Annual Report • Feb 26, 2014
Annual Report
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| KEMIRA IN 2013 | 2 |
|---|---|
| CEO's review | 2 |
| Our business business | 4 |
| Economic rconomic responsibility esponsibility |
6 |
| Strategy | 8 |
| Key figures | 10 |
| Financial and corpor corporate responsibility perf esponsibility performance |
13 |
| CORPORATE RESPONSIBILITY | 15 |
| Corporate responsibility r esponsibility reporting scopeting scope |
15 |
| Our approach | 16 |
| Material topics for Kemira's corpora's corporate responsibility esponsibility 17 |
|
| Stakeholder engagder engagement | 19 |
| Key activities in 2013 tivities 2013 |
22 |
| Our focus areas | 25 |
| Responsiblesponsible business pr e business practices |
27 |
| Responsiblesponsible supply chain | 29 |
| Responsibility f esponsibility for employees |
31 |
| Performance manag mance management and l ement leadership |
|
| development | 32 |
| Safety at workplaceorkplace | 33 |
| Responsiblesponsible manufacturing | 34 |
| Energy efficiencfy & climay climate change | 36 |
| Water efficiencfy | 41 |
| Sustainable products and solutions ts and solutions |
43 |
|---|---|
| Responsibility t esponsibility towards the lds local communities wher ocal |
where we |
| operate | 46 |
| GRI report | 48 |
| General standard disclosures | 53 |
| Strategy and analy analysis | 53 |
| Organizational prtional profile | 54 |
| Identified ma material aspec erial aspects and boundaries ts boundaries |
57 |
| Stakeholder engagder engagement | 62 |
| Report profile | 63 |
| Governance | 64 |
| Ethics and int integrity | 68 |
| Specific sSpecific standard disclosures by focus areas | 69 |
| Disclosures on manag es management apement approach |
69 |
| Economic perf conomic performance indica mance indicators |
79 |
| Responsiblesponsible business pr e practices |
80 |
| Responsiblesponsible supply chain | 82 |
| Responsibility f esponsibility for employees |
84 |
| Responsiblesponsible manufacturing | 89 |
| Sustainable products and solutions ts and solutions |
95 |
| Responsibility t esponsibility towards the lds local communities wher ocal communities where |
|
| we operate | 98 |
| Assurance statement | 99 |
Kemira in 2013 > CEO's review
The year 2013 wear 2013 was an impor as important miltant milestone for us – wor – we accomplished a significant r e accomplished a significant repositioning o epositioning of the compan f company to become a o become a profitable water pure-play. We sharpened our e e sharpened our existing strategy, and made c , made choices rhoices regarding the rding role of businesses f businesses, geographical raphical reach, growth and inno wth innovation. All of the choices rhoices reflect and supt support our strategy. Kemira has a unique s a unique strategy to provide chemicals fhemicals for businesses r or related to water quality and quantity manag er management. We help our cus e customers improve their water, energy and raw material efficiencfy.
Kemira's year 2013 was marked by launching the sharpened strategy followed by numerous actions to implement it. We divested several of our non-core businesses: our share in the Sachtleben joint venture, ChemSolutions' formic acid business and our coagulants business in Brazil. On the other hand, we acquired key polymer assets and competencies through the 3F acquisition as well as strengthened our position in the North American pulp and paper market by acquiring Soto industries. Towards the end of 2013, we also strengthened our asset footprint by finalizing our new Nanjing facility in China, and our Dormagen coagulant plant in Germany. These will help us to strengthen our position in the Chinese paper markets, and in sustaining our leadership position in the municipal and industrial water treatment market in EMEA.
We have worked hard on achieving a strong balance sheet and advancing towards the target profitability, and have made good progress due to a variety of efficiency measures. In 2012, we set a target of achieving EUR 60 million cost savings through the restructuring program Fit for Growth by the end of 2014, and we are progressing as planned. Fit for Growth measures have significantly reduced complexity, reduced our fixed cost base and strengthened our balance sheet in 2013. Beyond Fit for Growth, we improved our internal efficiency by
establishing a Business Service Center in Gdansk, Poland in order to benefit from process harmonization and centralization. In addition, we implemented a new business model based on customer segmentation in Municipal & Industrial.
We also continued implementing the Lean management philosophy, which drives us towards a learning organization. Through a Lean culture, we strive for continuous improvement through processes efficiency and waste reduction – waste in this context meaning unnecessary resources, bureaucracy and unproductive time. Furthermore, the optimization of our manufacturing network resulted in 18 site and 2 production plant closures or divestments.
In 2013, our organic revenue growth reached 3%, driven by higher sales volumes in the Paper segment. In Oil & Mining, revenue in local currencies remained flat as recovered polymer sales volumes, especially in North America, were offset by continued market softness, which was specifically related to process chemicals used in the mining industry. The revenue of Municipal & Industrial was partly impacted by the implementation of a new business model, targeting to improve the segment's profitability. Our operative EBIT increased 6% in 2013 driven by higher sales volumes and fixed costs savings related to the "Fit for
Growth" restructuring program. Our operative ROCE (Return On Capital Employed) improved significantly to 11.9% (10.0%) during the year. In addition, we generated over EUR 200 million of cash flow from the operative activities and reduced net debt by some 15% to EUR 456 million (532).
Kemira will continue to focus on improving its profitability and reinforcing the positive cash flow. The company will also continue to invest in order to secure future growth in water quality and quantity management related businesses – a market where Kemira's R&D expertise provides differentiation capabilities. The need to increase operational efficiency in our customer industries creates opportunities for us to develop new products, and offer solutions for both existing and potential customers.
Corporate responsibility and transparency are vital for a global organization, which is also seen as increased stakeholder expectations. It has become an elemental part of our management discussions, touching upon all areas of business.
In September 2013, we reviewed our corporate responsibility focus areas by conducting a stakeholder survey, which was used as the basis for defining our future development areas. During the year, we also started to evaluate our corporate responsibility performance against set targets and reporting on the progress in quarterly interim reports, which increases the transparency and traceability of our efforts. We have also successfully developed our reporting according to international frameworks and standards, and achieved a top position this year in Carbon Disclosure Project's Nordic 260 Climate Disclosure Leadership Index. In addition, we decided to follow the Global Reporting Initiative's (GRI) G4 sustainability reporting guidelines as one of the first companies in Finland.
From a customer and product responsibility point of view, we have made good progress in creating even more sustainable products, which is increasingly a requirement from our customers. Furthermore, Kemira's products and solutions enable our customers to improve their own water, energy and raw material efficiency, which provides us with business opportunities as the environmental norms and standards continue to tighten globally.
As for Kemira, we follow the chemical industry legislation closely to stay on par with the most recent regulations, which is developing rapidly not only in the EU and North America, but in the emerging markets as well.
For 2014, we have revised our corporate responsibility targets and key performance indicators which will help us measure our progress and maintain our ambition for continuous improvement. We have set ourselves targets and KPIs for all defined focus areas, such as responsible business conduct, supply chain and our employees. This report provides insight into our progress on the defined focus areas as well as our commitment to creating shared value to our stakeholders.
From an organizational perspective, the repositioning of Kemira is now almost finished, and our concentration is once again turned on growth. However, achieving growth would not be possible without the invaluable input of our employees. It was a challenging year for all, bringing substantial changes. I would like to thank our employees of their great and dedicated contribution.
In addition to thanking all our employees, I would like to acknowledge our shareholders for their trust. Clearly, from a shareholder's perspective, we continue to be a reliable investment, and are striving to constantly increase our shareholder return. Our ambitious journey towards becoming an industry and technology leader in chosen target markets will continue also under the leadership of Kemira's next CEO, Jari Rosendahl.
Kemira in 2013 > Our business
Kemira is a gla is global chemicals compan hemicals company serving cus y serving customers in water-intensive industries. We provide expertise and ctise chemicalshemicals that improve our cuse customers' water, energy and raw material efficiencfy.
Kemira is a global company focusing on pulp & paper, oil & gas, mining and water treatment. Our objective is to achieve above-the-market growth through our competent employees, high-performing organization, product and service innovations and further strengthened presence in mature and selected emerging markets.
In 2013, Kemira had annual revenue of EUR 2,229 million and 4,453 employees. Headquartered in Helsinki, we have operations in approximately 40 countries and sales to more than 120 countries. Kemira shares are listed on the NASDAQ OMX Helsinki Stock Exchange.
Kemira's business is organized into three customer based segments operating in the Water Quality and Quantity Management (WQQM) market: Paper, Oil & Mining and Municipal & Industrial. In 2013, Kemira divested the core assets of its fourth segment ChemSolutions, and the closing is expected in the first quarter of 2014. After closing the transaction, the ChemSolutions segment will be discontinued.
Kemira's Paper segment has unique expertise in applying chemicals and supporting pulp & paper producers to innovate and constantly improve their operational efficiency. We develop and commercialize new products to fulfil customer needs and to ensure the leading portfolio of products and services for paper wet-end, focusing on growth especially in packaging and board as well as tissue. We leverage our strong pulp & paper application portfolio
in North America and EMEA and increase focus on China, Indonesia and Brazil.
Kemira is a technology and market leader in paper wet-end chemistry. The demand for chemicals, especially sizing and strength chemicals, is growing, which is partly due to pulp and paper industry trends: increased use of recycled fibers, lightweighting of packaging and board and using hardwood instead of softwood in virgin pulp. Reducing water and energy consumption in production continues to be an industry trend, for which we can provide expertise and chemistry that improves the customers' process efficiency.
Kemira's Oil & Mining segment provides a unique combination of innovative chemicals and application knowledge that improves process efficiency and yield in oil, gas and metals recovery. We use our in-depth understanding of extraction processes to tailor solutions for water management and re-use. Expanding from our position in North America and EMEA, we continue to build a strong base for growth in selected countries in South America, Middle East and Africa.
We target growth across all our main differentiated product lines: high oil price spurres demand for identifying new sources, and increased wet and dry shale fracking increases demand for our polymer products, especially in North America. At the same time, declining ore assays require improved processing and the increasing environmental demands are accelerating demand for wastewater treatment.
Municipal & Industrial aims to be a leading water chemicals supplier for raw and waste water applications as well as for sludge treatment in EMEA and North America, and is capturing selected growth opportunities in the emerging markets. We enable our municipal and industrial customers to improve their water treatment efficiency by supplying them with competitive, highperforming products and value adding application support. Kemira is a technology and market leader in raw and waste water as well as sludge treatment. Water reuse remains the most efficient solution to meet the increasing water demand, which is an important driver of business. The other main driver for raw, wastewater and sludge treatment chemicals is legislation and regulatory enforcements that determine the quality standards for treated water and sludge.
Note: As announced on January 30, 2014, Kemira's South America region will be consolidated into the North America region. The combined region will be renamed 'The Americas'.
Information about Kemira's R&D activities can be found in Our focus areas: Sustainable products and solutions.
Visit Kemira.com – Fennosan PFA, Kemira's microbiological control system for tissue paper making, was awarded at the Paper Industry Technical Association's innovation contest.
Visit Kemira.com – Kemira's Paper segment furnishes General Electric (GE) boiler and cooling water chemical product technologies to the pulp and paper industry.
Visit Kemira.com – Oil & Mining segment generates environmental benefits for customers through tailored solutions.
Visit Kemira.com – Municipal & Industrial segment's DesinFix chosen as the wastewater treatment solution in Berlin, Germany.
Kemira in 2013 > Our business > Economic responsibility
Sustainable organic grganic growth, financial s wth, stability and tar tability target-orientt-oriented corpored corporate responsibility w esponsibility work are the key elements inements in Kemira's management of economic r f responsibility esponsibility.
Through all our operations we aim to secure Kemira's financial success and thus long-term value creation to our stakeholders. This can be achieved through implementing
our long-term strategy, recognizing and managing risks and opportunities, as well as providing transparent information to our stakeholders.
| 2011 2,192.0 |
|---|
| -1.654.0 |
| -299.3 |
| -101.4 |
| -37.4 |
| -184.3 |
| -84.4 |
| 138.7 |
| -16.9 |
| 66.9 |
| -13.2 |
| 91 |
* Income taxes paid
Through our long-term strategic tax approach we aim at being a responsible corporate citizen in all of our operating countries. Our tax management culture is based on our corporate values, Code of Conduct (.pdf) and tax policies. Our objective is to contribute to the company's strategic development and growth by taking into account the uncertainty and effects of tax legislation and its interpretations. The tax approach is applied to Kemira Oyj as well as all its subsidiaries in which Kemira has over 50% direct or indirect interest. With our tax approach, we aim at achieving a fair balance between tax optimization and risk management. Our principle is to strictly follow local tax practices and legislation in all regions where we have a tax status. One of our tax management objectives is to communicate the general tax related principles within the company in order to harmonize our practices and working methods for tax planning, transfer pricing, tax compliance, tax reporting and documentation requirements in order to reach the most optimal tax position.
We do not operate in tax haven countries as defined by the OECD for taxation reasons. Our limited operations in tax havens are due to business reasons, e.g. raw material sourcing and key customer's locations.
Kemira's principle is to apply the arm's length transfer pricing principles according to OECD recommendations in all intra-group product, service, IPR and financing transactions.
| Income taxes paid by region | |||
|---|---|---|---|
| EMEA | 68.9% | ||
| NA | 27.7% | ||
| SA | 2.1% | ||
| APAC | 1.3% | ||
| Total | 100% |
Kemira in 2013 > Strategy
In April 2013, Kemira presented its sharpened strategy in conjunction with the new financial targets for 2016. We focus on seeking growth particularly in the pulp, paper, oil, gas, and mining industries by developing chemical products and innovations differentiating Kemira against the competition. By the end of 2020, Kemira aims to become a leader in the industry and technology in the chosen target markets. Our vision is to provide the most valuable expertise and chemicals for water-intensive industries, which is also crystallized in our promise, "Where water meets chemistry".
Our strategy has four key focus areas; business focus, growth, geographical focus, and innovation.
Business fBusiness focus: Kemira provides expertise and tailored combinations of chemicals for water-intensive industries. We focus on pulp & paper, oil & gas, mining and water treatment to improve our customers' water, energy and raw material efficiency.
Growth: Paper and Oil & Mining segments are targeting profitable, above-the-market revenue growth through differentiated product lines, e.g. polymers, sizing and other process chemicals. Municipal & Industrial segment focuses on profitability improvement and on maximizing cash flow generation. We increase the share of capital expenditure used for differentiated product lines in order to support the targeted growth. With commodity products, such as coagulants and bleaching chemicals, the focus is on maximizing profitability and cash flow.
Geographical faphical focus: Mature markets continue to be important for all segments, whereas the focus in the emerging markets is on selective expansion. In the emerging markets, China and Indonesia are the key markets for the paper wet-end chemistry. Brazil and Uruguay will remain important markets for the bleaching chemicals used in the pulp industry. In addition to the mature markets, the Oil & Mining segment will focus largely on Argentina, Brazil and Middle East when it comes to oil and gas, and on Chile, Peru and Africa when it comes to mining. Municipal & Industrial remains mostly on the mature markets for the time being, but we monitor the development of legislation and business opportunities in the emerging markets closely.
Innovation: Research and Development is a critical enabler for organic growth in Kemira and provides differentiation capabilities in water quality and quantity markets. Kemira's R&D spend will be increased for process improvement innovations in paper, oil & gas and mining industries, as well as in the related product lines. We aim at achieving 10% of our revenue from innovation sales in 2016, that is sales from new products or products to new applications launched within the past five years.
Continuous efficiency improvement will remain the key enabler for a successful strategy implementation.
We have outlined a roadmap for our strategy "From redesign to expansion". Naturally, the different phases overlap to a degree.
Furthermore, achieving growth and expansion will not be possible without a performance driven organization and above all, its employees. To achieve the ultimate goal of being an industry leader, we are striving to be best-inclass in our ability to leverage global performance culture, talents and operations.
Visit Kemira.com – Kemira's sharpened strategy "From redesign to expansion" and financial targets for 2016 released in April 2013.
Visit Kemira.com – See Kemira's Capital Markets Day presentation from September, 2013.
| 2013 | 2012 | |
|---|---|---|
| Revenue | 2,229.1 | 2240.9 |
| Operative EBIT | 164.2 | 155.5 |
| EBIT | 42.6 | 33.1 |
| Operative EBIT, % | 7.4 | 6.9 |
| EBIT, % | 1.9 | 1.5 |
| Profit before tax | 2.5 | 28.6 |
| Net profit attributable to owners of the parent | -31.6 | 17.7 |
| EPS, EUR | -0.21 | 0.12 |
| ROCE, % * | 3.0 | 2.6 |
| Cash flow after investments | 195.7 | 71.8 |
| Equity ratio, % at period-end | 51 | 51 |
| Gearing, % at period-end | 41 | 42 |
| Personnel at period-end | 4,453 | 4,857 |
* 12-month rolling average (ROCE, % based on the reported EBIT).
| EUR million | 2013 | 2012 |
|---|---|---|
| Paper | ||
| Revenue | 1,067.6 | 1,005.6 |
| Operative EBIT | 86.5 | 75.3 |
| EBIT | 45.7 | 44.7 |
| Operative EBIT, % | 8.1 | 7.5 |
| EBIT, % | 4.3 | 4.4 |
| Capital expenditure | 75.2 | 72.2 |
| Cash flow after investments, excluding interest and taxes | 55.9 | 8.1 |
| Municipal & Indus Industrial | ||
| Revenue | 659.4 | 686.6 |
| Operative EBIT | 45.8 | 39.2 |
| EBIT | -23.4 | -16.5 |
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
| Operative EBIT, % | 6.9 | 5.7 |
|---|---|---|
| EBIT, % | -3.6 | -2.4 |
| Capital expenditure | 46.9 | 31.7 |
| Cash flow after investments, excluding interest and taxes | 36.7 | 39.2 |
| Oil & Mining | ||
| Revenue | 311.5 | 321.1 |
| Operative EBIT | 17.4 | 25.9 |
| EBIT | 6.5 | 14.2 |
| Operative EBIT, % | 5.6 | 8.1 |
| EBIT, % | 2.1 | 4.4 |
| Capital expenditure* | 188.2 | 177.7 |
| Cash flow after investments, excluding interest and taxes | -60.6 | -5.3 |
| Chemsolutions | ||
| Revenue | 190.6 | 227.6 |
| Operative EBIT | 14.5 | 15.1 |
| EBIT | 13.8 | -9.3 |
| Operative EBIT, % | 7.6 | 6.6 |
| EBIT, % | 7.2 | -4.1 |
| Capital employed* | 99.1 | 192.6 |
| Cash flow after investing activities | 82.3 | 23.6 |
*12-month rolling average
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
Kemira in 2013 > Key figures > Financial and corporate responsibility performance
| Financial targets | Progress | Key achievements 2013 |
|---|---|---|
| Organic revenue growth of 0%-5% | Met | |
| >15% higher operative EBIT | Not met | |
| Gearing level <60% | Met | |
| Corporate responsibility targets | Progress | Key achievements 2013 |
| Suppliers | ||
| Effective use of Code of Conduct for Suppliers, Distributors and Agents (CoC-SDA) in all relevant supplier relationships by the end of 2013 |
Met | |
| Active Supplier Performance management program in place by the end of 2013 |
Met | |
| Employees | ||
| All Kemira employees covered by Kemira Code of Conduct (CoC) training by the end of 2013 |
Met | |
| All Kemira employees covered by the global Performance Management process by the end of 2014 |
Underway | |
| Every people manager participates in leadership development programs at least once every 3 years, first target period 2013–2015 |
Underway |
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
| Operations | ||||
|---|---|---|---|---|
| Achieve zero injuries | Underway | |||
| Baseline analyzed and water efficiency program defined by the end of 2014 |
Underway | |||
| Baseline set and the energy efficiency index defined by the end of 2013 |
Met | |||
| Customers | ||||
| Sustainability and safety aspects considered in all New Product Development (NPD) projects by the end of 2014 |
Underway | |||
| Local Communities | ||||
| Each Kemira site with over 50 employees has participated in local community involvement initiatives at least once by the end of 2015 |
Underway |
Corporate responsibility
Corporate responsibility > Corporate responsibility reporting scope
The Corporate responsibility report 2013 provides basic information about Kemira's economic, environmental and social performance in the reporting period January 1 to December 31, 2013, unless otherwise stated.
The 2013 Corporate responsibility report is prepared in accordance with the Core option of the Global Reporting Initiative (GRI) G4 Guidelines. The report is meant to be read in context with the other sections of the Kemira 2013 Report and the Kemira Group Financial Statements 2013. Financial reporting has been prepared in accordance with the International Financial Reporting Standards (IFRS).
The reporting boundary for activities within the Kemira organization is the same as for financial reporting, and the boundaries outside the organization relate to supply chain and to the indirect CO2 emissions that are a consequence of Kemira's activities but occur from sources not owned or controlled by Kemira.
The content of the Corporate responsibility report was
reviewed and approved by Kemira Board of Directors in February 2014. The content related to economic, environmental and social performance has been independently assessed by Deloitte against the GRI principles for defining report content and quality. Deloitte has checked Kemira's reporting according to the GRI G4 guidelines and confirmed it to be in accordance with the Core option.
