Annual Report • Feb 24, 2017
Annual Report
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LASSILA & TIKANOJA Annual Report 2016
| Year 2016 | 3 |
|---|---|
| Key figures |
6 |
| Key events 2016 |
8 |
| Strategy implementation |
14 |
| Business operations | 17 |
| Environmental Services |
18 |
| Industrial Services |
20 |
| Facility Services |
22 |
| Renewable Energy Sources |
24 |
| Responsibility | 26 |
| Responsible business | 30 |
| Code of Conduct |
31 |
| Business solutions promoting customer's responsibility |
36 |
| Environmental responsibility |
40 |
| Recycling and material recovery |
41 |
| Reducing emissions and energy consumption |
45 |
| Responsibility for personnel |
49 |
| Work ability management and occupational safety |
50 |
| Employee satisfaction | 56 |
| Diversity and equality |
58 |
| Responsible supply chain |
61 |
| Responsibility of the supply chain |
62 |
| Active stakeholder relations |
65 |
| Stakeholder dialogue |
66 |
| Customer satisfaction |
72 |
| Reporting on corporate responsibility |
74 |
Last year was an eventful one for L&T. It was a good year by many measures but, at the same time, it was heavy and challenging. In spite of the difficult market climate, we achieved a good result, saw a significant reduction in sickness-related absences, improved customer satisfaction and accomplished great results on our path of renewal.
These results would not have been possible without our highly competent and serviceoriented personnel. I want to take this opportunity to extend my warmest thanks to everyone at L&T for their good work in 2016.
The year 2016 was in many ways similar to the previous few years. The business environment is in constant flux and the rate of change is accelerating further. While there are small signs of an upturn in the air, economic recovery will take a long time. This means that achieving growth requires finding new ideas to replace the old and traditional ones. These operating conditions further underscore the significance of renewal in all of our businesses.
In a business environment that is increasingly difficult to predict, we must have the
flexibility to adapt to the ongoing changes. Late in the year, we held statutory employer– employee negotiations to implement important adjustments that increase the speed and agility of our decision-making. The Group and divisional structures were clarified, decisionmaking power was shifted to the business level and we increased our investments in the renewal of our business.
Continuously improving the safety of our operations and the work ability of our personnel are important objectives for us. Our accident frequency increased slightly after several years of successfully reducing it, but I am confident that we will shape up and get back on track. I am particularly pleased by the fact that our sickness-related absences declined significantly in 2016 and our average retirement age rose to 63.8 years.
The renewal of our business continued at a fast pace and we achieved strong results on that front. Our new digital services were well received, our Hävikkimestari mobile app for managing and reducing food wastage in catering restaurants won an award from the Helsinki Climate Partners network, and our driving style monitoring received a Best IoT of the Year award.
Our Net Promoter Score, which measures customer satisfaction, improved from the previous year and the number of complaints decreased. We signed significant new service agreements in the latter part of the year, which will help us achieve our growth targets in 2017.
In order to maintain our capacity for strong financial performance, we must continue our efforts to improve productivity. In 2016, we continued the systematic implementation of our strategic development programmes aimed at improving productivity.
In 2017, we will begin to carry out in earnest the largest-ever change in our operating model, including the country-wide implementation of the Facility Services division's new ERP system in property maintenance and cleaning services. This will benefit our personnel and customers in the form of even more consistent service quality and systematic action.
| 2016 | 2015 | 2014 | |
|---|---|---|---|
| Net sales, EUR million | 661.8 | 646.3 | 639.7 |
| Operating profit, EUR million | 50.5 | 49.9 | 48.5 |
| Profit before tax, EUR million | 50.1 | 47.7 | 26.6 |
| Return on equity, % (ROE) | 20.0 | 18.2 | 8.7 |
| Return on invested capital, % (ROI) | 17.4 | 16.5 | 15.4 |
| Gearing, % | 17.3 | 19.8 | 25.2 |
| Equity ratio, % | 50.4 | 46.5 | 46.3 |
| Capital expenditure, EUR million | 41.6 | 49.6 | 44.7 |
| Total number of full-time and part-time employees at year end |
7,931 | 8,085 | 7,830 |
| Earnings per share, EUR (EPS) | 1.13 | 0.98 | 0.47 |
| Cash flow from operating activities/share, EUR | 1.99 | 2.33 | 2.06 |
| Capital repayment per share, EUR | 0.92 * | 0.85 | 0.75 |
| * Proposal by the Board of Directors |
Mushrooms from wood chips. Diesel from Christmas ham. A year of innovation.
In January, the Group acquired Huurinainen Oy, a Kajaani-based company specialising in waste management and sewer maintenance, and the Pieksämäki-based JPM-Kuljetus Oy. In addition to Kajaani, Huurinainen Oy served customers in Sotkamo and Paltamo. "The acquisitions were part of our strategic geographical expansion and service coverage improvement in Eastern Finland and Southern Savonia," says Vice President Petri Salermo.
Sorting waste became even easier for the residents of single-family houses in Vaasa and Pietarsaari with the roll-out of fourcompartment waste containers for their own yards in January. The containers are emptied by L&T's special four-compartment waste collection vehicles, which transport the different types of waste in separate compartments to ensure their appropriate recovery. The goal is
to increase waste recycling by making it as easy and convenient as possible.
L&T and the Foundation for Student Housing in the Helsinki Region (HOAS) brought back caretakers. The service model, which has been developed specifically for housing cooperatives, uses a systematic approach to work and teams of multi-talented professionals. "We have moved beyond the traditional division of duties between cleaners and janitors," says Marja Havia, the supervisor in charge of the teams.
The teams consist of service providers and property managers whose duties are determined according to customer needs.
Each year, L&T supplies thousands of interchangeable containers to construction and demolition sites. We developed a new kind of digital application to make it easier to order containers and have them picked up, and to facilitate the recycling of different waste materials. The Raksanappi service allows customers to use mobile devices to conveniently offer suitable containers for their sites.
L&T developed the Hävikkimestari application to help restaurants minimise their food waste. "The application provides an intuitive visualisation of the amount of food that goes to waste. It also helps customers identify the reasons for high wastage levels by tracking what is thrown away and why," says Lotta Toivonen, Environmental Management Expert
at L&T. Hävikkimestari won an environmental prize from the Finnish Fair Foundation and it was also chosen as one of the year's best pro-climate initiatives by the City of Helsinki Climate Partners network. Natural Resources Institute Finland (Luke) has estimated that as much as one fifth of all restaurant food is thrown away.
L&T became the first cleaning industry operator in Finland to introduce a state-of-the-art cleaning robot. Known as Ilona, the robot started working at the Sello shopping centre in Espoo in May. The cleaning robot is an intelligent scrubber-dryer that can be programmed to work autonomously. The robot cleans the floors and is smart enough not to bump into people or objects. It does not need
to be followed around by a human employee, giving cleaning professionals more time to handle more demanding tasks.
The Federation of Finnish Financial Services granted SFS-EN ISO 9001:2008 and SFS-EN 50518 (1-3) certificates to L&T's control room and energy service functions and operating premises. The certification requirements were related to operational quality, the company's reliable operations and the professional competence of the persons in charge. The certification process also included an assessment of the business premises, operations and technical characteristics.
Lahti Energia signed an agreement with five companies for the delivery of fuel to the Kymijärvi III heating plant. L&T Biowatti is one of the fuel suppliers. The fuel comprises wood that has been certified according to sustainable development principles. The fuel deliveries will begin in autumn 2019. The total value of the agreements is nearly EUR 15 million per year, and the annual energy content of the fuel
deliveries is equal to approximately 700 gigawatt hours. The term of the agreements is 3–5 years.
competition hosted by VTT Technical Research Centre of Finland. Comprised of Chris Holtslag and Pekka Väisänen, the Mushroom Power team presented an idea for multiplying the value of wood chips by using them as substrate for growing mushrooms. The team showed how Mushroom Power, a team that represents one answer to L&T's circular economy challenge, won the Hack the Waste innovation
existing methods can be used to cost-efficiently turn wood chips and mushrooms into versatile material for purposes such as manufacturing furniture and other goods.
Kesko's responsibility programme includes a commitment to the target of zero landfill waste, and the company is constantly on the look-out for new ways to minimise the amount of waste generated by its operations and increase recycling. The national agreement is aimed at enhancing the recycling of waste generated at Kesko's grocery shops and supermarkets and promoting the circular economy.
