Annual Report 2014 | Suomeksi |

Ethics and integrity

We believe there is a clear connection between high standards of ethical business practices and excellent financial results. As an industry leader, we go beyond simply obeying the law: we embrace the spirit of integrity and uphold the highest standards of ethical business conduct wherever we operate. The Fortum Code of Conduct and Fortum Supplier Code of Conduct articulate that spirit by defining how we treat others, engage in business, and safeguard our corporate assets, and what we expect from our suppliers and business partners.

Fortum’s Board of Directors is responsible for the company’s

mission and values and has approved the Fortum Code of Conduct. The Supplier Code of Conduct, based on the 10 principles of the UN Global Compact, has been approved by the Head of Procurement and purchasing steering group.

Compliance risks are managed as part of Fortum's operational risk management framework and control procedures . This process also includes risks related to sustainability and business ethics. A systematic compliance risk assessment is included in the annual business planning process, and follow-up is a part of the quarterly performance review. Line management regularly reports on the business ethical compliance activities to the Fortum Executive Management Team and further to the Audit and Risk Committee.

Fortum’s compliance process includes a grievance mechanism. The same mechanism is used for reporting any suspected misconduct relating to the environment, labour practices, decent work or human rights violations. “The Raise a concern” channel is available for all stakeholders and may

also be used by suppliers and partners to report cases of suspected misconduct related to the procurement process. In Russia, Fortum has a separate compliance organisation in place and employees are encouraged to use the channels provided by the compliance organisation. They may, however, also use the “Raise a concern” channel should they so wish.

In 2014, altogether 225 concerns were raised. The vast majority of the concerns, 197, were received via the channels provided in Russia. During the reporting period, 113 cases led to an investigation and 98 investigations were closed. At the end of the year, there were 15 investigations ongoing, 11 of which in Russia. Two concerns by suppliers were raised via the “Raise a concern” channel. Both were related to a possible conflict of interest; the investigations were still ongoing at year-end.

Roughly half of the investigated cases were related to non-compliance either with company rules or with laws and regulations. In these cases, corrective action was taken by

reviewing and developing existing processes and instructions and by providing training to employees. Fortum has zero tolerance towards alcohol and drug use. Some 19% of the cases were related to alcohol abuse during working hours. As the result of the investigations, nine employment contracts were terminated either by immediate dismissal or by mutual agreement, and 11 written warnings were given. The number of cases reported to police was 4; these have advanced to court proceedings. In 23 of the cases investigated, there was no cause for actions to be taken.

No cases of suspected corruption or bribery were detected in 2014. At the end of 2014, the local district court in Sweden issued a decision on a matter that was reported in Fortum’s Sustainability Report 2013, relating to a possible malpractice of a person employed by the joint venture Fortum Värme. The person was found guilty of accepting bribes and condemned to conditional imprisonment and fines. The parties have appealed the decision. The employment contract was terminated in 2013. In addition, a suspected case of

bribery targeting a former Fortum employee and originating from the year 2006 is due in court in Sweden in March 2015. The employment contract was terminated in 2006.

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