Trustworthy operator

Caruna is the largest electricity distribution system operator in Finland. Electricity network is a part of critical infrastructure in society, and therefore the reliability of electricity distribution is vital for the entire society.

Our aim is to generate and promote direct and indirect well-being for all of our stakeholders. Balanced consideration of economic, environmental and social responsibility in all our operations is beneficial both for us as a company and for our stakeholders, as well as an essential prerequisite for the further development of society.

Caruna in brief

Caruna is the largest company dedicated to the distribution of electricity in Finland. Our share of the local electricity distribution market is approximately 20%. We provide power to approximately 650,000 private and corporate customers in southern, southwestern and western Finland, the city of Joensuu and the regions of Koillismaa, Lapland and Satakunta. Our electricity network is nearly 79,000 kilometres long; it would stretch almost twice around the earth.

 

We endeavour to meet our customer’s expectations and, first and foremost, to secure an undisturbed supply of electricity.

We endeavour to meet our customer’s expectations and, first and foremost, to secure an undisturbed supply of electricity. We continuously improve and develop our electricity networks. We are set to invest MEUR 200 into improving the reliability of our electricity distribution every year for the next decade. Our vision is to be world’s best electricity distributor.

Caruna employs approximately 270 employees and 2,000 contractors in various projects around Finland. Our head offices are located in Espoo, Finland.

Caruna’s direct owners are Finnish employment pension companies Keva (12.5%) and Elo (7.5%), as well as international infrastructure investors First State Investments (40%) and Borealis Infrastructure (40%). Caruna’s operations are regulated by the Finnish Energy Authority, in charge of monitoring the electricity network business in Finland.

Corporate structure

Caruna Networks Oy is the parent company of the Caruna Group. Caruna Networks Oy’s parent company is Suomi Power BV, registered in the Netherlands. In addition to Caruna Networks Oy, the Caruna Group also comprises Caruna Networks Sähkönsiirto Oy, Caruna Networks Espoo Oy, Caruna Oy, and Caruna Espoo Oy. Caruna Networks Oy is the owner of Caruna Networks Sähkönsiirto Oy and Caruna Networks Espoo Oy, which, in turn, own Caruna Oy and Caruna Espoo Oy.

Of the Group companies, Caruna Oy and Caruna Espoo Oy conduct regional and distribution network activities within their own geographical areas, using their own electricity networks and operating under a network licence granted by the Energy Authority. Caruna Networks Oy, Caruna Networks Espoo Oy, and Caruna Networks Sähkönsiirto Oy provide support services for the entire Caruna Group.

From the CEO

Dear Reader,

2015 was the first complete operating year for Caruna. It was a very interesting and busy year as we continued to transform Caruna into an independent electricity distributor. Reporting was one of the areas under development, and this is the result: Caruna Report 2015 presents a comprehensive view of our operations and financial performance in 2015, in accordance with the Global Reporting Initiative (GRI) G4 guidelines.

During the past year, we put a great deal of effort into improving our IT systems to enable even more efficient operations. We created a new method for carrying out network improvements as wider-scale projects to enable us to carry out reliability investments required by the Electricity Market Act. Both of these focus areas are of primary importance to Caruna as we strive to fulfil our purpose.

Caruna also saw changes in terms of personnel in 2015. We underwent a round of co-operation negotiations aiming to restructure our organization to better fit the needs of an electricity company operating only in Finland. We prioritized the occupational well-being and health of our staff by various measures, relating to, for instance, occupational health services, opportunities for physical exercise, and general well-being at work. We aim to boost the engagement of our personnel by ensuring we communicate our goals and strategies in a transparent and active way. We continued to promote our company culture, together with the management, supervisors and everyone at Caruna. Our aim is to make Caruna a work community with positive energy.

Moving into our own premises in Perkkaa, Espoo, in September 2015 was an important step. These facilities are tailored to our operations and suitable for the personnel.

Caruna devotes a considerable amount of resources to the improvement of electricity networks. We started our improvement projects from sub-urban areas, but are now moving on to more rural regions. By progressing gradually, we aim to achieve the security of supply requirements set by the Electricity Market Act by 2028.

