Responsible and sustainable business practices are a strategic choice for Fingrid. Responsibility is one of our values. We take care of people and the environmental impacts of our operations, and comply with good governance practices while securing a reliable supply of electricity for everyone in Finland and enabling the achievement of climate goals. In particular, through our operations we promote the UN’s global Sustainable Development Goals (SDGs) related to climate actions, energy and infrastructure.
The starting point for Fingrid’s responsibility and sustainability work is our strategy where responsibility is an integrated goal and a corporate-level strategic choice. Corporate responsibility and compliance management is integrated with Fingrid’s management system and risk management practices.
Fingrid’s Board of Directors approves the company’s Code of Conduct and monitors compliance in operating responsibly. Furthermore, the Board is in charge of arranging corporate responsibility management and its integration into business operations.
The CEO and the heads of functions are each responsible for compliance management and corporate responsibility issues within their areas of responsibility. Alongside profitability, social issues and environmental impacts are taken into account in a well-balanced way in decision-making and when assessing operations. The Compliance and Responsibility team, which was reorganised in 2018, handles the corporate-level development and reporting. The General Counsel oversees the activities of the team. An appointed development manager is in charge of co-ordinating corporate responsibility reporting.
We have recognised the key issues in terms of accomplishing Fingrid’s strategy and functioning daily business. Any need to update the materiality analysis is assessed annually, and the Executive Management Group reviews such needs as part of the strategy process. All the requirements affecting the value chain, the strong link between corporate responsibility and the strategy, and Fingrid’s value creation capabilities are accounted for in this process. No changes in the materiality analysis were identified in 2018.
The issues essential for Fingrid were as follows:
- Success in the company’s mission, which is vital to society
- Safety and security
- Procurement practices
- Stakeholders’ trust
- Financial result
- Code of Conduct
- Caring for the working community
Our goal is for Fingrid’s personnel to be known in their day-to-day work for their responsible operating methods, which are developed continuously in the company. Responsibility is reflected in the level of Fingrid’s personnel satisfaction and commitment, in positive feedback from customers and stakeholders, in responsible purchasing practices and responsibility audits, and in honouring tax liabilities. In 2017, Fingrid was Finland’s 17th largest corporate income tax payer. We improve occupational safety in many ways and offset the climate and environmental impacts of our operations, from planning to maintenance, according to the principle of precautionary action.
Fingrid’s work is highly meaningful and our operations create value for Finnish society as a whole by securing highly reliable electricity transmission, a vital service for a well-functioning society. Through our affordable and stable grid fees we help promote Finland’s economic competitiveness. Even in the energy transformation, we have a key mission in ensuring that the grid and electricity markets enable effective action to combat climate change. We have set targets for the key issues in Fingrid’s operations and corporate responsibility, and here we give a summarised account of how they have been accomplished. More examples of our responsibility and sustainability are available in our annual report, which applies integrated reporting principles.
Every Fingrid employee makes a commitment to work in compliance with our Code of Conduct, which is based on the United Nations’ Global Compact initiative and the principles guiding business operations and human rights. Fingrid is committed to the UN Global Compact initiative’s principles on human rights, labour, the environment and anti-corruption. This strengthens the strategic and operational integration of corporate social responsibility in our operating methods and supports the co-operation with our agreement partners in promoting sustainable development and corporate responsibility.
Under our Code of Conduct, we are committed to respecting people and human rights. To ensure that we understand our impacts on human rights, we have carried out an assessment in compliance with the due diligence process recommended in the UN’s Guiding Principles on Business and Human Rights, and we update our action plan annually.
Our managers and the entire work community ensure compliance with the Code of Conduct. We require that all new employees, as well as the entire personnel, commit to completing our online induction course on the Code of Conduct. The online course was updated in 2018. The updated online training takes into account the new General Data Protection Regulation, and data security was one of the topics in internal audits, in addition to compliance management issues. A confidential reporting channel managed by an independent third party is available to employees who suspect a breach of the Code of Conduct. Preparations were made during the year to make the reporting channel available to external stakeholders as well. We achieved an excellent AAA rating in a survey where our personnel assessed the sustainability of our ways of operating.