L&T's work for the climate was recognised with the excellent grade of A- in the international Climate Change Disclosure survey conducted annually by CDP, a widely respected organisation that promotes the sustainable economy and the fight against climate change. A total of 14 companies in Finland and 39 companies in the Nordic countries achieved the Leadership level by receiving a grade of A or A-.
L&T won a safety competition organised for service providers by the maintenance company Efora. The competition criteria were the LTA1 and TRI accident frequency rates for 2015, the safety observations submitted by the company to Efora, participation/success in HSEQ (healthsafety-environment-quality) assessments and the result of supplier assessments in 2016. The monitoring period for the competition was 4
April–30 October 2016. L&T's participating units were the Kemi, Oulu, Varkaus, Heinola and Uimaharju units in the maintenance of technical systems business.
In December, L&T promoted the spirit of the circular economy by participating in Kinkkutemppu ("Ham Trick"), a campaign launched by the Chemical Industry Federation of Finland to collect the grease accumulated from the baking of the traditional Christmas ham at centralised collection points. The collected grease was subsequently turned into
renewable diesel fuel and the proceeds from its sale were distributed in their entirety to Finnish charitable organisations.
Based on our strategy review in 2016, we did not find it necessary to significantly change the company's strategic direction or financial targets. We will continue to focus on improving productivity. To support our growth targets, we will also increase our focus on the development of new service products, digital solutions and enhancing the customer and employee experience.
It appears that the Finnish economy will recover slower than expected in the next few years, and competition remains intense in all of our main markets. This forces us to take a critical view of our cost structure and continuously seek ways to increase profitability and ensure our future competitiveness. In 2016, we held statutory employer–employee negotiations and adapted our organisation to the increasingly changing market situation. At the same time, we simplified our organisational structures and expanded the decision-making authorisations of
our businesses.
The digital transformation poses many challenges to the traditional model of service production across many industries, including ours. We believe that the successful companies of the future will be those that have the agility and flexibility to adapt to the ongoing changes. To ensure that we can effectively take advantage of the opportunities presented by the digital transformation, we will significantly increase our investments in digital solutions, which will be developed using agile methods and customer engagement.
"Digitalisation" may sound like technobabble, but in practice it refers to services such as: Raksanappi, Hävikkimestari, Kimppanouto.
Our customers expect us to deliver continuously improved services, expertise and quantifiable added value with regard to cost efficiency, energy efficiency and material efficiency. At the same time, the circular economy and digitalisation are providing us with new opportunities for the development of services and the customer experience. In 2016, we implemented systematic customer experience management at both the Group level and the division level, and we strengthened our service development resources. We see a strong link between managing the employee experience and the customer experience as, in a service company, the two are closely intertwined.
We implement our strategy through strategic development programmes and projects that are based on our chosen strategic priorities. In 2016, we made consistent progress in our previously launched strategic programmes aimed at enhancing workforce management and the Facility Services division's operating model. We also launched a new programme aimed at enhancing the customer and employee experience.
L&T's net sales totalled EUR 661.8 million and the operating profit was EUR 50.5 million. The net sales were accumulated from some 50,000 corporate customers and 170,000 households in Finland. We also provide facility services in Sweden and environmental services in Russia.
| Target 2020 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|
| Growth | 5.0% | 2.4% | 1.0% | -4.3% | -0.9% |
| Return on invested capital | 20.0% | 17.4% | 16.5% | 15.4% | 10.6% |
| Operating profit | 9.0% | 7.6% | 7.7% | 7.6% | 5.0% |
| Gearing | 0–70% | 17.3% | 19.8% | 25.2% | 30.4% |
In 2016, the Environmental Services division's net sales increased by 3.2 per cent due to successful sales work and acquisitions, amounting to EUR 264.8 million (EUR 256.5 million). Operating profit totalled EUR 31.3 million (EUR 35.8 million).
There were changes in the business environment that affected the market structure. The responsibility for household packaging materials was shifted to producers and the volumes and prices of secondary raw materials were at a low level.
Customer requirements related to the management of environmental matters continued to increase, which provides us with opportunities for leveraging our entire value chain to benefit our customer companies. This trend is reflected in, for example, large corporations' willingness to develop their operations towards the circular economy.
We carried out a significant renewal of our strategy. The key focus areas are improving the customer experience, innovating and commercialising new services, and maintaining competitiveness through continuously increasing productivity.
The magic of recycling: cuts hundreds of thousands from waste costs. Less expensive mixed waste, more results.
In 2016, the Industrial Services division's net sales increased by 6.6 per cent to EUR 82.1 million (EUR 77.0 million). Operating profit totalled EUR 7.8 million (EUR 6.8 million).
The growth in net sales and improved profitability were supported by successes achieved in the project business, expanding our offering in the industrial and construction segments as well as successful efficiency improvement measures. We were also able to quickly and flexibly respond to growing customer demand.
Large-scale industry and the construction sector showed signs of recovery during the year. Nevertheless, there were substantial regional and sector-specific differences in industry.
In conjunction with updating our strategy, we assessed our strengths in relation to market potential and decided to further strengthen our service development and offering in the large-scale industry segment. We adapted our regional structure to better respond to customer needs and continued our systematic efforts to improve safety.
Less turnover, more partnership. The secret of a long-term customer relationship: doing what you do well.
In 2016, the net sales of Facility Services increased by 1.9 per cent to EUR 288.3 million (EUR 282.9 million). Operating profit totalled EUR 13.5 million (EUR 8.1 million).
The market for cleaning services remained challenging in 2016 due to the competitive situation and customers increasing the efficiency of their use of space. The recovery of the construction market was reflected in a slight increase in the demand for renovation services but, overall, the demand for facility services remained on a par with the previous year.
The Facility Services division's short-term strategy is focused on the renewal of the operating model and the improvement of profitability. We will respond to our customers' expectations of new service models by investing in service development and targeted acquisitions.
We combined property maintenance and personalised service. The result was the Caretaker. Fewer complaints, more happy customers.
In 2016, the net sales of Renewable Energy Sources decreased by 6.6 per cent to EUR 36.8 million (EUR 39.4 million). Operating profit totalled EUR 1.5 million (EUR 2.1 million). The relative profitability of the Renewable Energy Sources business remained on a par with the previous year.
In 2016, the overall demand for forest energy continued its decline from the peak level reached in 2013 due to factors including warm weather conditions, the weak profitability of electricity produced from wood chips and the ample supply of competing fuels. The decline in the overall demand for forest energy also affected the development of the Renewable Energy Sources division's net sales.
In the short term, the strategy for Renewable Energy Sources is focused on ensuring profitability and moderate growth. The business environment will remain challenging in 2017, but demand will improve in the coming years due to new plant investments. As the market situation improves, we aim to grow the business in line with our strategy.
| Material areas | Targets 2016 - 2020 | Achievements in 2016 |
|
|---|---|---|---|
| Responsible business |
Code of Conduct |
Establishing the Code of Conduct as an integral part of business operations Transparent tax footprint reporting No major damage or infractions |
All new L&T employees studied the guidelines Tax footprint EUR 156.0 million (2015: EUR 155.0 million) No major damage or infractions |
| Business solutions that promote customers' responsibility |
Measuring the carbon handprint of L&T's services |
We launched a project to measure the carbon handprint of our services. More concrete results from the project will be seen in 2017. |
|
| Environmental responsibility |
Recycling and material recovery |
Recovery rate of waste managed by L&T 95% Increasing the recycling rate of waste to 55% |
Recovery rate 94% (2015: 92%) Recycling rate 54% (2015: 53%) |
| Reducing emissions and energy consumption |
Reducing CO2 emissions by 25% compared to the level and volume of 2012 Building an operating model for verifying the emissions of transport subcontractors |
CO emissions 2 decreased by 22.5% compared to 2012 (2015: -19%) An operating model was built for verifying the emissions of transport subcontractors |
|
|---|---|---|---|
| Responsibility for personnel |
Work ability management and occupational safety |
Sickness-related absence rate 4.5% Average age of retirement 64 year Accident frequency under 10 in 2018 |
Sickness related absence rate 4.8% (2015: 5.2%) Average age of retirement 63.8 years (2015: 63.1) Accident frequency 15 (2015: 11) |
| Employee satisfaction |
Meininki employee satisfaction survey conducted regularly Over 80% of personnel are prepared to recommend L&T as an employer |
The next survey will be conducted in 2017 |
|
| Diversity and equality |
Promoting the employment of immigrants Supporting the continued work of persons with |
We actively promoted employment opportunities for persons with an |
| reduced work ability |
immigrant background. |
||
|---|---|---|---|
| Responsible supply chain |
Responsibility of the supply chain |
Building comprehensive supplier assessment process and setting quantitative targets during 2016 Reducing the environmental impacts of production equipment and materials: Over 80% of our heavy-duty vehicles are in the Euro 4 emissions category or newer Share of Ecolabelled cleaning agents > 80% |
All of our new contract suppliers conducted a self assessment. We set quantitative targets for our supplier assessments. Of our heavy duty vehicles, 64% were in the Euro 4 emissions category or newer (2015: 59%). Ecolabelled cleaning agents accounted for 72% of all cleaning agents used by us (2015: 82%). The overall consumption of cleaning agents decreased with the development of cleaning methods. |
| Active stakeholder relations |
Stakeholder dialogue |
Regular stakeholder support measurements for specified |
The measurement was conducted as planned. Stakeholder |
| stakeholders and its strengthening Transparent reporting of measures and projects |
support became stronger among policymakers and the media, but there was a slight decline in support among customers and our own personnel. |
|
|---|---|---|
| Customer satisfaction |
Regular measurement and reporting of the customer experience Transparent reporting of measures and projects |
The NSI measurement was conducted twice during the year. Customers' willingness to recommend us increased in the measurement. |
As part of the implementation of our Corporate Responsibility Programme in 2016, we continued to incorporate our responsible business practices and Code of Conduct as integral elements of our business operations:
We operate in compliance with laws and regulations and ensure that our operations involve no serious damage or offences. In 2016, we specified our process for investigating suspected cases of misconduct and the related operating model. The operating model will be implemented in our organisation in 2017.