Kemira has been reporting on its environmental performance since the early 1990s. Until 2010, we used Responsible Care Reporting Guidelines of the European Chemical Industry Council (CEFIC) as a framework for reporting. The first report prepared according to the GRI reporting guidelines G3.1 was published in February 2012 and covered Kemira's sustainability performance in 2011.
The reports for years 2003–2012 are available on Kemira's website.
Corporate responsibility > Our approach
At Kemira, the purpose o , the purpose of corporf corporate responsibility is t esponsibility to understand, identify and manag tand, and manage the impac e impacts of our acf activities on the tivities the environment and socie onment society. For us, corpor, corporate responsibility means being r esponsibility responsiblesponsible in our oe own operations and contributing t tions to sustainable development thr opment throughout our value c oughout chain.
Kemira aims to promote sustainable development including economic, environmental and social aspects. Our corporate responsibility management approach reflects the principles set out in the OECD Guidelines for Multinational Enterprises, a set of government-backed recommendations on responsible business conduct. Kemira is a signatory of Responsible Care, the voluntary initiative of the international chemical industry that drives continuous improvement in health, safety and environmental performance.
Sustainable development is a source of business opportunities for Kemira. Our strategy derives from global industry needs to produce more with less in a world where population growth and scarcity of resources set the standards for resource efficiency. With the help of our expertise and tailored combination of chemicals, our customers are able to improve their water, energy and raw material efficiency and thus reduce their own environmental impact. Kemira aims to develop and promote environmentally preferred products and solutions to its customers.
In addition to ensuring responsible business conduct in its own operations, Kemira expects its suppliers and other business partners to maintain the same high standards of operation. We have therefore introduced a Code of Conduct for Suppliers, Agents and Distributors, and we are focussing on further developing our supplier performance management approach.
At Kemira, corporate responsibility is managed through target-setting, which is the basis for continuous improvement. We set development and improvement targets for our responsibility focus areas, which are integrated into the operational management system. The focus areas have been defined through assessing our key stakeholders' expectations and impacts of our operations on value creation, society and the environment.
Corporate responsibility targets are approved by the Kemira Management Board. The Board of Directors is involved in discussing the responsibility targets and approves the corporate responsibility report.
Corporate responsibility > Our approach > Material topics for Kemira's corporate responsibility
Defining corporate responsibility topics material for Kemira is based on our stakeholder concerns and expectations and on assessing the impacts of our operations on the environment and society. The material topics are either a source of value creation or a business risk for Kemira. The topics and concerns most critical to our stakeholders are identified through various stakeholder engagement activities, including stakeholder surveys.
In September 2013, Kemira conducted a stakeholder survey to find out if the expectations towards our
corporate responsibility had changed since the first survey in 2011. As a new method, the survey was carried out as virtual brainstorming, where the respondents were able to see what other participants consider important and develop the ideas further.
The survey results 2013 were mostly in line with the earlier survey results, emphasizing the importance of innovation, sustainable products and solutions, responsible business practices and responsibility in the supply chain.
| Top 10 sustainability issues based on stakeholder survey in 2013 |
Sustainability focus areas from 2012 | |||||
|---|---|---|---|---|---|---|
| Suppliers | Employees | Own operations |
Customers | Local communities |
||
| 1. | Product stewardship and safe use of chemicals |
x | ||||
| 2. | Applying employee skills and know-how in the best possible way |
x | ||||
| 3. | Sustainability in the whole supply chain |
x | ||||
| 4. | Transparency in all operations |
x | x | x | x | x |
| 5. | Business ethics and compliance |
x | x | x | x | x |
| 6. | Sustainability in Kemira's own manufacturing operations |
x | ||||
| 7. | Employee health and safety |
x | ||||
| 8. | Innovating sustainable products and solutions |
x | ||||
| 9. | Employee well-being enhances safety |
x |
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
In accordance with the GRI G4 Sustainability Reporting Guidelines, Kemira has based its corporate responsibility reporting on material aspects, that reflect the organization's significant economic, environmental and social impacts, or substantively influence the assessments and decisions of our stakeholders. The chart presents aspects material for Kemira, the criteria of which can be found in the GRI section Identified material aspects.
Based on the results we fine-tuned our corporate responsibility focus areas, targets and KPI's for 2014; The key focus areas remain the same, but we specified Responsible Business Practices as an independent focus area to emphasize its importance to our stakeholders. Each focus area covers a wider range of topics and updated targets.
x x x x x
In the online version you can observe Kemira's corporate responsibility focus areas and the respective targets by activating the symbols inside the circles.
In the matrix, individual aspects related to supplier assessment are combined into one, and the same has been done with the individual aspects related to grievance mechanisms as well as compliance.
Corporate responsibility > Our approach > Stakeholder engagement
The primary purpose o The of stakeholder engagder engagement is tement to understand and identify t tand identify topics maopics material for our corpor or our corporate responsibility esponsibility. Different stakeholder groups vary in their e oups in their expectations, and our job is t , to meet the expectations thrtions through developing ouroping our corporate responsibility w esponsibility work.
Stakeholder inclusiveness is one of the main drivers for further improving our corporate responsibility management.
Maintaining an active dialogue with our stakeholders enables us to manage risks and identify opportunities deriving from economic, environmental and social developments. Kemira actively engages with different stakeholder groups, such as shareholders, employees, customers, suppliers and local communities. We also maintain active dialogue with decision-makers, legislators, NGOs and the media.
Kemira takes the concerns and expectations of stakeholders into account when setting targets and key performance indicators for corporate responsibility focus areas, and through open and regular reporting of the performance against set targets in interim financial reports and annual corporate responsibility report.
| Key stakeholder groups |
Basis for identification and selection of stakeholders |
Our approach to stakeholder engagement |
Key topics and concerns in 2013 |
|---|---|---|---|
| Shareholders and investors |
• Share of value creation to investors through dividends and interests payments • Investor expectations influence on value creation models and strategy |
• Share of value creation to investors through dividends and interests payments • Over 500 Kemira shareholders in the Annual General Meeting • Capital Markets Day in London with almost 60 participants • Approximately 35 roadshow days and almost 250 individual meetings with portfolio managers and other representatives |
• Potential risks and opportunities related to corporate responsibility issues, such as ◦ Product stewardship, hazardous substances and regulatory compliance ◦ Corporate governance, corruption ◦ Resource efficiency as a strategy driver ◦ Employee engagement ◦ Safety performance ◦ Supply chain sustainability • Organization's approach to corporate responsibility management |
| Customers | • Source of value creation to Kemira • Customer expectations and needs influence Kemira's product portfolio and service models |
• We work with our customers to develop products and solutions that help them meet their sustainability needs, to improve their water, energy and raw material efficiency • Personal contact with customers • Customer seminars, e.g lake restoration |
• Fulfilling the purpose stated in our sharpened strategy: improving customers' water, energy and raw material efficiency • Product stewardship • Business ethics and compliance, innovation |
| Employees | • Share of value creation to employees through salaries and payments • Employee well-being and capabilities influence our operational performance and value creation |
• We receive feedback from employees through our annual Pulse change surveys and bi annual Voices@Kemira survey • Personal development discussions twice a year • Kemira European Forum • Town hall meetings • Corporate responsibility brainstorming survey |
• Voices@Kemira, participation rate 75% (2011: 84%) • Employee well-being, health and safety, decent work conditions • Business ethics and compliance • Innovative products and solutions |
| Other relevant stakeholder groups |
Basis for identification and selection of stakeholders |
Our approach to stakeholder engagement |
Key topics and concerns in 2013 |
|---|---|---|---|
| Suppliers | • Share of value creation to suppliers through payments for goods and services • Supplier responsibility and performance influence Kemira's value creation capability and reduce risk |
• Code of Conduct for Suppliers, Distributors and Agents • We work closely with suppliers to ensure they maintain high standards of performance, and provide feedback to help them to improve their operations • Supplier performance evaluation program • Supplier audits |
• Product stewardship and safe use of chemicals • Business ethics and compliance: Code of Conduct for Suppliers, Distributors and Agents signed and attached in new and revised purchase contracts |
| Local communities |
• Share of value creation to society through tax payments and employment • Good environmental, health and safety performance has a high influence on the acceptance of local communities |
• We collaborate with local people at major sites to understand and address the concerns they may have • Open house days • Cooperation with schools |
• Safety, environmental, social and economic responsibility and impact • Transparency and continuous and open dialogue with the community |
|---|---|---|---|
| Government officialsf, decision-decision makers and opinion leaders |
• Stakeholders with capability to influence or make political decisions on environmental issues, climate change, and chemical legislation |
• We actively participate in the work of industrial trade associations and organizations. Kemira CEO is a member of CEFIC Board of Directors • We collaborate with selected non-profit organizations such as Baltic Sea Action Group • In selected cases we engage in active dialogue with government officials on national and EU level |
• Phosphorus advocacy project to provide EU and national governments' institutes information on chemical waste water treatment and recovery and sustainable reuse of phosphorus • Publication of phosphorus position paper • Participation in the preparation of the Cefic paper "The Role of the Chemical Industry in Enabling Shale Gas in Europe" • Two completed projects based on Baltic Sea Action Summit 2010 commitments; nutrient recycling from wastewater sludge and technology development for removal of micropollutants from waste water effluents |
Visit Kemira.com – Over 250 stakeholders took part in Kemira's virtual corporate responsibility brainstorming.
Visit Kemira.com – High disclosure score in Climate Disclosure Project signals thorough reporting on Kemira's carbon footprint, climate change and risk management.
Corporate responsibility > Our approach > Key activities in 2013
At Kemira, we have further developed our corpor oped corporate responsibility in 2013, int esponsibility internally as well as eell as externally. We have, for example, initia, initiated a shared a shared value pr ed value project together with a k ther key customer, published our fir first positiont position statements on t ements topics important for Kemira and included perf and performance results against corport corporate responsibility tar esponsibility targets in our int ts our interim reporting.
In 2013, we focused on reaching the first ever Kemira sustainability targets that were published in the Annual & Sustainability report 2012. Each sustainability target was assigned with a target owner, as well as a detailed roadmaps and planning to ensure the achieving of targets in due time.
We improved the communication of Kemira's performance against the set targets; the sustainability section in each
Kemira Interim report in 2013 includes a summary of the key achievements regarding the sustainability target focus areas.
Based on the results of the target performance reporting in 2013, we can proudly conclude that we managed to reach the targets that were due to be accomplished by the end of 2013. We are also proceeding according to our roadmaps for achieving the longer-term targets set for 2014–2015.
| Focus areas and targets | 2013 | 2012 |
|---|---|---|
| SUPPLIERS | ||
| Target: Effective use of Code of Conduct for Suppliers, Distributors and Agents (CoC-SDA) in all relevant supplier relationships by the end of 2013 |
||
| • KPI: Supplier contracts with signed CoC-SDA as attachment, % |
36% | - |
| Target: Active Supplier Performance management program in place by the end of 2013 | ||
| • KPI: Average performance of core suppliers (75% of spend), performance rate % |
94% | 96% |
| • KPI: Share of reviewed suppliers under certain performance level (corrective actions agreed), % |
11% | 14% |
| • KPI: Number of supplier audits per year |
29 | - |
| EMPLOYEES | ||
| Target: All Kemira employees covered by Kemira Code of Conduct (CoC) training by the end of 2013 | ||
| • KPI: Kemira employees completed Kemira CoC training, % |
90%1 | |
| Target: All Kemira employees covered by the global Performance Management process by the end of 2014 | ||
| • KPI: Kemira employees covered by the global Performance Management process, % |
56%2 | 55% |
| Target: Every people manager participates in leadership development programs at least once every 3 years, first target period 2013–2015 |
||
| • KPI: People managers covered by global leadership programs, cumulative % |
39% | 20%3 |
| OPERATIONS | ||
|---|---|---|
| Target: Achieve zero accidents | ||
| • KPI: Total Recordable Injuries (TRI) employees and contractors, 1 year rolling average |
7.1 | 8.5 |
| Target: Baseline analyzed and water efficiency program defined by the end of 2014 | ||
| • KPI: To be defined by the end of 2014 |
on-going | - |
| Target: Baseline set and the energy efficiency index defined by the end of 2013 | ||
| • KPI: To be defined by the end of 2013 |
EEI4 defined |
- |
| CUSTOMERS | ||
| Target: Sustainability and safety aspects considered in all New Product Development (NPD) projects by the end of 2014 | • | |
| • KPI: All new projects apply the sustainability check in Gate 1, % |
100% | - |
| • KPI: Existing projects apply the sustainability check in Gates 2–4, % |
92% | - |
| LOCAL COMMUNITIE AL COMMUNITIES |
||
| Target: Each Kemira site with over 50 employees has participated in local community involvement initiatives at least once by the end of 2015 |
||
| • KPI: Kemira sites (over 50 employees) with local community initiatives, cumulative % |
48% | 38%3 |
| 1 Active employees, excluding employees who are in the scope of divested businesses 2 All white collars are covered by the global Performance Management process 3 2012 Annual result |
||
| 4 EEI = Energy Efficiency Index |
Kemira's sustainability target-setting was evaluated in the second half of 2013 with a help of a stakeholder brainstorming survey. The results of the stakeholder brainstorming survey have been incorporated in our updated corporate responsibility focus areas and targets for 2014.
Partly as a response to the feedback from our stakeholders, year 2013 saw an improvement in Kemira's visibility in the external sustainability ratings and indices.
Kemira achieved for the first time a top position in CDP's Nordic 260 Climate Disclosure Leadership Index (CDLI). Kemira achieved an excellent score of 96B (75C in 2012). A high disclosure score 96/100 signals that Kemira has provided comprehensive information about the measurement and management of its carbon footprint, its climate change strategy and risk management processes and outcomes. The performance score was upgraded from C to B which reflects the improvement in actions on climate change mitigation, adaptation and transparency.
Kemira was also invited to respond to the Dow Jones Sustainability Index (DJSI) Sustainability assessment for the first time in 2013. Unfortunately our performance did not qualify us to be included in the DJSI indexes or in the RobecoSAM Sustainability Yearbook. The feedback gained through the process certainly helps us to identify our strengths within corporate responsibility management, but also where further improvement is needed. As an example, we identified aspects within social responsibility such as human rights and product stewardship management, where further work is required to bring us at par with our well established management practices in environmental responsibility.
Kemira initiated a three-year water stewardship project with our key customer Stora Enso in Guangxi, Southern China. The project "Creating Shared Value through Water
Stewardship in Guangxi" targets to promote responsible water management and community engagement in the Guangxi Province in Southern China, where Stora Enso leases 90,000 hectares of land and manages eucalyptus tree plantations. The project aims to find new solutions for responsible water management through stakeholder surveys, community work and water-related capacity building.
The project will create shared value by improving Stora Enso's tree plantations operations, and by strengthening Kemira's role as the water management solutions provider for the paper industry and for local communities, as well as bringing new know-how and better water management tools to local communities.
The consultative communication launched by the European Commission in July 2013 on the sustainable use of phosphorus triggered Kemira to conduct an active advocacy program during 2013. Kemira has technologies and extensive know-how for sustainable recovery and reuse of phosphorus, which is one of the vital building blocks for life, essential for animal feed and food production, yet the main source of eutrophication in the European surface waters, and the supplies are almost non-existent in Europe.
In addition to responding to the European Commission's consultative communication, Kemira published a position paper on sustainable recovery and reuse of phosphorus. We also conducted an advocacy contact program with key decision-makers and opinion leaders for underlining the importance of chemical recovery of phosphorus from wastewater and recycling back to agriculture, and how the use of coagulants to capture phosphorus is essential to meet EU policy goals from an environmental, economic, energy efficiency, employment and supply security perspective.
Corporate responsibility > Our focus areas
Our corporate responsibility focus areas and targets have been adjusted based on Kemira's sharpened strategy presented in April 2013 and on the stakeholder survey results in autumn 2013. The results of the stakeholder survey indicated growing importance of business ethics and compliance, product stewardship, responsibility in the supply chain as well as transparency of our operations to our stakeholders. To address this, we have singled out Responsible business practices as its own focus area. Otherwise the corporate responsibility focus areas identified earlier remain valid.
New and revised targets within our focus areas include establishing the Kemira Compliance program, climate change target, as well as employee engagement target based on the Voices@Kemira survey results.
The revised corporate responsibility targets were accepted by Kemira's Management Board in January 2014. Kemira's performance against targets in 2013 can be found in the section Key activities in 2013.
| Kemira's corporate responsibility focus areas and key performance indicators (KPI) 2014 | ||||||
|---|---|---|---|---|---|---|
| Focus area | Topic | KPI | KPI target value | New KPI |
||
| Responsiblesponsible businessbusiness practices |
Kemira Compliance Program | Kemira Compliance program established | Established by the end of 2014 |
X | ||
| Responsiblesponsible supply chain |
Code of Conduct for Suppliers, Distributors and Agents (CoC-SDA) |
Supplier contracts with signed CoC-SDA as attachment, % |
90% by the end of 2015 |
|||
| Supplier sustainability assessment | Number of core, strategic and critical suppliers covered by supplier sustainability assessment |
45 by the end of 2014 | ||||
| Responsibility esponsibility for employees |
Occupational health and safety | Number of Total Recordable Injuries (TRI) (per million hours, Kemira + contractor, 1 year rolling average) |
Achieve zero injuries | |||
| Performance management | Kemira employees covered by the global Performance Management process, % |
> 95% by the end of 2014 |
||||
| Leadership development | People managers participated in global leadership programs at least once in period 2013–2015, cumulative % |
> 95% by the end of 2015 |
||||
| Employee engagement | Employee engagement index, % | Employee engagement index at or above the external industry norm by the end of 2015 |
X | |||
| Participation rate in Voices@Kemira, % | 75–85% by the end of 2015 |
X | ||||
| Responsiblesponsible manufacturing |
Water efficiency | Baseline analyzed and water efficiency program defined |
By the end of 2014 | |||
| Climate change | Kemira Carbon Index performance | Kemira Carbon Index ≤ 80 by the end of 2020 (baseline year 2012 = 100) |
X | |||
| Sustainable products and solutionssolutions |
Sustainability aspects in New Product Development (NPD) process |
New NPD projects apply the sustainability check in Gate 1, % |
100% by the end of 2014 |
|||
| Existing NPD projects apply the sustainability check in Gates 2–4, % |
100% by the end of 2014 |
|||||
| Responsibility esponsibility towards the local communities where we operate |
Participation in local community involvement initiatives |
Kemira sites with over 50 employees participated in local community involvement initiatives at least once in period 2013–2015, cumulative % |
100% by the end of 2015 |
The Kemira Code oa Code of Conducf Conduct defines our w fines way of working and aff orking affects all emplts employees regardless of status or gtus geographical location.
In a global company a common set of practices is a valuable tool in ensuring responsible business behavior, as working cultures and even local legislation may differ greatly from country to country. The Kemira Code of Conduct (.pdf) sets guidelines for all aspects of business conduct, and acts as a framework for ensuring that our employees comply with Kemira's values and the principles set out in the OECD Guidelines for Multinational Enterprises.
The revised Code of Conduct was approved by the Board of Directors in December 2012, and its implementation began in the beginning of 2013. The revised Code is a signal of stronger requirement for compliance and ethics. Based on the internal control survey participated by representatives of the audit committee, senior and line management during 2013, the management has shown diligent compliance to Kemira Code of Conduct .
All Kemira employees are expected to comply with the Code of Conduct principles in their daily work. Kemira set a responsibility target in 2012 that all employees are trained for the Code of Conduct during 2013. The objective of the training is to raise awareness of the Code's requirements and the means of reporting about non-conformities.
During 2013, 90% of our active personnel (excluding employees who are in the scope of divested businesses) received training either via interactive e-learning tool or
on-site classroom training organized in collaboration with site management and local HR and legal functions. The remaining personnel will receive training in 2014. Additionally, all new employees will receive training as part of the induction process, and all personnel will be invited to repeat training on the Code on a regular basis.
We also published a Code of Conduct booklet, which has been printed in 17 languages and distributed to all our employees. The booklet is also available for our stakeholders.
Kemira's internal policies guide our employees regarding the commitments and expectations we have as a company. Our work in 2013 has concentrated on revising existing policies as well as creating new ones.
Anti-bribery rules have been made more explicit through Kemira Group Gifts, Entertainment and Anti-bribery Policy effective since January 2013, which has resulted in increased awareness towards such things as acceptable business gifts.
Competition Law Compliance Policy training was completed by 730 people in 2013 (2012: 751). This policy is communicated to the senior management and key persons working in sales, marketing, sourcing, procurement and other similar functions through a comprehensive, ongoing, and regularly repeated training process. Please see a list of relevant Kemira Policies in the Disclosures on Management Approach section of the GRI report.
The Ethics and Compliance's role within the Legal function became operational in 2013, focusing on coordinating and developing the company's compliance activities and promoting the principles of ethical business behavior. In addition to the Code of Conduct training program, we also launched the Kemira Ethics & Compliance Hotline.
