We responsibly take care of people and environmental impacts and comply with good governance practices while securing a reliable supply of electricity for everyone in Finland and building the clean power system of the future. For us, responsibility is a team effort, which requires the commitment of the entire personnel and the participation of our business partners.
We have recognised the key topics in terms of accomplishing Fingrid’s strategy and functioning daily business and set goals for them. We promote through our operations particularly the UN’s global Sustainable Development Goals (SDGs) related to climate actions, energy and infrastructure. A summary of the achievement of our goals is reported in the section Strategy and management system. In 2019, we updated our materiality analysis, highlighting Fingrid’s and the main grid’s key role in achieving Finland’s climate goals. The executive management group reviewed the need for an update as part of the strategy process and took into account the entire value chain, corporate responsibility’s strong link with the strategy and business and Fingrid’s ability to create value.
Image: Fingrid’s material corporate responsibility topics
During the year under review, we developed responsible business practices and sustainable development through many small and large actions. The personnel’s well-being was reflected in the upbeat chatter in the hallways and the low number of absences due to illness. Also, the results of the personnel survey support our observations. We highlighted the importance of people’s diversity in our operating methods and organisational culture. We were given responsibility and freedom in terms of when, where and how we performed our work. We also received international recognition for building a good place to work, i.e. the Great Place to Work® certification, which proves our personnel trust and feel that many things in our work community are good. The grade for responsible operations in the personnel survey was high, at 90 per cent.
Safety and security were highlighted in everything we do and we created a safety culture together with our contractors and service providers. We reduced the environmental impacts in accordance with our land use and environmental policy and the precautionary principle, by taking protected natural sites into account starting with project planning and by taking care of work sites’ material efficiency and chemical safety. From an environmental and climate viewpoint, we simultaneously created a significant positive impact by building, based on our investment programme, a strong main grid, to enable clean electricity to flow freely and to help Finland achieve its climate goals. A reliable main grid is a condition for a functioning society and indications of our success in this task are, in addition to high system security, our excellent ranking in the International Transmission Asset Management Study (ITAMS) and the ISO 55001 certification for the management of physical assets carried out in 2019. A summary of the value created by Fingrid through its business is available here. Corporate safety & security was a focus of the internal audit, as were crisis communications, use of the procurement system and the administration process for Datahub. We also established an internal data protection group.
In procurements we set sustainability requirements related to human rights, working life, occupational safety, environmental issues and anti-corruption in accordance with the United Nations’ Global Compact. We verified compliance with sustainability requirements through dozens of risk-based audits. As part of the procurement process, we checked regularly that elected suppliers are not subject to mandatory exclusion criteria based on procurement legislation for special sectors or international sanctions. Following a competitive tendering process, expert, outsourced workforce, including from abroad, were employed on the grid’s work and maintenance sites in various parts of Finland. Nine work sites were audited to verify compliance with contractor obligations, occupational safety and environmental management. Special attention was paid to risk assessments, safety plans for specific work phases and the use of chemical safety data sheets already during induction. In addition, key foreign subcontractors from the Baltics and Poland, as well as the cleaning service company used by the company, were audited by a third party, focussing especially on employment matters and wages. In international goods sourcing, third-party supplier audits were carried out at 20 production plants in a total of 11 countries, and three follow-up audits were carried out in order to rectify any observed non-compliances. The audits covered both Fingrid’s direct contractual partners and their suppliers. Deviations were largely linked to occupational health and safety, management systems, working hours and payroll practices. We interrupted procurements from one supplier and required measures for the co-operation to continue. Our experts also observed occupational safety and working conditions in connection with technical factory tests.
Image: Audits of international goods procurement by country and distribution of findings
To ensure our understanding of 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 also updated our action plan in 2019. We built trust and co-operated in our basic task with numerous transmission line right-of-way neighbours, authorities, customers and many other stakeholders. When looking for a route for a transmission line required for the energy and climate transition, we end up on land owned by someone else. From the very start of a project, we involve landowners and, for example, when we began the environmental impact assessment for the Huittinen-Forssa transmission line project, we sent more than 400 letters to landowners, and using the feedback, updated the route options to be reviewed in the environmental impact assessment. We also encouraged and supported the use of power line right-of-ways for the benefit of people and nature, for example, as a heritage habitat or wetland to increase biodiversity.
In our societally important core mission and as a natural monopoly, sustainable and responsible finances are important. The Council of European Energy Regulators’ (CEER) benchmarking study placed us among the most cost-effective TSOs in Europe in 2020 and electricity transmission prices will remain at their current level in 2020. The section Financial result 2019 contains our account of our tax footprint. Dividends are mainly paid to the State of Finland and to Finnish pension insurance and insurance companies.
During the year under review, climate change and sustainable financing were key issues on legislators’ and investors’ agenda. The new Government Programme contains, in addition to carbon neutrality, corporate responsibility entries on the development of binding corporate responsibility regulation and an analysis of EU-level corporate social responsibility legislation based on due diligence. At Fingrid, we developed our climate calculations and reporting and reported on the economic risks and opportunities of climate change for the first time in our new Task Force on Climate-related Financial Disclosure (TCFD) fact sheet. Our corporate responsibility reporting as a whole is integrated into Fingrid’s annual report. To ensure transparency and comparability, we report in accordance with the international Global Reporting Initiative (GRI) framework. The GRI Content Index compiles our reported sustainability data and provides links to the data’s location. The Report of the Board of Directors also includes non-financial information. The corporate responsibility reporting for 2019 was assured externally.
Corporate responsibility and compliance management is integrated with Fingrid’s management system and risk management practices. The starting point is Fingrid’s strategy where responsibility is a corporate-level strategic choice and one of the company’s values. According to Fingrid’s vision, the company and its employees are known for their responsible business practices. Fingrid’s Board of Directors approves the company’s Code of Conduct, monitors the responsibility of operations and ensures that corporate responsibility management is integrated into business operations. Corporate responsibility is reported on to the Board of Directors over the course of the year as required and separately in an aggregate form once a year. Corporate responsibility aspects are also included in the Board of Directors’ decision-making process when making decisions about, for example, investments. The President & CEO and the heads of functions are each responsible for compliance management and corporate responsibility issues within their areas of responsibility. The executive management group regularly reviews corporate responsibility issues, and alongside profitability, social issues and environmental impacts are taken into account in a balanced manner in decision-making. Responsibility impacts the remuneration of the President & CEO and the company executives and in 2019 responsibility was linked even more closely to the remuneration of executives. The Compliance and Responsibility Team headed by the company’s general counsel is responsible for company-level development and reporting and an appointed development manager is responsible for coordination.
Every Fingrid employee makes a commitment to comply with our Code of Conduct, which is based on the United Nations’ Global Compact initiative and the principles guiding business operations and human rights. During the year under review, we drew up ethical principles for the use of artificial intelligence and participated in a corporate AI ethics challenge. Our managers and the entire work community ensured that behaviour is in line with the Code of Conduct, relying also on online training. We also implemented online training for the whole personnel on corporate responsibility. A confidential and independent reporting channel was in place for reporting suspected breaches against the Code of Conduct. We improved its accessibility for external stakeholders by increasing the reporting channel’s visibility on our website and by promoting awareness of security and safety and the importance of reporting suspected misconduct among our suppliers. In 2019, no breaches of anti-competition laws, complaints related to the privacy of private individuals, corruption incidents, human rights violations or discrimination incidents occurred in Fingrid’s operations.
Image: United Nations Global Compact emblem