Our internal auditor received 10 reports of infringements against the Code of Conduct in 2016. The reports were received directly from our personnel, through supervisors or via our electronic channel. All of the reports required more investigation and six of them led to corrective measures. The labour law measures ranged from warnings to the termination of employment. In some cases, the reports led to changes to the company's existing processes.
Environmental permits guide the management and monitoring of environmental issues at our plants and terminals. At the end of 2016, L&T held 69 environmental permits related to the handling and storage of normal waste, hazardous waste, recycled wood and energy wood.
The environmental risks involved in our operations are primarily related to the fleet, waste storage and processing, and chemical safety. We seek to prevent environmental damage by means such as protective structures, measuring devices, inspections, guidelines and training for our personnel. All environmental damage incidents are recorded in our monitoring system.
Waste treatment can also cause litter, dust emissions, noise and unpleasant odours in the local environment. We aim to prevent these negative impacts in cooperation with the authorities.
L&T is among the most significant employers in its operating locations. The salaries, wages and taxes we pay, as well as the goods and services we buy, have a substantial impact on municipal finances and other businesses in each economic area.
The most important direct flows of money from our operations consist of customers' service fees, salaries, bonuses and social security costs, taxes, purchases of goods and services, compensation to financiers and shareholders, and investments.
Transparent tax footprint reporting is a key element of L&T's responsibility. The tax footprint refers to the tax revenue and tax-like payments accrued by society from a company's business operations. In addition to direct and indirect taxes, L&T's tax footprint reporting includes withholding taxes on salaries, as well as social security contributions.
L&T complies with local legislation in the payment, collection, accounting and reporting of
taxes. A key factor in L&T's tax management is the high-quality and timely submission of tax forms and ensuring that other statutory requirements are met.
The tax footprint summary includes taxes and tax-like payments for which L&T is responsible for paying or collecting the tax or payment in question. However, taxes included in the purchase price of a product or service, and for which L&T has no statutory reporting obligation, are not included in the tax footprint summary data.
Relevant taxes and payments are classified by type in this report. Figures for Finland are reported separately and other countries collectively.
| Finland | Other operating countries |
Total | ||||
|---|---|---|---|---|---|---|
| Taxes and tax-related costs, EUR million |
2016 | 2015 | 2016 | 2015 | 2016 | 2015 |
| Income taxes/corporate taxes | 10.0 | 9.6 | 0.4 | 0.4 | 10.3 | 9.9 |
| Withholding taxes on salaries and forest taxes, and tax-at-source |
49.2 | 49.4 | 3.3 | 3.2 | 52.5 | 52.6 |
| Social security contributions | 4.4 | 4.3 | 4.7 | 4.5 | 9.1 | 8.8 |
| Production taxes * | 0.1 | 1.1 | 0.0 | 0.0 | 0.1 | 1.1 |
| Value added tax (tax on consumption) |
77.5 | 76.5 | 5.3 | 5.2 | 82.8 | 81.7 |
| Property taxes | 0.4 | 0.1 | 0.2 | 0.1 | 0.6 | 0.2 |
| Insurance taxes | 0.6 | 0.6 | - | - | 0.6 | 0.6 |
| Total | 142.2 | 141.6 | 13.9 | 13.3 | 156.0 | 155.0 |
| * Taxes linked to production include, among others, waste taxes remitted by the company itself |
Our services play a significant role in ensuring the responsibility of our customers, managing their environmental and climate impacts and promoting material, energy and cost efficiency.
We help our customer companies measure, forecast and optimise resource use and minimise the environmental impacts and costs arising from their operations. We engage in active cooperation with customers and support the development of operations through methods such as waste management surveys, development plans, environmental reporting and training services.
In 2016, we launched a project aimed at offering our customers the opportunity to report their carbon handprint, i.e. the positive substitution effects of recycled materials, instead of their carbon footprint. More concrete results from the project will be seen in 2017.
We continuously look for ways to make recycling easier for our customers and we introduced new digital services for our customers in 2016.
We look after our customers' properties and advise them on how to sort waste. We offer Nordic ecolabel-certified cleaning services that are carried out using ecolabelled equipment and cleaning agents.
We adjust our customers' properties to support good working conditions while also helping to save energy and costs. In 2016, our eco-trained property managers made 563 energy conservation suggestions at our customers' operating locations, and our energy management centre produced 2,000 reports with action proposals to support our customers' decisionmaking. Our energy management centre monitored 254 properties and some 2,500 ventilation machines.
By outsourcing their support services to us, our industrial customers are free to focus on their core business. We make this possible by ensuring that support services are managed in an environmentally friendly, safe and cost-efficient manner.
We transport our customers' waste for recycling and recovery. We reduce the environmental impacts of our transport operations in many ways, such as improving route efficiency and promoting an ecological driving style.
We work continuously with customers to find new recycling and reuse solutions for commercial, industrial and construction waste. In 2016, we began collecting plastic and textile waste in a few towns. Some 54 per cent of our customers' waste could be recycled for use as raw material for new products, and 94 per cent was otherwise recovered.
Our industrial customers replace virgin raw materials with secondary raw materials, or fossil fuels with biofuels and solid recovered fuels. By doing this together with our customers, we were able to reduce Finland's carbon dioxide emissions by approximately 1.0 million tonnes in 2016.
We invest in the well-being at work and occupational safety of our personnel, with good results: according to our most recent personnel survey, 74per cent would recommend L&T as an employer, our sickness-related absence rate fell to 4.8per cent and we have halved our accident frequency in Finland over the past four years.
We are a significant employer, investor and purchaser of products and services at our operating locations. We also require our subcontractors to employ good and reliable operating methods and to offer a high level of delivery reliability.
We actively train our customers and other stakeholders in relation to current themes in environmental management. In 2016, we organised Environmental Academy training for a total of 337 customers. Their themes included legislative changes concerning producer responsibility for packaging and the ban on the landfill disposal of organic waste, as well as the circular economy. We also produce electronic online training services for our customers. Nearly 2,500 customer representatives participated in our various training activities in 2016.
We engage in constructive cooperation and continuous dialogue with policymakers, the authorities, organisations and other stakeholders to ensure that the necessary operating conditions for the circular economy are in place.
Our primary goal is always to direct materials to reuse or recycling, as our operations are guided by the order of priority stipulated by law and the circular economy approach. Through our services, we promote our customers' material and energy efficiency and reduce their costs. We strive to conserve virgin natural resources and mitigate climate change by replacing virgin raw materials with secondary raw materials and fossil fuels with bioenergy.
Of all the material flows managed by L&T in 2016, 94 per cent was recovered (2015: 92%) and 54 per cent was recycled (2015: 53%).
Caption: The reporting of waste managed by L&T is divided into materials sorted at source, mixed waste and hazardous waste. The reporting covers municipal waste, industrial waste and construction waste in Finland and Russia. Slurry, contaminated soil and ash are excluded from reporting.