The hotline is a 24/7 service for employees to report anonymously any non-conformities of law or the Code either by calling the hotline or filling out a web form. In addition to the Hotline, employees can report suspected non-conformities to their own line management, Kemira's Ethics and Compliance or Internal Audit functions.
For external enquiries and reporting on potential misconducts with respect to Kemira or its business partners, [email protected] can be contacted. This information is available in the Kemira Code of Conduct for Suppliers, Agents and Distributors in addition to Kemira's website.
Please see complementary specific standard disclosures material for the focus area in the GRI report sections Ethics and integrity and Responsible business practices.
Corporate responsibility > Our focus areas > Responsible supply chain
Kemira expects business int ts integrity fregrity from its supom its suppliers and strives for supply chain responsibility thr esponsibility through carough careful selection of suppliers, performance evaluation and auditing tion auditing.
Kemira's supply chain management is responsible for endto-end sourcing process from supplier identification to customer service. The vision is to become world-class in supply chain management and to provide value-added service to our business segments with optimal efficiency.
In 2012, Kemira set sustainability targets for our supplier relations. We initiated a supplier performance evaluation program and implemented the Code of Conduct for suppliers, distributors and agent (.pdf) (CoC-SDA) in all relevant supplier relationships.
Supplier relations management is built on three pillars; supplier selection, commitment to responsible business conduct, and performance evaluation. We have sharpened our supplier selection process, and expect costcompetitiveness, short-term operational excellence and long-term business stability from our suppliers.
The CoC-SDA sets requirements for different aspects of corporate responsibility, for example responsible business conduct, respect for human rights and environmental responsibility. By the end of 2013, 36% of Kemira's current suppliers have signed the CoC-SDA.
To ensure the suppliers' commitment towards the CoC-SDA, regular supplier audits are conducted. For noncompliance or unwillingness to sign the CoC-SDA, the supplier relationship may be reconsidered.
In 2013, we developed our supplier performance evaluation program by defining the evaluation criteria. The evaluation covers multiple aspects of the supplier's operations, and the threshold performance rate is 80%. For our core suppliers, we aim to keep the average performance level at minimum of 96%, and in 2013, performance rate was 94%.
Those suppliers not able to reach the threshold need to present a detailed corrective action plan to meet the requirements. In 2013, 11% of the reviewed suppliers did not reach the given performance level, and we have agreed upon corrective actions with them.
Kemira has also initiated a supplier assessment process as part of the supplier performance evaluation. A specific assessment of the most risky and critical vendors is made by assessing the supply risk, business impact, market availability, and various sustainability topics gathered. The assessment is conducted through a questionnaire that was piloted and fine-tuned in 2013. During the year, 29 suppliers were audited.
Kemira's supplier base:
Safety and environmental aspects are important for managing the sustainability of transportation. Kemira holds regular safety discussions with its logistics service providers and inspects accidents and near misses carefully. Transport safety managers from EHSQ meet twice a year to discuss occurred accidents and other safety issues on a global scale.
In 2013, we have calculated the greenhouse gas emissions of our transport activities for the first time. Further details can be found in the GRI report, indicator G4-EN30.
In Europe, all of our logistics partners are required to use Euro 4 compliant transport equipment, and Euro 5 requirements will become timely from the beginning of 2015. These Euro standards set limits for pollutant emissions caused by road vehicles. Using Euro 4 and 5 compliant vehicles reduces emissions from transportation in Kemira's value chain, and thus decreases our environmental impact.
During 2013 we have cut down the number of our logistics service providers to ensure cooperation with the best possible partners. Fewer partners facilitate the management of logistics sourcing as well as the negotiation with suppliers on safety and environmental requirements.
Please see complementary specific standard disclosures material for the focus area in the GRI report section Responsible supply chain.
Corporate responsibility > Our focus areas > Responsibility for employees
Employees are Kemira's key asset. Our Human Resources work is guided by the Kemira Code of Conduct and our company values:
Our Human Resources function ensures having the necessary know-how, strong leaders and engaged people to successfully execute our company strategy. To implement the sharpened strategy launched in April 2013, we initiated an active dialogue across all our segments and regions, top-down and bottom-up, which was accomplished through various local and virtual workshops. At individual level, the strategy roll-out was done via personal development discussions.
The organizational restructuring initiated in 2012, as well as the sharpened strategy, have influenced the focus of our Human Resources activities during 2013. The sharpening of the strategy has led to changes in the organization and, unfortunately, resulted in job reductions.
In 2013 we continued to focus on developing our global Performance Management process and Leadership Development programs further, for which we have also set corporate responsibility targets.
The biannual Voices@Kemira employee engagement survey was conducted in the fall of 2013. The survey results are a valuable source for gathering employee feedback and further develop our ways of working
accordingly. The survey focuses on employee engagement; which factors motivate Kemira employees to succeed. Other important themes include growth and development, performance management, leadership and strategy, corporate responsibility, collaboration and communication, as well as values based culture.
| Employee engagement | 2013 | 2011 | 2009 |
|---|---|---|---|
| Employee engagement index, % | 58 | 70 | 69 |
| Data coverage, % of total employees | 75 | 84 | 87 |
In 2013, the survey response rate (75%) and the engagement index (58%) were weaker than in the previous survey in 2011. During 2013, including the time when the survey was conducted, Kemira was implementing organizational restructuring measures and was in the middle of related negotiations, which is presumably one of the reasons for a lower response rate and engagement index.
According to the results, Kemira's strengths lie especially on managerial work, and employees find their jobs challenging and interesting with the possibility for career development. We will continue to focus on developing learning and career opportunities for our employees. On the other hand, accountability for low performance was recognized as a development area. This will be addressed through a global performance management process during 2014. Other key focus areas include further communicating Kemira's strategy and its significance to teams and individuals, engaging our employees in the
future of the company, as well as enhancing our leadership development portfolio.
Please see complementary specific standard disclosures material for the focus area in the GRI report sections Organizational profile and Responsibility for employees.
Corporate responsibility > Our focus areas > Responsibility for employees > Performance management and leadership development
One of Kemira's corporate responsibility targets is to have all employees covered by the global Performance Management process by the end of 2014.
Performance and development discussions (PDD) are an important element of Performance Management process, and according to Voices@Kemira employee survey results, the engagement rate is higher among employees that have had their PDDs with their managers. During 2013 we started extending the amount of employees covered by PDDs, and focused on defining and preparing the PDD process and compiling a model for data collection and consistent reporting. In 2013, the global performance and development discussions covered all white collar employees (56% of all our employees). We aim at achieving the target to cover all employees in 2014, when the PDD process will be introduced for all blue-collar employees on our manufacturing sites.
Good managers lead through their own strengths. In 2013, we focused on managers' personal development and leadership skills. As a new element to our leadership development portfolio we have included improving
managers' self-awareness and self-leadership, which helps in recognizing your own strengths and how to lead through your persona. During 2013 we conducted a leadership assessment to ca. 200 of our leaders, on which we will base individual leadership related development plans.
On-the-job-learning is one of the most effective methods for developing leadership skills. Other tools include Kemira's leadership development programs, such as the Bridge and Catalyst leadership programs, which continued in 2013. Catalyst is meant for leaders who want to build up skills for strategy execution, and Bridge focuses on foundational leadership skills for first level leaders, such as supervisors and team leaders. We also offer coaching and mentoring, as well as 360 feedback on leadership skills. By the end of the year, 39% of our leaders have been covered by global leadership programs.
Please see complementary specific standard disclosures material for the focus area in the GRI report section Responsibility for employees.
Corporate responsibility > Our focus areas > Responsibility for employees > Safety at workplace
Kemira's new EHSQ vision s w EHSQ vision states: Zero harm to people. Decreased injury r eased rate and pre and proactive reporting observa ting observations ontions on potential safential safety issues ar ty are signs oe of continuous impr f improvement in our saf ement safety culturty culture.
By deciding to report TRI (Total Recordable Injuries per million work hours) in 2012 instead of the formerly reported LTA (Lost Time Accident), we set ourselves stricter demands concerning workplace safety both for own employees and contractors working at Kemira sites. The currently reported TRI frequency includes fatalities, lost time injuries, restricted work cases and medical treatment cases of both Kemira employees and contractors working for Kemira.
Our long-term target is to achieve zero injuries, and we are making good progress. Since 2012, the TRI is reduced from 8.5 injuries per million working hours to 7.1 in 2013.
The improved TRI frequency is mostly due to increased safety observation reporting and increased awareness – people think and talk about health and safety more frequently.
As part of our EHSQ improvement strategy initiated in April 2013, we have created a new EHSQ vision, a new EHSQ policy and are now introducing new EHS standards that increase both safety culture and performance at our sites, offices and functions.
Corporate responsibility > Our focus areas > Responsible manufacturing
EnsuringEnsuring the safety of our operf operations, improving enerving energy and water efficiencfy and reducing CO educing 2 emissions ar emissions are the mose most important responsibility t esponsibility topics in our manuf opics in our manufacturing.
Commitment towards continuous improvement in our own production is seen in the corporate responsibility targets set for manufacturing, our management system certification to ISO standards and in the Lean initiative. A lean organization understands customer value and focuses its key processes on continuously increasing it. The goal is to provide value to the customer through a perfect value creation process that contains zero waste. Waste in this case means unnecessary extra resources, bureaucracy and time. The Lean manufacturing model is based on the creation of value for customers, which entails optimizing value chains and flow of information, improving production efficiency and increasing production responsibility.
In 2013, we introduced a new EHSQ strategy for Kemira, which includes a new vision, policy, internal targets and a strategic roadmap to becoming world-class in EHSQ. The focus during the year was on introducing and renewing our
internal EHS standards and this work will continue in year 2014. The new standards to improve workplace safety include Incident reporting, Incident investigation and Personal protective equipment standards.
During the past year we have also worked on building a new process safety standard and ten other EHS related standards as part of the EHSQ improvement program. Implementation of these new standard will continue in 2014, along with leadership development.
ZERO ENVIRONMENTAL HARM Through environmental excellence
ZERO HARM TO PEOPLE Through health & safety excellence
CUSTOMER SATISFACTION Through operational excellence
Kemira conducts environmental impact assessments and emission monitoring in every manufacturing site as
defined by the regulatory requirements, ISO 14001 management system and Kemira internal standards. The assessments monitor environmental performance of the site and its impact on the surrounding communities.
Each Kemira site is classified for actual and potential negative impacts of operations. A new three-level ranking system determines the internal Kemira requirements and frequency of audits for each site; higher ranking meaning higher requirements.
We take preventive actions and mitigation measures proactively for the operations that involve potential negative impacts on the local communities.
Please see complementary specific standard disclosures material for the focus area in the GRI report sections Responsible manufacturing.
Visit Kemira.com - Lean manufacturing optimizes value chains and flow of information, creating value for customers.
Corporate responsibility > Our focus areas > Responsible manufacturing > Energy efficiency & climate change
Striving for energy efficiency in manufacturing offers both environmental and economic benefits by reducing emissions and lowering manufacturing costs. We initiated an Energy Efficiency Enhancement E3 program in 2010 for identification and implementation of energy reduction potential at manufacturing sites.
The potential energy efficiency projects were identified by conducting regular energy audits at manufacturing sites. The manufacturing sites representing 94% of our energy use have now been audited. In 2013, the focus has been on the implementation of improvement projects, and in conducting follow-up audits. Total of 388 improvement projects have now been completed at 26 sites, generating annually 174,000 MWh energy reductions and EUR 7 million cost savings since 2010. Six sites have now completed all of the identified improvement projects.
Choices for energy efficiency improvement may include simple adjustments in operating methods, increased process efficiency, or more advanced solutions, such as utilizing waste heat in the local communities nearby Kemira's operations. As an example, in the Rotterdam site in the Netherlands, introduction of variable speed drives was a significant energy efficiency driver, and in the Krems site in Austria, optimization of steam usage generated considerable energy reductions. Follow-up audits at manufacturing sites have generated a collection of best practices which will be used across the organization where applicable.
In 2013 we have defined the Kemira Energy Efficiency Index (EEI) to measure the company's energy efficiency in manufacturing operations. The Energy Efficiency Index is the sum of site specific measures. The index is calculated individually for major sites that cover > 90% of Kemira's total energy use, and site specific indexes are consolidated to form the Kemira EEI Index. The index is not dependent on the impact of changes in the production mix and volumes. The index enables us to monitor energy efficiency from the consolidated perspective as well as locally at each site, reflecting on the actual improvements we have achieved.
| GRI-G4 indicator |
2013 | 2012 | 2011 | 2010 | 2009 | |
|---|---|---|---|---|---|---|
| Purchased ener hased energy |
||||||
| Fuel consumption, ktoe | 42 | 49 | 56 | 54 | 54 | |
| Fuel consumption as raw material, ktoe | 120 | 114 | 121 | 116 | 105 | |
| Purchased electricity, TJ | 10,077 | 9,620 | 10,657 | 10,346 | 9,718 | |
| Purchased heat, TJ | 4,553 | 4367* | 4,814 | 4,726 | 4,327 | |
| Purchased energy by primary sources, TJ1 | 29,487 | 29,284 | 32,122 | |||
| Energy balancey balance | ||||||
| Purchased fuel as energy source, TJ | EN3a-b | 1,755 | 2,028 | 2,345 | 2,261 | 2,261 |
| Purchased electricity, TJ | EN3c | 10,077 | 9,620 | 10,657 | 10,346 | 9,718 |
| Purchased heat, TJ | EN3c | 4,553 | 4367* | 4814* | 4,726 | 4,327 |
| Total energy purchased, TJ | EN3c | 16,386 | 16,015 | 17,816 | 17,333 | 16,306 |
| Total energy sold | EN3d | 1,544 | 1,676 | 1,859 | ||
| Total energy consumption, TJ | EN3e | 14,842 | 14,339 | 15,957 | ||
| Energy intensity2 |
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
| Energy intensity, TJ/ton | EN4 | 0.00314 | 0.00306 | 0.00325 |
|---|---|---|---|---|
| Reduction of energy consumpy consumption3 | ||||
| Change in energy consumption, TJ | EN5 | 503 | -1,618 |
* Data corrected due to more comprehensive data available in 2013.
1 The amount of energy Kemira uses through the purchase of electricity, steam and heat. Energy delivered off-site is included.
2 Kemira has calculated the energy intensity by dividing total energy consumption with the annual production volume. The total energy consumption includes fuel used for energy, electricity, heating, cooling and steam.
3 The types of energy included in the reductions include; fuel used for energy, electricity, heating, cooling and steam. The basis for the energy reduction is energy compumption in one year period.
The calculations have been made according to GRI G4 reporting guidelines. The source for conversion factors used is the International Energy Agency (IEA). Where specific information has not been publishded on production efficiencies by energy source, expert estimates have been made based on historical data.
Limiting climate change will require substantial and sustained reductions of greenhouse gas emissions. The 5th report of The Intergovernmental Panel on Climate Change (published in 2013) is expected to increase political pressure for a higher ambition level. There is also an ongoing active discussion in the EU regarding the EU 2030 climate and energy policy framework. Kemira is carefully following the public discussion on energy and climate policy development for anticipating the potential implications on our operations.
In 2013 Kemira defined the Kemira Carbon Index to monitor our CO2 performance from both consolidated and individual manufacturing site perspective. The Kemira Carbon Index covers CO2 emissions of Scope 1 and Scope 2 excluding direct emissions from chemical processing, and is not dependent on production structure, production mix or volumes.
Based on our work to define the Kemira Energy Efficiency and Carbon Indices, the results from the E3 energy efficiency enhancement program, and considerations about stronger political pressure on reducing CO2 emissions, Kemira has decided to set a long-term target for CO2 emission intensity from our manufacturing operations. The target is to reduce the value of the Kemira Carbon Index to or below 80 by the end of 2020, in comparison to the Carbon Index value of 100 in baseline year 2012.
| GRI-G4 indicator 2013* |
2012 2011 2010 2009 | |||||
|---|---|---|---|---|---|---|
| Releases inteases into air, CO2eq 1,000 tonnes | ||||||
| Direct greenhouse gas emissions (Scope 1)1 | EN-15 | 133 | 147 | 180 | 182 | 186 |
| Indirect greenhouse gas emissions (Scope 2)2 | EN-16 | 904 | 950 1054 | |||
| Other indirect greenhouse gas emissions (Scope 3)3 | EN-17 | 2,696 2,677 | ||||
| Total greenhouse gas emissions4 | 3,734 | 3,774 | ||||
| Greenhouse gas emissions intensity per 1000 tons of production5 | EN-18 | 0.787 0.800 | ||||
| Change in greenhouse gas emissions6 | EN-19 | -40 |
*In 2013, all greenhouse gases are included in the calculation. In previous years, only CO2 emissions were reported.
1 Greenhouse gas emissions from sources that are owned or controlled by Kemira (scope 1 of the WRI/WBCSD GHG Protocol). The source for the emissions factors used is GHG Protocol. Data covers all of Kemira's production sites according to Kemira consolidation rules.
2 Greenhouse gas emissions from the generation of purchased electricity, steam and heat that is consumed by Kemira (scope 2 of the WRI/WBCSD GHG Protocol) GHG emission are calculated as CO2 equivalents which includes CO2 , CH4, N2O, HFCs, PFCs, SF6, NF3.The sources for the emission factors used are the International Energy Agency (IEA), the UK government's Department for Environment, Food and Rural Affairs (DEFRA), Motiva Ltd. and energy utility companies. As many utility companies often publish their specific emissions factors during Q2 or Q3 of each reporting year, previous years' factors have been used. Data covers all of Kemira's production sites according to Kemira consolidation rules.
3 Greenhouse gas emissions from Kemira's value chain (Scope 3 of WRI/ WBCSD GHG Protocol). The calculation is based on the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard and a supporting guidance document Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain. Scope 3 emissions have been calculated since 2012.GHG emission are calculated as CO2 equivalents which incluldes CO2 , CH4 , N2O, HFCs, PFCs, SF6, NF3.The sources for the emission factors used include the guidance document for the Chemical Sector, the UK government's Department for Environment, Food and Rural Affairs (DEFRA), the International Energy Agency (IEA), Ecoinvent, CEFIC and ECTA. Data covers all of Kemira's production sites according to Kemira consolidation rules.
4 Total greenhouse emissions including Scope 1, Scope 2 and Scope 3
5 Kemira has calculated the GHG emissions intensity ration per production volume (1000 tons).Direct GHG emissions (Scope 1), indirect GHG emissions from energy consumption (Scope 2) and other indirect GHG emissions (Scope 3) are included.
6 Reduction of Scope 1, Scope 2 and Scope 3 GHG emissions have been calculated for 2013.
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
energy related activities, Waste generated in operations, Business travel, Employee commuting and Upstream leased assets (leased offices)
Please see complementary specific standard disclosures material for the focus area in the GRI report sections Responsible supply chain and Responsible manufacturing.
Visit Kemira.com – Kemira's Bradford site uses solar panels to generate energy with zero emissions.
Visit Kemira.com – Energy recovery project to utilize waste heat generates significant cost savings in Kemira's Kuusankoski site.
Corporate responsibility > Our focus areas > Responsible manufacturing > Water efficiency
As a company providing expertise and tailored combinations of chemicals for water-intensive industries, our own corporate responsibility program inevitably addresses water efficiency in our own manufacturing processes.
In Kemira's manufacturing, water is used mainly for cooling or as process water. Many of our sites collect rainwater, and for example recycle the used water back in the same process or reuse it in another facility.
In 2013 we started a project to assess opportunities for water efficiency improvement in our own operations. Our target is to understand and evaluate the water related risks and opportunities in our own manufacturing operations, and to develop a water management program by the end of 2014. This year we have focused on collecting detailed data on how water is used and analyzing opportunities for improvement. Based on the assessment results, key performance indicators for water efficiency will be defined during 2014.
| GRI-G4 Indicator |
2013 2012 2011 2010 2009 | |||||
|---|---|---|---|---|---|---|
| Water withdrer withdrawal, million m, m3, approx. | ||||||
| Total water withdrawal, million m3 , approx. |
EN8 | 157 | 145 | 169 | ||
| Cooling water volume, million m3 , approx. |
EN8 | 151 | 138 | 161 | 163 | 159 |
| Process water volume, million m3 , approx. |
EN8 | 6.3 | 6.7 | 7.8 | ||
| Water discharges, million m, m3, approx. | ||||||
| Wastewater volume, million m3, approx. | EN22 | 2.1 | 2.4 | 2.6 | 1.2 | 1.4 |
| External treatment, million m3 | EN22 | 1.7 | 1.8 | 1.9 | ||
| Own treatment, million m3 | EN22 | 0.4 | 0.6 | 0.6 | ||
| Releases inteases into water, tonnes | ||||||
| Chemical Oxygen Demand (COD)1 | 16 | 21 | 28 | 58 | 45 | |
| Nitrogen (N) | 2 | 2 | 3 | 4 | 4 | |
| Phosphorus (P) | 0.5 | 0.7 | 0.7 | 0.5 | 0.5 | |
| Suspended solids, 1,000 tonnes | 0.002 | 0.01 | 0.03 | 0.02 | 0.05 |
1 The reduction from 2010 to 2011 is partly caused by over-reported figures in previous years.
The calculations have been made according to GRI G4 reporting guidelines. The figures presented are based on data collected from Kemira's sites. Data covers all of Kemira's production sites according to Kemira consolidation rules.See also the graph Water balance and the table Summary of water indicators in the section of Responsible manufacturing; Water efficiency
Corporate responsibility > Our focus areas > Sustainable products and solutions
Kemira aims ta aims to develop environmentallonmentally preferred products and solutions t ts solutions to its cuso its customers. We are also committ e committed to ensuring the saf ensuring the safety of our prf our products and thats and that customers receive accurate information on their cor tion correct use.
