Annual Report 2013 | Suomeksi |

Sustainability targets and results

Fortum's sustainability targets consist of Group-level key indicators and division-level indicators. In addition to these, Fortum has set targets for Group-wide projects, such as supply chain monitoring, promoting work well-being, and minimum requirements for the environment, occupational health and safety. In 2013, we improved our performance in regard to many indicators, but a couple of targets were not achieved.

Group sustainability targets and performance in 2013
Target Status at the end of 2013 Remarks for 2013
Reputation index Target result 69.6 in One Fortum Survey (long-term target >70) 69.8
Customer satisfaction index (CSI) CSI divisional scores at level “good” (70-74) in One Fortum Survey 61-77 Customer satisfaction improved in 4 out of 5 customer segments. Power Solutions business area achieved the target.
Environmental responsibility
Specific CO2 emissions
Electricity production in the EU < 80 g/kWh, 5-year average 66 g/kWh Emissions in 2013 were 70 g/kWh. 5-year average was up from 60 g/kWh in 2012.
Total production (electricity & heat, all countries) < 200 g/kWh, 5-year average 186 g/kWh Emissions in 2013 were 196 g/kWh. 5-year average was up from 179 g/kWh in 2012. 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 66% Efficiency in 2013 was 61%. 5-year average was down from 67% in 2012. 5-year average has been decreasing since 2008.
Major EHS incidents < 40 Fortum-wide 51
(Fires, leaks, explosions, INES1) events exceeding level 0, dam safety incidents, environmental non-compliances)
Social responsibility
Security of supply
SAIDI2) < 110 minutes 220 minutes High SAIDI was caused by severe storms in the Nordic countries in December
CHP plant availability in Europe > 92% 94%
Occupational safety
Lost workday injury frequency (LWIF)3), Fortum personnel < 1 1.1
1) International Nuclear Event Scale
2) System Average Interruption Duration Index
3) LWIF = Lost workday injury frequency per one million working hours
Other sustainability targets and related performance in 2011-2013
Target 2013 2012 2011
Occupational safety
Total recordable injury frequency (TRIF) 1), Fortum personnel < 3.0 2.8 3.4 3.5
Lost workday injury frequency (LWIF) 2), contractors < 3.5 4.8 3.8 3.2
Number of fatalities, Fortum personnel 0 0 0 0
Number of fatalities, contractors 0 1 1 1
Number of lost workday injuries, Fortum personnel - 20 29 29
Number of lost workday injuries, contractors - 76 57 45
Number of safety walks 8,920 16,644 17,507 15,324
Number of improvement proposals and near-miss reports 7,800 21,876 6,362 10,087
Supply chain management
Supplier audits 9 3) 13 10 -
1) TRIF = Total recordable injury frequency per one million working hours
2) LWIF = Lost workday injury frequency per one million working hours
3) Three suppliers in risk countries/division, excluding ESD Division

Our key areas of development

Environmental responsibility indicators

Our key environmental responsibility indicators, specific CO2 emissions and energy efficiency, are embedded in the core areas of our strategy: CO2-free hydro and nuclear power production and energy-efficient combined heat and power production. We use these key indicators to measure our ability to respond to two major global sustainability challenges: mitigating climate change and improving resource efficiency.

In terms of environmental targets, however, the situation is challenging. Our fuel use efficiency and our specific CO2 emissions from total energy production have developed unfavourably during the past five years, although we are still on the better side of the target level.

Specific CO2 emissions from total energy production have been on the rise with the increased use of fossil fuels. Our Russian investment programme in its original form was factored into our target of <200 g/kWh set in 2010. However, the higher than initially planned use of coal has led to higher emissions than anticipated. Our goal in the upcoming years is to reverse the growth trend in specific emissions. In this regard, the plan in 2014 is to find emissions reduction opportunities for our biggest sources of emissions in Russia.

During the last five years, the overall efficiency of fuel use and the specific CO2 emissions from total energy production have developed unfavourably in regard to our targets.

