Annual Report 2014 | Suomeksi |

Supplier environmental assessment

EN32 Percentage of new suppliers that were screened using environmental criteria

The assessment of our suppliers covers aspects related to environmental responsibility, labour practices and human rights. The assessment of suppliers is addressed as a whole in the section Supplier Assessment: Environment, labour practices and human rights.

EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken

The most significant environmental impacts of our supply chain are related mainly to fuels, particularly to coal and biomasses. We purchase fuels from international and local suppliers. We recognise that open-pit coal mining can be challenging in terms of environmental protection, and working conditions in underground mines can create occupational health and safety concerns. The acquisition of biomass involves environmental risks, such as illegal logging and loss of biodiversity, but there are also economical, social and reputational risks related to human rights, labour rights and land ownership. In 2014, we had 134 fuels suppliers, 11% of them operate in risk countries.

We started the sustainability-related supplier audits in 2012 and we have aimed to increase the number of audits every

year. In the audit, we assess the supplier's compliance with the requirements in Fortum's Supplier Code of Conduct. Audits are always done on-site and they include a production inspection, employee interviews, and a review of documents and records.

In 2014, we audited 14 suppliers (2013:13), around 70% of which operate in risk countries. Out of audited suppliers, only one non-conformity related to environmental issues was found. The supplier has made a corrective action plan and we are monitoring the implementation of it.

We are member of the Bettercoal initiative, and we use the Bettercoal Code and tools in assessing the sustainability of the coal supply chain. In 2014, a total of 14 coal suppliers conducted a self-assessment in line with the Bettercoal initiative and one mine was audited. At the end of the year, the approval of the self-assessment and auditing process of Fortum’s largest coal supplier was pending.

We have recognised the challenges related to the origin of biomass and other biofuels, and we are developing measures to verify the traceability and sustainability of the fuels. The verification system in use at Fortum’s Joensuu bio-oil plant integrated with power plant is approved for bio-oil production by the Energy Authority.

The joint venture Fortum Värme purchased biomass and bio-oil from Sweden, Finland, Russia, Brazil and Malaysia, among others. Fortum Värme conducted a total of nine audits of its own suppliers of biofuel and its biggest contractors. Fortum Värme is a participant in the WWF Global Forest & Trade Network (GFTN) through GFTN Sweden and became a member of the Forest Stewardship Council (FSC) in 2012. Additionally, Fortum Värme has been a member of the Roundtable of Sustainable Palm Oil (RSPO) since 2005 and in 2014 became a member of the Roundtable of Responsible Soy organisation.


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