Kemira's products are used for process efficiency as well as water quality and quantity management in multiple industries, such as paper, oil & gas and mining, and water treatment. With the help of our products, our customers are able to improve their own water, energy and raw material efficiency, end-product quality, as well as operational efficiency. The main product lines of Kemira comprise polymers and other process chemicals, sizing and strength, coagulants and bleaching chemicals.
Kemira is seeking growth from new products and applications, and in 2013 the sales of new products increased to approximately 7% (5%) of Kemira's revenue. Kemira aims to gain EUR 250 million revenue from innovation sales in 2016.
Sustainability aspects are systematically evaluated in the New Product Development (NPD) process. The evaluation is conducted both for Kemira's own operations and for the impacts in customers' processes.
In 2013, over 90% of the existing NPD projects applied the sustainability check in Gates 2–4, and 100% of our new NPD projects started during 2013 applied the sustainability check in Gate 1.
Product regulatory compliance also plays an important role in the NPD process. Product safety checkpoints are defined for each gate, and registration of chemical substances is considered already at the earliest stage.
Chemical industry regulations are developing rapidly worldwide, setting new challenges for product safety and compliance activities. In addition to supporting business with product safety topics and following applicable laws and regulations on chemical product safety, registration processes take up time and resources. For example, the new European Biocidal Products Regulation requires registration of all biocide active substances and products.
In EU's Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) process, Kemira registered 29 substances in 2013. Preparations for the third deadline of REACH of 2018 have started. In USA, the Environment Protection Agency is implementing tighter regulations through Chemicals Management Policy and Toxic Substances Control Act. Kemira also obeys the new chemical regulations in emerging markets, such as China and Korea. New requirements of supply chain product safety communication have significantly intensified the information exchange with the customers and suppliers.
We have proceeded according to our plans in reclassifying and relabeling our products according to the Classification, Labeling and Packaging of substances and mixtures (CLP) regulations in Europe. In addition, we aim to have all our products in all market areas under one label in accordance with the Globally Harmonized System of Classification and Labeling of Chemicals requirements (GHS) well before the EU and North American deadlines of June 1, 2015.
Kemira Product Stewardship and Regulatory Affairs (PSRA) function is responsible for executing product safety and product regulatory compliance related activities globally, such as classification and labelling of products, safety compliance reviews in the NPD process, registration of substances, as well as identifying risks and environmental impacts of our products in their value chains and looking for opportunities to reduce their impacts.
PSRA collaborates closely with R&D, product management, sales and sourcing for ensuring product safety and compliance. Possible new regulatory risks are evaluated and mitigated in co-operation with Kemira's Corporate Responsibility. We are not only following existing legislation, but also the discussion and actions towards new legislation. We are, for example, striving to substitute the substances suspected of having endocrine disrupting properties or other hazardous properties deemed unfavorable in our products, and prepared a position paper on the subject.
In 2013 we have worked on building a culture of innovation throughout the organization. We have, for example, established an Innovation community consisting of people from different segments and functions. The community acts as an inspiration to people, stimulating creativity and creating enablers for an innovation culture – extending idea creation and collection beyond R&D.
Over 70% of our new product and application sales today is a result of Kemira's R&D program SWEET initiated in 2010. During 2013, the program has been integrated into Kemira' business operations, indicating the success of the four-year R&D program.
Please see complementary specific standard disclosures material for the focus area in the GRI report sections Sustainable products and solutions.
Visit Kemira.com – Kemira's collaborative R&D programme SWEET produced product innovations and increased attention towards water technology.
Visit Kemira.com – New acid-free antiscalants optimize plant recovery in industrial and drinking water treatment.
Visit Kemira.com – New KemGuard technology brings laboratories to oil and gas wells offshore and onshore.
Corporate responsibility > Our focus areas > Responsibility towards the local communities where we operate
Kemira interacts and acts actively strives to build good relationships with the communities wher tionships where we operate by engaging with l engaging local stakeholders on topics of mutualf mutual interest.
Kemira considers active engagement with local stakeholders is important in order to maintain an acceptable environmental and social footprint. Different sorts of interaction activities are needed globally, depending on the specific local requirements and concerns.
Through community involvement, Kemira can develop a reputation as a responsible neighbor. The engagement themes mostly revolve around solving water-related challenges, and topics such as safe neighborhoods, safety and wellbeing. Open communication and dialogue are important elements of community engagement.
Kemira's corporate responsibility target is that by 2015, each Kemira site employing over 50 people will have participated in a local community initiative at least once. Examples of possible actions include open house days, cooperation with schools and participating in non-profit organizations' charity work. By 2013, 48% of Kemira's sites have participated in local community initiatives, with some sites conducting multiple activities over the year.
Please see complementary specific standard disclosures material for the focus area in the GRI report section Responsibility towards the communities where we operate.
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
Visit Kemira.com – Kemira's Yanzhou site celebrated International Children's day by arranging a family day event.
Visit Kemira.com – Kemira's Bradford site promotes gender equality by hosting Women into STEM Apprenticeship Programme.
Visit Kemira.com – Millennium Youth camp attracted more than 1,600 applicants from more than 100 countries.
Visit Kemira.com – Collaboration with a local school in Atlanta introduces students with scientists.
According to the Global Reporting Initiative's G4 Sustainability Reporting Guidelines
Corporate responsibility > GRI report
Kemira's corporate responsibility report is prepared in accordance with the Core option of the GRI-G4 Guidelines. The report has been externally assured by Deloitte. The assurance report by Deloitte is available in the section GRI report: Assurance statement.
| General Standard Disclosures | ||||||
|---|---|---|---|---|---|---|
| General standard disclosures | Page | External assurance | ||||
| Strategy and analy analysis | ||||||
| G4-1 * | CEO's statement | Kemira in 2013: CEO's review | ||||
| G4-2 | Key impacts, risks and opportunities | Governance: Risk management Kemira in 2013: CEO's review |
||||
| Organizational prtional profile | ||||||
| G4-3 * | Name of the organization | GRI Report: Organizational profile | Refer to Assurance report | |||
| G4-4 * | Primary brands, products and services | Kemira in 2013: Our business | ||||
| G4-5 * | Location of the organization's headquarters | GRI Report: Organizational profile | Refer to Assurance report | |||
| G4-6 * | Countries where the organization operates | GRI Report: Organizational profile | Refer to Assurance report | |||
| G4-7 * | Nature of ownership and legal form | GRI Report: Organizational profile | Refer to Assurance report | |||
| G4-8 * | Markets served | Kemira in 2013: Our business | ||||
| G4-9 * | Scale of reporting organization | Kemira in 2013: Key figures | ||||
| G4-10 * | Breakdown of workforce | GRI Report: Organizational profile | Refer to Assurance report | |||
| G4-11 * | Employees covered by bargaining agreements | GRI Report: Organizational profile | Refer to Assurance report | |||
| G4-12 * | Organization's supply chain | GRI Report: Organizational profile | Refer to Assurance report | |||
| G4-13 * | Significant changes during the reporting period |
GRI Report: Organizational profile Financials: Changes in group structure |
Refer to Assurance report | |||
| G4-14 * | Explanation of how the precautionary principle is addressed |
Governance: Risk management | ||||
| G4-15 * | External principles and other initiatives to which the organization subcribes or which it endorses |
GRI Report: Organizational profile | Refer to Assurance report | |||
| G4-16 * | Memberships in associations | GRI Report: Organizational profile | Refer to Assurance report |
| Identified ma Identified material aspec erial aspects and boundaries ts |
|||||
|---|---|---|---|---|---|
| G4-17 * | Entities included in the organization's consolidated financial statements |
GRI report: Identified material aspects and boundaries |
Refer to Assurance report | ||
| G4-18 * | Process for defining report content and aspect boundaries |
GRI report: Identified material aspects and boundaries |
Refer to Assurance report | ||
| G4-19 * | Material aspects | GRI report: Identified material aspects and boundaries |
Refer to Assurance report | ||
| G4-20 * | Aspect boundary within the organization | GRI report: Identified material aspects and boundaries |
Refer to Assurance report | ||
| G4-21 * | Aspect boundary outside the organization | GRI report: Identified material aspects and boundaries |
Refer to Assurance report | ||
| G4-22 * | Explanation of the effect of any re-staments of information provided in earlier reports |
GRI report: Identified material aspects and boundaries |
Refer to Assurance report | ||
| G4-23 * | Significant changes from previous reporting periods |
GRI report: Identified material aspects and boundaries |
Refer to Assurance report | ||
| Stakeholder engagder engagement | |||||
| G4-24 * | Stakeholder groups engaged by the organization |
Corporate responsibility: Stakeholder engagement | Refer to Assurance report | ||
| G4-25 * | Basis for indentification and selection of stakeholders |
Corporate responsibility: Stakeholder engagement | Refer to Assurance report | ||
| G4-26 * | Approaches to stakeholder engagement | Corporate responsibility: Stakeholder engagement | Refer to Assurance report | ||
| G4-27 * | Key topics and concerns raised through stakeholder engagement |
Corporate responsibility: Stakeholder engagement | Refer to Assurance report | ||
| Report profile | |||||
| G4-28 * | Reporting period | GRI Report: Report profile | Refer to Assurance report | ||
| G4-29 * | Date of the most recent report | GRI Report: Report profile | Refer to Assurance report | ||
| G4-30 * | Reporting cycle | GRI Report: Report profile | Refer to Assurance report | ||
| G4-31 * | Contact point for questions regarding the report |
GRI Report: Report profile | Refer to Assurance report | ||
| G4-32 * | GRI content index | GRI Report: GRI content index | Refer to Assurance report | ||
| G4-33 * | Policy and current practice with regard to seeking external assurance for the report |
GRI Report:Report profile GRI report: Corporate responsibility reporting scope |
Refer to Assurance report | ||
| Governance | |||||
| G4-34 * | Governance structure of the report | Governance: Corporate governance | Refer to Assurance report | ||
| G4-36 | Executive-level positions with responsibility for economic, environmental and social topics |
GRI report: Governance | Refer to Assurance report | ||
| G4-37 | Processes for consultation betwen stakeholders and the highest governance body |
GRI report: Governance | Refer to Assurance report |
| G4-38 | Composition of the highest governance body and its committees |
Governance: Board of Directors | |
|---|---|---|---|
| G4-39 | Position of the Chairman of the Board | Governance: Board of Directors | |
| G4-40 | Processes for determining the composition, qualifications, and expertise of the highest governance body |
GRI report: Governance | Refer to Assurance report |
| G4-41 | Processes in place to avoid conflicts of interest |
GRI report: Governance | Refer to Assurance report |
| G4-42 | Executive-level roles in setting purposes, values, and strategy |
GRI report: Governance | Refer to Assurance report |
| G4-43 | Measures taken to develop and enhance the highest governance body's collective knowledge of economic, environmental and social topics. |
GRI report: Governance | Refer to Assurance report |
| G4-441) | Processes and actions taken with regard to highest governance body's performance |
GRI report: Governance | Refer to Assurance report |
| G4-45 | Highest governance body's role in the identification and management of economic, environmental and social impacts, risks, and opportunities |
GRI report: Governance | Refer to Assurance report |
| G4-46 | Highest governance body's role in reviewing the effectiveness of the organization's risk mangement processes |
GRI report: Governance | Refer to Assurance report |
| G4-47 | Frequency of the highest governance body's review of economic, environmental and social impacts, risks, and opportunities |
GRI report: Governance Governance: Board of Directors |
|
| G4-48 | Highest committee or position that formally reviews and approves the sustainability report |
GRI report: Governance | Refer to Assurance report |
| G4-49 | Process for communicating critical concerns to the highest governance body |
GRI report: Governance Governance: Shareholders´ meeting |
|
| G4-50 | Nature and total number of critical concerns that were communicated to the highest governance body and the mechanisms used to address them. |
Financials: Commitments and contingent liabilities GRI report: HR3 GRI report: SO5 |
Refer to Assurance report |
| G4-51 | Executive-level compensations | GRI Report: Governance | Refer to Assurance report |
| G4-52 | Process for determining remuneration | GRI Report: Governance | Refer to Assurance report |
| G4-53 | Process for seeking stakeholder views regarding remuneration |
GRI Report: Governance | Refer to Assurance report |
| Ethics and int Ethics and integrity |
|||
| G4-56 * | Organization's values, principles, standards and norms of behavior |
GRI Report: Ethics and integrity | Refer to Assurance report |
| G4-57 | Internal and external mechanisms for seeking advice on ethical and lawful behaviour |
GRI Report: Ethics and integrity | Refer to Assurance report |
| G4-58 | Internal and external mechanisms for reporting concerns about ethical and lawful behaviour |
GRI Report: Ethics and integrity | Refer to Assurance report | ||||
|---|---|---|---|---|---|---|---|
| The general standard disclosures marked with an asterisk * are minimum requirements for the G4 "Core" option. | |||||||
| 1) Partially reported. |
| Specific standard disclosures | |||||
|---|---|---|---|---|---|
| Material aspects | External assurance |
||||
| Indicators Category: Economic |
|||||
| Economic performance | EC1, EC3, EC4 | Refer to Assurance report | |||
| Category: Environmentalonmental | |||||
| Materials | EN1, EN2 | Refer to Assurance report | |||
| Energy | EN3, EN5, EN6 | Refer to Assurance report | |||
| Water | EN8, EN10 | Refer to Assurance report | |||
| Emissions | EN15, EN16, EN18, EN19, EN20, EN21 | Refer to Assurance report | |||
| Effluents and waste | EN22, EN23, EN24, EN25 | Refer to Assurance report | |||
| Products and services | EN27, EN28 | Refer to Assurance report | |||
| Compliance | EN29 | Refer to Assurance report | |||
| Transport | EN30 | Refer to Assurance report | |||
| Overall | EN31 | Refer to Assurance report | |||
| Supplier environmental assessment | EN32 | Refer to Assurance report | |||
| Environmental grievance mechanism | EN34 | Refer to Assurance report | |||
| Category: Socialory: Social | |||||
| Labor practices and decent work | |||||
| Employment | LA1, LA2 | Refer to Assurance report | |||
| Labor/Management Relations | LA4 | Refer to Assurance report | |||
| Occupational Health and safety | LA6 | Refer to Assurance report | |||
| Training and education | LA91) , LA10, LA11 |
Refer to Assurance report | |||
| Diversity and equal opportunity | LA12 | Refer to Assurance report | |||
| Equal remuneration for women and men | LA131) | Refer to Assurance report | |||
| Supplier assessment for labor practices | LA14 | Refer to Assurance report | |||
| Labor practices grievance mechanisms | LA16 | Refer to Assurance report |
| Human rights | ||||||||
|---|---|---|---|---|---|---|---|---|
| Non-discrimination | HR3 | Refer to Assurance report | ||||||
| Freedom of association and collective bargaining | HR4 | Refer to Assurance report | ||||||
| Assessement | HR92) | Refer to Assurance report | ||||||
| Supplier human rights assessment | HR10 | Refer to Assurance report | ||||||
| Human rights grievance mechanisms | HR12 | Refer to Assurance report | ||||||
| Society | ||||||||
| Local communities | ||||||||
| Local communities | SO1, SO2 | Refer to Assurance report | ||||||
| Anti-corruption | SO3, SO4, SO5 | Refer to Assurance report | ||||||
| Public policy | SO6 | Refer to Assurance report | ||||||
| Anti-competitive behaviour | SO7 | Refer to Assurance report | ||||||
| Aupplier assessment for impacts on society | SO9 | Refer to Assurance report | ||||||
| Compliance | SO8 | Refer to Assurance report | ||||||
| Grievance mechanism for impacts on society | SO11 | Refer to Assurance report | ||||||
| Product responsibility esponsibility |
||||||||
| Customer health and safety | PR1, PR2 | Refer to Assurance report | ||||||
| Product and service labelling | PR3, PR4 | Refer to Assurance report | ||||||
| Marketing communications | PR6 | Refer to Assurance report | ||||||
| Compliance | PR9 | Refer to Assurance report | ||||||
1) LA9: Partially reported, no company-wide information of training hours available. LA13: Partially reported, no data available for ratio of women to men for each employee category.
2) Partially reported. Systematic process for assessing human rights related risks will be initiated in 2014.
Corporate responsibility > GRI report > General standard disclosures > Strategy and analysis
For the statement from the most senior decision-maker concerning the relevance of sustainability to Kemira and Kemira's strategy for addressing sustainability, please see CEO's review.
G4-2: KEY IMPACTS, RISKS AND OPPORTUNITIES
A description of key impacts, risks, and opportunities can be found in the section Risk management and in the CEO's review.
Corporate responsibility > GRI report > General standard disclosures > Organizational profile
The name of the organization is Kemira Oyj.
A list of Kemira's primary brands, products, and services can be found under Our business.
G4-5: LOCATION OF THE ORGANIZATION'S HEADQUARTERS
Kemira's headquarters is located in Helsinki.
G4-6: COUNTRIES WHERE THE ORGANIZATION OPERATES
Kemira has operations in approximately 40 countries.
Kemira has no significant locations of operations, only one site with over 300 employees (305 employees end of 2013) out of total about 4,500 employees (6.9% of all employees).
G4-7: NATURE OF OWNERSHIP AND LEGAL FORM
Kemira is a publicly traded company listed on the NASDAQ OMX Helsinki Ltd.
Kemira's markets served, including geographical breakdown, sectors served and types of customers can be found under Our business.
For information on Kemira's number of employees, operations and financial figures, please see Key figures.
| G4-10: Total number of employees | |||||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | ||
| Personnel at year-end | 4,453 | 4,857 | 5,006 | 4,935 | 8,493 | 9,954 | |
| Females/males, % | 26/74 | 25/75 | 24/76 | 32/68 | 32/68 | 29/71 |
| G4-10: Total number of employees by employment contract and gender | |||||||
|---|---|---|---|---|---|---|---|
| 2013 | Female | Male | Total | Female % | Male % | Total % | Total % 2012 |
| Permanent | 1,127 | 3,223 | 4,350 | 96.8 | 98.0 | 97.7 | 98.0 |
| Fixed-term | 37 | 66 | 103 | 3.2 | 2.0 | 2.3 | 2.0 |
| Total | 1,164 (26%) | 3,289 (74%) | 4,453 | 100.0 | 100.0 | 100.0 | 100.0 |
| G4-10: Total number of permanent employees by employment type and gender | |||||||
|---|---|---|---|---|---|---|---|
| 2013 | Female | Male | Total | Female % | Male % | Total % | Total % 2012 |
| Full-time | 1,102 | 3,212 | 4,315 | 97.8 | 99.7 | 99.2 | 97.6 |
| Part-time | 25 | 11 | 36 | 2.2 | 0.3 | 0.8 | 2.4 |
| Total | 1,127 | 3,223 | 4,350 | 100.0 | 100.0 | 100.0 | 100.0 |
| G4-10: Total workforce by region and gender | |||||||
|---|---|---|---|---|---|---|---|
| 2013 | Female | Male | Total | Female % | Male % | Total % | Total % 2012 |
| APAC | 93 | 247 | 340 | 8.0 | 7.5 | 7.6 | 7.2 |
| EMEA | 739 | 1,856 | 2,595 | 63.5 | 56.4 | 58.3 | 57.8 |
| North America | 271 | 1,010 | 1,281 | 23.3 | 30.7 | 28.8 | 26.3 |
| South America | 61 | 176 | 237 | 5.2 | 5.4 | 5.3 | 8.7 |
| Total | 1,164 | 3,289 | 4,453 | 100.0 | 100.0 | 100 | 100.0 |
There is no significant variation in the employment figures on an annual level. The workload is evenly distributed during the year, which is why there is no need for seasonal workforce.
Percentage of employees covered by collective bargaining agreements varies widely by between regions, being lowest in North America (USA 4%, Canada11%), which is characteristic to the region. In many European countries all employees are covered by collective bargaining agreements, especially in Northern Europe (Finland, Sweden) and Southern Europe (Spain, France, Italy). In Central Europe the percentage varies (UK 31%, the Netherlands 68%, Germany 47%, Austria 100%), and in some Eastern European countries (for example Poland) there are no collective bargaining agreements. In South America all employees are covered by a collective agreement. For APAC the data is not applicable as collective bargaining agreements are not a prevailing practice in the chemical industry.