Caption: Pallets that are reused in accordance with the order of priority are one example of reuse. Energy recovery from waste is divided into two categories: recovery as a waste-derived fuel, and recovery in the incineration of mixed waste. Energy recovery as a waste-derived fuel includes solid recovered fuels, shredded used wood, tyre shreds used for energy production, as well as biogas and bioethanol produced from biowaste. L&T favours the use of waste that is unsuitable for recycling or environmental construction in energy production as solid recovered fuel.
Hazardous waste is treated at our own plants or delivered to our partners for recovery. In 2016, 66 per cent of hazardous waste was directed to be reused or recycled, and 10 was recovered as energy. 8.3 per cent was transported to other EU countries for treatment. We did not import any hazardous waste to Finland in 2016.
We continuously seek and develop solutions for the recycling and recovery of various waste materials.
In addition to our actual recycling channels, we develop new service concepts to support the reduction, reuse and recycling of waste.
The most significant direct environmental impacts of our operations are the emissions generated by collection and transport services. In 2016, L&T's operations caused 59.6 (2015: 59.5) thousand CO equivalent tonnes of emissions. 2
However, the greenhouse gas emissions caused by our operations only represent a small proportion of the overall benefit produced by recycling and delivering biofuels and solid recovered fuels to our customers.
In 2016, we worked with our customers to reduce Finland's CO emissions by approximately 1.0 million tonnes of CO (2015: 1.1 million). 2 2
Caption: The emissions have been calculated based on the international Green House Gas Protocol reporting standard and emission calculation model, utilising, for example, the VTT Technical Research Centre LIPASTO database. The emissions concerning district heating, subcontractors fuel consumption, as well as work travel only the operations in Finland are accounted.
In 2016, our greenhouse gas emissions declined by 21.5 per cent relative to the 2012 emissions level and operating volume.
Our greenhouse gas emission intensity, or greenhouse gas emissions relative to net sales, was 67.3 thousand CO tonnes per one million euros in 2016 (2015: 68.2 thousand CO tonnes per one million euros). 2 2
In 2016, our total diesel consumption was 15 million litres, which is 9,9 per cent more than in 2015. The expansion of our functions due to the business acquisitions and increasing of the cars explain the increase of consumption.
Gasoline consumption amounted to 350,000 litres (2015: 360,000 litres), a decrease of 2 per cent. Fuel oil consumption totalled 1.78 million litres (2015: 1.48 million litres), up 20 per cent from the previous year.
In 2016 we again introduced new multi-chamber loaders to improve the waste transportations. We now have as many as 62 (2015: 52) multi-chamber loaders in operation. Multi-chamber loaders have two or more chambers for different types of waste, which enables the collection of multiple types of waste in a single run.
We continued the active work for optimizing the transportation routes. Over the past five years, we have optimised nearly 3,000 routes, with over 600 optimised in 2016 (2015: 850). Route optimisation reduces fleet requirements and kilometres driven, and it also reduces stops and visits to yard areas. The amount of the optimized routes is dependent on the structure of the routes, which are optimized each year.
In long-haul logistics, we improved the efficiency of our operations by shifting to equipment that supports larger payloads and increasing round trip transports.
We leveraged our experience of optimising collection and transport routes in waste management by also planning snow ploughing routes in property maintenance. This allowed us to adjust the size of the fleet and improve the efficiency of subcontracting in our property maintenance operations.
In 2016, L&T's average driving style index stayed in good level 8.6 (2015: 8.6). The calculation is based on a weighted average.
Our electricity consumption in 2016 totalled 30,900 MWh (2015: 29,400 MWh). Electricity consumption increased mainly because the the new business acquisitions. In 2016 we started following also our use of district heating in our properties in Finland. In 2016 district heating was used according to the follow up 9,200 Mwh.
We continued to increase the capacity utilisation rate of our properties. We relocated our headquarters to a new multi-space office in January 2016. Named Tikanpesä, the new headquarters is located in Helsinki's Pitäjänmäki district with good public transport connections. We also encourage the employees at the company headquarters to
commute on foot or by bicycle by providing facilities such as better changing rooms and storage space for bicycles.
We have invested in work ability management for more than ten years. The Sirius work ability management programme is aimed at increasing employees' well-being, identifying problems at an early stage and focusing on their prevention.
Our objectives for work ability management for 2016–2020 are:
The five-year Sirius III work ability management programme started at the beginning of 2016. Its focus is on proactive measures, such as activities aimed at improving work fitness and strengthening the day-to-day management skills of supervisors. The programme is also focused on developing recruitment as well as work ability monitoring and career planning.
In 2016, our sickness-related absence rate in Finland fell to 4.8 per cent from 5.2 per cent in the previous year.
Musculoskeletal disorders are the most significant cause of disability pensions and
extended sickness leave at L&T. Promoting musculoskeletal health is part of L&T's basic activities: workplaces focus on finding ways to perform work in a manner that is less strenuous on the body.
L&T's Industrial Services division performs a significant amount of high-powered vacuuming work, which often involves very challenging working conditions and strain on the body. A project is underway in high-powered vacuuming operations in the process cleaning service line to improve occupational ergonomics and safety by means of new ergonomic guidelines and support from occupational physiotherapists from the occupational health care provider. Technical development work is also used to reduce the physical load of work and improve quality. The project will continue in 2017.
L&T has implemented an early care model to facilitate intervention in problems at the workplace as early as possible as well as cooperation to resolve issues. The early care model also helps supervisors intervene in problems or cases such as extended/recurring sicknessrelated absences in a timely manner, as well as obtain support for the employee from occupational health care services or the HR department, for example.
L&T's cleaning and property maintenance units implemented a policy in 2016 of allowing acutely ill employees to be absent for one day at a time, and a maximum of three consecutive days with the supervisor's permission but without a doctor's certificate. The policy was also expanded to pilot units in Environmental Services, Industrial Services, renovation and the maintenance of technical systems. The experiences have been positive: trust between employees and supervisors has increased and the costs associated with occupational health care appointments have declined.
According to a work ability management benchmark study, L&T's disability payments per manyear are significantly below the industry average. Over the past ten years, our average retirement age in Finland has increased from 59.4 years to 63.8 years.
Occupational safety measures and targets are managed under the strategic Nollapeli (Zero Accidents) programme, which supports the work done by the line organisation. The goal of the Zero Accidents programme is to promote occupational safety at L&T and develop the occupational safety culture with a focus on proactive measures.
Our target is to reduce our accident frequency (LTA, lost time accidents) to less than 10 by 2018. In 2016, our LTA figure was 15. The main reason for falling short of the target was that substitutive work was not used as in previous years.
In 2016, we also monitored our overall accident frequency (TRIFFI), which reflects all accidents including accidents resulting in absence, visits for medical treatment, accidents during workrelated travel, and accidents that did not result in absence. We almost achieved our TRIFFI target figure of 41. Our development in this area was positive, as our TRIFFI figure in 2016 was 42, the lowest in L&T's history.
There were no fatal accidents in 2016. There were also no cases of diagnosed occupational diseases.
The key proactive measures include safety observations, occupational safety sessions, Safety Walks and various risk surveys. Their aim is to proactively detect and identify occupational safety risks as well as define and implement the measures necessary for their prevention. Proactive measures are documented in the Zero Accidents system, which supports the monitoring of corrective measures, among other things. The number of proactive measures taken in 2016 was the highest in L&T's history. The number has more than doubled over the past five years.
monitored regularly. The targets for all proactive measures were reached at the Group level in 2016. Unit-specific targets have been set for proactive measures and their achievement is
Occupational safety is an integral element of all work performed at L&T's own operating locations as well as those of its customers. Proactive operating methods related to occupational safety are used in L&T's own units and at customers' units. Operating in a proactive manner helps us develop our own safety as well as the safety of our customers. A significant proportion of our Safety Walks and safety observations are made at our customer locations.
| Development of occupational safety in Finland | ||||||
|---|---|---|---|---|---|---|
| 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | |
| Safety observation reports |
21,713 | 19,414 15,383 14,885 10,987 | 5,341 | |||
| Hazard assessments | 900 | 1,148 | 1,684 | 1,839 | 3,086 | 1,707 |
| Safety Walk observation rounds |
10,283 | 9,273 | 6,808 | 5,577 | 1,670 | 1,519 |
| Occupational safety sessions |
8,047 | 7,472 | 6,517 | 4,973 | 1,491 | 680 |
| Accident frequency | 15 | 11 | 18 | 18 | 33 | 35 |
| Overall accident frequency |
42 | 46 | 54 | 50 | 63 | 62 |
Our partners are interested in our safety procedures and they audited L&T's operations during the year. We achieved good results in supplier audits and received useful feedback related to occupational safety. We believe that auditing practices between partners will develop our operations further and help ensure that the procedures used are in line with agreements.
