Sustainability Report 2012 2/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Sustainability report 2012 2/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

TABLE OF CONTENTS

Contents 2 Operations 28 Sustainable operations 29 Overview 3 Case: Weight-watching the way to lower emissions 30 The world of Finnair 4 Case: Calculating emissions for cargo customers 32 The Finnair network 5 About this report 6 Society 33 Ville Iho: Our year 2012 7 Arja Suominen: Communicating in difficult times 34 Kati Ihamäki: Rich history, bright future 10 How we engage and cooperate with stakeholders 36 Achievements and goals 13 One Europe, one sky 37 A global emissions trading scheme: Around the corner? 39 Customers 14 The role of aviation in a modern economy 40 The customer’s path 15 Case: New life for Madagascar’s rain forest 41 A sustainable journey 16 Case: Product development and the customer experience: Fare branding 17 GRI 43 Case: Finnair partners make the grade for quality 18 About this report 44 Case: Sustainable design delights customers 20 Economic responsibility 47 Environmental responsibility 52 Personnel 21 Social responsibility 62 A year of major structural reform 22 GRI index table 80 Job grading: Bringing a uniform framework to work roles 24 Contact information 88 Codes for success 25 Case: Staying safe on the job 26 3/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

OVERVIEW

The world of Finnair 4 The Finnair network 5 Tell us what you think

About this report 6 We hope you find yourself engaged and invested Ville Iho: Our year 2012 7 in the ongoing story of how an airline impacts the world. You are invited to leave feedback to Kati Ihamäki: Rich history, bright future 10 sustainability@Finnair.com or comment on our Achievements and goals 13 Facebook page at www.facebook.com/Finnair 3 4/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Information graphics: Tero Harsunen

Finnair’s Network Control Center works 24 hours a day to ensure Employee well-being and work capacity are monitored by Finnair Health 1 accurate and smooth flight operations. 3 Services, which is also responsible for providing aviation medical services The world of and regular check-ups for flying personnel.

2 We seek ways to reduce heat, electricity and water consumption in our offices. We also sort bio-, paper and energy waste for collection and Finnair recycling.

CDA

Finnair aircraft land with a 1 Continuous Descent Approach Check in Check in (CDA) whenever possible. CDA via Internet via text message landings reduce noise, fuel 11-12 km consumption and emissions. 2 Finnair offers customers several options for checking in 3 • Check-in kiosk • Baggage drop by the check-in kiosks

Well-maintained and clean engines consume less fuel and emit A fewer greenhouse gases. Finnair Technical Services operates under an environmental permit and aims to reduce the When Finnair Cargo maximises aircraft environmental impact from, for example, the use of chemicals in payload we can fly with fuller planes, C aircraft maintenance. which reduces emissions per tonne of transported goods. B

B A

In 2012, 68% of cabin waste was reutilised, meaning it was Finnair’s promise of service is either reused as material or incinerated for use as energy. a promise of peace of mind, EU regulations concerning catering waste originating from and our professional and outside the EU prevent Finnair from reutilising more. A B C experienced personnel are the keys to fulfilling this. All Asian When 1 kg of fuel is burned, 3.15 kg of CO2 is discharged into the atmosphere. Greenhouse gas emissions flights also include cabin crew C are by far an airline’s largest environmental impact. Finnair improves fuel eciency and reduces emissions from the destination country by technological, operational, infrastructural and economic means. in Asia. 5/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI The Finnair network

New York 13 Asian megacities

More than 60 Helsinki destinations in Europe

Tokyo Nagoya Osaka Seoul Beijing Shanghai Xi’an* Hong Kong Chongqing Hanoi* Bangkok Singapore Delhi * Opening June 2013. 6/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI About this report

h ig THE PURPOSE of the Sustainability Report ployee feedback and government guidance. h is to measure and account for the econom- Material topics also arise from our own risk ic, social and environmental impact of the management framework and from discus- Finnair Group’s activities, and to identify and sions with outside interest groups. Accord- explain the strategic business ramifications ingly, the key material topics in this report of this impact. Shareholders, customers, em- are (in alphabetical order): ployees, other interested stakeholders and • Customer satisfaction and service quality m the general public at large comprise our in- • Energy use and reutilisation of waste ed iu tended audience. The scope of the report is • Greenhouse gas emissions m defined according to theFinnair Group’s ma- • Impact (including noise) on communities Importance to stakeholders terial activities in 2012 across all its units. • Labour relations and human rights • Long-term financial sustainability Materiality • Safety Since 2008, we have prepared this report • Supply chain oversight according to guidelines established by the lo Global Reporting Initiative (GRI). In consid- See the accompanying matrix which illus- w ering the relevant materiality of our opera- trates the degree of importance different tions, we have taken into account stakehold- stakeholder groups attach to particular ma- er input, including customer feedback, em- terial subjects. Influence on business success

Importance to stakeholders Shareholders & Analysts Customers Employees Government NGOs General Public Customer satisfaction and service quality high high high high medium high Energy use and reutilisation of waste high medium medium medium high medium Fuel efficiency/Greenhouse gas emissions high high high high high medium Impact (including noise) on communities medium medium medium high high high Labor relations and human rights high medium high high high medium Long-term financial sustainability high medium high medium medium medium Safety high high high high high high Supply chain oversight medium medium medium medium high medium 7/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Only a profitable “company can invest in its future and offer employment in the long term. Ville Iho, Deputy CEO from 27 Jan 2013 onwards Our year 2012

ear 2012 was a turnaround year for YFinnair: Our operational result returned to the black after four years of negative results. The structural change and cost savings program we started in 2011 proceeded fast- er than planned, and Finnair also improved its sales and network management, increasing passenger volumes. We flew with fuller planes than before.

Sustainable profitability is a key requirement for socially and environmentally sustainable business operations. Only a profitable company can invest in its future and offer employment in the long term. We have gotten off to a good start, but are still far from our long term target operating profit margin of 6 per cent, which is needed for financing future fleet investments. Renewal of the fleet is vital for Finnair’s competitiveness, as each 7 8/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

new generation of aircraft technology offers GA Telesis about selling a part of the engine The changes in Catering and Engine Services individuals at Finnair in 2009 after the then- significant cost effectiveness benefits. operations. If implemented, the deal would were preceded by thorough evaluation pro- CEO had left the company in fairly dramatic enable continued employment for 80 engine cesses, where we mapped both our own cost way, caused much talk among Finnair per- Focusing on airline business services professionals at Helsinki Airport. level as well as different alternatives for im- sonnel in 2012. Finnair published these bo- During 2012 Finnair implemented major proving the competitiveness of the opera- nuses in its financial review of 2011, as the structural changes and focused more on its Flybe cooperation expanded tions. During that period, we held several dis- bonuses were paid that year. In the light of core business as an airline. In August, LSG In October 2012 we transferred our Embraer cussion sessions and communicated the status the changed situation in 2012, people found Sky Chefs took full managerial and opera- traffic to the operations of our cooperation of the process to employees on a regular ba- it difficult to understand why such bonuses tional responsibility for our inflight and ca- partner Flybe Finland. The move was a part sis. Especially in the case of Engine Services, were granted in 2009. tering service provider Finnair Catering, and our efforts to improve the profitability of personnel did not always agree with calcula- more than 500 Catering employees thus got our loss-making European traffic. The only tions made by Finnair, which were based on The company has committed to more open a new employer. LSG Sky Chefs’ world-class change for our customers was that the cabin a comparison of costs between our own op- communications on pay and remuneration process understanding, purchasing power crew for these flights comes from Flybe. Ap- erations and other market players. Factual issues, which inevitably will be on the agen- and global product development will enable proximately 120 Finnair pilots agreed to fly information was provided to the personnel to da also in 2013, as Finnair continues to seek Finnair to offer its customers higher quality Embraer flights operated by Flybe for Finnair solve the differences in points of view. cost savings and productivity improvements. meals in a more a cost effective way. on a temporary basis, and they will then in Finnair implemented a change in the short- due course come back to Finnair and receive term incentive program for the management In the summer, we implemented another additional training to fly our Airbus flights. in 2012, changing the formula used for cal- significant change, when Finnair made the The cooperation with Flybe has started well, Together with personnel culating the incentives, which resulted in a decision to buy engine and component ser- and customer feedback has been positive. “we will find ways to decrease of approximately 6 per cent in the vices from a specialised service provider, SR Customer satisfaction on Flybe operated average target cash remuneration of man- Technics in Switzerland. This meant discon- flights is on par with theFinnair operated secure our future. agement. Toward the end of 2012, Finnair tinuing Finnair’s own engine operations and flights. FromFinnair, a cooperation of this also discontinued its incentive program tar- major adjustments in our component ser- magnitude requires a new way of working, For Finnair, re-employment of personnel im- geted at the entire personnel, and intends vices, and decreasing more than 200 posi- and we have developed control systems for pacted by personnel reductions is important. to develop during 2013 new programs that tions from Finnair Technical Services. Finnair monitoring and ensuring a high quality of Together with employment authorities and work better from both the personnel and agreed with labour unions on a financial sup- operations on a continuous basis. Approxi- other key players, we have developed a service the company point of view. The long-term port package, including re-employment sup- mately 30 per cent of our European traffic is called Career Gate to support redundant em- incentive program for management has also port, for employees who lost their jobs. We now operated by our partner Flybe Finland. ployees in seeking new employment. The first been renewed. held long discussions with the personnel experiences from Career Gate have been posi- representatives about the contents of the Changes not easy for personnel tive and we will continue to develop it further. Savings to improve package, and personnel at Technical Services The changes during 2012, which also included competitiveness continue walked out twice during the process. Final- use of subcontracted cabin crew on certain Lively discussion of bonuses In the second half of 2012, we announced a ly, an agreement was reached. Finnair has routes and personnel decreases in customer from year 2009 new savings program that targets addition- been conducting negotiations with US based services, were not easy for Finnair personnel. Special bonuses, which were granted to key al annual savings of 60 million euros. The 9/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

earlier announced 140 million euro savings ops more efficient flight procedures together program is well on track, but it is clear that with local air traffic control and Eurocontrol sustainable profitability and the upcoming – examples include increasing the amount of New containers reduce major investments that are vital for our com- Continuous Descent Approaches as well as “C02 emissions by petitiveness require further decreases in our integration with the European Collaborative cost level. The planning of the new initiatives Decision Making system, which decreases un- 2.5 million kilos. has now commenced and we seek savings pri- necessary waiting both at the taxiing phase marily from internal efficiency improvements and during flight. and from renewal of structures impacting productivity of work. We believe that togeth- Toward global emissions er with the personnel we will be able to find trading? ways to secure Finnair’s future in the rapidly Emissions trading aimed at reducing CO2 changing and ruthlessly competitive aviation emissions caused concern for airlines dur- market. Even though simplifying the heavy ing 2012. The European Union’s Emissions cost structures at Finnair requires difficult Trading Scheme came into effect at the be- actions, preserving the company’s vitality is ginning of the year and Finnair prepared for the best alternative for all parties involved. it in our own operations. Due to the opposing views and counteractions by different coun- Environment and costs go hand tries arising from the EU’s unilateral approach in hand to a global problem, the EU made the deci- For an airline, profitability and environmental sion at the end of the year to take a time- responsibility are tightly linked, as fuel costs out in implementation of the scheme. As a form approximately one third of our costs. consequence in 2012 the Emission Trading We seek fuel efficiency first and foremost Scheme only applies to intra-EU flights. We by using a modern fleet, but also by several hope this time-out will be used the right way smaller, daily choices. Aircraft weight man- and we will soon have a global system, which agement is a part of our daily work. In 2012, encourages airlines everywhere to limit their we selected new, lighter containers for car- CO2 emissions and removes the threat of pos- go use, which bring us annual fuel savings of sible trade wars. approximately 800,000 kilos, reducing our CO2 emissions by 2.5 million kilos. Fuel efficiency was a key criterion also when we Ville Iho selected the engine supplier for our future Deputy CEO Airbus 321 ER aircraft. Finnair also devel- Finnair 10/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Rich history, bright The price of fuel – and the climate future “repurcussions of burning fossil fuels – is motivating companies of all stripes to increase their climate-change awareness and n 2013 Finnair is celebrating its 90th an- develop greater intelligence on Iniversary. While the year provides a fine occasion to stop and look back, one key rea- green issues. son the company has lasted so long is that we Kati Ihamäki, have never stopped looking ahead. From the Vice President, Sustainable Development civil aviation pioneers of the 1920s to today, the world has always rewarded those who are prepared for tomorrow. Such preparation is the essence of what sustainable development is about.

2012 saw several good developments in the company’s long game, not least of all the first positive financial result since 2007. But perhaps even more gratifying news from a risk management and sustainability work perspective was Finnair’s inclusion as the first ever airline in the Carbon Disclosure Project’s Lead- ership Index. The CDP operates the world’s only global climate change reporting system, 11/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

gathering data on behalf of institutional inves- geted the UNICEF Schools for Asia program, tors on how firms recognise, manage and limit supporting education for the most disadvan- greenhouse gas emissions as well as the busi- Finnair’s carbon taged children in 11 Asian countries. During ness risks associated with climate change. “performance sends six weeks from November 26, 2012 to Jan- uary 6, 2013, Finnair’s customers donated Earning a score of 92 out of 100, Finnair was a serious signal 69,729.28 euros of their spare change in commended for its progress in emissions re- that we are thinking foreign currencies, using special envelopes duction, improvements in reporting capabil- responsibly about placed in aircraft seat pockets and collec- ity and overall leadership on climate issues our impact and are tion boxes at Helsinki Airport. Additional- in the airline sector. Such recognition sends ly, Finnair Plus customers donated a record a serious signal to investors and the wider determined to stick amount to the project – more than 2 million public that Finnair is not only thinking re- around for the very Finnair Plus points. sponsibly about its impact on the environ- long haul. ment, but as a business it is determined to Environmental goals for 2013 stick around for the very long haul. and beyond Thanks in part to various fuel saving meas- We aim to send a similar message to share- trated on the sustainable development of ures and optimisation of the fleet and net- holders, investors and other stakeholders with our core business, the wider world still mat- work (outlined in the Operations section of this report, including the GRI section. Finnair ters greatly to Finnair, and where we have this report), Finnair is well on its way toward was one of the first airlines to begin report- reasonable opportunities to effect positive meeting its target of reducing CO2 emissions ing on environmental issues in 1997, and since change and also engage customers, those per seat by 24 per cent per seat by 2017 from 2008 the company has also embraced the wid- opportunities are worth pursuing. Partners 2009 levels. This year we also managed to er reporting ramifications of the GRI. Our 2011 to whom customers can donate Finnair Plus reduce total overall CO2 emissions – by al- Sustainability Report was also chosen as an points include the Association for Friends of most 2 per cent, despite an overall increase investor’s favourite in a Finnish sustainability University Children’s Hospitals, the Cancer in capacity. report competition where special acknowl- Foundation’s Pink Ribbon Fund, Red Cross, edgement was made of Finnair’s integration Baltic Sea Action Group, and the Finnish In 2013 we look set to keep up the pace in of strategy with sustainability reporting. Association for Nature Conservation, whose emissions reduction, as the first of five new work in Madagascar is profiled in this re- Airbus 321 ER aircraft arrives in the fleet in Finnair in the world port on page 41. September. The sharklet-equipped planes will An important part of our approach to sus- improve fuel efficiency, while the selected tainability is the continuing partnerships Perhaps our most high-profile project, how- engines, supplied by IAE International Aero with various charitable organisations and ever, remains the Change for Good partner- Engines, will also save about 300 tons of projects. While we are naturally concen- ship with UNICEF. This year’s campaign tar- fuel per year per aircraft over the compe- 12/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

tition. The new planes will be quieter and the entirety of their shipment – see page 32 more comfortable for passengers, as well as for more details. about 5 per cent more fuel efficient than the four Boeing 757s they will replace. The move Finally, although we take pride in a leader- also enables more flexibility and interoper- ship position on envixronmental issues, ul- ability between European scheduled and lei- timately we believe that when it comes to sure flights, driving up aircraft utilisation and sustainability – rather like safety – we are further reducing per-passenger emissions. better off when airlines cooperate rather than compete. To that end, in 2013 Finnair This is good news for our environmental im- is one of the pilot airlines participating in pact, but also critical to our need for a leaner the IATA Environmental Assessment (IEnvA) cost base in the future, given that fuel rep- program, which aims to create a standard, resents almost a third of total expenditures internationally recognised evaluation sys- at Finnair and that fuel costs are likely to re- tem for assessing and improving any air- main high or even rise further in the foresee- line’s environmental performance. More an- able future. Indeed, the price of fuel – and nouncements relating to our progress with the climate repercussions of burning fossil this project are due later in the year, but we fuels – is motivating companies of all stripes hope the results will lead to a new common to increase their climate-change awareness baseline approach to minimising an airline’s and develop greater intelligence on these is- environmental impact. The mainstreaming sues. To help meet this demand, for cargo of sustainable thinking in the aviation world customers we have launched a new tool to can only help our airline, our industry and help them calculate the carbon footprint of our planet.

KEY SUSTAINABILITY INDICATORS 2012 2011 2010 Flight operations Fuel consumption, 1,000 kg 785,176 800,449 704,885 Flight emissions, CO2, 1,000 kg 2,473,304 2,521,414 2,220,388 Personnel Departure turnover, % 6.9 7.0 7.3 Illness and accident absenteeism, % 4.9 5.4 5.5 13/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Achievements and goals

OBJECTIVE ACTIONS IN 2012 TIMETABLE

FINANCIAL Sustainable, profitable growth. Announced plans for further permanent reduction of Continuous objective. RESPONSIBILITY EUR 60 million in cost base, in addition to EUR 140 million announced in 2011; optimised fleet and route network; new route to Chongqing opened and new routes planned for Hanoi and Xi’an. Preparing for emissions trading. Prepared for emissions trading with assurance Enforcement of EU Emissions Trading Scheme on provided by PriceWaterhouseCoopers. flights into and out of Europe suspended for one year while a global solution through ICAO is sought. ETS continues to apply to intra-European flights, for which Finnair remains prepared. SOCIAL Reducing absenteeism due to illness and accidents. Absenteeism was 4.9% in 2012 (5.4 % in 2011). Continuous objective. RESPONSIBILITY Renewing human resources strategy and Employee Code of Conduct and Supplier Code of Launched in late 2012 with implementation and preparing Code of Conduct. Conduct written; Board of Directors approval granted. training in 2013. Developing management practices. Use of Performance Dialogue sessions with employees, Continuous objective. where targets are mutually agreed upon in line with overall company goals and strategy. Job grading also introduced, to bring a more uniform framework to work roles. ENVIRONMENTAL Reducing flight emissions. Reduced emissions from 84.41 grams per available Continuous objective; stayed on target to reduce RESPONSIBILITY seat kilometre in 2011 to 83.2 in 2012. emissions per seat by 41% from between 1999 and 2017 and by 24% between. Waste recycling. Increased recycling of Finnair Group waste from 67% Continuous objective. in 2011 to 68% in 2012. Biofuels development. No significant milestones reached, but planning Taking part in EU Biofuels Flightpath 2020 initiative. continues, as do projects with different partners to help make sustainable biofuels cost competitive with conventional fuel. Energy consumption in Finnair Group properties. Finnair’s new office facility near Helsinki Airport, the Move to HOTT due in Summer 2013. House of Travel and Transportation (HOTT), to have Gold LEED rating. 14/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

CUSTOMERS

The customer’s path 15 A sustainable journey 16 Case: Product development and the customer experience: Fare branding 17 Case: Finnair partners make the grade for quality 18 Case: Sustainable design delights customers 20 15/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Finnair 3 7 8 The customer’s path 2 4 5 6 9

23 1 11 10

22 12 WHEN YOU FLY, it’s about more than a flight. A customer’s journey is made up of numer- 21B ous encounters with the staff of Finnair and 21A its partners, each of which are critical to the delivery of an overall quality experience. This 13 20 map illustrates a few of them.

19 18 17 16 15 14

1. Point of departure / 5. Arrival at the airport 13. Boarding on the plane 20. Exiting the plane 22. On the way to the destination Airport Cabin crew Ground services destination 2. Searching for info & buy- 6. Check-in 14. Building one’s own nest 21A. Baggage claim Taxi / train / bus / car / metro ing the ticket & planning Ground services and take-off 23. Feedback Web / phone / advertising / 7. Check-in Cabin crew 21B. Transfer Web / phone / fax / letter travel agency / rumours Automat 15. Meal 3. Check-in 8. Baggage drop Cabin crew Web / text message Ground services 16. Finishing the meal 4. On the way to the airport 9. Security check Cabin crew Outside of the airport Taxi / train / bus / car / Ground services 17. Work / entertainment / metro 10. Shopping / lounge sleep / learning At the airport Airport shops, lounge Cabin crew 11. Passport control 18. Shopping In the plane Border guard Cabin crew 12. Boarding on the plane 19. Landing and abandoning Alternative path Ground services the nest Cabin crew 16/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

A sustainable A well-designed “customer experience journey goes hand in hand with sustainability goals.

AIR TRAVEL may be a necessity for modern orders of magnitude more carbon-intensive Hello, I’m Firdaus. @FHavg surprised to find that a well-designed custom- life, but in the age of climate change, so too than their vegetarian alternatives. As a re- @Finnair I do appreciate if an air- er experience goes hand in hand with sustain- is environmental responsibility. Given the sult, in November 2012 we began introduc- line promotes sustainability. I see ability goals. Witness the recycled moulded greenhouse gas emissions that are directly ing a vegetarian option in both Business and too much wastage going on in this fiber wall tiles in the Finnair lounge, for ex- attributable to aviation, how can these two Economy Class on all long-haul flights. (Pre- industry + for sake of cost-cutting. ample, that absorb high-frequency ambient needs be reconciled? At Finnair we invest viously vegetarian meals had to be specially noise and create a sense of calm during your in modern aircraft and infrastructure while ordered ahead of time.) Of course, a meat- 9VSKA @9VSKA layover. Or the time and hassle saved by flying optimising the efficiency of our operations based option remains available for all pas- @Finnair I wish I could say yes. But the most direct (and therefore least carbon in order to keep our carbon profile – and sengers as well. not right now, unfortunately. intensive) route via Helsinki instead of some fuel bill – as slim as possible. We also re- But how much do sustainability concerns other less efficient, more congested hub. utilise more than 60 per cent of catering truly impact a customer’s choice of airline? All three answers are fair and certainly In the long term, we believe that there waste, and have implemented various en- Recently we decided to ask directly custom- valid, and to judge from other surveys we’ve need not be a trade-off between the expand- ergy-smart practices in our office buildings ers following us in other social media. Here conducted, roughly representative of general ed possibilities for trade, travel and tourism and ground operations. But as a service is a sampling of the conversation on Twitter: consumer attitudes on this topic as well. But that aviation brings to customers and a sus- company that ultimately exists to support to users such as @9VSKA, we’d like to point tainable and responsible future. The Finnair the needs of customers, we also stay en- Finnair @Finnair out that even if you’re not in a position to promise to customers dovetails with a com- gaged with customers for their feedback on Does #sustainability factor into your make sustainability a major factor in your mitment to that future. how else we can improve the sustainability choice of airline? If so, how?#ecofly travel choices, Finnair believes in providing of our product offering. customers the opportunity to fly greener In late 2011, we organised (in cooperation Tomi Rintanen @Tomi_Rintanen whenever possible, with minimum effort. At with Helsinki Airport) the Quality Hunters @Finnair Choice of a “sustainable” every stage of the customer journey, from Season 2 initiative, where we hired seven airline factors on business flights, choosing paperless boarding passes to se- Quality Hunters to travel the world in search but for personal flights: price, lecting a meal to picking the right hotel at the of new ideas to improve air travel. Among schedule&connections are the key. destination, customers are given options to the wider online Quality Hunters communi- effect small but meaningful change. They also ty, by far the most popular suggestion put to are able to donate their Plus points to a num- Finnair was to provide more vegetarian meal ber of charitable projects, should they wish. choices, noting that meat-based dishes are Moreover, customers may be pleasantly 17/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

CUSTOMERS: CASE

Product development and the customer experience:

Nora Härme, Head of Ancillary Fare branding Services, was project manager for fare branding project. Photo: Tim Bird

FINNAIR’S NEW TICKET TYPES

journey of a thousand miles begins with there is an additional SAVER ticket type in BUSINESS CLASS: Business Class premium age service, priority airport services (check-in, A a single step, but a flight always begins Economy. services, full flexibility. Business Class cabin security, boarding, baggage claim), two pieces with one thing: your ticket. And in today’s and meal service, lounge access, priority air- of checked luggage, one carry-on, advance aviation industry, what you pay for and what Although the ticket types differ in terms and port services (check-in, security, boarding, seat selection, unlimited flexibility, full refund you get is not always transparently clear, as flexibility (see table), no matter the ticket type, baggage claim), two pieces of checked lug- of unused tickets, 150% Finnair Plus points. airlines’ practices vary from company to com- all Finnair tickets include at least one carry- gage, two carry-ons, advance seat selection, pany. on, one piece of checked luggage and a route- unlimited flexibility, fully refundable, 200% VALUE: Flexibility for travellers. Economy specific meal or beverage service on flight. Finnair Plus points. Class cabin and meal or beverage service, one In an effort to improve clarity in ticket pricing piece of checked luggage, one carry-on, pos- and offer fares to all segments of customers in ”These new ticket types enable passengers to BUSINESS SAVER: Pampering for leisure sibility to change name, flight or date for a the fast-growing market in air travel, Finnair book the fare most appropriate for their needs, travellers, cost efficiency for business trav- fee, partial refund for unused tickets, 100% implemented a major renewal of ticketing in in a simple and transparent way, without sac- ellers. Business Class cabin and meal ser- Finnair Plus points. November 2012. The target was simple; to in- rificing the core product offering that all pas- vice, lounge access, priority airport services crease transparency and to make it easier for sengers expect from a high-quality, full-service (check-in, security, boarding, baggage claim), BASIC: Best available fare with all the necessary customers to choose the services they need. airline like Finnair,” says Anssi Komulainen, two pieces of checked luggage, two carry-ons, services for convenient travel. Economy Class We developed new “branded” fares, or ticket SVP Customer Service. “We want to offer clear advance seat selection, limited flexibility, par- cabin and meal or beverage service, one piece types: BUSINESS and BUSINESS SAVER in and understandable options to customers who tially refundable, available only on interconti- of checked luggage, one carry-on, non-changea- Business Class and PRO, VALUE and BASIC come from all walks of life and who each have nental flights, 200% Finnair Plus points. ble, non-refundable, 50% Finnair Plus points. in Economy Class. In Asia and North America, different needs and priorities when they fly.” PRO: Priority airport services, full flexibil- For more flexibility, customers can choose dif- ity. Economy Class cabin and meal or bever- ferent ticket types for return flights. 18/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

CUSTOMERS: CASE Finnair partners make the grade for quality

Specialised global partners “can help us with their competence and improve the quality of operations. 19/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

s Finnair focuses more on its core airline External partners provide services in many the processes operated outside your own and ending with the final pick.” Abusiness, the company has outsourced operational areas, says Iho, including flight company.” many specialised services to reliable part- operations (contract-flying and codeshare Criteria for selection include economical, op- ners in a drive to improve economic effi- arrangements including cooperation with Specialists develop competences erational and quality related issues. Special ciency and operational quality. But in all op- partner airline Flybe), maintenance (heavy Finnair has a long and respected heritage importance is attached to the SLA (Service erations, whether outsourced or in-house, maintenance, engine maintenance, compo- in aviation, but that does not make an air- Level Agreement) and the criteria that the safety and quality remain the top priorities, nent maintenance), and ground services (de- line masters in every field. “Specialised vendor is willing to accept within that context. and in the end, Finnair is still responsible for icing, fuelling and loading). global partners can help us with their com- them. Choosing the right partner can help petence, and we have seen great quality de- “Meetings between operational teams on bring improvements to safety and efficien- For all partners, adherence to the Finnair sup- velopment, for example, in ground handling both sides are also very important, allow- cy that Finnair could not achieve otherwise plier Code of Conduct (ethical guidelines) is since outsourcing our hub ramp operation ing us to get a sense of the culture prevail- on its own. expected. “Fortunately all vendors producing to Swissport.” The fact that the Helsinki hub ing inside the vendor company. Before en- services for airlines are working according produced the best operational quality ever re- tering into the final agreement, the partner “We have a specialised unit, Safety and Qual- to clear international standards, including corded in 2012 is evidence of that, he says. At is of course officially audited. ity Management, which continuously evalu- IOSA (IATA Operational Safety Audit),” Iho the same time, safety related indicators have ates Finnair operations, including those which explains. “Even so, for us the basic stand- clearly shown a positive development as well. “We have gone through major outsourcing have been outsourced,” says Chief Operating ards are not enough: in addition, we have processes in various areas of our operations,” Officer Ville Iho. “Methods include audits, our much, much stricter internal and related In a relatively compact industry like avia- says Iho. “Experiences from the SRT, LSG, inspections, observations and external infor- auditing and reporting routines. tion, it is easy to share information open- Swissport and Flybe cooperations have been mation-gathering. And of course when con- ly between and about different companies. very positive.” sidering a partnership, the safety and qual- “The most important thing is to work closely “Usually the players we work with are well ity culture of a potential vendor have always with the vendor and maintain knowledge in- known for their track records and reputa- See the accompanying timeline on the devel- been evaluated.” house about the outsourced service. Only in tions. Any selection is multi-phased, start- opment of Finnair’s operational ecosystem that way is it possible to control and steer ing from a long list of potential candidates in 2011–2012.