Kemira's Supply Chain function is in charge of the end-toend product flow which comprises managing the sourcing of materials and services, inventory and demand replenishment planning, logistics operations, customer order handling and customer service. Most of the suppliers are direct producers of materials, energy and utilities, and service providers.
The total number of suppliers is about 10,000, out of which 650 are raw material suppliers.
Total spend of direct and indirect sourcing was about EUR 1.7 billion in 2013.
Top 100 direct material suppliers make 80% of the total spend. Geographically 85% of the supplies are from EMEA and NAFTA.
During 2012-2013 Kemira has announced 20 site or production plant closures in line with Kemira's consolidated manufacturing footprint optimization plan. The production from closed sites has been transferred to Kemira's other sites, except for titanium dioxide and formic
acid business, which have been sold. At the end of 2013, Kemira had 59 manufacturing sites. The environmental reporting scope included 64 sites according to Kemira consolidation rules.
Acquisition of 3F Chimica S.p.A.; two new manufacturing sites in Italy and one in USA focusing on polymer production.
Establishment of multifunction Business Service Center in Gdansk, Poland (transactional services including customer service and procurement).
There are no significat changes in share capital structure and other capital formation, maintenance, and alteration operations. For further information, please see Note 33.
There are no significant changes in the supply chain in terms of location of material and service suppliers or in selection or termination of suppliers.
Kemira's risk management policy and principles proactively protect and help Kemira to reach the desired aggregate risk level and ensure the continuity of Kemira's operations. Read more in the section Risk management.
Kemira follows the OECD Guidelines for Multinational Enterprises. Kemira respects and supports the fundamental human rights as defined by the United Nations Universal Declaration of Human Rights and complies with the International Labour Organization's Declaration on Fundamental Principles and Rights at Work.
Kemira Oyj is committed to the Responsible Care program by the International Council of Chemical Associations (ICCA).
Kemira is a member of World Business Council for Sustainable Development (WBCSD), Chemical Industry Federation of Finland (CIFF) and European Chemical Industry (CEFIC). Kemira's CEO is a member of the CIFF and CEFIC Board.
On a national level Kemira is, for example, a member of Cleantech Finland and participates actively in the Baltic Sea Action Group's (BSAG) Commitment to Act.
The entities included in Kemira's Consolidated Financial Statements are listed in the Notes to the Consolidated Financial Statements 34; Group companies.
All the Group companies are included in Kemira's corporate responsibility report. More detailed description of the boundaries and the completeness of the report data is provided in the tables G4-20 and G4-21 Description of the reporting scope and methods of data collection.
During the autumn of 2013 Kemira updated the assessment of material sustainability topics in accordance with the new GRI G4 process for defining report content. Based on the first materiality analysis conducted in 2011, Kemira had defined its corporate responsibility priorities and targets as part of its corporate responsibility management process. The targets for corporate responsibility were approved by the Management Board in the end of 2012.
The second stakeholder survey was conducted in the autumn 2013 to understand how and in which areas we could improve our corporate responsibility. This was done via a web-based stakeholder brainstorming where stakeholders could discuss and provide their viewpoint on any corporate responsibility topics and concerns they considered important. The survey was participated by 243 stakeholder representatives from 27 countries. The share of external stakeholders was 51.4% of the participants and they represented mainly shareholders and investors, customers, suppliers, non-govermental organizations and governmental authorities.
According to the results of the stakeholder survey, both internal and external stakeholders highlighted the importance of product safety and innovation, business ethics and compliance, and responsibility in the supply chain.
The outcomes of this online stakeholder survey were taken into account when updating Kemira's corporate
responsibility focus areas and targets for 2014, and when defining material aspects and boundaries for the report content.
The most material corporate responsibility aspects for Kemira were determined based on three criteria:
If the aspect met most of the three criteria, it was considered to be material. In this process, 36 of the 46 aspects included in the GRI G4 guidelines were identified as material. Four of the earlier reported aspects were not considered material any more. Aspects Indirect economic impacts, Market presence, Investment and biodiversity were reported in 2012 but were not considered material when defining material aspects and boundaries for the 2013 report content.
The scope of the report does not contain any other changes, nor restatements of information provided in the previous reports.
Aspect boundaries for the identified material aspects were then evaluated in reflection to the sustainability context, that is based on the significance of their economic, environmental and social impacts in our value chain. A more detailed description of the aspect boundaries and completeness of data collection for the identified material aspects can be found in the table Description of the reporting scope and methods of data collection.
Based on the materiality assessment, stakeholder survey results and discussions with Kemira's management, Kemira has defined six corporate responsibility focus areas, and has established performance targets for each focus area. The corporate responsibility focus areas are:
The material aspects and the relevant performance indicators are organized and reported by Kemira's six corporate responsibility focus areas. The results of the materiality assessment, as well as the updated Kemira corporate responsibility targets, have been validated by the Kemira Management Board in January 2014.
| G4-19: Material aspects by Kemira's corporate responsibility focus areas | ||||||
|---|---|---|---|---|---|---|
| Material aspects identified |
Responsible business practices |
Responsible supply chain |
Responsibility for employees |
Responsible manufacturing |
Sustainable products and solutions |
Responsibility towards the local communities where we operate |
| Category: Economic | ||||||
| Economic Performance (see section Economic responsibility) |
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| Category: Environment | ||||||
| Materials | ||||||
| Energy | Scope 3 | |||||
| Water | ||||||
| Emissions | ||||||
| Effluents and waste | ||||||
| Products and services | ||||||
| Compliance | ||||||
| Transport | ||||||
| Overall env. expenditures and investments |
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| Supplier environmental assessment |
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| Environmental grievance mechanisms |
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| Category: Social | ||||||
| Sub-category: Labor Practices and decent work | ||||||
| Employment | ||||||
| Labor/management relations |
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| Occupational health and safety |
| Training and education | ||||||
|---|---|---|---|---|---|---|
| Diversity and equal opportunity |
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| Equal remuneration for women and men |
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| Supplier assessment for labor practices |
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| Labor practices grievance mechanisms |
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| Sub-category: Human rights | ||||||
| Non-discrimination | ||||||
| Freedom of association and collective bargaining |
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| Assessment | ||||||
| Supplier human rights assessment |
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| Human rights grievance mechanisms |
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| Sub-category: Society | ||||||
| Local communities | ||||||
| Anti-corruption | ||||||
| Public policy | ||||||
| Anti-competitive behavior |
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| Compliance | ||||||
| Supplier assessment for impacts on society |
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| Grievance mechanisms for impacts on society |
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| Sub-category: Product responsibility | ||||||
| Customer health and safety |
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| Product and service labeling |
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| Marketing communications |
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| Compliance |
| G4-20: Description of the reporting scope and methods of data collection Aspect boundaries within the organization |
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|---|---|---|---|---|
| Materials Aspec erials Aspects |
Aspect boundaryt boundary | Completeness | ||
| Category: Economic | ||||
| Economic performance | All Kemira operations (according to Kemira consolidation rules) |
Data is extracted from the Kemira ERP* system and collected from Kemira consolidated companies. Consolidation on the Group level. |
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| Category Environment | ||||
| Materials; Products and services; Transport | All Kemira operations covered by the Kemira ERP* (according to Kemira consolidation rules) |
Data is extracted from the Kemira ERP* system and R&D New Product Development (NPD) process documentation. |
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| Energy (Scope1 and 2); Water; Emissions; Effluents and waste; Compliance, Environmental expenses and investments |
All Kemira sites (according to Kemira consolidation rules). The environmental reporting scope included 64 sites. |
Data is collected from each production site and consolidated on the Group level. |
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| Category:Social | ||||
| Labor PrLabor Practices and Decent W tices Work Employment; Labor/management relations; Occupational health and safety** (incl.contractors working at Kemira sites); Training and education; Diversity and equal opportunity; Equal remuneration for women and men |
All Kemira operations (according to Kemira consolidation rules) |
HR data management system. Kemira is to some extent using supervised workers and supervised employees of contractors, but the information is managed locally at respective sites and is not collected and consolidated globally. Safety data management system |
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| Human Righ Rights Non-discrimination; Freedom of association and collective bargaining; Human rights assessment |
All Kemira operations (according to Kemira consolidation rules) |
Notifications through Compliance & Ethics Hotline and [email protected] |
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| Society Local communities; Anti-corruption; Public policy Anti-competitive behavior; Compliance |
All Kemira operations (according to Kemira consolidation rules) |
Data is collected from each region and from the Kemira legal archive files, and through notifications from Kemira Compliance and Ethics Hotline |
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| Product responsibility esponsibility Customer health and safety; Product and service labeling; Marketing communications; Compliance |
All Kemira operations covered by the Kemira ERP* (according to Kemira consolidation rules) |
Data is extracted from the Kemira ERP* system, R&D NPD process documentation and Kemira legal archive files |
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| Grievance mechanism | All Kemira operations | Kemira Compliance and Ethics Hotline | ||
| *Kemira ERP = Kemira Enterprise Resource Planning |
**Occupational health & safety: TRI number includes the contractors
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
| G4-21: Description of the reporting scope and methods of data collection Aspect boundaries outside the organization |
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|---|---|---|---|---|---|
| Materials Aspec erials Aspects |
Aspect boundaryboundary |
Completeness | |||
| Indirect emissions in the value chain (EN17, EN30) |
Scope 3 | Data collected from Kemira ERP* system and relevant organizational units. Default data and assumptions as refered by WBCSD Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain |
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| Supplier assesments | Suppliers | Harmony Contract Management Tool to track suppliers that signed for CoC-SDA. | |||
| Grievance mechanism | External stakeholders |
Data is collected from [email protected] | |||
| *Kemira ERP = Kemira Enterprise Resource Planning |
There are no major restatements of information provided in previous reports except a few environmental related data: Indicators EN23 and EN27 are restated for years 2011-2013 due to more comprehensive data available. Indicator EN23 is also reported by more comprehensive disclosure of waste disposal methods.
There are no significant changes from previous reporting periods in the reporting scope and aspect boundaries.
Emissions in the value chain (Scope 3) and Supplier assessments are included as new items.
Corporate responsibility > GRI report > General standard disclosures > Stakeholder engagement
G4-24: STAKEHOLDER GROUPS ENGAGED BY THE ORGANIZATION
For a list of stakeholder groups engaged by the organization, please see Stakeholder engagement.
G4-25: BASIS FOR INDENTIFICATION AND SELECTION OF STAKEHOLDERS
The basis for identification and selection of stakeholders with whom to engage can be found in Stakeholder engagement.
For the organization's approach to stakeholder engagement, please see Stakeholder engagement.
The key topics and concerns raised through stakeholder engagement, as well as Kemira's response to those topics and concerns, can be found under Stakeholder engagement.
The reporting period is from January 1 to December 31, 2013, unless otherwise stated.
Kemira's Annual Report 2012 (including Sustainability Report and Financial Statements) was published on February 28, 2013.
Kemira's corporate responsibility report and financial statements are published annually.
For questions regarding the report or its contents, please contact Kemira Corporate Responsibility: [email protected].
G4-32: GRI CONTENT INDEX
Please see GRI report for the GRI content index.
G4-33: POLICY AND CURRENT PRACTICE WITH REGARD TO SEEKING EXTERNAL ASSURANCE FOR THE REPORT
Information on the organization's policy and current practice with regard to external assurance can be found in Corporate responsibility reporting scope and Assurance statement.
The company's corporate governance is also described in the Corporate governance section of the Kemira 2013 report.
For information on Kemira's governance structure and committees, please see Corporate governance.
Senior Vice President, Communications & Corporate Responsibility, reports to the Managing Director.
Director, Corporate Responsibility, reports to the Senior Vice President, Communications & Corporate Reponsibility.
Kemira Oyj's corporate governance is based on the Articles of Association, the Finnish Companies Act and NASDAQ OMX Helsinki Ltd's rules and regulations on listed companies. These rules regulate the procedures regarding when and how listed companies disclose information to the market. All information that is likely to materially influence the valuation of a listed company must be published in such a manner that the information reaches all market participants simultaneously.
Furthermore, Kemira complies with the Finnish Corporate Governance Code which is publicly available at http://cgfinland.fi/en/
Kemira Oyj's general operating principles, mutual responsibilities and lines of responsibility are defined by the Kemira Code of Conduct. Kemira's values and ethical principles underpin the company's corporate governance and the way in which the company interacts with its main stakeholders.
Kemira's shareholders' meeting is held at least once a year.
Shareholders have a right to demand a matter that falls within the competence of the general meeting by virtue of the Limited Liability Companies Act to be included in the agenda as well the right to review fiscal information for the past year and bring up questions or matters regardingly.
In 2013 Kemira's Investor Relations held approximately 35 roadshow days and almost 250 individual meetings with portfolio managers and other representatives in several different countries. The Head of Investor Relations reports to the Chief Financial Officer.
Please read more on the composition of the highest governance body and its committees in the section Board of Directors.
Please read more about the Chair of the highest governance body and his duties in the section Board of Directors.
G4-40: PROCESSES FOR DETERMINING THE COMPOSITION, QUALIFICATIONS, AND EXPERTISE OF THE HIGHEST GOVERNANCE BODY
Kemira complies with the Finnish Corporate Governance Code which is publicly available at www.cgfinland.fi (see chapter 3: Board)
The Annual General Meeting (AGM) makes decisions on matters within its competence under the Companies Act and the Articles of Association on the discharge of Board members and the Managing Director and his Deputy from liability, the election of the Chairman, Vice Chairman and other members of the Board of Directors and their emoluments, and the election of the auditor and the auditor's fees.
The Nomination Board, consisting of shareholders or the representatives of shareholders, prepares annually a proposal for the next AGM concerning the composition and remuneration of the Board of Directors.
Kemira's Board of Directors' tasks and duties are defined in the section Board of Directors.
The Finnish Corporate Governance Code defines the evaluation of the independence of the Board of Directors and obliges the directors to provide the Board with sufficient information that allows the Board to evaluate their qualifications and independence, and notify the Board of any changes in such information.
The related parties, transactions and disclosure of related parties and transactions are defined in the Kemira Group Related Party Policy (approved by the Management Board). Related party information is disclosed in the Consolidated Financial Statements as required by the International Financial Reporting Standards (IFRS).
All Board members are independent of the company. The Board members are also independent of significant shareholders of the company except for the Vice Chairman Jari Paasikivi. Jari Paasikivi is the CEO of Oras Invest Oy, which is the owner of over 10% of Kemira Oyj's shares.
As stated in the company's Code of Conduct, all Kemira employees, as well as the Board of Directors, must recognize and avoid conflicts of interest and must always disclose any potential or actual conflict of interest situation to their supervisor in accordance with applicable Kemira policies.
Kemira Oyj and the Kemira pension fund Neliapila own 4,037% of the shares of the energy production company Pohjolan Voima. Pohjolan Voima is the major owner of another energy production company Teollisuuden Voima Oy, where Kemira has a direct minority ownership share of about 1%.
The Managing Director is responsible for managing and developing the company in accordance with the instructions and regulations issued by the Board of Directors, ensuring that the company's interests are served by the subsidiaries and associated companies under its ownership, and puts the decisions taken by the Board of Directors into effect. The Managing Director reports to the Board on financial affairs, the business environment and other significant issues.
The Management Board is responsible for securing the long-term strategic development of the company. The Management Board also approves the Company's Policies.
The Board of Directors approves the company's values, strategy and organization. The Board of Directors approves the most important Policies, such as the Code of Conduct. The Board approves the interim reports and financial statements as well as the corporate responsibility report.
G4-43: MEASURES TAKEN TO DEVELOP AND ENHANCE THE HIGHEST GOVERNANCE BODY'S COLLECTIVE KNOWLEDGE OF ECONOMIC, ENVIRONMENTAL AND SOCIAL TOPICS
The knowledge of economic, environmental and social topics is enhanced through various presentations and discussions as well as review of, for example, the EHSQ report, interim report and corporate responsibility report.
The Board of Directors conducts an internal selfassessment annually. Action plans are created based on the results. The results are presented to the Nomination Board
The risks and opportunities are included in the Kemira's strategy, as approved by the Board of Directors. The review of the strategy is a continuous process. The Board of Directors meet once a month. Early warning signals are presented to the Board of Directors once a month, covering information on the markets relevant to the company.
Internal audit reviews the results of the risk assessment processes on a yearly basis for audit planning purposes. The risk management process is evaluated by internal audit every three years. According to Kemira's Enterprise Risk Management process, the Board of Directors review the risk management process through its Audit Committee annually, Management Board and segment management semiannually and RBU/function/region management quarterly.
The tasks and duties of the highest governance body can be found under Board of Directors.
In 2013, the Board of Directors met 16 times. The average attendance rate at the meetings was 97.6%.
Defining Kemira's corporate responsibility material topics and focus areas is based on our stakeholders' concerns and expectations, and on assessing the impacts of our operations on the environment and society. The material topics are either a source of value creation or a business risk for Kemira.
Kemira sets improvement targets for each defined corporate responsibility focus area. The target setting is designed together with the respective members of Kemira's Management Board responsible for individual corporate responsibility focus areas.
Kemira's corporate responsibility targets are approved by the Kemira Management Board. Corporate responsibility targets are discussed annually with the Kemira Board of Directors. Performance againts corporate responsibility targets is reported quarterly in Kemira's interim reports by the Kemira Board of Directors.
Kemira's corporate responsibility report is approved by the Kemira Board of Directors and assured by an external partner.
More information on the process for communicating critical concerns to the highest governance body can be found in the section Shareholders' meeting.
See also disclosure G4-58 for the internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and matters related to organizational integrity.
The following critical concerns are reported to the Boad of Directors:
Litigations, if relevant to the Board of Directors, see chapter "Litigation" in Note 30: Commitments and contingent liabilities.
Cases of discrimination are described under the indicator HR3: Total number of incidents of discrimination and corrective actions taken, and cases of corruption under SO5: Confirmed incidents of corruption and actions taken. There were 4 cases of violations against the Code of Conduct reported to the Audit Committee. The Committee reports to the Board on each meeting.
Based on the decisions of the 2013 Annual General Meeting, Board members are entitled to a yearly fee and a fee per meeting.
The fees are as follows:
Fees payable for each Board meeting and its committees are:
The meeting fees are to be paid in cash.
Travel expenses are paid according to Kemira's travel policy.
In addition, the Annual General Meeting decided that the annual fee should be paid as a combination of the company's shares and cash in such a manner that 40% of the annual fee is paid with the company's shares owned by the company or, if not possible, shares purchased from the market, and 60% is paid in cash. The shares will be transferred to the members of the Board of Directors and, if necessary, acquired directly on behalf of the members of
the Board of Directors within two weeks from the release of Kemira's interim report January 1–March 31, 2013.
The Board of Directors determines the salaries of the Managing Director and other Group Management Board members, other remuneration, and employment terms. Management compensation consists of a monthly salary, fringe benefits and performance based incentives. A twelve-month period of notice applies to both sides for the Managing Director. In addition to the salary of the notice period, the Managing Director is not entitled to a separate severance pay. The Group Management Board does not have a separate supplementary pension scheme. The performance based incentives consist of a cash bonus plan and a share based plan.
The annual cash bonus is determined by the achievement of the Group and personal performance targets for each financial year. The maximum bonus for the Managing Director is 60% of the annual gross salary for the same period and 50–70% for other Group Management Board members. In 2013, Group performance targets were Group EBIT and cash flow and personal performance targets including social and economic objectives, depending on the role. All Group Management Board members had a People and Talent Development target in addition of the operative and financial targets.
In February 2012, Kemira Board of Directors decided to establish a new share-based incentive plan that follows the already terminated 2009–2011 plan aimed at the company's strategic management for the years 2012–2014, as part of the company's incentive and commitment schemes. The delivery of share rewards within the plan is subject to the achievement of the performance targets set by the Board of Directors, which include both internal and external performance targets. The internal target setting is divided into three one-year performance periods: 2012, 2013 and 2014. Payment depends on achievement of the set intrinsic value targets calculated from the development of EBITDA and the development of the net debt. The program also includes a three-year external goal, which is tied to the relative total shareholder return (TSR) performance during 2012–2014. As a guiding principle, reward will only be paid based on excellent performance.
The value of the aggregate reward paid out in the course of the three-year plan may not exceed 120% of the CEO's and 100% of the other participants' gross salary for the same period. The applicable taxes will be deducted from the gross earning and the remaining net value is delivered to the participants in Kemira shares.
Shares earned through the plan must be held for a minimum of two years following each payment. In addition, the participants must retain fifty per cent of the shares obtained under the plan until their ownership of Kemira shares based on shares obtained through the share-based incentive programs of Kemira has reached a share ownership level which in value equals at least their gross annual salary for as long as they remain participants in the plan.
The shares transferable under the plan comprise treasury shares or Kemira Oyj shares available in public trading.
In addition to the share-based incentive plan aimed at the company's strategic management, Kemira has a sharebased incentive plan aimed at other key personnel, in which the strategic management will not participate.
The Annual General Meeting decides on remuneration for Board members.
