Long-term plan

We recognize that our sustainability impacts occur throughout our value chain, and focus our work around three long-term goals – minimize environmental impact, be an ethical forerunner, and create value for all our stakeholders.

We are convinced that our long-term success as a company is connected to our part in improving environmental and social conditions in the world. This requires a business model that takes into account aspects of corporate responsibility, covering our own operations, partners and suppliers as well as our services. Therefore, sustainability is a natural part of our daily business operations and integrated into our value chain.

Value chain

CR long-term plan supporting sustainable development

We are concerned about climate change and actively expressed our support to COP 21 (21st Conference of the Parties to the United Nations Framework Convention on Climate Change), and the results thereof, through CDP. Our way of doing this is by integrating sustainability into our business, from policy as well as practice perspectives. We are also engaging in open dialogue about sustainability together with our stakeholders. Our aim is to lower the environmental impacts of Tieto as a company, our customers, and our supply chain.

Our environmental footprint is mainly caused by energy consumption in offices and data centres. In addition, business travel accounts for about one third of our footprint. Hence, to us, minimizing environmental impact means reducing energy consumption, increasing energy efficiency and replacing business travel with online conferencing options. The bigger opportunity, however, lies in reducing emissions in other industries through innovative IT solutions and services. According to the Global eSustainability Initiative Smarter 2030 report, ICT can enable a 20% reduction of global CO2e (CO2 equivalent) emissions by 2030, thus holding emissions at 2015 levels. We are committed to increasing the environmental friendliness of our data centres, and implementing solutions that improve customers’ sustainability as well as in society at large.

Being an ethical forerunner in global society means that we want to show a good example across our countries of operation. The European Union’s first Anti-Corruption Report, published in early 2014, concludes that corruption continues to be a challenge in Europe, and that the situation varies from one member state to another. In recent years, some Nordic companies have suffered from corruption cases too. In 2013, the European Union launched an ICT-sector guide on implementing the UN Guiding Principles on Business and Human Rights. To us, it means focusing on human rights, especially in our supply chain. Our approach is not only compliance-based, but is intended to create a culture based on transparency and openness. We call it an open source culture.

Creating value for stakeholders touches upon our customers, employees and investors – our main three stakeholder groups – as well as society as a whole. Our aim is to create value for all our stakeholders. By delivering sustainable IT services and solutions to enterprises and society, we help to improve economic, societal, as well as environmental conditions in the world. At the same time we help to increase our own profitability, which is crucial for our long-term success as an innovator, employer and taxpayer. 

Our CR long-term plan is based on our CR materiality as expressed by our stakeholders. It also comprises the elements of the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises. As part of reviewing our CR materiality during 2016 this plan will be reviewed, and the long-term targets will be updated. While reviewing stakeholder expectations we will take into account new CR initiatives and compliance requirements. The following table summarizes our current targets for prioritized CR aspects.

Minimize environmental impact
CR aspect Long-term target (2014–2016) 1) Result 2015 (2014)
Energy consumption Reduce total indirect energy consumption by 3.5% annually (kWh). -9% (-5%)
Use of materials and chemicals Reduce paper consumption by 5% annually (tons). -4% (-21%)
Waste management Only partners accepting Supplier Code of Conduct Rule used for e-waste recycling (relation of e-waste partners). 40% (15.4%)
     
1) To be renewed 2016 - until 2020
 
Be an ethical forerunner in society   
CR aspect Long-term target (2014–2016) 1) Result 2015 (2014)
Business Ethics No breaches of CoC 0 (0)
  100% of employees trained on Code of Conduct and Anti-corruption annually 73% (74%)
Procurement and supply chain 100% of suppliers serving Tieto on regular basis to adhere to Supplier Code of Conduct Rule 31% 2) (30%)
  Zero violations of Supplier Code of Conduct Rule of contracts 0 (0)
Employee health and wellbeing 100% of employees (minimum 95%) to have energy above work related demand 93% (94%)
     
