REPORT 2016
Reliable operator
Caruna is Finland’s largest electricity distribution company. Electricity networks are an integral part of a society’s infrastructure, and therefore the reliability of electricity distribution is vital to the entire society. We aim to deliver added value to all our stakeholders and, at the same time, ensure our operations are financially, socially and environmentally sustainable.
++ During 2016, we continued to improve ++ We raised distribution prices to finance our our electricity network by increasing the network improvement projects and reached underground cabling of the networks a solution on a gradual introduction of price to protect them from adverse weather increases with the Consumer Ombudsman. conditions.
++ We were involved in planning the electricity ++ We have worked hard to improve the network of the future with the smart grid customer experience. working group organised by the Ministry of Economic Affairs and Employment.
++ Caruna’s net sales in 2016 were EUR 384 ++ The Board of Caruna appointed Tomi Yli-Kyyny million. as the new CEO.
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Caruna in brief
Caruna is Finland’s largest electricity distribution company. Caruna’s share of the Finnish electricity distribution market is 21 per cent. We provide power to 665,000 private and corporate customers in South, Southwest and West Finland, the city of Joensuu and North Finland. Our electricity network is roughly 82,000 kilometres long and would stretch twice around the earth.
We endeavour to meet our customer’s expectations and, first and We endeavour foremost, to secure an undisturbed supply of electricity. We continuously to meet our improve and develop our electricity networks. We are set to invest EUR customer’s 200 million into improving the reliability of our electricity distribution expectations and, every year for the next decade. Our vision is to be the best electricity first and foremost, distributor. to secure an undisturbed supply We have 270 of our own members of staff and we directly employ 2,000 of electricity. more in our projects around Finland. Our head offices are in Espoo, Finland.
Caruna is owned by Finnish employment pension companies Keva (12.5%) and Elo (7.5%), as well as international infrastructure investors First State Investments (40%) and Borealis Infrastructure (40%). Our operations are tightly regulated. In Finland, the Finnish Energy Authority is in charge of monitoring the power supply trade.
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CORPORATE STRUCTURE Caruna Networks Oy is the parent company of Caruna Networks Group (“Caruna”). The parent company of Caruna Networks Oy is Suomi Power BV, with its domicile in The Netherlands. In addition to Caruna Networks Oy, Caruna Group includes Caruna Networks Sähkönsiirto Oy, Caruna Networks Espoo Oy, Caruna Oy and Caruna Espoo Oy. Caruna Networks Oy owns Caruna Networks Sähkönsiirto Oy and Caruna Networks Espoo Oy, which, in turn, own Caruna Oy and Caruna Espoo Oy.
Of the Group companies, Caruna Oy and Caruna Espoo Oy conduct regional and distribution network activities in their own electricity networks under a network licence granted by the Energy Authority. Caruna Oy is responsible for the distribution of electricity in Southwest Finland, Satakunta region, South Ostrobothnia, Ostrobothnia, North Ostrobothnia and Lapland. Caruna Espoo Oy operates in Espoo, Kauniainen, Kirkkonummi and Joensuu.
Caruna Oy and Caruna Espoo Oy are separate companies with separate pricing policies, because factors such as local network conditions affect the price of electricity distribution. The majority of Caruna Oy’s network is situated in rural areas and Caruna Espoo Oy’s in urban areas.
Caruna Networks Oy, Caruna Networks Espoo Oy and Caruna Networks Sähkönsiirto Oy provide support services for the entire Caruna Group.
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Financial key figures
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From Caruna’s CEO 2016 was full of events for Caruna. We continued our network improvement projects, increased our customer numbers and reviewed our customer service and procurement practices, among other things.
Uninterrupted electricity supply is the key expectation of our customers. It is up to us to ensure that daily life runs smoothly for the 1.5 million people living in our network area in Finland, also promoting the general safety and security of supply in the entire society at the same time.
In addition to a reliable supply, our customers expect reasonable pricing It is up to us to and good-quality customer service from us. The price increases we ensure that daily implemented in early 2016 led to extensive public debate on the pricing life runs smoothly of electricity distribution. After talking with the Consumer Ombudsman, for the 1.5 million we changed the timing of the increases so that they are implemented people living in our gradually over two years, as they are considered reasonable by the network area in authorities over this period of time. These price increases are necessary Finland. as they enable us to keep up with the requirements and expectations facing the sector.
Under our ten-year network improvement programme, we renew network sections at the end of their service life and install cables underground where they are protected from adverse weather conditions. We are committed to meeting the targets defined in the Electricity Market Act by 2028 by ensuring that we will be able to restore the power to our customers within six hours in urban areas and within 36 hours in rural areas. We invest roughly EUR 200 million into our network every year.
The improvement of occupational safety is one of our key goals, and we have been successful in this area. The Zero Accident Forum run by the Finnish Institute of Occupational Health assigned Caruna the highest possible category in occupational safety for the second year running. We also achieved our best result so far in the injury frequency of contractors. These are very good results, but we will still continue to pay special attention to safety. Each accident at work involving injury will be investigated and, if necessary, work practices changed to improve safety.
In accordance with the new network construction procurement strategy, key materials are acquired by Caruna instead of contractors, starting from the beginning of 2016. We extended our material recycling agreement with Kuusakoski. All materials dismantled from networks are reused.
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Successful operations require employees who possess the necessary expertise and feel satisfied and happy at work, as well as good working relationships with stakeholders. During 2016, we focused our efforts on strengthening the customer-oriented approach and expertise of our personnel, along with improving their well-being and work rotation. We engaged in active dialogue with the authorities, municipalities, organisations and land-owners. These relationships will continue to be important for us in the future, too.
The energy sector is facing a great deal of change. Both the production and consumption of energy are undergoing transition. The electrification of traffic bears a great impact on the production and distribution of electrical power and likewise on the balance between supply and demand. Small-scale production of energy is important for many, considering people’s own sense of responsibility and ecological factors.
A smart electricity network enables a more efficient utilisation of energy and supports the move towards more ecological ways of producing energy. We contribute to our country meeting the national targets for reducing carbon dioxide emissions by designing and constructing our network so that it is suitable for decentralised production of renewable energy.
We forge ahead with our network improvement projects in 2017. We are We forge ahead also going to continue making the customer experience better by, for with our network instance, introducing new data systems that enable us to communicate improvement with customers more efficiently. We streamline our own operations and projects in 2017. reinforce our financial efficiency. We are also going to continue making Caruna wants to be a reliable partner and take an active role in the the customer development of future energy systems. Our actions are designed to serve experience better. both our customers and all stakeholders. We share positive energy.
In Espoo, March 2017
Jyrki Tammivuori Acting CEO
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Main events during 2016
JANUARY-MARCH ++ We were one of the main partners of the 2016 World Junior Ice Hockey Championships held in Helsinki at the end of 2015 and beginning of 2016. We launched a three-year long sponsorship with the Finnish Ice Hockey Association, with the particular aim of supporting exercise and sport activities for children and the youth. ++ We told our customers we would increase our prices from 1 March 2016. These increases provoked extensive public debate. In talks with the Consumer Ombudsman, we came up with a solution of introducing the increases gradually over time, and temporarily reduced the basic electricity distribution charges for a year. ++ We entered into a major three-year framework agreement with Empower, Telog and Voimatel, for the development and renovation of electricity distribution networks in South and North Ostrobothnia, Ostrobothnia and Lapland. ++ We refinanced our operations in accordance with our long-term plan. Funds obtained from international capital markets allowed us to guarantee the realisation of our network improvement projects. ++ We published our financial statement data and our first corporate responsibility report at the end of March.
APRIL-JUNE ++ We continued our efforts to secure our network improvement investments and financed our operations by bonds offered to international institutional investors. ++ The Zero Accident Forum run by the Finnish Institute of Occupational Health assigned Caruna the highest possible category in occupational safety. ++ A total of 20 people started working at Caruna for the summer.
JULY-SEPTEMBER ++ The storm Rauli in August was the most significant adverse weather event of the year to impact our network. ++ Caruna was rewarded for leadership in good customer experiences in a survey by Customer Experience Professionals Association™ CXPA Finland. ++ Kantti and Peuravaara wind farms were connected to our network.
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OCTOBER-DECEMBER ++ CEO Ari Koponen announced his resignation from his post in October and Head of Finances Jyrki Tammivuori stepped into the role of acting CEO. In December, the Board appointed Tomi Yli-Kyyny as the new CEO of Caruna. He will start in the spring of 2017. ++ We signed a three-year agreement with Eltel Networks, Relacom and Vertek on network improvement work in Central and Western Uusimaa region. ++ The European Investment Bank granted Caruna a loan of EUR 200 million for the realisation of network improvement projects. ++ The increasing popularity of small-scale production of electricity started to become more visible within Caruna’s network area. The number of solar power systems connected to our network nearly tripled by the end of the year, compared to last year. ++ Throughout the year, we continued to carry out network improvement projects aimed at enhancing the reliability of supply.
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Finnish electricity market
ELECTRICITY PRODUCTION AND TRANSMISSION Electricity is produced by power plants operated by nuclear, hydro or wind power or various fuels. There are approximately 120 companies and 400 power plants producing electricity in Finland.
Main grids and distribution networks transmit electricity from power plants to private homes and other users. Fingrid Oyj is in charge of the transmission of electricity over the main grid. The main grid transmits electricity from producers to electricity distributors and industrial companies. Electricity distribution companies distribute electrical power to homes and businesses over medium and low voltage distribution networks.
Electricity distribution in short
REGULATION OF ELECTRICITY DISTRIBUTION The Finnish electricity distribution market is strictly regulated and monitored. The purpose of the Finnish Electricity Market Act is to ensure the reliability of supply, competitive prices and effective and equal service practices to end users.
As an electricity distributor, Caruna operates under network licences granted by the Energy Authority. The Energy Authority monitors the operations of electricity distributors and defines an allowed reasonable
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rate of return for the distribution of electricity. Electricity distributors then use this value as a basis for their distribution prices.
All electricity network trade is regulated by the Electricity Market Act. It is based on the premise that electricity networks constitute a market place for producers and users, that, on equal and reasonable terms, offers services to all electricity trade parties, both suppliers and buyers. Network operators, such as Caruna, are required to utilise, develop and maintain their networks in accordance with the needs of the electricity market, and thus secure the functionality and reliability of the electricity distribution system from their part. Network operators are also required to offer customers a network connection and electricity distribution on equal and reasonable terms.
Data management is likewise an important element of all electricity market activities. Caruna is under a specific, statutory obligation to remain impartial and to share all necessary data between all market parties, but on the other hand, we are also tied by the regulations on handling personal information. One of these regulations specifies that consumers must always have the right to manage any information concerning them.
The Electricity Market Act was amended in 2013, with the aim to The Electricity improve the security of electricity supply. The Act specifies that service Market Act was interruptions caused by storms or snowfall must not exceed six hours in amended in urban areas or 36 hours in any other areas. 2013, with the All electricity network operators are required to improve their reliability aim to improve of supply to ensure that outages do not exceed the time limits defined in the security of the Act after 2028. For Caruna, this means significant investments into electricity supply. improving the reliability of supply, for instance, by replacing overhead lines with cables underground and by increasing network automation. Other investments are necessary because aging network structures need to be renovated.
MONITORING OF ELECTRICITY DISTRIBUTION PRICES The Energy Authority monitors the revenues of electricity distributors in four-year regulatory periods. If the revenue from any regulatory period exceeds the limit of reasonable return defined by the Energy Authority, the company accrues overincome. If, on the other hand, the revenues realised during a period remain below this limit, the company accrues underincome.
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Caruna defines its electricity distribution prices by estimating a certain level of return and expenses. There are several factors influencing the amount of expenses, such as the inflation, interest rates and weather conditions, for instance. Therefore, the estimates are rarely realised Caruna defines precisely as they are. its electricity distribution prices Should the amount of collected electricity distribution fees remain below by estimating the predicted level, Caruna may charge more fees during the following a certain level four-year period. If, however, the customers have been overcharged for of return and electricity, Caruna credits the excess to customers during the following expenses. period.
ELECTRICITY NETWORKS IN THE FUTURE We always strive to develop our services so that they can respond better to the expectations of our customers and the changing needs of the society. New technologies, such as energy reserves and wide-scale decentralised energy production, are going to change the tasks and business models of network operators in the future. Smart meters are a good example of changes brought about by new technologies. We installed these meters before the end of 2014, and they allow the customers to purchase electrical power by the hour and monitor their consumption at Caruna’s energy reporting service.
The smart grid working group organised by the Ministry of Economic Smart meters are Affairs and Employment is looking for ways to improve the involvement a good example of options available to customers. The working group intends to draw up changes brought electricity network design and construction guidelines that would ensure about by new customers are able to be more actively involved in the electrical power technologies. We market by, for instance, selling the electricity they generate with their installed these small-scale production equipment. meters before the end of 2014. Caruna’s role in the working group is to act as a technical advisor and provider of services and solutions that answer the customers’ needs. The working group is to present their guidelines for the future of the entire Finnish electricity grid in an official report in the autumn 2018.
In addition to planning for the future, we at Caruna are building a strong foundation for future energy markets, thanks to our network improvement projects which are already underway. Our current network construction principles enable a large-scale and cost-effective connection of renewable energy sources to our network. Smart meters, in turn, allow the customers to sell any electricity they are not using.
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Corporate responsibility For Caruna, sustainability means that we are trustworthy and accountable to our customers, partners and owners, for the benefit of the Finnish society, and that safety and the environment always come first in all our operations.
In 2015, we outlined the most significant impact factors of our operations, defined our key sustainability themes and set goals for our corporate responsibility.
• Our goal is to be Finland’s most sustainable electricity distributor, able to generate added value for our customers, owners and the society. • We provide a reliable electricity network for the safe and Our goal is to be environmentally sustainable distribution of electricity. Finland’s most sustainable • We realise our vision by conducting our work ethically and taking the electricity long-term view together with our partners. distributor. KEY CORPORATE RESPONSIBILITY THEMES We defined the main impacts of our business in accordance with the Global Reporting Initiative (GRI) G4 materiality analysis guidelines during the summer and autumn 2015. Along the materiality analysis process, we outlined the core focus areas of Caruna’s corporate responsibility and GRI G4 aspects.
We improve our operations and generate related reports focusing on essential corporate responsibility themes. We take the results of the materiality analysis process into account also when planning and implementing our collaboration with stakeholders.
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Themes and aspects of corporate responsibility
CORPORATE RESPONSIBILITY PRINCIPLES Caruna’s HSE (Health, Safety and Environment) policy describes our corporate responsibility principles:
• Our company, all personnel and business partners adhere to the applicable laws and other regulations, best practices and sector Our products standards. and services are • We develop our electricity network by taking into account health, safe, of a high safety and environmental concerns both in our daily activities and quality and easily long-term operations. available. • All our employees and business partners must be provided the opportunity to work in a healthy, safe and motivating working environment. • Our products and services are safe, of a high quality and easily available. • We promote the culture of good health, safety and well-being in all of our activities by setting goals, targets and plans of action in the spirit of continuous improvement.
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• We identify the environmental impact of our network assets and operations, and manage them carefully. We take into account the entire life-cycle of electricity networks. • We prevent and minimise any damage to people and the environment by systematic risk assessments. • We require our employees and business partners to commit to our responsible practices and common goals. • We collaborate with the municipalities, authorities, private land- owners and other external stakeholders. • Our operations are characterised by openness in internal and external communications, thus creating trust among customers, business partners and other stakeholders.
CORPORATE RESPONSIBILITY GOALS Caruna has set goals for selected corporate responsibility-related key figures for 2017. The key indicators and goals are shown in the following table.
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*SAIDI = System Average Interruption Duration Index. Average duration of power supply interruptions per customer. **KAH = Inconvenience caused by the interruption. The indicator shows the calculated inconvenience cost resulting from the interruption of supply, used to reflect the degree of inconvenience experienced by customers. ***TRIF = Total Recordable Injury Frequency. The indicator reflects the ratio of occupational accidents to Caruna’s employees, leading to absences from work or requiring medical treatment visits, in relation to working hours (incidents/million realised working hours). ****LWIF = Lost Workday Injury Frequency. The indicator reflects the ratio of occupational accidents to contractors or subcontractors while they work for Caruna or are within Caruna’s work sites, leading to a disability of at least one working day, in relation to working hours (incidents/million realised working hours) *****Materials recycling has been outsourced to Kuusakoski Oy from August 2015. The Kuusakoski collaboration concerns new contractor agreements. The goal is to achieve a 30%-recycling rate for materials from dismantled network sections and for those ending up at Kuusakoski in 2017. For older agreements, contractors are in charge of recycling. The recycling rate is set to increase in the future as more contract agreements will be covered by Kuusakoski collaboration.