The overall efficiency of fuel use has decreased because of the increase in condensing power production; consequently, we have not reached our 70% target. The two gas turbine power plants commissioned in 2013 at the Nyagan plant in Russia were the primary contributors to the increase in condensing power production. Power generation at the Inkoo coal-fired condensing power plant in Finland ended in February 2014, which will reduce some of our condensing power production. Additionally, Fortum has two big CHP plants under construction: in Chelyabinsk, Russia, and in Stockholm, Sweden. Their commissioning, in 2015 and 2016, will contribute to improved efficiency of fuel use.

The total number of major EHS incidents, a category that covers fires, leaks of over 100 litres, explosions, nuclear and dam safety incidents, and environmental permit non-compliances, was 51; the target was 40. To some extent,

the reasons for exceeding the target can be attributed to changes in definitions and in reporting practices. However, incidents increased in some projects and exceptional situations. Improvement measures for these incidents are local, such as better management of changes in projects and the development programme for the Heat Division's Swedish functions. Corrective measures also include e.g. renovation projects to reduce transformer oil leaks and modifications to Russian plants to reduce waste water permit violations.

Social responsibility indicators

Of our key social responsibility indicators, the security of supply of energy reflects Fortum’s role in securing reliable energy supply for society. Safe operations and a good level of safety are demonstrations of professional operations and the level of expertise.

With regard to social responsibility indicators, we did not achieve our targets in security of electricity supply or in contractor work safety. Due to the severe storms in December, the System Average Interruption Duration Index (SAIDI), which indicates reliability of electricity distribution, was double compared to our target.

With regard to social responsibility indicators, we did not achieve our targets in security of electricity supply or in contractor safety.

Our preparedness to respond to storm damage improved significantly, and repairs were completed more quickly than before. However, power outages affected a large number of

customers, and as a result the SAIDI was high. Construction of a weather-proof grid continues; the aim is to have about half of our customers in Finland and nearly all of our customers in Sweden within the sphere of weather-proof power distribution by the end of 2014.

The number of improvement proposals and near-miss reports increased considerably due to high activity in the Heat and Russia Divisions and the clarification of reporting practices in the Russia Division.

Despite many development measures, the lost workday injury frequency (LWIF) for contractors worsened and was 4.8 (2012: 3.8). In 2013, there was one fatal accident involving a contractor employee at the Chelyabinsk CHP-2 plant in Russia. In February 2014, a contractor employee died in an accident in power distribution in Sweden.

Additionally, the number of contractor accidents increased from the previous year. Most of the units and projects were able to improve contractor safety, but the weak development in a few of the organisations led to an unsatisfactory overall result.

The biggest challenges were the construction and renovation projects in Russia and Sweden, and the electricity transmission repair and modification work mainly in Finland.

Contractor safety is a major challenge and will remain a focus area in 2014. To improve the situation, existing development projects have been continued and new projects have been launched. A common contractor management model was adopted Fortum-wide in 2013. To emphasise the importance of contractor safety, LWIF for contractors was made one of the Group-level sustainability key indicators for 2014.

Contractor safety is also a more prominent part of Fortum's incentive schemes. Additionally, the auditing of issues related to social responsibility was expanded among contractors.

Corporate sustainability targets in 2014
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
Total efficiency of combustion
(Definition: produced energy divided by the primary energy of fuel)
> 70%, 5-year average
Major EHS incidents < 35
(Fires, leaks, explosions, INES1) > 0 events, dam safety incidents, environmental non-compliances)
Social responsibility Target
Security of supply
SAIDI2)
- Sweden < 100 min
- Norway < 96 min
CHP plant availability > 95%
Occupational safety
Lost workday injury frequency (LWIF)3), Fortum personnel < 1
Lost workday injury frequency (LWIF)3), contractors < 3.5
1) International Nuclear Event Scale
2) System Average Interruption Duration Index
3) LWIF = Lost workday injury frequency per one million working hours
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