Case study: How Fortum creates economic value for its stakeholders
Fortum is a Finnish state-owned energy company with activities in more than 40 countries, securing a fast and reliable transition to a carbon-neutral economy by providing customers and societies with clean energy and sustainable solutions. Fortum continuously monitors the impact and added value generated by its operations to its stakeholders, who include lenders and shareholders, customers, personnel, suppliers of goods and services, and the public sector.
This case study is based on the 2020 Sustainability Report by Fortum, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Fortum seeks to create sustainable value for all its stakeholders Tweet This! as a trustworthy, value-adding partner. In order to create economic value for its stakeholders Fortum took action to:
- create economic value for employees and suppliers
- create economic value for lenders and shareholders
- create economic value for the public sector
Subscribe for free and read the rest of this case study
Please subscribe to the SustainCase Newsletter to keep up to date with the latest sustainability news and gain access to over 2000 case studies. These case studies demonstrate how companies are dealing responsibly with their most important impacts, building trust with their stakeholders (Identify > Measure > Manage > Change).
With this case study you will see:
- Which are the most important impacts (material issues) Fortum has identified;
- How Fortum proceeded with stakeholder engagement, and
- What actions were taken by Fortum to create economic value for its stakeholders
Already Subscribed? Type your email below and click submit
What are the material issues the company has identified?
In its 2020 Sustainability Report Fortum identified a range of material issues, such as energy efficiency, business ethics and compliance, climate change and GHG emissions, employee wellbeing, health and safety. Among these, creating economic value for its stakeholders stands out as a key material issue for Fortum.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Fortum engages with:
| Stakeholder Group |
| Lenders and shareholders |
| Customers |
| Personnel |
| Future talent |
| Service and goods suppliers |
| Authorities and decision makers |
| Media |
| Energy sector organisations |
| NGOs |
| Local communities |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Fortum engaged with its stakeholders through surveys sent to over 900 representatives of NGOs, customers, public administration, capital markets, research institutes, industry organisations and opinion leaders.
What actions were taken by Fortum to create economic value for its stakeholders?
In its 2020 Sustainability Report Fortum reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees and suppliers
- In 2020, Fortum spent 1,195 MEUR in employee wages, salaries, remunerations, and other indirect employee costs and 48,699 MEUR in payments to suppliers of raw materials, goods and services.
- Creating economic value for lenders and shareholders
- In 2020, Fortum spent 1,081 MEUR in compensation to lenders and shareholders (dividends paid to investors, interest, realised foreign exchange gains and losses, and other financial expenses).
- Creating economic value for the public sector
- In 2020, Fortum spent 484 MEUR in income and production taxes paid, support for society and donations.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
78% of the world’s 250 largest companies report in accordance with the GRI Standards
SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.
Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.
7 GRI sustainability disclosures get you started
Any size business can start taking sustainability action
GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom (venue: London School of Economics)
- Exclusive FBRH template to begin reporting from day one
- Identify your most important impacts on the Environment, Economy and People
- Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP.
- Benchmarking methodology to set you on a path of continuous improvement
See upcoming training dates.
References:
This case study is based on published information by Fortum, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://www.fortum.com/files/fortum-sustainability-2020/download?attachment=
Note to Fortum: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.