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Reliable electricity distribution
Securing the reliability of electricity supply is the cornerstone of our operations. Our goal – reliable electricity distribution – also represents best possible customer service. We improve our network with a long-term view, to be able to meet the requirements of our customers and the society, both now and in the future.
++ During 2016, our focus was on the customer ++ We installed a total of 4,566 kilometres of experience, mainly in terms of the reliability cables underground in order to protect our of supply. network from adverse weather conditions.
++ We renovated and constructed our electricity ++ Our reliability of supply rate was 99.98%. network for EUR 238 million. ++ We upgraded our contingency and ++ With the network improvement projects, ca emergency plans needed in case of network 30,000 of Caruna’s customers got access to disturbances and exceptional circumstances. a medium-voltage cable network and more reliable electricity distribution.
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Electricity network in numbers
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Network maintenance and development As Finland’s largest electricity distribution company, Caruna owns over 82,000 kilometres of electricity network. We plan, construct and maintain our network to meet the current and future needs of our customers and the society. We monitor our network 24/7. Our contractors are on stand-by in our network areas, ready to carry out maintenance and We monitor our repairs in the event of faults. network 24/7.
Caruna is running a ten-year network improvement programme, installing more cables underground to minimise weather damage. We are committed to meeting our statutory targets by 2028, when we will be able to restore the power to our customers within six hours in urban areas and within 36 hours in rural areas. We invest roughly EUR 200 million into our network every year.
Goals for the reliability of supply defined in the Electricity Market Act
Our network improvement programme is guided, in addition to the target level of the security of supply outlined in the legislation, by the network’s age profile and growth, mainly achieved through new network connections and advancements in the society’s basic infrastructure, among other things. The network constructed now must be able to serve the Finnish society for the next 40 to 50 years and reflect the relevant changes in the consumption and production of energy, such as the electrification of traffic and micro production of electricity.
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Factors guiding our investments
We make the investments related to the reliability of supply in the order of their customer impact; prioritising those that benefit our customers the most. The actions will first be targeted into areas with the greatest customer density and quantity of distributed electricity. In 2016, we conducted more underground cabling work outside urban areas than before. The actions will We work on our network in large geographical blocks, which allows us first be targeted to optimise both the related purchases and environmental and technical into areas with aspects of the work. Project planning is guided by life cycle costs: even the greatest though underground cabling is slightly more expensive at the construction customer density stage compared to the traditional overhead lines, its maintenance and and quantity repair costs are lower. of distributed electricity. We also improve the reliability of electricity networks by various technical solutions. For instance, we are able to isolate faults and resume power supply to undamaged network sections faster, thanks to circuit networks and network automation. We also manage forest areas in close proximity to power lines.
Caruna’s Asset Management unit is in charge of managing the network assets.
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+ Case: The cabling of a low-voltage network calls for a glimpse into a crystal ball
Before starting to lay electric cables underground, it is important to consider and try to predict the needs of the network 40 years from now. We know, for example, that the low-voltage network of the future will be affected by the increasing popularity of electric cars and solar panels.
Caruna has already laid about 40% of its electricity network underground and in 2018 it will start cabling the low-voltage network that reaches all the way to customers’ homes and workplaces.
To ensure smart solutions, other future needs of the electrical network are also being piloted. A think tank resulted in a so called link cabinet that was first tested in 2015. The cabinet will be placed at the edge of the customer’s plot, and the idea behind it is to combine the customer’s meter reading centre and Caruna’s electricity supply in such a way that the cabinet will facilitate electricity distribution for as many different needs as possible. When building new constructions, the cabinet will also ensure an immediate electricity supply, whereas with the old operations model it takes about two weeks.
“In the future, customers may have their own renewable sources of energy, such as solar panels or even a small wind power station. The link cabinet would act as a connection point between the customer’s internal network and Caruna’s network, and consequently it would allow the use of alternative energy sources for other things too, besides the customer’s own immediate needs,” says Sebastian Ahlnäs, who is leading the project.
This new cabinet could also be used as a charging point for an electric car and in future it may even supply an optical fibre connection, allowing the customer to get their electricity and internet connection from the same source. The solution is currently being developed in collaboration with Aalto University.
“Aalto University stepped in when we wanted to make the cabinet look as pleasing as possible. After all, it will be installed in a visible place on the perimeter of the customer’s plot and it must blend in with the streetscape,” Ahlnäs explains.
Built in an area of 35 detached houses in Hyvinkää, the first pilot was a great success and led to further piloting in 2016 in two new areas, Mustio and Aura. The functionality of a total of 60 link cabinets as part of the underground electricity network are being tested in the pilot areas to find out how best to build a low-voltage network in 2018 and 2016 AT CARUNA – Report what structure it should have. REPORT 2016
ELECTRICITY NETWORK IMPROVEMENT MEASURES IN 2016 In 2016, we continued to make extensive investments into improving the reliability of supply in all our network areas. Renovation of medium voltage networks remained the main focus of our network improvement projects.
In total, we constructed roughly 4,566 km’s worth of small and medium voltage cable networks. The cabling level of the entire network was 40% by the end of 2016. With the network improvement projects, ca 30,000 of Caruna’s customers got access to a medium-voltage cable network and more reliable electricity distribution.
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Reliability of supply in 2016 In 2016, our network was spared any major damage caused by storms or heavy snowfall. The storm Rauli in August 2016 was the most significant single factor causing prolonged average fault repair times. Network improvements carried out from 2014 to 2016 decreased the impacts of the storm. Our reliability of electricity supply level remained on the same level as the year before; at 99.98%.
In 2016, the figure reflecting the frequency of supply interruptions, Our reliability of SAIFI (System Average Interruption Frequency Index), was 1.7. This electricity supply means that, on average, customers were subjected to less than two level remained on supply interruptions during the year. The SAIDI figure (System Average the same level as Interruption Duration Index), reflecting the average duration of supply the year before; at interruptions experienced by customers annually, was 95 minutes. 99.98%.
The key figures also take into account planned supply interruptions. The number of planned supply interruptions has increased because Caruna is running a major network improvement programme, and the commissioning of new network sections results in supply interruptions to customers. We inform our customers of these interruptions in advance.
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Preparedness for exceptional circumstances The society is increasingly more dependent on a reliable supply of electricity under all conditions. Interdependencies between critical electricity and IT networks and customers have been analysed, for instance, in a study by the National Emergency Supply Agency.
We strive to guarantee an electricity supply service that is as free as possible from disturbances. In case the supply of electricity is The electricity interrupted, Caruna, as the operator of the distribution network, has to interruptions inform its customers and the authorities in charge of rescue operations map offers our without delay. Customers and the authorities must also be provided with customers up-to- an estimate of the extent and duration of the interruption. The authorities date information receive the information through the Critical Infrastructure Disruption about supply Control Room Cooperative Group (Krivat in Finnish), a portal used by the interruptions and authorities and infrastructure organisations critical for the security of estimated repair supply.häiriö- ja vikatilanteista saamiemme kokemusten perusteella. times. The electricity interruptions map on our website offers our customers up-to-date information about supply interruptions and estimated repair times. The number of customers affected by interruptions in Caruna’s electricity supply is also shown in the electricity outages map on the Finnish Energy website (Energiateollisuus ry). Our customers can also subscribe to the free alert service Caruna Sähkövahti that informs users of outages directly to their mobile phone or e-mail. We also give our customers advice on how to prepare for electricity supply interruptions.
Caruna has drawn up contingency and an emergency plans for network interruptions and exceptional circumstances, as required by the Electricity Market Act. The contingency plan covers electricity network disturbances under normal conditions, such as interruptions caused by natural phenomena. The emergency plan, in turn, describes how to secure the reliability of electricity supply under emergency law conditions in case of serious external or internal threats. We keep refining these plans and our practices on the basis of experience gained from disturbances and failures.
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Preparedness for exceptional circumstances
The contingency and emergency plans required by the Electricity Market Act must be updated regularly. We submitted the most recent updates to the authorities in June 2016. We review our plans four times a year to ensure an appropriate level of continuity management. Caruna’s Network Operations unit is in charge of contingency and emergency plans. The Head of Security ensures the plans are up to date and appropriate reports are submitted to the authorities.
Caruna takes part in contingency and emergency organisation activities organised by the authorities, with the purpose of ensuring collaboration and readiness in all situations.
SECURITY OF SUPPLY As the largest distribution network operator in Finland, Caruna is considered a critical company for the security of supply. Security of supply means the ability to handle disturbances and crisis situations with a minimum amount of special arrangements and damage. We are prepared to maintain our ability to supply electricity on the current supply security level even during a longer crisis. We are prepared We took part in five energy security training events coordinated by to maintain our the authorities in 2016. By investing in the reliability of our electricity ability to supply network, we ensure the security and reliability of supply, particularly during disturbances caused by the climate. electricity even during a longer crisis.
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+ Case: Caruna prepares for storms and snow-burdened trees by participating in several drills a year
Imagine if electricity, the Internet and mobile phones stopped working, sewers became blocked, radiators stopped heating and no fuel was available at petrol stations. This is a possibility if a storm causes trees to fall onto power lines, or snow-laden branches dip down onto the overhead lines, preventing the distribution of electricity for an extended time.
Caruna is preparing itself for situations like this by compiling preparedness plans and engaging in regular drills. In 2016, Caruna rehearsed their preparedness for disturbances through various cooperation and emergency drills a total of six times. The purpose of these drills is to refine the cooperation between Caruna, the rescue services, teleoperators, contractors, Fingrid and other local electricity network companies, as well as municipalities and the Centres for Economic Development, Transport and the Environment.
“Caruna plays a significant role in our society as a large distributor of electricity and therefore it is important that its emergency response processes are in place and that they have been rehearsed in case of a crisis. Caruna is well-organised and proactive in this area and its level of preparedness is excellent. Many small companies may have just one person in charge of all their emergency preparations,” says secretary of the Alvar Commission of Western Finland from the National Emergency Supply Agency, Petri Jokilahti, who coordinated the Länsi-Myteri drill.
Organised in May, the Länsi-Myteri drill was a typical cooperation exercise. It involved simulating the destruction caused by a storm, such as outages caused by trees that have fallen on electricity cables due to heavy snow burdens and winds of more than 20 metres per second. Jokilahti points out that climate change is causing increasing numbers of heavy low-pressure storms, which is why more storm preparation drills have been organised in the last few years than before.
The main target of the drills is to improve cooperation between the different participants and to boost the recognition of critical actions. In a fierce storm, there must be close cooperation to pinpoint the disturbance quickly, because the standby batteries of base stations only provide electricity for a few hours.
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Updates of the situation will be communicated, for example, via the nationwide Krivat system which operates outside the public Internet and mobile telephone network on a fixed broadband platform maintained by the State Security Networks Group. If needed in a crisis, a contact person from the Länsi-Uusimaa Rescue Department can be invited to the Caruna offices to pass on information about the situation to other rescue departments within Caruna’s area.
“During the Länsi-Myteri drill, we discovered that having up-to-date contact information is crucial in disturbances that require a rapid response. Changes in the operating environment and technology emphasise the importance of up-to-date action plans and continuous training,” concludes Jari Ahlstedt, Operation Manager at Caruna and one of the drill planners and coordinators.
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Safety
We consider safety of primary importance in all of our operations. Our goal is to ensure that our electricity networks or operations do not cause any danger or harm to people or the environment.
++ We achieved our best result so ++ Caruna’s safety management system was far in the injury frequency of certified in accordance with the international contractors. safety management standard, OHSAS 18001:2007.
++ In 2016, the Zero Accident Forum run by ++ We gave out Caruna safety awards the Finnish Institute of Occupational Health to our contractors for the assigned Caruna the highest possible second time. category in occupational safety, for the second year running.
++ Our project supervisors and contractors ++ Through our network improvement carried out over 2,200 work site inspections programme, we supported and promoted the and Caruna’s own employees completed security of supply and safety in the society. nearly 500 safety observation rounds, also referred to as ‘Safety Walks’.
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Safe electricity network
In Finland, the basic requirements for electrical safety are defined in the Electrical Safety Act. We design, construct and maintain our electricity networks in accordance with statutory regulations, sector standards and best practices.
One of the requirements of the Electrical Safety Act is that electricity networks may not cause danger. We pay particular attention to safety in our network design and network component selection, as well as in the requirements and supervision regarding construction sites and electrical work. The overall responsibility for safety management was transferred to the Head of Network Operations at the end of 2016.
We identify and evaluate risks and hazards related to our electricity network and operations on a regular basis. We assign potential safety flaws into categories and repair them in the order of urgency; either as One of the immediate fault repairs, in connection with maintenance scheduled for the requirements near future, or within the next few years within projects included in our of the Electrical long-term network improvement programmes. Safety Act is All of our electrical equipment bears warning plates to indicate the danger that electricity of electric shock. We prevent any intentional or unintentional access to networks may not electrical equipment by locks, structural solutions and careful placement cause danger.
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of equipment. We repair all faults with the potential of causing danger and remove any trees fallen on the lines as quickly as possible. We mark off work sites and provide clear signage to ensure outsiders cannot accidentally enter these areas.
Caruna’s networks are subjected to occasional electricity-related accidents and near misses every year. The majority of these are due to failure to follow safety regulations regarding electrical work. We report any electricity-related accidents and near misses immediately to the Finnish Safety and Chemicals Agency (Tukes), to share information and to improve the electrical safety in the sector.
In 2016, two near miss incidents to third parties took place in our network areas. In both cases an electric discharge caused a minor fire in the open but neither resulted in personal injury.
SAFETY OF THE SOCIETY The reliability and security of electricity supply has an indirect impact on the safety of the entire surrounding society. Our network improvement programme boosts the operational reliability of users who are critically dependent on uninterrupted supply and minimises the probability of adverse effects to the society. Such critical users of electricity can be, for instance, hospitals, nursing homes, public transport, teleoperator base stations, water supply plants and waste water treatment plants.
CUSTOMER SAFETY Ensuring customer safety is an integral part of Caruna’s safety management. If our electricity network suffers damage, we repair the faults quickly.
We monitor the quality of electricity and faults via remotely readable meters. We regularly analyse any atypical data registered by the meters to identify possible faults in the electricity network or customer’s meter reading centres. We investigate and repair unclear cases. In 2016, remotely readable meters helped us find 358 faults in the electricity network or customer’s meter reading centres. We repaired them immediately.
We have also trained our customer advisors to identify different types of faults on the basis of descriptions by customers.
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Occupational safety We require that all our employees and partners be offered the opportunity to work in an environment that is healthy, safe and motivating. Our goal is to entirely avoid all accidents.
Occupational safety requires collaboration between all parties working at the office, site or projects. Risk assessment is fundamental for safety at work sites. We require both ourselves and our partners to monitor continuously the risks and dangers associated with work methods and environments. We draw up a safety plan for each project and keep it up to date.
We require that all deviations are reported and investigated, that Our goal is to corrective or preventive measures are set up for them, and that the entirely avoid all progress of these measures is followed up. We share with our partners accidents. what we learn from the investigation of deviations, to help prevent further similar occurrences throughout the supply chain. Caruna is a member of the Zero Accident Forum of the Finnish Institute of Occupational Health and committed to the concept of ‘zero accidents’.
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+ Case: Caruna ranks among the top in the world in occupational safety
For the second year in a row, Caruna has achieved the best rating in the occupational safety classification granted by the Zero Accident forum of the Finnish Institute of Occupational Health. A total of 67 companies achieved the Zero Accident category and 29 made it to the top of the world category.
The Zero Accident forum grants annually classifications to workplaces that have invested in the continuous improvement of safety at work. In considering the classification, the forum looks at the level of safety at the workplace through, for example, its accident frequency and management practices. The notification and investigation procedures for occupational accidents and dangerous situations must be in order both for the company’s own staff and contractors.
In 2016, Caruna’s safety management system was certified according to the international standard, OHSAS 18001:2007.
“Safety is a key part of all our operations and we commit to it fully, from top management down,” says Piia Häkkinen, Head of Health, Safety and Environmental Issues.
Caruna’s current development priority is the improvement of contractor safety.
“At worksites, safety is even more important than for us office workers. This year we have invested particularly in training the whole procurement chain, supervision at worksites, boosting contractors’ self-monitoring processes and making the reporting and processing of pro-active indicators, such as near misses and safety observations, more efficient. Also, supplier auditing is a central part of our safety management system. These audits ensure that our contractors have the basics under control,” Häkkinen says.
According to Häkkinen, common safety practices must be put into practice and the whole subcontracting chain must be trained on them. Every worksite has its own safety plan that is based on the recognition of risk factors and on risk assessment. Everyone working on the worksite, regardless of who their employer is, must be familiarised with the safety plan. Separate, written plans are required for jobs that present a special danger, such as demolition or explosion work.