We regularly measure the job satisfaction of our personnel and use their feedback in the longterm development of our operations.
The most recent Meininki personnel survey was conducted in November 2015. In the survey, L&T employees expressed their views related to the prerequisites of work, motivation, the operations of the unit, and management. The survey indicates what areas we have been successful in and what are the areas of improvement, both at the unit level and the company level.
work together on developing L&T's employee experience and customer experience. We believe that, in a service company, a good customer experience is created through a good employee experience, which is why we have established a close link between enhancing the employee experience and improving the customer experience.
L&T takes a systematic and long-term approach to developing employee competencies and leadership. All of our new employees start by completing an induction training programme, after which their professional development is supported by learning on the job, career paths, job rotation and training.
We ensure the competence of our supervisors through coaching focused on the development of managerial work, business development and leadership.
Our personnel are highly diverse, with a broad age distribution and more than 80 different nationalities represented. Some 16 per cent of our personnel have immigrant backgrounds.
In 2016, we employed approximately 8,000 people in Finland, Sweden and Russia. Each year, we recruit some 2,000 employees in Finland, including approximately one thousand summer workers.
The availability of good employees is becoming increasingly challenging, particularly in growth centres. Ensuring the availability of employees is a critical success factor in our labourintensive industry. It can be influenced by reducing employee turnover, taking measures targeted at specific professional groups and by activating groups outside the labour market. Employee turnover varies substantially between our different professional groups:
In 2016, we held 58 statutory employer–employee negotiations, which led to the termination of the employment of 133 employees. Of those whose employment was terminated, 51 were salaried employees and 82 were non-salaried employees. In addition, six people were temporarily laid off as a result of the negotiations. The reasons for the large statutory employer–employee negotiations were loss-making and unprofitable operations.
We want to promote diversity and the employment of immigrants. We have aimed to actively promote the integration into Finnish society of refugees entitled to asylum by offering them employment opportunities through a new kind of integration training. The project is part of a project launched by the Ministry of Economic Affairs and Employment, which includes several employers and institutional investors. The new model combines traditional integration training with vocational training. As the Finnish State has experienced challenges in launching the new operating model, the training has not yet begun in spite of efforts to do so.
In addition to its involvement in the project, L&T has assessed alternative methods to promote the employment of immigrants, as the company has vacancies that it has not been able to fill with jobseekers representing the native population.
| Personnel in figures | 2016 | 2015 | 2014 |
|---|---|---|---|
| Total number of full-time and part-time employees at year end |
7,931 | 8,085 | 7,830 |
| Finland | 7,023 | 7,192 | 7,076 |
|---|---|---|---|
| Sweden | 652 | 640 | 507 |
| Russia | 256 | 253 | 247 |
| Average number of employees converted to full-time | 7,199 | 7,099 | 7,257 |
| Personnel by gender | |||
| female, % | 46 | 48 | 47 |
| male, % | 54 | 52 | 53 |
| Personnel by type of employment | |||
| permanent, % | 93 | 95 | 94 |
| temporary, % | 7 | 5 | 6 |
| full-time, % | 66 | 63 | 63 |
| part-time, % | 22 | 24 | 25 |
| employees called in when necessary, %* | 12 | 13 | 12 |
| Leased employees by personnel group | |||
| salaried employees | 897 | 1,886 | |
| employees | 27,146 | 24,063 | |
| Personnel by personnel group | |||
| salaried employees, % | 16 | 15 | 16 |
| employees, % | 84 | 85 | 84 |
| Share of employees with an immigrant background, %** |
16 | 17 | 16 |
| from the EU | 41 | 43 | 41 |
| outside the EU | 59 | 57 | 59 |
| Average retirement age bu country | |||
| Finland | 63.8 | 63.1 | 63.1 |
| Sweden | 65 | 65 | |
| Russia | 57.5 | 57 | |
| Sickness absences, %** | 4.8 | 5.2 | 5.3 |
| Accident frequency | 15 | 11 | 17 |
| Percentage of employees who had target setting and performance reviews, % |
80 | 85 | 80 |
| * Type of employment in use only in Finland | |||
| ** Figures cover only operations in Finland |
We require our entire supply chain to comply with legislation, contracts and collective agreements, as well as to satisfy our responsibility requirements with regard to environmental responsibility, our service providers' supply chain responsibility, quality and occupational safety. In selecting suppliers, we emphasise the reliability of operations, ethical and environmental principles, product/service quality and cost efficiency, all of which must meet our strict standards.
Cooperation with a new contract supplier can only begin after the supplier has completed a self-assessment survey, based on which we decide on starting cooperation and any further actions deemed necessary.
In 2016, we continued to develop our supplier assessment process in relation to our corporate responsibility programme.
After more of our suppliers joined the Tilaajavastuu.fi service in 2016, some 98 per cent (2015: 95%) of our service providers were registered on the service at the end of the year. Going forward, joining the service is a requirement for starting and continuing cooperation.
We updated our heavy-duty fleet and replaced some of the oldest vehicles with newer Euro 6 class vehicles that have lower emissions. In 2016 we invested altogether 18 million euros in fleet. Together there are 892 (2015: 875) heavy duty vehicles in our use.
Some 64 per cent of the heavy duty fleet belonged to Euro 4 –emission class or newer in 2016 (2015: 59 %). We also diminished the environmental effects of our fleet by developing the driving habits, optimizing our functions (increasing the utilization rate of our fleet) as well as diminishing the amount of the fleet.
in Finland, the total purchases from whom exceeded EUR 1,000 during the year. Total purchases of goods and services amounted to EUR 256 million (2015: EUR 247 million). The total value of purchases increased as a result of the expansion of the recycling business, which led to a higher purchasing volume of supplies, and a higher level of service purchasing. In 2016, L&T had approximately 5,000 (2015: 4,800) suppliers of goods, materials and services
In Finland, 94.6 per cent (2015: 94.9%) of purchases were made from companies operating in Finland, and 5.3 per cent (2015: 5.1%) from other EU countries. Practically no purchases were made from countries outside the EU (0.02%).
| Breakdown of procurement in Finland | |
|---|---|
| Total EUR 256 million | |
| % of the total |
|
| Direct procurement* | 60 % |
| Vehicles and equipment** | 18 % |
| Indirect procurement, real estate and facilities** |
22 % |
| * Direct procurement includes: raw materials and material payments, external workforce, technical materials and supplies. |
|
| ** Vehicles and equipment, indirect procurement and real estate and facilities also include investments. |
In 2016, we conducted an extensive stakeholder survey that received responses from the representatives of 1,000 of our key stakeholders (current and potential customers, our own personnel, potential employees, investors, national and regional policymakers and the media). The survey was conducted for the second time, which allowed us to compare the results to those of the corresponding survey from two years earlier.
In the coming years, we will focus particularly on measures aimed at improving the customer experience and the state of mind of our personnel, as well as the development of interaction.
We will moderately increase our focus on our employer image and invite a growing number of L&T employees to serve as employee ambassadors to communicate what it is like to work at L&T.