     
Create value for stakeholders
CR aspect Long-term target (2014–2016) 1) Result 2015 (2014)
Customer Experience Customer Experience Index 8.2 by 2020 2) (scale 1-10). 7.54 (7.51)
Quality of Products and Services ISO 9001 certification based on business needs (% of employees). 73% (65%)
  ISO 27001 certification based on business needs (% of employees). 48% (35%)
  All sites >50 employees to be certified with ISO 14001 by 2015 (% of employees). 82% -> 95% 3) (62%)
  ISO non-conformities to be closed according to the requirements. Goal met (Goal met)
Financial Performance 10% EBIT margin as a long-term objective.  8.6 % (4.0%)
  Dividend increasing annually in absolute terms (min. 50% of net results). Proposed dividend up 10% to EUR 1.10 (1.00). Extra dividend of EUR 0.25 is proposed. Dividend yield 5.5%, payout ratio 110%, including extra dividend.
  Net debt/EBITDA 1.5 as an upper limit in the long-run. 0.1 (-4.0)
     

CR risks and opportunities

To address CR related risks and opportunities, we strive to integrate our CR impacts at the core of our business, and to include more CR elements in our business processes and systems. We have identified four main risks related to CR. All four are connected to some of our highest priority aspects identified in our latest materiality analysis (2014). 

Climate change concerns all of us – people, organizations and enterprises and society.  At Tieto, we mitigate climate change related risks via active environmental management, green IT and lowering customers’ emissions with sustainable IT.

We also recognize that our supply chain poses potential risks in terms of human rights and labour rights. We strive to mitigate these risks via our Supplier Code of Conduct Rule, supplier management and assessments. In addition, by increasing understanding of supply chain related impacts we will be able to improve human rights as well as labour rights conditions together with our suppliers. In this context, it is imperative that we understand and recognize the differences between the cultures in the Nordics and in other Tieto countries.

Corruption is another potential CR risk, not only for Tieto but for enterprises and society at large. According to Transparency International’s Corruption Perception Index, measuring public sector corruption, 114 of the 168 countries  included in this  measuring score below 50 out of 100 (i.e. 100 indicates countries highly clean from corruption). The majority of our businesses are located in countries that may be considered to be cleaner from corruption based on Transparency International’s measuring. Based on this index, 79% of operating countries score above 50. However, we do recognize corruption risks related to our procurement and sales, especially in Eastern Europe and Asia. We strive to mitigate this risk via Code of Conduct and Anti-Corruption Rule implementation, communication with suppliers, and training of sales personnel and partners.

Our proactive approach is embedded into monitoring and follow-up processes. Our whistle-blowing process allows anonymous and confidential reporting on policy and rule violations, or any unethical behaviour, to the General Counsel of the company. The process is designed to ensure that persons reporting violations will not be subject to any retaliation.

Employee health risks are mainly related to the knowledge-intensive work of our industry combined with the transformation of the IT sector. The rapid digitalization of society is impacting competence needs, work content as well as the way of working. This development might impact the psychosocial well-being for individual employees. We mitigate these risks through line manager attention and follow-up, and communication. We strive to offer our employees a work environment supporting the psychosocial well-being. Our open source culture is one important element, another one is a flexible and mobile work environment supporting work-life balance.

As an IT services provider, our biggest CR opportunities relate to the sustainability impacts of our IT services and solutions, and our role in creating a society where responsible and sustainable business is the norm. We have measured the sustainability impacts of IT since 2010 by calculating the emission reductions from our own digital transaction services and other digital services replacing paper. We are committed to continuing the study of sustainability effects of IT, as well as to continuing the development of sustainable IT solutions.

Management of CR aspects has an impact on the surrounding society, the environment as well as on our long-term financial soundness. The CR demands from our customers have intensified during the past years. For many of our customers, a CR requirement such as compliance with the United Nations Global Compact is a minimum-level requirement.