Focusing on core competences while partnering with world-class specialists

August 2011 November 2011 July 2012 August 2012 October 2012

Finnair and Flybe (UK) acquire Finnish Baggage and apron services Engine and component services LSG Sky Chefs (Germany) partners Flybe Finland begins operating Commuter Airlines and set up the transferred to Swissport transferred to SR Technics with Finnair to assume managerial Finnair’s Embraer aircraft on select holding company Flybe Nordic, whose (Switzerland). (Switzerland). and operational responsibility for European “thin” routes. Flybe Finland begins operating select Finnair Catering, which remains domestic and short-hop routes on owned by the Finnair Group. behalf of Finnair. 20/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

CUSTOMERS: CASE Sustainable design delights customers

ableware and textiles used in aircraft rience from spring 2013. Marimekko table- strict requirements of the aircraft envi- The Business Class tableware is made with Tneed to endure hard use. They are ware and textiles will bring their own fresh ronment. Special attention was paid for a new kind of porcelain that has been de- washed thousands of times, transported touch to the visual environment of the cab- example to durability, stackability and signed for flying. Thanks to the composi- from one place to another, and packed in in, and support Finnair’s customer service functionality in the serving situation. The tion of the porcelain, the tableware items tight spaces. Tableware and textiles also play promise, which is to bring Peace of Mind to prints used in the tableware and textiles are very durable, but approximately 10 to a key role in creating the right kind of atmos- our customers. are classic designs by the legendary design- 20 per cent lighter than traditional mate- phere in the cabin. Finnair has joined forces er Maija Isola, and they reflect the forms rials. This helps in part to reduce aircraft with Finnish design house Marimekko and is Designer Sami Ruotsalainen created the and colors of Finnish nature. Finnair cus- weight and hence fuel consumption and integrating Marimekko-designed tableware Marimekko for Finnair collection for air- tomer service and catering experts were carbon emissions. and textiles to the Finnair customer expe- craft use, combining aesthetics with the also part of the planning team. 21/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI PERSONNEL

A year of major structural reform 22 Job grading: Bringing a uniform framework to work roles 24 Codes for success 25 Case: Staying safe on the job 26 22/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

FACTS

CAREER GATE IS A PATH A year of major TO NEW BEGINNINGS Finnair’s Career Gate service helps personnel with re-employment. In 2012, the structural reform Career Gate service organised a number of information sessions and offered one- on-one support for re-employment:

11 information sessions on change IN 2012, Finnair carried out a number of sub- ly meetings between management and all Finnair’s catering operations were trans- security (373 participants) stantial structural reform projects in order shop stewards. ferred to the Germany-based LSG Skychefs in to improve its financial standing and com- In 2011, Finnair announced plans to iden- summer 2012, but Finnair Catering remains 6 information sessions on retirement and petitive position, resulting in a decrease in tify more cost-effective alternatives for or- a subsidiary of Finnair. However, decisions pensions (159 participants) personnel of 1,013 employees. When Finnair ganising its catering operations as well as regarding catering operations are now in started its structural reform and cost re- its engine and component services. The de- the hands of LSG Skychefs, which also has 3 recruitment events (193 participants) duction programme in August 2011, it was cision to make the announcement early was the option of buying the business during the clear that the initiatives would involve dif- made despite the fact that, at the time, the term of the contract between the two par- 1 information session on applying for ficult changes with regard to company per- company was still analysing its operational ties. In conjunction with the change, Finnair work (15 participants) sonnel. strengths and weaknesses and potential busi- Catering was renamed LSG Skychefs Finland. “The members of the Executive Board de- ness partners. The structural reform projects Finnair now purchases catering services for 3 information sessions on training cided that our approach and operating prin- for catering and engine and component ser- its flights departing from Helsinki from LSG (114 participants) ciple would be characterised by the word “to- vices were implemented in summer 2012. Skychefs Finland. gether”: all structural reforms would be im- After a comprehensive analysis of poten- 1 information session on plemented together with our personnel and tial business partners and employee consul- entrepreneurship (20 participants) we would communicate the plans as openly as tations, Finnair decided to discontinue its in- possible at an early stage”, explains Manne house engine operations and make significant We didn’t want the 25 persons participated in one-on-one Tiensuu, Finnair’s Senior Vice President adjustments to its component services. As of “changes to take anyone counselling on employment of Human Resources. “We didn’t want the July 2012, Finnair has been purchasing the changes to take anyone by surprise. We knew corresponding services from SR Technics. The by surprise. 100 persons attended initial assessment this would result in increased uncertainty reforms resulted in a reduction of approxi- discussions among our employees, but we nevertheless mately 280 jobs in Finnair Technical Services. In spring 2012, Finnair announced plans wanted to give people time to prepare for Since summer 2012, Finnair has been in talks to transfer its Embraer traffic to be oper- 111 persons attended re-employment the coming changes.” with the US-based GA Telesis about the pos- ated by its business partner Flybe. Accord- coaching The structural reform projects were dis- sible sale of a part of its engine service oping to Finnish legislation governing business cussed with employee representatives in erations, which could allow some of the dis- transfers, personnel are typically transferred both unit-specific discussions and in month- continued jobs to be saved. along with the business operations being 23/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

OPEN AND CONTINUOUS DIALOGUE PLAYS A KEY ROLE

FINNAIR has seven employee organisations event to discuss the industry situation and and a total of eight different collective bar- Finnair’s strategy and to jointly develop ideas transferred. However, in this case Finnair and may help avoid the need for layoffs entirely gaining agreements. In autumn 2011, the for improvement. Over 75 per cent of the par- the pilots concerned agreed that while some in certain months. management of the company decided to focus ticipants stated that the objectives set for the 120 Embraer pilots would be transferred to Reductions in personnel were also imple- on creating an increasingly open culture of event were achieved to a good extent. In par- work on flights operated by Flybe, they would mented in Finnair’s ground handling opera- dialogue by launching regular free-form dis- ticular, participants gave positive feedback remain employed by Finnair and, after com- tions, as check-in functions were revamped cussion sessions to facilitate the informal regarding the event’s constructive atmos- pleting supplementary training, return to op- in spring 2012. While the possibility of re- exchange of views and opinions. In total, eight phere and the approach of working together. erate Finnair’s Airbus fleet as vacancies arise. dundancies was discussed with employees such meetings were arranged in 2012 under In conjunction with these changes, an agree- already in the spring, personnel consulta- the title “Trust Forum”. Participants included Finnair’s various units also meet with rep- ment was reached on productivity improve- tions on reductions were conducted only in shop stewards and occupational safety del- resentatives of employee organisations in ments and cost reductions pertaining to all late autumn after the company had accumu- egates as representatives of employee organi- monthly meetings and weekly departmen- Finnair pilots. lated sufficient experience of using the new sations and members of the human resource tal meetings. The company also organised A corresponding agreement was not operating model. administration and senior management as a total of six information sessions pursu- reached with cabin crew. Finnair assessed In autumn 2011, Finnair launched the representatives of the company. ant to the Finnish Act on Co-operation Within the willingness of cabin crew to transfer to Career Gate service to help employees made Undertakings in 2012. Flybe, but no cabin crew members were in- redundant as a result of personnel cuts to find The two-hour sessions cover current topics. clined to transfer. Nevertheless, the amount new work opportunties. “The experiences The Trust Forum sessions in 2012 covered the Finnair has also encouraged all employees to of cabin crew work available at Finnair was re- with the service have been encouraging in following subjects: modes of co-operation take advantage of the opportunities for dia- duced as Embraer flights were transferred to 2012. Employees have found the Career Gate between the company and employee organi- logue offered by the new intranet launched in Flybe. “We didn’t want to oblige any employ- service useful,” says Tiensuu. sations, developing the procedures for imple- 2012 to highlight matters of concern. ee to transfer, even though that is standard The Career Gate services are provided in menting redundancies, supporting re-employ- practice in the context of business transfers, conjunction with employees, relevant or- ment through the Career Gate service, special Finnair employee organisations: as the positions concerned were customer ganisations and the authorities. The service bonuses granted in 2009, matters related to • Finnish Airline Pilots’ Association (SLL) service work,” Manne Tiensuu explains. “We comprises information sessions, recruitment an apartment transaction involving the com- • Finnish Cabin Crew Union (SLSY) and the employees agreed that the person- events and re-employment coaching. In to- pany’s CEO, equality and non-discrimina- • Finnish Aviation Union (IAU), Ground nel who were entitled to transfer would re- tal, some 1,000 people attended Career Gate tion policies, internal communication and its and Technical services main employed by Finnair, but that the need events in 2012. improvement, the company’s ethical guide- • Finnairin Insinöörit Firy (Finnair Engineers’ for reductions in personnel created by the lines, incentive systems and company car pol- Association) changes would be met by layoffs until the icy. The materials covered in the sessions are • Finnairin Ylemmät ry (Finnair White-Collar cabin crew’s agreement on protection against also distributed to participants through the Employees Association) unilateral termination expires at the begin- company intranet portal. • Finnairin Tekniset ry (Finnair Technical ning of 2014.” In addition to the layoffs, the Employees’ Association) company will offer employees the opportu- In August, members of the Trust Forum • Suomen Lentovirkailijat ry (Finnish Aviation nity to take voluntary unpaid leave for a pe- attended a two-day discussion and teamwork Employees Association) riod of one month. Voluntary unpaid leave 24/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Job grading: Bringing a uniform framework to work roles

ONE MAJOR PROJECT for Human Resources Grade 1 in 2012 was establishing a system of consist- Executive ent job grading throughout the company. Job leaders Maintaining mobility SVP Executives grading outlines a uniform process and struc- “between grades is ture to classify all positions within Finnair. Grade 2 a & b The structure consists of internal job grades important. Business and function leaders VP, Head of, MD assigned to each position based on formal job descriptions. The grades provide a fair Grade 3 Director and transparent structure for determining Business and function managers base pay, incentives and benefits. Head of, Director The job grades reflect tasks and account- abilities within the organisation structure, Grade 4 Business and function managers not the hierarchical reporting structure. Typi- Manager cally, the grades vary for positions report- Managers ing to the same supervisor. In some cases an Grade 5 employee’s position can even be graded the Functional experts Expert, Consultant, Manager same as the position of his or her supervisor. From the point of view of both personal Grade 6 Experts and organisational development, maintain- Team leaders and functional experts ing mobility between grades is important. An Team leader, Supervisor, Expert, Analyst employee can move around grades horizon- tally and vertically, depending on the stage in Grade 7 Specialist and employees his or her career. In cases of a move to a lower Specialist Representative, Coordinator Planner, Specialist Employees grade, this can reflect a natural professional shift from one area of expertise to another. Grade 8 The accompanying diagram describes and Specialist and employees Assistant, Coordinator, Clerk explains the different job grades.

25/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Codes for success

THE PAST YEAR saw several important developments at Finnair in the social aspect of “APARTMENTGATE” its sustainable development. Chief among them was the approval by the Board of Di- RAISED PUBLIC DISCUSSION IN FINLAND rectors of a new Code of Conduct for all management and employees. In a logistically de- THE APARTMENT ARRANGEMENTS of Finnair. Finnair also leases office facilities from manding business with global reach in many Finnair CEO Mika Vehviläinen raised public dis- Ilmarinen. different legal jurisdictions and cultural tra- cussion in 2012. As part of his terms of employ- ditions, good intentions and instincts are not ment as CEO, Vehviläinen had a company hous- Helsingin Sanomat, the Finnish daily, wrote enough – clear ethical guidelines and princi- ing benefit which he did not use during 2010, about the apartment arrangement in spring ples for doing business must be articulated his first year as Finnair CEO, nor did he receive 2012, raising a vivid discussion around the as well. The full text of the Code can be found any compensation to cover for it. topic. After that, the police announced they at www.finnairgroup.com in the Corporate had started, on their own initiative, an investi- Responsibility section. In 2011, Vehviläinen sold his apartment to pen- gation on suspected bribery in relation to the As an airline, however, we are only at the sion insurance company Ilmarinen at a market apartment arrangement. In September 2012, tip of a very deep supply chain. Of equal im- price. Ilmarinen then leased the apartment the Deputy Prosecutor General decided not to portance, then, is the Supplier Code of Con- to Finnair at a market rent, for the purpose of bring any charges, declaring that nothing in the duct, which governs all procurement deci- the housing benefit that the CEO was entitled matter had been against the law. sions and also came into force in 2012. It to under his service contract. Vehviläinen thus can also be at www.finnairgroup.com in the continued to live in the apartment, accord- The spirited discussion around the apartment Corporate Responsibility section. ing to the terms of his company housing ben- topic showed that adhering to laws and regu- These formal declaration of principles are efit. Ilmarinen isFinnair’s pension insur- lations is not enough, but matters should be intended to help us build a strong and fair ance company, and in 2011 Ilmarinen’s CEO viewed in a wider context as well. business on a solid foundation of ethics that was appointed the Chairman of the Board at will stand the test of time. 26/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

PERSONNEL: CASE Staying safe on the job

The aim of occupational safety is “to promote well-being at while increasing productivity with lower Kimmo Ketola (left), Head of Health Services, injury costs and better work quality. and Anna Melleri, Head of Work Safety. Photo: Tim Bird 27/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

ealth and safety is every employee’s and to provide information. We are also re- ing ensure that we follow guidance and ful- at a high level meeting. As part of your job, Hfirst priority atFinnair. Head of Health sponsible for providing mandatory occupa- fil responsibilities spelled out in the Finnish workplace safety is never “finished”. It’s an Services Kimmo Ketola and Head of Work tional health services for most Finnair staff, Occupational Health and Safety Act and other ongoing state of awareness. Safety Anna Melleri describe their roles at with the exception of some Finnair Group en- workplace safety standards. The overall aim Finnair and share their perspectives on how tities, which have their own services in place. is to promote well-being at work while in- What happens if someone is best to promote and maintain employee safe- Additionally we provide aviation medical ser- creasing productivity with lower injury costs injured on the job? ty and well-being. vices for pilots and cabin crew at the Finnair and better work quality. We are serving a AM: Every employee is insured for accidents Aero Medical Centre at Helsinki Airport. We support function for line managers and em- at the workplace and in work-related travel- Explain the difference between do regular medical check-ups there for fly- ployees, who bear ultimate responsibility for ling, worldwide. In Finland, by law this also health and safety. ing personnel. safety. Our work plays a part in risk manage- includes commuting. If an employee has suf- Kimmo Ketola: Health is more personal, ment at the frontline level. fered an acute injury, normally we call 112 your physical and mental state. It’s about bi- AM: If medical attention is needed while per- and get an ambulance to the scene immedi- ological, psychological and social well-being. sonnel are on duty abroad, all employees are What are the rules of thumb to ately. In minor accidents, the injured should covered with appropriate insurance. workplace safety? report to their supervisor, get an insurance Anna Melleri: Safety is more about the sur- AM: Follow instructions and regulations. Use certificate from her or him, and seek medical rounding environment, what kind of risks the KK: Occupational Safety looks after the safe- and take care of equipment and safety de- care from the doctor of their choice. environment exposes you to, and how you ty of the work environment itself, but Health vices properly. Report hazards or other risks, minimise those risks. Services gives input and medical opinions and eliminate them when it is possible to do What are the most typical on that as well. We assess the work environ- safely. Take responsibility for your own and workplace accidents? KK: Of course, feeling safe is your basic need, ment together with employees – the psycho- others’ safety. AM: Ordinary slips and falls are not uncom- and that plays directly into your health and social aspect as well as the physical environ- mon. Some employees can also be at risk of your personal sense of wellbeing. ment – and evaluate ergonomics, chemicals, How would you describe a good sharp objects and tools. anything that might impact on health. We safety culture? AM: And a work-place accident can ruin your also manage return-to-work if someone is KK: It’s about a mindset, part of how you KK: Commuting accidents also happen every health. So our two functions naturally have on a long sick leave. We can help the per- think about your job. now and then, though as a company there scope for cooperation. son return with adjusted working hours or isn’t much we can do about events that hap- improved ergonomics in the workplace, for AM: Culture is “the way we typically do things pen outside our own premises. What is Finnair Health Services example. We work very closely with manag- around here” -attitude, skills and actions all responsible for? ers in these cases. in the service of a zero-accident mentality. AM: But we can increase our safety aware- KK: Health Services is responsible for pro- Daily communication with colleagues is very ness on our own, as individuals. That’s part viding the means and the information for And Occupational Safety? important. This relates to a full range of safe- of safety culture. personnel to stay in good health. Ultimate AM: My work is more strictly about pre- ty critical behaviors, from the wearing of high responsibility for personal health lies with venting accidents and continuously devel- visibility clothing to the handling of tools or employees themselves, but we’re here to help oping the safety culture. It’s also about help- the seriousness with which safety is discussed 28/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI OPERATIONS Sustainable operations 29 Case: Weight-watching the way to lower emissions 30 Case: Calculating emissions for cargo customers 32

Photo: Tim Bird 29/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Sustainable operations

WHAT IS DESIGN? In 2012 this question was on the minds of many in Finland during Hel- sinki’s World Design Capital year. To Finnair, design is a systematic way of doing things, an outlook. Smooth, safe and punctual airline operations are all about developing the right processes, which need to be carefully designed with the end customer in mind. Good design of any service or product also fundamentally meets three requirements: usability, desirability and sustainability. The usability and desirability of our service, we hope, speaks for itself. But the sustainability of operations is usually hidden from view – after all, safe and smooth operations means that the customer hardly no- tices them. But from network and fleet optimisation to “weight watching” to fuel-efficient piloting techniques, behind the scenes many experienced professionals are working to keep our carbon profile lean and the airline on track to meet its ambitious emissions reduction target: 24 per cent per seat by 2017, from 2009 levels. 30/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

OPERATIONS: CASE Weight-watching the way to lower emissions

Weight is an important “factor, because each kilo we carry increases Operations analyst Juha Karstunen and one fuel consumption. of Finnair’s new light-weight cargo containers. Photo: Tim Bird 31/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

trict control of aircraft and load weights containers, says Karstunen. “Kevlar is more Shas become a normal process in Finnair’s durable than aluminium and easier to han- everyday business. When evaluating any new dle and repair. Also the extremes of Finn- items that go into aircraft, weight is taken into ish weather (temperatures can fall to mi- account along with price, safety and qual- nus 20 degrees centigrade and snow fall kg ity. From seats to catering trolleys to cof- can be heavy) bring another constraint in fee sticks, “weight is an important factor, terms of the products and materials that can 50saving from each Finnair flight reduces annually because each kilo we carry increases fuel be used. Kevlar is highly resistant to tem- consumption,” says operations analyst Juha perature changes. Better overall durability Karstunen. brings savings over the container’s lifetime and in that way supports our sustainabili- 330,000 kg These considerations extend to the materi- ty goals. We decided to change all the long of fuel als used for cargo containers. “Our new LD3 haul containers at the same time because containers, used in A330 and A340 aircrafts, of the massive overall savings potential. In are made of Kevlar,” Karstunen says, refer- short haul traffic the savings potential with ring to a high-strength synthetic fibre first lightweight containers is lower, and in any used as a commercially produced material case, a different container type is used for in the 1970s to replace the steel elements of narrow-body aircraft.” tyres in racing cars. Aviation materials technology is evolving but “The material is better known from its mili- remains governed by tight regulations. “Natu- tary applications, and it’s a very strong and rally we continuously develop our operations light composite material. Our containers are and as part of this we evaluate new possibili- currently the lightest on the market and 25 ki- ties when it comes to the materials or equip- los lighter than our old aluminium contain- ment to be used in our aircraft,” Karstunen ers. That represents about 800,000 kilos in concludes. “The evaluation process has to annual fuel savings, or 2.5 million kilos of be carried out with the greatest care, and CO2. Lighter weight also means greater safe- decisions are not made only on the basis of ty during ground handling and smoother op- price. Regulations in the aviation business The amount is erations overall.” are very strict when it comes to materials equivalent to the and components. We can’t select whatever weight of three As well as weight, durability and strength vendor or product we like unless it has been average-size blue are also significant selection criteria for certified for airline use.” whales. 32/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

OPERATIONS: CASE This tool helps us “maintain and develop a very competitive Calculating emissions value proposition to our customers. for cargo customers Milla Nyholm, Marketing manager, Finnair Cargo

ore companies than ever require de- “Responsibility for emissions begins with ac- Mtailed accounting information on the curate reporting, and tools like this will be- environmental impact of their operations. come the new normal for what customers And because, in this deeply interconnected need,” explains Milla Nyholm, Finnair Cargo’s era, more companies than ever also have marketing manager who oversaw the pro- globalised production platforms, calculating ject. “This tool helps us maintain and devel- the carbon footprint of complex transpor- op a very competitive value proposition to tation chains can get tricky. In response to our customers.” rising demand, Finnair Cargo has developed a brand-new emissions reporting tool that The cargo emissions reporting tool was de- provides forwarding agent customers with veloped in partnership with IT consultancy information on the CO2, SO2 and NOx emis- CGI Group, formerly known as Logica. CGI sions of each of their shipments’ complete was tasked with developing not only an easily journey, from origin to destination. usable interface, but a dynamic underlying system as well, capable of updating auto- The tool factors in different modes of trans- matically with new fuel consumption, pay- portation utilised by any given shipment, in- load and weight figures. “Creating a report- cluding air, road and sea. The calculator al- ing tool this accurate required highly techni- lows freight forwarders to plug in a range cal expertise both in software development of dates and access emissions information and in transport-sector emissions,” says Ulla on each of their deliveries from that time Heinonen, Sustainability Project Manager of period. Freight companies can then pass on CGI. “Thus CGI experts in sustainability con- these figures to clients who require them in sulting and business intelligence tools also their own reporting. participated in the project.” 33/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

SOCIETY

Arja Suominen: Communicating in difficult times 34 How we communicate and cooperate with stakeholders 36 One Europe, one sky 37 A global emissions trading scheme: Around the corner? 39 The role of aviation in a modern economy 40

Case: New life for Madagascar’s rain forest 41 Finnair flies to Singapore daily. 34/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Partly as a result of listening “to stakeholder input, we have been actively developing our dialogue channels and we have updated our ethical principles. Arja Suominen, Senior Vice President, Communicating Communications and Corporate Responsibility in difficult times

here was a time when most flag carrier Tairlines operated as monopolies in their home markets. And for much of Finnair’s history after the Second World War, Finnair was such an airline. But with the closer integration of Europe and the mandated lowering of barriers to open competition, during the past decade or so the market has not been kind to Europe’s “legacy” carriers, Finnair included. Aggressive competition arrived on the scene, putting severe financial strain on established airlines struggling to adapt to a new business reality.