“One of our contractors is implementing a good practice on securing the safety of the subcontracting chain. They have divided their own subcontractors by risk category and
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plan safety measures carefully according to them,” Häkkinen explains.
Caruna’s contractors and subcontractors are required to take an online course on safety and the environment. The course deals with the basics of safety. After completion, the course qualification is valid for three years, and more than 1,500 people have now completed the course, which was updated in 2015.
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We monitor the safety of our work environment and operations by conducting regular inspections and safety observation rounds, also referred to as ‘Safety Walks’. Safety Walks are safety-oriented, interactive rounds at work sites or offices. They focus on people, safe working methods and the conditions, whereas site inspections usually tend to focus on techniques and safety deficiencies.
We have set our personnel Safety Walk goals based on their tasks. During 2016, our employees completed a total of 492 Safety Walks.
Work site inspections, on the other hand, are mainly carried out by the project supervisors of our partners. We require our contractors to monitor the work sites and send us safety reports. We help them in these tasks by providing mobile tools that enable them to send reports directly from the field, attaching any necessary photographs. In 2016, our project supervisors and contractors recorded a total of 2,200 work site inspections.
CONTRACTOR SAFETY The requirement of safe work and work environment applies equally to all of Caruna’s personnel, contractors and subcontractors. We agree on safety rules and practices when entering into collaboration agreements. We give induction training to all of our contractors and require all subcontractors be presented to us for advance approval.
LWIF (Lost Workday Injury Frequency), the indicator tracking contractor and subcontractor safety, is one of our key indicators. It reflects the ratio of occupational injuries to contractors or subcontractors while they work for Caruna or are within Caruna’s sites, leading to a disability of at least one working day, in relation to working hours. The indicator We have systematically enhanced our reporting systems for contractor tracking contractor injuries and working hours from 2011. The peak of contractor injuries and subcontractor was seen in 2013, which is partially explained by more efficient reporting safety is one of our procedures. We have been able to cut down on the frequency of injuries, key indicators. thanks to training, induction and systematic handling of anomalies. In 2016, the contractor injury frequency was at its lowest during our entire reporting history: 5.2 (incidents/million realised working hours). Our goal for 2017 is less than 8.
We are also monitoring serious contractor injuries. An injury is classified as serious if it leads to a disability of at least 30 days or a permanent disability.
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We had three serious contractor injuries in 2016, two of which involved subcontractors working for a main contractor. In January, a technician fell down from a pole, breaking his shinbone. In February, a subcontractor stumbled on uneven ground at the work site and landed hard on his hand, resulting in a broken wrist. In July, the lifting tool used with cable drums fell down and hit a member of the excavation contractor’s staff who suffered a broken heel. The improvement of subcontractor occupational safety in collaboration with main contractors is one of the key areas we focus on in safety matters in 2017.
We reward our partners for good safety-related work and address any shortcomings. In 2016, we gave Caruna’s second safety award to We reward our contractors who excelled in improving safety at work. In the company partners for good category, we presented the award to Infratek Finland. They emphasise safety-related preventive actions in their safety practices, which can be seen in the work and address safety statistics: the company did not sustain any injuries leading to absence in 2016. any shortcomings.
In the individual category, we rewarded two people: Mikko Iso-Räsy from Voimatel and Taneli Vihanto from Rejlers. Iso-Räsy prevented damage by being very vigilant when carrying out a connection programme. Vihanto has worked hard to refine the role of safety coordinator in collaboration with contractors.
SAFETY AND ENVIRONMENTAL TRAINING We train and provide induction for both our own personnel and the personnel of our partners in matters related to safety and the environment.
An online course in safety and environmental matters is obligatory for everyone working at Caruna’s work sites. In 2015, roughly 600 contractors took the course, and in 2016, roughly 900. An online course on electrical safety at the work site is recommended for all who work at any work site. This course was taken by roughly 400 contractors in 2015 and by 700 in 2016.
We also provide our partners various types of training on safety and environmental matters, such as training on duty service, fault detection, land-use planning, major disturbance situations and management of adjacent forest areas. More than 1,700 people attended these courses in 2016.
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Environment
Our goal is to manage our environmental impacts in such a way that our electricity network and our activities pose no risk or harm to the environment at all.
++ In 2016, Kuusakoski processed about 15% ++ Caruna pledged to improve its energy of the demolition materials from Caruna’s efficiency by continuing to the next network projects and the rest was dealt with period of the Energy Efficiency by contractors through their contractual Agreement from 2017 to 2025. partners.
++ In their first year, the solar panels fitted onto ++ In 2016, we phased out 250 pole the roof of our head office produced more transformers from groundwater areas in than 14 MWh of electricity for the building. order to reduce the risk of groundwater contamination caused by oil spills. ++ The quantity of oil spills remained the same: there were seven involving more than 100 kg of spillage.
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Key environmental impacts We identify and assess our environmental impact on a regular basis. The following table lists the most important environmental impacts associated with our operations, as well as the main measures for managing them.
table continues on the next page >
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Use of materials We have made large investments to ensure a weatherproof and reliable electricity network. The numbers of purchased components for network building and the quantities of raw materials these contain are also considerable. Underground cables, pad-mounted secondary substations and distribution transformers are the main components of networks. We subject our material acquisitions to strict requirements right from the time tenders are invited. Environmental impacts, for instance, are given considerable weight in the consideration of these tenders. We investigate the component material compositions, potentially dangerous and hazardous characteristics, safe use and correct recycling at the end of their life cycle during the acquisition stage.
We connect almost 4,000 new distribution transformers to our electricity network every year. In terms of raw materials, this signifies roughly 400 tonnes of aluminium, 1,500 tonnes of steel and 600 tonnes of mineral oil. The new distribution transformers we use comply with the Ecodesign Directive.
The cables we use contain only aluminium as their conductive material. Annually, we acquire at least 1,500 kilometres of cable which contains about 1,300 tonnes of aluminium.
We acquire some of the materials we use directly and some indirectly via our contractors. Since 2016, we have increased our direct acquisition of materials. This clarifies our follow-up and reporting procedures.
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Requirements for land use and landscape impacts
Electricity networks have both a physical and visual impact on their environment. Considerable investments into weatherproof underground cable networks reduce the restrictions and harmful effects related to the use of land near electricity networks and free the land for other uses. Landscapes and sceneries improve as overhead cables are eliminated.
We strive to reconcile the needs and expectations expressed by various stakeholders, regarding the selection of power network routes and structures. Whenever possible, new electricity networks are built alongside roads and in public areas. Smooth collaboration with land owners, municipalities, ELY Centres, the National Board of Antiquities, environmental organisations and other stakeholders in all matters regarding land use is of primary importance.
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Biodiversity Underground cabling protects biodiversity and lessens the impact of electricity networks on plants and animals. We also do our best to prevent the risk of bird collisions and electric shocks by installing marker balls on overhead lines and landing perches on poles.
We assess the impacts of our network improvement programmes on biodiversity right from the planning stage and when applying for the necessary licences.
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Energy usage The majority of the energy used by Caruna consists of the transmission and transformer losses of the electricity network. The distribution of electricity always involves some loss, and the electricity distribution company is responsible for it. We strive to enhance the energy-efficiency of our networks and to reduce losses. Since the autumn of 2015, all new distribution transformers used by Caruna are low-loss ECO transformers compliant with the updated EU Directive.
We use CO2-free (zero carbon dioxide emissions) electricity to compensate for grid losses. In 2016, we purchased 389.3 GWh of electricity to compensate for the loss of electricity.
In addition, the standby power plants in our network area require small amounts of fuel. Our contractors acquire the fuel needed.
OWN CONSUMPTION OF ENERGY
Caruna’s own consumption of energy mainly consists of the electricity and heat energy used in our office buildings. The majority of our own Caruna’s own energy consumption takes place at our premises on Upseerinkatu in Espoo consumption of where we moved in September 2015. In 2016, we consumed 2.21 GWh of energy mainly electricity and 1.82 GWh of heat energy. consists of the electricity and heat The majority (nearly 75%) of the energy is used for cooling down energy used in our the servers and the substation control room, as well as for cooling, office buildings. heating and ventilating the rest of the building. Other significant energy consumption functions are water heating and lighting, for instance. The energy consumption of the restaurant operating in the building has not been taken into account in Caruna’s energy consumption.
In the Upseerinkatu offices, we use ground heat as well as district heating for operating the air conditioning.
OWN ENERGY PRODUCTION
Caruna has two production sites for solar power whose main purpose is to collect first-hand experience of decentralised energy production. Caruna has two production sites At the end of 2015, we had 110 solar panels installed on the roof of our for solar power. offices on Upseerinkatu. The nominal output of these solar panels is
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roughly 29 kWp. In 2016, their total energy production was over 14 MWh, which we utilised on the premises.
In addition, there are 119 solar panels on the roof of our primary substation in Keilaniemi, Espoo. In 2016, their total energy production was over 24 MWh. We used about 10 MWh of this at the substation and transferred the rest to our distribution network to compensate for network losses.
ENERGY EFFICIENCY AGREEMENT Energy efficiency is a key part of Caruna’s environmental responsibilities and customer cooperation. We have been involved in the National Energy Efficiency Agreement and the Energy Conservation Agreement preceding it since the beginning of the agreement system in 1997. The previous agreement term closed at the end of 2016, and Caruna also acceded to the contract of the new agreement season 2017–2025.
We are committed to taking energy efficiency into account in all our Our extensive internal operations and to make our own energy consumption more effective, especially when it comes to grid losses. Our extensive network network improvement programme reduces network losses. We take losses into improvement account and reduce them also through careful network planning, our programme choice of components and the optimisation of the basic connection state. reduces network losses. In addition, we are committed to improving our customers’ awareness of their own energy use and the potential for making it more efficient. We offer them, for example, an energy reporting service, energy efficiency counselling and guidance in adopting their own energy production.
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Greenhouse gases Sulphur hexafluoride, or SF6, is a potent greenhouse gas, but also an excellent insulator in electrical devices. Due to the use of the gas, SF6- isolated devices are equipped with moisture protection, which decreases the risk of inadvertent electric shocks and enhances both the safety of the network and the occupational safety of our contractors.
We monitor all equipment for potential SF6 gas leaks and minimise the possibility of environmental impacts resulting from such leaks by systematic control, inspections and maintenance. We also monitor the SF6 gas status of all equipment while carrying out regular inspections. Any gas leaks and doubts related to gas meters are documented and recorded. We keep a record of our SF6 gas balance and leaks, and report this data to the branch organisation Finnish Energy (Energiateollisuus ry) once a year. We require all contractors handling SF6 gas to hold the required skills and knowledge. Caruna’s use, handling and recording of SF6 gas were included in internal audits in 2016.
In 2016, the total quantity of SF6 gas present in Caruna’s electricity Use, handling and network was 9,610 kg. Approximately a thousand of the 26,000 secondary recording of SF6 substations in Caruna’s medium and low voltage networks contained SF6 gas were included gas. Caruna’s high-voltage network included a little fewer than 700 SF6- in internal audits isolated components. The amount of SF6 gas emitted into the atmosphere in 2016. was 23.29 kg, representing 0.24% of the total quantity of the gas. The emission quantity grew considerably from previous years due to the gas leak caused by damaged equipment at the primary substation in Gumböle, Espoo.
With new contracts on pad-mounted secondary substations, we will begin to use more and more entirely sealed, gas-insulated SF6 medium voltage switchgear in 2017. They are more reliable and safer to use than ever.
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Dismantling and recycling of electricity networks As we replace overhead networks with underground cables, considerable amounts of material needs to be disposed of, such as transformers, iron, conductors, cables, general waste, impregnated wooden poles, glass, porcelain, concrete and copper.
Up to the autumn of 2015, most of the dismantled materials (excluding poles and transformers) were handed over to our contractors, who provided us with regular reports on dismantled material quantities.
In August 2015, we signed a service contract for the transport and In 2016, processing of dismantled materials with Kuusakoski Oy. As agreed, Kuusakoski Kuusakoski is responsible for the collection of such material from processed 4,400 worksites and its further processing. Impregnated poles are an exception tonnes of the to this procedure; Kuusakoski only transports them from worksites to demolition waste Ekokem’s combustion plants. In the future, we will be able to monitor from our network all materials recycled by Kuusakoski in real time. In 2016, Kuusakoski projects. processed approximately 15%, i.e. 4,400 tonnes, of the demolition waste from our network projects.
In 2016, we dismantled 3,000 tonnes of impregnated poles from our network. Their processing and disposal is subject to tight regulations. A previously common impregnant, CCA, contains toxic and carcinogenic substances and its use on new poles has been banned since 2006. Creosote is another commonly used but carcinogenic impregnant, but Caruna has not used any creosote-treated poles since 2007.
If we notice any loss of poles at the dismantling sites, we report it to the police.
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Environmental damage In our type of operations, a typical example of environmental damage can be leakage of transformer oil into the environment as a result of a damaged transformer. In Finland, over 50% of all transformer damage is caused by lightning.
Oil collectors are installed under building and pad-mounted secondary substations and primary substations, to prevent oil leaking into the environment because of transformer damage. Pole-mounted transformers are susceptible to weather conditions and do not have integral oil collectors. Each pole transformer contains roughly 100 to 200 kg of mineral oil, but usually only a small amount of this would end up in the environment even if the transformer suffers damage.
We clear up any oil leaks as soon as possible and verify the effectiveness In 2016, we of the purification process from soil samples. Information about oil leaks launched a and purification process reports are submitted to the authorities; in this renovation case to the local ELY Centre. programme for pole-mounted In 2016, our electricity network suffered a total of 34 oil leaks, of which transformers in seven were slightly over 100 kg in magnitude. There were no extensive oil groundwater areas leaks or environmental damage caused by oil leaks. with the target of minimising In 2016, we launched a renovation programme for pole-mounted environmental transformers in groundwater areas with the target of minimising the risk damage. of groundwater contamination caused by oil spills. From 2016 to 2018, we will replace all pole-mounted transformers in groundwater areas with pad-mounted secondary substations equipped with oil collectors. During the first year of this project, we removed 250 pole-mounted transformers from groundwater areas. There are still 1,150 such transformers left.
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Environmental goals We intend to keep improving the energy and materials efficiency of our operations, decreasing any adverse effects on the environment and enhancing the recycling of used materials.
During 2017, we aim to significantly cut down the number of pole-mounted transformers in groundwater areas, both as part of our network improvement programme and our renovation programme for pole- mounted transformers in groundwater areas. The number of oil spills will fall as our network improvement programme progresses.
We will also strive to raise the recycling rate of dismantled networks in We will strive to collaboration with Kuusakoski. Our target is for Kuusakoski to process the raise the recycling dismantled material in 30% of all our projects in 2017. rate of dismantled networks. Our key environmental goals for 2017 are recorded in the table on corporate responsibility.
In order to achieve our environmental goals and reduce the environmental impacts of our operations, we train both our own employees and our contractors.
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+ Case: Up to 30,000 bees buzzing around Caruna
Caruna’s bee experiment in the summer of 2016 produced 99 kilograms of honey. More important than the honey harvest, however, is the significance of the bees to the world.
Without bees, there would be few plants and consequently little food for us. The various species of bees have been estimated to pollinate 75–85% of the plant species in the world and without them many plants would not be able to reproduce. Urbanisation and pesticides, for example, have reduced the number of these pollinators, which is already hindering food production in places.
This gave one Caruna employee the idea that Caruna could introduce its own beehives. This would even out Caruna’s carbon footprint and give it a chance to do its bit to sustain our ecosystem.
The buzzing occupants on the roof of Caruna’s office produced almost a hundred kilograms of honey. The harvest was only half of what was expected, but even so it provided plenty of sweetness for the needs of the staff canteen and as presents for the staff. There were two reasons for the poor yield: the rainy summer and the growing season starting two weeks ahead of time, which was evident in honey harvests all over the country.
No bee stings were suffered during harvesting. Although the staff dared not make the acquaintance of the bees buzzing on the roof, the bee experiment received only positive feedback, says Property Manager Antero Lehtonen. The greatest reason for this was the skilful beekeeper Jas Stanislav, who is a board member of the Finnish Beekeepers’ Association and takes care of 40 hives every summer at four bee farms in Espoo and the surrounding area. It is critical to tend to bees regularly to prevent them from forming into swarms and seeking a new place for a hive.
“The bee-keeper changed the honeycombs and fed the bees once a week with a special solution. During the summer, we had three different-tasting and different types of honey harvests, and we sent samples of each to Belgium to be studied in order to find out what plant species they contain,” Lehtonen explains.