The Board of Directors determines the salaries of the Managing Director and other Group Management Board members, other remuneration, and employment terms.
The Group Performance targets in the annual cash bonus as well as the the targets in the share-based plan for the strategic management are determined for each financial year separately by the Board of Directors.
The Board of Directors may use external, independent remuneration consultants when needed. Consultants have been used for example for defining the incentive plan.
Shareholders represent one of Kemira's three key stakeholder groups in addition to customers and employees, and shareholders' views regarding remuneration are taken into account in Kemira Oyj's shareholders' meeting, Annual General Meeting (AGM), which is the company's highest decision-making body. The AGM makes decisions on matters within its competence under the Companies Act and the Articles of Association, including the election of the Chairman, Vice Chairman and other members of the Board of Directors and their emoluments, and the election of the auditor and the auditor's fees. Process for determining remuneration
Corporate responsibility > GRI report > General standard disclosures > Ethics and integrity
The Kemira Code of Conduct is based on Kemira's values, which are also incorporated in the Code. The Code sets the framework for Kemira policies and defines the key principles that are expressed in more detail in the respective policies.
The current version of Kemira's Code of Conduct was approved by the Board of Directors in December 2012 and entered into force on January 1, 2013. The Code is available in 24 languages.
During 2013, training has been provided to all Kemira personnel in all countries via online training program and classroom trainings. 90% of our active personnel (excluding employees who are in the scope of divested businesses) received training during 2013 either via interactive e-learning tool or on-site classroom training. The remaining personnel will receive training in 2014. All new employees will also receive training when joining the company. Signing the Code is not required globally, but this practice is nevertheless in use in some countries.
As a document the Code of Conduct is owned by the Legal function (headed by the Group General Counsel), and most of the activities related to the Code are managed by Ethics & Compliance sub-function (organized under Legal).
Kemira has in-house legal counsels in all regions that can be contacted via all usual means (e-mail, call, face-toface, etc.). No special channels have been set up for anonymous contacts. Kemira employees can contact Kemira's Legal function (in-house legal counsels or Ethics & Compliance) in any questions or concerns relating to
ethics or compliance. This is stated for example in the Code of Conduct. Any reporting will be treated strictly confidentially and anonymously to the extent possible. Preventing an employee from reporting a violation of the Code is prohibited.
Satisfaction with Legal's advice services is not measured separately, but is indirectly covered as part of the Business Alignment Survey conducted by Legal in November/ December 2013.
Each Kemira employee must report any violation of law, unethical activities or non-conformity with the Code of Conduct either via the Kemira Ethics and Compliance Hotline, an independent reporting service provided by an external partner; to Kemira Group Ethics & Compliance function; or the relevant line management.
Each line manager has an obligation to forward all reports made to the line management to the Ethics & Compliance function, which has the overall responsibility of the reporting.
Each employee is required to attend a mandatory Code of Conduct training, which contains information about the reporting system. The reporting system is available 24/7 for the employees and it is provided in 45 different languages. All reports will be treated confidentially and anonymously to the extent possible. According to Code of Conduct, all allegations of potential violations of the Code made in good faith will receive a fair and comprehensive investigation conducted with the relevant internal and/or external assistance. Raising a concern about compliance with the Code will not lead to adverse work-related consequences.
Corporate responsibility > GRI report > Specific standard disclosures by focus areas > Disclosures on management approach
Disclosure of management approach is reported by the generic management approach covering Kemira's corporate responsibility in general, and by the specific management approaches covering each focus area of corporate responsibility. The management approach of
economic performance is covered by Kemira's corporate governance and financial guidance. Sustainable organic growth, financial stability and target oriented corporate responsibility work are the key elements in Kemira's management of economic responsibility.
| Management approach of Kemira's corporate responsibility | |
|---|---|
| Description of management approach |
At Kemira, the purpose of Corporate Responsibility is to identify, understand and manage the impacts of our activities on the environment, people and the society. |
| Policies | Kemira has a wide scope of company policies that support the implementation of corporate responsibility targets, and that relate to the management approach of each corporate responsibility focus area. • Kemira Code of Conduct, Code of Conduct for Suppliers, Distributors and Agents, and EHSQ policy are publicly available • All other policies referted to in the focus area specific DMA are non-public, internal documents |
| Commitments | • Kemira Code of Conduct is in line with the OECD Guidelines for Multinational Enterprises • Kemira respects and complies with internationally acknowledged human rights such as the United Nations Universal Declaration of Human Rights and ILO declaration on Fundamental Principles and Rights at Work • Kemira is signatory of Responsible Care, the voluntary initiative of the international chemical industry. |
| Goals and targets |
Our corporate responsibility targets can be found in the section Our focus areas. |
| Responsibilities | and reports to SVP, Communications and Corporate Responsibility, a direct subordinate of the CEO. | Director, Corporate Responsibility, is responsible for overall development and management of corporate responsibility activities, | ||||
|---|---|---|---|---|---|---|
| Corporate Responsibility team • Team is lead by Director, Corporate Responsibility • Team is responsible for management of a company-wide process to identify corporate responsibility priorities and targets, coaching and supporting the organization, coordinating, monitoring and reporting of the corporate responsibility related activities in Kemira, establishing the processes, tools and metrics to ensure compliance with relevant external norms, guidelines and expectations, stakeholder dialogue related to corporate responsibility, public affairs issue management • Team responsibilities are connected to performance evaluation and incentive plan: 30% of bonus targets are based on individual KPI's to ensure that corporate responsibility targets are implemented and achieved. For corporate responsibility, generic catalog KPI's are defined which can be used as part of bonus KPI's in other parts of the organization Corporate Responsibility management team |
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| • • |
Team is chaired by Director, Corporate Responsibility | Team members are from the organisational units that are responsible for implementation and business integration of the | ||||
| corporate responsibility targets • |
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| Team members are responsible for the management and performance follow-up of target implementation in their respective organizational unit • Team is responsible for proposing target updates and KPI's to Kemira's Management Board and performance reporting • Responsibilities are largely connected to performance evaluation. For details, see DMA by focus areas |
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| Resources | Segments and functions (Legal, Sourcing and Procurement, Supply Chain Management, EHSQ, Manufacturing, Human Resources, Communications and Corporate Responsibility. |
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| Specific actions (processes, programs, projects, initiatives) |
Corporate level, global activities: • Stakeholder engagement surveys conducted on regular basis • Target-setting and performance management according to corporate responsibility management process • Corporate responsibility reporting on quarterly and annual basis |
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| Evaluation of management approach |
Kemira's Managemet Board annually reviews and approves the corporate responsibility targets. The approved targets and the corporate responsibility report are presented and discussed with the Board of Directors. The performance follow-up of target implementation is conducted every quarter, and the results are reported to the Management |
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| Board, as well as to stakeholders in the quarterly Kemira Interim Reports. | ||||||
| Mechanisms fhanisms for monitor monitoring the eoring the effectiveness of the manag f management apement approach | ||||||
| Audit coverage of corporate responsibility areas in 2013 | ||||||
| Assurance unitance unit | Economic | Environmentalonmental | Social | |||
| Internal assurance | ||||||
| Kemira Internal Audit | Evaluation of internal controls: Reliability of financial reporting, effectiveness and efficiency of operations |
Evaluation of internal controls: Compliance with applicable laws and regulations |
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| Supply Chain Management |
Supplier performance management |
Supplier performance management |
Supplier performance management | |||
| Environment, Health, Safety and Quality |
Management system audits, site-specific EHS audits |
Management system audits, site specific EHS audits |
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
| Product Stewardship and Regulatory Affairs |
Product regulatory compliance at manufacturing sites |
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|---|---|---|---|
| External assurnal assurance | |||
| External certification partner for quality, environmental and safety management systems |
Assessing and auditing of environmental management systems by ISO 14001 |
Assessing and auditing occupational health and safety management systems by ISO 18001 and quality management systems by ISO 9001 |
|
| External service provider for legal compliance auditing |
Legal compliance audits | Legal compliance audits | |
| External service provider for financial auditing |
Assessing and auditing financial statements |
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| External service provider for corporate reporting assurance |
Assessing and auditing the management and performance of environmental responsibility according to GRI |
Assessing and auditing the management and performance of social responsibility according to GRI |
|
| Improvements in management approach in 2013: • to increase in the coming years • • in the Kemira Interim reports • meeting |
Board of Directors level discussion on corporate responsibility focus areas and targets once a year | Management Board is more involved in the discussion concerning corporate responsibility topics, and this activity is expected Performance results of corporate responsibility targets are disclosed quarterly to the Management Board, and to stakeholders Corporate Responsibility management team has regular meetings with preagreed annual agenda and one focus area per |
|
| • More active in external benchmarking (CDP, DJSI) |
| Management approach by focus areas | ||||||
|---|---|---|---|---|---|---|
| Focus area: Responsiblesponsible business pr e practices |
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| Material aspects and reported indicators (Note: materiality iseriality is described in G4-18) |
• Anticorruption (SO3, SO4, SO5) • Public policy (SO6) • Anticompetitive behaviour (SO7) • Compliance (SO8) (EN29 by EHSQ, PR9 by PSRA) • Grievance mechanism (EN34, LA16, HR12, SO11) |
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| Description of management approach |
The management of responsible business practices forms the basis for Kemira to conduct its business: ethically and in compliance with applicable laws, regulations and Kemira's own policies throughout the organization. |
| Policies | • Kemira Code of Conduct (2012) • Competition Law Compliance Policy (2006) • Group Gifts, Entertainment and Anti-bribery Policy (2012) • Group Sponsorship and Donation Policy (2013) • Group Related Party Policy (2012) • Risk Management Policy (2010) • Business Control Manual (2009) • Business Agreement Policy (2013) • Legal Review Guidelines for Business Agreements (2013) • Kemira Oyj Procuration Policy (2013) • Kemira Group Policy for Issuing and Maintaining Policies (2013) • EHSQ policy (2013) – foundation for management systems The Kemira Code of Conduct requires compliance with laws and regulations and adherence to company policies by every company employee. Kemira has a zero tolerance policy with regard to breaches of competition law and does not tolerate any corruption or bribery. Kemira and its employees must never offer, solicit or accept a bribe in any form. Kemira does not accept financial support to politicians, political parties or political organizations. The main channels for Kemira to contribute to public policy development are by contributing to the work of relevant trade and industry associations. |
|---|---|
| Goals and targets | • Training of employees for the Kemira Code of Conduct (CoC) • Development of Kemira Compliance Program including Communication, Training and managing the Kemira Ethics & Compliance hotline. See details in the table Corporate responsibility targets in the section Our focus areas. |
| Responsibilities | • Head of Legal function aswers for the compliance program, responsible business conduct and grievance mechanism. Responsibilities are connected to performance evaluation and incentive plan with the KPI "Secure that Kemira is at the end of 2013 fully compliant with Code of Conduct" • Director, Ethics and Compliance (Legal function) is responsible for the Kemira Compliance program and for grievance mechanism. Responsibilities are connected to performance evaluation and incentive plan with the KPI "All Kemira emplyees trained by Dec 31, 2013" • Head of EHSQ (Environment, Health, Quality and Safety) is responsible for auditing, and recognizing gaps versus safety/ environmental legal requirements and internal standards, and to work as experts together with Kemira's organization to fill the gaps • Head of PSRA (Product Stewardship and Regulatory Affairs) is responsible for product regulatory compliance |
| Resources | • Legal function is responsible for the development and implementation of the Kemira compliance program. Legal/Ethics and Compliance is responsible for grievance mechanism. • EHSQ is responsible for leading the EHSQ Community and to develop and maintain Kemira's EHSQ vision, strategy and development roadmaps for the segments and functions within Kemira. • PSRA function is responsible for safety documentation and product registrations processes and implementation. • Line organizations are accountable and responsible for EHSQ and product safety compliance within their organizations. Line organizations are accountable and responsible for EHSQ and product safety within their organizations. |
| Specific actions (processes, programs, projects, initiatives) |
Corporate level, global activities: • Code of Conduct training provided for all employees during 2013 • Ethics and Compliance hotline was launched and made available to all Kemira employees in 2013 • Kemira Group Compliance program has been initiated to further develop compliance management • New EHSQ vision, policy, strategy 2013–2020, new targets 2013–2020, new set of KPI's and five standards developed in 2013 |
| Evaluation of management approach |
Improvements in management approach in 2013: • Organizational role and position, Director Ethics and Compliance established • Sustainability topics in greater role in the agenda of Kemira Internal Audit • EHSQ: Several new KPI's introduced and monitored and integrated management system introduced in Europe |
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|---|---|---|---|---|---|---|
| Focus area: Responsiblesponsible supply chain | ||||||
| Material aspects and reported indicators (Note: materiality iseriality is described in G4-18) |
• Supplier assessment (EN32, LA14, HR10, SO9) • Emissions (EN17) – Scope 3 related to supply chain • Transport (EN30) |
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| Description of management approach |
Management approach is intended to minimize negative economic, environmental and social impacts, and develop responsible business practices in the supply chain. |
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| Policies | • Kemira Code of Conduct (2012) • Code of Conduct for Suppliers, Distibutors and Agents (2012) • EHSQ policy (2013) • Sourcing & Procurement Policy (2012) • Kemira Global Travel Policy (2010) |
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| Goals and targets | • Code of Conduct for Suppliers, Distributors and Agents (CoC-SDA) • Supplier performance evaluation program See details in the table Corporate responsibility targets in the section Our focus areas. |
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| Responsibilities | • Head of Sourcing and Procurement is responsible for the implementation of the Code of Conduct for Suppliers, Agents and Distributors (CoC-SDA), suppliers performance evaluation program and the Scope 3 part for business travel. Responsibilities are connected to performance evaluation and incentive plan with KPI related to Supplier Relationship program including Supplier Performance Evaluation and supplier assessments. • The negotiating Sourcing Managers, who are in contact with the suppliers, have the responsibility to systematically discuss the sustainability related topics with the business partners. Responsibilities are connected to performance evaluation and incentive plan with following KPI's: • Training has been organized on how to implement CoC-SDA on purchase orders and contracts • CoC-SDA is posted on the Kemira web page as well as at Kemira intranet • CoC-SDA is attached to contracts that can be found on Harmony, Kemira contract database • Head of logistics is responsible for transportation EHS, and Scope 3 for transportation |
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| Resources | • Sourcing & Procurement (in Finance and Accounting function) • Supply Chain Management function |
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| Specific actions (processes, programs, projects, initiatives) |
Corporate level, global activities: • Introducing the Code of Conduct for Suppliers, Distributors and Agents to all new and renewed contracts • Supplier Performance Evaluation (SPE) program initiated • Supplier assessments as part of the SPE program initiated to cover the most critical and risky vendors |
|||||
| Evaluation of management approach |
Improvements in management approach in 2013: • CoC-SDA published and incorporated in all relevant supplier relationships • Supplier Performance Evaluation (SPE) process initiated • Head of Sourcing and Procurement personally involved |
| Focus area: Responsibility f esponsibility for employees |
|
|---|---|
| Material aspects and reported indicators (Note: materiality iseriality is described in G4-18) |
• Employment (LA1, LA2) • Labor/management relations (LA4) • Occupational health and safety (LA6) • Training and education (LA9, LA10, LA11) • Diversity and equal operation (LA12) • Equal remuneration for women and men (LA13) • Non-discrimination (HR3) • Freedom of association and collective bargaining (HR4) • Human rights assessement (HR9) |
| Description of management approach |
Management approach is to ensure that Kemira has the necessary know-how, strong leaders and engaged people to successfully execute its strategy. Focus is on enhancing positive impacts on human capital and respect on human rights, and to avoid, mitigate, or remediate any negative social impacts on labor practises, decent work and human rights. |
| Policies and commitments |
Policies • Kemira Code of Conduct (2012) • EHSQ policy (2013) • Group Compensation Approval Policy (2013) • Group Recruitment Policy (2013) Commitments • Kemira's approach to labor practices and human rights is guided by the Kemira Code of Conduct which is in line with the OECD Guidelines for Multinational Enterprises • Kemira respects and supports the fundamental human rights as defined in the United Nations Universal Declaration of Human Rights • Kemira complies with the International Labour Organization's Declaration on Fundamental Principles and Rights at Work. |
| Goals and targets | • Performance management • Leadership development • Employee engagement • Occupational health and safety See details in the table Corporate responsibility targets in the section Our focus areas. |
| Responsibilities | • VP, Talent Development, is responsible for talent and leadership development as well as employee engagement. Responsibilities are connected to performance evaluation and incentive plan with a KPI related to leadership and talent management • Director, Compensations and Benefits is responsible for performance management process. Responsibilities are connected to performance evaluation and incentive plan with a PDD coverage KPI • Head of EHSQ (Environment, Health, Quality and Safety) is responsible for auditing and recognizing gaps versus safety/ environmental legal requirements and internal standards, and to work as experts together with Kemira's organization to fill the gaps. Responsibilities are connected to performance evaluation and incentive plan with the KPI "EHSQ vision, policy and standard development" |
| Resources | Human Resources function EHSQ function – occupational safety Line organizations are responsible and accountable for EHSQ and product safety within their organizations |
| Specific actions (processes, programs, projects, initiative |
Corporate level, global activities: • Performance and development discussions (PDD) established as an elemental part of the performance development process. Regular performance and career development reviews (PDDs) are in place in all countries where Kemira is present • Leadership development: Leadership position requirements have been defined as part of Kemira's job architecture. Leadership competencies have been defined for all three leadership levels. Leadership assessment for senior and mid-level leaders has been designed and implemented, resulting to a development of a leadership development portfolio which is being implemented according to annual plan • Employee engagement: Global employee engagement survey is in place and organized every 2 years. Action plans based on the results are being developed. • Occupational safety: Kemira aims at having all of its sites certified in accordance with the OHSAS 18001 standard. At the end of 2013, OHSAS 18001 certification covered globally 55% of all locations and 69% of all manufacturing sites • New EHSQ strategy, 'Kemira Care initiative', is under implementation. |
|---|---|
| Evaluation of management approach |
Improvements in management approach in 2013: • HR management's role and responsibilities related to social responsibility clarified • Global processes for employee related data management established. Tools enabling consistent execution of people processes (e.g. talent management, learning management, compensation management) are being implemented • Introduced standards to improve safety of employees • Measuring TRI for both Kemira employees and contractors |
| Focus area: Responsiblesponsible manufacturing | |
| Material aspects and reported indicators (Note: materialityeriality described in G4-18) |
• Materials (EN1, EN2) • Energy (EN3, EN5, EN6) • Water (EN8, EN10) • Emissions (EN15, EN16, EN18, EN19, EN20, EN21) • Effluents and waste (EN22, EN23; EN24; EN25) • Environmental expenditures and investments (EN31) • Environmental compliance (EN 29) |
| Description of management approach |
Management approach is intended to avoid, mitigate, or remediate negative impacts of Kemira's manufacturing operations on the environment and climate, and enhance positive impacts on society. |
| Policies | • Kemira Code of Conduct (2012) • EHSQ policy (2013) • Internal EHSQ management guidelines in place at most of the European plants |
| Goals and targets | • Climate change target introduced • Water efficiency targets See details in the table Corporate responsibility targets in the section Our focus areas. In addition to the corporate responsibility targets set on the Group level, Kemira sets environmental targets at the plant level. |
| Responsibilities | • Head of manufacturing at each segment is responsible for energy and water efficiency, reductions of emissions and waste, effective usage of materials and safety. Responsibilities are connected to performance evaluation and incentive plan with KPI's related to occupational and process safety and energy efficiency • Head of EHSQ (Environment, Health, Safety and Quality) is responsible for auditing, and recognizing gaps versus safety/ environmental legal requirements and internal standards, and to work as experts together with Kemira's organization to fill the gaps. Responsibilities are connected to performance evaluation and incentive plan with the KPI "EHQS vision, policy and standard development" • Sourcing and Procurement / Sourcing managers are responsible for purchasing of materials • Sourcing and Procurerement is responsible for purchasing of energy. |
| Resources | Manufacturing units, Sourcing and Procurement function, Supply Chain Management, EHSQ function, line organization in manufacturing sites |
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|---|---|---|---|---|---|---|---|---|
| Specific actions (processes, programs, projects, initiatives) |
Corporate level, global activities: • E3 Energy Efficiency Enhancement program • LEAN manafacturing project was established to improve manufacturing efficiency and reduce waste (waste in this case means unnecessary extra resources, bureaucracy and time) • Certification of manufacturing sites continues. Kemira aims to have all sites certified in accordance with the ISO 9001, ISO 14001 and OHSAS 18001 standards. At the end of 2013, the coverage of certified manufacturing sites was: |
|||||||
| ISO 9001 | ISO 14001 | OHSAS 18001 | ||||||
| Total | # | % | # | % | # | % | ||
| Manufacturing | 59 | 48 | 81 | 44 | 75 | 41 | 69 | |
| EMEA | 32 | 30 | 94 | 28 | 88 | 25 | 78 | |
| North America | 22 | 14 | 64 | 14 | 64 | 14 | 64 | |
| South America | 3 | 3 | 100 | 2 | 67 | 2 | 67 | |
| APAC | 2 | 1 | 50 | 0 | 0 | 0 | 0 | |
| • Process safety standard developed in 2013 and will be launched in 2014 |
||||||||
| Evaluation of management approach |
Improvements in management approach in 2013: • Manufacturing community and EHSQ community were established to facilitate collaboration across organizations units and countries • Introduction of five new EHS standards in 2013 and more standards to be introduced in 2014 |
| Focus area: Sustainable products and solutions ts |
|
|---|---|
| Material aspects and reported indicators (Note: materiality iseriality is described in G4-18) |
• Products and services (EN27, EN28) • Customer health and safety (PR1, PR2) • Product and service labelling (PR3, PR4) • Marketing communication (PR6) • Product compliance (PR9) |
| Description of management approach |
Management approach is intended to enhance positive indirect impacts of Kemira's products, and to avoid, mitigate, or remediate negative impacts on environment, people, and society over the whole product life-cycle. The aim is to ensure that all of Kemira's products are safe for Kemira's employees, value chain partners and customers, and that appropriate registration, documentation, and labeling is provided. |
| Policies | Kemira Code of Conduct (2012) Employee invention policy (2009) Policy on intellectual property rights (2009) Guideline for trademark use and registration (2011) EHSQ policy (2013) |
| Goals and targets | Sustainability aspects to be evaluated in 100% of New Product development (NPD) projects by the end of 2015 |
| See details in the table Corporate responsibility targets in the section Our focus areas | |
| Other goals: 100% compliance with product regulatory requirements | |
| Responsibilities | • Senior Manager Process development, R&D and Technology is responsible for NPD process development. Responsibilites are connected to performance evaluation and incentive plan with the KPI of R&D projects completed as planned (including sustainability checks made at each Gate of the NPD process) • Head of PSRA (Product Stewardship and Regulatory Affairs) is responsible for necessary documentation for product registrations and regulatory compliance |
| Resources | • The R&D and Technology function is responsible for all R&D activities in Kemira Group and coordinates the NPD process activities across organizational units. • PSRA function is responsible for necessary documentation for product registrations and regulatory compliance. |
| Specific actions(processes, programs, projects, initiatives) |
Corporate level, global activities: • Sustainability criteria defined and implemented in the New Product Development (NPD) process. • Sustainability reviews required at every stage of the New Product Development (NPD) process before proceeding to the next stage in order to ensure that all sustainability criteria are identified at the earliest stage. The process also aims to identify less hazardous and more sustainable alternatives for raw materials. • Product regulatory compliance according to all relevant legislations such as REACH (Registration, Evaluation, Authorization and Restriction of Chemicals), and GHS (Globally harmonized System of Classification and Labelling of Chemicals). |
| Evaluation of management approach |
Improvements in management approach in 2013: • Sustainability criteria of NDP process being developed, training of project teams for sustainability evaluation • "One label"- project initiated to ensure compliance with upcoming GHS classification • Site audits for material safety data initiated • PSRA and EHSQ reporting to the same EVP for total safety management • Improvement of Kemira's ERP system initiated to ensure improved product safety data management |
| Focus area: Responsibility t esponsibility towards the lds local communities wher ocal where we operate |
|
|---|---|
| Material aspects and reported indicators (Note: materiality iseriality is described in G4-18) |
Local communities (SO1, SO2) |
| Description of management approach |
The management approach is intended to create a positive image of Kemira's operations in the communities where we operate. Focus is on ensuring that Kemira has a continuous dialogue with local communities to understand and have activities in place to respond to their needs, concerns and expectations, and providing opportunities for Kemira employees to participate in local community initiatives. |
| Policies | Kemira Code of Conduct (2012) Group Sponsorship and Donation Policy (2013) EHSQ policy (2013) |
| Goals and targets | The responsibility target of community involvement is that by 2015, each Kemira siteemploying over 50 people would have participated in a local community involvement initiative at least once. See details in the table Corporate responsibility targets in the section Our focus areas |
| Responsibilities | • Site management is responsible for local activities • Communication & Corporate Responsibility function is responsible for global guidelines, coordination and reporting Responsibilities are connected to performance evaluation in some regions. |
| Resources | All Kemira operating sites |
| Specific actions (processes, programs, projects, initiatives) |
Corporate level, global activities: • Activities are coordinated globally on Kemira Group level but activities are planned and implemented locally on site level. • Some examples of local activities are open house days for community residents at manufacturing sites, cooperation with local schools and universities, local sponsorships and donations. |
| Evaluation of management approach |
Improvements in management approach in 2013: • Global guidance developed for activity planning of local community events • Group Sponsorship and Donation Policy (2013) |
Corporate responsibility > GRI report > Specific standard disclosures by focus areas > Economic performance indicators
For Kemira's economic value generated and distributed, please see Economic responsibility.