Caruna’s procurement model has been modified, and one of the positive outcomes is that the challenges facing electricity distribution within a specific region can now be solved in a comprehensive way. When all work within an area is done to a level that is as near to completion as possible in one go, we can avoid digging up road surfaces repeatedly and minimize the disturbance caused by the works.

The amount of Caruna’s yearly procurements is considerable, and the majority of it consists of work. Our network improvement program has a significant impact on regional employment conditions. In 2015, we employed directly roughly 2,000 people and indirectly some 4,000 people, in addition to our own staff.

 

We are building a network that is going to serve the Finnish society for another 40 years in the very least.

We are building a network that is going to serve the Finnish society for another 40 years in the very least. The network renovation and improvement initiatives currently underway ensure reliable electricity distribution and improve the quality of electricity. The quality of electricity is increasingly more crucial in the modern society; for instance, the production processes of many manufacturers are completely dependent on the quality of energy. By building a new network, we can also guarantee better protection for the distribution of electricity that is essential for securing the continuity of supply in an emergency.

Control of material flows has been another area of focus for us. We strive to ensure that all new materials used in the network improvement work are as environmentally friendly as possible, hoping to minimize the environmental burden of the future generations. All materials must comply with Caruna’s strict requirements for quality, environmental impact, and responsibility.

A new partnership helps us achieve a 100%-recycling rate for dismantled materials in the future.

We believe that the Finnish energy market is going through a major reform at the moment. Small-scale and decentralised production is set to increase, resulting in more complexity in the Finnish energy system. Network improvement projects also help us incorporate more intelligent functions in the system, strengthen the system’s flexibility, and, for instance, feed renewable energy generated by individual households into the system on a wider scale.

More electricity will also be required by just moving around in the future, as the popularity of electric cars grows. Finland already has a comprehensive network in place because of the wide-spread use of electric heating. This means that good prerequisites for the expansion of electromobility already exist as the heater poles and associated infrastructure can be modified to suit the needs of electric cars, for instance. On the other hand, advancements in battery technology open up interesting scenarios and require more flexibility from energy systems, which is why we are also in contact with companies that develop battery technologies.

Our modern information society requires electricity, and electricity networks convey more data than ever before. Wherever energy is transferred, data is also on the move. The information society needs electrical power!

Caruna aims to be the best and most responsible electricity distributor. As our mission states, we want to share positive energy, and in so doing, meet the expectations of our stakeholders and contribute to improving the reliability, competitiveness, and security of supply in the Finnish society.

In Espoo, March 2016

Ari Koponen
CEO

Events from 2015

JANUARY–MARCH

  • We entered into a significant framework agreement with Eltel Networks and Relacom Finland, regarding the small investment, maintenance and fault management services of our network in southwestern and western Finland, Joensuu, and the regions of Koillismaa and Uusimaa.
  • Around the New Year, Aapeli, one of the year’s two major storms, affected electricity distribution heavily.
  • Caruna’s renewed website was published in February.
  • In January and February, we took part in co-operation negotiations aimed at restructuring some older structures from the time Caruna worked as part of an international group. These negotiations also sought to adapt our operations to suit the needs of a standalone company.
  • We adopted the Trimble NIS network information system, which allows us to develop and manage our network assets more efficiently.

 

APRIL–JUNE

  • In April, we improved our customer services for our electricity distribution customers by in-sourcing customer services back to Caruna.
  • Also in April, the year’s second major storm, Suoma, caused electricity distribution outages particularly in the West and Southwest of Finland.

 

JULY–SEPTEMBER

  • We acquired Lapin Sähköverkko Oy and the electricity network they operated from Kemijoki Oy.
  • Our customers within the distribution network of Caruna Espoo Oy received a one-off refund on their electricity distribution price.
  • We moved into our own premises at Leppävaara in Espoo. At the same time, we discontinued the property and office services originating from the Fortum time, as well as the associated IT infrastructures.
  • We outsourced our project management supervision to the specialist organisation Rejlers.
  • We launched an initiative for improving our company culture, entitled ‘Hyvän energian työviikko’ (‘The work week of positive energy’).
  • We signed a framework agreement for investment into supply reliability within Finland’s southwestern and Satakunta regions, worth MEUR 150. Our partners in this endeavour are the TLT Group, Sallila Sähköasennus, Telog, and Eltel Networks.
  • We also signed supply agreements for distribution transformers and underground cables. Our chosen partner for distribution transformers is SLO and for underground cables, Prysmian Finland.