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Our personnel
Competent employees who have the necessary expertise and who feel happy and satisfied at work are the cornerstone of our success. During the year, we focused our efforts on improving the well-being of our personnel, strengthening their customer-oriented approach and expertise, along with work rotation and listening to what our employees have to say.
++ The main theme of our personnel ++ We practised giving and receiving feedback development was improving their customer- and charted our joint know-how in oriented approach, which was supported with competence games that involved the entire several events and various training. staff.
++ Both short-term and long-term work rotation ++ The amount of training offered increased a grew more popular. great deal from the previous year.
++ Once again, our summer intern programme ++ Our investment in well-being at work paid off: was extensive and successful – many of the 74% of our employees feel that their well- interns continued working for us part-time in being is being looked after at work. the autumn.
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Key figures on personnel
No significant changes occurred in the number of Caruna personnel during 2016. Employee turnover rate was approximately 5.9 percent in 2016. We hired 21 new permanent and 10 fixed-term employees. Of all the employment contracts, 18 (6.6%) were fixed-term and 5.1 percent were part-term.
We employ roughly twenty fixed-term summer interns a year to perform various roles. They act as stand-ins for regular employees who are taking their summer holidays, or as compilers of various theses and final year projects. In addition, Caruna had 22 temporary agency workers at the end of 2016. We use them to even out peak periods especially in customer service tasks, but also in IT projects.
In Caruna’s operational model, contractors and subcontractors play a key role in network building and maintenance. We directly provide jobs to some 2,000 people and indirectly to 4,000 people in Finland.
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Job satisfaction We regularly assess the job satisfaction of our personnel. In the autumn of 2016, we had the extensive Kaiku employee survey done for the second time. We also completed three brief Pulssi surveys. The Kaiku survey gave our employees the opportunity to suggest development actions and to give open feedback on matters affecting their job satisfaction. The engagement index in the last survey of the year was 65 (2015: 76). Although this is still a reasonable result, we take it being lower than the previous year very seriously and immediately embarked on corrective action.
The results of the Pulssi survey provided a basis for team-specific development plans. The results showed that people find their own tasks meaningful and the work community good. There is room for improvement in internal cooperation within the company, customer orientation and opportunities for personal development. These were the same themes that came up in the autumn of 2015. The 2016 study also demonstrated that the quality of supervisor activities varies.
Some measures relating to these development areas were already launched at the beginning of 2016. In order to improve internal cooperation, we encouraged our personnel to engage in work rotation, which will help to increase their understanding of each other’s duties and roles within the organisation. Caruna’s Management Team lead by their example and each member of the team spent at least one workday shadowing, for example, a member of the customer service team.
The development of the customer experience was the theme of the year at The development Caruna. In the autumn, we communicated our new customer strategy and of the customer customer paths to our personnel during a shared day-long development experience was the event. Everyone at Caruna had an opportunity to influence the way we will theme of the year improve the customer experience in the future. at Caruna.
Over the year, almost everyone at Caruna participated in the competence game, which involved fellow workers discussing their development within Caruna’s shared areas of competence and giving each other feedback, as well as tips and advice for future development. As a form of improving competence, work rotation and shadowing a colleague (i.e. watching them at work) grew more popular.
In 2016, we also inspected the company’s management model. At the end of the year, we reconstructed our management team work and will continue its development in 2017. Also, the targeted support of supervisor activities will be launched in 2017. 2016 AT CARUNA – Report REPORT 2016
Case: The COP network creates a comfortable + atmosphere outside working hours
Caruna’s recreational employee network COP proves that people at Caruna are an open and outgoing bunch.
What if you could hang out with your workmates outside of work too? Established a year ago, the Caruna Organized Professionals, i.e. COP, offers an opportunity to get to know other people from Caruna at after-work events, spend time together at sauna evenings or go and see a colleague’s musical together. COP also opens a door to networking events where you can meet employees from other companies.
“The best thing about the COP network is that you get to know your workmates through leisure activities. It’s a pleasure to realise how much professional skills and competence we have at Caruna. The network is a great way to build community spirit and everybody is welcome to join. These days, when I bump into people in a corridor or lift, it’s always someone I know,” Petri Lagerqvist, one of the founders of COP, smiles.
COP is part of the nationwide Finland Young Professionals network. Despite its umbrella organisation’s name, COP activities at Caruna are intended for everyone regardless of age, and today some 50 Caruna employees take part in them. The core team currently consists of 5–6 members, and people from all walks of life at Caruna are welcome to join and chip in with new ideas. You can decide yourself how active you want to be, but be prepared for COP to become an important part of your life.
“At our first meeting a year ago, we got to know each other using the speed-dating concept. You discover completely new aspects of your colleagues when you have a chance to talk about more than just work. Then if you come across a problem, you know exactly who to turn to and it’s easy to ask someone you already know for help,” Online Services Manager Lagerqvist sums up.
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Workplace well-being Over the year, we supported the preservation and development of working capacity in many ways. Together with Diacor, the organisation in charge of our occupational health care, we carried out three workplace surveys focusing on physical, mental and social stress factors. Diacor also organised some small-scale lectures, for instance, on stress management and getting into a relaxed state before starting a holiday.
Over the year, we continued training supervisors in Caruna’s early support model. The purpose of early support discussions is to intervene early on in any problems reducing an employee’s ability to work, to prevent prolonged absences and ease their return to work.
Our occupational well-being team coordinates wishes received from Our personnel gave employees and strives to bring good energy to the working day through occupational well- a comprehensive supply of services. In 2016, the most popular parts of being a better than this supply were the sports and culture perk Smartum, energy tests for measuring fitness level, advice and guidance at our own gym, outdoor average score for recreation day, theatre events and expert lectures. In the job satisfaction the industry. survey, our personnel gave occupational well-being at Caruna a better than average score for the industry.
Diacor’s occupational health care was complemented by the services of the Enerkemi Insurance Fund. As in the previous year, we offer our personnel the opportunity of flexible working times, home care services for a sick child and telecommuting.
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Personnel development We want to provide our current and future employees a good place to work and develop as a skilled worker, expert or manager. In 2016, a Caruna employee used an average of 31.5 hours on training, which is three times more than in 2015. The main reason for this strong growth was the training given on our new data systems and the competence game whose aim was to support personal development.
We prioritise safety and the environment in all our activities and We prioritise emphasise them also in our training. Over the year, other areas of focus safety and the included training in our renewed business processes and systems, the competence game designed for feedback and the communication of environment in all Caruna’s core competences, as well as interaction and communications our activities and training. Additional training themes included electrical engineering, emphasise them occupational safety, supervisor activities and management, as well as also in our training. data systems, which changed considerably over the year as part of the founding of Caruna’s own financial administration and HR management services.
In the autumn of 2016, we created the Caruna Academy concept. The academy’s lectures deal extensively with Caruna’s business activities. They are open for everyone and can be viewed as recordings after the event. We will continue to develop this concept in 2017.
HIGHLIGHTING COMPETENCE The Caruna Talent operations model is a key tool for the development of Caruna’s personnel and helps us to identify the skills and skilled persons crucial for the company’s future. The model focuses on strengths and development opportunities, as well as the quality of feedback and continuous interaction. As a result, we will have a general impression of the focus areas for development, as well as concrete development plans whose realisation we will monitor regularly.
Based on the feedback from our personnel, among other things, we reconstructed the development model for our employees’ performance in the autumn of 2015. In accordance with the new model, in 2016 we emphasised one-on-one discussions between a supervisor and the people working under them that take place regularly but following a flexible cycle, and development discussions that support an employee’s comprehensive performance, development and well-being at work.
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Principles of remuneration To us, remuneration is an approach that supports occupational well- being and includes both material and immaterial benefits. At Caruna, our principles for remuneration include fairness, transparency and competitiveness. We have categorised pay grades according to a competence classification to ensure fair remuneration. We strive to reward people in a competitive manner and participate annually in pay studies, which provide information about developing remuneration.
Remuneration is directed by an individual’s performance and the achievement of the company’s strategic targets. Every Caruna employee with a permanent work contract belongs to the performance bonus system. In this system, parts of the targets are shared with everyone in the company and some are personal. For the first time, it was possible to transfer all or half of the performance bonuses paid in 2016 to a fund.
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Caruna’s supply chain We carry out our network investment and repair work with the help of our contractors and their subcontractors. In addition, we have outsourced our project management supervision during construction in order to be able to guarantee sufficient capacity and expertise in the monitoring of the electricity network’s building and maintenance.
At Caruna, we are in charge of the general planning of the electricity network, which is based on the reliability, age and maintenance analyses of the network. Our contractors draw up terrain and electrical plans based on Caruna’s instructions. Caruna then approves the plans, the contractors build the network and the network is put into operation in cooperation with the contractors. The operator in charge of project management supervision oversees the activities during construction and also performs the checks during the guarantee period. Any anomalies are documented and photographed using mobile devices in order to ensure clear reporting.
In 2016, Caruna had thirteen main contractors and 238 subcontractors In 2016, Caruna building its networks. Due to the growth of our project sizes, contracting had thirteen has been centralised to a fewer number of large main contractors main contractors than earlier. Caruna’s contractors reported that their share of foreign and 238 workers was less than one per cent of the total workforce. subcontractors building its Contractors may use their own subcontractors to fulfil their contractual networks. obligations after Caruna has approved the subcontractor. Subcontractors must observe the same principles and requirements as the main contractors and commit themselves to Caruna’s instructions and obligations. We began regular contractor auditing in 2016.
Through our sourcing, our operations have considerable direct and indirect financial impacts. Our projects provide employment directly or indirectly to thousands of people around Finland.
SUSTAINABILITY REQUIREMENTS In all our contracts, we set suppliers strict requirements to which every partner must commit themselves. The contracts are founded on Caruna’s contractual practices which take quality monitoring and risk management into account. All partners must also commit themselves to observe Caruna’s Supplier Code of Conduct, which obliges contractors to act according to Finnish legislation and regulations. Therefore, all contractors
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must observe at least the rules and regulations of the generally binding national collective agreements on the terms and working conditions of employment relationships.
Sustainability requirements are a part of our documents relating to The requirements competitive tendering. The requirements concern, for example, financial concern, for stability, working conditions, client liability and taking environmental example, financial factors, such as material recycling, into account. stability, working conditions, client A person working in Caruna’s network building is required to speak liability and taking Finnish to ensure occupational safety. The legislation imposes certain environmental requirements on the use of foreign workers. Caruna treats all its service factors into and material suppliers equally and without discrimination, observing the account. EU-level public procurement legislation on special sectors.
We exclude suppliers from competitive bidding who have been sentenced for the crimes mentioned in Act 349/2007 on public contracts in special sectors.
MONITORING SUPPLIERS Caruna’s supplier management activities focus on the comprehensive management of the relationship between Caruna and the supplier. Our target is to develop new operational models and operative activities in collaboration with our suppliers throughout the agreement term. We regularly monitor the activities of all our partners and their fulfilment of the contractual terms. The persons involved with the supplier or the project in question participate in the monitoring meetings relating to Caruna’s supplier management.
Caruna’s suppliers are divided into three categories and we work We regularly in close cooperation with all of them. We meet our largest and most monitor the critical contractors four times a year at special development meetings, activities of all our the purpose of which is to improve our mutual operations and make partners and their them more effective during the agreement term, as well as to ensure smooth cooperation between the companies. Caruna’s procurement fulfilment of the organisation is responsible for monitoring any development areas and the contractual terms. implementation of actions that have been agreed upon.
Over the year, we developed our cooperation with our partners by renewing our Partner Website aimed at contractors, which includes, for example, the Supplier Code of Conduct. The development work on
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customer experience, which involved the entire Caruna Group, also incorporated our partners: in the autumn of 2016, we launched an online course dealing with customer encounters for our contractors and their subcontractors.
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Case: Caruna brings its partners together + to improve operations
Procurements and their quality play a crucial role for a company like Caruna which invests hundreds of millions of euros every year in developing its electricity network. This underground network must function for at least 40 years, in any weather, in our northern climate, to provide Finns with electricity, no matter the circumstances.
“Our starting point is to acquire, cost-effectively, network components that are as high in quality as possible and to build our network using skilful professionals,” says Procurement Manager Mervi Haukilahti.
In 2016, Caruna focused specifically on making its contractors’ production processes more efficient. The network is built in association with many different players who would not necessarily engage in such close collaboration without Caruna: contractors, material suppliers, project managers, Caruna’s recycling partner and a huge group of Caruna employees.
“We are developing the best possible collaboration model for this to make our orchestra of many parties play as efficiently as possible,” Haukilahti explains.
More than 600 development ideas were collected through a workshop and an electronic survey directed at contractors, material suppliers and service providers.
These included some great ideas, for example, on recycling. In 2016, Caruna adopted the eService tool which allows contractors to order recycling containers to the worksite. The tool also provides Caruna with up-to-date information on what materials are being recycled and how much.
There were also many development ideas concerning safety issues. In future, the planning of health and safety issues, employee orientation and the use of protective equipment will be monitored more systematically. In addition, data security was a key theme in 2016 in new contracts relating to data communications, and Caruna performed four data security audits on its ICT suppliers.
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SUPPLIER AUDITS In 2016, we developed a supplier auditing process and put it into operation. This auditing is a part of our supplier management concept and its aim is to monitor our key suppliers and help them develop their operations.
In 2016, we performed five supplier audits, involving three of our main In 2016, we contractors for investment programmes for our distribution networks, performed five one material supplier and one service provider of project management supplier audits. supervision. The focus areas of the auditing were stakeholders and the operating environment, management and leadership, expertise and resources, sustainability and sustainable development, managing anomalies, data management and communications, and contractual obligations and projects.
There were very few deviations in the audits and corrective actions on those discovered are underway.
In 2017, we will audit six new suppliers. Together, these 11 suppliers encompass roughly 70% of Caruna’s purchasing value.
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Caruna’s procurement process In 2016, we digitised our entire tendering and contract process. This has made the procurement process considerably more efficient and transparent. We now take care of the whole process via an electronic tendering portal, from the preparation of contractual data to tendering and completed agreements. Suppliers can see our invitations to tender on the Tarjouspalvelu.fi supplier portal, from where the data is transferred to the national HILMA announcement portal for public procurement and the EU-level TED portal. Using the electronic portal is free for suppliers and they can also find supply agreements in the same system.
In 2016, we also adopted an electronic auctioning system made possible In 2016, we by the Act on public contracts in special sectors. We used this system for digitised our entire the first time for inviting tenders for contract and primary transformer tendering and projects. contract process.
Caruna’s purchases are made using the IFS purchasing tool. The purchases are coordinated by Caruna’s Procurement Department, which adds control and transparency to the ordering and payment process.
Plan to Source to Pay
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Material procurement In 2016, we charted Caruna’s network building and service procurement needs, on the basis of which we created procurement strategies for the coming years.
Our procurement strategy for network building defines our focus areas for the next few years, as well as the key network materials that Caruna procures itself. Transferring the responsibility of the largest acquisitions of materials to Caruna has made the monitoring of material quality and accountability requirements more efficient and increased cost- effectiveness. It also makes follow-up and reporting simpler. The quality, safety and environmental aspects of the materials used by Caruna are carefully considered both when inviting tenders and during factory audits afterwards.
Materials, such as cables, transformers and secondary substations, are New electricity essential for building and renovating networks. The key raw materials networks are built of network building are aluminium, copper and steel. As a rule, new using mainly new electricity networks are built using new materials. materials. In 2015 and 2016, we invited tenders on essential network building materials, including all the key materials identified in our procurement strategy, such as cables, transformers and secondary substations. The deliveries of material under the consequent new agreements started at the beginning of 2016. In addition, we invited tenders on materials for primary transformers and secondary substations in 2016, and the agreements resulting from this will take effect in 2017.
We select all our material suppliers via Caruna’s electronic procurement system without discrimination and according to the requirements set on competitive tendering in relation to public procurement.
The recycling of the materials dismantled from Caruna’s networks is the responsibility of Kuusakoski Oy. Kuusakoski ensures that the materials are processed and recycled appropriately and supplies Caruna with detailed reports.
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Serving our customers
OUR CUSTOMER BASE
By our customer volumes, Caruna is Finland’s largest company dedicated to electricity distribution. Caruna Oy is responsible for electricity distribution in North Finland, South and Southwest Finland and in the regions of Satakunta and Ostrobothnia. Caruna Espoo Oy delivers electricity to the towns of Joensuu, Espoo, Kirkkonummi and Kauniainen.
Our customer base has grown steadily since 2007. This growth has resulted from several factors, such as the rate of urbanisation and the location of our network areas in towns and regions which are attracting new residents and growing.
