Supply chain management

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 2016 was EUR 2.5 (2015: 2.2) billion. Fuel purchases, investments, and electricity purchased by the Electricity Sales business area from the Nordic wholesale electricity market for retail sales accounted for most Fortum’s purchases.

Fortum’s fuel purchases in 2016 totalled EUR 531 (2015: 567) million. Of our purchases, EUR 599 (2015: 527) million targeted various investments. The biggest investments, EUR 214 million, were made in Russia. The rest of our purchases, EUR 1.4 (2015: 1.1) billion, consist of other goods and services. 

Sustainable fuel purchasing 

The most significant environmental impacts of our supply chain are related mainly to fuels, particularly to coal and biomasses. There are significant environmental aspects associated with open-pit coal mining, including natural resource efficiency, emissions to air, water and soil, and impacts on biodiversity. Significant occupational health and safety risks can be related to working in underground mines. The sustainability aspects of biomass sourcing are related primarily to biodiversity, but risks particularly outside the EU can also include, for instance, illegal logging or human rights violations. In fuel purchasing, special attention is paid to the origin of the fuel and to responsible production.

Sustainable supply chain

We expect our business partners to act responsibly and to comply with the Fortum Code of Conduct and the Supplier Code of Conduct. Fortum’s key tools in supply chain management are country and counterparty risk assessments, pre-selection of suppliers and supplier audits.

In supplier audits, we assess the supplier’s compliance with the requirements in Fortum’s Supplier Code of Conduct. During the year, we audited a total of 13 (2015: 9) suppliers in China, India, Russia, Poland, Latvia, Lithuania and Finland.