Coverage of the organization's defined benefit plan obligations can be found in Notes to the Consolidated Financial Statements 23: Defined benefit plans.
Percentage of salary contributed by employee or employer and the level of participation in retirement plans are defined according to the local legislation and practices.
Information about financial assistance received from governments can be found in the Notes to the Consolidated Financial Statements 4: Operating expenses. Corporate responsibility > GRI report > Specific standard disclosures by focus areas > Responsible business practices
Corruption risks were evaluated through Internal Audit survey and internal audits. The internal audit survey was conducted with global coverage and the results of the annual survey were taken into account in preparing the annual audit plan. Based on the revenue generated in locations subject to audit, approximately 91% of the operations were assessed for risks related to corruption. Number of assessed operations is not relevant as Kemira evaluates corruption based on processes and it might cover transactions done is several locations.
No significant risks related to corruption were identified through the risk assessment.
Anti-corruption is dealt with both in the Code of Conduct and also in the Kemira Group Gifts, Entertainment and Anti-Bribery Policy. Both documents have been communicated to all (4453) employees through Kemira's intranet, and the CoC is also publicly available.
There is no specific training on anti-corruption, but the topic is covered in the Code of Conduct training, which is provided to all Kemira employees. 90% of our active personnel (excluding employees who are in the scope of divested businesses) received training during 2013 either via interactive e-learning tool or on-site classroom training organized in collaboration with site management and local HR and legal functions. The remaining 10% (from different employee categories and regions) will receive the training in 2014.
The Board approves the Code and therefore sets the framework in Kemira concerning anti-corruption. No specific training has been provided to the Board.
Kemira's business partners are required to sign the Kemira Code of Conduct for Suppliers, Agents and Distributors (CoC-SDA). The CoC-SDA states that Kemira expects its business partners to adhere to local legislation and avoid
corruption in all its forms. In total 174 Kemira's suppliers (36% of all Kemira's suppliers) have signed the CoC-SDA by year-end 2013.
There have been no confirmed incidents of corruption or public legal cases regarding corruption during 2013.
The Kemira Code of Conduct and the Kemira Group Gifts, Entertainment and Anti-bribery Policy prohibit any financial support to politicians, political parties or political organizations. No financial or in-kind political contributions paid by Kemira have come to Kemira's attention during 2013.
At Kemira, there were no pending or completed legal actions initiated under national or international laws designed for regulating anti-competitive behavior, antitrust, or monopoly practices in 2013. However, Kemira is a defendant in 3 legal proceedings in which damages are sought for violations of competition law. Such proceedings are described in Kemira's Financial Statements under the heading Litigation.
No significant fines or non-monetary sanctions have come to Kemira's attention during 2013.
For monetary value of significant fines for non compliance with laws and regulations concerning the provision and use of products and services, please see PR9, and concerning environmental laws and regulations, see EN29.
There were in total two grievances about environmental impacts filed through formal grivance mechanisms, both of which were addressed and resolved during the reporting period. There were no cases of grievances about environmental impacts filed prior to the reporting period that would have been resolved during the reporting period.
There were no grievances about labour practices filed through formal grievance mechanisms during the reporting period, nor filed prior to the reporting period and resolved during the reporting period.
There was one case of internal discrimination filed through formal grievance mechanisms during the reporting period, which was addressed and resolved during the reporting period. One grievance about human rights impacts filed prior to the reporting period was resolved during the reporting period.
There were no grievances about impacts on society filed through formal grievance mechanisms during the reporting period, nor grievances filed prior and resolved during the reporting period.
Corporate responsibility > GRI report > Specific standard disclosures by focus areas > Responsible supply chain
G4-EN30: Significant en : environmental impac onmental impacts of transporting products and ots and other goods andoods and materials ferials for the oror organization's operations, and transporting member ting members of the workforce
| 1 G4-EN30: Transport impact, tCO2e |
2013 | 2012 |
|---|---|---|
| Upstream transportation and distribution | 134,129 | 151,496 |
| Downstream transportation and distribution | 369,157 | 368,879 |
| Business travel | 11,250 | 11,789 |
| Employee commuting | 13,754 | 14,998 |
| Total transport | 528,289 | 547,162 |
| Total Scope 3 emissions | 2,696,340 | 2,676,984 |
| Transport as percentage of total Scope 3 emissions | 20% | 20% |
1 Scope 3 emissions have been calculated according to the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard and a supporting guidance document Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain.
Sources for emissions factors used include: Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain, the UK government's Department for Environment, Food and Rural Affairs (DEFRA), CEFIC and ECTA.
To mitigate the environmental impact of the supply chain, the optimization of logistics is one of the key measures. Kemira encourages its logistics service partners to use at minimum Euro 4 compliant transport equipment. Kemira's target is to move on to the Euro 5 requirements starting from January 1, 2015.
Kemira has also focused its attention on load optimization, e.g. by sending full truck loads on the roads. Furthermore, the tendering process has led the logistics service providers to look for back haul arrangements. Also the new logistics IT system, which already has been in use in Kemira's North American operations, supports Kemira's target of load optimization. The logistics IT system was implemented in Europe during 2013.
To mitigate the environmental impact from business travel the investments on video and online meeting facilities are
targeted to minimize the business travel between Kemira locations.
Kemira is committed to conducting business ethically and sustainably, and expects its suppliers to do the same. Each supplier under contract is required to sign the Kemira Code of Conduct for Suppliers, Distributors and Agents (CoC-SDA), or to comply with the CoC-SDA requirements through their own Code of Conduct in case it is more stringent. Our CoC-SDA covers topics related to business integrity, fair
and ethical business conduct, respect of human rights, provision of decent working conditions and protection of the environment. 59% of the suppliers contracted in 2013 have signed the CoC-SDA. In total 36% of all Kemira's suppliers have signed the CoC-SDA by year-end 2013, although we only targeted for 25%.
Kemira has also initiated a supplier assessment process as part of the supplier performance evaluation (SPE) program. The assessment process includes a specific assessment of the most risky and critical vendors by assessing the supply risk, business impact and market
availability, as well as sustainability topics, such as responsible care, compliance with legislation, compliance with industrial standards to protect the people and environment, labor practices and human rights.
The SPE program includes top 5 spend suppliers per sourcing line and low performing suppliers that represent 47% of our total spend in 2013 and 80% of our direct purchases.
The supplier assessment (or supplier audit) covered 29 suppliers in 2013.
| G4-EN17: Greenhouse gas emissions from Kemira's value chain | |||
|---|---|---|---|
| tCO2e | 2013 | 2012 | |
| Purchased goods and services | 1,197,058 | 1,148,100 | |
| Capital goods | 278,097 | 274,203 | |
| Fuel and energy related activities | 216,265 | 218,518 | |
| Upstream transportation and distribution | 134,129 | 151,496 | |
| Waste generated in operations | 50,012 | 16,083 | |
| Business travel | 11,250 | 11,789 | |
| Employee commuting | 13,754 | 14,998 | |
| Upstream leased assets (leased offices) | 11,671 | 17,014 | |
| Downstream transportation and distribution | 369,157 | 368,879 | |
| End-of-life treatment of sold products | 412,693 | 422,013 | |
| Total | 2,676,984 | 2,696,340 |
See also the table Summary of greenhouse emission indicators in the section Responsible manufacturing: Climate change.
Greenhouse gas emissions from Kemira's value chain (Scope 3 of WRI/ WBCSD GHG Protocol). The calculation is based on the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard and a supporting guidance document Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain. Scope 3 emissions have been calculated since 2012.
GHG emission are calculated as CO2 equivalents which includes CO2, CH4, N2O, HFCs, PFCs, SF6 and NF3. The sources for the emission factors used include the guidance document for the Chemical Sector, the UK government's Department for Environment, Food and Rural Affairs (DEFRA), the International Energy Agency (IEA), Ecoinvent, CEFIC and ECTA.
Data covers all of Kemira's production sites according to Kemira consolidation rules.
Corporate responsibility > GRI report > Specific standard disclosures by focus areas > Responsibility for employees
Total number of new hires in 2013 was 431, out of which 33% were female and 67% male.
In 2013, employee turnover rate was 16.1% against the 11.3% in 2012.The turnover was impacted by organizational changes driven by strategy implementation and related restructuring activities and redundancies. The turnover rate was highest in South America (32.9%) and lowest in NAFTA (10.1%).
| G4-LA1: New employee hires w/o aquisitions 2013 | |||
|---|---|---|---|
| Age group | Number oNumber of new hires |
% of total new hires |
|
| <30 | 201 | 46.6 | |
| 30-50 | 196 | 45.5 | |
| >50 | 34 | 7.9 | |
| Total | 431 | 100.0 |
| G4-LA1: New employee hires w/o aquisitions 2013 | |||
|---|---|---|---|
| Gender | Number oNumber of new hires |
% of total new hires |
|
| Female | 141 | 32.7 | |
| Male | 290 | 67.3 | |
| Total | 431 | 100.0 |
| G4-LA1: New employee hires w/o aquisitions 2013 | |||
|---|---|---|---|
| ------------------------------------------------- | -- | -- | -- |
| Region | Number oNumber of new hires |
% of total new hires |
|---|---|---|
| APAC | 42 | 9.7 |
| EMEA | 239 | 55.5 |
| NAFTA | 104 | 24.1 |
| SA | 46 | 10.7 |
| Total | 431 | 100.0 |
| G4-LA1: Total turnover by age group | |||
|---|---|---|---|
| Age group | Turnover | Turnover, % | |
| <30 | 77 | 11.9 | |
| 30-50 | 357 | 14.6 | |
| >50 | 281 | 20.8 | |
| Total | 715 | 16.1 |
| G4-LA1: Total turnover by gender | |||
|---|---|---|---|
| Gender | Turnover | Turnover, % | |
| Female | 198 | 17.0 | |
| Male | 517 | 15.7 | |
| Total | 715 | 16.1 |
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
| G4-LA1: Total turnover by region | |||
|---|---|---|---|
| Region | Turnover | Turnover, % | |
| APAC | 62 | 18.2 | |
| EMEA | 445 | 17.1 | |
| NAFTA | 130 | 10.1 | |
| SA | 78 | 32.9 | |
| Total | 715 | 16.1 |
| G4-LA1: Voluntary turnover by age group | |||
|---|---|---|---|
| Age group | Voluntaryoluntary turnover |
Voluntaryoluntary turnover, % |
|
| <30 | 35 | 5.4 | |
| 30-50 | 147 | 6.0 | |
| >50 | 23 | 1.7 | |
| Total | 205 | 4.6 |
| G4-LA1: Voluntary turnover by gender | |||||||
|---|---|---|---|---|---|---|---|
| Gender | Voluntaryoluntary turnover |
Voluntaryoluntary turnover, % |
|||||
| Female | 64 | 5.5 | |||||
| Male | 141 | 4.3 | |||||
| Total | 205 | 4.6 |
Benefit programs in Kemira differ by regional and country specific market practices. In most European countries the same benefits are offered to full-time and part-time employees. Some exceptions apply, for example sickness fund in Finland is offered to full-time employees with more than one year contract. In APAC, temporary employees are eligible only to mandatory benefits as it is a market practise. In North America the eligibility of benefits varies, in USA employees are eligible if they work minimum 20 hrs and in Canada 24 hrs. The benefits are the same for all benefits eligible employees. The amount of employees not receiving benefits is low (in NA total 2 persons, in APAC 5 persons).
Benefit practices are country specific and are not related to individual locations of operations.
Kemira follows all local laws and regulations and other agreements regarding notice periods. Notice periods and the time period for consultation process related to operational changes varies a lot by country and region.
G4-LA6: Type of injury and r f rates of injuryf injury, occupational diseases tional diseases, lost days, and absenteeism, and t eeism, total number o tal of work-related fatalitiestalities, by region and b egion by gender
As of 2013, Kemira will only report TRI (Total Recordable Injuries per million working hours).
TRI per million work hours is composed of three indicators:
| G4-LA6: Occupational Health and Safety indicators | |||||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2011 | 2010 | 2009 | |||
| Number of Lost Time Injuries per million working hours, LTI1 |
2.3 | 2.7 | 3.1 | 3.5 | |||
| Total Recordable Injuries, TRI2 |
7.1 | 8.5 | |||||
| Total Recordable Injuries by regions, TRI2 |
|||||||
| EMEA | 9.2 | ||||||
| NA | 5.1 | ||||||
| SA | 7.4 | ||||||
| APAC | 0.0 |
1 Injuries causing an employee absence at least one day (LTA1), Kemira personnel. This figure was reported for the last time in 2012.
2 As of 2013, Kemira will only report TRI. TRI per million work hours = Lost Time Injuries (LTA1) + Restricted work cases + Medical treatment cases, 1 year rolling average. Numbers include Kemira personnel and Contractors
Kemira does not collect Incident data by gender, all injuries are treated in a simmilar way independent of gender.
Training registers are currently managed locally, so the information of training hours is not available for global reporting. Kemira is implementing a global learning management system, that will allow visibility of training offering to employees, and when completed, it will enable full reporting of internal training activities.
Different kind of skills development and training programs as well as leadership development programs (internal and external) are provided to all employees to support employee development, such as:
Outplacement services are provided in most regions when the terminations are the result of redundancies. In some European countries outplacement and other support activities are part of a social plan. Outplacement is not offered in APAC, as it is not relevant in that market. In some cases transition assistance programs are also offered in connection with retirement.
All permanent white collar employees, who are not absent for an extended time period, because of leaves, for example, are covered by global performance and development discussion process. Blue collar employees have been covered partly in similar processes managed locally, but detailed data for coverage is not available for
| G4-LA11: Percentage of employees receiving regular performance and career development reviews |
||||||
|---|---|---|---|---|---|---|
| Total | Employees covered in Global PDDobal PDD process |
Coverage % | ||||
| Female | 1,060 | 816 | 77 | |||
| Male | 3,221 | 1,566 | 49 | |||
| Total | 4,281 | 2,384 | 56 |
G4-LA12: Composition o G4-LA12: Composition of governance bodies and nance breakdown of employees per empl ees employee category according to gender, age group, minority gr , group membership, and other indicather indicators of diversity
| G4-LA12: Management Board | ||||||||
|---|---|---|---|---|---|---|---|---|
| Females | Female % |
Male | Male % |
Total | Total % |
|||
| <30 | 0 | 0% | 0 | 0% | 0 | 0% | ||
| 30-50 | 1 | 50% | 4 | 44.4% | 5 | 45% | ||
| >50 | 1 | 50% | 5 | 55.6% | 6 | 55% | ||
| Total | 2 | 100% | 9 | 100% | 11 | 100% |
| G4-LA12: Board of Directors | ||||||||
|---|---|---|---|---|---|---|---|---|
| Female | Female % |
Male | Male % |
Total | Total % |
|||
| <30 | 0 | 0% | 0 | 0% | 0 | 0% | ||
| 30-50 | 0 | 0 % | 3 | 0 % | 0 | 0% | ||
| >50 | 2 | 100% | 3 | 100% | 5 | 100% | ||
| Total | 2 | 100% | 3 | 100% | 5 | 100% |
| Female | Female % |
Male | Male % |
Total | Total % |
|
|---|---|---|---|---|---|---|
| <30 | 205 | 18% | 441 | 13% | 646 | 14% |
| 30-50 | 710 | 61% | 1,743 | 53% | 2,453 | 56% |
| >50 | 249 | 21% | 1,105 | 34% | 1,354 | 30% |
| Total | 1,164 | 100% | 3,289 | 100% | 4,453 | 100% |
In 2013, Kemira implemented a global job structure, which describes job families and the respective job roles with required qualifications and main responsibilities. The job structure links to job grades which define the salary range and the incentive opportunity for a specific job role. The factors impacting salary increase include country-specific salary budgets, the position of an employee in the salary range and employee performance. Incentive payouts are based on measured achievement for pre-defined targets on the company, unit and individual levels.
During 2013, mapping of individual positions and employees to job roles and gathering of salary data to global HRIS Human Resources Information System were almost finalized. The completion of job grade mapping and salary data gathering will allow evaluation, analysis, and implementation of equal remuneration.