 

OCTOBER–DECEMBER

  • We completed a project begun in 2014 on the management of adjacent forest areas along power line corridors, intended to enhance the reliability of our electricity distribution to customers.
  • Lapin Sähköverkko Oy was merged into Caruna Oy in late 2015.
  • We were one of the main sponsors of the 2016 World Junior Ice Hockey Championship games held in Helsinki. (PHOTO: LEIJONAT.FI)
  • We continued with the investment initiatives launched in 2014 aimed at improving the reliability of electricity distribution.

 

Values, strategy and Code of Conduct

In addition to applicable legislation and regulations, Caruna’s operations are conducted in accordance with jointly defined values, company strategy and strong corporate governance principles.

Values

Caruna’s values were jointly defined by company personnel, the management team, and the Caruna Group Board of Directors in 2014.

 

WE ARE CUSTOMER CENTRIC

  • We enable a carefree daily life for our customers through our partners and our own actions.
  • We recognize and strive to understand the needs of future generations and develop our operations to meet them.
  • We are easy to approach and a professional partner.

asiakaslahtoisyys_02

WE ARE RESPONSIBLE

  • We are a reliable and responsible partner for our customers, contractors and owners.
  • Our work contributes to build the Finnish society.
  • We put safety and sustainability first in everything we do.

vastuullisuus_02

WE ARE COLLABORATIVE

  • We work transparently across organization boundaries to reach our common goals
  • We develop the electricity distribution business together with the authorities, municipalities and the industry, both in Finland and in Europe.

yhteistyo_02

WE ARE RESULT ORIENTED

  • We operate efficiently for the good of our stakeholders.
  • We develop our business proactively with a long perspective.
  • We create value for our shareholders in a sustainable way.

tuloksellisuus_02

Strategy

In accordance with our company strategy, we look after the well-being of our personnel, serve our customers in the best way possible, maintain and develop our network so that it meets the future needs of our customers and society and make our expertise available for wider use by the sector.

We focus on four elements: the customers, electricity network, operational environment and company culture. This allows us to meet the needs of our key stakeholders while also achieving our own goals on the journey to becoming the best electricity distributor — first in Finland, then in Europe, and ultimately in the entire world.

Operating principles

Caruna’s Code of Conduct forms the basis for our operating principles.

Caruna’s Code of Conduct is based on our values and it forms the basis for our operating principles. It defines how we take care of Caruna’s property, how we collaborate and act toward each other, and how we run our electricity distribution business. The Code of Conduct and the guidelines based on it are part of Caruna’s Compliance system.

The Code of Conduct ensures that everyone at Caruna understands the practices and ethical principles that guide our operations in the same way. We adhere to our Code of Conduct in all our business operations, both within the company and when dealing with our stakeholders and the surrounding society.

It concerns all Caruna employees, managers, and board members alike. Everyone at Caruna takes an online course on the Code of Conduct and commits to its principles as part of their induction process. We also require our contractors, service providers, suppliers, and other contractual partners to adhere to the same principles. Caruna has drawn up a separate document for contractors and suppliers, the Supplier Code of Conduct, and each contractor and supplier is expected to commit to following it.

Our Code of Conduct is complemented by policies approved by the board, outlining in more detail the operational principles concerning Caruna’s focus areas, as well as by internal guidelines. Caruna has put in place separate guidelines for areas such as anti-corruption measures and conflicts of interest. The contents of the Code of Conduct and key guidelines were presented to everyone at Caruna in a special briefing meeting in the autumn of 2015. The employees commit to adhere to the guidelines as they complete their Code of Conduct online course. Caruna published a separate guideline and online course on competition law in December 2015.

Caruna’s policies and guidelines are available to the entire personnel in the company’s intranet. Documents in use by both Caruna and its contractors and other partners are found in the common electronic working areas. The operational principles for the key areas (personnel policy, HSE policy, sourcing policy) are available in this report’s chapters concerning individual responsibility areas, and also on Caruna’s website. Suspected cases of misconduct can be reported using the appropriate reporting channel available on our website.