Responsible procurement practices are impactful in Fingrid’s outsourcing-based business model. We also require all contractors to comply with Fingrid’s Supplier Code of Conduct, and we monitor their compliance based on risk assessments. Fingrid is prepared to commit, through similar principles, to the corporate responsibility requirements set by contractual partners.
Grid infrastructure construction and maintenance is subject to competitive bidding, and our work sites around Finland employ a competent workforce also from abroad. We ensure that we meet our obligations to investigate and our responsibility when using an external workforce. During the year, we developed our processes by securing compliance with social obligations for new suppliers according to the public procurement procedure applied to special sectors, such as criminal register data, and by implementing continuous monitoring of international sanctions. We audited ten of our work sites to verify compliance with contractor obligations, occupational safety and environmental management. The audits revealed that operations and induction at the work sites are generally on a good level and continuously improving. We additionally introduced an external service for monitoring the payroll and employment issues of foreign workforce.
To ensure compliance with the Supplier Code of Conduct in international goods sourcing, we audited 15 production plants in seven countries through a third-party auditor. Follow-up audits were also carried out. The audited companies included both Fingrid’s direct contractual partners and their suppliers. The deviations mainly concerned fire safety, working hours, payroll practices and management systems. The shortcomings were addressed collaboratively according to the related action plans. Our experts observed occupational safety and working conditions also in connection with technical factory tests.
Reporting on corporate responsibility is one of the topics in Fingrid’s annual report, in compliance with the principles of integrated reporting. To ensure transparency and comparability, our reporting has complied with the international Global Reporting Initiative (GRI) framework since 2011. Our reported data is compiled in a GRI Content Index. We also take into account the requirements for corporate responsibility reporting by state-owned companies and ESG reporting guidance for stock exchanges. The annual report stands for a Communication on Progress (COP) report in compliance with the UN’s Global Compact initiative. The Report of the Board of Directors includes also non-financial information. The corporate responsibility reporting for 2018 was verified by a third party.
Net impact assessment shows that Fingrid’s operations have significant positive impacts on society and the climate
One of the most debated topics in corporate responsibility is value creation. It attracts a lot of interest from boards of directors, investors and other stakeholders alike. The value created by a company and maintaining it in the future are parameters often gauged visually, but they can more and more often also be evaluated numerically.
Together with Upright Oy, we carried out an exercise to evaluate the added value Fingrid creates for society, in other words our net impact, using data from 2017. Upright’s model evaluated the positive and negative impacts of Fingrid’s operations in four dimensions: the environment, health, society and information. The data for the key impacts was processed into so-called impact units to achieve comparability. The purpose of this approach is to create an understanding of the scale of the various impacts, instead of accurately gauging individual impacts.
According to the net impact analysis, Fingrid creates significant positive impacts on climate and society. The evaluation of the environmental and climate dimension shows that the positive impact of Fingrid’s operations clearly outweigh the resulting environmental harm, as the electricity transmission grid provides a platform for a clean power system. The positive impact resulting from the grid’s enabling role in clean power production and consumption clearly exceeds the harm to biodiversity and people caused by the transmission lines and Fingrid’s own greenhouse gas emissions.
When evaluating the social dimension, Fingrid also creates a significant positive impact by enabling electricity supply at market prices and by ensuring the system security of the Finnish power system. Well-functioning electricity markets and cross-border connections ensure effective price formation for electricity. High system security of the grid helps to avoid financial losses. System security is vital to a society that is dependent on a large supply of electricity, a fact that is further highlighted by the increasing electrification of our society in the future.
The information dimension of Fingrid’s operations is also highly significant, as data on the electricity markets and the power system becomes openly available and free of charge to citizens and various operators in society. This enables the development of new and innovative digital solutions. Datahub, the centralised information exchange solution for retail markets, offers quality information exchange services, provides a platform for future innovations, and enables a development leap in the retail markets for electricity.