Non-financial information

This section describes Tieto’s Corporate Responsibility (CR) activities as required in the Chapter 3a of the Finnish Accounting Act on non-financial information (NFI). The linkages between NFI areas and Tieto's CR focus reas are identified in the chart describing policies and processes. More information is available in the Corporate Responsibility report

Description of Tieto's business model

Tieto is one of the largest software and IT services companies in the Nordics. The company’s industry-specific software and service capabilities support customers’ business renewal based on constant innovation and efficient operations.

Tieto’s role varies from advisory and design of services to building and running IT solutions. Tieto aims to co-create new solutions and innovate new data-driven business models with customers and partners. Value creation and competitiveness are based on solutions combining best-of-breed technologies with integration capabilities, industrialized service delivery and strong global delivery capability.

Description of management of NFI topics

Tieto has a systematic approach to managing Corporate Responsibility, including appropriate policies, processes, governance and organization, competences and communication.

Tieto’s CR work is led by the company’s CR steering group. The steering group advises the Leadership Team and Board of Directors on the CR area, and approves the strategic CR plans and Corporate Responsibility section of Tieto's Annual Review together with Tieto’s Leadership Team. The CR steering group represents different functions and units of Tieto, ensuring that the voices of internal and external stakeholders are taken into account. 

Tieto’s Leadership Team and the Board of Directors reviewed Corporate Responsibility matters four times in 2017. The topics included the review of the CR report, review and approval of the CR plan 2017–2020, review of NFI information including relevant CR risks, donations in 2017 and topical matters.

Tieto’s CR plan 2020 comprises prioritized sustainability areas, which are developed through specific engagement with relevant stakeholders as well as internal prioritizations. Sustainability is an opportunity rather than a risk to Tieto, as digitalization is able to improve wellbeing and environmental conditions in other sectors. The sustainability areas are the material topics covering the capabilities, products, facilities and services needed to deliver services to our customers. The areas also include the sustainability impacts IT solutions can deliver to customers, such as by helping to reduce customers’ CO2 emissions, eliminate the grey economy or improve people’s health and wellbeing. Each sustainability area in the plan has a public goal and target, and the action plans, implementation and reporting are run by nominated owners and partners. Sustainability area goals and results for 2017 are presented in the table in this section.

The CR plan is developed and managed according to Tieto’s Corporate Responsibility management process, which follows the United Nations Global Compact Management Model and GRI standards. Linkages to United Nations Sustainable Development Goals, which are considered a strategic tool enabling corporations to contribute to more a sustainable society, are established where relevant. The management of Tieto’s Sustainability areas including policies, processes, due diligence and escalation channels is illustrated in the chart in this section.

Tieto’s ethical values are summarized in the Tieto Code of Conduct policy, which applies to all of Tieto’s employees, and a separate Supplier Code of Conduct applied to any third party contributing to the company’s services, products and other business activities. Those are based on the United Nations Global Compact principles regarding human rights, labour rights, anti-corruption and the environment as well as the OECD Guidelines for Multinational Enterprises. The policies apply to all of the sustainability areas, which are also linked to other, topic-specific policies and more detailed rules. The policies cover the relevant legal, certification and other best practice requirements and are reviewed annually.

Escalations involving possible Code of Conduct breaches are reported to the General Counsel or Internal Audit. All escalations are investigated confidentially through our pre-defined process by an escalation function consisting the General Counsel, Compliance Officer, Chief Audit Executive and Head of CR. The outcomes of all investigations are reported as part of compliance risk reporting to the Compliance and Privacy Board and Audit and Risk Committee of the Board of Directors. In addition, sustainability areas have separate channels for incident reporting and continuous improvement.

NFI

Main risks in non-financial area

The aim of Tieto’s internal control framework is to assure that operations are effective and well aligned with the strategic goals. The internal control framework is intended to ensure correct, reliable, complete and timely financial reporting and management information. The framework endorses ethical values, good corporate governance and risk management practices. Risk management and major risks are described in detail in the Corporate Governance Statement.

The risk management framework consists of the risk management organization, related policies, operating principles and tools. The risk management organization develops and maintains the company’s risk management framework, including risk reporting, risk management governance and follow-up of risk exposures consisting of strategic, financial, operational and compliance risks.

Tieto’s risks with respect to Corporate Responsibility and NFI topics are mainly compliance risks. These risks include a reputational factor, which in addition to negative publicity could lead to score drops in Corporate Responsibility indices and deviations in audits. Severe breaches in these areas could also lead our customers, who rely on highly reputable partners, to lose their trust in us.

Fraudulent, unethical, or even illegal actions by individuals in areas such as corruption or conflict of interest can take place if anti-corruption awareness and team culture are not at a sufficiently high level. Such situations can have negative consequences ranging from disqualification from public tenders to sanctions. Compliance trainings, audits and follow-up are used to mitigate the risk.

Stress-related health issues as well as discrimination and harassment are human and labour rights related risks. From an operational perspective, deliveries could be compromised if key resources go on long sick leaves. Health issues have an impact on costs as well. Both health issues and discrimination and harassment can lead to environments where employees may not reach their full potential. Discrimination could also hinder our ability to develop solutions to societal problems.

Tieto believes that diversity in personnel, whether in terms of gender, age or cultural background, is needed to stay competitive in the fast-paced ICT industry. Diversity and inclusion are an integral part of our Open Source Culture as well as our Human Resources activities. Being able to unwind and maintain wellbeing is equally crucial. The employee health and wellbeing index is measured and follow-up actions taken where necessary to improve employee wellbeing.

Tieto’s supplier base consists of direct and indirect suppliers. Supply chains may include compliance risks related to the environment, human and labour rights or even corruption. Severe breaches against international conventions in the supply chain could lead to customers deciding to terminate contracts. Tieto mitigates these risks through its Supplier sustainability programme and on-boarding practices, consisting of both compliance and audit activities.

Goals and results for each sustainability area
Sustainability area NFI trigger Goal Result 2017       Target 2020
Equal Opportunities Social and employee matters %ratio Completion of Code of Conduct e-learning for awareness on equality 88%   100%
Employee Experience Social and employee matters Employee engagement score, % 73% Long term target to be revisited 73%
% of employees being always or often stressed and not being able to recover 3%   Keep low
Ethical Culture All %ratio Completion of Code of Conduct e-learning 88%   100%
Information Security and Data Privacy Respecting human rights Total number of substantiated complaints regarding breaches of customers’ privacy and losses of customer data. 0   0
Sustainable Supply Chain Respecting human rights, Anti-corruption and Bribery matters, Environmental matters %ratio of new or renewed suppliers agreeing to Tieto’s Supplier code of conduct1) 100%   99 %
Greenhouse Gasemissions Environmental matters Reduction of CO2 emissions from Tieto's indirect energy consumption -44% Change to renewable electricity in Nordic data centers in 2017 -50 %
Sustainable IT Solutions Environmental matters ktons CO2 avoided by customers through use of IT services provided by Tieto 75 kton CO2   Renewed, more accurate model with new baseline developed in 2017 Increase customers' avoided CO2 emissions exceeding Tieto's own CO2 emissions
1) Contracts made through procurement function