Caruna respects the UN human rights principles, the International Labour Organization’s (ILO) fundamental conventions, and the UN Global Compact initiative. Caruna’s consolidated financial statements are drawn up in accordance with International Financial Reporting Standards (IFRS).

Governance and management

Caruna’s management practices are based on the company’s strategy and values, as well as on policies and principles defined on the Group level. Our management practices adhere to highly regarded corporate governance and general leadership principles. We have defined Caruna’s strategy and business goals on a company-wide basis and shared them with the entire organisation.

Caruna’s operations are led by our Management Team, in charge of long-term strategic planning and the business plan. The business plan is drawn up for four-year periods and is adjusted annually as necessary. Each business unit uses these documents as the basis for their own yearly operation plans. The operations and goals are monitored regularly by various management teams and the Caruna Management Team. The results are reported to the Board of Directors.

A set of company- and unit-specific performance indicators have been created for monitoring Caruna’s operations, including cascading down to individual employee level. The operations are examined as a whole, and the indicators have been designed to exclude the possibility of partial optimisation. The performance of each member of personnel is looked at in light of the company’s strategic business goals. The set of indicators also functions as a basis for our reward system. Caruna’s reward system applies to our entire personnel.

The quality of management is evaluated by yearly personnel surveys. Caruna promotes self-management and encourages the members of personnel to actively participate in improving the working environment.

Board of Directors

Members of the Board in 2015

caruna_hallitus

 

Juha Laaksonen
Chair
Juha Laaksonen
Chair

Chairman of the Board since 2014

Degree:
B.Sc. (Econ.)

Present positions:

  • Chairman of the Board, Alfred Kordelin Foundation, since 2014

  • Member of Board, Sponda Plc, since 2013

  • Member and Vice-Chairman of the Board, Taaleritehdas Plc, since 2013

  • Chairman of the Board, The Association of Finnish Fine Arts Foundations, since 2012

  • Member of the Board and Chairman of the Audit Committee, Kemira Oyj, since 2007

  • Chairman of the Board, The Fortum Art Foundation, since 2006

Previous experience:

  • Executive Vice President and CFO, Fortum Corporation, 2000–2012

  • Vice President, Mergers & Acquisitions, Fortum Oyj, 2000

  • Executive Vice President, Finance & Planning, Fortum Oil & Gas, 1999

  • Chief Financial Officer, Neste Oyj, 1998–1999

  • Corporate Controller, Neste Oyj, 1997–1998

  • Vice President, Finance & Strategy, Neste Chemicals, 1993-1996

  • Various managerial and expert positions, Neste Corporation, 1979-1992

  • Chairman of the Board, Sato Oyj, 2007-2015

  • Member of the Supervisory Board, Kemijoki Oy, 2002–2013

  • Member of the Board, Teollisuuden Voima Oy, 2003–2010

  • Member of the Board, Neste Oil Oyj, 2005–2007

  • Member of the Supervisory Board, Tapiola Mutual Insurance Company, 2002–2007

  • Chairman of the Board, Fortum Pension Fund, 2001–2005

Marcus Ayre
Member of the Board
Marcus Ayre
Member of the Board

Degree:
Bachelor of Laws (Hons) degree from the University of Birmingham and a qualified barrister

Present positions:

  • Partner in the European Direct Infrastructure team and Head of Infrastructure Transactions, First State Investments (FSI)

  • Member of the Direct Infrastructure Senior Management Team and EDIF Investment Committee member

 

Previous experience:

  • Vice President and other various management roles, HSBC and Baring Brothers/ ING Barings

  • Extensive industry experience, including a decade spent in investment banking.

Ralph Berg
Member of the Board
Ralph Berg
Member of the Board

Degree:
Juris Doctor from the Universidad de Buenos Aires.

Present position:

  • Executive Vice President & Global Head of Infrastructure, Omers Private Markets

 

Previous experience:

  • Managing Director and Head of the European Power and Utilities Team, Credit Suisse

  • Energy team at Deutsche Bank in New York and London for almost 12 years.