In many respects, I am hopeful that Finnair’s 2012 will be remembered as a turning point, as the company faced down stiff competition 35/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

and executed deep structural reforms and of listening to stakeholder input, we have agement’s policy to communicate early, ex- we have found that by engaging customers cost saving programs, resulting in its first been actively developing our dialogue chan- plain why changes are needed and the choic- in social media, we can improve our commu- profitable year since 2007. nels and we have updated our ethical princi- es available, and continue the dialogue dur- nication with customers and deliver a better ples, which were approved by the Board of ing the whole change process. service as well. The difficulties throughoutFinnair’s journey Directors in the latter part of 2012. We are back toward profitability have been numer- now in the process of communicating them We are aiming at fostering a workplace cul- At Finnair, there is still much work to do to ous, however, and for an established com- and training personnel in what they mean ture of open dialogue. Successful companies achieve a long term and sustainable profit- pany in the throes of such change, timely and in practice throughout 2013. Instincts and in the 21st century have figured out that there ability as an independent company fighting open communication – with the public, with good intentions are not enough; clearly de- is much to be gained from the flattening of its own corner. But 2012 illuminated the way customers, with employees – is key to sur- fined and inarguable principles are neces- old hierarchies. On this score, to my mind a forward – both strategically, and in how we vival. Naturally, in our home market, where sary as well. major positive achievement in 2012 was the communicate amongst ourselves and with customers and the general public have strong quiet rollout of a renewed company intranet, the outside world. emotional ties with the Finnair brand, there with enhanced social networking function- has always been much discussion about the ality that encourages lively discussion and company. In times of change, the discussion We have found that surfaces employee expertise on a variety of has been lively and stakeholders – among “by engaging customers topics. This not only can help Finnair identify whom we count every Finn – have expressed early signals of challenges as it moves for- many different opinions about the change in social media, we ward, but it will also help identify opportu- and its consequences. can improve our nities for durable competitive advantage as communication and the company develops a niche for itself in a In this environment, chief among the hot- deliver a better service brave new aviation world. button topics of concern in 2012 was the level of executive compensation at the airline in as well. Since our customers are also increasingly 2009, at a time when some Finnair employ- present in a variety of social media, Finnair ees gave up part of their benefits or lost their But trying to be good listeners does not mean has developed its external social media strat- jobs. The discussion about executive benefits we have decided to take a passive or reactive egy too, and established or improved its on- unquestionably affected the tone of overall approach to communications. On the con- line presence in channels like Facebook, You- discussions of employees and other stake- trary, proactive communications remains Tube, Twitter and Sina Weibo. Perhaps the holders about Finnair’s restructuring and the vital for the development of the company most important development has been within company’s future. and the growth of its business. If there is our customer service approach: Our custom- difficult news concerning Finnair, our aim is ers can get answers to questions and prob- Listen, learn and act to communicate openly, honestly and in a lems via both Facebook and Twitter. All air- The essence of good communication is in the timely manner. The same principle applies lines sometimes face unexpected situations, old adage: “We have two ears and one mouth internally as well. In discussions on issues be it snow at Heathrow Airport or IT issues – use them in proportion.” Partly as a result that impact on personnel, it is Finnair man- affecting check-in at Helsinki Airport, and 36/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI How we communicate and cooperate with stakeholders

STAKEHOLDER CHANNELS SUBJECTS

CUSTOMERS Surveys, research, written feedback, Finnair websites, social media, customer The travel experience, customer service issues, product quality, on time service encounters at every stage of the journey. performance, emissions and noise reduction, safety, recycling, responsible tourism, charitable giving via Finnair Plus. PERSONNEL Personnel magazine, intranet, internal blogs, theme weeks, personnel events, Working capacity and wellbeing at work, target setting, Code of Conduct and 4D Wellbeing At Work survey, occupational health unit, performance dialogue ethical issues, changes to improve productivity, increasing trust, reducing sessions, discussions with labour organisations, Career Gate. environmental impact on the job, career assistance for employees made redundant. SHAREHOLDERS Stock exchange releases and reporting, investor meetings, road shows and other Improving profitability in a sustainable way, sustainable investing, improving long- AND INVESTORS events, investor section on Finnair Group website, Carbon Disclosure Project, term competitiveness in the changing market environment. Annual General Meeting. AVIATION SECTOR Membership in IATA and AEA; membership in TOI and STLN (Sustainable Travel Safety, emissions reduction, emissions trading, air traffic management, biofuel Leadership Network) for sustainable tourism; oneworld alliance member; code- supply chain development, sustainable tourism, economic impact of sector. share cooperation with other airlines; cooperation with Finavia and other airport operators; sector seminars and working groups; manufacturers. AUTHORITIES Various government ministries, ministerial working groups, events, meetings, Safety, emissions trading, air traffic management, economic contributions of AND GOVERNMENT Finnish Consumer Agency, Flight Safety Authority (TraFi), embassies. aviation, impact of operations on environment and noise, traffic continuity, biofuels, employee relations. NON-GOVERNMENTAL Cooperation with Finnish Association for Nature Conservation, Baltic Sea Action Greenhouse gas emissions reduction, environmental remediation, public health ORGANISATIONS AND Group, UNICEF, Finnish Red Cross and other NGOs. Member of the Carbon measures, disaster relief, wildlife protection, common interest projects for COMPANIES WITH SUSTAINABLE Disclosure Project. Recycling partnerships with sustainable design firms such as sustainability. DEVELOPMENT APPROACH Tikau, U6 and GlobeHope. SUPPLIERS Contractual cooperation, Finnair procurement guidelines and Supplier Code of Cooperation efforts to reduce emissions and other environmental impacts, Conduct, extranet. monitoring of responsibility everywhere in the value chain. MEDIA Press releases, press conferences, visits by reporters, press trips, interviews, Company strategy and business, emissions reduction, personnel relations, websites, engagement in social media. financial sustainability, economic contributions of aviation, ethics, charitable cooperation projects, trends in traffic, biofuels, emission trading , noise, impact of aviation on local economy and mobility. GENERAL PUBLIC Communications via media, websites, e-mail and lectures; engagement in social Customer service issues, product quality, labour relations, economic contributions media including blogs, Facebook, Twitter and Sina Weibo. of aviation, ethics, emissions reduction, presence in local economies, charitable cooperation projects, corporate citizenship. 37/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

One Europe, one sky

“AIR TRAFFIC MANAGEMENT” isn’t the most exciting phrase in the airline sector’s playbook on how to tackle climate change. It lacks the headline appeal of shiny new air- planes or intriguing innovations in alternative fuels. But overdue reform of air traffic management could, at a stroke, save around 10 per cent of aircraft emissions in Europe alone, and even more elsewhere around the world. It’s in many ways the low-hanging fruit of emissions reduction – if only we could get close enough to the tree. Today’s system of nation-based air traffic control services dates back to the founding of ICAO at the Chicago Convention in 1944. The system has functioned extremely well over the decades, and is one reason why flying has become the safest form of transportation there is. But the architects of air traffic control as we know it could scarcely have imagined aviation as it has become in 2013, with greatly expanded range in aircraft, technological sophistication in navigational tools, and a global economy dependent on routine intercontinental air travel. In Europe in particular, a patchwork of nearly 40 different nation-based flight control zones is being stretched to the limit, given the real- 38/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

ity of modern, integrated Europe with more have contributed expertise throughout the 2030, on-time implementation of SESAR will than 33,000 commercial flights on the busi- project’s lengthy definition and development reduce carbon emissions by a net amount of est days. By 2020, the EU expects that num- phases. For good reason, aviation is a cau- 50 million tons. ber to rise to 50,000. tious industry, and contemplates changes in Those gains are not automatic, however. Moreover, when navigating today’s air traf- operations only after exhaustive testing and Airlines, airports, air navigation service pro- fic control system, the shortest distance be- consultation. Similar reforms are also un- viders, labour organisations, manufacturers, tween two points is rarely a straight line. derway in the United States, China and else- and dozens of national civilian and military Planes must zigzag around dozens of frag- where, but Europe, with its dozens of national authorities all must agree on the way forward mented civil and military airspace require- borders, faces a uniquely complex challenge. for the profit of all. If successful, the revo- ments, which can be extremely wasteful of lution of air traffic management would be a both fuel and passengers’ time. Direct costs major European accomplishment, and light associated with different air traffic control the way forward for the industry. Finnair is charges over relatively short distances also The shortest distance committed to whatever actions are neces- represent a significant portion of airlines’ “between two points sary to help ensure this outcome. cost structures, and are also factored into ticket prices. Without modernisation, de- is now rarely a straight lays and inefficiencies will unquestionably line. mount, needlessly constraining opportunities for long-distance trade and travel that 2013 will be a defining year for SESAR, aviation makes possible. as the project begins to move on to the de- ployment phase, targeted for completion by SESAR – Flying on the straight 2020. Should the build-out of new infrastruc- and narrow ture and consensus among a complex array The Single European Sky, an EU initiative that of stakeholders be reached on time, the Eu- began in 2004, is intended to do away with ropean Commission forecasts a savings of these different jurisdictions, consolidate air 948 to 1575 kg in CO2 emissions per flight, navigation services, and separate the provi- shorter flight times by an average of 8 to 14 sion of those services from regulatory func- minutes, improved safety by a factor of 10, tions. This transformation in European avi- and airspace capacity able to easily cope with ation is being achieved with the help of the the next 30 years of projected growth in air practical and technical aspect of this project, travel. By 2020, the European Commission operating under the name SESAR – or Single calculates these benefits would amount to a European Sky ATM Research, to which Finnair €419 billion positive impact on European GDP and other Finnish aviation stakeholder groups and create some 328,000 additional jobs. By 39/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

A global emissions trading scheme: Finnair welcomes “emissions trading Around the corner? as a way of concretely reducing an airline’s carbon footprint.

IN NOVEMBER 2012, EU Climate Commis- several years, Finnair has been making ef- Helsinki, for example, is subject to the ETS wisdom of coming together to trade emis- sioner Connie Hedegaard announced the forts to promote the vision of a global emis- for the first leg of the journey. An airline fly- sions,” Finnair CFO Erno Hildén wrote in European Union’s intention to “stop the sions trading deal through advocacy in trade ing between the same cities via the Middle 2011’s Sustainability Report. One year later, clock” on enforcing the EU Emissions Trading associations such as IATA and AEA. East, however, is not subject to the ETS at any we aren’t quite there yet, but progress is pal- System (ETS) on flights arriving in or depart- Finnair welcomes emissions trading as stage, despite emitting more carbon along pable – down to just three different possibili- ing from Europe. Citing progress on estab- a flexible, market-oriented solution to the a longer flight path. Of course, extra cost ties for a market-based solution, according lishing a global means of reducing aviation problem of how to account for and reduce an associated with emissions trading is not the to the latest media reports. emissions, the move gives ICAO, the UN’s avi- airline’s carbon footprint. As a system that only reason customers might choose a long- Finnair is hopeful that 2013 will finally seal ation body, one more year in which to finalise precisely rewards (or punishes) airlines for er route with more emissions. But it is now the deal – and bring aviation’s green future a global deal on emissions reduction. Intra- their carbon performance, emissions trading unnecessarily a factor in favour of choosing that much closer. European flights are still subject to the ETS, is also superior to outright taxation, which more emissions, not less. which came into force on January 1, 2012. would merely increase costs of all airlines, Down the road, as different jurisdictions Since the ETS entered into effect, Finnair and do little to motivate airlines to invest in begin to implement their own interpretations had been committed to meeting its report- getting ahead of the pack in emissions re- of carbon trading in a patchwork system, var- ing and monitoring obligations for all of its duction. ying economic interests and trade objectives flights. Per the new recommendations from could further cloud or even endanger the the EU, however, Finnair is now participating Going global is better prospects for concretely reducing emissions. in the ETS with respect to all traffic within the However, in a global marketplace, regional A single global deal, by contrast, lays out the EU, EEA, Switzerland and Croatia. systems such as the EU’s have the effect of rules of the game clearly, and rewards the The negotiations presently underway to es- distorting competition and promoting “car- airlines that are doing the most to cut emis- tablish a global, market-based mechanism for bon leakage” as airlines seek to reroute sions and push the industry forward. the regulation and reduction of greenhouse flights around the trading zone. Finnair’s case “It is our hope that 2012 will be remem- gas emissions are ultimately between the provides a concrete example of this phenom- bered as the year when all players in the sovereign nations of ICAO, but for the past enon. A routing from Barcelona to Tokyo via airline business, from every region, saw the 40/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Helsinki is significantly The role of aviation “more connected to in a modern economy the rest of the world than other cities of a comparable size.

THE PURPOSE of this Sustainability Report are included. The sector also directly sup- most logical place to route transfer traffic is to communicate, as accurately as possi- ports about 104,000 jobs and pays more than between Europe and Asia – aviation trans- ble, the impact of Finnair’s commercial pres- 864 million euros in tax, while aviation’s ex- forms possibilities for Finnish firms, opening ence. Any business has its positive and neg- tensive supply chain generates an additional up more foreign markets to more exports, ative externalities, and in the case of avia- 909 million euros. An additional 686 million lowering transport costs over longer distanc- tion, the negatives – in particular noise and euros are raised by taxing the spending of es, and making Helsinki more attractive to greenhouse gas emissions – are well known employees of both the aviation sector and highly skilled workers from elsewhere in the and much discussed. It is in Finnair’s inter- the rest of the supply chain. EU. Noting that aviation is on a growth trend est to be forthright about all externalities, also in Finland, Oxford Economics estimates 3.9% to measure and report them accurately and The Asian strategy: Punching that a further 10 per cent improvement in of Finland GDP * verifiably, and explain what the company is above our weight connectivity would result in an additional 115 doing to minimise harm. And indeed, much More difficult to quantify but no less impor- million euros in GDP annually. of this report is dedicated to just that. tant is the infrastructure value of connections The connectivity effect of air service infra- 104,000 jobs The more positive externalities generated between cities and markets. The unique Asian structure makes globalised supply chains and by aviation are just as real, however, and es- strategy pursued by Finnair and Finavia (the “just-in-time” manufacturing processes pos- pecially for a geographically isolated country operator of Helsinki Airport) means that the sible for companies, enabling them to com- 864 M€ in tax like Finland, very substantial. In 2011 IATA Helsinki capital region, with a population of pete on the global stage and also allowing commissioned a series of reports for coun- just over one million, is served by an airport Finnish residents access to the benefits of tries around the world on the economic im- that is substantially larger and more connect- global society. Aviation, in other words, is a pact of aviation. The report on Finland, un- ed to the rest of the world than most airports key part of any advanced economy – and one dertaken by Oxford Economics and published for other cities of a comparable size. About contributing factor of why Finland seems to in 2012, was eye opening for its attempt to 15 million passengers travelled through Hel- punch above its weight on the world stage put a euro sign on the precise value of avia- sinki Airport in 2012, for example, compared economically, technologically and culturally. tion’s economic and social footprint. with 5 million in Gothenburg and 2.2 million The report concluded that aviation con- in Vilnius. For more information on aviation’s wider role stitutes 3.2 per cent of Finland’s GDP, or 3.9 By turning the very remoteness of Finland in the economy and society, visit per cent if catalytic effects through tourism into an advantage – as the geographically www.aviationbenefitsbeyondborders.org. * Catalytic effects through tourism are included. 41/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

SOCIETY: CASE New life for Madagascar’s rain forest

he influence of aviation extends beyond financial support, Finnair Plus members are Tnational borders, and Finnair’s corporate able to donate Plus points to the project. responsibility extends beyond the countries to which it flies. That is why it has given fi- Madagascar’s expanding human population nancial support to a reforestation project numbers around 22 million and originally ar- in Madagascar, helping to halt and reverse rived here from Southeast Asia 2,000 years the destruction of a unique and precious en- ago. Enriched by arrivals from the African vironment. mainland, their complex culture evolved on the basis of knowledge of and respect for Thanks to the project, undertaken in cooper- natural resources, and many Malagasies con- ation with the Finnish Association for Nature tinue to recommend natural plant-based rem- Conservation (FANC), work is under way in edies for all kinds of ailments. The cultural Madagascar to expand areas of rain forest, code of fady, a mix of folklore and animism, ultimately reconnecting isolated fragments governs the traditional uses of fauna and to maintain the natural mobility of native flora and also remains strong. species, as well as to monitor the various Often the only way extents of forest degradation. The project is Seventy per cent of the population survive “to sustain a livelihood is known as Manondroala, meaning “showing on no more than one US dollar a day. The the forest” and also the name for an endan- short-term pressure is greater than ever to to get it from the forest. gered Malagasy tree. In addition to Finnair’s pursue the practice of slash-and-burn agri- 42/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

culture to clear forest for the cultivation of “This is the most effective way forward, rice (Malagasies eat more rice per capita than to hand the management to people who any other country) and other crops. Erosion have an interest in the forest’s well-be- NATURAL PARTNERS and water management problems ensue, and ing,” he says during a visit to the seedling the devastating cyclones that sweep in off nursery, close to a reforestation area at the the Indian Ocean annually exacerbate the Andasibe-Mantadia National Park. The park Finnair’s many years of cooperation with the Sometimes people ask me why the Association damage. Meanwhile, other alien flora spe- is home to the biggest of Madagascar’s fa- Finnish Association for Nature Conservation for Nature Conservation engages in coopera- cies may take hold in cleared forest, upset- mous lemurs, the Indri, as well as a menag- began in 2006. Supporting water conservation tion with an airline, since air travel speeds up ting the endemic ecological balance. erie of exotic geckoes, snakes and insects work felt natural for a company whose operat- climate change. To this I have answered, is it endemic to the country. ing area also includes the countries surround- not better to engage in cooperation with an “Replanting forests in itself is not enough,” ing the Baltic Sea. The considerable support airline that actively develops its operations says Olli Turunen of FANC. “The involvement “The reaction from the local community is has helped the Association for Nature Conser- in a more environmentally friendly direction of local people is just as important.” This is generally good to Mitsinjo and to projects vation engage in more effective water conser- and sets a good example for many other air- the first project in the southern hemisphere such as Manondroala,” says Angela Tarimy, vation work, the results of which have been lines? Should we turn our backs and not take in which the FANC has been involved. Its ul- who coordinates the FANC project in Mada- fruitful up to this day and have led to contribu- the opportunity to be involved with influencing timate aims, says Turunen, are to restore a gascar. “It is also in the interests of local tions from other companies and citizens con- these issues? I feel that further development minimum of 20 and up to 100 hectares of people to maintain a healthy forest in order cerned about the situation of our waterways. can be achieved through cooperation and by forest with endemic trees, destroying alien to encourage tourism, for small businesses The cooperation has also increased the visibil- sharing information and competences. species, and training local people, through to provide products and services to the ho- ity of the Association for Nature Conservation organizations such as Mitsinjo, to implement tels,” she adds. “About half of the people in among entirely new target groups. Pirjo Itkonen and develop forest monitoring. and around Andasibe gain direct economic Corporate Fundraising benefits from tourism.” Over the years, the cooperation has changed Finnish Association for Nature Conservation forms and the areas of support have changed, “They also know the benefits of a healthy but the will to engage in cooperation has Replanting forests forest. They know it is a source of medicinal remained strong. When the Association for “in itself is not enough. plants – the forest is a free pharmacy! This Nature Conservation decided to launch its has also made the training of people easier first ever development cooperation project in The involvement of because they possess a great deal of tradi- Madagascar, Finnair quickly made the decision local people is just as tional knowledge about the forest. I am op- to support the project. At its best, coopera- important. timistic that one day Madagascar will get all tion means long-term partnership and trust of its forest back.” that benefits both parties and helps to develop Olli Turunen, FANC socially responsible operations. 43/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

CONTENT GRI About this report 44 Economic responsibility 47 Environmental responsibility 52 Social responsibility 62 GRI Index table 80 Contact information 88 44/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

About this report

This is Finnair’s fifth corporate responsibility re- Reported business units and subsidiaries port. The report outlines the work done at Finnair Operating segment Business unit/subsidiary Included Justification in 2012 in all of the subareas of corporate respon- in report sibility. Finnair began reporting on its environmen- AIRLINE BUSINESS Airline Business Yes tal impact in 1997 and in 2008 was one of the first Finnair Cargo Oy Yes airlines in the world to communicate its corporate Finnair Cargo Terminal Operations Oy Yes responsibility issues by applying the Global Repor- Finnair Aircraft Finance Oy and FAF subsidiaries Yes ting Initiative (GRI) reporting framework. AVIATION SERVICES Finnair Technical Services Oy Yes Finnair Engine Services Oy Yes Reporting principles Northport Oy (ground handling) Yes Finnair’s corporate responsibility report has been Finnair Catering Oy/LSG Sky Chefs Finland Yes compiled in accordance with the GRI’s G3 Guide- - Finncatering Oy No Subsidiary of a subsidary. Connected with flight lines. operations only as a producer and supplier of inflight meals; in that respect it is reported under Finnair In addition to the parent company, the report co- Catering/LSG Sky Chefs Finland’s figures. vers subsidiaries and business units that support Finnair Facilities Management Oy Yes flight operations in Finland as well as the group’s TRAVEL SERVICES Oy Aurinkomatkat - Suntours Ltd Ab Yes subsidiaries that provide and sell travel services - Aurinko Oü, Estonia (Horizon Travel Oü) No Foreign subsidiary of a subsidiary (travel agency) in Finland. - OOO Aurinko (Calypso World of Travel), Russia No Foreign subsidiary of a subsidiary (travel agency) - Finnair Travel Retail Oy, Helsinki Yes The Finnair Group does not report on the opera- Finland Travel Bureau Ltd. (FTB) Yes tions of foreign subsidiaries, because as minor ope- - A/S Estravel Ltd No Foreign subsidiary of a subsidiary (travel agency) rators they are deemed not to be of key significan- Area Travel Agency Ltd. Yes ce in terms of the group’s corporate responsibility Back Office Services Estonia Oü, Estonia No issues. Possible exceptions to this are mentioned Amadeus Finland Oy Yes separately in connection with each key figure. The OTHER FUNCTIONS Group Administration Yes Finnair Group, moreover, does not report on out- Joint functions Yes sourced operations. FTS Financial Services Oy Yes Finnair Flight Academy Oy Yes 45/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Finnair Technical Services, which belonged to the Figures on economic responsibility are mainly de- Finnair and LSG Sky Chefs Group (LSG) signed a part- ty with laws and regulations has been confirmed parent company, was divided at the beginning of rived from the financial statements. Other infor- nership agreement according to which LSG assumes with the group’s Legal Affairs department. Custo- 2010 into two subsidiaries, Finnair Technical Servi- mation with respect to economic responsibility is full managerial and operational responsibility for the mer satisfaction data, on the other hand, are based ces Oy and Finnair Engine Services Oy. Higher-level derived from the group’s various operators. inflight and catering service provider Finnair Catering on customer satisfaction surveys and on feedback administrative structures are, however, the same Oy. The partnership aims at further improving the received by the group. in both companies and they are dealt with in this Finnair’s largest single material cost item is jet quality and cost effectiveness of catering services for report as one entity, Finnair Technical Services. fuel. In this report, jet fuel is treated, however, as Finnair’s customers. Effect of any re-statements of This approach is justified by the fact that the ope- energy, because in terms of its purpose and envi- information provided in earlier rations of both technical services subsidiaries are ronmental effects it is sensible to understand jet The partnership agreement with LSG excludes Finnair’s reports the repair and maintenance of aircraft and their fuel as stored energy. Fuels are also reported on fully owned subsidiary Finncatering Oy, whose core There have been no changes in the methods of data components, and for this reason their corporate the basis of their mass and volumes. business consists of providing take away meals, pro- collection and calculation used for social indicators responsibility aspects are convergent at the group cessed foods and bakery products to cafes, restaurants compared with the 2011 report. level. During 2012, Finnair made the decision to In terms of flying, emissions values and fuel con- and grocery stores. Finncatering will remain one of discontinue the operations of Finnair Engine Servi- sumption figures are derived from the company’s the suppliers of LSG Sky Chefs Finland. The agreement For environmental performance indicator EN1, the ces, and Finnair now purchases its engine services own monitoring systems and based on actual con- also excludes Finnair’s fully owned subsidiary Finnair data on the use of propylene glycol, and chemi- and some component services from SR Technics sumption. Because Finnair has prepared for the EU Travel Retail Oy, which is specialised in inflight and cals used by Finnair Technical Services, is reported in Switzerland. Finnair Engine Services was plan- emissions trading system, the emissions calcula- airport travel retail and tax free sales. more accurately than in last year’s report. More ned to be ramped down by the end of 2012, but as tions are also verified by an external party. information on this is provided under the section Finnair is conducting negotiations with GA Telesis In addition, the travel agency Area’s head offi- on the indicator in question. Another new additi- regarding selling a part of Engine Services opera- In relation to material streams, amounts of was- ce has a Green Office certificate awarded by the on to this year’s report are figures for chemicals tions, Finnair has continued to operate a part of te, and energy consumption of properties, data WWF, within whose framework certain environ- used in dry ice in catering services. Engine Services operations. have been obtained from service providers, goods mental parameters prescribed for the company suppliers and on the basis of invoices paid. With are monitored effectively. Regarding the electricity that Finnair purchased in Information sources, respect to Finnair Technical Services, environ- 2012, different energy sources and their relative measurement and calculation mental data are also obtained from monitoring Information on personnel comes from Finnair’s proportions are not known, nor is the amount of methods and measuring systems required by their environ- HR information system and from parties respon- primary energy required to produce the electricity. The information of the report has been collected mental permits. In terms of Technical Services’ sible for the wellbeing of employees. Accident sta- from the group’s internal statistics systems and also use of materials, only chemicals are reported, tistics are obtained from the insurance company Changes pertaining to the group’s organisational from various subcontractors. In terms of measure- because the statistical practice of raw materials and they are updated retroactively, as a result of structure and the calculation of the financial statement and calculation methods, the GRI G3 calcu- and spare parts does not allow a comparable way which the 2012 figures may be subject to further ment data are described in more detail in Finnair’s lation guidelines have been adhered to whenever of presentation. Finnair Technical Services is not, adjustment. Information relating to human rights Financial Report. the available data have so allowed. If some other however, a significant user of raw materials, and and local communities are derived from procu- measurement or calculation method has been used, its main environmental aspects relate to storage rement agreements, from personnel responsible Reporting priorities this is mentioned in connection with the key figu- and use of chemicals. Finnair Catering Oy has an for procurement, subcontractors and, in terms of In 2011, Finnair discontinued its annual Log Book re concerned. The figures have been presented in ISO14001-certified environmental management the impact of tourism, mainly from Aurinkomat- publication, and instead began raising important time series when this has been appropriate and system, within whose framework Catering moni- kat-Suntours, which as a tour operator occupies a themes in the form of articles in this Corporate reliably possible. tors certain variables very closely. key position in this respect. Operational conformi- Responsibility Report. This report comprises the 46/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

following sections: Finnair’s second important interest group natu- • General overview of Finnair rally consists of its customers, so special attenti- • Customers on is also paid in the report to customer relation- • Personnel ships. The third key social responsibility aspect in • Operations terms of the impact of the group’s activities rela- • Society tes to tourism. Tourism is one of the biggest in- • GRI indicators dustries in the world, and it has a huge impact on local communities. In the Finnair Group, subsidi- The report covers all elements of corporate res- aries that provide and sell travel services form an ponsibility. From an environmental standpoint, the important interface between the group and local Finnair Group’s overwhelmingly most significant communities at tourist destinations. Because the function is flying. According to some estimates, social impacts of tourism are difficult to measu- 95 per cent of the sector’s total environmental im- re in a universal way, they are not addressed here pacts arise from flying. The environmental load numerically but qualitatively. from flying comes mainly from engine emissions and particularly from the use of fossil fuels. On a With respect to economic responsibility, the empha- global level, aviation causes around 2–3 per cent sis is on ensuring profitable business operations. In of the world’s human-derived carbon dioxide emis- the long term, only a profitable company can gene- sions. The significance of flying is also highlighted rate wellbeing for society and its interest groups. in the reported key figures. Other important as- The economic significance of regular, efficient air pects at group level are material streams and waste transport for a geographically distant country like issues. Individual business units and subsidiaries Finland is substantial. In terms of Finland’s econo- naturally have their own particular environmen- mic life and political activity, efficient flight con- tal aspects, but over the group as a whole these nections to many important destinations are es- are marginal compared with flying. A number of sential and constitute part of the infrastructure of these have, however, been included in the report. trust and international interaction. Finnair is also a significant employer and taxpayer. In terms of social responsibility, the report high- lights key figures relating to the group’s personnel. Aviation and its support functions are very labour-intensive sectors, and Finnair is a significant employer in Finland. Highly specialised expertise is also typically required of personnel, so compe- tent, satisfied and motivated employees are vital for Finnair. For these reasons, personnel issues are covered widely and comprehensively in the report. 47/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Economic responsibility

