
Energy efficiency Corporate Governance
Security of supply Labour rights
Water use Human rights
Biodiversity Diversity and equal opportunity
Circular ecomony Innovation and digitaisation
  Stakeholder engagement
  Economic value creation
  Customer rights and satisfaction

Continuously improving our performance

Fortum wants to excel in sustainability. The Group-level sustainability targets are linked to the main sustainability focus areas and affect every Fortum employee. Targets are set annually and are based on continuous operational improvement. The achievement of the sustainability targets is monitored in monthly, quarterly and annual reporting.

Fortum’s new strategy drives the clean energy transition forward. We have committed to the carbon-neutral (Scope 1, 2 and 3) target globally, in line with the goals of the Paris Agreement, by 2050 at the latest, and in our European generation (Scope 1 and 2) by 2035 at the latest. By 2030, Fortum will phase-out or exit about 8 GW of coal-fired power generation. Our target is to build 1.5–2 GW of new renewable energy capacity by 2025, primarily in Europe. Fortum set also a new biodiversity target, addressing the year 2021. We aim at conducting a minimum of 12 major voluntary measures that improve the living conditions of species and strengthen populations.

Safety-related targets are part of Fortum’s incentive plans. The Group’s new safety target is measured as Total Recordable Injury Frequency (TRIF), for own personnel and contractors, and our ambitious goal is to be below 1.0 by the end of 2025. We also understand that diversity and inclusion are key to long-term success as a company in all our markets. Fortum’s target is to comply with the principles issued in the Finnish Government Resolution on equal gender representation in the boards of listed companies with the aim of the board consisting of at least 40% of women and men each by 2020. In accordance with the German “Law on Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector,” Uniper has set a target for women to account for 25% of its high-level executives by June 2022.

Climate and resources targets

Climate

  • Reduction of CO2 emissions (Scope 1 and 2) in European generation by at least 50% by 2030 (compared to base-year 2019)
  • Carbon neutral (Scope 1 and 2) in European generation by 2035 at the latest
  • Carbon neutral globally (Scope 1, 2, and 3 greenhouse gas, GHG, emissions) in line with the goals of the Paris Agreement, by 2050 at the latest

Biodiversity

  • Number of major voluntary measures enhancing biodiversity ≥12 in 2021

Personnel and society

Safety:

  • Total Recordable Injury Frequency (TRIF) <1.0 by the end of 2025

Gender equality:

  • Fortum, excluding Uniper: Board consisting of at least 40% of women and men each by 2020, in compliance with the principles issued in the Finnish Government Resolution.
  • Uniper: women to account for 25% of top executives by June 2022

Sustainability indices and ratings

Fortum is ranked in category A- in the CDP Climate Change 2020 rating, and Uniper in category B. In the MSCI ESG Ratings 2020 assessment, Fortum, excluding Uniper, received a “BBB” rating and Uniper a “BB” rating. Both companies have also participated in the 2020 rating by ISS ESG Corporate Rating, where Fortum, excluding Uniper, received a “Prime Status (B-)” rating and Uniper a “Medium C” rating. In addition, Fortum, excluding Uniper, is listed on the Nasdaq Helsinki exchange and is included in the STOXX Global ESG Leaders, OMX Sustainability Finland, ECPI®, Euronext Vigeo Eurozone 120, and Euronext Vigeo Europe 120. Read more

Sustainability risks

Fortum’s operations are exposed to risks, which, if materialised, can have adverse effects on the environment and on the safety and security of employees, contractors and neighbouring societies. Key sustainability risks are presented in the Climate section in the Climate and resources review in the Sustainability Report.

Fortum takes into consideration the climate-related transition risks of potential new businesses, investments and technologies. Fortum’s operations are also exposed to physical risks caused by climate change, including changes in weather patterns that could alter energy production volumes and energy demand. Fortum adapts its operations to the changing climate and takes it into consideration, for example, in evaluating growth and investment projects and in operation and maintenance planning.

Fortum believes that the growing awareness and concern about climate change will increase the demand for low-carbon and resource- and energy-efficient energy products and services. Fortum's circular economy services also respond to this demand by utilising waste stream materials as efficiently as possible.

Sustainability governance and management

Sustainability management at Fortum is strategy-driven and is based on the company’s values, the Code of Conduct, the Supplier Code of Conduct, the Sustainability Policy and other policies and their specifying instructions defined at the Group level. As sustainability is an integral part of Fortum’s strategy and operations, the highest decision making on sustainability and climate-related matters falls on the duties of the Board of Directors, who share joint responsibility for these matters.

The Fortum Executive Management decides on the sustainability approach and Group-level sustainability targets that guide annual planning. The targets are ultimately approved by Fortum’s Board of Directors. Fortum Executive Management monitors the achievement of the targets in its monthly meetings and in quarterly performance reviews. The achievement of the targets is regularly reported also to Fortum’s Board of Directors. Fortum’s line management is responsible for the implementation of the Group’s policies and instructions and for day-to-day sustainability management. Realisation of the safety targets is a part of Fortum’s short-term incentive programme. Fortum’s long-term incentive programme for key employees and executives includes a climate-related metric. In the 2020–2022 plan, the target is related to the reduction of Fortum’s CO2 emissions aligned with Fortum’s strategy. Fortum’s Corporate Sustainability unit is responsible for coordination and development of sustainability at the Group level and for maintaining an adequate situation awareness and oversight regarding sustainability.

Fortum is a participant of the UN Global Compact initiative and the UN Caring for Climate initiative. Fortum respects and supports the International Bill of Human Rights, the United Nations Convention on the Rights of the Child, and the core conventions of the International Labour Organisation (ILO). Additionally, Fortum recognises in its operations the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises and OECD Due Diligence Guidance for Responsible Business Conduct, the International Chamber of Commerce’s anti-bribery and anti-corruption guidelines, and the Bettercoal initiative’s Code on responsible coal mining.

Business ethics

The Fortum Code of Conduct and Fortum Supplier Code of Conduct define how we treat others, engage in business, safeguard our corporate assets, and how Fortum expects our suppliers and business partners to operate. Fortum’s Board of Directors is responsible for the company’s mission and values and has approved the Fortum Code of Conduct. Fortum has zero tolerance for corruption and fraud and does not award donations to political parties or political activities, religious organisations, authorities, municipalities or local administrations.

In addition to internal reporting channels, Fortum employees and partners can report suspicions of misconduct confidentially by using the “SpeakUp” channel on Fortum’s internal and external web pages.

Suspected misconduct and measures related to ethical business practices and compliance with regulations are regularly reported to the Audit and Risk Committee.

During 2020, one case of corruption or bribery was confirmed.

Paying taxes responsibly

We have local operations and tax contributions in more than 15 countries. We pay taxes always in the country where our business operations are located and where the added value is generated, in accordance with the local regulations.

The country-specific reporting of taxes has become an important topic in international and national public and political discussions. Fortum annually publishes country-by-country taxation its Tax footprint. Download Tax footprint 2020

We are exposed to changes in taxation and how local tax authorities interpret tax laws. We aim to identify simple and cost-efficient solutions supporting our business as a whole to manage taxes in a sustainable manner. Artificial or other aggressive solutions are not being used, and legality and honesty are highly valued.

Sustainability reporting

Fortum’s sustainability reporting covers all functions under Fortum’s operational control, including subsidiaries in all countries of operation. Read more about sustainability at Fortum in and in annual Sustainability Reports.

 

Sustainability report

Learn more about our sustainability performance in 2020

Environmental friendly

Sustainability at Fortum