OUR CUSTOMERS’ EXPECTATIONS The key expectations of Caruna’s customers are uninterrupted electricity distribution, reasonable pricing and user friendliness. We strive to meet our customers’ expectations and, first and foremost, secure a supply of electricity that is as reliable as possible. We keep improving and developing our electricity network to meet the requirements and future needs of a modern society. Thanks to these efforts, our customers can generate electricity for their own use, and sell the surplus through our network.
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In 2016, we continued the implementation of our customer strategy and initiated a large-scale project to develop our customer experience. This included the introduction of a customer experience group, responsible for The key developing the experience we deliver to our customers. Their development expectations efforts drew from the feedback received through our customer and of Caruna’s employee surveys. customers are uninterrupted As part of the initiative, we invited all employees to a training day to play electricity the role of a customer. We also launched an online course on customer distribution, encounters aimed at our contractors to further improve the experience reasonable they deliver to customers. pricing and user friendliness. We strengthened our customer service in social media, and launched a customer chat function on our website in late 2016. We further improved the customer experience by reforming the online services aimed at our customers, such as the energy monitoring service which helps customers to monitor their energy use and, if necessary, change their energy use habits. In addition, our website now includes a map which allows customers to follow the progress of our network improvement programme. In case of any disturbances affecting electricity distribution, we serve our customers 24/7.
Customer Experience Professionals Association™ CXPA Finland rewarded Caruna for developing the leadership in good customer experience. In CXPA Finland’s annual survey, ‘Customer Service Management in Finland’, Caruna was ranked third, up from the previous year, and showed the fastest overall improvement.
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+ Case: Caruna is listening to their customers more attentively than ever
Caruna is active in developing its customer service, and the company was awarded by the CXPA Finland survey for improving its management of the customer experience.
In the spring of 2016, when Caruna’s customer Tuija Rantala found her light bulbs blowing one after the other, she began to suspect that there was something wrong with the electricity supply. This was the beginning of a months-long investigation into the matter together with Caruna. As a result, Rantala’s friends came up with the tag “it’s working like Caruna”.
Cases like Rantala’s are taken very seriously at Caruna. At the end of 2015, Caruna launched a new customer strategy project that included extensive customer surveys. For this purpose, Rantala also was invited to Caruna’s kick-off day in the autumn to share her experiences.
“I want to thank Caruna for being willing to improve things and for not being indifferent to my problems,” Rantala says and adds that she was surprised to receive the invitation.
The target of Caruna’s development work on customer experiences is to improve and speed up customer service so that each customer is connected to the right person to help them as quickly as possible. Rantala says she queued for up to five minutes at the switchboard. Some months later she received confirmation that the metering work had been done and there should be no more problems with the supply. The fault had been fixed as if by magic.
“What our customers primarily expect from us is reliability of supply, fair prices, ease of use and, above all, professional help delivered quickly. We receive feedback on the length of our delivery times and the accessibility of customer service, and this year we have discovered that even two minutes is too long to wait,” says Head of Customer Relations Katriina Kalavainen.
In November 2016, the Caruna website launched a chat channel. According to Kalavainen, the company has received a lot of positive feedback about it, because customers get answers to their questions quickly and in many situations it has replaced email.
“In future, we aim to guide our customers straight to an expert on the issue at hand. For example, if a municipality contacts us about the building of traffic lights, the customer
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will have clear guidelines on who to call. We will cooperate internally throughout Caruna to complete this work,” Kalavainen explains.
The CPXA Finland survey was answered by a total of 88 professionals from the field of customer experience management from 74 companies. The survey was completed for the fourth time this year in Finland. The prize for the best customer experience management went to TeliaSonera, the second prize to SOK and Caruna shared the third prize with HUS Medical Imaging and Elisa.
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CUSTOMER SATISFACTION We measure customer satisfaction on a regular basis. In order to achieve more comprehensive results than in the previous years, in 2016 our NPS (Net Promoter Score) survey covered all contacts to our customer service. Our 2016 NPS score was -12.5 (on a scale of -100 to +100), significantly lower than last year. We take this trend seriously, and our key response was to initiate a programme for improving customer experience. For 2017, NPS will become one of Caruna’s shared key performance indicators.
We regularly monitor customer service availability, service levels, waiting We measure times, total number of contacts, fault service availability, turnaround time customer of customer-initiated jobs and accuracy of metering data in invoicing, and satisfaction on a keep developing our operations on the basis of this data. regular basis.
NON-DISCRIMINATION OF CUSTOMERS Concerning our customer contracts, we observe standardised and fair practices by customer group and contract type. The prices, terms and conditions of our network services are similarly fair and non- discriminatory for everybody accessing them. The prices, terms and conditions are made available on our website. The terms and conditions of our network services are based on the general terms and conditions approved by the authorities.
Our fair treatment of electricity retailers and other market parties contributes to an effective electricity market. Our employees are trained to take account of the necessary requirements, both in customer service contacts and in data processing.
We annually report to the Energy Authority about the measures we have The prices, terms taken to ensure fair treatment of customers, electricity retailers and the and conditions of market parties. Our 2015 report was submitted on time in May 2016, and our services are was also published on our website. The 2016 report will be completed and similarly fair and submitted to the Energy Authority by no later than 31 May 2017. non-discriminatory for everybody. Each year, the Energy Authority receives some complaints concerning electricity connections and other issues. The changes to pricing Caruna implemented on 1 March 2016 led to an investigation conducted by the Energy Authority on Caruna’s actions and pricing. The Energy Authority’s concluded that Caruna had acted in compliance with the Energy Market Act when it announced the price increases, and Caruna had taken into
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account the requirements for fairness and non-discrimination in its pricing changes.
The Consumer Disputes Board was also applied for decisions. In its response, the Board’s plenary session reviewed sample cases of three different modes of living to decide whether Caruna’s distribution prices were reasonable. The Board found the increases to be reasonable. Precedents issued by the plenary session guide the Consumer Disputes Board’s later decision-making practice.
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Our role in society A modern society cannot function without a reliable supply of electricity. We form a central part of the Finnish key infrastructure and security of supply. We create prerequisites for economic activity, public services and the smooth running of our customer’s daily lives.
SECURITY OF SUPPLY As the largest distribution network operator in Finland, Caruna is considered a critical company for the security of supply. Security of supply means the ability to handle disturbances and states of crisis with a minimum amount of special arrangements and damage. We are prepared to maintain our ability to supply electricity on the current supply security level even during a longer crisis. By investing into the reliability of our electrical network, we ensure the security and continuity of supply, particularly during disturbances caused by the climate.
In Finland, the power generation pool of the National Emergency Supply By investing into Agency controls energy security, which means detailed contingency and the reliability of emergency planning of energy production, transmission and distribution. our electrical The key objective of the power generation pool is to ensure, while network, we operating under normal circumstances, that there will be sufficient ensure the security capacity to guarantee national power generation in emergencies. and continuity Observing the plans drawn up and tested in advance, the pool must of supply, be prepared to manage and carry out power generation in case of particularly during crisis, in accordance with the tasks and mandates assigned to it by the disturbances Government. caused by the climate. As a participant in the regional pools, operating under the Agency’s national power generation pool, Caruna is a member of the ALVAR committee for regional preparedness. Caruna is also a member of the Finnish Communications Regulatory Authority’s HÄTY incident cooperation group, and the Krivat cooperation group for organisations critical for the security of supply. Over the year, we took part in six shared exercises coordinated by the authorities.
Many of our customers are classified by the authorities as organisations critical for the security of supply. Under emergency law, we would take special measures to secure power distribution to these customers.
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Economic impact Our operations have both direct and indirect economic impacts. Caruna has 270 employees. In 2016, we also employed roughly 2,000 contractors in projects across Finland. In addition, Caruna indirectly provides work for 4,000 people.
ECONOMIC VALUE ADDED TO SOCIETY The most significant direct cash flows in our business consist of electricity distribution fees, purchases from service and goods suppliers, compensation to investors, network renewal and maintenance investments, personnel wages and tax-like payments.
INDIRECT ECONOMIC IMPACT We observe the Finnish legislation in the paying, collecting, accounting and We observe the reporting of our taxes. For Caruna, accurate and timely actions in filing tax returns and dealing with other statutory obligations is of primary Finnish legislation importance. in the paying, collecting, The term ‘tax footprint’ refers to the income society receives from a accounting and company’s corporate taxes and tax-like payments. In addition to direct reporting of our and indirect taxes, Caruna’s tax footprint includes reports on tax withheld taxes. from employee wages and social security contributions.
The tax footprint summary includes taxes and tax-like payments Caruna is legally obliged to pay or collect. However, the summary does not cover taxes which are included in the purchase price of products or services and which Caruna is not legally required to report.
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Stakeholder collaboration In defining our most important sustainability topics, we have identified our key stakeholders and their expectations of Caruna. We seek an open and fair dialogue with all stakeholders. We collect feedback from our stakeholders through an annual reputation survey. As from 2017, we will conduct a six-monthly reputation survey targeting our most important stakeholders.
For our key stakeholders and the forms of stakeholder dialogue, see the following table.
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We also hold project meetings with representatives of the key environmental organisations and landowners relevant to Caruna’s operations.
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Sponsorship Our principle is to share good energy on our network areas through sponsorship. Caruna’s sponsoring activities are based on our values: customer centricity, responsibility, collaboration and result orientation.
Our focus is on junior sports, with the Finnish Ice Hockey Association as Caruna’s our main partner for the 2016-2019 sponsorship period. Caruna was the sponsoring principal Finnish sponsor of the Ice Hockey World Junior Championship activities are held in Helsinki between December 2015 and January 2016. based on our values: customer At the beginning of 2016, we increased our collaboration with the Finnish centricity, Ice Hockey Association to promote the wellbeing of children and young responsibility, people in Finland, while supporting ice hockey as a club sport across the nation. We also seek to celebrate the valuable work volunteers do for their collaboration and clubs. result orientation.
In 2016-2019, our largest contribution to junior ice hockey is the ‘Easy Hockey, Sponsored by Caruna’ activities aimed at young people aged 10 to 17, who are interested in ice hockey as a leisure activity rather than a competitive club sport. Studies indicate that children and young people should be encouraged to try a diverse range of sports and activities. Instead of having targets and imposing compulsory training, Easy Hockey lets the players decide the level of their play.
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+ Case: Caruna supports volunteers’ team spirit as a sponsor of the IIHF World Junior Championship
The IIHF World Junior Championships held in Helsinki at the beginning of 2016 made history by breaking the European attendance record. A total of 215,225 ice hockey fans came together at the Helsinki Ice Hall and Hartwall Arena. Caruna had the honour of being the tournament’s main cooperation partner and the patron of the volunteers.
“We wanted to participate in the tournament in order to direct our sponsoring on the young and on voluntary work. The volunteers do amazing, valuable work and that is definitely worth acknowledgment,” says Caruna’s Head of Communications, Henna Tuominen.
A voluntary team of more than 400 people worked hard behind the scenes of the tournament. Their tasks included, for example, transporting the referees from their hotel to the event, assisting the live score service and acting as first aid and medical personnel. These hardworking volunteers didn’t even mind the fact that the tournament took place in the Christmas season.
“Last year I participated in the Under 18s World Championships in Lappeenranta and liked the work and the atmosphere so much that I wanted to help this year too. It’s a great opportunity to see what goes on behind the scenes and it offers a new perspective on the sport,” says volunteer Eveliina Montonen, a member of the medical team.
The IIHF World Junior Championships marked the beginning of three-year cooperation with Caruna and the Finnish Ice Hockey Association. As their main partner in 2016–2019, Caruna will support especially the activities of children and young people in clubs all over Finland and highlight the valuable work done by volunteers in such clubs.
Studies show that children and young people benefit from participating in many different sports and that organisations offering hobbies should aim to provide diverse activities.
“We want to encourage children and young people to enjoy exercise. Easy Hockey is aimed at 10–17-year-olds and offers young people the chance to have fun playing once a week. This leaves time for other hobbies too. The threshold for participating is low, because players only need ice skates, a hockey stick, a neck guard and a helmet with a facemask,” Tuominen says.
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+ Case: Caruna prepares for storms and snow-burdened trees by participating in several drills a year
Imagine if electricity, the Internet and mobile phones stopped working, sewers became blocked, radiators stopped heating and no fuel was available at petrol stations. This is a possibility if a storm causes trees to fall onto power lines, or snow-laden branches dip down onto the overhead lines, preventing the distribution of electricity for an extended time.
Caruna is preparing itself for situations like this by compiling preparedness plans and engaging in regular drills. In 2016, Caruna rehearsed their preparedness for disturbances through various cooperation and emergency drills a total of six times. The purpose of these drills is to refine the cooperation between Caruna, the rescue services, teleoperators, contractors, Fingrid and other local electricity network companies, as well as municipalities and the Centres for Economic Development, Transport and the Environment.
“Caruna plays a significant role in our society as a large distributor of electricity and therefore it is important that its emergency response processes are in place and that they have been rehearsed in case of a crisis. Caruna is well-organised and proactive in this area and its level of preparedness is excellent. Many small companies may have just one person in charge of all their emergency preparations,” says secretary of the Alvar Commission of Western Finland from the National Emergency Supply Agency, Petri Jokilahti, who coordinated the Länsi-Myteri drill.
Organised in May, the Länsi-Myteri drill was a typical cooperation exercise. It involved simulating the destruction caused by a storm, such as outages caused by trees that have fallen on electricity cables due to heavy snow burdens and winds of more than 20 metres per second. Jokilahti points out that climate change is causing increasing numbers of heavy low-pressure storms, which is why more storm preparation drills have been organised in the last few years than before.
The main target of the drills is to improve cooperation between the different participants and to boost the recognition of critical actions. In a fierce storm, there must be close cooperation to pinpoint the disturbance quickly, because the standby batteries of base stations only provide electricity for a few hours.
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Updates of the situation will be communicated, for example, via the nationwide Krivat system which operates outside the public Internet and mobile telephone network on a fixed broadband platform maintained by the State Security Networks Group. If needed in a crisis, a contact person from the Länsi-Uusimaa Rescue Department can be invited to the Caruna offices to pass on information about the situation to other rescue departments within Caruna’s area.
“During the Länsi-Myteri drill, we discovered that having up-to-date contact information is crucial in disturbances that require a rapid response. Changes in the operating environment and technology emphasise the importance of up-to-date action plans and continuous training,” concludes Jari Ahlstedt, Operation Manager at Caruna and one of the drill planners and coordinators.
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Case: The COP network creates a comfortable + atmosphere outside working hours
Caruna’s recreational employee network COP proves that people at Caruna are an open and outgoing bunch.
What if you could hang out with your workmates outside of work too? Established a year ago, the Caruna Organized Professionals, i.e. COP, offers an opportunity to get to know other people from Caruna at after-work events, spend time together at sauna evenings or go and see a colleague’s musical together. COP also opens a door to networking events where you can meet employees from other companies.
“The best thing about the COP network is that you get to know your workmates through leisure activities. It’s a pleasure to realise how much professional skills and competence we have at Caruna. The network is a great way to build community spirit and everybody is welcome to join. These days, when I bump into people in a corridor or lift, it’s always someone I know,” Petri Lagerqvist, one of the founders of COP, smiles.
COP is part of the nationwide Finland Young Professionals network. Despite its umbrella organisation’s name, COP activities at Caruna are intended for everyone regardless of age, and today some 50 Caruna employees take part in them. The core team currently consists of 5–6 members, and people from all walks of life at Caruna are welcome to join and chip in with new ideas. You can decide yourself how active you want to be, but be prepared for COP to become an important part of your life.
“At our first meeting a year ago, we got to know each other using the speed-dating concept. You discover completely new aspects of your colleagues when you have a chance to talk about more than just work. Then if you come across a problem, you know exactly who to turn to and it’s easy to ask someone you already know for help,” Online Services Manager Lagerqvist sums up.
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+ Case: The cabling of a low-voltage network calls for a glimpse into a crystal ball
Before starting to lay electric cables underground, it is important to consider and try to predict the needs of the network 40 years from now. We know, for example, that the low-voltage network of the future will be affected by the increasing popularity of electric cars and solar panels.
Caruna has already laid about 40% of its electricity network underground and in 2018 it will start cabling the low-voltage network that reaches all the way to customers’ homes and workplaces.
To ensure smart solutions, other future needs of the electrical network are also being piloted. A think tank resulted in a so called link cabinet that was first tested in 2015. The cabinet will be placed at the edge of the customer’s plot, and the idea behind it is to combine the customer’s meter reading centre and Caruna’s electricity supply in such a way that the cabinet will facilitate electricity distribution for as many different needs as possible. When building new constructions, the cabinet will also ensure an immediate electricity supply, whereas with the old operations model it takes about two weeks.
“In the future, customers may have their own renewable sources of energy, such as solar panels or even a small wind power station. The link cabinet would act as a connection point between the customer’s internal network and Caruna’s network, and consequently it would allow the use of alternative energy sources for other things too, besides the customer’s own immediate needs,” says Sebastian Ahlnäs, who is leading the project.
