Annual Report 2014 | Suomeksi |

Sustainability a part of the strategy

Competitiveness, security of supply and market-driven production enable long-term profitable growth. A company that is financially strong is able to shoulder its responsibility for the environment, take care of its personnel, oversee its supply chain, meet the expectations of customers and provide excellent value to its shareholders. At the same time it can develop sustainable energy solutions that benefit all of society.

Sustainability targets

The Fortum Executive Management Team decides on Fortum’s sustainability approach and Group-level sustainability targets that guide annual planning. The targets and the desired performance level are reviewed annually and are ultimately approved by Fortum’s Board of Directors. The Fortum Executive Management Team monitors the achievement of the targets in its monthly meetings and in quarterly performance reviews. The achievement of the targets is regularly reported also to Fortum’s Board of Directors. Sustainability targets affect every Fortum employee and are part of Fortum’s short-term incentive (STI) scheme. Fortum’s Board of Directors annually decides on the sustainability targets to be included in the incentive scheme. In 2014 the incentive scheme included an index measuring lost workday injury frequency for Fortum employees and for contractors, the number of major environmental, health and safety non-compliances (EHS non-compliances), and Fortum’s ability to improve its performance in the Dow Jones Sustainability Assessment.

One of Fortum’s targets for 2015 is to reduce the number of serious injuries by half. Therefore, Fortum’s Board of Directors has for 2015 approved for inclusion in the short-term incentive scheme an index measuring the number of serious injuries in addition to the issues measured the previous year. In 2015, the weight of the sustainability index in the STI is 20% (2014: 20%).

In these we succeeded: Success in customer satisfaction and employee safety

Group sustainability targets and performance in 2013‑2014
Target for the year 2014 Status at the end of 2014 Status at the end of 2013 Remarks
Reputation index Target result 70.8 in One Fortum Survey 70.4 69.8
Customer satisfaction index (CSI) CSI divisional scores at level “good” (70‑74) in One Fortum Survey 67‑77 61‑77 Customer satisfaction improved in 4 out of 5 customer segments. Power Solutions and Heat business areas achieved the target.
Environmental responsibility
Specific CO2 emissions
Electricity production in the EU < 80 g/kWh, 5‑year average 60 g/kWh 60 g/kWh Emissions in 2014 were 39 (2013: 64) g/kWh.
Total production (electricity & heat, all countries) < 200 g/kWh, 5‑year average 198 g/kWh 197 g/kWh Emissions in 2014 were 189 (2013: 204) g/kWh. 5‑year average has been increasing since 2008.
Energy efficiency
Total efficiency of combustion
(Definition: produced energy divided by the primary energy of fuel)
> 70%, 5‑year average 63% 64% Efficiency in 2014 was 64% (2013: 59%). 5‑year average has been decreasing since 2008.
Major EHS incidents < 35 Fortum‑wide 27 35
(Fires, leaks, explosions, INES1) events exceeding level 0, dam safety incidents, environmental non‑compliances)
Social responsibility
Security of supply
SAIDI2) < 100 minutes 97 minutes 103 min
CHP plant energy availability > 95% 94.7% 94% In 2013, energy efficiency KPI was measured only for sites located in Europe. In 2014, the KPI covers whole Fortum.
Occupational safety
Lost workday injury frequency (LWIF)3), Fortum personnel < 1 1.0 1.0
Lost workday injury frequency (LWIF)3), contractors < 3.5 3.2 3.9
1) International Nuclear Event Scale
2) System Average Interruption Duration Index
3) LWIF = Lost workday injury frequency per one million working hours

In addition to Group-level targets approved by Fortum’s Board of Directors, Fortum also has division-level targets. These targets are monitored and are reported in the same way as the Group-level targets.

In terms of contractor safety, 2014 was a rough year. There were three fatal accidents involving our contractors’ employees: in Sweden, a subcontractor’s employee perished in the electricity distribution business, and another subcontractor’s employee at a hydropower plant; in Russia, a subcontractor’s employee perished at the Chelyabinsk power plant construction site. Additionally, two contractor employees perished in an accident at a construction site at Fortum Värme in Stockholm. Fortum Värme is no longer included within the sphere of Fortum Group’s target setting for 2014, so this accident is not seen in Fortum’s statistics. Immediate corrective measures were started after the accidents, and the measures will continue during 2015.


Other sustainability targets and related performance in 2013‑2014
Target 2014 2013
Occupational safety
Total recordable injury frequency (TRIF) 1), Fortum personnel < 3.0 2.0 2.5
Number of fatalities, Fortum personnel 0 0 0
Number of fatalities, contractors 0 3 1
Number of lost workday injuries, Fortum personnel 15 16
Number of lost workday injuries, contractors 35 54
Supply chain management
Supplier audits2) 15 23 13
1) TRIF = Total recordable injury frequency per one million working hours
2) Fortum and joint venture Fortum Värme conduct supplier audits with shared resources.

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Corporate sustainability targets for 2015

Fortum’s sustainability targets are based on the continuous improvement of operations. Targets for 2015 put even stronger emphasis on safe operations. In addition to lost workday injury frequency (LWIF), the frequency of injuries requiring medical attention, i.e. total recordable injury frequency (TRIF) for own personnel, was also included as a Group target. Our goal is also to reduce the number of serious injuries by half. In their operating plans for 2015, each division is required to include measures to ensure uncompromised compliance with the Group’s EHS guidelines and requirements.

In terms of energy efficiency, we decided to replace the old indicator measuring the efficiency of fossil fuel combustion with a new energy-efficiency index that takes into account all

production forms. Fortum’s new target is to achieve annual energy savings of >1,400 GWh by 2020 compared to 2012. This energy savings is equivalent to the annual heating demand of more than 75,000 households (18,500 kWh/household) or the annual energy production of more than two hundred 2.5 MW wind power plants.

To be improved: Contractor safety and our reputation in Sweden

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Corporate sustainability targets in 2015
Target
Reputation index Target result 70.8 in One Fortum Survey
Customer satisfaction index (CSI) CSI divisional scores at level “good” (70‑74) in One Fortum Survey
Environmental responsibility Target
Specific CO2 emissions
Electricity production in the EU < 80 g/kWh, 5‑year average
Total production (electricity & heat, all countries) < 200 g/kWh, 5‑year average
Energy efficiency
Energy efficiency improvement by 2020 as compared to 2012 > 1,400 GWh/a
Major EHS incidents ≤ 27
(Fires, leaks, explosions, INES1) > 0 events, dam safety incidents, environmental non‑compliances)
Social responsibility Target
Security of supply
CHP plant energy availability > 95%
Occupational safety
Total recordable injury frequency (TRIF)2), Fortum personnel ≤ 2.5
Lost workday injury frequency (LWIF)3), contractors ≤ 3.2
Number of serious accidents4) ≤ 8
1) International Nuclear Event Scale
2) TRIF = Total recordable injury frequency per one million working hours
3) LWIF = Lost workday injury frequency per one million working hours
4) Accidents leading to fatality, permanent injury or absence from work exceeding 30 days
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