Strategy implementation and raft. Finnair now operates traffic of a correspon- social responsibility and risk management orga- quickly as possible when it is necessary to reduce partnerships ding scope with a smaller fleet than a year earlier. nisations, which work under the authority of the staff. Significant changes in the company’s opera- Finnair is one of the world’s most innovative, safest CEO. In addition, it is in the interests of the group’s tions are required in order to achieve the planned and longest-operating airlines. Finnair’s vision is Finnair took significant steps in implementing its tour operators to promote sustainable tourism, cost reductions. These changes also apply to the to be the number one airline in the Nordic region strategy and developing its operations in 2012. In which benefits local businesses and organisations. company’s personnel, and personnel reductions and the most desired alternative for Asian routes. addition to optimising its operations, Finnair inve- cannot be avoided. In addition, its aim is to double its revenue from sted in growth and service quality. The most sig- Business operations are based on international- Asian traffic in 2010–2020. As part of the imple- nificant investment in the implementation of the ly accepted ethical principles governing business Market environment 2012 mentation of its growth strategy and the structu- Asian growth strategy in 2012 was the opening of a partnerships and interest group relationships. The The global airline industry is currently undergoing ral change of the company, Finnair focused on its new route to Chongqing, China in May. This was the company applies the rules relating to listed com- structural changes, the typical characteristics of core business in 2012 and built a more extensive first direct scheduled flight route from Chongqing panies as well as international financial reporting which are market liberalisation, increasing com- network of partners around itself. Finnair’s growth to Europe, and the route has had a good start. At standards. Finnair’s Board of Directors has set fi- petition, overcapacity, consolidation, alliances and strategy is based on the growing Asian market, the the end of the year, Finnair announced it was pre- nancial targets for the company, which are outlined specialisation. In 2012, the intense competition in fastest flight connections and cost-competitiveness. paring to launch two new Asian routes. Flights to in material directed at investors. The company’s fi- the industry was seen in major cost-reduction and Xi’an in China and the Vietnamese capital Hanoi nancial reporting aims to provide, as transparently structural change programs and in the bankrupt- In 2012, Finnair continued the implementation of will begin in May 2013. The new routes are further as possible, information about Finnair’s financial cies of a number of European airlines. The capacity the structural change and cost-reduction program steps towards realising Finnair’s vision of doubling position and development. growth in the market is clearly more controlled than commenced in 2011. The aim of the program is its revenue from Asian traffic by 2020. previously, and various partnerships have emer- to cut Finnair’s costs permanently by 140 million Economic effects of an airline ged, especially in international long-haul traffic. euros by the end of 2013. Due to the actions ta- Finnair’s objective is to create sustainable econo- Aviation is a significant industry for Finnish society Finnair’s goal is to take advantage of the oppor- ken, Finnair achieved cumulative annual savings mic added value by producing flight services pro- and the national economy. The accessibility cre- tunities presented by the changes in its industry of 100 million euros by the end of 2012. At the fitably, cost-competitively and in harmony with the ated by airline traffic is a necessity for Finland’s and to strengthen its position in traffic between same time, the company has been able to move needs of the environment and society. Responsible global competitiveness and its economic impact is Asia and Europe and within Europe. a significant share of fixed costs to volume-based operations are the cornerstone of profitable bu- considerable; aviation is estimated to account for variable costs. The cost-reduction measures were siness activity. 3–4 per cent of GDP, employment and tax revenue. The largest individual cost factor of airlines is jet also seen in the decrease of airline unit costs in Finnair’s effective Asian strategy is a key element fuel. The price of jet fuel remained high in 2012, the last quarter of the year. Economic operating principles of the GDP contribution of aviation and its impact creating significant cost pressures for airlines. The As a public limited company, Finnair is committed to is estimated at 1–2 billion euros. weakening of the euro against the US dollar further In 2012, Finnair concluded partnership arrange- earning a profit for its shareholders. The company’s increased the cost in euros of fuel, leasing and traf- ments related to its technical services and cate- profit distribution principles are expressed in Profitability in a highly competitive industry that is fic charges, which are typically quoted in dollars. ring operations and transferred one-third of its Eu- Finnair’s dividend policy. Finnair takes into account sensitive to cyclical fluctuations requires structural On the other hand, the high fuel price has made ropean feeder traffic to Flybe. The company also the effects of its operations and financial decisions changes, which Finnair, like other airlines, is imple- the industry healthier as the financially weakest sought efficiency and flexibility in the use of its on the environment and society. These effects are menting. The company’s Career Gate operating mo- competitors have exited the market. fleet by reducing its narrow-body fleet by nine airc- identified and assessed by the company’s corporate del helps Finnair personnel find employment as 48/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

The global demand for air travel continued to grow in 2012, but the rate of growth slowed down so- mewhat. Demand developed better than expected, particularly in the European markets, which have suffered from weak economic conditions and un- certain prospects. The positive development of demand and revenue in European air traffic was also contributed to by more moderate capacity increases and a number of airlines exiting the market. Finnair also benefited from competitors closing down certain routes. In the domestic market and short-haul traffic, Flybe Nordic, the joint venture of Finnair and Flybe, launched a number of new routes and strengthened its competitive position.

Passenger traffic between Asia and Europe increased as expected in 2012 due to economic growth in Asia. At the same time, competition was inten- sified by a number of European airlines launching new routes from Central Europe to China. However, the uncertainty in the world economy and the euro area was reflected in the entire industry as decli- ning business travel and lower cargo volumes. The demand for cargo traffic stabilised towards the end of the year, but unit revenues continue to be under pressure due to the decline in import demand in the euro area and the overcapacity of air cargo traffic. There was considerable overcapacity in the Finnish package tour market in the first half of the year, but the situation improved towards the end of the year as the operators in the industry adjusted their supply to correspond to demand. 49/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Economic indicators

EC1 Direct economic value generated and distributed, including revenues, operating costs, emp- Computational monthly earnings of Finnair’s largest Finnish personnel groups in 2012 loyee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments Lowest quartile* Median* Upper quartile EUR million 2012 2011 2010 Employee group 25%, EUR EUR 75%, EUR Direct economic value Executive board 18,221 19,787 21,095 Consolidated turnover 2,449.4 2,257.7 2,023.3 Finnish Airline Pilots’ Association (SLL) 7,340 10,089 15,169 Other operating income 20.8 13.9 20.1 Management positions 7,503 9,118 10,941 Financial income 7.9 9.0 6.5 Finnair Engineers’ Association 4,601 5,224 6,294 Total 2,478.1 2,280.6 2,049.9 Finnair White-Collar Employees Association 4,439 5,134 5,879 Finnair Technical Employees’ Association 4,079 4,714 5,561 Distributed economic value* Finnish Aviation Union (IAU), Technical 3,646 4,349 4,851 Cash paid outside the company, materials and services, 1,840.8 1,749.6 1,485.1 services other operating expenses Finnish Cabin Crew Union (SLSY) 3,489 4,201 4,906 Payments to personnel** 426.9 455.4 438.8 Finnish Aviation Union (IAU), Ground services 3,335 3,674 4,049 Payments made to shareholders and loan providers Finnish Aviation Employees Association 3,092 3,434 3,835 Dividend 0.0 0.0 0.0 * The median pay describes the average salary of each group, or the point where half of the employees in the group earn more than the amount, and half earn Interest and other financial expenses 25.5 30.6 26.3 less. One quarter of the employees earn less than the lowest quartile and one quarter of the employees earn more than the highest quartile. Payments to government 0.1 0.0 1.9 Computational monthly earnings: taxable gross earnings divided by 12 months. The calculations only include employees who earned pay for the full year. The calculations do not include tax-free benefits or other untaxed forms of compensa- Donations and other charitable payments n/a n/a n/a tion, such as daily allowance. The data does not include pilots who are in supervisory roles. Distributed, total 2,293.3 2,235.6 1,952.1 Economic value retained for operational development 184.8 45.0 97.8 Investments in tangible and intangible assets as well as 41.4 158.6 5.3 acquisitions of subsidiaries Operational result 44.9 –60.9 –4.7 Return on capital employed (ROCE), % 3.0 –5.2 –0.4

* The proposed contribution to the Personnel Fund for 2012 is EUR 4.8 million Finnair’s Board of Directors will also propose to the 2013 Annual General Mee- ting that a dividend of EUR 0.10 per share be paid for 2012, amounting to EUR 12.8 million in total. ** More information on payments to personnel: Computational monthly earnings of Finnair’s largest Finnish personnel groups in 2012. 50/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Earnings divided into base salary and other compensation for Finnair’s le opposition, in particular from countries outside curity in accordance with the Employee Pensions largest personnel groups in 2012 the EU. As a result, the International Civil Aviati- Act (TyEL). Pension contributions amount to 17.6 on Organization (ICAO) is preparing an alternati- per cent of salaries and 14.2 per cent of total per-

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ve proposal with regard to international emissions sonnel expenses. In addition, some employees are trading for the aviation industry. In 2012, the EU covered by an additional pension fund benefit and Executive board 73% 27% ETS is only applied to flights within the EU. ICAO management by an additional benefit in accordan- Finnish Airline Pilots’ Association (SLL) 67% 33% intends to publish its proposal for a global scheme ce with their contracts. Of group personnel, around Management positions 79% 21% at the ICAO Assembly in November 2013. 43 per cent are covered by the additional pension Finnair Engineers’ Association 86% 14% fund benefit. Finnair’s pension liability (Finnish Ac- Finnair White-Collar Employees Association 84% 16% The direct additional costs of emissions trading in counting Standards) in respect of its own pension

Finnair Technical Employees’ Association 77% 23% the coming years are difficult to estimate due to fund is around EUR 319 million. Pension liabilities potential regulatory changes following the ICAO As- are covered in full. Finnish Aviation Union (IAU), Technical services 72% 28% sembly. In 2012, the direct costs incurred by Finnair Finnish Cabin Crew Union (SLSY) 54% 46% from EU emissions trading scheme totalled appro- EC4 Finnish Aviation Union (IAU), Ground services 65% 35% ximately EUR 1.5 million. Significant financial assistance received from Finnish Aviation Employees Association 87% 13% government Finnair is a leading airline in carbon reporting and The Finnish Government does not support Finnair’s Base salary Other compensation reducing emissions. The risks, opportunities, po- operations financially. TheFinnair Aviation Acade- * Other compensation, such as variable pay components and performance-based pay. Other compensation varies considerably by personnel group. For example, the variable pay components of management are typically linked to the achievement of the company and personal targets, while the variable pay tential financial effects and management methods my constitutes an exception. The Finnair Aviation components of cabin and ground services are typically based on various forms of additional pay defined in the relevant collective labour agreements. related to climate change are described in detail in Academy, founded in 1964, is a special vocational Finnair’s responses to the Carbon Disclosure Pro- educational establishment maintained by Finnair ject (CDP) report. Plc, which operates as a special educational estab- EC2 per seat by 24 per cent by 2017, using 2009 as lishment under the Act on Vocational Adult Edu- Financial implications and other risks and the baseline. Finnair placed at the top of the list in the Carbon cation (631/1998). opportunities for the organisation’s activi- Disclosure Project’s (CDP) 2012 report on the Nor- ties due to climate change In order to reach this goal, the company follows a dic countries and was the first airline ever to make The Aviation Academy’s task is to arrange furt- In combating climate change, the main measures are strategy comprised of four elements: technologi- it to the Leadership index of the CDP report. The her vocational training leading to a vocational or directed at reducing the combustion of fossil fuels. cal development, improvement of operational ef- CDP is responsible for the world’s only global cli- special vocational qualification as well as other The jet fuel used by Finnair is fossil fuel and fuel ficiency, development of infrastructure and sup- mate change reporting system, and its initiatives further vocational training required for the prac- costs are Finnair’s single most significant cost item. port of themarket based measures. Finnair opera- are backed by 655 institutional investors from tice of Finnair Plc’s and its subsidiaries’ operations Therefore, all the factors influencing the price of jet tes a modern fleet and will invest in fuel-efficient around the world. Finnair has participated in the (Further Vocational Training Arrangement Permit fuel similarly influenceFinnair’s operating costs. next-generation aircraft also in the coming years CDP since 2007. 551/530/2006, 13 December 2006). As a private- to maintain its competitive advantage. ly-owned educational establishment, the Aviation The need to reduce fuel consumption and the re- EC3 Academy funds its operations in accordance with sultant carbon dioxide emissions has a significant The European Union included the aviation industry Coverage of the organisation’s defined bene- government aid practices. In 2012, the Finnair Avi- impact on the company’s business operations. in its Emissions Trading Scheme (ETS) at the be- fit plan obligations ation Academy received a total of approximately Finnair’s long-term goal is to reduce emissions ginning of 2012. The EU ETS met with considerab- All Finnair employees are covered by pension se- EUR 2.3 million. 51/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

EC6 destination country, Greece, more than 90 per cent Policy, practices and proportion of spending of the hotels used by Aurinkomatkat in summer on locally-based suppliers at significant lo- 2012 were in local ownership. cations of operation Finnair has no local procurement policy as such In addition, Aurinkomatkat has a local represen- and does not compile information at the group tative at each of its destinations, from whom the level on the local characteristics of its suppliers. company purchases, among other things, ground When purchases are made, attention is paid, for transfers, tour arrangements and other operatio- example, to their appropriateness, reliability, pri- nal services. Area Oy and Finland Travel Bureau ce and quality. The products purchased must be Ltd, which specialise in business travel, also use long-lasting and as safe as possible for people and local agents when preparing travel programmes the environment. In addition, many of the group’s and making group bookings. procurement categories are officially regulated, in which case possible suppliers must be approved EC9 by the authorities. For example, all purchases re- Understanding and describing significant in- lating to flight safety are of this type. direct economic impacts, including the extent of impacts. Some group subsidiaries have their own principles that support local procurement. Aviation is a significant industry for Finnish society and the national economy. The accessibility cre- Finnair’s largest single procurement item is jet ated by airline traffic is a necessity for Finland’s fuel, which is also Finnair’s most significant ope- global competitiveness and its economic impact is rational expense item. In jet fuel procurement, fi- considerable; aviation is estimated to account for nancial factors and reliability of supply are most 3–4 per cent of GDP, employment and tax revenue significant. To ensure reliability of supply,Finnair (source: Oxford Economics: Economic benefits of has diversified its jet fuel purchases among some air transport in Finland – www.benefitsofaviation.aero/ 40 different suppliers. Documents/Benefits-of-Aviation-Finland-2011.pdf). Finnair’s effective Asian strategy is a key element of the GDP Most of the hotels used in the programme of Finnair contribution of aviation and its impact is estimated Group’s subsidiary Aurinkomatkat-Suntours Ltd are at 1–2 billion euros. small and medium-sized hotels, which are, as a rule, locally owned. The assessment criteria for More information on the economic impact of avi- hotels used by Aurinkomatkat gives more weight ation is available in the section on page 40 of this to hotels that are in local ownership. In addition, report. Further information is also available on a hotel receives additional points if it favours local the IATA website at www.iata.org/whatwedo/Documents/ producers and suppliers in its own procurement. economics/aviation_economic_benefits.pdf. For example, in Aurinkomatkat’s biggest summer 52/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Environmental responsibility

Finnair’s goal is to be the leading airline in the field Finnair Board of Directors has a nominated person than three litres per hundred kilometres per pas- managerial responsibility with the Finnair Group of environmental responsibility. We take environ- for corporate responsibility. Environmental training senger. Technological development also includes until August 2012) also uses biodegradable packa- mental aspects into consideration in all our opera- is available for our entire personnel, and we high- biofuel projects. Finnair flew its first commercial ging where applicable. tions, and support the International Air Transport light important themes and best practices with dif- biofuel flights in summer 2011, immediately af- Association (IATA) target of zero-emission aviation. ferent internal and external campaigns. ter the enabling certification came into force. We Finnair Technical Services and, formerly, Finnair Ca- We comply with current environmental legislation, have several projects on-going in this area and tering are the units that consume the most heat, but our environmental work aims at exceeding sta- Approximately 95 per cent of an airline’s environ- plan more biofuel flights. In terms of infrastruc- electricity and water. Finnair Catering/LSG Sky Chefs tutory requirements and being a pioneer in evalua- mental impact arises from engine emissions. In ad- ture, the Single European Sky project plays a sig- Finland has an environmental management system ting, reporting and reducing environmental impacts. dition to carbon dioxide emissions and noise, air nificant role in the development of an efficient air according to the ISO 14001 standard. Finnair Techni- transport causes other emissions that affect air qua- transport system. cal Services’ operations are covered by a permit Our environmental work is for the long term. Our lity and the climate, and an effort must be made to granted by the Uusimaa Regional Environmental environmental organisation has existed in various reduce them. We seek to reduce flight emissions by Helsinki Airport and its three runways ensure smooth Centre, and it reports on its activities annually to the forms since the late 1980s, and we have reported all possible means. Our actions are focused on four operations both on the ground and in the air. In ad- authorities. We pay specific attention to VOC emis- on our environmental impacts since 1997. The en- areas: technological advances, operational impro- dition we have together with Finavia explored pos- sions and reducing the use of chemicals in Techni- vironmental organisation has nowadays been rep- vements, infrastructure development and market- sibilities to further increase the proportion of Conti- cal Services. laced by our corporate responsibility organisation, related means, such as emissions training. nuous Descent Approach (CDA) landings at Helsinki- which in addition to environmental aspects also co- Vantaa, which reduce fuel consumption and noise. The building of a new, LEED Gold-certified headquar- vers social responsibility. In all these areas we cooperate closely with vario- We continue to carry out projects to reduce fuel ters for Finnair will be completed in summer 2013, us players, such as aircraft and engine manufactu- consumption, emissions and noise in our operations. and environmental aspects have been carefully ta- We manage corporate responsibility at the group rers, airports, air traffic control and the relevant ken into consideration. Our new headquarters will level, and each unit has individuals responsible for authorities. In all our operations, we strive to reduce waste and enable new ways of working, which also support environmental activities and guidelines. Our envi- to lower our energy consumption. At Finnair’s ope- environmental sustainability. ronmental management steering group cooperates In terms of technology, Finnair’s most important rating locations, whether on the ground or in the air, with subcontractors to improve waste management environmental act is modernising its fleet.Finnair every effort is made to recycle glass, paper and metal An open dialogue with different stakeholders is a and energy efficiency ofFinnair real estate. Finnair already operates one of the youngest fleets in the and collect energy waste which can be used as an in- prerequisite for environmental responsibility. We participates actively in industry workgroups, such business. In European traffic we fly with Airbus dustrial energy source. In addition, the Finnair Group report on our environmental impacts regularly in as IATA’s environmental committee and AEA Envi- A320 series aircraft, and our partner Flybe Fin- collects biowaste. On our flights, we have sorted alu- this report and as a part of the Carbon Disclosure ronmental Committee, as well as in industry workg- land also operates Embraer and ATR aircraft on minium, glass, energy waste and plastic wherever Project (CDP). In addition we communicate directly roups in Finland and the Nordic countries, promo- our behalf on select domestic and “thin” routes. possible. The proportion of recycling of waste has with various parties about our operations and gladly ting the reduction of the aviation sector’s environ- Our long haul fleet modernisation was completed risen to more than 60 per cent in Finnair Group. On answer questions posed by interest groups. mental load. in 2010 and the average age of aircraft in the fleet flights, the share of recycled waste is also more than is now 8.4 years. New technology Airbus A350 60 per cent. Legislation prevents the reutilisation Environmental responsibility calls for the exchan- Finnair’s corporate responsibility policy also defines XWB wide body aircraft will join the fleet in 2015– of international food waste for safety reasons. LSG ge of ideas and continuous development of opera- our strategy for environmental management. The 2017. Their average fuel consumption will be less Sky Chefs Finland (known as Finnair Catering with tions according to the latest available information. 53/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Environmental indicators 2012

EN1 mixture of propylene glycol and hot water is used Finnair’s offices succeeded in reducing their paper consumption by more than ten per cent. This was main- Materials used by weight or volume for de-icing. The company’s propylene glycol con- ly due to the scaling back of operations, the move to electronic invoicing and booking systems as well as The emphasis of Finnair’s use of materials is main- sumption in 2012 increased substantially from the printing practices that save paper. ly on transport fuels, particularly jet fuel. In this previous year. There are two significant reasons report, fuels will be treated mainly as energy and behind this increase: the winter of 2012 was cold 2012 2011 2010 2012 2011 2010 2012 2011 2010 the consumption of fuels is reported in section and there was a lot of snowfall. Early in the year, 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 EN3. In addition to flight operations and fuel burn, winter went on relatively long, and late in the year Unit kg kg kg l l l pcs pcs pcs significant material flows are created in LSG Sky winter began earlier than in 2011. Besides weat- Plastic 319 218 240 Chefs Finland (known as Finnair Catering until Au- her conditions, the glycol consumption figure was Paper (not office) 270 260 260 gust), Finnair Technical Services and Finnair Cargo. affected by the company this year reporting all of Cardboard 110 100 110 Finnair’s offices also have their own clearly distin- the glycol it purchased. Some of the total amount Textiles 50 87 95 guishable profiles as users of materials. was used for de-icing aircraft operated by other Metals* 35 53 70 airlines. More information on de-icing agents is Chemicals** 708 222 241 As one of Finland’s largest kitchens, LSG Sky Chefs given in section EN21. Porcelain 17 18 18 Finland consumes the most materials in the group. Glass 9 10 10 The raw materials used consist mainly of food- Finnair Technical Services’ most important envi- Board stuffs and the materials required for packaging ronmental aspects relate to the use of spare parts Loading pallets n/a 85 120 them. Most of the materials used are renewable. and chemicals. Due to the use of chemicals, Techni- (wood) cal Services has an environmental permit. In 2012, Office paper 29 33 49 The most significant consumption of materials by the operations of Finnair Technical Services were (reams) Finnair Cargo arises from the storage of cargo as scaled back considerably, which is reflected in a Propylene glycol 5,282 1,442 2,398 *** well as preparing and protecting cargo for tran- significant decrease in chemicals consumption. Food purchases 3,050 3,023 3,255 sportation. Cargo to be transported is protected The spare parts and components needed for the with plastic, because the loading and unloading maintenance of aircraft are to a large extent re- * This figure does not include metals used byFinnair Technical Services, because the statistics system used for metal raw material consumed in Technical Ser- vices cannot provide comparable data. Finnair Technical Services does not manufacture products, however, so as a user of raw materials it is not a significant of aircraft and the transport of cargo between the pairable goods. Technical Services strives to repair player on an industrial scale. terminal and the aircraft takes place outside, which aircraft components whenever safety aspects and ** Chemicals consumption figures are not directly comparable to previous years, as this year’s figure is the first to include dry ice used by LSG Sky Chefs Fin- land. Dry ice is, by a significant margin, Finnair’s third-largest category of chemicals purchases behind jet fuel and propylene glycol. requires that cargo be protected from the weather. official regulations allow, because the components *** The figure for propylene glycol is not fully comparable to previous years, as this year’s figure covers all glycol purchased byFinnair for use in Finland. Some are very expensive. This is standard practice in the of the total amount is used for de-icing aircraft operated by other airlines. Aircraft de-icing is a significant area of material industry. This means that the lifecycle of aircraft use in Finnair’s operations. In cold weather, ice components is typically long. The amounts of com- and frost form on the fuselage and wings of airc- ponents and spare parts are not reported, however, raft as well as falling snow, which must be remo- because no universal or meaningful comparable ved before take-off for flight safety reasons. A data are available on them. 54/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Finnair Technical Services’ use of chemicals 2008–2012, in tonnes Finnair’s primary energy consumption 2010–2012 CHEMICAL GROUP 2012 2011 2010 2009 2008 Lentopetroli 2012 2011 2010 Glues and sealing agents 0.9 2.7 3.2 2.6 1.8 Jet fuel (Jet A-1), 1,000 kg 785,176 800,449 704,885 Paints and varnishes 9.1 16.5 24.4 17.5 15.5 MWh 9,445,665 9,629,398 8,479,767 Surface finishing agents 6.4 11.3 24.5 19.3 16.1 GJ 34,004,395 34,665,834 30,527,160 Cleaning agents and detergents 38.6 41.2 48.2 47.4 51.4 Change % -1.9 13.6 -1.1 Solvents 19.8 29.0 26.4 26.4 29.2 Lubricants and oils 93.4 105.4 86.0 92.7 86.5 Total 168.2 205.9 212.8 205.8 200.5 Ground vehicles 2012 2011 2010 Petrol, 1,000 l 21 27 32 EN3 MWh 185 247 289 Direct energy consumption by primary energy source GJ 664 888 1,041 Finnair’s direct primary energy consumption consists of the use of transport fuels. Aviation is a very ener- Change % -25.2 -14.7 7.8 gy-intensive activity. On a global level, Finnair’s largest environmental load arises from flying and particularly from the use of fossil jet fuel. Diesel, 1,000 l 77 200 220 MWh 771 1,996 2,200 In 2012, Finnair’s total consumption of jet fuel decreased by over 15 million kilograms, or nearly 2 per cent, GJ 2,777 7,187 7,922 compared to the previous year. The savings in fuel consumption were achieved by, among other things, Change % -61.4 -9.3 -10.4 route network optimisation, developing flight and taxi practices and reducing the empty weight of aircraft. Finnair also improved its fuel efficiency relative to available capacity: in 2012 Finnair’s fleet consumed 1.5 Fuel oil, 1,000 l 269 1,213 1,675 per cent less jet fuel per available passenger kilometre and just under one per cent less jet fuel per avai- MWh 2,687 12,131 16,747 lable tonne kilometre. Due to fuel savings measures and improved utilisation rates, every passenger ki- GJ 9,673 43,670 60,289 lometre flown and every tonne kilometre of payload transported were operated with less fuel consumed. Change % -77.9 -27.6 12.6