This new cabinet could also be used as a charging point for an electric car and in future it may even supply an optical fibre connection, allowing the customer to get their electricity and internet connection from the same source. The solution is currently being developed in collaboration with Aalto University.
“Aalto University stepped in when we wanted to make the cabinet look as pleasing as possible. After all, it will be installed in a visible place on the perimeter of the customer’s plot and it must blend in with the streetscape,” Ahlnäs explains.
Built in an area of 35 detached houses in Hyvinkää, the first pilot was a great success and led to further piloting in 2016 in two new areas, Mustio and Aura. The functionality of a total of 60 link cabinets as part of the underground electricity network are being tested in the pilot areas to find out how best to build a low-voltage network in 2018 and 2016 AT CARUNA – Report what structure it should have. REPORT 2016
+ Case: Caruna is listening to their customers more attentively than ever
Caruna is active in developing its customer service, and the company was awarded by the CXPA Finland survey for improving its management of the customer experience.
In the spring of 2016, when Caruna’s customer Tuija Rantala found her light bulbs blowing one after the other, she began to suspect that there was something wrong with the electricity supply. This was the beginning of a months-long investigation into the matter together with Caruna. As a result, Rantala’s friends came up with the tag “it’s working like Caruna”.
Cases like Rantala’s are taken very seriously at Caruna. At the end of 2015, Caruna launched a new customer strategy project that included extensive customer surveys. For this purpose, Rantala also was invited to Caruna’s kick-off day in the autumn to share her experiences.
“I want to thank Caruna for being willing to improve things and for not being indifferent to my problems,” Rantala says and adds that she was surprised to receive the invitation.
The target of Caruna’s development work on customer experiences is to improve and speed up customer service so that each customer is connected to the right person to help them as quickly as possible. Rantala says she queued for up to five minutes at the switchboard. Some months later she received confirmation that the metering work had been done and there should be no more problems with the supply. The fault had been fixed as if by magic.
“What our customers primarily expect from us is reliability of supply, fair prices, ease of use and, above all, professional help delivered quickly. We receive feedback on the length of our delivery times and the accessibility of customer service, and this year we have discovered that even two minutes is too long to wait,” says Head of Customer Relations Katriina Kalavainen.
In November 2016, the Caruna website launched a chat channel. According to Kalavainen, the company has received a lot of positive feedback about it, because customers get answers to their questions quickly and in many situations it has replaced email.
“In future, we aim to guide our customers straight to an expert on the issue at hand. For example, if a municipality contacts us about the building of traffic lights, the customer
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will have clear guidelines on who to call. We will cooperate internally throughout Caruna to complete this work,” Kalavainen explains.
The CPXA Finland survey was answered by a total of 88 professionals from the field of customer experience management from 74 companies. The survey was completed for the fourth time this year in Finland. The prize for the best customer experience management went to TeliaSonera, the second prize to SOK and Caruna shared the third prize with HUS Medical Imaging and Elisa.
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+ Case: Up to 30,000 bees buzzing around Caruna
Caruna’s bee experiment in the summer of 2016 produced 99 kilograms of honey. More important than the honey harvest, however, is the significance of the bees to the world.
Without bees, there would be few plants and consequently little food for us. The various species of bees have been estimated to pollinate 75–85% of the plant species in the world and without them many plants would not be able to reproduce. Urbanisation and pesticides, for example, have reduced the number of these pollinators, which is already hindering food production in places.
This gave one Caruna employee the idea that Caruna could introduce its own beehives. This would even out Caruna’s carbon footprint and give it a chance to do its bit to sustain our ecosystem.
The buzzing occupants on the roof of Caruna’s office produced almost a hundred kilograms of honey. The harvest was only half of what was expected, but even so it provided plenty of sweetness for the needs of the staff canteen and as presents for the staff. There were two reasons for the poor yield: the rainy summer and the growing season starting two weeks ahead of time, which was evident in honey harvests all over the country.
No bee stings were suffered during harvesting. Although the staff dared not make the acquaintance of the bees buzzing on the roof, the bee experiment received only positive feedback, says Property Manager Antero Lehtonen. The greatest reason for this was the skilful beekeeper Jas Stanislav, who is a board member of the Finnish Beekeepers’ Association and takes care of 40 hives every summer at four bee farms in Espoo and the surrounding area. It is critical to tend to bees regularly to prevent them from forming into swarms and seeking a new place for a hive.
“The bee-keeper changed the honeycombs and fed the bees once a week with a special solution. During the summer, we had three different-tasting and different types of honey harvests, and we sent samples of each to Belgium to be studied in order to find out what plant species they contain,” Lehtonen explains.
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Case: Caruna brings its partners together + to improve operations
Procurements and their quality play a crucial role for a company like Caruna which invests hundreds of millions of euros every year in developing its electricity network. This underground network must function for at least 40 years, in any weather, in our northern climate, to provide Finns with electricity, no matter the circumstances.
“Our starting point is to acquire, cost-effectively, network components that are as high in quality as possible and to build our network using skilful professionals,” says Procurement Manager Mervi Haukilahti.
In 2016, Caruna focused specifically on making its contractors’ production processes more efficient. The network is built in association with many different players who would not necessarily engage in such close collaboration without Caruna: contractors, material suppliers, project managers, Caruna’s recycling partner and a huge group of Caruna employees.
“We are developing the best possible collaboration model for this to make our orchestra of many parties play as efficiently as possible,” Haukilahti explains.
More than 600 development ideas were collected through a workshop and an electronic survey directed at contractors, material suppliers and service providers.
These included some great ideas, for example, on recycling. In 2016, Caruna adopted the eService tool which allows contractors to order recycling containers to the worksite. The tool also provides Caruna with up-to-date information on what materials are being recycled and how much.
There were also many development ideas concerning safety issues. In future, the planning of health and safety issues, employee orientation and the use of protective equipment will be monitored more systematically. In addition, data security was a key theme in 2016 in new contracts relating to data communications, and Caruna performed four data security audits on its ICT suppliers.
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+ Case: Caruna ranks among the top in the world in occupational safety
For the second year in a row, Caruna has achieved the best rating in the occupational safety classification granted by the Zero Accident forum of the Finnish Institute of Occupational Health. A total of 67 companies achieved the Zero Accident category and 29 made it to the top of the world category.
The Zero Accident forum grants annually classifications to workplaces that have invested in the continuous improvement of safety at work. In considering the classification, the forum looks at the level of safety at the workplace through, for example, its accident frequency and management practices. The notification and investigation procedures for occupational accidents and dangerous situations must be in order both for the company’s own staff and contractors.
In 2016, Caruna’s safety management system was certified according to the international standard, OHSAS 18001:2007.
“Safety is a key part of all our operations and we commit to it fully, from top management down,” says Piia Häkkinen, Head of Health, Safety and Environmental Issues.
Caruna’s current development priority is the improvement of contractor safety.
“At worksites, safety is even more important than for us office workers. This year we have invested particularly in training the whole procurement chain, supervision at worksites, boosting contractors’ self-monitoring processes and making the reporting and processing of pro-active indicators, such as near misses and safety observations, more efficient. Also, supplier auditing is a central part of our safety management system. These audits ensure that our contractors have the basics under control,” Häkkinen says.
According to Häkkinen, common safety practices must be put into practice and the whole subcontracting chain must be trained on them. Every worksite has its own safety plan that is based on the recognition of risk factors and on risk assessment. Everyone working on the worksite, regardless of who their employer is, must be familiarised with the safety plan. Separate, written plans are required for jobs that present a special danger, such as demolition or explosion work.
“One of our contractors is implementing a good practice on securing the safety of the subcontracting chain. They have divided their own subcontractors by risk category and
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plan safety measures carefully according to them,” Häkkinen explains.
Caruna’s contractors and subcontractors are required to take an online course on safety and the environment. The course deals with the basics of safety. After completion, the course qualification is valid for three years, and more than 1,500 people have now completed the course, which was updated in 2015.
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+ Case: An internal auditor speeds development ideas up
Often the best way to develop operations is to take a look inwards. At Caruna, internal audits are a key tool for development. They are performed especially in sectors with significant or ambiguous requirements, risks or opportunities, or when the aim is to challenge established routines or ensure the completion of a change.
Caruna has about 20 internal auditors. They perform some 15 audits per year, which involve assessing the company’s operational processes by acquainting themselves with the requirements and documentation relating to them and by interviewing the persons involved and observing their activities. This auditing is independent and is based on proof: the activities are always compared to some criteria, such as legislation or other external requirements, or instructions, plans and targets.
Jaana Varis has been an internal auditor for a year and feels that she can have an influence on the development of the whole company’s operations.
“It’s interesting to have the opportunity to see the company’s operations with fresh eyes. This is a way to make the person in charge of the object of the audit aware of the development ideas, although an auditor can’t decide what to do about them. In the best case scenario, you will see what actions are put into place,” says Varis, Head of Customer Compensation Services.
Over the past year, Varis had audited, for example, contractor safety in network deactivation. One development idea suggested for this was to make a consistent template for the safety plan, including the best aspects of all the models used by the different contractors.
“The most surprising thing is how many development ideas people have given. It’s great that we have a channel like this,” Varis comments.
Auditing has given her too new instruments and assessment tools for her own job of processing complaints.
“For example, in an outage the customer would not only be told the reason for the interruption, but we could ask what we can do to help them cope with the situation,” Varis explains.
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Piia Häkkinen, who is in charge of the internal auditing procedure and the operation of the auditor network, explains that Caruna employees have been interested in the audits and participate in them actively.
“The greatest benefit from this is that we now have this internal auditor network running and are learning to give and receive constructive feedback,” says Häkkinen, who herself has also been the object of an audit.
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+ Case: Caruna supports volunteers’ team spirit as a sponsor of the IIHF World Junior Championship
The IIHF World Junior Championships held in Helsinki at the beginning of 2016 made history by breaking the European attendance record. A total of 215,225 ice hockey fans came together at the Helsinki Ice Hall and Hartwall Arena. Caruna had the honour of being the tournament’s main cooperation partner and the patron of the volunteers.
“We wanted to participate in the tournament in order to direct our sponsoring on the young and on voluntary work. The volunteers do amazing, valuable work and that is definitely worth acknowledgment,” says Caruna’s Head of Communications, Henna Tuominen.
A voluntary team of more than 400 people worked hard behind the scenes of the tournament. Their tasks included, for example, transporting the referees from their hotel to the event, assisting the live score service and acting as first aid and medical personnel. These hardworking volunteers didn’t even mind the fact that the tournament took place in the Christmas season.
“Last year I participated in the Under 18s World Championships in Lappeenranta and liked the work and the atmosphere so much that I wanted to help this year too. It’s a great opportunity to see what goes on behind the scenes and it offers a new perspective on the sport,” says volunteer Eveliina Montonen, a member of the medical team.
The IIHF World Junior Championships marked the beginning of three-year cooperation with Caruna and the Finnish Ice Hockey Association. As their main partner in 2016–2019, Caruna will support especially the activities of children and young people in clubs all over Finland and highlight the valuable work done by volunteers in such clubs.
Studies show that children and young people benefit from participating in many different sports and that organisations offering hobbies should aim to provide diverse activities.
“We want to encourage children and young people to enjoy exercise. Easy Hockey is aimed at 10–17-year-olds and offers young people the chance to have fun playing once a week. This leaves time for other hobbies too. The threshold for participating is low, because players only need ice skates, a hockey stick, a neck guard and a helmet with a facemask,” Tuominen says.
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Values, business principles and strategy
In addition to applicable legislation and regulations, Caruna’s operations are conducted in accordance with jointly defined values, company strategy and good corporate governance principles.
Values Caruna’s values were defined together with the personnel, Management Team and Board of Directors in 2014.
WE ARE CUSTOMER CENTRIC • We enable a carefree daily life for our customers through our partners and our own actions. • We recognize and strive to understand the needs of future generations and develop our operations to meet them. • We are easy to approach and a professional partner.
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WE ARE RESPONSIBLE • We are a reliable and responsible partner for our customers, contractors and owners. • Our work contributes to build the Finnish society. • We put safety and sustainability first in everything we do.
WE ARE COLLABORATIVE • We work transparently across organization boundaries to reach our common goals. • We develop the electricity distribution business together with the authorities, municipalities and the industry, both in Finland and in Europe.
WE ARE RESULT ORIENTED • We operate efficiently for the good of our stakeholders. • We develop our business proactively with a long perspective. • We create value for our shareholders in a sustainable way.
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Strategy
In accordance with our company strategy, we serve our customers in the best possible way, look after the wellbeing of our personnel as well as possible, maintain and develop our network so that it meets the present and future needs of our users and society, and make our expertise available for a wider use to develop the sector.
We focus on four elements: customers, electricity network, operational environment and company culture. This allows us to meet the needs of our key interest groups while also achieving our own goals on the journey to become the best electricity distributor – first in Finland, then in Europe, and ultimately in the entire world.
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The way we work Caruna’s Code of Conduct is based on our values and it forms the basis for our operating principles. It defines how we take care of Caruna’s property, how we collaborate and act toward each other, and how we run our electricity distribution business. The Code of Conduct and the guidelines based on it are part of Caruna’s Compliance system.
The Code of Conduct ensures that everyone at Caruna understands the practices and ethical principles that guide our operations in the same way. We adhere to our Code of Conduct in all our business operations, both within the company and when dealing with our interest groups and the surrounding society.
The Code of Conduct concerns all Caruna employees, managers and Board The Code of members alike. Everyone at Caruna takes an online course on the Code of Conduct ensures Conduct and commits to its principles as part of their induction process. that everyone We also require our contractors, service providers, suppliers and other at Caruna contractual partners to adhere to the same principles. Caruna has drawn understands the up a separate document for contractors and suppliers, the Supplier Code practices and of Conduct, and each contractor and supplier is expected to commit to ethical principles. following it.
Our Code of Conduct is complemented by policies approved by the Board, outlining more in detail the operational principles concerning Caruna’s focus areas, as well as by internal guidelines. Caruna has in place separate guidelines for areas such as anti-corruption measures, conflicts of interest and confidential data. Regarding competition law, we have specific guidance and an online course which is part of employee induction.
Caruna’s policies and guidelines are available to the entire personnel in the company’s intranet. Documents in use by both Caruna and its contractors and other partners are found in the common working areas and rooms. The operational principles for the key areas (personnel policy, HSE policy, supply policy) are available in this report’s chapters concerning individual corporate responsibility areas, and also on Caruna’s website. Suspected cases of misconduct can be reported using the appropriate reporting channel available on our website.
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We respect the UN Declaration of Human Rights, International Labour Organization’s (ILO) conventions and the UN Global Compact initiative. Caruna’s consolidated financial statements are drawn up in accordance with the International Financial Reporting Standards (IFRS).
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Good governance
We commit to good governance practices in all our activities. Transparent and clearly defined governance forms the basis of our reliable and responsible operations, while benefiting all stakeholders.
Corporate structure Caruna Networks Oy Group (‘the Group’) comprises parent company Caruna Networks Oy and its subsidiaries Caruna Networks Sähkönsiirto Oy, Caruna Networks Espoo Oy, Caruna Oy and Caruna Espoo Oy.
The Group governance is based on the Finnish legislation, the articles of association of the Group companies and the recommendations on good governance issued by Finland Chamber of Commerce for unlisted companies.
The consolidated financial statements and interim reports are drawn up in accordance with the International Financial Reporting Standards (IFRS) approved by the EU. The parent company’s Board’s Annual Report and financial statements have been drawn up in compliance with the Finnish company legislation, the Accounting Act and the instructions and opinions issued by the Accounting Board under the auspices of the Ministry of Economic Affairs and Employment.
The Auditors’ Report covers the consolidated financial statements and parent company’s financial statements.
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Caruna Networks Oy’s governing bodies Caruna Networks Oy’s decision-making bodies are the general meeting and the Board of Directors. The Board of Directors’ three committees, the Audit Committee, the Nomination and Remuneration Committee and the Health, Safety and Environment Committee, prepare the items debated by the Board and assist the Board in its decision making. The CEO is responsible for executive management. In decision making, the CEO is supported by Caruna’s Management Team.
Internal auditors help to ensure that the Group’s operations remain effective and appropriate. They report to the Board and Audit Committee.
GENERAL MEETING Caruna Networks Oy’s general meeting exercises the highest decision- making powers in the Group.
The general meeting’s decisions usually require a simple majority. Such decisions include approving the financial statements, paying dividends, discharging the Board of Directors and the CEO from liability, electing the Board of Directors and the auditors and making decisions regarding their remuneration.
In accordance with the Limited Liability Companies Act and the articles of association, the general meeting is convened by the Board of Directors.
