Annual Report 2013 | Suomeksi |

Sustainability approach

Sustainability is an integral part of Fortum's strategy. In its operations, Fortum gives balanced consideration to economic, social and environmental responsibility.

Our economic responsibility includes competitiveness, performance excellence and market-driven production, which create long-term value and enable profitable growth. We aim for performance excellence. A company that is financially strong is able to shoulder its responsibility for the environment, take care of its personnel, meet the needs of its customers and support the development of the entire society.

The efficient use of resources and the need to mitigate climate change are emphasised in our environmental responsibility. Our know-how in CO2-free hydro and nuclear power production and in energy-efficient CHP production plays a key role in this. Through research and development activities, we are creating prerequisites for environmentally benign energy solutions.

Our social responsibility includes being a good corporate citizen and taking care of our own personnel and the

surrounding community. Our innovations and the secure supply of power and heat support the development of society and increase well-being. We promote well-being and safety in the work community, respect for individuals and mutual trust, and responsible operations in our supply chain and in society in large.

Management model

Sustainability management at Fortum is strategy-driven and is based on the company's values, the Code of Conduct, and the policies and their specifying instructions defined at the Group level. We comply with laws and regulations. In addition to our values, all of our operations are guided by good governance, effective risk management, adequate controls and the internal audit principles supporting them.

At Fortum, responsibility for issues related to sustainability

lies with division and Group function management, and, ultimately, the President and CEO and the Board of Directors. The Board of Directors has not appointed any of its members specifically conversant in sustainability and thus in its decision-making relies on the information and expert statements provided by the Fortum Management Team and the Group's sustainability experts. Fortum's corporate governance is discussed in the Governance section of the Annual Report 2013.

Sustainability management at Fortum is strategy-driven and line management has clear responsibility in it.

Corporate Sustainability unit

The Corporate Sustainability unit is responsible for coordinating and developing sustainability at the Group level. In 2013, Corporate Sustainability was part of Corporate Finance. In addition to business divisions, Sustainability unit closely collaborates with the other units of Corporate Finance: Risk, Mergers and Acquisitions, Strategy, Purchasing, and Internal Audit units. Also the cooperation with the Legal, the Communications and the Corporate Relations units is part of everyday activities. The head of Corporate Finance, Fortum's Chief Financial Officer, reports to the CEO and is a member of the Fortum Management Team. The CFO also participates in Fortum's Board meetings.

The Corporate Sustainability unit manages the Group's Environment and Health and Safety (EHS) network. Corporate Sustainability is a member of the Group's Finance Forum

dealing with investments and gives sustainability approval (environmental, occupational health, safety and social impacts) for all significant investments, acquisitions and divestments as part of Fortum's investment evaluation and approval procedure. In addition, Corporate Sustainability plays a central role in the Group's market outlook and public affairs processes and supports investor relations with its expertise.

In February 2014, Fortum announced a reorganisation of its business structure as of 1 March 2014. Along with this change part of group level functions were administratively located in business divisions. Corporate Sustainability will become part of Heat, Electricity Sales and Solutions division. The head of this division will report to Fortum's Chief Operating Officer (COO) and is a member of the Fortum Executive Management.

Line management responsibility

Fortum's line management is responsible for sustainability management, and the realisation of targets is part of Fortum's incentive system.

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