Fortum highlights the importance of decarbonisation and climate change mitigation, while at the same time the necessity to secure reliable and affordable energy for all. Fortum also gives balanced consideration in its operations to the promotion of energy efficiency and a circular economy, as well as its impacts on personnel and societies.
Based on a materiality analysis, Fortum’s sustainability priority areas are:
| Climate and resources | Personnel and society | Governance |
|---|---|---|
| Biodiversity | Corporate citizenship | Business ethics and compliance |
| Circular economy and waste management | Diversity, equity and inclusion | Corporate Governance |
| Climate change and GHG emissions | Fair and attractive employer | Customer rights and satisfaction |
| Emissions to air, land and water | Health, safety and | Innovation and digitalisation |
| Energy efficiency | Human rights and supply chains | Shared value creation |
| Secure and affordable energy supply | Just transition | |
| Water use and optimisation | Stakeholder engagement |
Our targets:
Environmental targets:
SBTi 1.5.C
- Emission reduction according to SBTi 1.5 C trajectory. This commitment assumes full exit from Russia.
- Target for specific emissions at below 20g CO2/kWh for total energy production and at below 10g CO2/kWh for power generation by 2028.
Carbon neutrality by 2030 (all Scopes 1, 2 and 3)
- Coal exit in our own operations by the end of 2027
Biodiversity
- No net loss of biodiversity from existing and new operations in Scopes 1 and 2 from 2030 onwards, excluding all aquatic impacts.
- 50% reduction in dynamic terrestrial impacts in upstream Scope 3 by 2030 compared to 2021
- Commitment to continue local initiatives and develop science-based methodology with partners to assess the aquatic impacts of hydropower during 2023.
Personnel and society
Safety:
- Total Recordable Injury Frequency (TRIF), for own personnel and contractors, <1.0 by the end of 2030
- No severe or fatal injuries
- 95% execution rate for the safety leadership training in 2023
- 60% execution rate for safety improvement plans in 2023
Diversity in focus
We value diversity and foster fair treatment and equal opportunity in the recruitment, remuneration, development and advancement of employees, regardless of ethnicity, religion, political opinion, gender, age, national origin, language, sexual orientation, marital status, disability, or any other factor. Discrimination or unfair treatment is not tolerated, and we address it immediately.
Sustainability indices and ratings
Fortum received a score of “B“ in the CDP Climate Change 2022 rating. In the MSCI ESG Ratings assessment, Fortum received a “BBB” rating in 2021. Fortum has also participated in the ISS ESG Corporate Rating in 2022, where Fortum received a “Prime B-” rating. In 2022, Fortum was awarded Gold EcoVadis Medal. In 2022, Fortum has also been rated 62 points out of a maximum 100 points by Moody’s ESG Solutions. In addition, Fortum is listed on the Nasdaq Helsinki exchange and is included in the STOXX Global ESG Leaders, OMX Sustainability Finland, and ECPI® indices. Fortum has been certified as a Nasdaq’s ESG Transparency Partner.
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, including climate-related risks, are reported to Fortum Executive Management and the Audit and Risk Committee as part of the annual review of material risks and uncertainties for Fortum. Fortum’s risks are presented in the Risk management section in the Operating and Financial Review.
Climate change and the need for decarbonisation and resource efficiency are changing the energy industry in a profound way, and these changes also create new business opportunities for Fortum. As such, Fortum is well positioned to capture opportunities resulting from the energy transition, aimed at curbing climate change. The energy transition requires not only renewables but increasingly also energy storage and other flexible solutions to provide security of supply and to decarbonise industry, transportation, heating and cooling. Building on our strengths, our future will be driven by CO2-free power generation, sustainably transforming our own operations to become carbon neutral and engaging customers and society to decarbonise.