BOARD OF DIRECTORS The Board of Directors is responsible for the strategic development of the Group and for monitoring and steering the Group’s business operations and governance. In accordance with the Limited Liability Companies Act and the articles of association, the Board of Directors represents the Group and ensures the oversight of accounting and financial management. The Board of Directors decides on Caruna’s values.
The Board has between one and ten ordinary members and two deputy members. The Annual General Meeting elects the members for a term which ends at the next Annual General Meeting.
The Board convenes according to an agreed schedule to discuss matters
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assigned to it. The Board has approved the rules of procedure for its activities.
The CEO, the CFO and the Head of Company Development, who also acts as the Board’s secretary, regularly attend Board meetings. Other Management Team members and directors of the Group attend the meetings by invitation.
COMMITTEES OF THE BOARD OF DIRECTORS The committees working under the Board are the Audit Committee, the Nomination and Reward Committee and the Health, Safety and Environment Committee. The committees support the work of the Board by preparing and evaluating matters for decision by the Board.
Committee members are elected by the Board. Each committee must have three members whose term of office ends at the conclusion of the next Annual General Meeting. All Board members have the right to attend committee meetings.
The committee’s chair regularly reports to the Board on the committee activities after each meeting. All Board members can access the committee meeting documents and agendas. The Board of Directors has approved the committees’ written rules of procedure. The rules are regularly reviewed and updated.
AUDIT COMMITTEE The Audit Committee assists the Board of Directors in tasks related to financial reporting, risks and oversight. The Audit Committee oversees the financial reporting process and monitors the effectiveness of the Group’s internal auditing and risk management systems.
Caruna’s auditor, CEO, CFO and Head of Company Development, who acts as the committee secretary, regularly attend the committee meetings. Other directors attend the meetings by invitation.
The Audit Committee approves the rules of procedure for the internal audit and the auditing plan. The committee also reviews the plan for the external auditing of the accounts and discusses the auditing plan, the Audit Reports and their effects.
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NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee assists the Board of Directors in tasks related to the nominations and remuneration of the Group’s management.
The committee meetings are regularly attended by the CEO and the Head of Company Development, who also acts as the committee secretary. The Head of HR attends the meetings by invitation.
HEALTH, SAFETY AND ENVIRONMENT COMMITTEE The Health, Safety and Environment Committee assists the Board in decision making concerning the safety of operations, environmental issues and corporate responsibility. The committee approves the Group’s corporate responsibility programme and indicators.
The CEO, the Board member responsible for HSE matters, the HSE Manager and the Head of Company Development, who also acts as the committee secretary, regularly attend the meetings.
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Board of Directors and committees in 2016
MEMBERS OF THE BOARD OF DIRECTORS Until the Annual General Meeting of 23 March 2016, the Board members were Juha Laaksonen (Chair), Marcus Ayre, Ralph Berg, Jouni Grönroos, Niall Mills, Tomas Pedraza and deputy members Gregor Kurth and Alejandro Lopez Delgado.
The Board members elected at the Annual General Meeting of 23 March 2016 are Juha Laaksonen (Chair), Ralph Berg, Jouni Grönroos, Niall Mills and Tomas Pedraza, and new member Alejandro Lopez Delgado until the 2017 Annual General Meeting. Gregor Kurth and Delphine Voeltzel were elected as deputy members.
The Board of Directors convened nine times in 2016.
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JUHA LAAKSONEN b. 1952 Chairman of the Board
Degree: Previous experience: • B.Sc. (Economics) • Executive Vice President and CFO, Fortum Corporation, 2000–2012 Present positions: • Vice President, Mergers & Acquisitions, • Member of Board, Technopolis Plc, since 2016 Fortum Oyj, 2000 • Chairman of the Board, Alfred Kordelin • Executive Vice President, Finance & Planning, Foundation, since 2014 Fortum Oil & Gas, 1999 • Member and Vice-Chairman of the Board, • Chief Financial Officer, Neste Oyj, 1998–1999 Taaleritehdas Plc, since 2013 • Corporate Controller, Neste Oyj, 1997–1998 • Chairman of the Board, The Association of • Vice President, Finance & Strategy, Neste Finnish Fine Arts Foundations, since 2012 Chemicals, 1993-1996 • Member of the Board and Chairman of the • Various managerial and expert positions, Audit Committee, Kemira Oyj, since 2007 Neste Corporation, 1979-1992 • Member of Board, Sponda Plc, 2013-2016 • Chairman of the Board, The Fortum Art Foundation, 2006-2016 • Chairman of the Board, Sato Oyj, 2007-2015 • Member of the Supervisory Board, Kemijoki Oy, 2002–2013 • Member of the Board, Teollisuuden Voima Oy, 2003–2010 • Member of the Board, Neste Oil Oyj, 2005–2007 • Member of the Supervisory Board, Tapiola Mutual Insurance Company, 2002–2007 • Chairman of the Board, Fortum Pension Fund, 2001–2005
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RALPH BERG b. 1972 Member of the Board
Degree: Previous experience: • Juris Doctor, Universidad de Buenos Aires • Managing Director and Head of the European Power and Utilities Team, Credit Suisse Present position: • Director of the energy team at Deutsche Bank • Executive Vice President & Global Head of Infrastructure, Borealis Infrastructure
JOUNI GRÖNROOS b. 1965 Member of the Board
Degree: Previous experience: • M.Sc. (Economics), Helsinki School of • Chief Financial Officer, Rapala VMC Economics Corporation and AvestaPolrit Oyj • Managerial positions in Outokumpu Oyj Present positions: • Auditor, KPMG • Deputy Chief Executive Officer and Chief Financial Officer, Fazer Group, since 2010 • First deputy member and then member of National Auditing Board, Central Chamber of • Deputy member of the Board, East Office Oy, Commerce Finland since 2013 • Member of the Board, Finnish Coast Artillery Foundation, since 2002 • Deputy member of the National Auditing Board, Finnish Patent and Registration Office, since 2016
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ALEJANDRO LOPEZ DELGADO b. 1977 Member of the Board
Degree: Previous experience: • B.Sc. and M.Sc. (Civil Engineering), • Principal, Mubadala Infrastructure Partners Universidad Politecnica de Madrid • Merchant Banking Associate, Goldman Sachs • MBA from The Wharton School at the Infrastructure Partners University of Pennsylvania • Associate Consultant, The Boston Consulting Group Present position: • Project Engineer, Cintra (Ferrovial Group) • Director, Borealis Infrastructure • Member of the Board, Scotia Gas Networks
NIALL MILLS b. 1968 Member of the Board
Degree: Previous experience: • MBA, London Business School • Over 25 years’ experience in infrastructure • Institute of Directors Diploma in Company and engineering and project management Directorship • Director positions at Anglian Water Group, • BEng (Hons) in Civil Engineering Electricity North West, Regasificadora del Noroeste, Newham Hospital Healthcare • Fellow of the Institution of Civil Engineers Services, Caruna and Digita
Present position: • Asset Director, Southern Water • Partner and Head of Infrastructure Asset • Director of Projects, Novar Projects Limited Management, European Direct Infrastructure • Project Director, Bechtel Limited Team, First State Investments (FSI)
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TOMAS PEDRAZA b. 1977 Member of the Board
Degree: Previous experience: • Industrial Engineer, Universidad Pontificia de • Member of the Strategy and Business Comillas Development team, Gas Natural Fenosa • MBA, IESE Business School, University of Navarra • MBA, Stephen M. Ross School of Business, University of Michigan • MBA, China Europe International Business School
Present position: • Director, European Direct Infrastructure team, First State Investments (FSI)
GREGOR KURTH b. 1981 Deputy Board Member
Degree: Previous experience: • M.Sc. (Finance and Accounting), Cass • Investment Analyst, 3i Infrastructure Business School, City University of London • Analyst, Deutsche Bank • B.Sc. (Economics), Maastricht University
Present position: • Director, European Direct Infrastructure team, First State Investments (FSI)
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DELPHINE VOELTZEL b. 1984 Deputy Board Member
Degree: Previous experience: • M.Sc. (Finance), HEC School of Management • Mergers & Acquisitions Analyst, Rothschild Present position: • Associate Director, Borealis Infrastructure
AUDIT COMMITTEE Following the Annual General Meeting of 23 March 2016, Jouni Grönroos (Chair), Tomas Pedraza and Delphine Voeltzel were elected to the Audit Committee. During the previous term, which ended at the Annual General Meeting, the committee members were Juha Laaksonen (Chair), Marcus Ayre, Ralph Berg and Jouni Grönroos.
The Audit Committee convened three times in 2016.
NOMINATION AND REMUNERATION COMMITTEE Following the Annual General Meeting of 23 March 2016, Juha Laaksonen (Chair), Alejandro Lopez Delgado and Niall Mills were elected to the Nomination and Remuneration Committee. During the previous term, which ended at the Annual General Meeting, the members were Juha Laaksonen (Chair), Ralph Berg and Niall Mills.
The Nomination and Remuneration Committee convened twice in 2016.
HEALTH, SAFETY AND ENVIRONMENT COMMITTEE Following the Annual General Meeting of 23 March 2016, Niall Mills, Kenton Bradbury and Tomas Pedraza were elected to the committee. The members elected at the 2015 Annual General Meeting were Niall Mills (Chair), Colin Hood and Tomas Pedraza.
The Health, Safety and Environment Committee convened twice in 2016.
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Management Team The CEO has a management role under the Limited Liability Companies Act. The CEO chairs the Management Team. In accordance with the Limited Liability Companies Act and the instructions and orders given by the Board, the CEO is responsible for the Group’s executive management. Under the Limited Liability Companies Act, the CEO is responsible for ensuring that the company’s accounts are in compliance with the law and its financial affairs have been arranged in a reliable manner.
In 2016, Caruna’s CEO was Ari Koponen until his resignation on 17 October 2016, when Jyrki Tammivuori was appointed the Group’s acting CEO.
The Management Team supports the CEO’s work. The Management Team assists the CEO in achieving strategic and sustainable business objectives in a manner decided by the Board, prepares the Group’s business plans and decides on investment and business arrangements that fall within its remit.
Financial performance and the outcomes of the corporate responsibility programme are monitored by monthly reporting and reviewed monthly by the Management Team. The Group’s operational management includes extended quarterly business monitoring meetings. The extended Management Team includes, in addition to the Team members, the elected representatives of Caruna’s employees and senior employees.
Each member of the Management Team is responsible for the operative implementation of the day-to-day business activities.
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MEMBERS OF THE MANAGEMENT TEAM
ARI KOPONEN M.Sc. (Economics), b. 1964 CEO until 17.10.2016
Degree: Previous positions: • M.Sc. (Economics) • Head of Fortum Distribution, 2009-2013 • Head of Asset Management and Design, Experience: Nordic, Fortum Distribution, 2006-2009 • 27 years in the energy business • Head of Fortum Distribution, 2005-2006 • Manager Business Development, Fortum Corporation, 2003-2005 • CEO, ELNOVA/Uudenmaan Sähköverkko, 2002-2003
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JYRKI TAMMIVUORI M.Sc. (Economics), b. 1971 CFO, CEO since 17.10.2016
Degree: Previous positions: • M.Sc. (Economics) • Acting Chief Financial Officer, Stora Enso Oyj, 2013-2014 Experience: • Group Treasurer, Stora Enso Oyj, 2008-2014 • Member of management team since 2015, • Several other finance positions at Stora Enso over 19 years of experience in finance Oyj in Brussels, London and Helsinki, 1999- 2008 • Member of the Board of Directors, Tornator Oyj, 2012-2015 • Deputy Member of the Board of Directors, Tornator Oyj, 2010-2012 • Non-executive Member of the Board of Directors, Thiele Kaolin Company, GA USA, 2009-2014
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JÖRGEN DAHLQVIST B.Sc. (Engineering), b. 1966 Head of Network Operations
Degree: Previous positions: • B.Sc. (Eng.) • Head of Network Operations Finland, Fortum Distribution, 2006-2013 Experience: • Operation Manager South Finland, Fortum • Over 20 years in electricity distribution Distribution, 2003-2005 • Network Service Manager South Finland, Fortum Distribution, 2003 • Network Operations /Primary Substations Project Management, ELNOVA/Uudenmaan Sähköverkko, 1995-2002
RIIKKA HIRVISALO-OJA M.Sc. (Economics), b. 1966 Head of Regulation and Revenue
Degree: Previous positions: • M.Sc. (Economics) • Head of Customer Relations, Nordic, Fortum Distribution, 2009-2013 Experience: • VP Purchasing and AMM Nordic, Fortum • Over 15 years in electricity distribution, of Distribution, 2007-2009 which 9 in the Nordic organisation • Head of Measurements and Technical Service, Customer Service, Fortum Distribution, 2005- 2007 • Head of Technical Service, Customer Service, Fortum Distribution, 2004-2005
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TIMO JUTILA B.Sc. (Engineering), b. 1966 Head of Asset Management and Design
Degree: Previous positions: • B.Sc. (Engineering) • Head of Local Network, Sweden and Finland, Fortum Distribution, 2013 Experience: • Head of Customer Relations, Finland, Fortum • 17 years in electricity distribution and 9 Distribution, 2008-2012 years in multiple positions in the electricity • Head of Technical Service (Customer machines manufacturing industry Relations), Fortum Distribution, 2008 • Head of Technical Service Finland, Fortum Customer Services, 2004-2007
KATRIINA KALAVAINEN B.Sc. (Economics), b. 1970 Head of Customer Relations
Degree: Previous positions: • B.Sc. (Economics) • Head of Customer Data Management, Fortum Distribution, 2008-2013 Experience: • Team Manager, Customer Service, Fortum • Six years in electricity distribution, Distribution, 2008 15 years in customer services • Customer Service Manager, private and small business customers, Elisa Oyj, 2006-2008 • Customer Service Manager, private customers, Elisa Oyj, 2004-2005
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HEIKKI LINNANEN M.Sc. (Engineering), b. 1971 Head of Projects, IT and Sustainability
Degree: Previous positions: • M.Sc. (Engineering) • Head of Projects, IT and Sustainability, Fortum Distribution, 2013 Experience: • Project Manager, smart metering project • Six years in Nordic electricity distribution, 15 Finland, Fortum Distribution, 2008-2012 years in project and IT management • Program Manager, integration and solution sales, Nokia Siemens Networks, 2006-2008 • Portfolio Manager, Nokia Siemens Networks, 2005-2006
HARRI PYNNÄ Master of Laws, b. 1956 Head of Company Development
Degree: Previous positions: • Master of Laws • General Counsel of Fortum Corporation, 1998-2013 Experience: • Industrial Counsellor for Ministry of Trade • 19 years of experience in energy business and Industry, 1994-1998 • Legal Counsel and Senior Vice President, Corporate and Investment banking, Union Bank of Finland, 1982-1994
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TOMMI SAIKKONEN M.Sc. (Economics), b. 1966 Head of HR
Degree: Previous positions: • M.Sc. (Economics) • VP Human Resources, Electricity Solutions & Distribution, Fortum Oyj, 2009-2013 Experience: • VP Human Resources, Distribution, Fortum • Six years of experience in Nordic electricity Oyj, 2008-2009 distribution, 23 years in HR • HR Manager / Director, Human Resources, Nokia Ltd, 2000-2008 • HR Consultant / HR Manager, ICL Data Ltd, 1997-2000
HENNA TUOMINEN MA, b. 1976 Head of Communications
Degree: Previous positions: • MA (Intercultural business communication) • Communications Manager, Elisa Oyj, 2009- 2014 Experience: • Communications consultant, PR and • Management team member since 2014, over reputation, management agency Pohjoisranta, 15 years of experience in communications 2001-2009
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Remuneration of management, Board of Directors and committees The remuneration paid to the members and deputy members of the Board of Directors and committees came to a total of EUR 170 thousand in 2016.
In 2016, the total earnings paid to Caruna’s CEO Ari Koponen and, following his resignation, the acting CEO Jyrki Tammivuori came to EUR 981 thousand, consisting of a monthly salary, employee benefits and the long-term performance-based management incentives. The remuneration received by other Management Team members in management positions amounted to EUR 1,053 thousand.
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Management
Caruna’s management is based on the company strategy, values, guidelines and good governance.
Caruna’s management Caruna’s management practices are based on the company’s strategy and values, as well as on policies and principles defined on the Group-level. Our management practices adhere to good corporate governance and the best leadership principles. We have defined Caruna’s strategy and business goals on a Group-wide basis and shared them with the entire organisation. Our personnel gave occupational well- Caruna’s operations are led by our Management Team, in charge of long- being a better than term strategic planning and the business plan. The business plan is drawn average score for up for four-year periods and adjusted yearly as necessary. Each business the industry. unit uses these documents as the basis for their own yearly operation plans. The operations and goals are monitored regularly by the unit management teams and the Caruna Management Team. The results are reported to the Board of Directors.
