Case study: How KONE creates economic value for its stakeholders
As a global leader in the elevator and escalator industry, KONE provides elevators, escalators and automatic building doors, as well as solutions for modernisation and maintenance to add value to buildings throughout their life cycle. Creating value for its customers, shareholders and the wider society is a top priority for KONE. Tweet This!
This case study is based on the 2020 Sustainability Report by KONE, 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
KONE directly contributes to economic development in the over 60 countries where it operates, committed to making a positive impact throughout its whole value chain. In order to create economic value for its stakeholders KONE took action to:
- create economic value for employees
- create economic value for suppliers
- create economic value for shareholders
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With this case study you will see:
- Which are the most important impacts (material issues) KONE has identified;
- How KONE proceeded with stakeholder engagement, and
- What actions were taken by KONE to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2020 Sustainability Report KONE identified a range of material issues, such as ethical business practices, diversity and inclusion, cybersecurity and data privacy, carbon neutral operations. Among these, creating economic value for its stakeholders stands out as a key material issue for KONE.
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 KONE engages with:
| Stakeholder Group | Method of engagement |
| Customers
| · Customer meetings and events · Constant dialogue through solution support · Seminars and conferences · Company reports · Marketing materials, website and social media channels · Annual customer loyalty survey |
| Employees
| · Performance discussions · Continuous face-to-face dialogue between employees and managers · Training events · Global learning solutions · Innovation creation through innovation tool · Internal social media channels · Compliance Line · Company intranet and internal employee publications |
| Shareholders
| · Stock exchange releases · Financial and other company reports · Management meetings with investors and analysts · Annual general meetings · Capital markets days |
| Suppliers | · Continuous one-to-one dialogue · Annual supplier day for selected strategic suppliers · Trade fairs · Steering group meetings · Supplier workshops |
| Distributors and agents
| · Continuous dialogue through daily contacts · Regular country visits · Distributors’ meetings and various support tools |
| Media | · Press releases · Interviews · Background briefings · Visits · Press events · Publications · Company website and social media channels |
| Educational institutions | · KONE international trainee programme · CEMS global alliance of academic and corporate institutions · Thesis opportunities · Local internships · Participation in recruitment fairs · Common projects · Guest lectures · Participation in research programmes and social media channels |
| Local communities | · Company website · Stakeholder relations · Reports · Social media channels |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics KONE engaged with its stakeholders through two anonymous online surveys and phone interviews. A targeted online questionnaire was sent to over 350 recipients, including customers, investors and analysts, industry associations, public authorities, suppliers, employees, media representatives, educational institutions and non-governmental organisations, as well as selected KONE experts and KONE’s Executive Board members. Additionally, KONE conducted an open online survey among equipment users and all KONE employees. The targeted and open online survey responses amounted to 148. In addition, a total of 17 stakeholder representatives were interviewed to deepen KONE’s understanding about their expectations on KONE’s sustainability approach.
What actions were taken by KONE to create economic value for its stakeholders?
In its 2020 Sustainability Report KONE reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- KONE pays wages and salaries to over 60,000 employees in more than 60 countries. In 2020, KONE paid MEUR 2,308 for employee wages and salaries and MEUR 1,012 in employment-related costs and taxes.
- Creating economic value for suppliers
- KONE conducts business with approximately 30,000 suppliers, out of which almost 3,000 are key suppliers. In 2020, KONE’s purchases from suppliers amounted to MEUR 5,683.
- Creating economic value for shareholders
- In 2020, KONE paid MEUR 1,166 in dividends to its shareholders.
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
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References:
This case study is based on published information by KONE, 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.kone.com/en/Images/KONE-Sustainability-Report-2020_tcm17-105566.pdf
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