Annual Report 2013 | Suomeksi |

Reporting principles

Fortum's Annual Report consists of four parts: Financials, Annual Review, Governance and Sustainability. The entire Annual Report will be published online in Finnish and English on Fortum's website.

Fortum as a company and key information on production capacity, customers, certified management systems and carbon dioxide emissions is described in the Annual Review.

The Sustainability Report reviews Fortum's operations in 2013 and also contains some information from January-February 2014. The 2012 Sustainability Report was published in March 2013, and the 2014 report will be published in March 2015.

The report is divided into four sections. The first section describes sustainability as part of Fortum's strategy. The second section focuses on Fortum's business value chain and the role of different production and distribution forms in it.

Fortum's key stakeholder groups and their expectations about Fortum's sustainability work are discussed in the third section. The standard disclosures of the Global Reporting Initiative (GRI) G3.1 Guidelines are presented in the fourth section.

Contact persons providing more information related to the report can be found on the contacts page.

Report scope and boundary

Reporting related to operations and management covers all functions under Fortum's control, including subsidiaries in all countries of operation. The consolidation includes the parent company Fortum Corporation and all the companies in which Fortum Corporation has the power to govern the financial and operating policies and in which it generally holds, directly or indirectly, more than 50% of the voting rights. Possible

deviations to this principle are reported in conjunction with information applying different boundaries.

The reporting of management practices does not fully cover Fortum's minority ownerships, and thus the defining of the scope of reporting is not fully compliant with the GRI Boundary Protocol. According to the GRI Boundary Protocol, entities with 50% ownership or less and with significant sustainability impacts should be included in the management approach disclosures. In Fortum's case, management practices of the Olkiluoto nuclear power plant (26% ownership), Kemijoki Oy (18% ownership in equity capital, 64% ownership in hydropower shares) and Turun Seudun Maakaasu ja Energiantuotanto Oy (49.5% ownership) in Finland and the management practices of the Forsmark (26% ownership) and Oskarshamn (46% ownership) nuclear power plants in Sweden are excluded from the reporting.

Information from previous years is presented as pro forma information, i.e., presented on the basis of the organisation and the functions of each year; the impacts of ownership changes in production facilities, for example, have not been updated afterwards in the previous key indicators.

Capacity changes

New and acquired capacity

Four new CHP plants were inaugurated in 2013: Järvenpää (Finland), Brista (Sweden), Klaipeda (Lithuania) and Jelgava (Latvia). In Russia, two units of the gas-fired Nyagan power plant were commissioned. In addition, Fortum acquired Amrit Solar power plant in North-Western India.

The plants and capacity acquired during a year are included in reporting starting from the takeover. The same principle

applies to new capacity built and new plants inaugurated during the year.

Leased and divested capacity

Fortum sold the Kuusamo Power Plant in Finland to Adven Oy on 1 October 2013. The Kuusamo Power Plant is included in Fortum's sustainability reporting for the period January-September. At the end of 2013 Fortum also sold the Kauttua and Nokia power plants, and the ownership of the Uimaharju power plant was transferred back to Stora Enso in accordance with the agreement signed in 1990. These plants are included in reporting for the whole year of 2013.

Measurement and calculation principles

Data for economic performance indicators is collected from the audited financial statements and from

financial accounting and consolidation systems.

The environmental information of the report covers the plants for which Fortum is the legal holder of the environmental permit. Normally, Fortum is the majority shareholder of such plants, but the company can be the holder of a plant's environmental permit also when it is a minority shareholder. In such cases, the plant information is reported in its entirety, but only the share of production and emissions corresponding to Fortum's share of ownership are calculated in the specific emissions figures.

Fortum utilises a Group-wide database with instructions for collecting site-level environmental data. Sites are responsible for data input, emissions calculations and assurance. The Corporate Sustainability unit compiles all data and is responsible for disclosed sustainability information.

Fortum's CO2 emissions subject to the EU Emissions Trading Scheme are annually verified at the site-level by external verifiers. Direct and indirect greenhouse gas emissions have been reported in accordance with the Greenhouse Gas Protocol and based on the Greenhouse Gas Analysis performed by an external consultant.

Fortum's human resources (HR) management system HeRMeS is currently used in Finland, Sweden, Norway and Poland, excluding the Zabrze and Bytom functions, and it is the main system for all employee-related personal and job data. In 2013, HeRMeS was introduced partly also in Estonia, Latvia and Lithuania. Other social responsibility data, such as occupational health-related data, originates from various data systems and is collected by the relevant contact persons and delivered to Corporate Sustainability unit in the format recommended by GRI.

Global Compact reporting

Fortum has been a member of the United Nations Global Compact initiative since June 2010. This report describes the realisation of the Global Compact's ten principles in Fortum's operations. Global Compact approves the use of the indicators in the GRI G3.1 Guidelines in Communication on Progress (COP) reporting. The GRI index presents the indicators used to measure Fortum's performance in fulfilling the principles of human rights, labour standards, the environment and anti-corruption.

Fortum joined the Caring for Climate initiative in November 2013. Fortum meets the reporting requirements of the Caring for Climate initiative by participating annually in the assessment in the CDP's climate change programme and by publishing its response on the CDP's website.

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