In 2012, Finnair’s ground vehicles consumed a substantially lower amount of fuel than in the previous year. As this was primarily due to the outsourcing of ground services, the figures are not fully comparab- Total 2012 2011 2010 le to the previous year’s fuel consumption figures. MWh 9,449,308 9,643,772 8,499,003 GJ 34,017,509 34,717,579 30,596,412 Change % -2.0 13.5 -1.0

In addition to Finnair’s fleet’s energy and fuel consumption, the company’s energy balance sheet also includes the transportation capacity that Finnair Cargo purchases from other companies. In 2012, transport of the cargo entrusted to Finnair Cargo by other airlines required 31,800 tonnes of jet fuel in total. This is equal to approximately 1,400,000 GJ. The amount includes cargo flights that were operated solely due to Finnair Cargo. 55/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Fuel consumption and fuel efficiency in flying 2006–2012 EN4 2012 2011 2010 2009 2008 2007 2006 Indirect energy consumption by primary source Consumption, 785,176 800,449 704,885 712,487 831,423 763,454 655,454 In 2012, Finnair’s indirect energy consumption increased slightly from the previous year. Electricity con- tonnes sumption declined by approximately 4 per cent, but heating energy requirements increased due to the g/RPK* 33.8 36.3 35.1 36.0 38.0 38.2 38.3 early winter and the end of the year being colder than the previous year. g/ASK* 26.4 26.8 27.0 27.3 28.6 29.0 29.2 g/RTK 281.2 297.1 283.0 313.5 330.0 332.5 335.3 Indirect energy consumption 2012 2011 2010 g/ATK 182.2 183.7 184.7 183.7 186.9 193.5 195.3 Electricity MWh 52,584 54,721 56,034

* Fuel consumption adjusted to passenger traffic. GJ 189,302 196,996 201,722 Change % -3.9 -2.3 -1.2 RPK = revenue passenger kilometres. Change from 2007, % -9.5 -8.4 -6.2 ASK = available seat kilometres. Heat MWh 63,002 59,551 70,375 RTK = revenue tonne kilometres, i.e. capacity use according to payload weight. ATK = available tonne kilometres, i.e. capacity according to payload weight. GJ 226,807 214,384 253,350 RPK and ASK describe passenger traffic performance and RTK and ATK describe performance according to payload capacity (passengers + baggage + cargo). Change % 5.8 -15.4 15.6 Change from 2007, % -0.4 4.2 23.2 Passenger traffic fuel efficiency 2006–2012 Payload fuel efficiency 2006–2012 Total MWh 115,586 114,272 126,409 GJ 416,110 411,379 455,072 grams grams Change % 1.1 -9.6 7.5 40 400 Change from 2007, % -4.8 -2.2 8.2 33.8 Of the heat energy consumed by Finnair, 204,437 GJ, i.e. more than 90 per cent, was consumed in the 30 300 281.2 26.4 operating locations situated at Helsinki-Vantaa Airport. Some 65,273 MWh, corresponding to 234,983 GJ, of primary energy was needed to produce this heat. The heat energy was delivered by district heating, 20 200 182.2 of which 50.7 per cent was produced by natural gas, 48.7 per cent by coal, 0.2 per cent by heavy fuel oil, 0.2 per cent by light fuel oil and 0.2 per cent by liquid petroleum gas (LPG). 10 100

Finnair buys electricity from the electricity derivatives market via the Finnish national grid. According to 0 0 06 07 08 09 10 11 12 06 07 08 09 10 11 12 the company that maintains the grid, most of the production is carbon neutral, but part is produced by g/RPK g/ASK g/RTK g/ATK fossil fuels. The different energy sources and their relative proportions are not known, nor is the amount Adjusted to passenger traffic of primary energy required to produce the electricity. 56/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

EN5 operations employ single engine taxiing whenever us properties for a whole weekend and informing Finnair’s travel agencies offer their customers op- Energy saved due to conservation and effi- possible. The use of APU engines has been optimi- personnel of ways to conserve energy at work as portunities to reduce their business travel by uti- ciency improvements sed (the auxiliary power unit, or APU, generates well as off duty. lising the virtual meeting services they provide. Owing to the energy-intensive nature of its ope- electricity, pressurised air and hydraulics for va- rations, Finnair has a strong interest in making its rious aircraft systems). Together, these measures In October, Finnair organised its annual energy con- EN8 operations more energy efficient, particularly with result in annual fuel savings of several million ki- servation week, during which information and ener- Total water withdrawal by source regard to jet fuel consumption. The single most lograms. In addition, an extensive training period gy conservation tips were disseminated through In 2012, Finnair’s water usage fell by nearly 14 per significant measure by whichFinnair has reduced on economical flying was organised for pilots in the company’s internal communication channels. cent compared to the previous year. While water its energy consumption is its fleet modernisation, autumn 2012. The aim of the training was to con- Every day of the week had its own theme, and in consumption was successfully reduced across the which began in the late 1990s and continues to this sistently implement practices that promote fuel relation to each theme personnel were encouraged organisation, the single most significant factor in day. Next-generation aircraft consume approxima- efficiency in different flight stages. These include to discuss and consider the significance of energy the reduction was the scaling down of the pro- tely 20 per cent less fuel than their predecessors. optimal airspeed and altitude. Flight planning is conservation as well as new ways to save energy. duction operations of Finnair Technical Services. The carbon dioxide emissions of the aircraft have also aimed at achieving optimal fuel efficiency by also declined by a corresponding amount. selecting the most economical route alternatives Finnair Facilities Management Oy has joined an Finnair’s water consumption 2010–2012 and negotiating more efficient overflight routes. energy efficiency agreement between the Confe- Water The fuel savings program has resulted in approxi- deration of Finnish Industries, the Finnish Ministry consumption 2012 2011 2010 mately 1.5 per cent in savings in the consumption As a partner of Finavia, Finnair has already parti- of Employment and the Economy and industry as- Water, m3 100,098 116,315 121,512 of jet fuel compared to the 2010 level. This corres- cipated for many years in the development of new sociations. The parties to the agreement are com- Change, % -13.9 -4.3 11.2 ponds to nearly 12 million kilograms of fuel saved per kinds of landing practice. In Continuous Descent mitted to reducing properties’ energy consumpti- year, which in turn translates to a decrease in CO2 Approach (CDA) landing, the aircraft’s altitude is on by nine per cent from the 2007 level by 2016. In 2012, the water used by Finnair was taken from emissions of almost 38 million kilograms. One sig- reduced gradually throughout the entire landing the municipal water supply network. The primary nificant factor affecting fuel consumption is aircraft stage. A landing performed in the traditional way EN6 water source is Lake Päijänne. weight. The use of new technology and high-quality includes horizontal flight stages, when the aircraft’s Initiatives to provide energy-efficient or re- lightweight materials have enabled the company to engines have to be used now and then with grea- newable energy-based products and servi- EN11 reduce the empty weight of its aircraft. For examp- ter power. This means that the aircraft’s consump- ces, and reductions in energy requirements Location and size of land owned, leased, ma- le, the aluminium hold containers used in Finnair’s tion of fuel and air emissions are higher than in as a result of these initiatives naged in, or adjacent to, protected areas and wide-body aircraft were replaced by composite hold a CDA landing. In 2012, some 48 per cent of all Finnair requires the biofuel it uses to be produced areas of high biodiversity value outside pro- containers at the end of 2012. The weight reduction Finnair landings at Helsinki-Vantaa were CDA lan- in a genuinely sustainable way. This means, among tected areas will yield savings of approximately 800,000 kilo- dings. This is two percentage points higher than other things, that the biofuels are not produced at The Finnair Group has no owned, leased or ma- grams of fuel per year. The seats on Finnair’s A320 in 2011. At other Finnish airports the proportion the expense of food crops and that land use in the naged land areas in protected areas or directly fleet were also replaced by lighter models, which will of CDA landings is significantly higher, but detai- production of raw materials is socially, economically adjacent to them. result in annual fuel savings of nearly one million ki- led information for other airports is, unfortuna- and environmentally sustainable. At present, there lograms. Weight control is a significant factor in all tely, not available. is no commercially viable biofuel on the market that Of the company’s business units and subsidiaries, Finnair purchases and upgrades related to aircraft. would meet these criteria. Nevertheless, Finnair Finnair Technical Services is the only one that hand- In March, Finnair participated in the internatio- actively participates in various working groups and les significant quantities of materials that are ha- Finnair has invested in fuel efficiency in many areas nal Earth Hour for the third time by switching off engages in bilateral negotiations with various ac- zardous to the environment. Finnair Technical Ser- of its operational functions. For example, ground its advertising lights at the airport and in vario- tors to find such an alternative. vices is situated in a zoned area at Helsinki-Vantaa 57/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Airport. The zoned area is close to a ground wa- on the environment and biodiversity. The opera- EN15 in a special position, because the water vapour ter area. Technical Services has a valid environ- tions aim to avoid excursions to sites where visits Endangered species with habitats in areas generated by the engines is released high in the mental permit, the conditions of which oblige the could pose a threat to biodiversity. Customers are affected by the organisation’s operations atmosphere, increasing the atmosphere’s H2O con- company to review the effects of its activities on informed at destinations on appropriate conduct to The location of Helsinki-Vantaa Airport is such that tent above the cloud layer. However, not much is the environment and to report on them regularly preserve biodiversity. runoff water from the airport can reach the River yet known about the significance of water vapour to the authorities. Vantaa, where there is a significant population of emissions in aviation. In 2010, Finnair Group set Since 2008, Aurinkomatkat-Suntours Ltd has been a the thick-shelled river mussel (Unio crassus). The an ambitious target for cutting its carbon dioxi- EN13 main sponsor of the Finnish environmental organi- protected bivalve is classified as a near threatened de emissions. Finnair’s target is to reduce its CO2 Habitats protected or restored sation Turtle Watch, which operates in Phuket, Thai- (NT) species and it has also been protected under emissions by 24% per seat by 2017, using the 2009 Finnair did not participate in habitat protec- land. The organisation’s Finnish marine biologists the EU Habitats Directive. level as the baseline. tion or restoration projects in 2012. are studying how green turtles raised in captivity Finnair Technical Services is a member of the River can be introduced back into nature. The purpose is Both Finnair Technical Services and Finavia, which Vantaa and Helsinki Region Waterways Protection to determine how transplantation works as a me- maintains Helsinki-Vantaa Airport, have, on the Association, which aims to promote the protecti- ans of protection for the endangered green turtle. basis of their environmental permits, a continuo- on of waterways in its operating area. The asso- us obligation to monitor the effects of their ope- ciation also seeks to promote other environmen- Aurinkomatkat-Suntours also supports a Turtle rations. According to a study conducted by a third tal protection, recreational use of waterways and Watch campaign aimed at reducing the use of wild party and completed in January 2013, some slightly fishing in its area. animals as tourist attractions. Endangered wild ani- elevated levels were observed in the streams and mals such as monkeys, elephants and exotic lizards ditches of the airport, but the impact of the air- EN14 are a familiar sight on Thailand’s busy tourist stree- port was not distinguishable during the monitoring Strategies, current actions, and future plans ts, where they are used for photographs and for en- period in analyses made at the River Vantaa and for managing impacts on biodiversity tertainment at restaurants. Many of these “street the River Kerava. The management of glycol emis- International cargo operations by both air and sea animals” are classified as endangered under inter- sions is the responsibility of the airport operator. adhere to the International Standards for Phytosa- national standards, and all wild animals on the stree- nitary Measures prescribed by the Food and Agri- ts are victims of the illegal animal trade. In additi- EN16 culture Organisation (FAO), which regulate, among on, keeping gibbons and elephants in the street is Total direct and indirect greenhouse gas other things, the quality and characteristics of tim- against Thai law. emissions ber used in logistics. Timber must be treated so that Nearly all of Finnair Group’s greenhouse gas emis- no parasites or insect pests are transported along Aurinkomatkat-Suntours is also involved in a turtle sions arise from flight operations. Flying primarily with it. Correctly-treated timber is also stamped in protection project on the island of Zakinthos in Gree- causes two kinds of direct greenhouse gas emissi- the manner required by the standard. ce. The island is one of the most important nesting ons: carbon dioxide and water vapour. Water va- areas for loggerhead turtles in the Mediterranean, pour is the most important greenhouse gas in the Nature and biodiversity is a significant attractiveness as one quarter of all of these turtles’ nests are loca- atmosphere, but it is not generally examined di- factor in the operations of Aurinkomatkat-Suntours ted on Zakinthos. The project’s focus is on the pro- rectly as a human-derived greenhouse gas emis- Ltd, a tour operator that is part of Finnair Group. In tection of loggerhead turtles nesting on the island sion, because the water vapour in the atmosphe- planning its destination programs, Aurinkomatkat- as well as the construction of a turtle rescue centre re is mainly the result of natural evaporation. Air Suntours carefully evaluates their potential effects close to the port of Agios Sostis. transport can in this respect be considered to be 58/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Finnair’s direct and indirect greenhouse gas emissions 2010–2012 chases transport services from truck companies, In 2012, one extinguisher containing Halon 1301 CO2 H2O and the statistical practices of these companies do gas was set off, resulting in 10.4 kilograms of ha- Direct greenhouse gas not allow actual emissions to be calculated at pre- lon being released into the atmosphere. emissions, tonnes 2012 2011 2010 2012 2011 2010 sent. Finnair Cargo’s main partners in truck traffic Flying 2,473,304 2,521,414 2,220,388 1,020,729 1,040,583 916,351 use vehicles classified as EURO 4 at a minimum. Halons Ground equipment 979 3,870 5,181 released into the Indirect greenhouse EN19 atmosphere 2012 2011 2010 gas emissions Emissions of ozone-depleting substances Halon 1211 0 0.3 0 Electricity n/a 10,070 1,884 The Finnair Group does not use agents that destroy Halon 1301 10.4 8.3 3.6 Heat 18,799 14,850 20,684 the ozone layer in the upper atmosphere. Aircraft Total, kg 10.4 8.6 3.6 Total 2,493,081 2,550,203 2,248,137 1,020,729 1,040,583 916,351 fire extinguishing systems, which use halon fire-extinguishing agents, constitute an exception. Halon CFC 104 84 36 equivalent These figures also include the capacity acquired from that were operated solely due to Finnair Cargo. must be used in aircraft fire-extinguishing systems, as Total other operators by Finnair Cargo. In 2012, this cargo alternative agents approved for civil aviation use are capacity produced approximately 100,000 tonnes of Information on truck transport used by Finnair Car- not yet available on the market. The types of halon The ODP (ozone depleting potential) of halon 1211 is carbon dioxide. The amount includes cargo flights go is absent from this report. Finnair Cargo pur- used in Finnair aircraft are Halon 1301 and Halon 1211. 3 and that of halon 1301 is 10. The ODP of a chemical compound is the relative amount of degradation to the ozone layer it can cause, using the ozone depleting Direct CO emissions in passenger traffic Passenger traffic unit-specific Payload traffic unit-specific 2 potential of a CFC compound as the reference point. CO2 emissions 2006–2012 CO2 emissions 2006–2012

tonnes grams grams EN20 3,000,000 140 1,200 Nitrogen and sulphur oxides (NOx, SOx), and

2,473,304 120 other significant air emissions 2,500,000 1,000 106 886 In 2012, the total nitrogen oxide emissions from 100 2,000,000 83 800 Finnair flight operations declined by just under 7 80 574 per cent compared to the previous year. The decli- 1,500,000 600 60 ne is due to decreased fuel consumption. 400 1,000,000 40

500,000 20 200 Besides carbon dioxide, nitrogen oxides (NOx) are the most significant air emission arising from flying. 0 0 0 08 09 10 11 12 06 07 08 09 10 11 12 06 07 08 09 10 11 12 NOx emissions arise from combustion processes g/RPK g/ASK g/RTK g/ATK that take place at high temperatures. Nitrogen oxi- Adjusted to passenger traffic des contribute to the formation of ozone in the lo- RPK = revenue passenger kilometres. wer atmosphere, but destroy methane, which is a ASK = available seat kilometres. powerful greenhouse gas, in the atmosphere. The RTK = revenue tonne kilometres, i.e. capacity use according to payload weight. ATK = available tonne kilometres, i.e. capacity according to payload weight. impact of nitrogen oxides is complex and in many RPK and ASK describe passenger traffic performance and RTK and ATK describe performance according to payload capacity (passengers + baggage respects still not fully understood. + cargo). 59/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

The basis of the calculation of NOx emissions pro- In addition to NOx emissions, Finnair’s operations Finnair Technical Services VOC emissions in 2012 duced by the engines of Finnair aircraft are emis- give rise to volatile organic compound (VOC) emissi- sion figures in relation to route lengths reported ons. VOC emissions are harmful to the environment, Ali- Aro- Halo- by engine and aircraft manufacturers. In Finnair, for example, by contributing to the formation of phatic matic genated hydro hydro Alco- hydro- these values are applied to actual fuel consump- ozone in the lower atmosphere. Lower-atmosphe- VOC, 1,000 kg carbons carbons Ketones hols carbons Various Total tion figures separately for each individual route. re ozone, moreover, is harmful to both human and Paints and varnishes 2.6 2.6 In addition, the figures are compared with docu- animal health and flora. Finnair’s VOC emissions Paint removal agents 1.9 0.1 1.9 ments based on engine certifications maintained are derived mainly from hydrocarbons that remain Glues and sealing 0.1 0.1 by the UN’s International Civil Aviation Organisa- uncombusted during the combustion of transport agents tion (ICAO). fuels as well as from chemicals used in Technical Solvents 0.7 0.02 0.2 0.7 0.0 2.0 3.7 Services. Finnair Technical Services’ environmen- Anti-corrosion agents 0.1 0.1 NOx emissions arising from Finnair flight opera- tal permit specifies an upper annual limit for VOC Cleaning agents 5.8 0.2 6.0 tions 2010–2012 emissions and Technical Services’ emissions are Washing benzene / 2.1 2.1 2012 2011 2010 considerably lower than this. Due to substantial washing solvents

NOx emissions, 5.6 6 5.9 scaling down of operations, the VOC emissions of Total 2.8 0.02 0.2 8.4 0.1 5.0 16.4 Mkg Finnair Technical Services declined by more than a fifth in 2012 compared to the previous year. EN21 used in aircraft de-icing, which in small amounts Total water discharge ends up in small streams and ditches that surround Wastewaters produced by the Finnair Group are Helsinki Airport. The area’s streams and ditches discharged into the municipal sewerage network. run into the River Vantaa and the River Kerava. The exception is a water-propylene glycol mixture With respect to propylene glycol, according to research into its effects during winter 2011–2012, the

Unit-specific NOx emissions, Unit-specific NOx emissions, relative to Developement of use of solvent-containing streams and ditches surrounding the airport sho- passenger traffic 2006–2012 payload capacity 2006–2012 chemicals and VOC emissions in Finnair wed slightly elevated levels resulting from glycol. Technical Services 1992–2012 However, the airport’s operations were not percep- grams grams kg tible in analysis results from the River Vantaa and 0.60 5.00 200,000 the River Kerava. Finavia, which maintains Helsin- 0.50 4.00 ki Airport, issues reports on the propylene glycol 150,000 0.40 and the amounts thereof that end up in the soil 3.00 and waterways in connection with aircraft de-icing. 0.30 100,000 0.24 2.00 0.19 2.00 49,470 0.20 1.30 50,000 1.00 0.10 15,496

0.00 0.00 0 06 07 08 09 10 11 12 06 07 08 09 10 11 12 92 94 96 98 00 02 04 06 08 10 12 g/RPK g/ASK g/RTK g/ATK VOC emissions Solvent-containing chemicals Adjusted to passenger traffic 60/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

EN22 Amounts of waste 2008–2012 The majority of Finnair’s hazardous waste is ge- Finnair Technical Services’ hazardous waste Total weight of waste by type and disposal nerated by Finnair Technical Services. In 2012, the 2008–2012 method amount of hazardous waste generated by Technical tonnes tonnes The total amount of waste generated by Finnair dec- Services declined by 37 per cent from the previo- 6,000 250 reased by 12 per cent, or nearly 600 tonnes, from the us year, returning to approximately the same level previous year. The decline in the quantity of waste 5,000 as in 2010. The scaling down of Finnair Technical 200 is primarily explained by fleet and network optimi- Services operations is not yet reflected in the ha- 4,000 sation and downsizing of operations. The company zardous waste figures for 2012, as the adjustments 150 also placed more focus on waste sorting and the 3,000 result in one-time increases in the amounts of cer- 110.4 100 waste recovery rate was again improved in 2012. 2,000 tain waste fractions. 50 1,000 Waste generated by Finnair according to final dis- Also as a one-off item,Finnair Technical Services posal method. The figures do not include hazardo- 0 delivered 500 old, low-level radiative exit signs to 0 08 09 10 11 12 08 09 10 11 12 us waste. Suomen Nukliditekniikka and 5.1 kilograms of dep- Composting Recycling Energy use Landfill site* Other** leted uranium to the Finnish Radiation and Nuclear 1,000 kg 2012 2011 2010 Safety Authority. The depleted uranium had pre- Composting 404 461 469 viously been used as counterweights in the aile- Change, % -12 -2 31 Amounts of waste and utilisation percentage ron of aircraft. 2008–2012 Recycling 1,157 1,374 1,251 Change, % -16 10 7 Hazardous waste generated by Finnair 2012 2011 2010 Energy use 1,301 1,349 756 5,800 80 Change, % -4 78 52 68 Hazardous 110 175 117 Landfill site* 1,410 1,671 2,180 waste, tonnes 5,400 60 Change, % -16 -23 -23 Change, % -37 49 -15 Other** 144 157 163 Re-utilisable* 24 42 35 5,000 40 Change, % -9 -3 -16 * Reutilisable hazardous waste includes waste kerosene, which is used as a Total 4,414 5,011 4,819 co-combustion agent in processing hazardous waste, and part of solvent 4,600 20 waste, which Finnair’s partner cleans and returns to Technical Services Change, % -12 4 -4 4 414 for reuse. Re-utilisation % 68 67 55 4,200 0 Recycling-% 39 40 39 08 09 10 11 12 Total, tonnes Utilisation, % * In 2012, of the amount of waste that ended up in landfill sites, nearly 64 per cent consisted of food portions and trays served on flights and produced outside the EU area, which according to EU regulations must be destroyed by a special method. ** Other waste means re-utilised waste that goes to a third party for further processing. The proportions of each waste segment are not known. Other waste is considered recyclable waste here. 61/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

EN23 Finnair fleet noise values Total number and volume of significant spills Aircraft type Engine type Takeoff noise / ICAO Approach noise / ICAO No major oil or chemical spills occurred at Finnair noise limit noise limit in 2012. B757-200 P&W 2040 87.3/97.3 98.1/101.8 A340-311 CFM56-5C2 95.0/103.7 97.2/104.7 A few minor spills occurred: Six hydraulic fluid spills A330-302 GE-CF6-80E1A4/B 92.2/98.1 98.6/104.4 occurred in loading vehicles used by LSG Sky Chefs B757-200 P&W 2040 89.7/94.1 98.1/102.0 Finland. The spills were on asphalt and all of the A319-112 CFM56-5B6/2P 83.4/90.9 94.7/100.2 leaked hydraulic fluid was recovered. No accurate A320-214 CFM56-5B4/2P 83.6/91.3 96.0/100.4 estimate of the amount of spilled hydraulic fluid A320-214 CFM56-5B6/2P 84.9/91.6 96.0/100.6 is available, but the total amount was under 400 A321-211 CFM56-5B3/2P 86.4/92.2 97.0/100.9 litres. A321-211 CFM56-5B3/2P 88.3/92.6 97.0/101.1 Embraer 190 GE CF34-10E 86.1/89.3 92.7/99.2 EN26 Embraer 170 GE CF34-8ES 84.1/89.0 94.9/98.2 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation One typical adverse environmental effect of air transport is noise. The noise produced by aircraft is mainly engine noise and aerodynamic noise. The level of engine noise is greater in takeoffs, while the level of aerodynamic noise grows during approaches.

