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Sustainability management

We divide sustainability management into five components

Sustainability is a natural part of our business: it means sustainable product development, safe and eco-friendly products as well as high standards of quality in everything we do. We ensure that our activities do not harm the environment or people. Our tyres are easy on the environment and, even under difficult conditions, they will help you reach your destination. Our business must be profitable so that we are able to offer security, work and well-being for our personnel, while also considering investors, customers and other stakeholders. Sustainability is an essential part of our daily work and leadership, which is mainly guided by the group strategy.

Sustainability management covers the following material topics:

  • Transparent and comprehensive reporting
  • Business ethics and compliance with the laws and regulations
  • Responsible purchasing of raw materials, goods and services
  • Good corporate citizenship
  • Active stakeholder engagement

For more information about the content of the material topics, click here.

The figure below presents our areas of sustainability as well as the essential principles, commitments and guidelines that guide our business.

Our group strategy in a nutshell

Our values, strategy and goals provide us with a clear framework for building sustainable success and continuously improving our operations together.

Our values guide us to succeed

Our company culture, the Hakkapeliitta Spirit, lays a solid foundation for improving our company and for building success. In 2018, we will be starting value discussions with our personnel with the aim of creating an even more harmonised company culture and establishing closer international cooperation.

The basic elements of the Hakkapeliitta Spirit are our values, which guide and support the implementation of our strategy.

  • Inventiveness: We develop and create things and boldly question the existing practices!
  • Entrepreneurship: We want to be the best and most sustainable tyre company!
  • Team spirit: We respect and support each other!

Our strategy and goals provide the guidelines for our business

Our strategy helps us differentiate, supports profitable growth, guides us in the changing business environment and directs our future development. Our mission statement – “Nokian Tyres is a life driven company. Our mission is to give you peace of mind in all conditions.” – guides the choices that we make.

We develop and manufacture safe, high-quality and eco-friendly tyres for the premium segment. We are a market leader in the winter tyre market and focus on the replacement tyre market. Our pioneering position and strong expertise on challenging conditions also enable us to produce very safe summer tyres and all season tyres.

In the development and manufacture of heavy special tyres, we focus on carefully selected segments, such as tyres designed for forestry, agriculture and material handling. Our premium tyres feature innovative solutions that support the business of our end users.

One of our group companies is Vianor, a chain specialising in car maintenance and tyre services that offers first-class service for consumers and corporate customers. Our own retail chain helps in the development of concepts for driving our customers’ sales and provides deeper insight into our customers’ business and consumer needs.

The strategy lays the foundation for our business goals that will keep us on track to profitable growth:

  • Market leadership in select segments in the Nordic countries and Russia.
  • Growing our sales by 50% in Central Europe over five years.
  • Doubling our sales in North America over five years.
  • Raising the fully owned subsidiary Vianor’s results (EBITDA) to a level of +3%.
  • Growing the sales of heavy tyres by 50% over four years.
  • Operating in all major winter tyre markets in the long term.

We have a desire to be a technology and sustainability pioneer and to maintain our profitability. We intend to offer a stable dividend policy for shareholders and an excellent and inspiring work community for our personnel. We want to be the top consumer choice and our customers’ number one partner.

See also our Environmental, Safety and Quality Policy for our valued quality and sustainability promises as well as the measures for meeting them.

Sustainability goals guide our operations

Our everyday improvement of sustainability is guided by the group’s sustainability goals and the road map plan that we updated in 2017. The target time for the road map projects and the group’s sustainability goals is 2020.

Group’s sustainability goals

The following table shows Nokian Tyres’ sustainability goals for 2020 and their progress.

Area of sustainability

Goal

Progress in 2017

Hakkapeliitta Way
General sustainability of our business

  • We will improve our Dow Jones Sustainability Index assessment by two points each year from 2015 to 2020.
  • All of our raw material suppliers will have conducted a sustainability self-assessment in 2017.
  • We will have audited all of our major rubber processor partners (at least 80% of our natural rubber purchasing volume) by 2020.
  • At least two thirds of our raw material suppliers will have ISO 14001 certification in 2020.
  • We were selected for Dow Jones’ DJSI World sustainability index and improved our score by 6 points compared to 2016.
  • We sent out a self-assessment survey to all material suppliers in 2017. 85% of the suppliers responded, and this work will continue in 2018.
  • The audits have progressed according to plan, and we audited four processors in 2017.
  • In 2017, 71% of our raw material suppliers had the ISO 14001 certification, which means that we are heading in the right direction.