| Stakeholder | Description of interaction in 2016 |
|---|---|
| We conducted two Net Promoter Score surveys in Finland and received more than 5,000 assessments of our operations. We utilised the results at the corporate, division, service line and unit levels to improve customer satisfaction. |
|
| We also conducted more than 50 customer-specific satisfaction surveys that provided valuable information on our day-to-day performance. |
|
| Customers | We initiated efforts to develop the customer experience. As part of these efforts, we conducted 26 in-depth interviews to increase our customer insight. |
| We organised Environmental Academy training events focused on current issues in environmental management for a total of 337 customers and also trained some 2,500 employees of our customer companies using electronic online training. |
|
| We support the professional development of our personnel by learning on the job, career paths, job rotation and training. We ensure the competence of our supervisors through measures including coaching focused on the development of managerial work, business development and leadership. The development of personnel is based on performance reviews. |
|
| We regularly measure the job satisfaction of our personnel and use their feedback in the long-term development of our operations. Personnel representatives are extensively engaged in the company's decision-making forums and development programmes at various levels of the organisation. |
|
| Personnel | We gave Employee of the Month and Supervisor of the Month awards in property maintenance and cleaning and support services, and we also introduced awards in Environmental Services late in the year. In total, we recognised approximately 60 professionals for |
| good work performance. | |
|---|---|
| We continued to shift the focus of our work ability management toward proactive measures. We developed our comprehensive risk management and continued the Zero Accidents programme aimed at further improving the safety of work. |
|
| We communicated with our personnel using the intranet, the Letti personnel magazine, videos, newsletters, text messages, WhatsApp messages and our internal Yammer and Facebook networks. |
|
| We actively communicated career opportunities at L&T in both traditional and social media. |
|
| Potential employees |
We cooperated with several educational institutes and participated in job fairs and related events. We participated in the #kipahommaa16 photo competition organised by siistiihommaa.fi. We produced and published career story videos featuring L&T employees talking about their career paths. |
| Investors | We met with investors and analysts at approximately 40 different events, including seminars, road shows and our Annual General Meeting. |
| We used stock exchange releases, press releases and our website for regular communications with the capital markets. |
|
| Suppliers of | We revised the self-assessment and auditing practices for contract suppliers by defining critical points for the assessment as well as the selection criteria for suppliers to be audited. |
| services and | We adopted a new supplier classification model. |
| goods | We introduced a new implementation model for responsible purchasing. |
| Organisations, lobbying and cooperation projects |
We participated actively in the work of industry and labour market organisations as well as cooperation networks and research projects that promote responsible business, the circular economy and energy efficiency in Finland and at the EU level. In 2016, the events and campaigns we participated in included the Hack the Waste event organised by VTT Technical Research Centre of Finland and the Kinkkutemppu project organised by the Chemical Industry Federation of Finland. |
| In 2016, we continued our positive cooperation with HOPE, a charitable organisation that focuses on supporting low-income families and families with children who have suffered various crises. |
| Charity | During the year, we collected usable sports equipment and toys at our operating locations for distribution by HOPE. We also provided assistance to local HOPE offices; for example, by donating bin bags. We also made smaller local donations to support charities. |
|---|---|
| Authorities | We participated in the drafting and implementation of the Public Procurement Act and environmental legislation, both directly and through lobbying organisations. We met with parliamentary committees, parliamentary groups and key public officials. |
| and influential political actors |
We also presented concrete solutions for promoting the circular economy and recycling. At the local level, we were active in issuing statements concerning municipal waste management regulations as well as municipal decisions regarding waste transportation systems. |
| We responded to nearly 70 media contacts to satisfy journalists' information needs or to identify interviewees. |
|
| Media | We published approximately 20 press releases and organised media events and meetings. |
In 2016, L&T's focus on exercising influence on society was on ensuring the functionality of the markets.
From the perspective of L&T's service business, the most significant legislative reform concerned the Public Procurement Act, which practically means the national implementation in Finland of the EU's Public Procurement Directive. With respect to the Public Procurement Act, the legislative amendments that are favourable to L&T include the strict regulation of inhouse entities, the modernisation of procurement procedures and enhanced monitoring. The Finnish Parliament approved the new Public Procurement Act in December.
In the environmental business, we aim to promote the Finnish Government Programme's stated goal of opening up the closed waste market by discontinuing municipal exclusive rights to waste.
implementation of the Finnish national roadmap. At the EU level, a key area of influence was the circular economy package, which was prepared in various EU institutions throughout 2016 and still remains in the preparatory stages. With regard to the circular economy package, we emphasised the significance of setting concrete targets and harmonising concepts and statistics. With respect to the circular economy, we were closely involved in the drafting and
At the national level, we were involved in the preparatory work for the new National Waste Plan and the drafting of legislation to promote recycling. We aim to promote the expansion of the reporting procedures stipulated by the MARA decree to contaminated land areas and industrial side streams. The MARA decree governs the utilisation of certain types of waste in earth construction.
At the municipal level, we were active in expressing our views on the amendment of waste management regulations and transportation system decisions. We want to promote the sorting of waste at source, the freedom of choice and the market-based waste collection system.
In Finland and Sweden, we have also aimed to promote employment-based immigration by being active in expressing our opinions in the public discussion, as well as developing our own solutions for the employment-based integration of refugees.
In 2016, we conducted two customer surveys in Finland to determine our Net Promoter Score (NPS). In practice, our NPS tells us how many of our customers would recommend us to others. By conducting the surveys, we obtained more than 5,000 assessments of our operations, which we then utilised at the corporate, division, service line and unit levels to improve customer satisfaction. We also conducted more than 50 customer-specific satisfaction surveys that provided valuable information on our day-to-day performance.
The best way to brainstorm customer-oriented services: involve the customer.
We report on corporate responsibility as part of our Annual Report for the period 1 January– 31 December 2016. Our report for 2015 marked the first time we reported in accordance with the revised Global Reporting Initiative (GRI) G4 Core framework. The report is published only on our website.
The report includes all Group companies and subsidiaries, and it covers all of our operations in Finland, Sweden and Russia. If information concerning a single indicator was not available for all of our operating countries, or if a calculation has changed from previous years, this is disclosed next to the indicator. The reporting of key indicators does not cover external service providers and suppliers.
Key environmental responsibility indicators are assured by an independent third party.
Our corporate responsibility report is based on a materiality analysis, which we updated in 2015 in accordance with the revised requirements of the GRI G4 reporting guidelines.
In the analysis, we defined L&T's material responsibility aspects and material aspects from the perspective of key stakeholders, which are related to the most significant economic, social and environmental impacts of our operations, as well as issues that may be significant to the decisions and choices made by L&T's stakeholders.
We divided the identified material aspects into three groups based on their impacts on our business and the expectations of our stakeholders. The materiality analysis as approved by L&T's steering group of corporate responsibility.
| L&T's material Aspects/ GRI | Key indicators | |||
|---|---|---|---|---|
| Aspects | ||||
| Recycling and material recovery | ||||
| Materials | Materials used (G4-EN1) | |||
| Percentage of materials used that are recycled input materials (G4-EN2) | ||||
| Effluents and Waste | Total weight of waste (G4-EN23) | |||
| Significant spills (G4-EN24) Hazardous waste (G4-EN25) |
||||
| Reducing emissions and energy consumption | ||||
| Energy | Energy consumption within the organisation (G4-EN3) | |||
| Energy intensity (G4-EN5) | ||||
| Reduction of energy consumption (G4-EN6) | ||||
| Emissions | Direct greenhouse gas emissions (G4-EN15) | |||
| Energy indirect greenhouse gas emissions (G4-EN16) | ||||
| Other indirect greenhouse gas emissions (G4-EN17) | ||||
| Greenhouse gas emissions intensity (G4-EN18) | ||||
| Reduction of greenhouse gas emissions (G4-EN19) | ||||
| Transport | Environmental impacts of transporting products, goods and materials, and transporting members of the workforce | |||
| (G4-EN30) | ||||
| Business solutions that promote the customer's responsibility | ||||