In the Finnair Group, noise pollution is reduced by modernising the aircraft fleet and by planning takeoffs and landings at less undesirable times from a noise perspective. However, Finnair also operates flights in the evenings and at night, at which times noise is perceived to be more disruptive. 62/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Social management

In 2012, the development of Finnair’s management metrics used include performance management, Trust forum Audits of occupational safety culture continued in the shape of the International management development and improving trust. Cooperation between labour organisations and the activities as a development tool Winning Team strategy project. The company sys- Employee commitment to Finnair, its strategy, ways employer’s representatives was strengthened in Finnair’s occupational safety management and oc- tematically implemented tools developed on the of working and organisational renewal are impor- 2012. Monthly trust forums provide opportunities cupational safety activities were audited in spring basis of its management principles (goal-oriented, tant preconditions for the group’s success and the- for joint development and open dialogue for rep- 2012 to identify development areas and determi- developing, incentivising, caring and fair) to sup- refore the level and development of commitment resentatives of labour organisations, occupational ne focal points for operations for the period 2012– port supervisors and teams in their day-to-day work. needs to be monitored. The metrics incorporate health and safety delegates and representatives 2016. The audits were carried out by the Finnish Finnair’s Takeoff development programs continued the measurement of employee commitment both of the employer. The forums cover current themes Federation of Accident Insurance Institutions and and the company also launched Runway develop- emotionally and behaviourally. and also focus on the planning of improved opera- they applied the structure of the OHSAS 18001 oc- ment programs for team supervisors in spring 2012. ting methods and practices. cupational health and safety management system This has further strengthened the company’s con- Every autumn, Finnair measures day-to-day well- to investigate the practices used in the company. sistent management culture and improved the ca- being at work, job satisfaction and general satis- In 2012, the trust forum met eight times to openly The auditing process comprised an electronic ques- pacity of managers to lead their teams, their busi- faction through the implementation of a conden- discuss a variety of themes related to the company tionnaire sent to selected personnel, participation nesses and each other. Finnair’s talent review and sed 4D Pulse survey. The average scores of the and its public image. Among other things, personnel in occupational health and safety committee mee- successor planning processes continued to play an 4D Pulse survey can be seen as a general index of representatives had the opportunity to ask ques- tings and interviews with occupational health and important role in the management and develop- occupational wellbeing and job satisfaction in the tions from senior management regarding events safety delegates. The results were reported at the ment of the organisation in 2012. The talent review work community. and news that were widely discussed by personnel business unit and group level. The steering group is based on Finnair’s management principles and to shed light on their backgrounds. of the auditing process was Finnair’s occupational Performance Dialogue process. The talent review The participation rate in the spring 2012 survey health and safety committee. has helped improve the company’s successor plan- was 56.9 per cent and the wellbeing-at-work in- Occupational safety ning and career rotation opportunities and allowed dex (4D Pulse) was 4.0 (on a scale of 1 to 5, with 5 Finnair joined the Discrimination-Free Zone cam- General observations from the organisation to systematically focus its person- being the highest score). With a response rate of paign in 2012 to encourage discussion on fair and the evaluation nel development efforts on certain target groups. 56.6 per cent, the 4D Pulse survey conducted in equal treatment in the workplace. The Discrimina- Finnair has had a strong focus on occupational sa- the autumn provided a representative sample of tion-Free Zone campaign is an information cam- fety in recent years. Since 2006, the company has The 4D wellbeing-in-work the company’s work atmosphere. The wellbeing- paign against all types of discrimination, bullying developed the safety of its work environment by survey improved work at-work index for the group as a whole was 3.9 on and harassment. The campaign is a way for orga- conducting risk evaluations. At the same time, the community dialogue in 2012 a scale of 1 to 5. nisations and work communities across Finland to company has focused on preventive measures and Finnair carried out its 4D wellbeing-in-work sur- declare their commitment to the principle of non- acquired a 3T system to support occupational safe- vey twice in 2012, as per the annual plan. Among In addition to the survey, the company has a sys- discrimination. Declaring a workplace as a discri- ty management. Whereas in the past occupational Finnair’s strategic focal points reflected in the more tematic process and a set of operating models for mination-free zone means opposition to discrimi- safety activity was based on reacting to statistical extensive survey carried out in the spring were processing the results in the work communities. nation, intervention and the recognition of equality data, the focus is now on preventive goal-oriented customer orientation and building an internatio- The aim is to activate the work community to dis- between all people. efforts to improve occupational safety on the basis nal winning team. HR focal areas are measured cuss ways to improve wellbeing-at-work based on of monitoring operational matters. at the individual and work community levels: the an analysis of the survey results. 63/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Business units have not been forced to adopt a con- General recommendations sistent operating model. Instead, they have opera- The occupational health and safety function must ted effectively on their own initiative without the implement the annual plan for activities across implementation of centralised requirements. The all units. The agendas of occupational health and centralised and consistent modelling and manage- safety committees must be made consistent and ment of operations has not been a focal point in the standardised for the most part. This will ensure allocation of resources. However, matters related the systematic discussion of key issues and the to the use of the 3T system and work-related risk implementation of the continuous improvement evaluations have been implemented consistently method. Matters that are specific to the unit con- and the training of the occupational health and cerned are added to the standardised agendas. safety organisation has also been partly carried Standardisation and development of occupational out in a centralised manner. safety metrics will be a focal point. Business unit management must pay special attention to the usa- The utilisation of accident statistics varies and sear- bility and implementation of metrics. ching for information has, to some extent, been perceived as difficult. The availability of informa- Occupational health and tion in the statistics maintained by the insurance wellbeing company is varied and rapid organisational changes In the aviation industry, some employees have to make comparisons of historical data challenging. work in exceptional conditions and work atypical The survey indicates that the management’s com- working hours. mitment to the development of occupational safety is at a good level. Risk evaluations are compre- At Finnair, the Finnair Health Services unit is res- hensive and accidents are reported without delay. ponsible for activities relating to occupational Areas requiring improvement included the utilisa- health and working capacity. Finnair Health Ser- tion of the results of investigations into accidents vices is one of Finland’s leading experts in aviati- and hazardous situations, awareness of the results on medicine. of safety tours and familiarity with occupational safety metrics. 64/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Responsibility for human rights

Procurement practices Finnair’s Code of Conduct and Finnair’s Procure- and disruption of any kind in the workplace has no the UN’s Universal Declaration of Human Rights Finnair’s 2012 renewed ethical guidelines (Finnair ment Guidelines document, which specifies the ge- place in the company’s operating culture. in all group related activities. supplier code of conduct) set clear principles to neral policies governing all procurement. In addition, ensure ethical purchasing. Finnair also expects its subsidiaries and business units have their own, more It is the duty of every group employee to act so that As an airline, Finnair operates under strict inter- suppliers to act according to the company’s ethical detailed, procurement guidelines, which specify more no one is accorded an unequal status. Business unit national regulation and supervision. The compa- operating practices and its Supplier Code of Con- detailed criteria under the general procurement gui- managers are responsible for ensuring that any ny considers that there is no significant risk of duct. Finnair’s procurement operations are entirely delines, taking into account the special needs of each equality issues arising in their units are addressed child or forced labour in flight operations. With based on the objective and fair treatment of supp- operating unit. Conforming with the UN’s Universal and resolved. The group conducts equality planning respect to procurement practices, the same rules liers. The persons who make procurement decisions Declaration of Human Rights and all applicable laws and develops anti-discrimination practices conti- and principles apply to child and forced labour as at Finnair must always be fully independent of the and statutes is an absolute minimum requirement. nually as part of normal human resources mana- apply to other human rights issues. The legality business partners concerned. A Finnair employee gement. The legality and regulatory compliance of of Finnair’s operations is monitored as part of must declare himself/herself disqualified due to It is the responsibility of everyone involved in pro- operations is also monitored as part of the group’s the group’s general control and audit processes. bias whenever they are required to make a deci- curement to play their part in ensuring that the general monitoring and audit processes. sion pertaining to a contract or business relation- procurement guidelines are adhered to. A more Our ethical operating practices ship involving family relationships, ownership in general monitoring responsibility rests with tho- Freedom of association and for suppliers the company concerned (with the exception of a se responsible in the product and service groups. collective negotiation Finnair expects its suppliers to act according to reasonable share of ownership in a listed compa- Auditing is performed in certain product and ser- The Finnair Group understands and accepts the the group’s ethical operating practices. These gui- ny) or any other business or debt relationship ex- vice groups. Auditing focuses on quality and safe- right of workers to organise. There is a long traditi- delines do not contain instructions for all possible ternal to Finnair. ty factors. With respect to procurement covered on of trade union activity in the company. In additi- situations; the intention is to give a general indi- by official regulations, only operators approved by on, freedom of association and the collective right cation of how to behave. A procurement steering group operating under the International Air Transport Association (IATA) to negotiate on occupational issues are recognised Finnair’s management is responsible for the stee- can act as suppliers or subcontractors to Finnair. as fundamental rights in Finland. Labour market Complying with laws and ring, development and coordination of the group’s culture in the company has been constructed in regulations procurement activity. The most significant product/ In human rights matters, Finnair obliges its supp- such a way that the organisation of workers and Suppliers and their representatives must conduct service entities are the responsibility of cross-or- liers and subcontractors to adhere to, among other collective negotiations between the company and their business in accordance with local laws and ganisational or intra-business unit procurement things, Finnair’s Supplier code of conduct. employee groups are part of normal activity. regulations. In all their activities, suppliers must groups, i.e. category teams, formed around each comply with environmental law. product or service entity. Discrimination Child and forced labour Finnair does not accept discrimination in any form. The Finnair Group does not accept the use of child Business practices The management of each business unit must en- Finnair’s anti-discrimination policy is based on the or forced labour at any stage of the company’s va- Transactions with suppliers are carried out with sure that individuals handling procurement activi- company’s Human Resources Handbook and Code of lue chain. In all of its activities, the group comp- integrity and in accordance with signed contracts. ty have at their disposal up-to-date procurement Conduct. At Finnair, no one is discriminated against lies with legislation and also requires this of its Additionally, all suppliers must also comply with guidelines and that the guidelines are adhered to. for reasons of gender, religious or political convic- partners. In addition, the group requires its per- the following guidelines: All of Finnair’s procurement activity adheres to tion, age, race, skin colour or origin. Harassment sonnel and partners to adhere to the principles of • Suppliers must act in accordance with the UN’s 65/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Universal Declaration of Human Rights Practices relating to personnel • Information relating to business operations is In managing their personnel, Finnair suppliers created and stored, and archived information must comply with all local laws and regulations. destroyed, in accordance with local laws and When operating at a shared workplace, a supplier’s regulations employees are required to comply with the same • Suppliers must use the material and immate- safe working methods and operating principles as rial property of Finnair responsibly (premises, Finnair employees, including those pertaining to supplies, consumables and equipment which the protective equipment, permits and adherence to Finnair Group has authorised the supplier to use) operating guidelines while taking local circums- • Suppliers must comply with all of Finnair’s re- tances into consideration. Finnair also negotiates quirements relating to passwords, confidenti- cooperation and communication practices with ality and data security suppliers with regard to occupational safety and • Suppliers must keep secure the confidential and health. secret information they receive, and ensure that the information does not fall into unauthorised It is the supplier’s responsibility to ensure that its hands nor is otherwise misused representatives undertake to comply with the ethi- • Suppliers must respect the ownership of cal guidelines intended for Finnair Group suppliers. Finnair’s intellectual property rights, including copyrights, trademark rights and business sec- rets • Suppliers must refrain from issuing statements to representatives of the media on Finnair’s behalf • Suppliers must exercise good discretion and mo- deration when giving gifts or entertainment benefits toFinnair employees. Finnair does not accept corruption in any form. Particularly during competitive tendering, suppliers must refrain completely from offering benefits to group employees. • Suppliers must not engage in business activities with Finnair employees whose life partner or other family member or relative is in a position in which he or she benefits financially from the supplier. 66/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Society

Social influence rations and strategy, including communications and Monitoring relating to the prevention of corruption is relate to economics, finance and information security. Aviation is a strictly regulated sector. As such, it is im- brand building. Responsible communication is one the responsibility of management and Internal Audi- The company has internal control guidelines, according portant for Finnair to participate in discussions and of the fundamental requirements for maintaining a ting. Internal Auditing monitors compliance with the to which each unit or function manager must arran- decisionmaking concerning its operating conditions. positive corporate image. key principles of the Code of Conduct as part of ana- ge internal control of his/her own unit or organisation. lysing and controlling business processes and through Finnair engages in advocacy work in an ethically sus- Finnair’s communication is based on interaction, with special inspections. The internal control environment consists of the ro- tainable manner by appropriately introducing its views every employee required to communicate matters re- les, responsibilities and documented internal control and perspectives where necessary. The company does lated to their area of responsibility to the relevant tar- Accepting or giving bribes is strictly forbidden. Giving principles as well as the company’s values and ethics. not pressurise or support political decision-makers get groups. Those in supervisory roles have a further and accepting business gifts should be avoided where- Roles and responsibilities are in accordance with the in any way. duty to communicate goals, operations and results to ver possible without acting contrary to good manners. Finnish Companies Act, the Finnish Corporate Gover- their own work community and create a work environ- nance Code for Listed Companies and the regulations The aim of Finnair’s advocacy activities is to maintain ment that enables genuine constructive discussion. Suspected cases of bribery must be reported to the governing the aviation industry. relationships with the authorities in the field of tran- company’s Internal Auditing department and, whe- sport policy and to participate in relevant negotiations Corruption re necessary, relevant training will be arranged for The Internal Auditing function regularly reports to the and the operations of advocacy organisations. Finnair Finnair does not accept corruption in any form. Iden- new recruits. Audit Committee of Finnair’s Board of Directors. The is a member of various aviation industry advocacy as- tifying and evaluating corruption risks is part of the results of the Audit Committee’s control work are re- sociations, such as AEA and IATA. general risk surveys carried out by the company and Competition ported to Finnair’s Board of Directors. its business areas. Finnair’s principle is to adhere to competition law in Within the group, the legality and acceptability of ad- all of its business operations. The airline industry is a Internal Auditing is employed to verify the integrity vocacy work is monitored as part of Finnair’s general Finnair’s procurement guidelines set clear principles highly competitive sector globally and new competi- of transactions and the accuracy of information in control and audit processes. to ensure ethical procurement. Finnair also expects tors are constantly entering the market. As in the case internal and external accounting and to confirm that its suppliers to act according to the company’s ethical of corruption risk, Internal Auditing verifies complian- controls are exercised effectively, property is main- Communication operating practices. Finnair’s procurement operations ce with competition law as part of general process tained, and operations are conducted appropriately Finnair’s goal is to be open, honest and timely in its are entirely based on the objective and fair treatment and control audits, and it also, in connection with in accordance with the group’s objectives. The internal communications. Finnair’s communications comply of suppliers. The persons who make procurement de- audits of foreign sales units, reviews in more detail auditing priorities are determined in accordance with with the regulations governing listed companies and cisions at Finnair must always be fully independent of issues relating to compliance with competition law. the group’s risk management strategy. limited liability companies as well as the obligations the business partners concerned. A Finnair employee pursuant to the Finnish Act on Co-operation within must declare himself/herself disqualified due to bias Conforming with regulations Information regarding control requirements is commu- Undertakings and the communications guidelines of whenever they are required to make a decision per- Most of Finnair’s operational activities are based on of- nicated through guidelines, policies and procedures. In- the State Ownership Steering Department. taining to a contract or business relationship involving ficial regulations and are subject to official supervision. ternal Auditing reports the results of its work regularly to family relationships, ownership in the company con- the Audit Committee. The results of the Audit Committee’s Finnair’s communications take various perspectives cerned (with the exception of a reasonable share of Individuals approved by the authority in question are control work, in the form of observations, recommenda- into consideration and respect all views. Responsibi- ownership in a listed company) or any other business responsible for compliance with official regulations. In tions and proposed decisions and measures, are conti- lity must also be reflected in all of the company’s ope- or debt relationship external to Finnair. addition, the most important supervision responsibilities nuously reported to Finnair’s Board of Directors. 67/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Product responsibility

As an airline, Finnair’s mission is to carry custo- At Finnair, responsibility for operational safety rests the company’s Quality Manager, who serves at the the fleet to make sure that the same event does not mers and their goods safely and on time to their with the manager responsible for each area of ope- same time as the Flight Safety Director. recur. In risk assessment and classification we use destinations. The Finnair Group’s business units rations. The Department of Safety and Quality pro- the Event Risk Classification (ERC) method, created and subsidiaries play their part in supporting the duces risk information for management using the Although the foundation of flight safety is created by the Airbusled Airline Risk Management Solutions comprehensive achievement of this goal. The ob- latest methods. A quality management system is through regulations, an effective airline needs a sa- (ARMS) working group, which was introduced for jective is to ensure the wellbeing of customers and used to monitor the effectiveness of all measures fety culture that emphasises and cares for flight sa- airlines’ use in 2009. This method represents the a smooth, trouble-free travel experience in eve- and general compliance with regulations. Within the fety. The modern safety culture is described by the industry’s latest risk knowledge and helps Finnair ry respect. Safety occupies a key position in the framework of the quality management system, the term “Just Culture”. This term is intended to empha- produce more standardised and objective risk in- group’s operations. The most significant product company’s safety-critical elements are audited an- sise that all kinds of human slip-ups and errors are formation for management use. We examine risks responsibility aspects in the Finnair Group’s ope- nually. Everyone who works in roles that influence permitted, but intentional violation of regulations is identified by the ERC more deeply using the Safe- rations are flight safety, food safety, responsibili- flight safety participates regularly in safety training unacceptable. Our entire safety philosophy is based ty Issue Risk Assessment (SIRA) method, which is ty for individual customers, and responsibility for courses, whose content and scheduling is monito- on the idea that no single human error causes an ac- also a tool produced by the ARMS working group. the cargo carried by Finnair. Flight safety is always red both internally and by the authorities. Safety- cident, rather safety networks built into the system In the SIRA method, an attempt is made to identi- the highest priority in all operations, and in this related information is disseminated throughout the are able to catch errors and mitigate their impact. fy all scenarios connected with the perceived risk, area no compromises are made on any grounds. organization via a dedicated safety magazine. In In addition, an effective safety culture has another and numerical probabilities based on internatio- addition, separate safety bulletins are published dimension: reporting. Personnel – traditionally pi- nal data are assigned to all of these scenarios. The In the Finnair Group situations that deviate from for flight personnel as required. lots in particular but nowadays also other workers numerical possibilities obtained in this way must the norm are prepared for in advance. The group to an increasing extent – report the risks associated fulfil the requirements set by management and has developed processes for various unexpected In the European Union, OPS-1 regulations governing with their work and events that occur. The company the authorities. situations and these are continually updated and the operation of commercial aircraft are binding on applies a safety reporting system in which reports maintained. Customers must be able to trust in the all EU airlines. Additionally, as a member of the In- on air safety, maintenance safety, ground safety In addition to risks identified due to reporting, we fact that they will be cared for throughout the enti- ternational Air Transport Association (IATA), Finnair and cabin safety are produced. According to Just survey flight safety risks monthly with flight person- re service chain. As a result, the Finnair Group also adheres to IATA Operational Safety Audit require- Culture principles, those making reports suffer no nel and flight safety professionals in a designated pays great attention to the selection of partners. ments, which are to some extent stricter than the consequences on the basis of safety reporting. A Hazard Identification Team (HIT) and by monito- European OPS regulations. Responsibility for ful- safety report cannot, however, be used to wash ring daily flights on the basis of flight recordings. Flight safety filling these requirements rests with the manager one’s hands of safety violations – intentional vio- The purpose is to identify risks and to make a dee- Flight safety work extends to all aspects that im- responsible for each operating area. Fulfillment of lations are unacceptable. per SIRA analysis of the risks identified. The inter- pact on flight safety. Risk prevention is built into the the regulations is ensured with the aid of a quality pretation of individual flights is called Flight Data company’s operating culture, and numerous official system and particularly the quality system’s audits. At Finnair all safety reports are interpreted and Management (FDM). At best, an aircraft records in regulations guide the group’s activities. In case of hu- Compliance with regulations of all of the airline’s given a risk classification according to the serious- its “black box” more than one thousand flight pa- man error, various protection networks have been cre- operations is ensured by an annual audit, and pos- ness of the event. In serious cases, corrective me- rameters many times per second. The black box re- ated in the company’s operating systems with the key sible deviations from requirements are designated asures are initiated immediately. A corrective me- cordings are downloaded after flights and analysed objective of stopping the advance of a possibly dama- for correction by the responsible manager. The ope- asure may be, for example, the changing of a faulty by a special program. In this way, we can verify later ging course of events and the materialisation of risk. ration of the quality system is the responsibility of component and immediate checking of the rest of that every flight has been carried out taking into ac- 68/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

count the company’s methods and the limitations of tire value chain, from raw material suppliers and operations are audited by customers, an external as various surprise campaigns and measurements each type of aircraft. Any anomalies are always in- product preparation to delivery of the end product audit organisation and the authorities. performed by external parties. Our partners’ ope- vestigated separately in cooperation with the flight of the aircraft. In Finnair Catering/LSG Sky Chegs rations are also continually evaluated. Monitoring * Finnair and LSG Sky Chefs Group (LSG) signed a partnership agreement crew in question and a safety analyst. Finland, product safety requirements fulfil – and according to which LSG assumes full managerial and operational respon- is systematic and is used to set targets and check in many respects exceed – the production hygiene sibility for the inflight and catering service provider Finnair Catering Oy. that they are being met. Staff expertise is ensured The partnership aims at further improving the quality and cost effective- Events that seriously jeopardise safety are rare and requirements set by the authorities. The company ness of catering services for Finnair’s customers. through training. The partnership agreement with LSG excludes Finnair’s fully owned sub- almost without exception a separate safety inves- adheres to its own monitoring system, which is ap- sidiary Finncatering Oy, whose core business consists of providing take tigation is launched in respect of them. A safety in- proved by the authorities and complies with IATA away meals, processed foods and bakery products to cafes, restaurants Cargo and ground handling and grocery stores. Finncatering will remain one of the suppliers of LSG vestigation may be carried out by the authority con- and ITCA recommendations, and is based on risk Sky Chefs Finland. The agreement also excludes Finnair’s fully owned sub- Finnair Cargo’s service policy is to offer its customers sidiary Finnair Travel Retail Oy, which is specialised in inflight and airport cerned (Accident Investigation Board of Finland). If assessment of the entire production chain. Regular travel retail and tax free sales. efficient, trouble-free logistics services. This means, the authority decides not to carry out an investigati- internal and external auditing ensures that opera- among other things, that cargo entrusted to Finnair on, Finnair performs an internal safety investigation. tions run as planned and that they fulfil both le- Customer care Cargo for transport is delivered to its destination In cases related to flying, the safety investigator is gislative requirements and our customers’ wishes. The Finnair Group’s customer service vision is to exactly as agreed with the customer. Cargo is also always an experienced pilot specially trained in the provide the world’s best service. This means ful- delivered to customers in precisely the same condi- subject. The safety investigator (or investigators) Raw materials are acquired only from approved filling customers’ expectations and needs in both tion as it was received by Finnair Cargo. always carries out the investigation independently suppliers. To receive approval, suppliers are au- normal and exceptional situations. To sharpen cus- and the company’s management has no opportu- dited. During auditing, suppliers may be given re- tomer service, the group’s customer service orga- The Ground Operations unit, which belongs to the nity to influence the course of the investigation. quirements and recommendations that they must nisation was separated into its own division at the group’s parent company, is responsible for the acqui- This ensures independence and objectivity also in fulfil before they are approved. For all raw-material end of 2009. In February 2011, the Finnair Group sition, quality criteria and quality control of ground those cases where the perceived shortcomings may consignments, an acceptance inspection is perfor- also launched the Peace of Mind concept in service handling services required at airports. The unit’s relate to the organisation’s activities. med in which particular attention is paid to veri- design, a project aimed at updated the company’s task is to ensure that the ground services used by fy that the arrival temperature is such that con- entire customer service concept and the philosophy Finnair fulfil the requirements set for them, both in Food safety tinuity of the “cold chain” has been maintained. behind it. The goal was the comprehensive impro- terms of quality and in respect of safety and official Finnair Catering, as of Aug 1, 2013 LSG SKy Chefs At the heart of catering’s own monitoring system vement of the customer experience. regulations. Finland Oy*, provides catering and logistics servi- is HACCP-based risk assessment. Various support ces. Its kitchen is one of the largest in Finland. The programs – such as a cleaning program, tempe- For exceptional situations, Finnair has its own cross- To deliver on their service promises, both Finnair task of catering production is to produce quality rature observations and good hygiene practices – organisational unit. All flight traffic irregularities Cargo and the Ground Operations unit apply a sys- services and products cost efficiently to all of the proactively aim to minimise product-safety risks. are handled centrally from Helsinki, thereby gathe- tematic evaluation process when selecting sub- company’s customer airlines. Catering production Monitoring and internal audits ensure that agreed ring all of the available information into one place. contractors and partners that provide terminal is also responsible for developing quality and en- practices are implemented. The company works In this way, a more detailed overall picture of the and other ground handling services. Partners are vironmental issues throughout the Catering ope- closely with local food and environmental autho- multiplier effects and costs of the irregularities is required, for example, to ensure and maintain the rations. The company’s goal is to be the best com- rities. The skills and expertise of personnel are obtained, and efforts are made to minimize incon- expertise of their personnel, and also to ensure that pany offering catering services to its customers. maintained through regular training. venience to the customer. vehicles, equipment and premises are appropriate. In addition to quality audits at airports, Finnair In food preparation and logistics, particular atten- The company has a quality management system Monitoring and supervision of customer service ac- also regularly performs quality inspections that tion is paid to product safety. In food preparation, that covers all catering operations. An internal audit tivity is based on regular auditing, customer feed- continually monitor both its own and its subcont- the food safety risks are evaluated along the en- is regularly performed in the system. In addition, back and customer satisfaction surveys, as well ractors’ work. 69/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Finnair Cargo and Ground Operations quality managers are responsible for maintaining and updating their own quality systems and ensuring that operations comply with requirements. Ground Ope- rations also has an area manager, responsible for airport operations, who has a significant role in monitoring operations’ compliance with regulations. If some activity does not to some extent comply with the operations manual or prevailing legislation, the deviation is documented and corrective measures effected immediately.

Further information:

More information about IATA safety and quality audits: www.iata.org

International Travel Catering Association: www.itcanet.com 70/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Social indicators 2012

LA1 Finland. Of these, 177 are employed in sales and Total workforce by employment type, emp- customer service duties for Finnair’s passenger loyment contract and region and cargo traffic. A total of 321 people worked for The number of Finnair employees decreased signi- travel agencies and tour operators based in the ficantly in 2012 as a result of the structural change Baltic countries and as guides at Aurinkomatkat- in progress at the company. At the end of 2012, the Suntours’ holiday destinations. Personnel based number of Finnair’s employees was 6,368, which is abroad are included in the total number of Finnair 1,013 fewer than in the previous year. Geographi- employees. cally, nearly all personnel work in Finland and most of these at Helsinki-Vantaa Airport or in its imme- Full-time staff accounted for 95 per cent of Finnair diate vicinity. employees, and 97 per cent of staff were employed on a permanent basis. The average age of emplo- There are 640 Finnair employees working outside yees was 44 years.