World on wheels
Safe and eco-friendly products

  • Reducing the rolling resistance of the product range by 7% from 2013 to 2020, thereby creating a decrease of 500 million kg in CO2 emissions from traffic.
  • Each new product generation will have a lower rolling resistance compared to the previous one.
  • We reached the goal already in 2017. We will set a new goal in 2018.
  • We have launched new products with a lower rolling resistance than the previous products.

Economy
High customer satisfaction and profitable growth

  • We will continuously improve customer satisfaction – by one percentage point, at a minimum, in the annual customer satisfaction index.
  • Customer satisfaction was already on a good level and improved by 2.6% in 2017.

People
Safe working environment and sustainable company culture

  • Occupational health and safety: A 70% improvement in the LT1F injury frequency rate tracking from 2015 to 2020.
  • Everyone gets to go home healthy every day.
  • Everyone in our group will have completed the online course on sustainability in 2017.
  • We made good progress with occupational safety and improved the injury frequency rate by 33% year over year.
  • No severe accidents occurred in the group during the year.
  • 55% of all personnel completed the online course on sustainability.

Planet
Being a pioneer in sustainability

  • Energy efficient production: decreasing energy consumption annually by 1% from 2016 to 2020.
  • A 20% reduction in CO2 emissions from production (kg CO2/kg product) from 2013 to 2020 (scope 1 and scope 2).
  • Reducing the use of municipal water by 25% compared to the 2013 baseline.
  • Utilising 100% of production waste and taking no production waste to landfills; Nokia 2016, Vsevolozhsk 2020.
  • Zero environmental accidents.
  • The reduction of energy consumption in production was approximately 8% from the previous year, which means that the target was met and exceeded.
  • The actual reduction of CO2 emissions from production was 36% in 2017, which means that we are heading in the right direction.
  • In 2017, the consumption of municipal water was approximately 40% lower than in 2013, which means that the target was met and exceeded.
  • In Nokia, 100% of production waste was recycled and the recycling rate was 88.7% in Vsevolozhsk, which means we are heading in the right direction.
  • No environmental accidents occurred in 2017.

Sustainability Road Map

In 2017, we made the Nokian Tyres Sustainability Road Map to guide our work on sustainability. The road map defines seven areas of sustainability and their related projects. The projects are led by the Corporate Sustainability working group, which is headed by the Environmental and Responsibility Manager. The progress with the road map processes is tracked on a monthly basis. The following graph presents the areas of the road map and the related special projects.

Systematic leadership of sustainability improves the operations and company culture

Our strategy also guides our choices in terms of sustainability. We work hard together for improving the sustainability of our company, functions and products.

We take into account the entire product life cycle and all of our business functions and we strive to go beyond the minimums required by the law and applicable standards. We emphasise the management of sustainability in all of our functions and our supply chains. We want to be the most responsible and ethical tyre company and an industry pioneer.

The company’s sustainability functions are led by a member of the group’s management team who is ultimately responsible for meeting the goals of corporate sustainability. All supervisors’ duties include day-to-day leadership of sustainability. Larger topics and guidelines are discussed by the management team and, if necessary, by the Board of Directors.

Nokian Tyres’ dedicated Corporate Sustainability working group comprises finance, purchasing, communication, environment, quality, consumer, customer service and HR experts. The working group’s main task is to design and promote measures for improving sustainability. Then, each unit’s management team is responsible for implementing the measures according to their unit strategy.

The Safety Management group, which comprises safety experts and management representatives, works on and tracks the safety aspects. Supply chain sustainability is being developed and guided by the Sustainable Purchasing working group. The Energy Efficiency working group promotes the means for improving energy efficiency throughout the group. Product Development creates safer and eco-friendlier products by reducing rolling resistance, for example.

Department-specific occupational health and safety groups, environmental representatives and other local working groups focus on improving the practical work in terms of eco-friendliness, safety and well-being. Each Nokian Tyres’ employee is responsible for working and acting ethically.

Furthermore, HR, Communication and the Risk Management working group support the work for improving the safety culture and implementing changes in the group.

The following graph describes the leadership of sustainability at Nokian Tyres.

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