Jouni Grönroos
Member of the Board from 24 March 2015
Jouni Grönroos
Member of the Board from 24 March 2015

Degree:
M.Sc. (Econ.)

Present positions:

  • Deputy Chief Executive Officer and Chief Financial Officer of the Group Management Team at Fazer Group since 2010

  • Member of the National Auditing Board of the Central Chamber of Commerce of Finland

  • Member of Board of the Finnish Coast Artillery Foundation

 

Previous experience:

  • Managerial positions in Rapala VMC Corporation, Outokumpu Stainless Steel Oy, AvestaPolarit Oyj Abp and Outokumpu Oyj

Colin Hood
Member of the Board until 4 Nov 2015
Colin Hood
Member of the Board until 4 Nov 2015

Present positions:

  • Chairman of the Offshore Renewable Energy Catapult in Glasgow an Innovate UK funded organization.

  • Sits on the boards of HS1 and Ellevio on behalf of Borealis.

 

Previous experience:

  • Chairman of Southern Water

  • He was formerly Deputy CEO and COO of Scottish and Southern Energy and has served on the boards of FirstGroup and the Glasgow 2014 Commonwealth Games.

John McManus
Member of the Board until 9 Dec 2015
John McManus
Member of the Board until 9 Dec 2015

Degree:
B.Comm. degree from the University of Toronto. He also holds the Chartered Professional Accountant and Chartered Accountant designations

Present positions:

  • Senior Advisor to Borealis/OMERS

  • Member of Board of Bruce Power, HS1, Associated British Ports, Scotia Gas Networks, and DRTP

Niall Mills
Member of the Board
Niall Mills
Member of the Board

Degree:
MBA from London Business School, an Institute of Directors Diploma in Company Directorship and a B.Eng. (Hons) in Civil Engineering. He is a Fellow of the Institution of Civil Engineers

Present position:

  • Partner and Head of Infrastructure Asset Management in the European Direct Infrastructure Team, First State Investments (FSI)

 

Previous experience:

  • Over 25 years’ experience in infrastructure and engineering and project management

  • Director of Anglian Water Group, Electricity North West, Regasificadora del Noroeste, Newham Hospital Healthcare Services, Caruna and Digita Oy.

  • Asset Director at Southern Water, Director of Projects at Novar Projects Limited and Project Director at Bechtel Limited

Tomas Pedraza
Member of the Board
Tomas Pedraza
Member of the Board

Degree:
Industrial Engineer at the Universidad Pontificia de Comillas. He also has an Executive MBA from the IESE Business School, University of Navarra, Spain, University of Michigan – Stephen M. Ross School of Business and China Europe International Business School

Present position:

  • Director in the European Direct Infrastructure team at First State Investments (FSI)

Previous experience:

  • Member of the Strategy and Business Development team of Gas Natural Fenosa

Alejandro Lopez Delgado
Deputy Board Member
Alejandro Lopez Delgado
Deputy Board Member

Degree:
B.Sc. and M.Sc. (Civil Engineering) degrees from Universidad Politecnica de Madrid and an MBA from The Wharton School at the University of Pennsylvania

Present position:

  • Director at Borealis Infrastructure

  • Member of Board at Scotia Gas Networks

 

Previous experience:

  • Previous roles at Mubadala Infrastructure Partners in Abu Dhabi, Goldman Sachs Infrastructure Partners in London and Cintra (Ferrovial Group) in Madrid.

Gregor Kurth
Deputy Board Member
Gregor Kurth
Deputy Board Member

Degree:
M.Sc. in International Finance and Accounting from City University of London and a BSc in International Economics from Maastricht University, Netherlands

Present position:

  • Director in the European Direct Infrastructure team at First State Investments (FSI)

 

Previous experience:

  • Has previously worked for 3i Infrastructure and Deutsche Bank

In 2015, the board held a total of eight meetings.

The Board of Directors meets according to a previously agreed upon schedule. In 2015, the board held a total of eight meetings. The CEO attends board meetings regularly. The manager in charge of company development acts as the secretary of the Board.