Number of employees 31 December 2012

Fixed-term and permanent employees as of 31 December 2012 Airline busi- Aviation Travel Other Total ness services services functions 10,000 Total 3,784 1,518 810 256 6,368 Fixed-term (%) 3.9 1.6 4.9 5.9 2.9 8,000 Permanent (%) 96.1 98.4 95.1 94.1 97.1 6,368 6,000

Full-time and part-time employees as of 31 December 2012 4,000 Total 3,784 1,518 810 256 6,368 Part-time (%) 6.4 4.0 3.3 2.0 5.2 2,000

Full-time (%) 93.6 96.0 96.7 98.0 94.8 0 08 09 10 11 12 71/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

LA2 opportunity to agree on their terms of employment their employment. Some collective bargaining ag- Total number and rate of employee turnover by age group, gender and region through collective bargaining in countries in which reements contain provisions on notice periods for Number and proportion of those who ended their employment (voluntarily, made redundant, retired or that is the local practice. layoffs that are more advantageous to employees. as a result of a fatality). Finnair Group and its subsidiaries apply altogether se- LA6 Airline Aviation Travel Other Total ven different national or local company specific collec- Percentage of total workforce represented business services services functions tive labour agreements, either through its membership in formal joint management worker health Total 3,784 1,518 810 256 6,368 in its employer union Service Sector Employers PALTA and safety committees that help monitor Departed 143 211 102 61 517 or through a local agreement. These collective labour and advise on occupational health and safety Turnover, % * 3.9 8.4 10.5 20.3 6.9 agreements are available on at www.Finnairgroup.com programs

* As of 31 December 2012. in the Careers section (in Finnish only). At Finnair, co-operation on occupational health and Turnover figures do not include changes in personnel numbers due to outsourcing and the ending of fixed-term employment contracts.Finnair personnel wor- safety is organised in compliance with Finnish oc- king abroad are included in the figures.Finnair does not maintain turnover statistics in relation to gender, age group or other diversity aspects. In addition to these, the subsidiaries of Finnair Travel cupational health and safety legislation. Personnel LA3 Services apply the universally binding collective labour have representation in official occupational health Benefits provided to full-time employees that agreement for Finnish travel agencies and Finncate- and safety committees at the company level or the are not provided to temporary or part-time ring Oy applies the universally binding labour agree- business unit level. The committees’ work also affects employees, by major operations ment of the food sector in Finland. Finnair’s personnel abroad. Finnair employees enjoy the same benefits irrespecti- ve of type of employment. Some benefits are such that LA5 The occupational health and safety committees ope- they enter into effect only after employment has lasted Minimum notice period(s) regarding signifi- rate at the company level, representing various per- a certain period of time. An exception is Finnair’s Fi- cant operational changes, including whether sonnel groups. In large corporations, employees are nancial Services Office, which only serves permanent it is specified in collective agreements also represented by occupational health and safety employees who are its members. Significant operational changes in Finland are go- delegates at the department level, who participate in verned by the Finnish Act on Co-operation within Un- occupational health and safety activity in pairs with Departure turnover 2008–2012 LA4 dertakings. Depending on the matter in question, the the employer’s representatives at the job level. Oc- Percentage of employees covered by collec- minimum time period applied can range from one cupational health and safety delegates are selected % tive bargaining agreements day to six weeks. The collective bargaining agree- via elections for terms of two years at a time. The 8.0 All Finnair employees in Finland have the right and ments that concern Finnair do not include provisions most recent term started at the beginning of 2012. 6.9 opportunity to agree on their terms of employment that run counter to these legislative provisions. For

6.0 through collective bargaining. Senior management redundancies and layoffs, the minimum notice period Employee health and safety issues are also handled constitutes an exception to this, as its terms of emp- pursuant to the Act on Co-operation within Underta- by Finnair’s informal Trust Forum. Members of the

4.0 loyment are agreed on locally. kings applies in addition to the statutory notice period Executive Board, HR management, delegates and oc- for redundancies and layoffs prior to the termination cupational health and safety organisations are invited In addition to flight crew, Finnair currently has emplo- of employment or payment of wages. The statutory to join the forum. The forum provides background in- 2.0 yees abroad in 28 countries (approx. 200 employees). notice period for layoffs is two weeks and the notice formation on and discusses matters such as equality The employment contracts and terms of employment period for employees made redundant ranges from and non-discrimination, planning and changes per- 0 08 09 10 11 12 are based on local legislation. Employees have the 14 days to six months depending on the duration of taining to employees on a broad basis. 72/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

LA7 Illness and accident absenteeism 2008–2012 Rates of injury, occupational diseases, lost days and absenteeism, and total number of work-related fatalities by region in 2012 Workplace accident frequency (number of % Number of work- Number of workplace accidents per one mil- Number of business trip Sickness days due to 6.0 related accidents accidents lion working hours) accidents work-related accidents Airline’s flight personnel 83 73 25 10 470 5.5 Airline’s ground personnel 30 13 9 17 219 Finnair Technical Services Oy 54 39 26 15 339 5.0 4.9 Finnair Engine Service Oy 6 4 13 2 19 Cargo Oy and FCTO Oy 3 2 10 1 38 4.5 Finnair Catering Oy/ 36 27 30 9 132 LSG Sky Chefs Finland 4.0 Finncatering Oy 23 19 63 4 74 08 09 10 11 12 Northport Oy 4 2 11 2 0 Finnair Flight Academy Oy 1 0 0 1 0 Oy Aurinkomatkat - 3 1 2 2 36 Suntours Ltd Ab Finnair’s Travel Services segment is not included Area Oy 4 1 6 3 3 in the data shown in the table on illness and acci- Finland Travel Bureau Ltd 7 1 5 6 85 dent absenteeism in 2008–2012. The percentages Amadeus Oy 1 0 0 1 0 have been calculated using statistics on days of Total 255 182 15 73 1,415 absence relative to days of employment of workers in active service. The figures do not includeFinnair’s leased employees or subcontractors. One occupational disease case was observed in Finncatering during 2012. There were no fatalities in 2012 (the most recent fatality was in 2005). Work-related accidents include workplace accidents and accidents occurring on business trips. Sickness days due to work-related accidents. This figure includes days of sickness absence caused by accidents that occurred in 2012, where the duration of the incapacity to work was at least three successive days in addition to the day of the accident. If the incapacity to work lasted longer, all absence days are included in this figure. The day of the accident is not included in the calculation. Workplace accident frequency = number of workplace accidents / one million working hours. Workplace accidents include all accidents that incurred treatment expenses and occurred at the workplace or during work. 73/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

LA8 tices, meeting customer needs, leading expertise Promoting employee health and working capacity flown. In addition, Finnair Health Services monitors Education, training, counselling, preventi- and the production and application of research through various career stages the radiation exposure of all flight personnel on a on and risk-control programs in place to as- evidence as well as effective processes to ensure Employees are invited to medical check-ups every quarterly basis. No employee’s radiation exposure sist workforce members regarding serious the efficacy of operations.Finnair Health Servi- three to five years, depending on their duties and has exceeded the annual maximum level (6 mSv). diseases ces’ main research cooperation partners are the age, in order to promote their health and working Finnish Institute of Occupational Health and the capacity. Medical examinations were carried out for Finnair Health Services has offered employees ino- Occupational health services and wellbeing-at- National Institute for Health and Welfare. a total of 875 employees in 2012. The examinations culations against work-related infectious diseases. work activities had a broad focus on various health risks (inclu- The Health Services unit has actively monitored the In the aviation industry, some employees work in ex- Occupational health activities ding diabetes and cardiovascular diseases) as well epidemiological situation of various infectious di- ceptional conditions and at atypical working hours. Workplaces and occupational health care have as musculoskeletal disorders, psychological disor- seases and issued instructions to employees as ne- At Finnair, the Finnair Health Services unit is respon- cooperated in many ways to improve operating prac- ders and other serious illnesses that may compro- cessary. For example, reminders of the risk of in- sible for activities relating to occupational health and tices that have enabled employees to continue in mise working capacity. fluenza were issued in summer and autumn 2012. working capacity. Finnair Health Services, Finnair their present work despite individual health rest- Employees were offered the opportunity to have Aeromedical Center FAeMC (subsequently referred rictions and ageing. These practices include reha- Work placement medical examinations were con- an influenza vaccination on a voluntary basis in au- to as Health Services) coordinates and is responsible bilitation, trial work placements, the lightening of ducted for new recruits and employees changing tumn 2012. Further instructions and guidelines have for the implementation of occupational health care workloads, job modification, flexible working hours jobs and facing new medical requirements. Retur- been issued on matters such as good hand hygiene in the entire Finnair group. Finnair Health Services is and part-time work. Partial daily sickness allowance ning examinations were also conducted for emplo- to prevent infectious diseases. one of Finland’s leading experts in aviation medicine. from the Social Insurance Institution of Finland is yees returning to work after extended periods of used in part-time work arrangements when possible. incapacity to work. Employees are given information and guidance on Finnair Health Services has focused in particular on healthier eating habits. In special cases, occupa- developing screening and care practices for illnesses Finnair has implemented an early intervention ope- Medical examinations pertaining to exposure at work tional health care can refer employees to nutritio- that threaten working capacity. At Finnair, workpla- rating model for the management of risks related include examinations concentrating on the effects nal therapists for further counselling. In 2012, the ces and occupational health care have cooperated to working capacity. The operating model is inclu- of cosmic radiation, carcinogenic substances, sol- company began and deepened cooperation with a in many ways to improve operating practices that ded in group-level operating guidelines and training. vents, noise, vibration and working night shifts. In nutritional therapist. Finnair Health Services occu- enable employees to continue in their present work In 2012, an online course on the early intervention minimising exposure to such work-related health pational health nurses and, where necessary, physi- despite individual health restrictions and ageing. operating model was translated into English and hazards, the primary focus is on implementing wor- cians participate in the development of crew meals The company engages in active communication on published on the Finnair intranet. king methods and procedures that involve minimal for flight personnel. occupational health issues by utilising its internal exposure to hazards. Aviation operations require the communication channels and by arranging special Finnair’s substance abuse program is designed to use of effective chemicals and special attention is As in previous years, rehabilitation to maintain wor- occupational health theme days. contribute to an intoxicant-free workplace and work paid to chemical hazards and protection from them. king capacity was carried out in cooperation with community. This also promotes flight safety. Identi- workplaces, the Social Insurance Institution of Fin- As an authorised aviation medicine centre, Finnair fying substance abuse problems, early intervention, Cosmic radiation assessments were conducted for a land and Siuntio Wellness & Conference Resort. In Health Services also provides aviation medical treatment and rehabilitation help reduce the nega- total of 39 pregnant members of the flight personnel 2012, a total of three rehabilitation courses custo- examinations for the company’s pilots, cabin crew tive health effects of substance abuse and influen- in 2012. All flight personnel can check their cumulati- mised to the requirements of specific jobs began, and external aviators. ce service quality, productivity, occupational safety ve radiation exposure by accessing a browser-based with 10 participants in each. The courses targeted and working atmosphere. A project to update and system that provides information on actual hours of office workers, cabin service personnel and Techni- The operations, services and methods of Finnair revise the substance abuse program was started in flight duty performed and a mathematical calculati- cal Services employees. Health Services are based on industry best prac- 2012 and will continue in 2013. on of cosmic radiation exposure based on the routes 74/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

As the company has implemented substantial struc- Exercise program in 2012 ged in very little physical activity. As benefits of- The primary goal of the team supervisors’ Runway tural changes over the past few years, redundancies, Research indicates that exercise programs are ten spread to entire families through women, the management program has been to strengthen their layoffs and other changes have been unavoidable. more cost-effective when they are aimed at lifes- program also has a positive social cascade effect. supervisory role and self-awareness (360-degree Finnair Health Services has supported employees, tyle changes and when their focus is on increasing appraisal and personal development plans), pro- work communities and supervisors in coping with the day-to-day physical activity and cut down on Finnair’s management development supports vide supervisors the opportunity to pause, discuss the changes. Support has been actively offered to the number of passive hours of those who get litt- wellbeing at work and clarify their own thoughts, build a strong su- individual laid-off employees and work communities le exercise to begin with. In recognition of this, The management development effort launched by pervisor network for Finnair and to help super- to help them identify coping strategies and find new the focus of Finnair’s support for physical fitness Finnair in 2011 started with defining the company’s visors learn Finnair’s fundamental management direction in life. Occupational health physicians and in 2012 was on increasing the day-to-day activity management values, or management attributes. principles (as part of performance management, nurses have been responsible for group and indivi- of employees whose exercise habits were below The management of teams and individuals is based the performance and development discussion pro- dual-level support measures related to the struc- current recommendations. The exercise program on five cornerstones:Finnair employees are goal- cess and by practising the giving of feedback and tural changes in their respective areas of responsi- was designed and implemented in cooperation bet- oriented, fair, incentivising, developing and caring, coaching according to the model implemented by bility. The health of the company’s personnel had ween the UKK Institute, UKK Health Services and and they treat each other accordingly. These attri- Finnair) and to help them transfer what they have remained good even during the structural changes. Finnair Health Services. butes were used as the basis of the development learned into their work communities and relation- of performance assessment, the 360-degree ma- ships with subordinates in a way that strengthens Wellbeing-at-work program The effect of the six-month exercise program on nagement appraisal tool, recruitment criteria and the organisation’s change management. The principles of Finnair’s wellbeing-at-work pro- the participants’ day-to-day activity and fitness va- the perspectives incorporated in the 4D employee gram for the period 2011–2015 apply to all busi- riables was evaluated by various measures. Based survey. The company has coached its management In 2012, some 200 supervisors from various units ness units and their employees. The aim of the on information collected from exercise logs, the systematically based on these perspectives. were selected for the Runway training program. program is to promote the effectiveness and func- participants’ average day-to-day physical activity Courses were arranged in both Finnish and English. tionality of the work community and to ensure the increased to a level above recommendations and The company’s structural change and cost reduction wellbeing of personnel through all career stages. was maintained at that level throughout the durati- programs that continued in 2012 have inevitably had LA9 The program contributes to employee productivity, on of the exercise program. The body composition, an effect on the working capacity and wellbeing at Health and safety topics covered in formal the company’s competitiveness and attractiveness cardiovascular performance and musculoskeletal work of everyone at Finnair. As a result, the role of agreements with trade unions as an employer as well as the implementation of fitness of the participants showed significant chan- a supervisor at Finnair and the quality of manage- Finnair’s primary occupational safety forums are the social component of corporate responsibility. ges that reduce health risks. Based on measured ment and leadership has been highlighted even more the joint occupational health and safety commit- changes in body weight and endurance test per- than before. Recognising this, the company has con- tees of personnel and the employer. The develop- Finnair added more detail to its steering model formance, the estimated overall mortality risk and tinued to actively support supervisors in developing ment of occupational health and safety is based for wellbeing at work in 2012. The members of the the risk of dying of cardiovascular disease declin- their management skills and implementing changes. on the occupational health and wellbeing-at-work steering group in 2012 were the ed by an average of 6–12% for every participant. • Assessing the current status of occupational Director of Finnair Health Services, Finnair’s Head The development of management culture and chan- safety and planning the further development of Occupational Safety, Finnair Cargo’s HR mana- The program’s efficacy and cost-effectiveness were ges in supervisory work require further focus and of operations ger and the group’s director in charge of human assessed to be at least at the same level as those investment. As the effective management of the • Establishing specific operating methods for inap- resource development. Since summer 2012, the of previous projects. change process requires strength in numbers, in propriate conduct and harassment and the early steering group has met monthly. 2012 the company provided training to 200 team intervention operating models. The exercise program was particularly beneficial supervisors on a consistent model for leadership • Developing the compiling of statistics on acci- to female participants who had previously enga- and change management. dents and hazardous situations and the way such 75/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

flight cases are investigated The shared occupational safety rules of workplaces Year 2012 employees office staff personnel management total • Developing shared occupational safety practi- were developed in 2012 through cooperation between Student hours 38,599 26,046 78,317 2,791 145,753 ces for workplaces, taking into consideration the the various actors at the airport, but also by asses- Persons per personnel 1,380 2,406 2,461 121 6,368 occupational safety perspectives of subcontrac- sing and supporting the safety efforts of subcontrac- group ting chains and supplier networks. tors and updating the relevant rules and procedures. Average hours per person 28 10.8 31.8 23.1 22.9

The assessment of the current status of occupational As an aviation industry employer, Finnair actively de- 2012 2011 2010 2009 safety was carried out in cooperation with an accident velops the occupational safety of its employees in Student hours 145,753 203,899 117,156 181,309 insurance company. The method of implementation cooperation with representatives of labour market Average student hours per person 22.9 27.3 15.4 22.8 was an electronic survey sent to a network of experts organisations in a transport and logistics group coor- as well as selected supervisors and employees. The dinated by the Centre of Occupational Safety. The LA11 The aim of the new training solutions is to decrease assessment also included interviews with the occupa- working group promotes occupational safety, occupa- Programs for skills management and life- operating costs, make training models more effi- tional health and safety organisation and monitoring tional health and safety cooperation and the develop- long learning cient and reduce emissions from flight operations. of the activities of the occupational health and safety ment of working life in aviation industry workplaces. Via the Finnair Flight Academy (FFA), Finnair sup- The International Air Transport Association (IATA) committee. The joint development areas selected on ports the development of personnel skills actively has estimated that inefficient operational models the basis of the assessment were harmonising occu- The themes of the working group include, among ot- and by diverse means. Finnair Flight Academy is increase operational costs by as much as 2–8%. pational safety and health operations between bu- her things, making the airport a safe workplace, de- responsible for the implementation of all person- The Reverse Green™ type training program covers siness units and maintaining standardised statistics. veloping occupational safety training in the aviation nel development programs including flight training, all areas of flying that influence overall economy. The unit-specific development areas were related to, industry and preventing violence in customer service. security and service training, technical training and This involves both skills and attitudes. The Fit to among other things, the need to revise and update Finnair’s joint personnel development services. Fly™ recurrent training program covers the same risk assessments, developing supervisors’ occupatio- http://ttk.fi/toimialat/ilmailuala (in Finnish) themes as part of annual training sessions. Mul- nal safety expertise and improving communication Personnel development is strategy-oriented and it tifly™, organised in collaboration with Patria Pilot with personnel. The actions were incorporated into LA10 utilises, in addition to traditional proximity training, Training, provides newly qualified pilots extensi- the action plans for 2013 and 2014. Average hours of training per year per emp- network learning, job rotation, learning in work, ve training in economical flying, also in the chal- loyee by employee category coaching and mentoring. Training and development lenging Nordic conditions. Finnair Flight Academy The investigation of accidents and hazardous situa- In 2012, Finnair provided training for its emplo- needs are surveyed in the company’s various bu- also markets its training solutions to other airlines. tions has been highlighted as one area of develop- yees via the Finnair Aviation Academy amoun- siness units and subsidiaries as well as at the de- ment. The aim of investigations is to identify the cau- ting to 145,753 student hours in total. Relative to partmental and individual level in, for example, The Finnair Aviation Academy, founded in 1964, ses of accidents and hazardous situations to develop company’s total number of personnel, this corres- the performance and development reviews. The is a special vocational educational establishment measures to prevent similar accidents in the future ponds to 22.9 hours per employee. The figures do proportion of online training increased in 2012 and, maintained by Finnair Plc, which operates as a spe- and to learn from accidents through the entire line not include courses arranged within departments at the start of the year, the company implemented cial educational establishment under the Act on organisation. The operating model created for acci- nor training provided by parties outside the com- a new learning environment that facilitates more Vocational Adult Education (631/1998). Its task is dent investigations was developed in cooperation with pany. effective utilisation of new teaching methods and to arrange further vocational training leading to personnel representatives. The investigation model better monitoring of learning outcomes. a vocational or special vocational qualification as improved the investigation of serious accidents by, well as other further vocational training required among other things, developing reporting and the Finnair Flight Academy’s new flight training solu- for the practice of Finnair Plc’s and its subsidiaries’ work of investigation teams. tions emphasise the benefits of economical flying. operations (Further Vocational Training Arrange- 76/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

ment Permit 551/530/2006, 13 December 2006). cess implemented throughout the company at the Senior ly acceptable tourism. Aurinkomatkat-Suntours, As a privately-owned educational establishment, beginning of 2011 is to have all personnel attend a management, % 2012 2011 2010 moreover, joined the Code of Conduct for the Pro- the Aviation Academy funds its operations in ac- PD review at least twice per year. Women 30 36 33 tection of Children Against Sex Tourism and Traf- cordance with government aid practices and it is Men 70 64 67 ficking in 2001, and requires that it be adhered a member of Business Education Establishments LA13 Under 30 years 2 2 n/a to in all of its hotel contracts. old ELO (Elinkeinoelämän oppilaitokset Elo ry). Composition of governance bodies and break- 30–50-year-olds 70 68 n/a down of employees per category by gender, HR3 Over the past few years, Finnair has invested in age group, minority group membership and Over 50 years old 28 30 n/a Total hours of employee training on policies Peace of Mind training aimed at improving custo- other indicators of diversity and procedures concerning aspects of human mer service. A significant proportion of Finnair’s At the end of 2012, 54 per cent of Finnair’s per- HR1 rights that are relevant to operations personnel have participated in Peace of Mind ser- sonnel were women and 46 per cent were men. Percentage and total number of significant Aurinkomatkat-Suntours Ltd provides training vice skills development training. Finnair’s service Three of the seven members of Finnair’s Board of investment agreements that include human to all new guides in respect of the company’s identity and its results are reflected in day-to-day Directors are women. rights clauses or that have undergone human work against child sex tourism. The number of encounters between personnel and employees as rights screening training hours relating to human rights is not se- well as between colleagues. Finnair’s aim is to be The average age of Finnair’s personnel in 2012 was Finnair has its own ethical guidelines for suppliers parated from the total number of training hours the preferred airline for traffic between Asia and 44 years. Of the personnel, 27 per cent were over and subcontractors and all suppliers are required given. Training relating to human rights was not Europe. The key components of service skills – pre- 50 years of age, while five per cent were under 30 to comply with them. All partners and subcont- otherwise arranged at Finnair in 2012. However, sence, permission to do and individuality – consti- years of age. The employees’ average number of ractors, moreover, are obliged to comply with the the human rights theme will be highlighted in tute Finnair’s service identity and are an important years in service was 17. Employees who have wor- principles of the UN Universal Declaration of Hu- the training on the new Code of Conduct to be differentiating factor. ked for Finnair for over 20 years account for 43 man Rights as well as local legislation. carried out in 2013. per cent of personnel, while 13 per cent have wor- One of the key objectives in 2012 was to familiari- ked for Finnair for over 30 years. Finnair does not HR2 HR4 se all Finnair personnel with the Peace of Mind maintain statistics on ethnic minorities. Percentage of significant suppliers and cont- Total number of incidents of discrimination approach, including teams and units that are not ractors that have undergone screening on hu- and actions taken directly involved in customer service. To this end, All personnel, % 2012 2011 2010 man rights and actions taken There were two suspected cases of occupational the company created an e-learning course that Women 54 54 53 Finnair has its own ethical guidelines for suppliers discrimination at Finnair in 2012. In one of the ca- was taken by 3,397 employees. Men 46 46 47 and all suppliers are required to comply with them. ses, the District Court dismissed the civil suit af- Under 30 years old 6 7 7 All partners and subcontractors, moreover, are ter the prosecutor had previously decided to not The Peace of Mind concept was clarified and con- 30–50-year-olds 63 63 65 obliged to comply with the principles of the UN press charges in the same matter. The preliminary cretised further in autumn 2012 and the training Over 50 years old 31 30 28 Universal Declaration of Human Rights as well as investigation of the other case was still ongoing at programs will continue in 2013. local legislation. Finnair uses well-known suppliers the end of the year. and subcontractors of good repute both in Fin- LA12 land and abroad. Finnair does not, however, con- HR6 Percentage of employees receiving regular duct human rights screenings itself. Finnair and Operations identified as having significant performance and career development reviews its tour operator and travel agency subsidiaries risk for incidents of child labour, and measu- Finnair’s development and career reviews cover all have separately signed the Helsinki Declaration, res taken to contribute to the elimination of personnel. The aim of the updated PD review pro- which aims to promote sustainable and ethical- child labour 77/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

