Case study: How Kesko creates economic value for its stakeholders
Kesko is a Finnish listed trading sector company operating in the grocery trade, the building and technical trade and the car trade, with approximately 1,800 stores engaged in chain operations in Finland, Sweden, Norway, Estonia, Latvia, Lithuania and Poland. Kesko’s operations generate economic benefits for various stakeholders in Kesko’s operating countries and market areas Tweet This!, including shareholders, customers, personnel, retailers, suppliers of goods and providers of services, and society.
This case study is based on the 2021 Annual Report by Kesko, 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
Kesko’s mission is to create welfare responsibly for all its stakeholders and for all society. In order to create economic value for its stakeholders Kesko took action to:
- create economic value for suppliers and service providers
- create economic value for employees
- create economic value for providers of capital and owners
- create economic value for the public sector
- create economic value for communities
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With this case study you will see:
- Which are the most important impacts (material issues) Kesko has identified;
- How Kesko proceeded with stakeholder engagement, and
- What actions were taken by Kesko to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2021 Annual Report Kesko identified a range of material issues, such as climate change, sustainable products, biodiversity, responsibility of the purchasing chain, wellbeing of customers. Among these, creating economic value for its stakeholders stands out as a key material issue for Kesko.
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 Kesko engages with:
To identify and prioritise material topics Kesko engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Customers
| · Daily customer encounters · Customer service channels and applications · Customer surveys · Social media |
| Investors, shareholders, analysts and other representatives of capital markets
| · General Meeting · Financial reporting · Press conferences · Investor web pages, social media channels and other digital channels · Investor and analyst meetings · Surveys and assessments · Personal dialogue |
| Kesko’s personnel, K-retailers and store staff
| · Daily interaction · Personnel survey, pulse surveys and performance and development reviews · Retailer events and meetings · K Group’s virtual event K-Team Live · Electronic communication channels and Kehittyvä kauppa (Developing Retail) trade magazine · K Code of Conduct · SpeakUp reporting channel |
| Other key stakeholders (suppliers and service providers, media, authorities, nongovernmental and other organisations) | · Meetings with suppliers and partner events · Media events and enquiries · Activities in organisations · Enquiries from NGOs
|
What actions were taken by Kesko to create economic value for its stakeholders?
In its 2021 Annual Report Kesko reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for suppliers and service providers
- In 2021, Kesko paid €10,556 million for goods, materials and services purchased.
- Creating economic value for employees
- In 2021, Kesko paid €764 million for employee salaries, fees and social security expenses.
- Creating economic value for providers of capital and owners
- In 2021, Kesko paid €68 million to providers of capital (net finance income/costs) and €421 million in dividends to owners (proposal to the General Meeting).
- Creating economic value for the public sector
- In 2021, Kesko paid €143 million in taxes (including income taxes, real estate taxes and net worth taxes).
- Creating economic value for communities
- In 2021, Kesko spent €4 million in 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
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References:
This case study is based on published information by Kesko, 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:
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