President & CEO, Nokian Tyres: Hille Korhonen

Full speed ahead in various sustainability areas

The past year was a success in terms of corporate sustainability and our business. In 2017, we made good progress in many areas of sustainability and remained on schedule with our corporate sustainability goals.

We received recognition for our determined work to improve sustainability when Nokian Tyres was selected for Dow Jones’ DJSI World sustainability index in 2017. With a total sustainability score nearly twice as high as the industry average, we significantly improved our results. We were the highest-ranking company in the tyre industry and were only one point behind the world’s highest score in the Auto Components sector.

International commitments guide our corporate sustainability efforts

Sustainability is a natural part of our everyday work and leadership and an essential part of our business and strategy. Committing to international sustainable development goals guides our corporate sustainability work and supports sustainable development globally.

The past fiscal period was our company’s second full year as a member in the United Nations Global Compact (UNGC) initiative. In 2017, we continued integrating the UNGC principles in our business: we focused on the identified development needs and started a human rights impact assessment across the group, which continues in 2018. Furthermore, in spring 2017, we updated our group’s Ethics Guidelines and the procedure guiding sustainability in procurement.

The use of international indicators also supports our goal of improving sustainability in the entire tyre industry. We are committed to improving sustainability in the industry based on the Global Compact initiative’s principles and hope that increasingly more tyre companies would adopt the principles. This way, we can drive transparency in the industry and ensure even better that our stakeholders have access to information that helps them evaluate our activities.

We are also committed to the UN’s Sustainable Development Goals (SDGs). In 2017, we started a process for determining the SDGs important for our company. Our work for implementing the goals in our business continues in 2018. The purpose is to create a framework for our company that would help us support sustainable development even better with our activities.

Result-oriented work on sustainability on schedule

Our everyday improvement of sustainability is guided by the group’s sustainability goals and the road map plan that we updated in 2017. The projects included in the road map cover seven aspects related to the climate, environment, people, supply chain, economy, stakeholder engagement and products & services. The target time for the road map projects and the group’s sustainability goals is 2020. In 2018, we will, however, update the sustainability goals that we reached already in 2017.

One goal for 2020 that we reached ahead of target was reducing the rolling resistance of our product range by 7% compared to the 2013 baseline, thereby creating a decrease of 500 million kg in CO2 emissions from traffic. Reaching this target early demonstrates our determined work for improving the eco-friendliness of our products without compromising on safety.

As part of our efforts for improving supply chain sustainability, we have set a goal to audit all of Nokian Tyres’ major rubber processor partners by 2020, comprising at least 80% of our natural rubber purchasing volume. In 2017, we audited four natural rubber processors together with an external auditor. For our company, the audits guarantee that our requirements are followed in the best possible way, and they provide an opportunity for the audited companies to improve their activities and occupational safety.

A higher rate of waste is utilised in our production facilities: In Nokia, we reached 100% utilisation and, in Russia, the number was nearly 90%. Moreover, we developed our company’s safety culture further and managed to improve the injury frequency rate by 33% year over year. We aimed for 1% improvement in customer satisfaction, which was already on a good level, and reached an improvement of 2.6%. You can see our targets and progress on sustainability in more detail under Sustainability management.

Boldly towards the future with sustainability in the core

In 2018, we will be working towards improvements in terms of our company culture, way of working and various aspects of corporate sustainability. In many ways, we are facing an interesting year of progress. One important site for our sustainability work will be our upcoming factory in Dayton, Tennessee. We want the factory to also be a pioneer in corporate sustainability. Our brand stands for Scandinavian values and Nordic expertise. Sustainability can be easily connected with our renewed brand values.

The importance of sustainability will continue to grow, based on both the needs of stakeholders as well as companies’ own desire to improve their activities and products. We have long term commitment for corporate sustainability regarding our own products and operations as well as the entire tyre industry. We want to set an example for the tyre industry and create added value for people, the economy and environment.

Hille Korhonen

This page is included in KPMG’s assurance scope. Assurance report can be found here.