| Products and Services | Initiatives to mitigate environmental impacts of products and services (G4-EN27) | |||
| Work ability management and occupational safety | ||||
| Employment | Total number and rates of new employee hires and employee turnover (G4-LA1) Benefits provided to full-time employees that are not provided to temporary or part-time employees (G4-LA2) |
|||
| Training | Programmes for skills management and lifelong learning (G4-LA10) | |||
| Regular performance and career development reviews (G4-LA11) | ||||
| Occupational Health and Safety | Occupational accidents, occupational diseases and absenteeism (G4-LA6) | |||
| Workers with high incidence or high risk of diseases related to their occupation (G4-LA7) | ||||
| Compliance with regulations concerning the health and safety impacts of products and services (G4-PR2) | ||||
| Customer satisfaction | ||||
| Product and Service Labelling | Results of surveys measuring customer satisfaction (G4-PR5) | |||
| Employee satisfaction | ||||
| Employee satisfaction | Results of employee satisfaction survey (L&T) | |||
| Code of Conduct | ||||
| Economic output | Direct economic value generated and distributed (G4-EC1) | |||
| Financial assistance received from government (G4-EC4) | ||||
| Environmental Grievance Mechanisms | Grievances about environmental impacts (G4-EN34) | |||
| Anti-corruption | Business units assessed for risks related to corruption (G4-SO3) Communication and training on anti-corruption policies and procedures (G4-SO4) |
|||
| Confirmed incidents of corruption and actions taken (G4-SO5) | ||||
| Anti-competitive Behaviour | Legal actions related to anti-competitive behavior, anti-trust and monopoly practices (G4-SO7) | |||
| Public Policy | Total value of political contributions by country and recipient/beneficiary (G4-SO6) | |||
| Compliance | Significant fines and non-monetary sanctions for non-compliance with environmental laws and regulations (G4- | |||
| EN29) Significant fines and non-monetary sanctions for non-compliance with laws and regulations (G4-SO8) |
||||
| Incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of | ||||
| products and services during their life cycle (G4-PR2) | ||||
| Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data (G4- | ||||
| PR8) | ||||
| Fines for non-compliance with laws and regulations concerning the provision and use of products and services (G4- | ||||
| PR9) | ||||
| Ethics and Integrity | Values and codes of conduct (G4-56) | |||
| Mechanisms for seeking advice on ethical and lawful behavior (G4-57) | ||||
| Mechanisms for reporting concerns about unethical or unlawful behaviour (G4-58) | ||||
| Local Communities | Operations with actual and potential negative impacts on local communities (G4-SO2) | |||
| Dialogue with stakeholders | ||||
| Stakeholder Engagement | List of stakeholder groups engaged by the organisation (G4-24) | |||
| The basis for identification and selection of stakeholders with whom to engage (G4-25) | ||||
| Approaches to stakeholder engagement (G4-26) Key topics and concerns raised through stakeholder engagement (G4-27) |
||||
| Responsibility of the supply chain | ||||
| Procurement Practices | Proportion of spending on local suppliers at significant locations of operation (G4-EC9) | |||
| The organisation's supply chain (G4-12) | ||||
| Supplier Environmental Assessment | Percentage of new suppliers that were screened using environmental criteria (G4-EN32) | |||
| Supplier Assessment for Labour Practices | Percentage of new suppliers that were screened using labour practices criteria (G4-LA14) | |||
| Diversity and equality | ||||
| Diversity and Equal Opportunity | Composition of governance bodies and breakdown of employees per employee category according to gender and | |||
| age group (G4-LA12) | ||||
| Non-discrimination | This page is generated from Lassila & Tikanoja's online Annual Report www.lassila-tikanoja.fi/annualreport2016 76 Total number of incidents of discrimination and corrective actions taken (G4-HR3) |
| GRI Content | Location | Remarks | |
|---|---|---|---|
| General Standard Disclosures | |||
| Strategy and Analysis | |||
| Statement from the most senior | |||
| G4-1 | decision-maker of the | Year 2016 | |
| Description of key impacts, risks | Business drivers and the | ||
| G4-2 | and opportunities | operating environment | |
| Organizational Profile | |||
| Financial statements, General | |||
| G4-3 | Name of the organisation | information | |
| Primary brands, products and | |||
| G4-4 | services | Services | |
| Location of the organisation's | Financial statements, General | ||
| G4-5 | headquarters | information | |
| Number of countries where the | Financial statements, General | ||
| organisation operates, and | information | ||
| names of countries where either | |||
| the organisation has significant | |||
| operations or that are specifically | |||
| relevant to the material | |||
| sustainability aspects covered in | |||
| the report | |||
| G4-6 | |||
| Nature of ownership and legal | Financial statements, General | ||
| G4-7 | form | information | |
| Financial statements, General | |||
| G4-8 | Markets served | information | |
| Key figures | |||
| G4-9 | Scale of reporting organisation | ||
| Personnel in figures | |||
| G4-10 | Number of employees | ||
| G4-11 | Percentage of employees | In Finland and Sweden, all employees | |
| covered by collective bargaining | are covered by collective bargaining | ||
| agreements | agreements Information for Russia is | ||
| not available. | |||
| Responsibility of the supply | |||
| G4-12 | The organisation's supply chain | chain | |
| Significant changes during the | Report by the Board of | ||
| reporting period regarding the | Directors, Changes in Group | ||
| organisation's size, structure, | structure | ||
| ownership or supply chain | |||
| G4-13 | |||
| G4-14 | Precautionary approach | The precautionary approach is part of | |
| our environmental policy. We estimate | |||
| environmental risks of our actions and | |||
| prevent them in advance following the | |||
| precautionary approach. | |||
| Externally developed principles | Stakeholder relations | ||
|---|---|---|---|
| or initiatives to which the | |||
| organisation subscribes or which | |||
| it endorses | |||
| G4-15 | |||
| Memberships of associations and | Lobbying and cooperation | ||
| advocacy organisations | networks | ||
| G4-16 | |||
| Identified Material Aspects and Boundaries | |||
| List of all entities included in the | Financial statements, Group | ||
| G4-17 | organisation's consolidated | companies | |
| financial statements | Reporting on corporate | ||
| Process for defining report | responsibility | ||
| G4-18 | content | Reporting on corporate responsibility |
|
| Reporting on corporate | |||
| G4-19 | Material Aspects | ||
| The Aspect Boundary for each | responsibility Reporting on corporate |
||
| material Aspect within the | responsibility | ||
| G4-20 | organisation | ||
| The Aspect Boundary for each | Reporting on corporate | ||
| material Aspect outside the | responsibility | ||
| G4-21 | organization | ||
| Effect of any restatements of | Reporting on corporate | ||
| information provided in previous | responsibility | ||
| G4-22 | reports | ||
| Significant changes from previous | Reporting on corporate | ||
| reporting periods in the Scope | responsibility | ||
| and Aspect Boundaries | |||
| G4-23 | |||
| Stakeholder Engagement | |||
| List of stakeholder groups | |||
| G4-24 | engaged by the organisation | Stakeholder relations | |
| The basis for identification and | |||
| G4-25 | selection of stakeholders with | Stakeholder relations | |
| Approaches to stakeholder | |||
| G4-26 | engagement | Stakeholder relations | |
| Key topics and concerns raised | |||
| G4-27 | through stakeholder engagement | Stakeholder relations | |
| Report Profile | |||
| Reporting on corporate | |||
| G4-28 | Reporting period | responsibility | |
| Date of most recent previous | 25 February 2015 | ||
| G4-29 | report | ||
| Reporting cycle | Reporting on corporate | ||
| G4-30 | responsibility | ||
| Contact point for questions | Reporting on corporate | ||
| regarding the report or its | responsibility | ||
| contents | |||
| G4-31 | |||
| GRI Content Index | GRI Index | ||
| G4-32 |
| The organisation's policy and | Reporting on corporate | ||
|---|---|---|---|
| current practice with regard to | responsibility | ||
| seeking external assurance for | |||
| G4-33 | the report | ||
| Governance | |||
| Governance Structure and Composition | |||
| Governance structure and | Corporate Governance | ||
| G4-34 | committees | Statement | |
| The process for delegating | Managing and reporting on | ||
| G4-35 | authority | corporate responsibility | |
| Managing and reporting on | |||
| G4-36 | Responsible persons | corporate responsibility | |
| Remuneration and Incentives | |||
| Remuneration policies for the | Remuneration statement | ||
| highest governance body and | |||
| G4-51 | senior executives | ||
| Ethics and Integrity | |||
| The organisation's values, principles, standards and norms |
Code of Conduct | ||
| G4-56 | of behaviour | ||
| Mechanisms for seeking advice | Code of Conduct | ||
| on ethical and lawful behavior | |||
| G4-57 | |||
| Mechanisms for reporting | Code of Conduct | ||
| concerns about unethical or | |||
| G4-58 | unlawful behavior | ||
| Specific Standard Disclosures | |||
| Disclosures on Management Approach | |||
| Generic Disclosures on Management | Managing and reporting on corporate responsibility | ||
| Approach | Code of Conduct | ||
| Environmental responsibility | |||
| Social responsibility | |||
| Responsibility of the supply chain Report by the Board of Directors, Corporate responsibility |
|||
| Economic Responsibility | |||
| Economic performance | |||
| Direct economic value generated | |||
| G4-EC1 | and distributed | Financial added value to stakeholders and tax footprint |
|
| Financial assistance received | In 2016, grants and assistance received | ||
| from government | from the government for product | ||
| development and projects amounted to | |||
| EUR 40,163. | |||
| G4-EC4 | |||
| G4-EC9 | Procurement Practices | Responsible supply chain | |
| Environmental Responsibility | |||
| Materials |
| G4-EN1 | Materials used by weight or | Recycling and material | We report our managed material flows |
|---|---|---|---|
| volume | recovery | divided into materials sorted at source, | |