PROJECTS PROJECTS Finnair does not approve of the use of child labour the exploitation of forced labour at the international in any part of its value chain. With respect to the level cannot be excluded. The textile industry is one aviation industry, the company has not identified such sector. Finnair’s uniforms and workwear are ac- MAYAN CHILD PROJECT HELPING POOR any risk for incidents of child labour. This is a con- quired from suppliers that have addressed ethical Aurinkomatkat-Suntours participates in the CHILDREN IN LANGKAWI sequence both of the general nature of the industry perspectives in their own operations. Juntos Calentermos el Invierno project toget- Aurinkomatkat-Suntours supports a local and the strict official regulation and supervision of her with dolphin excursion organiser Delphi- charitable organisation in Langkawi. The the industry. Nevertheless, the aviation industry SO1 nus and a local representative, Hotelbeds Pla- organisation was established to help in the and Finnair’s operations do interact with sectors Nature, scope and effectiveness of any pro- ya del Carmen, in Mexico. The purpose of the daily lives of local low-income families. in which the exploitation of child labour cannot be grams and practices that assess and manage project is to collect toys and warm clothing excluded. One such sector is the textile industry. the impacts of operations on communities, in partnership with the local DIF aid organi- The efforts to improve their daily living con- The uniforms and workwear used in the company including entering, operating and exiting sation for poor Mayan children living in palm ditions include food donations, helping fami- are acquired from suppliers that have addressed As a company, Finnair is not deemed to have a sig- leaf huts. Temperatures in the region can be lies with children’s school fees and training this issue in their own operations. nificant direct impact on local communities outside as low as 6 degrees Celsius. The organisation women to earn additional income through Finland. For this reason, no programs relating to also helps women who are victims of domestic e.g. making textiles and handicrafts. On excursions, Aurinkomatkat-Suntours guides mo- the assessment and management of the impacts violence, orphaned children and single mot- nitor the operations at excursion sites and destina- of operations on local communities have been con- hers. Aurinkomatkat-Suntours communicates Interested customers are invited to partici- tions for the use of child labour. If any problems are sidered necessary. information on the project to customers prior pate by bringing clothing and toys for local detected, the excursion destinations and the con- to their travel date to give them the opportu- children. Multivitamin tablets for children tents of the excursions are changed as necessary. However, Finnair recognises that the tourism in- nity to pack warm clothing or school supplies are also much needed. On location, Aurin- In order to prevent child prostitution, Aurinkomat- dustry has significant impacts on local communi- to give to the local children. komatkat-Suntours guides sell small cook- kat-Suntours has a clause in its hotel contracts that ties around the world. Of Finnair’s subsidiaries, books featuring recipes from this multicul- entitles the company to immediately terminate the the tour operator Aurinkomatkat-Suntours and PHUKET CHILDREN tural area, prepared according to methods contract if child prostitution is detected in the hotel. the travel agencies Area Oy and Finland Travel PROJECT used by local women. Customers can also Bureau Ltd, in particular, occupy a special posi- make a small cash donation at the destina- HR7 tion in respect of their opportunities for influen- Aurinkomatkat-Suntours participates in a tion to help local families in their daily lives. Operations identified as having significant ce in this field. In 2010 Finnair joined the inter- project to help local children in Phuket in risk for incidents of forced or compulsory la- national Sustainable Travel Leadership Network, partnership with its long-term partner, the Further information is available at bour, and measures taken to contribute to the which promotes sustainable tourism. Finnair and English-Thai company Siam Safari Nature www.langkawicharity.com elimination of forced or compulsory labour the tour operators and travel agencies belonging Tours. The project helps children from low- Finnair does not approve of the use of forced labour to it have signed the Helsinki Declaration, which income rural families in schools and orphana- in any part of its value chain. With respect to the avi- aims to promote sustainable tourism. Aurinko- ges on the outskirts of Phuket. Customers are ation industry, the company has not identified any matkat-Suntours, moreover, has its own agree- informed of the project before their travel risk for incidents of forced labour. This is a conse- ments and projects to minimise the negative im- date to give them the opportunity to pack quence both of the general nature of the industry pacts of tourism, including a water-consumption clean used clothing, toys, notebooks and ot- and the strict official regulation and supervision of classification for hotels, the Tour Operator’s Ini- her supplies suitable for children aged 4–16. the industry. Nevertheless, the aviation industry and tiative and the Code of Conduct for the Protection Finnair’s operations do interact with sectors in which of Children Against Sex Tourism and Trafficking. 78/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Aurinkomatkat-Suntours also has selected local resources appropriately. Finnair’s advocacy work As part of its advocacy work, Finnair cooperates performs regular audits throughout the entire pro- recipients of support at various destinations to involves pursuing key interests at the national and with various aviation industry organisations such duction chain. Food safety verification and assess- give customers a concrete opportunity to support international levels. as the AEA and IATA. Finnair also strives to coope- ment processes are outlined in more detail in the local residents. This policy has been successful in rate with relevant government ministries. Finnair is section on the management of product responsibility. providing support to those in need. Siberian overflight rights are a key advocacy tar- involved in the Trade Policy Committee of the Con- get in terms of Finnair’s strategy. The location of federation of Finnish Industries (EK), the activities Aurinkomatkat-Suntours Ltd, Finnair’s subsidia- Links: the company’s home airport between Europe and of the Finnish-Russian Chamber of Commerce, the ry that produces package tours, always evaluates http://www.Finnair.com/GB/GB/corporate-responsibility/we-work- Asia is such that by utilising Russian and particu- political advisory board for air transport and the as widely and precisely as possible any threats to within-community (Finnair sustainability pages) larly Siberian airspace, Finnair is able to offer its EU’s transport section. The company also coopera- health and safety. The evaluation is based on the http://www.aurinkomatkat.fi/info/hyva-tietaa/hotellit/ymparis- customers the most direct routes between Europe tes closely with the Finnish Transport Safety Agency assessments of different authorities on the situa- totietoisen-valinta (in Finnish) and many important Asian destinations. For this (TraFi) and the Finnish Ministry of Transport and tion of the country and destination in question and http://www.toinitiative.org/ (TOI) reason, Finnair tries both individually and in coope- Communications. how it is expected to develop in the near future, http://www.smal.fi/file.php?264 (Helsinki Declaration) ration with the authorities to influence the mainte- for example politically. In addition, during the ho- http://www.sustainabletravelinternational.org/ nance of existing rights and to obtain new rights. SO6 liday season Aurinkomatkat-Suntours continually Total value of financial and in-kind contri- monitors its destinations in terms of their health SO2 A second important advocacy target is various air butions to political parties, politicians and and security situation in cooperation with different Percentage and total number of business transport agreements. Opening a new route re- related institutions by country authorities and other relevant parties. units analysed for risks related to corruption quires the signing of an air service agreement bet- Finnair makes no contributions of any kind to po- All Finnair business units run an analysis of risks ween Finland and the destination country. In ad- litical parties. PR3 related to corruption as part of the company’s ge- dition, air service agreements regulate how often Type of product and service information re- neral risk survey. one can fly to each destination. The parties to air PR1 quired by procedures, and information re- service agreements are normally states or groups Life cycle stages in which health and safety im- quirements SO3 of states (such as the EU). To maintain and increase pacts of products and services are assessed Finnair’s operations are regulated by numerous Percentage of employees trained in the business it is important that the company’s route for improvement, and percentage of signifi- official regulations and international agreements. organisation’s anti-corruption policies and network is optimal in terms of customer demand. cant products and service categories subject For the customer, the most important product in- procedures Appropriate cooperation with the authorities and to such procedures formation issues relate to the conditions of carri- Certain job descriptions at Finnair are such that other parties is a key instrument for ensuring this. With respect to Finnair’s products and services, the age and customer’s rights. they are considered to have a higher than normal most significant health and safety issues relate to risk of corruption associated with them. All those EU emissions trading, which started in 2012, is a flight safety and food safety. The duty to disclose relating to the conditions of handling such tasks are offered the opportunity to significant issue for Finnair, which operates in and carriage is based on the Montreal Convention, and participate in anti-corruption training. from the EU area. Finnair considers meeting the In terms of foodstuffs, the safety of all products used the content of the Convention has also been codified challenge set by climate change to be essential, in manufacturing has been assessed. Finnair Ca- in official regulations. Finnair’s General Conditions SO5 but perceives that regional emissions trading po- tering/LSG Sky Chefs Finland monitors and seeks of Carriage are enclosed with travel and cargo do- Public policy positions and participation in ses the threat of carbon leakage and distortion of to ensure the safety of foodstuffs throughout its cuments, and are also available on the company public policy development and lobbying competition. For this reason, Finnair engages in production chain, from the selection and auditing website. The special conditions for package tours Finnair aims to utilise advocacy channels in an et- advocacy work to achieve a global emissions tra- of subcontractors to food preparation and serving. are based on the EU Directive 90/314/EEC. The hically correct manner by allocating its available ding agreement for air transport. Finnair Catering’s Quality Assurance Department conditions relating to package tours provided by 79/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Finnair are to be found in tour operators’ travel in, among other things, changes to Finnair’s ticket tainment and economy class meals. The ratings of PR6 documents, travel brochures and websites. types, the reorganisation of check-in procedures at economy class meals on long-haul flights impro- Programs for adherence to laws, standards Helsinki-Vantaa Airport and in changes to Finnair’s ved in autumn 2012 after the menus for flights de- and voluntary codes related to marketing The airline has a duty to communicate the customer service concept, which is aimed at the parting from Helsinki were renewed and the main communications, including advertising, pro- passenger’s rights if a passenger is denied access comprehensive improvement of the customer ex- meal was made larger. Finnair will continue its in- motion and sponsorship to a flight, the passenger’s flight is cancelled or the perience going forward. Customer feedback also flight meal renewal in 2013. Finnair acts in accordance with all general rules, flight is delayed. This duty is based on EC Regula- plays a significant role in motivating customer ser- laws, recommendations and good marketing prac- tion 261/2004. At the same time, the airline must vice personnel. Finnair’s customer satisfaction surveys also cover tices relating to advertising and sponsorship. The inform customers of whom they can file a comp- the services of LSG Sky Chefs Finland. In addition main standards include marketing legislation (most laint with. Finnair complies with these regulations Finnair monitors customer satisfaction daily on its to customer satisfaction surveys at the group level, significantly the Finish Consumer Protection Act), in its customer service operations. scheduled flights, and the results are reported on Finnair’s subsidiaries also conduct their own cus- the Finnish Consumer Agency’s guidelines on the monthly. The customer satisfaction survey covers tomer satisfaction surveys and commission them marketing of flights (based on European Parliament A customer’s protection of privacy is prescribed all of Finnair’s scheduled traffic destinations and from external parties. and Council Directive (2005/28/EC)) and the prin- by the Finnish Personal Data Act 22.4.1999/523. also part of the scheduled traffic destinations ope- ciples relating to good advertising practice issued rated with Flybe’s aircraft. The survey is carried out by the Council on Ethics in Advertising. Links: through questionnaire forms distributed on flights. http://www.finnair.com/FI/GB/info/conditions-of-carriage The forms are distributed to pre-determined ran- http://www.finnaircargo.fi/en/cargo/ dom seats. Key indicators are the general rating of http://www.aurinkomatkat.fi/matkaehdot(in Finnish) the flight experience and of various elements such https://www.area.fi/ehdot-ja-saannot(in Finnish) as booking, airport services and in-flight services. http://www.smt.fi/tietoa-matkalle (in Finnish) Where necessary, this information is also supple- Finnair’s customer satisfaction http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:2200 mented with online surveys, for example. On Asi- with flight as a whole in 2012 1A0718(01):EN:HTML an routes, Finnair also participates in IATA’s com- http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:3199 petitor monitoring surveys, which help track the % 0L0314:EN:HTML quality of service experienced by the customer in 100 http://eur-lex.europa.eu/LexUriServ/LexUriServ. comparison to the most important competitors. 80 do?uri=CELEX:32004R0261:EN:HTML http://www.finlex.fi/en/laki/kaannokset/1999/19990523 Overall, Finnair’s customer satisfaction has re- 60 mained close to the level seen in recent years, PR5 achieving the previously set target. Of all custo- 40 Practices related to customer satisfaction, mers completing the survey in 2012, 86 per cent including results of surveys measuring cus- rated their experience as “very good” or “good”. 20 tomer satisfaction The strengths of the service included efficient and 0 Finnair monitors the customer feedback it recei- smooth ground services and effective transfers at Inter- Inter- Europe Europe continental continental Business Economy ves and reports on the feedback to the depart- Helsinki-Vantaa Airport. Customers also appreciate Business Economy Class Class ment concerned at least once per month. Customer Finnair’s cabin environments and friendly in-flight Class Class feedback has been used taken into consideration service. Development areas include in-flight enter- Very poor Poor Fair Good Very good 80/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

GRI Index table

GRI guidelines Finnair Group Report GRI indicator Included Page/contents Shortcomings/anomalies/justifications 1. Strategy and Analysis 1.1 Statement by the CEO Yes p. 7; Financial report p. 4 1.2 Description of key impacts, risks, and -opportunities Yes p. 7–13, 15–16, 19, 22–23, 34–36, 40, 44–48; Financial report p. 4–6, 16–17, 48, 54–55 2. Organisational Profile 2.1 Name of the organisation Yes Finnair Oyj 2.2 Primary brands, services and/or brands Yes Financial report p. 11–13 2.3 Operational structure of the organisation Yes Financial report p. 10–13, 45, 52–53 2.4 Location of organisation’s headquarters Yes Helsinki-Vantaan lentoasema, Tietotie 11 A, 01053 Finnair 2.5 Georgaphical location of operations Yes Financial report p. 5, 11–13 2.6 Nature of ownership and legal form Yes Financial report p. 15–16, 23, 43 2.7 Markets served Yes Financial report p. 5–7 2.8 Scale of the reporting organisation Yes Financial report p. 5, 11–13 2.9 Significant changes during the reporting period regarding Yes Financial report p. 7–13 size, structure or ownership 2.10 Awards received in the reporting period Yes p. 11; Financial report p. 1, 12 3. Report Parameters 3.1 Reporting period Yes 1.1.–31.12.2012 3.2 Date of most recent report Yes March 2011 3.3 Reporting cycle Yes Annual. Next report due March 2014. 3.4 Contact point for questions regarding Yes Finnair Oyj, Tietotie 11 A, 01053 the reports or its contents Finnair. VP Sustainable development Kati Ihamäki, kati.ihamaki(a)Finnair.fi 81/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

3.5 Process for defining report content Yes p. 6, 44–46 3.6 Boundary of the report content Yes p. 44–46 3.7 Specific limitations on the scope or boundary of the report Yes p. 44–46 3.8 Basis for reporting on joint ventures, subsidiaries, leased Yes p. 44–46 facilities and outsourced operations 3.9 Data measurements techniques and the bases of Yes p. 44–46 Possible anomalies are mentioned separately for each indicator. calculations 3.10 Explanation of the effect of any re-statements of Yes p. 44–46 information provided in earlier reports 3.11 Significant changes from the previous reporting periods Yes p. 44–46 in the scope, bounday or measurements methods applied in the report 3.12 GRI Content Index Yes p. 80–87 3.13 Policy and current practice with regard to seeking Yes The report has not been externally external assurance for the report assured 4. Governance, Commitments and Engagement 4.1 Governance structure of the organisation Yes Financial report p. 13–14, 49–53 4.2 Status of the chair of the highest governance body Yes Financial report p. 13–14, 49–53 4.3 Independence of Members of the Board of Directors Yes Financial report p. 13–14, 49–53 4.4 Mechanisms for shareholders and employees to influence Yes Financial report p. 13–14, 49–53 actions of Board of Directors 4.5 Linkage between compensation for Members of the Board Yes p. 13–14, 49–53, 56–61; Financial of Directors and senior managers to the organisation’s report p. 5–7 social and environmental performance 4.6 Process to prevent conflicts of interests in Board work Yes Financial report p. 13–14, 49–53 4.7 Process for determination the qualifications of Members of Yes Financial report p. 13–14, 49–53 the Board in areas of strategic management and corporate responsibility 4.8 Mission, values and codes of conduct Yes p. 11, 25, 29; Financial report p. 5–7 4.9 Board’s procedures for overseeing management of Yes p. 52; Financial report p. 49–53 corporate performance 4.10 Process for evaluating the Board of Directors’ own Yes Financial report p. 49–53 performance 4.11 Application of the precautionary principle Yes Financial report p. 49–53 82/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

4.12 Commitment to external corporate responsibility Yes p. 11, 42 initiatives 4.13 Memberships in organisations, associations and advocacy Yes p. 36 organisations 4.14 List of interest groups engaged by the organisation Yes p. 6, 36 4.15 Basis of identification and selection of interest groups Yes p. 6, 36 4.16 Approaches to engagement with interest groups Yes p. 6, 15, 34–36 4.17 Key topics and concerns raised through interest-group Yes p 6, 15–16, 36 engagement 5. Management Approach and Performance Indicators Approach to management of economic responsibility Yes p. 13, 47–48; Financial report p. 17 Economic Performance Indicators EC1 Direct economic value generated and distributed, including Partly p. 11, 49–50 Level and amount of community support not reported, because funds and other investments in revenues, operating costs, employee compensation, community projects consist of items that cannot be separated from the group’s financial statement donations and other community investments, retained information. Finnair’s objective is to include the level of community support in the 2013 report. earnings, and payments to capital providers and governments EC2 Financial implications and other risks and opportunities for Yes p. 50; Financial report p. 6, 16, 48, the organisation’s activities due to climate change 54–55 EC3 Coverage of pension obligations Yes p. 50; Financial report p. 38–39 EC4 Significant financial assistance received from government Yes p. 50; Financial report p. 15 EC5 Range of ratios of standard entry level wage compared to No Nearly all of the Finnair Group’s personnel fall within the sphere of collective bargaining agreements, local minimum wage at significant locations of operation so this indicator not deemed to be essential for the group. EC6 Policy, practices, and proportion of spending on locally- Partly p. 51 Finnair has no local procurement policy as such, and does not compile information at Group Level on based suppliers at significant locations of operation the local characteristics of its suppliers. EC7 Procedures for local hiring and proportion of senior Partly Indicator is not essential for the Finnair Group operations, because Finnair has no significant management hired from the local community at locations operating locations abroad. In Finland, Finnair’s employees, including senior management, are mainly of significant operation Finnish. EC8 Development and impact of infrastructure investments No In the reporting period, the Finnair Group has not made infrastructure investments for the public and services provided primarily for public benefit (through benefit. commercial, in-kind, or pro bono engagement) EC9 Understanding and describing significant indirect Yes p. 51 economic impacts, including the extent of impacts Approach to management of environmental responsibility Yes p. 13, 52 Environmental Performance Indicators EN1 Materials used by weight or volume Yes p. 53–54 83/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

EN2 Percentage of materials used that are recycled input No Not an essential indicator for the sector, because the aviation industry is such an externally regulated materials sector that companies’ room for manoeuvre is in many respects restricted. Insofar as there is discretion, the percentage of recycled materials is not ascertained at group level. EN3 Direct energy consumption by primary energy source Yes p. 54–55

EN4 Indirect energy consumption by primary energy source Yes p. 55 With respect to electricity, the primary energy sources are not ascertained for 2012, because they depend e.g. on the prevailing hydro-power roduction capacity and the share of hydropower in the grid at any given time. EN5 Energy saved due to conservation and efficiency Yes p. 56 improvements EN6 Initiatives to provide energy-efficient or renewable energy Yes p. 56 based products and services, and reductions in energy requirements as a result of these initiatives EN7 Initiatives to reduce indirect energy consumption and the No Significant energy aspects in theFinnair Group’s operations relate to flying, which has been reported reductions achieved in items EN3 and EN5. Finnair has an interest in reducing its own material intensity, which generally also affects indirect energy consumption the same way.Finnair does not, however, monitor at group level the energy balances of its material acquisitions and their development. EN8 Total water withdrawal by source Yes p. 56 EN9 Water sources significantly affected by withdrawal of Yes The water used by the Finnair Group comes via the municipal network from Lake Päijänne. With water respect to water resources, the Finnair Group is not a significant factor. EN10 Percentage and total volume of water recycled and Partly With respect to water resources, the Finnair Group is not a significant factor. Finnair Catering’s two reused dishwashing machines are equipped with a water recycling system. EN11 Location and size of land owned, leased, managed Yes p. 56–57 in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas EN12 Description of significant impacts of activities, products, No There are no such areas within the Finnair Group’s sphere of influence. Operations may, however, and services on biodiversity in protected areas and areas have an impact on the River Vantaa and the River Kerava. This has been reported on separately in of high biodiversity value outside protected areas items EN15 and EN21. Operational impacts in respect of flight route destinations cannot, on the other hand, be reasonably ascertained by Finnair. EN13 Habitats protected or restored No p. 57 Not during the reporting period. EN14 Strategies, current actions and future plans for managing Yes p. 57 Owing to the nature of operations, at group level it is not deemed pertinent to prepare concrete impacts on biodiversity strategies or plans in relation to biodiversity. EN15 Endangered species in areas affected by operations Yes p. 57 EN16 Total direct and indirect greenhouse gas emissions by Yes p. 57–58 weight EN17 Other relevant indirect greenhouse gas emissions by No Direct and indirect greenhouse gas emissions arising from the Finnair Group’s operations are stated weight in item EN16. The main indirect emissions falling outside EN16 arise from the production and distribution of fuel used in aircraft and from the manufacture of new aircraft. In respect of these, Finnair has no influence nor information on the amounts of emissions. 84/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

EN18 Initiatives to reduce greenhouse gas emissions and Partly p. 56 In the Finnair Group’s operations, energy consumption and greenhouse gas emissions go hand in reductions achieved hand. Thus all actions taken during the year to reduce energy consumption also affect in the same way and to the same extent the greenhouse gas emissions arising from the group’s activities. EN19 Emissions of ozone-depleting substances by weight Yes p. 58

EN20 NOx, SOx and other significant air emissions by type and Yes p. 58–59 weight EN21 Total water discharge by quality and destination Yes p. 59 The amounts of glycol used in ice prevention and de-icing of aircraft that end up in waterways are reported by and are the responsibility of the airport maintainer. EN22 Total weight of waste by type and disposal method Yes p. 60 EN23 Total number and volume of significant spills Yes p. 61 EN24 Weight of transported, imported, exported, or treated No The Finnair Group does not transport nor treat hazardous waste. The amounts and treatment of waste deemed hazardous hazardous waste arising from the group operations are reported in item EN22. EN25 Water bodies and related habitats significantly affected Partly The Finnair Group’s wastewater is directed to the municipal wastewater treatment plant. In terms of by the organisation’s discharges of wastewater and treated wastewater, the Finnair Group’s specific impact cannot be isolated. The impacts of Helsinki- runoff Vantaa airside runoff are outlined in items EN11, EN15 and EN21. EN26 Initiatives to mitigate environmental impacts of products Partly p. 61 See also EN5, EN6 and EN16. and services, and extent of impact mitigation EN27 Percentage of products sold and their packaging No Not an essential indicator for the Finnair Group, because the Finnair Group, excluding Finnair materials that are reclaimed by category Catering, does not manufacture products. Finnair Catering collects and recycles the meal packaging, excess portions and drinks containers served on flights. EN28 Monetary value of significant fines and total number Yes No known cases of nonmonetary sanctions for non-compliance with environmental laws and regulations EN29 Significant environmental impacts of transporting No The significant environmental impacts arising from theFinnair Group’s operations come mainly from products and other goods and materials used for the flying. The impacts of transportation in support of operations are not known, but they are marginal organisation’s operations, and transporting members of compared with the environmental impacts of flying. the workforce EN30 Total environmental protection expenditures and Partly Altogether, 2.3 million euros were The Finnair Group’s statistical practices do not enable reporting according to GRI requirements. In investments by type spent on waste management, addition, in all procurement environmental aspects are in-built, so the separation of environmental maintenance, environmental investments is not deemed to meaningful. training, environmental certification, various membership fees and environmental studies. Social Performance Indicators Approach to management of labour practices and Yes p. 13, 62–63 decent work conditions LA1 Total workforce by employment type, employment Yes p. 70 contract, and region 85/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

LA2 Total number and rate of employee turnover by age group, Partly p. 71 Finnair does not keep track of employee turnover by gender, age group or other diversity aspects. gender, and region LA3 Benefits provided to full-time employees that are not Partly p. 71 provided to temporary or part-time employees by major operations LA4 Percentage of employees covered by collective bargaining Yes p. 71 The Finnair Group’s statistical practices do not enable fully reporting according to GRI requirements. agreements. 90% of Finnair personnel is covered by collective bargaining agreements. LA5 Minimum notice period regarding significant operational Yes p. 71 changes LA6 Percentage of total workforce represented in formal joint Yes p. 71 management-worker health and safety committees that help monitor and advise on occupational health and safety programmes LA7 Rates of injury, occupational diseases, lost days and Partly p. 72 The objective is to make the entire indicator according to GRI in the 2013 report. absenteeism, and number of work-related fatalities by region LA8 Education, training, counselling, prevention, and Yes p. 73–74 Finnair Group programmes in the event of serious diseases relate only to the group’s personnel. risk-control programmes in place to assist workforce members, their families or community members regarding serious diseases LA9 Health and safety topics covered in formal agreements Partly p. 74–75 The Central Organisation of Finnish Trade Unions SAK and the Confederation of Finnish Industries EK with trade unions identify the health and safety of an individual employee, non-discrimination and equality as the bases for the regulations in their collective agreements. http://ttk.fi/toimialat/kuljetus_ja_logistiikka/ilmailuala LA10 Average hours of training per year per employee by Yes p. 75 Finnair Group is a multi-sector company which has numerous different employee groups and job employee category classifications. The classifications used by different subsidiaries and business units are not sufficiently comparable. Therefore training hours have been counted using the whole group’s employee numbers. Group employees working abroad are also included in the figures. LA11 Programmes for skills management and lifelong learning Yes p. 75–76 LA12 Percentage of employees receiving regular performance Yes p. 76 and career development reviews LA13 Composition and diversity of governance bodies and Yes p. 76; Financial report p. 49–53 personnel groups LA14 Composition and diversity of governance bodies and No As a multi-sector company, the Finnair Group has numerous different employee groups and job personnel groups classifications. The group’s statistics do not enable a reporting practice according to GRI guidelines, nor for the above reason is this appropriate. Approach to management of human rights issues Yes p. 64–65 HR1 Percentage and total number of significant investment Partly p. 76 In 2012, investment agreements were such that no risk of human rights violations could be identified. agreements that include human rights clauses or that As such there are no specific clauses in these agreements relating to human rights.Finnair does not have undergone human rights screening conduct human rights screening itself. 86/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

HR2 Percentage of significant suppliers and contractors that Yes p. 76 have undergone screening on human rights and actions taken HR3 Total hours of employee training on policies and Partly p. 76 procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained HR4 Total number of incidents of discrimination and actions Yes p. 76 taken HR5 Operations identified in which the right to exercise No The indicator is not essential, because as a Finnish company Finnair operates in a labour market freedom of association and collective bargaining may be culture in which employees’ rights to organise and negotiate working conditions collectively are at significant risk recognised fundamental rights. HR6 Operations identified as having significant risk for Yes p. 76–77 incidents of child labour, and measures taken to contribute to the elimination of child labour HR7 Operations identified as having significant risk for Yes p. 77 incidents of forced or compulsory labour, and measures taken to contribute to the elimination of forced or compulsory labour HR8 Percentage of security personnel trained in the No The Finnair Group does not have its own security personnel. organization’s policies or procedures concerning aspects of human rights that are relevant to operations HR9 Total number of incidents of violations involving rights of Yes No known cases indigenous people and actions taken Approach to management of community responsibility Yes p. 66 SO1 Programs related to the assessment and management of Yes p. 77–78 Finnair does not have group-level programs to assess and manage the impact of operations on local the impacts of operations on local communities communities. SO2 Percentage and total number of business units analysed Yes p. 78; Financial report p. 48 for risks related to corruption SO3 Percentage of employees trained in organisation’s Partly p. 78 Comprehensive percentages and figures are not available, because training is conducted anticorruption policies and procedures independently by business units and subsidiaries themselves. Finnair Flight Academy has not organised any anti-corruption training in 2012. SO4 Actions taken in response to incidents of corruption Yes p. 25; Financial report p. 17 SO5 Public policy positions and participation in public policy Yes p. 78 development and lobbying SO6 Total value of financial and in-kind contributions to Yes p. 78 political parties SO7 Total number of legal actions for anti-competitive Yes In 2010, the Finnish Competition Authority began an investigation into Finnair Catering Oy to assess behaviour, anti-trust, and monopoly practices and their its participation in suspected cartel operations in tax-free retail at Helsinki-Vantaa Airport. The outcomes investigation is still ongoing. 87/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

SO8 Monetary value of significant fines and total number of Yes The Disciplinary Committee of NASDAQ OMX Helsinki Oy imposed a warning on Finnair for neglecting nonmonetary sanctions for non- compliance with laws and its reporting obligations required by the Finnish Corporate Governance Code concerning management regulations remuneration. In 2012, Finnair was ordered by the Supreme Court of Finland to compensate the notice period salary of a purser after revoking the purser’s employment contract. According to the Supreme Court’s decision, the purser’s dismissal was justified, but Finnair should have terminated the employment contract rather than revoking it. Approach to management of product responsibility Yes p. 67–69 PR1 Life cycle stages in which health and safety impacts of Yes p. 78 products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures PR2 Total number of incidents of non-compliance with Yes No known cases regulations and voluntary codes concerning health and safety impacts of products and services PR3 Type of product and service information required by Yes p. 78–79 procedures, and percentage of significant products and services subject to such information requirements PR4 Total number of incidents of non-compliance with Yes No known cases regulations and voluntary codes concerning health and safety impacts of products and services PR5 Practices related to customer satisfaction, including results Yes p. 79 of surveys measuring customer satisfaction PR6 Programmes for adherence to laws, standards, and Yes p. 79 voluntary codes related to marketing communications, including advertising, promotion, and sponsorship PR7 Total number of incidents of non-compliance with Yes No known cases regulations and voluntary codes concerning marketing communications PR8 Total number of substantiated complaints regarding Yes No known cases breaches of customer privacy and losses of customer data PR9 Monetary value of significant fines for non-ompliance Yes No known cases with laws and regulations concerning the provision and use of products and services

Based on our own assessment, our reporting complies with the A application level of the GRI G3 guidelines (version 3.0). PricewaterhouseCoopers Oy has checked that our reporting complies with the A application level of GRI. 88/88 OVERVIEW / CUSTOMERS / PERSONNEL / OPERATIONS / SOCIETY / GRI

Contact information

Finnair Tietotie 11 A (Helsink Airport) 01053 Finnair Tel. +358 600 0 81881 (€1.25 answered call + local network charge) www.finnair.com www.finnairgroup.com

VP, Sustainable Development Kati Ihamäki Tel +358 (09) 818 4101 kati.ihamaki@finnair.com