There was one incident of discrimination during the reporting period. The incident, which came through the official Kemira Ethics & Compliance reporting channel, was investigated by North American Human Resources. A remediation plan was implemented, and the results were reviewed through routine internal management review processes. As a result, the incident is no longer subject to action
G4-HR4: Oper G4-HR4: Operations and sup tions and suppliers identified in s identified in which the righh right to exercise freedom of associaf association and colland collective bargaining may be viola gaining may be violated or at significant risk significant risk, and measur , measures taken to support these righthese rights
As outlined in the Kemira Code of Conduct, Kemira complies with the International Labour Organization's Declaration on Fundamental Principles and Rights at Work. Kemira respects the right of all personnel to establish or join trade unions and other representative organizations.
A Code of Conduct training has been provided to all Kemira employees. See G4-56 for Code of Conduct training and G4-57 for Kemira Ethics and Compliance Hotline for internal reporting.
Kemira has not identified any violations of freedom of association and collective bargaining in own operations. Kemira has considered supplier related risks on labor rights, and no evidence has been found that suppliers would prohibit their employees' opportunities to exercise freedom of association and collective bargaining.
As no risks for violations of freedom of association and collective bargaining have been identified, no support measures have been taken.
Please see complementary general standard disclosure G4-11.
Please see complementary general standard disclosure G4-11.
As outlined in the Kemira Code of Conduct, Kemira is committed to respect and support fundamental human rights as defined by the United Nations Universal Declaration of Human Rights. A Code of Conduct training has been provided to all Kemira employees. See G4-56 for Code of Conduct training and G4-57 for Kemira Ethics and Compliance Hotline for internal reporting.
Kemira has issued a separate Code of Conduct for Suppliers, Distributors and Agents, which sets expectations to business partners to respect human rights and provide employees with appropriate working conditions. See also EN32, LA14, HR10, SO9
In 2013, Kemira has identified that further development of human rights management requires a more detailed assessment of the implications of the UN Guiding Principles on Business and Human Rights on Kemira's business (risk assessment). Based on the results of the risk assessment, it can be evaluated if there are any business activities, operations or countries that should be subject to human rights review or human rights impact assessment. The risk assessment work will be initiated in 2014.
Corporate responsibility > GRI report > Specific standard disclosures by focus areas > Responsible manufacturing
There is a slight decrease in the total weight of renewable materials between 2012 and 2013 as a result of a different mix of products sold and thus raw materials purchased. No change has occurred on the list of raw materials classified as renewable.
| G4-EN1: Materials used by weight or volume | ||||
|---|---|---|---|---|
| 2013 | 2012 | |||
| Total materials purchased | 3.9 million tonnes |
3.6 million tonnes |
||
| Renewable materials used | 28 tons |
30 tons |
||
| Share of renewable materials | 0.73% | 0.83% |
Kemira is using a number of materials classified as waste or recycled material as raw material in its production. There is a slight decrease in the total weight of recycled or waste materials from external partners between 2012 and
2013 as a result of a different mix of products sold and thus raw materials purchased.
No change has occurred on the list of raw materials classified as recyclable.
| G4-EN2: Percentage of materials used that are recycled input materials | |||||
|---|---|---|---|---|---|
| 2013 | 2012 | ||||
| Total materials purchased | 3.9 million tonnes |
3.6 million tonnes |
|||
| Recycled or waste materials from external partners | 911,000 tonnes |
938,000 tonnes |
|||
| Share of recycled materials | 23% | 26% |
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
See Kemira's Energy Balance in the section Responsible manufacturing: Improving energy efficiency.
See Kemira's Energy data summary in the section Responsible manufacturing: Improving energy efficiency.
See the Kemira Energy data summary in the section Responsible manaufacturing: Improving energy efficiency.
See Kemira's Energy data summary in the section Responsible manaufacturing: Improving energy efficiency.
See also the graph Water balance and the table Summary of water indicators in the section of Responsible manufacturing: Water efficiency.
| G4-EN8: Total water withdrawal by source1) | |||||||
|---|---|---|---|---|---|---|---|
| Process water, 1000m3 | 2013 | 2012 | |||||
| • Surface water |
1,482 | 1,794 | |||||
| • Ground water |
417 | 763 | |||||
| • Rainwater |
50 | 41 | |||||
| • Waste water from another organization |
121 | 9 | |||||
| • Municipal water supplies |
2,200 | 3,463 | |||||
| • Other |
2,036 | 629 | |||||
| Total water withdrer withdrawal used as a pr al process water |
6,341 | 6,699 | |||||
| Cooling wCooling water, million m, million m3 | 2013 | 2012 | |||||
| • Surface water |
146 | 131 | |||||
| • Ground water |
2 | 3 | |||||
| • Rainwater |
0 | 0 | |||||
| • Waste water from another organization |
0 | 0 | |||||
| • Municipal water supplies |
1 | 0 | |||||
| • Other |
3 | 4 | |||||
| Total water withdrer withdrawal used as a cooling w al cooling water |
151 | 138 | |||||
| Total water withdrer withdrawal, million m, m3 | 157 | 145 | |||||
1) The calculations have been made according to GRI G4 reporting guidelines. The figures presented are based on data collected from Kemira's sites.
See also the graph Water balance and the table Summary of water indicators in the section of Responsible manufacturing: Water efficiency.
| G4-EN10: Percentage and total volume of water recycled and reused1) | |||||||
|---|---|---|---|---|---|---|---|
| 1000m3 | 2013 | 2012 | |||||
| Water recycled back in the same process | 78 | 77 | |||||
| Water recycled in a different process, but within the same facility | 58 | 128 | |||||
| Water reused in another facility | 1,280 | 1,107 | |||||
| Total volume of water recycled and reused by the organization | 1,422 | 1,312 | |||||
| Total volume of water recycled and reused as a percentage of the total water withdrawal reported under indicator G4-EN8 |
22% | 20% |
1) The calculations have been made according to GRI G4 reporting guidelines. The figures presented are based on data collected from Kemira's sites
G4 indicaG4 indicators EN15, EN16, s EN16, EN18 and 19 19: Direct greenhouse gas (GHG) emissions (Scope 1) eenhouse 1), energy indirect GHG emissions (Scope 2) t 2), GHG emissions int emissions intensity and r ensity reduction of GHG emissionsemissions
See the table Summary of greenhouse gas emission indicators in the section Responsible manufacturing: Climate change.
There were no emissions derived from ozone-depleting substances (ODS) at any of the Kemira sites in 2013.
Data was collected for the first time in 2013.
| G4-21: NOx, SOx, and other significant air emissions1) | ||||||||
|---|---|---|---|---|---|---|---|---|
| tonnes | 2013 | 2012 | 2011 | 2010 | 2009 | |||
| 2 Nitrogen oxides (NO2) |
185 | 190 | 242 | 273 | 263 | |||
| 3 Sulphur dioxide (SO2) |
122 | 116 | 153 | 168 | 1,015 | |||
| Volatile organic compounds (VOC)4 | 685 | 742 | 665* | 96 | 174 | |||
| Volatile inorganic compounds (VIC)5 | 65 | 94 | 100 | 64 | 34 | |||
| Particulates | 16 | 21 | 23 | 19 | 58 |
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
| G4-EN22: Total water discharge by quality and destination1 | ||||||
|---|---|---|---|---|---|---|
| Million mMillion m3, approx. | 2013 | 2012 | ||||
| Wastewater volume | 2.1 | 2.4 | ||||
| External treatment | 1.7 | 1.8 | ||||
| Own treatment | 0.4 | 0.6 | ||||
| 1 The calculations have been made according to GRI G4 reporting guidelines. The figures presented are based on data collected from Kemira's sites |
All recycled and reused water was used within Kemira's manufacturing locations.
See also the the graph Kemira water balance and the table Summary of water data in the section Water efficiency.
| G4-EN23: Total weight of waste by type and disposal method 1) | |||||||
|---|---|---|---|---|---|---|---|
| Waste, tonnes | 2013 | 2012 | 2011 | 2010 | 2009 | ||
| Hazardous waste, total | 41,096 | 48,436 | 55,305 | 14,658 | 7,109 | ||
| Off-site landfill2) | 1,359 | 1,024 | 10,037 | 9,079 | 2,621 | ||
| Off-site incineration | 3,858 | 1,933* | 2,343 | 2,357 | 3,271 | ||
| Off-site recycling | 3,032 | 2,652 | 2,145 | ||||
| Other off-site treatment | 32,818 | 42,826** | 40,681** | 3,164 | 1,217 | ||
| On-site incineration | 29 | 1 | 99 | ||||
| On-site landfill | 0 | 0 | 0 | 59 | 0 | ||
| Non-hazardous wastes, total | 25,192 | 31,024 | 33,394 | 35,500 | 44,000 | ||
| Off-site landfill | 13,432 | 11,107 | 12,238 | ||||
| Off-site incineration | 5,674 | 1,482 | 1,451 | ||||
| Off-site recycling | 4,406 | 14,286 | 14,866 | ||||
| Other off-site treatment | 1,580 | 1,691 | 2,617 | ||||
| On-site incineration | 30 | 21 | 25 | ||||
| On-site landfill | 70 | 2,437 | 2,197 | ||||
| Total waste disposale disposal | 66,288 | 79,460 | 88,699 | 50,158 | 51,109 |
This PDF has been generated from Kemira's online Report. The file may not contain the entire Report, which is available at www.kemira.com/reports2013
1)Hazardous and non-hazardous wastes reporting for 2011-2013 is restated for all waste disposal methods in use at Kemira.
2)The increases in 2010 and 2011 are mainly due to contaminated land remediation projects at sites.
*2012 Data corrected due to more comprehensive data available in 2013.
** Volumes in 2013 redefined as "Hazardous waste other treatment" instead "Wastewater external treatment". Reporting restated for 2011 to 2012.
The weight data of disposed waste is based on internal company records.
There has been three significant spills during 2013 with a total volume of 26,500 kg.
These spills were not reported in Kemira's Financial Statements.
The three spills had no permanent or significant impact to the environment beyond the remediated soil.
The total amount of hazardous waste treated outside of the own country of the operating site was 2 tons in 2013, i.e. 0,005 % of the total amount hazardous waste (41,096 tonnes) was shipped internationally.
Kemira reports environmental protection costs by environmental capital expenditure and by environmental operating costs
| G4-EN31: Total environmental protection expenditures and investments by type | |||||||
|---|---|---|---|---|---|---|---|
| EUR million | 2013 | 2012 | 2011 | 2010 | 2009 | ||
| Environmental capital expenditure | 1.4 | 3.4 | 3.6 | 2.9 | 2.3 | ||
| Environmental operating costs | 11.8 | 14.2 | 12.7 | 12.8 | 14.9 | ||
| Total environmental protection expenditures and investments | 13.2 | 17.6 | 16.3 | 15.7 | 17.2 | ||
| Group net sales | 2,229 | 2,241 | 2,207 | 2,160 | 2,500 | ||
| Total environmental costs, % of net sales | 0.6 | 0.8 | 0.8 | 0.7 | 0.7 |
Monetary value of significant finesfor non-compliance with environmental laws or regulations totalled EUR 42,000
There was one case of non-monetary sanction for noncompliance with environmental laws and regulations.
Kemira's business purpose is to enable customers to improve their water, energy and raw material efficiency. Kemira's product portfolio and application know-how enables customers to better manage their water intensive processes leading to decreased water and energy use and improved water end quality. Kemira products are used to mitigate the environmental impact of customers, that is to purify water, improve the utilization rate of natural resources and reduce energy in pumping of fluids.
In the development of new products and solutions, sustainability reviews are required at every stage of the New Product Development (NPD) process before proceeding to the next stage. This will ensure all sustainability criteria are identified and implemented at the earliest stage. The process also aims to identify less hazardous and more sustainable alternatives for raw materials.
The volume of water purified with Kemira products is based on the share of product sales to water purification applications and using an experience based average chemicals dosage. The figures for 2011-2013 are restated due to more comprehensive data available in 2013.
| G4-EN27: Water purified with Kemira products | ||
|---|---|---|
| Year | m3 Purified wurified water million m er |
|
| 2000 | 2,300 | |
| 2003 | 3,600 | |
| 2006 | 7,800 | |
| 2009 | 10,100 | |
| 2010 | 10,700 | |
| 2011 | 12,800 | |
| 2012 | 13,100 | |
| 2013 | 15,900 |
Kemira does not sell any reclaimed products, whereas we aim to reclaim as much of the packaging material as possible. When plastic or other material is used as a basis for packaging, Kemira strives to reclaim the material and thus minimize the use of virgin materials. Kemira is also using a third party service provider for returning packaging from the customers' sites for reuse. Packaging that is returned to Kemira or to a third party from the customers is either reused or processed for recycling.
| G4-EN28: Reclaimed packaging materials | 2013 | 2012 |
|---|---|---|
| Reconditioned IBC's * | 20% | 22% |
| Recycled liquid packages | 5% | 4% |
| * IBC=Intermediate Bulk Container |
The data for total purchased volumes of liquid packages, including IBC's, is received from Kemira ERP system/ Business Warehouse. The volume data on reclaimed and recycled IBC's is obtained from the supplier of IBC
containers. The data on recycled liquid packages is obtained from Kemira ERP system/Business Warehouse (except the data on recycled IBC's).
Kemira has signed the ICCA Responsible Care Initiative which forms the basis for our product stewardship.
Systematic health and safety related actions are carried out at manufacturing sites and within the product lines. By the end of 2013, 75% of manufacturing sites are certified to ISO14001 environmental management standard and 69% to OHSAS 18001 safety management standard. Moreover, 100% of services (for example operation services at customer site) are certified to these management standards. Management systems certified to ISO 14001 and OHSAS 18001 standard require constant performance improvement concerning health, safety and environmental impacts.
To secure the safety of raw materials, an RMQ (Raw Material Query) is required from all new raw material suppliers. Kemira's Supply Chain Management also maintains "Supplier Minimum Requirements" database.
Proactive measures for reduction of potential health hazards subject to anticipated future legislation have resulted in action plans related to 15% of our product lines. Sustainability and product regulatory compliance reviews are required for all product development projects at every stage of the New Product Development (NPD) process
Kemira has not detected any cases of non-compliance with regulations resulting in a fine, penalty or warnings. However, Kemira detected six incidents of non-compliance with voluntary codes, which are under discussion with authorities. Downstream customers have not reported any cases of health and safety related non-compliance.
Kemira's product portfolio contains approximately 2,700 different products, and all of them are documented and labeled according to legal requirements, including identification of hazardous components. Kemira provides Material Safety Data Sheets for all products, whereas in most jurisdictions, only hazardous products need to be covered.
| G4-PR3: Product and service information provided | |||||
|---|---|---|---|---|---|
| Yes | No | ||||
| The sourcing of components of the product or service | Only if requested by customers |
||||
| Content, particularly with regard to substances that might produce an environmental or social impact |
As required by law, always in Material Safety Data Sheets and on the Labels |
||||
| Safe use of the product or service | When legally required, safe use of the product or service is communicated in the MSDS's and on the Labels. |
||||
| Disposal of the product and environmental/social impacts |
When legally required, disposal of the product and environmental/social impacts are communicated in the MSDS's and on the Labels. |
||||
| Other |
In addition to label and Material Safety Data Sheet information, more detailed information about the products and their raw materials are provided upon the request. Customers' information requests have more than doubled during 2013 up to about 400 customer queries per month.
Customer complaints, claims or non-conformities in quality systems are actively monitored, evaluated and corrected as required by the quality management systems in use at Kemira.
During year 2013, there were 116 incidents of customer complaints related to labeling. Main causes for these were mostly found in distribution (54 cases) and warehousing (29 cases). The most typical incident was that a wrong label had been used in packaging. Handling of 17 cases was not completed by year end.
During year 2013, there were 8 incidents related to "non compliance with regulations"
Main causes for these were mostly found in logistic carriers (4 cases). The most typical incident was related to temperature during transport. Handling of all cases were completed by year-end.
There were no incidents of non-compliance with regulations resulting in a fine, penalty or in a warning.
Kemira follows all relevant chemical laws and regulations, and thus does not sell any banned products.
Kemira is proactive in mitigating health-, safety-, environment or image related risks, for example concerning products subject of stakeholder questions or public debate:
Action plan has been created and is being implemented on products containing suspected Endocrine Disruptors. Additionally, the following disputed products are being studied; Products containing genetically modified materials, nanomaterials, disputed renewable materials or crisis metals.
During 2013, all non-compliance penalties of approximately EUR 600,000 happened in the USA.
The cases have been concluded in 2013.
Corporate responsibility > GRI report > Specific standard disclosures by focus areas > Responsibility towards the local communities where we operate
G4-SO1: Percentage of operations withtions with implemented local community engag ocal community engagement, impact assessments t assessments, and de, development propment programs
48% of Kemira's sites have participated in local community activities during 2013.
Some of Kemira's sites are located in the vicinity of residential areas. Thus, incidents involving leakage of chemicals could have a negative impact on both the safety and environment of local communities. Kemira conducts environmental impact assessments and emission monitoring in every manufacturing site as defined by the regulatory requirements, ISO 14001 management system and Kemira internal standards. The assessments monitor environmental performance of the site and its impact on the surrounding communities. Additionally, each Kemira site has appropriate contingency plans in place to ensure the safety of surrounding communities. This is done in close cooperation with local environmental authorities. To enhance safe use of chemicals, Kemira works in close cooperation with many local chemical agencies.
Each Kemira site is classified for actual and potential negative impacts of operations (end of 2013: 59 sites). A new three-level ranking system determines the internal Kemira requirements and frequency of audits for each site: higher ranking meaning higher requirements.
Environmental classification results 2013:
We take preventive actions and mitigation measures proactively for the operations that involve potential negative impacts on the local communities.
To further enhance environmental and process safety management, a new Process Safety Management Standard is currently being finalized and will be implemented starting Q2 2014.
In addition to continuous safety and risk management work, Kemira focuses on a continuous dialogue with local communities to understand and implement activities to respond to their needs, concerns and expectations, and providing opportunities for our own employees to participate in local community initiatives.
We have been engaged by Kemira Oyj (hereafter Kemira) to provide a limited assurance on Kemira's corporate responsibility information for the reporting period of January 1, 2013 to December 31, 2013. The information subject to the assurance engagement is the Corporate Responsibility section of the Kemira Report 2013 (hereafter: Responsibility Information) that management intends to publish on www.kemirareports.com.
Management is responsible for the preparation of the Responsibility Information in conformity with Kemira's reporting principles and the Sustainability Reporting Guidelines (G4 Core) of the Global Reporting Initiative. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the Responsibility Information that are free from material misstatement, selecting and applying appropriate criteria and making estimates that are reasonable in the circumstances. The scope of the Responsibility Information depends on Kemira's Corporate Responsibility focus areas and as well as the reporting principles .
Our responsibility is to express a limited assurance conclusion on the Responsibility Information based on our engagement. We conducted our assurance engagement in accordance with International Standard on Assurance Engagements (ISAE) 3000 to provide limited assurance on performance data within the Responsibility Information. This requires that we plan and perform the engagement to obtain required level of assurance about whether the Responsibility Information is free of material misstatement. In addition we have reviewed whether the Responsibility Information has been prepared in accordance with the Sustainability Reporting Guidelines (G4 Core) of the Global Reporting Initiative.
We did not perform any assurance procedures on the prospective information, such as targets, expectations and ambitions, disclosed in the Responsibility Information. Consequently, we draw no conclusion on the prospective information. Our assurance report is made in accordance
with the terms of our engagement with Kemira. We do not accept or assume responsibility to anyone other than Kemira for our work, for this assurance report, or for the conclusions we have reached.
A limited assurance engagement with respect to responsibility related data involves performing procedures to obtain evidence about the Responsibility Information. The procedures performed depend on the practitioner's judgment, but their nature is different from, and their extent is less than, a reasonable assurance engagement. It does not include detailed testing of source data or the operating effectiveness of processes and internal controls and consequently they do not enable us to obtain the assurance necessary to become aware of all significant matters that might be identified in a reasonable assurance engagement.
Our procedures on this engagement included:
Performing analytical review procedures and testing data on a sample basis to assess the reasonability of the presented responsibility information;
Performing site visits to selected sites in China, Sweden and Germany to review compliance to reporting policies, to assess the reliability of the responsibility data reporting process as well as to test the data collected for responsibility reporting purposes on a sample basis and;
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
We complied with Deloitte's independence policies which preclude us from taking financial, commercial, governance and ownership positions which might affect, or be perceived to affect, our independence and impartiality and from any involvement in the preparation of the report. We
have maintained our independence and objectivity throughout the year and there were no events or prohibited services provided which could impair our independence and objectivity.
This engagement was conducted by a multidisciplinary team including assurance and sustainability expertise with professional qualifications. Our team is experienced in providing sustainability reporting assurance.
On the basis of the procedures we have performed, nothing has come to our attention that causes us to believe that the information subject to the assurance engagement is not prepared, in all material respects, in accordance with the Sustainability Reporting Guidelines (G4 Core) of the Global Reporting Initiative.
Helsinki 10.2.2014
Jukka Vattulainen Lasse Ingström
Authorized Public Accountant Authorized Public Accountant
"This independent assurance provider's statement gives no assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular whether any changes may have occurred to the information since signing this assurance statement. These matters are the responsibility of the management but no control procedures can provide absolute assurance in this area."
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