Corporate Responsibility 2020 plan
For Tieto, sustainability is both a responsibility and possibility. We deliver solutions that help our customers renew their business as well as create economical, societal and environmental value. To accomplish this, we focus on three objectives: minimizing environmental impact, being an ethical forerunner and creating value for our stakeholders.
As a company, we are convinced that our long-term success is dependent on our active role in sustainable development. This requires a business model that takes into account social and environmental aspects covering business operations, partners and suppliers as well as services and solutions. Therefore, sustainability is a natural part of Tieto’s daily business operations and integrated in our value chain.
Corporate Responsibility 2020 plan supporting sustainable development
We recognize that our responsibility is to have a positive impact on sustainable development within the societies we operate. For many of our customers, compliance with the United Nations Global Compact is a minimum-level requirement. To meet stakeholder requirements and expectations, we strive to integrate sustainability into our everyday life from both a policy and practical perspective. We also engage our stakeholders in an open dialogue about the topic.
Our corporate responsibility (CR) objectives include lowering the environmental impacts of our own operations as well as those of our customers and supply chain, to be an ethical forerunner in global society, and to create value for all stakeholders. Our Corporate Responsibility 2020 plan (for 2017-2020) is based on the CR materiality analysis conducted through a stakeholder dialogue in 2016. This plan also comprises elements from the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises.
While revisiting the expectations of our stakeholders, we have also taken into account the new CR initiatives and compliance requirements. The Corporate Responsibility 2020 plan reflects among other things Tieto’s contribution to the United Nations Sustainable Development goals.
The following table summarizes our current CR targets for prioritized sustainability areas during 2017–2020.
|Goals and results for each sustainability area|
|Sustainability area||Goal||Result 2017||Target 2020||UN sustainable development goals|
|Equal Opportunities||Completion of Code of Conduct e-learning for awareness on equality, ratio (%)||88%||100%|
|Employee Experience||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|
|Completion of Code of Conduct e-learning, ratio (%)||88%||100%|
|Information Security and Data Privacy||Total number of substantiated complaints regarding breaches of customers’ privacy and losses of customer data||0||0|
|Sustainable Supply Chain||New or renewed suppliers agreeing to Tieto’s Supplier code of conduct, ratio (%)||100%||99%|
|Greenhouse Gas emissions||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||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|
|Financial performance||% sales growth||3.0%, or 3.6% in local currencies||Above market CAGR|
|% EBIT margin||9.0%||Long term > 10%|
|% adjusted margin||10.5%||Long term >10%|
|Annually increasing dividends||Base dividend up by 4%, additional dividend proposed||Annual increase in absolute terms|
|Net debt to EBITDA ratio, limited in the long term||0.8||<1.5 long term|
|Customer experience||Net promoter score rNPS (-100 to 100)||21||40|
|Customer experience indexCXI (1 to 10)||7.97||8.20|
Corporate Responsibility opportunities and risks
Minimizing environmental impact
Tieto recognizes that climate change is a global concern, which needs to be addressed by all enterprises and organizations. Minimizing environmental impact starts by focusing on what we can do on a daily basis. Most of our direct environmental burden comes from energy consumption and travel. By simply increasing the efficiency of the daily operations, Tieto has steadily reduced its CO2 emissions. Tieto has implemented an ISO14001 certified environmental management system (EMS) since the end of 1990s. Currently over 90% of operations are covered.
We are moving to offices with green certificates and making the best use of each square metre. In our data centres, we are constantly trying to find new ways to optimize energy efficiency while the amount of data is increasing. In addition, our Nordic data centres run with renewable energy and whenever possible, the excess heat is recycled back to the nearby neighbourhood. Virtual meetings are a natural part of our way of working, and when travelling, we always try to find the most reliable partners for business travel.
The bigger opportunity, however, lies in reducing emissions in our customer 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 keeping emissions at 2015 levels. Tieto is committed to increasing the environmental friendliness of our data centres, and implementing solutions that improve customers’ sustainability as well as benefits society at large.
Being an ethical forerunner
Being an ethical forerunner in global society means showing a good example as a corporate citizen both internally and externally in all our operating countries. The global #MeToo campaign created a lot of discussion around diversity and equality during autumn 2017. Tieto wants to ensure those values are taken seriously and actively promotes and communicates them as an integral part of our corporate culture.
The European Union’s Anti-Corruption Report 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. The European Union has 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.
Tieto’s approach to business ethics is not only compliance-based, it is intended to create a culture based on transparency and openness. We call it an Open Source Culture, which means that we search and give feedback; we challenge the status quo; we are accountable for results; and we lead by example and values.
Creating value for stakeholders
Our “creating value for stakeholders” objective involves Tieto’s key stakeholder groups: customers, employees and investors as well as society as a whole.
Tieto’s ambition is to enhance our customers’ use of digital services and solutions to support their business renewal. By delivering sustainable IT services and solutions to enterprises and public sector organizations, Tieto helps to improve economic, societal, as well as environmental conditions in our operating markets. At the same time, the company’s profitability can be strengthened, which is essential for our long-term success as an innovator, employer and taxpayer, to mention a few examples.
Corporate responsibility related risks
Tieto strives to integrate corporate responsibility (CR) activities at the core of the business and to include CR elements in our business processes and systems. During early 2018, we have re-evaluated the main risks in our operations.
Tieto’s risks on corporate responsibility are mainly categorized as compliance risks. These risks always include a reputation factor, which in addition to negative publicity and associations among stakeholders may lead to a decline in the Corporate Responsibility indices or deviations in audits. Severe breaches in these areas could also lead to loss of customers who rely on highly reputable partners.
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 on a sufficient level. Such situations can lead to implications ranging from disqualification from public tenders to contractual sanctions. Compliance training, audits and follow-ups are used to mitigate the risk.
Employee wellbeing and stress-related health issues together with discrimination and harassment are the identified risks related to human and labour rights. From operational perspective, Tieto’s customer deliveries could be compromised if key resources are on long sick leaves. Both health issues and discrimination and harassment can create a working environment where employees may not reach their full potential. Discrimination could also hinder our ability to develop innovative solutions to address customers’ problems.
Tieto strongly believes that diversity of personnel, whether based on gender, age or cultural background, is needed to stay competitive in the fast-paced IT industry. Diversity and inclusion form an integral core of our Open Source Culture. Being able to recharge and maintain wellbeing is equally crucial. Employee health and wellbeing index is measured and followed up across the organization and actions taken where necessary.
Tieto’s supplier base consists of direct and indirect suppliers. Risks related to supply chains may include compliance risks related to environment, human and labour rights or even corruption. Severe breaches against international conventions in the supply chain could lead to customers terminating their contracts. Tieto mitigates these risks through the Supplier sustainability program and on-boarding practices, consisting of both compliance and audit activities. We also continuously develop our partner qualification and third-party risk management processes.