Sustainability governance and policies
Fortum Executive Management decides on the sustainability approach and Group-level sustainability targets that guide annual planning. The Group’s performance targets, including sustainability and climaterelated targets, are approved by Fortum’s Board of Directors. Fortum’s line management is responsible for the implementation of Fortum’s policies and instructions and for day-to-day sustainability management and improvement plans. Fortum’s short-term incentive (STI) programme, applicable to all employees, includes safety as one element. In the 2022 STI programme, the safety target contains the following elements: severity rate per Total Recordable Injuries (TRI) of own employees and contractors combined, the execution rate of Safety Leadership Training, and the execution rate of safety eLearning. Fortum’s long-term incentive (LTI) programmes includes a climate-related metric. In the 2021–2023 LTI plan, the target is linked to the reduction of Fortum’s coal-based power generation capacity in line with Fortum’s coal-exit path, with a minimum level requiring exceeding the communicated ambition level. In the 2022–2024 LTI plan is related to the reduction of the absolute CO2 emissions in the European fossil fleet, based on a fossil fleet review addressing the Group’s European generation portfolio and a pathway developed to reach Fortum Group’s 2030 and 2035 climate targets. Targets of both LTI plans were adjusted in early 2023 due to the divestment of Uniper. In the 2023–2025 LTI plan, the ESG target is linked to emission reduction targets based on the climate science (SBTi 1.5°C) and related to emissions in Europe, and Fortum’s reputation index development among key stakeholders. The relative TSR measured against a peer group of European utilities remains as a measure in the plan. Sustainability management at Fortum is strategy-driven and based on the company’s Values, Code of Conduct, Supplier Code of Conduct, sustainability-related policies, and other Group policies and their specifying instructions. The Code of Conduct establishes the basic principles of conduct that everyone must follow. The Code defines how we treat each other, do business, and engage with the world. The Supplier Code of Conduct, based on the ten principles of the UN Global Compact, outlines the requirements for Fortum’s suppliers and business partners. Fortum follows and respects 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). Fortum also recognises in its operations the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, the International Chamber of Commerce’s anti-bribery and anti-corruption guidelines, and the Bettercoal initiative’s Code on responsible coal mining. Fortum is a participant of the UN Global Compact initiative and the UN Caring for Climate initiative.
Business ethics
Zero tolerance for corruption and bribery is highlighted in Fortum’s Code of Conduct and Supplier Code of Conduct. In addition, separate instructions and guidelines have been created to address various topics, including but not limited to anti-bribery, compliance management, safeguarding company assets, conflict of interest, anti-money laundering, economic sanctions and competition law. Fortum’s Board of Directors has approved the company’s Code of Conduct and Supplier Code of Conduct. The Codes of Conduct are regularly reviewed in order to ensure compliance with evolving company and regulatory requirements. The latest revision of Fortum’s Code of Conduct and Supplier Code of Conduct took place in 2021.The Code of Conduct online training is mandatory for all employees. In addition, relevant individuals are regularly trained in policies and systems that help to prevent corruption. Internal and external reporting channels are offered for reporting suspicions of misconduct. The channels are described in the Code of Conduct and accessible on the company’s internal and external webpages. Suspected misconduct and measures related to ethical business practices and compliance with regulations are regularly monitored and assessed by Fortum’s Audit and Risk Committee. No new cases of corruption or bribery were confirmed in Fortum’s operations in 2022. One case was under investigation at year-end.
Fortum’s approach to taxation – our principles for responsible tax
One of the ways Fortum companies contribute to societies is by paying taxes in countries where we operate according to the local rules and regulations.
Fortum publishes Tax Footprint annually and or the first time a Country-by-Country Tax Report for the year 2022.
Sustainability reporting
Fortum’s sustainability reporting covers all functions under Fortum’s operational control, including subsidiaries in all countries of operation. Fortum’s TCFD (the Task Force on Climate-related Financial Disclosures) report is included in the Sustainability report. The non-financial reporting, in line with the Accounting Act, is included in the Operating and Financial Review in the Financials. Read more about sustainability at Fortum's sustainability pages in and in annual Sustainability Reports.