| mixed waste and hazardous waste. We | |||
| monitor the volume and weight of | |||
| materials, but due confidentiality, we do | |||
| not disclose this information. | |||
| G4-EN2 | Percentage of materials used that | Recycling and material | The materials we use are primarily |
| are recycled input materials | recovery | waste, which we direct to recycling and | |
| other reutilisation. We report the | |||
| recycling and recovery rate of our | |||
| managed material flows and our own | |||
| plants. | |||
| Energy | |||
| G4-EN3 | Energy consumption within the | Reducing emissions and energy | We report fuel consumption in litres. |
| organisation | consumption | ||
| G4-EN5 | Energy intensity | Reducing emissions and energy | |
| consumption | |||
| G4-EN6 | Reduction of energy | Reducing emissions and energy | We report fuel consumption in litres. |
| consumption | consumption | ||
| Emissions | |||
| G4-EN15 | Direct greenhouse gas emissions | Reducing emissions and energy | |
| (scope 1) | consumption | ||
| G4-EN16 | Energy indirect greenhouse gas | Reducing emissions and energy | The emissions of district heating is |
| emissions (scope 2) | consumption | reported only of Finnish offices in 2016. | |
| G4-EN17 | Other indirect greenhouse gas | Reducing emissions and energy | Reported only of Finnish actions in |
| emissions (scope 3) | consumption | 2016. | |
| G4-EN18 | Greenhouse gas emissions | Reducing emissions and energy | |
| intensity | consumption | ||
| G4-EN19 | Reduction of greenhouse gas | Reducing emissions and energy | |
| emissions | consumption | ||
| Effluents and Waste | |||
| G4-EN23 | Total weight of waste by type and disposal method | Recycling and material | |
| recovery | |||
| G4-EN24 | Total number and volume of | Compliance with | |
| significant spills | environmental regulations | ||
| G4-EN25 | Weight of transported, imported, | Recycling and material | Reporting the specific amounts of |
| exported, or treated waste | recovery | weight is not possible based on the | |
| deemed hazardous under the | confidentiality. | ||
| terms of the Basel Convention | |||
| Annex I, II, III and VIII, and | |||
| percentage of transported waste | |||
| shipped internationally | |||
| 80 | |||
| Products and Services |
| G4-EN27 | Extent of impact mitigation of | ||
|---|---|---|---|
| environmental impacts of | Business solutions promoting | ||
| products and services | customer's responsibility | ||
| Reducing emissions and energy | |||
| consumption | |||
| Compliance | |||
| Monetary value of significant | Code of Conduct | ||
| fines and total number of non | |||
| monetary sanctions for non | |||
| compliance with environmental | |||
| laws and regulations | |||
| G4-EN29 | |||
| Transport | |||
| G4-EN30 | Significant environmental | Reducing emissions and energy | |
| impacts of transporting products | consumption | ||
| and other goods and materials | |||
| for the organisation's operations, | |||
| and transporting members of the | |||
| workforce | |||
| Supplier Environmental Assessment | |||
| G4-EN32 | Percentage of new suppliers that | Responsible supply chain | |
| were screened using | |||
| environmental criteria | |||
| Environmental Grievance Mechanisms | |||
| G4-EN34 | Number of grievances about | Compliance with | |
| environmental impacts filed, | environmental regulations | ||
| addressed, and resolved through | |||
| formal grievance mechanisms | |||
| Social Responsibility | |||
| Labour practices and decent work | |||
| Employment | |||
| G4-LA1 | Total number and rates of new | Personnel in figures | |
| employee hires and employee | |||
| turnover by age group, gender | |||
| and region | |||
| G4-LA2 | Benefits provided to full-time | In 2016, in addition to statutory | |
|---|---|---|---|
| employees that are not provided | occupational health care, we provided | ||
| to temporary or part-time | all employees with health care on the | ||
| employees, by significant | general practitioner level at the | ||
| locations of operation | occupational health care centre, | ||
| regardless of the nature of the | |||
| employment relationship. Membership | |||
| of the L&T sickness fund is only available | |||
| to those who work at L&T in Finland full | |||
| time and whose employment | |||
| relationship has lasted more than four | |||
| months. The personnel benefit | |||
| programme is available in Finland to | |||
| permanent employees and employees | |||
| who have worked on a fixed-term | |||
| contract for more than one year, and | |||
| who work at least 20 hours per week. | |||
| Occupational Health and Safety | |||
| G4-LA6 | Type of injury and rates of injury, | Occupational safety | |
| occupational diseases, lost days | |||
| and absenteeism, and total | |||
| number of work-related | |||
| fatalities, by region and by | |||
| gender | |||
| G4-LA7 | Work ability management | Tasks in which employees are exposed | |
| are covered by occupational safety | |||
| Social responsibility | guidelines, work placement inspections | ||
| Workers with high incidence or | and regular inspections. | ||
| high risk of diseases related to | |||
| their occupation | |||
| Training | |||
| G4-LA10 | Programmes for skills | Competence development | |
| management and lifelong | |||
| learning that support the | Work ability management | ||
| continued employability of | |||
| employees and assist them in | |||
| managing career endings | |||
| G4-LA11 | Percentage of employees | Personnel in figures | |
| receiving regular performance | |||
| and career development reviews, | |||
| by gender and by employee | |||
| category | |||
| Diversity and Equal Opportunity | |||
| G4-LA12 | Composition of governance | Personnel in figures | |
| bodie | 82 |
| Internal audit focuses on controlling |
|---|
| corruption related risks. In 2016 there |
| processes, where the operating model |
| was developed and the chance for |
| corruption was prevented or minimized. |
| inspected in Finland and one business |
| risks in development processes. |
| G4-SO7 | Total number of legal actions for | No incidents. | |
|---|---|---|---|
| anti-competitive behaviour, anti | |||
| trust and monopoly practices and | |||
| their outcomes | |||
| Compliance | |||
| G4-SO8 | Monetary value of significant | No incidents. | |
| fines and total number of non | |||
| monetary sanctions for non | |||
| compliance with laws and | |||
| regulations | |||
| Product Responsibility | |||
| Customer Health and Safety | |||
| G4-PR2 | Total number of incidents of non | No incidents. | |
| compliance with regulations and | |||
| voluntary codes concerning the | |||
| health and safety impacts of | |||
| products and services during | |||
| their life cycle, by type of | |||
| outcomes | |||
| Product and Service Labelling | |||
| G4-PR5 | Results of surveys measuring | Customer satisfaction | |
| customer satisfaction | |||
| Customer Privacy | |||
| G4-PR8 | Total number of substantiated | No incidents. | |
| complaints regarding breaches of | |||
| customer privacy and losses of | |||
| customer data | |||
| Compliance | |||
| G4-PR9 | Monetary value of significant | No incidents. | |
| fines for non-compliance with | |||
| laws and regulations concerning | |||
| the provision and use of products | |||
| and services | |||
This document is a translation of the Finnish report
We have been engaged by the Management of Lassila & Tikanoja (hereafter L&T) to provide limited assurance on the Environmental Numerical Data presented in the "Environmental responsibility"-part of L&T´s Annual Report for the reporting period January 1, 2016 to December 31, 2016 (hereafter Environmental data).
Global Reporting Initiative's Sustainability Reporting Guidelines G4 was used as the assurance criteria (hereafter GRI G4).
The inherent limitations on accuracy and completeness in data related to the Environmental data are to be taken into account when reading our assurance report. The presented Environmental data is to be considered in connection with the explanatory information on data collection, consolidation and assessments provided by L&T.
The Management of L&T is responsible for the measuring, preparation and presentation of the Environmental data in accordance with the GRI G4.
Our responsibility is to express an independent conclusion on the Environmental data. We have conducted the engagement in accordance with ISAE 3000 (Revised). To the fullest extent permitted by law, we accept no responsibility to any party other than L&T for our work, for this assurance report, or for the conclusions we have reached.
We are independent from the company according to the ethical requirements in Finland and we have complied with other ethical requirements, which apply to the engagement conducted.
We apply the International Standard on Quality Control 1 (ISQC 1) and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
A limited assurance engagement consists primarily of making inquiries of persons responsible for the preparation of the Environmental data presented, and applying analytical and other evidence gathering procedures, as appropriate. The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement and consequently the level of assurance obtained in a limited assurance engagement is substantially lower.
An assessment of conformity with the reporting principles of GRI G4 in the presentation of the Environmental data;
An assessment of the definition of the reporting boundaries for Environmental data in the context of L&T's business operations and sector;
An assessment of data management processes, information systems and working methods used to gather and consolidate the Environmental data;
A review of the presented Environmental data with an assessment of information quality and reporting boundary definitions;
Assessment of data accuracy and completeness through a review of the original documents and systems on a sample basis;
A site visit conducted to one of L&T's sites.
Based on the assurance procedures performed, nothing has come to our attention that causes us to believe that the information subject to the assurance engagement is not prepared in accordance with the GRI G4 in all material respects.
Helsinki, 20 February 2017
KPMG OY AB
Lasse Holopainen Nathalie Clément Authorised Public Accountant, KHT Senior Manager, Advisory
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