A set of company- and unit-specific performance indicators have been created for monitoring Caruna’s operations, including a range of targets down to a person-specific level. The operations are examined as a whole,
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and the indicators have been designed to exclude the possibility of partial optimisation. Each employee’s performance is compared with the company’s strategic business goals. The set of indicators also functions as a basis for our reward system. Caruna’s reward system applies to the entire personnel.
The quality of management is evaluated by yearly personnel surveys. Caruna promotes self-management and encourages employees to actively participate in improving the working environment.
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+ Case: An internal auditor speeds development ideas up
Often the best way to develop operations is to take a look inwards. At Caruna, internal audits are a key tool for development. They are performed especially in sectors with significant or ambiguous requirements, risks or opportunities, or when the aim is to challenge established routines or ensure the completion of a change.
Caruna has about 20 internal auditors. They perform some 15 audits per year, which involve assessing the company’s operational processes by acquainting themselves with the requirements and documentation relating to them and by interviewing the persons involved and observing their activities. This auditing is independent and is based on proof: the activities are always compared to some criteria, such as legislation or other external requirements, or instructions, plans and targets.
Jaana Varis has been an internal auditor for a year and feels that she can have an influence on the development of the whole company’s operations.
“It’s interesting to have the opportunity to see the company’s operations with fresh eyes. This is a way to make the person in charge of the object of the audit aware of the development ideas, although an auditor can’t decide what to do about them. In the best case scenario, you will see what actions are put into place,” says Varis, Head of Customer Compensation Services.
Over the past year, Varis had audited, for example, contractor safety in network deactivation. One development idea suggested for this was to make a consistent template for the safety plan, including the best aspects of all the models used by the different contractors.
“The most surprising thing is how many development ideas people have given. It’s great that we have a channel like this,” Varis comments.
Auditing has given her too new instruments and assessment tools for her own job of processing complaints.
“For example, in an outage the customer would not only be told the reason for the interruption, but we could ask what we can do to help them cope with the situation,” Varis explains.
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Piia Häkkinen, who is in charge of the internal auditing procedure and the operation of the auditor network, explains that Caruna employees have been interested in the audits and participate in them actively.
“The greatest benefit from this is that we now have this internal auditor network running and are learning to give and receive constructive feedback,” says Häkkinen, who herself has also been the object of an audit.
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Organisational structure Caruna operates three business units: Asset Management, Network Operations and Customer Relations. The business operations are supported by support units and each unit’s Head reports directly to the CEO.
In Caruna’s management process, the business unit management teams undertake preparatory work. They are responsible for ensuring that the tasks delegated to them by the CEO are carried out by the appropriate people.
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Management of different areas
ASSET MANAGEMENT Caruna’s Asset Management unit is in charge of managing the network assets and responsible for the principles of network asset management. The management of assets is guided by the network building and maintenance principles, and the network development plan submitted to the Energy Authority every two years. All plans take account of Caruna’s customers, quality standards and the environment.
The key principle and factor steering Caruna’s asset management is Safety the reliability of supply. Network building is also guided by the age of the management at network, growth and the needs of a changing society. Caruna is based on goals and on Network investment, along with maintenance projects and programmes, the principle are discussed and approved as part of investment reviews. The of continuous purpose of these reviews is to ensure that Caruna’s electricity network improvement. development is aligned with Caruna’s strategy, financial and technical targets and the network building and maintenance principles.
MANAGEMENT OF HEALTH, SAFETY AND THE ENVIRONMENT Caruna’s health, safety and environmental (HSE) policy defines the principles of our health and safety management and environmental action. Our HSE policy also applies to our partners and covers our entire supply chain.
Environmental management is part of Caruna’s integrated HSE management process. The Management Team sets environmental goals, targets and programmes, and monitors how they are realised. Environmental responsibilities are further allocated to business units in accordance with the types of their activities.
Safety management at Caruna is based on goals and on the principle of continuous improvement. Safety-related matters are set goals and targets, whose realisation is monitored and communicated regularly. The frequency of incidents causing contractor absences is one of the key indicators on the level of the entire company. Caruna’s safety management covers our entire supply chain, including our partners.
A member of the Management Team is in charge of Caruna’s safety management. Caruna’s Management Team sets the shared rules, goals
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and targets for safety-related activities, and monitors their realisation. The Management Team ensures the availability of personnel and material resources required by these goals. Safety responsibilities are further allocated to business units in accordance with the type of their activities.
In safety and environmental management, the Management Team is supported by the HSE Manager, together with the HSE team composed of representatives from the business units. Caruna’s occupational well- being team and industrial safety committee handle issues related to the occupational health and work-related well-being of the company’s own personnel.
Caruna’s occupational health and safety management system, which complies with OHSAS 18001:2007, was certified in 2016. Caruna also has set up a certified environmental management system that complies with ISO 14001:2004.
HR MANAGEMENT Caruna’s objective is to be a desired employer who attracts and retains competent employees. Caruna’s employee policy guides our day-to- day operations. The Head of HR is responsible for the management and development of Caruna’s people. The Head of HR is a member of the Management Team. The HR unit, supervisors and employee representatives also contribute to the implementation of Caruna’s HR policy.
We observe the following principles concerning Caruna’s people: We support the employees’ career • We believe that people work well when they have good leaders. development and • We observe fair, open and competitive remuneration practices at each opportunities level of the organisation. to improve their • We support the employees’ career development and opportunities to skills. improve their skills. • We allocate resources according to a long-term plan. • We provide a safe and healthy working environment. • We respect the freedom of association and the right to negotiate collective agreements. • We provide equal opportunities.
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Caruna’s supervisors are expected to share a set of supervisor competences. These have been defined as direction, high-quality decision making and development of teams and individuals. Attention is paid to these competences in recruitment, and they guide the development of supervisor activities.
PROCUREMENT MANAGEMENT All purchasing-related areas and processes have been assigned to Caruna’s procurement organisation. A centralised organisation working under the Head of Procurement enables a professional procurement function and adherence to high standards. Our competitive Our competitive tendering is guided by the Act 349/2007 on public tendering is contracts in special sectors (erityisalojen hankintalaki) which includes guided by the provisions on the tendering process. In the process, particular attention Act 349/2007 on is paid to fair and non-discriminatory treatment of bidders and the total public contracts in cost of purchases, including quality standards. special sectors.
Risk management plays a key role in Caruna’s Source to Pay procurement process and selection of partners. The management of supplier risk is an essential part of Caruna’s procurement function. We seek to proactively minimise supplier risk and secure Caruna’s business operations and continuity under any circumstances.
CUSTOMER RELATIONS MANAGEMENT Caruna’s Head of Customer Relations and the Management Team are responsible for customer relations management. They also lead a broad- based customer experience group, responsible for developing customer experience and ensuring that the decisions are effectively implemented. The customer experience group was established in late 2016. Customer experience management seeks to develop Caruna’s business operations with a customer-centric approach. Customer experience The Caruna-wide customer experience group is chaired by Caruna’s Head management of Customer Relations and its members represent all business units and seeks to develop support functions. In customer experience projects, the group exercises Caruna’s business higher decision-making powers than the business units and support operations with a functions. The group members have the authority to implement the customer-centric measures decided in the group in their line organisations. approach.
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The customer experience group drafts and proposes the necessary decisions to the Management Team for approval. The group’s leader presents to the Management Team and for the CEO’s approval any Caruna- wide matters that would have a significant effect on the company.
Key objectives of the customer experience group:
• Ensuring that Caruna’s strategy is realised in the development of customer experience • Developing customer-centric operations • Developing the customer experience skills of Caruna’s employees and partners and committing them to customer-centric development • Highlighting the state of customer experience and the factors influencing it • Verifying the progress of development tasks • Creating methods to effectively implement the customer-centric approach at the early stages of Caruna’s development measures
FINANCIAL MANAGEMENT Our responsibility as a company is to ensure our business is profitable and to improve our operations and network assets with a long-term view. The profitability and competitiveness of our business enables us to be a reliable employer and a significant investor and buyer of services.
We manage financial responsibilities in accordance with Caruna’s general Clearly defined leadership principles. Clearly defined responsibilities, goals, on-going responsibilities, monitoring, and internal supervision are management cornerstones. In goals, on-going addition to these, risk assessment is critical for financial management. monitoring, A comprehensive coverage of market and operative risks allows us and internal to optimise Caruna’s financial performance and minimise any factors supervision are threatening our business operations. management cornerstones. The Finances unit is in charge of financial reporting and of verifying the accuracy of the reports every month. The Group employs appropriate financial reporting systems, used in accordance with internal supervising principles.
The Finances unit provides the Management Team, the Board and the Audit Committee operating under the Board’s direction with reports of the Group-wide, company-wide and unit-specific financial performance.
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The Board uses this information to assess the Group’s current and future condition. The company’s financial statements are approved by the Board.
In addition to the Audit Committee, the accuracy of financial reporting and functionality of processes are audited by Caruna’s internal audit and an independent Authorised Public Audit company. The Group’s consolidated financial statements are drawn up in accordance with the IFRS standards, and the separate financial statements of the parent company and affiliate companies follow the Finnish Accounting Act.
MANAGEMENT OF CORPORATE RESPONSIBILITY Caruna’s corporate responsibility is guided by the company’s vision, mission, values, and strategy. Responsibility is one of Caruna’s core values, visible in all our planning and operative activities.
Caruna’s Board of Directors and the HSE Committee reporting to it Responsibility is are responsible for the strategic monitoring and guidance related to one of Caruna’s corporate responsibility in the entire company. The CEO and the Heads core values, visible of the Communications, Head of Projects, IT and Sustainability, and in all our planning HSE Manager report the corporate responsibility goals and results to and operative the Board. Corporate responsibility is discussed regularly by Caruna’s activities. Management Team. The key indicators of the priorities set out for corporate responsibility, such as reliability of supply, contractor safety and customer experience, are included in the company’s KPIs that are monitored monthly.
The Head of Communications is responsible for materiality analysis, determination of priorities, corporate responsibility programme, indicators and objectives. Caruna’s Management Team and Board approve the priorities, objectives and key actions of corporate responsibility. Coordination and implementation of corporate responsibility are carried out by the HSE team with members from all Caruna business units. The HSE Manager and the Head of Communications are responsible for more detailed planning and implementation of matters related to corporate responsibility within their own competences.
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Risk management
We ensure the continuity of our operations by identifying and managing risks.
Exceptional weather conditions The most significant operational risks relate to exceptional weather conditions, such as storms, heavy snowfall, and exceptionally severe frosts, which can affect the reliability of electricity supply in the transmission and distribution network. The main measures we can use to prevent distribution disturbances are clearing corridors for power-lines and building the networks underground, where they remain protected from trees fallen down because of strong winds or heavy snowfall.
In addition, we develop the structure of our networks in such a way that a faulty part can be secluded during an outage, which again improves our ability to minimise the number of customers affected by it. In a disturbance, it is essential to be correctly prepared, based on contingency plans.
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Unfavourable changes in the regulatory environment In the long run, operational risks often emerge as a result of changes in regulations, but also, in the short term, of various interpretations of regulation decisions and rules. However, the Finnish regulatory environment can be considered stable. The current regulation period commenced at the beginning of 2016, and it provides an 8-year prognosis instead of a 4-year one.
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Supplier risk Due to various reasons, such as liquidation, the suppliers we use may be unable to deliver the commissioned network projects and services. Our procurement model will ensure Caruna a favourable and sound position for competition in each of its network areas. A systematic control model for contractors and services will provide fast signals from the market of any contractor-specific problems, consequently providing the opportunity to step in and perform the necessary corrective actions in time.
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Report description and GRI content index
Report description Caruna reports on the corporate responsibility of its operations now for the second time. The reporting complies with GRI’s G4 guidelines. Caruna’s Annual Report includes a review of financial performance.
This Annual Report covers Caruna’s operations from 1 January 2016 to 31 December 2016. Caruna reports on its operations on an annual basis. The previous report was published on 29 March 2016. The next report will be published in early 2018.
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Defining the report contents Caruna’s report on corporate responsibility for 2016 has been drawn up in accordance with the Global Reporting Initiative’s GRI G4 Guidelines. The report is formulated by complying with the procedural methods and core application scope in the GRI G4 guidelines. The report covers the standard disclosures of the G4 Guidelines, its Electric Utilities Sector Disclosures, and the aspects of corporate responsibility considered material to Caruna’s operations. Corporate responsibility agency Mitopro Oy has reviewed the Report’s compliance with the Core scope of the GRI G4 Guidelines.
In mid- and late-2015, we identified the key areas of our corporate responsibility. The process covered the economic, environmental and social aspects of Caruna’s activities regarding both stakeholders and business operations. The process begun with an internal definition of the framework for Caruna’s operations from the point of view of corporate responsibility. This stage also involved identifying a wide range of themes related to sustainability. The following stage consisted of a sustainability survey where we asked both internal and external stakeholders to share their views regarding Caruna’s operations, sustainability, and the most important development areas.
The stakeholder survey covered corporate customers, private customers, contractors and other partners, municipal decision-makers, government authorities, regional administrations, rescue services, higher education institutions, industry organisations and Caruna’s employees.
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Materiality assessment process
The results of the stakeholder survey were processed by Caruna’s HSE working group, the Management Team and the HSE Committee appointed by the Board of Directors. At the last stage of the process, we summarised and grouped our sustainability themes and aspects into six groups and several sub-groups, which are described below.
Themes and aspects of corporate responsibility
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GRI’s material aspects and boundaries The companies covered by Caruna’s consolidated financial statements are listed in the introduction to the Annual Report. The data provided in the report on corporate responsibility cover Caruna Group’s companies and business operations.
Caruna’s material GRI G4 aspects and their boundaries are described in the following table.
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GRI Content Index
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Data
Indicators describing Caruna’s operations and corporate responsibility are gathered to this section. For further information about the actions behind the numbers, see the Report section.
Electricity network and reliability of supply The following indicators describe Caruna’s electricity network and reliability of supply.
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Electricity network length by Cabling rates of low and medium regions voltage networks
Level of weather resistance* Regional investments in low- and medium-voltage networks in 2016
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*Level of weather resistance refers to the percentage of medium-voltage network which either has been cabled or is located in an environment where trees do not compromise electricity distribution.
**In addition, we invested 28 million euros in a high-voltage regional network.
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Safety The following indicators describe the safety of Caruna’s operations.
*Safety walks carried out by Caruna’s employees on worksites and offices. The annual results are not comparable because since August 2015, when Caruna outsourced project supervision, the Safety Walks carried out by the project supervision have been reported as site inspections.
**The indicator reflects the ratio of occupational accidents to contractors or subcontractors while they work for Caruna or are within Caruna’s worksites, leading to a disability of at least one working day, in relation to working hours (incidents/million working hours).
***An accident leading to a disability of over 30 days or a permanent disability.
****The TRIF (Total Recordable Injury Frequency) reflects the ratio of occupational accidents to Caruna’s employees, leading to absences from work or requiring medical treatment visits, in relation to working hours (incidents/million realised working hours).
In 2016, Caruna’s own personnel did not have any occupational diseases.
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Environment The following indicators describe Caruna’s environmental impact.
*The figures for 2014 and 2015 exclude Caruna’s share of the energy consumption in the company’s previous head office building.
**Of which 20 kg from a leak at Gumböle primary substation.
***CO2e = tonnes of carbon dioxide equivalent = GWP value x weight; GWP = Global Warming Potential; GWP value of SF6 gas is 22,800.
****Partly estimated.
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*As the method of calculating the relative losses changed at the end of 2014, 2014 is not comparable with 2015 and 2016.
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Employees The following indicators describe Caruna’s employees.
Educational background of Age distribution of personnel (%) personnel (%)
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*The number of employees in 2015 and 2014 reported here differ a little from the numbers reported in the Annual Report 2015 due to a different measurement method.
**Turnover describes the percentage of employees departing on their own initiative. Comparable date is not available for 2014 as the company was established in March 2014.
***Hours per person-year. Comparable date is not available for 2014 as the company was established in March 2014. The 2015 data may have some deficiencies due to the manual reporting system. A new reporting system was introduced at the beginning of 2016.
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Procurement The following indicators describe Caruna’s procurement.
*For the most part, subcontractor working hours are estimates.
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Customers The following indicators describe Caruna’s customers.
Caruna’s share of the electricity supplied through the distribution network (%)
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Number of customers over time
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NPS customer satisfaction (on a scale of -100 to +100)
Comparable date is not available for 2014 as the company was established in March 2014.
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Economic impact The following indicators describe Caruna’s economic impact.
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