Committees under the Board are the Audit Committee, the Nomination and Remuneration Committee, and the Health, Safety and Environment Committee. Matters related to corporate responsibilities are discussed mainly in the Health, Safety and Environment (HSE) Committee. The committees support the Board by preparing and discussing in more detail matters under the responsibility of the board. The Board appoints committee members from amongst the Board members. When necessary, the Board may form other committees and work groups from its members to prepare important decisions.

Internal auditors help to ensure that Caruna’s operations remain successful and appropriate. They report to the Board and the Control Committee.

Management Team

Management team in 2015:

Ari Koponen
M.Sc. (Economics), b. 1964
CEO
Ari Koponen
M.Sc. (Economics), b. 1964
CEO

Degree:
M.Sc. (Economics)

Experience:
26 years in the energy business

Previous positions:

2009-2013   Head of Fortum Distribution
2006-2009   Head of Asset Management and Design, Nordic, Fortum Distribution
2005-2006   Head of Fortum Distribution
2003-2005   Manager Business Development, Fortum Corporation
2002-2003   CEO, ELNOVA/Uudenmaan Sähköverkko

Jörgen Dahlqvist
B.Sc. (Engineering), b. 1966
Head of Network Operations
Jörgen Dahlqvist
B.Sc. (Engineering), b. 1966
Head of Network Operations

Degree:
B.Sc. (Eng.)

Experience:
20 years in electricity distribution

Previous positions:

2006-2013   Head of Network Operations Finland, Fortum Distribution
2003-2005   Operation Manager South Finland, Fortum Distribution
2003              Network Service Manager South Finland, Fortum Distribution
1995-2002   Network Operations /Primary Substations Project Management, ELNOVA/Uudenmaan Sähköverkko

Riikka Hirvisalo-Oja
M.Sc. (Economics), b. 1966
Head of Regulation and Revenue
Riikka Hirvisalo-Oja
M.Sc. (Economics), b. 1966
Head of Regulation and Revenue

Degree:
M.Sc. (Economics)

Experience:
15 years in electricity distribution, of which 8 in the Nordic organisation

Previous positions:

2009-2013   Head of Customer Relations, Nordic, Fortum Distribution
2007-2009   VP Purchasing and AMM Nordic, Fortum Distribution
2005-2007   Head of Measurements and Technical Service, Customer Service, Fortum Distribution
2002-2005   Head of Technical Service, Customer Service, Fortum Distribution

Timo Jutila
B.Sc. (Engineering), b. 1966
Head of Asset Management and Design
Timo Jutila
B.Sc. (Engineering), b. 1966
Head of Asset Management and Design

Degree:
B.Sc. (Engineering)

Experience:
16 years in electricity distribution and 9 years in multiple positions in the electricity machines manufacturing industry

Previous positions:

2013  Head of Local Network, Sweden and Finland, Fortum Distribution
2008-2012 Head of Customer Relations, Finland, Fortum Distribution
2008 Head of Technical Service (Customer Relations), Fortum Distribution
2004-2007 Head of Technical Service Finland, Fortum Customer Services

Katariina Kalavainen
B.Sc. (Economics), b. 1970
Head of Customer Relations
Katariina Kalavainen
B.Sc. (Economics), b. 1970
Head of Customer Relations

Degree:
B.Sc. (Economics)

Experience:
5 years in electricity distribution, 14 years in customer services

Previous positions:

2008-2013 Head of Customer Data Management, Fortum Distribution
2008  Team Manager, Customer Service, Fortum Distribution
2006-2008 Customer Service Manager, private and small business customers, Elisa Oyj
2004-2005   Customer Service Manager, private customers, Elisa Oyj

Heikki Linnanen
M.Sc. (Engineering), b. 1971
Head of Projects, IT and Sustainability
Heikki Linnanen
M.Sc. (Engineering), b. 1971
Head of Projects, IT and Sustainability

Degree:
M.Sc. (Engineering)

Experience:
5 years in Nordic electricity distribution, 14 years in project and IT management

Previous positions:

2013  Head of Projects, IT and Sustainability, Fortum Distribution
2008-2012 Project Manager, smart metering project Finland, Fortum Distribution
2006-2008 Program Manager, integration and solution sales, Nokia Siemens Networks
2005-2006 Portfolio Manager, Nokia Siemens Networks

Harri Pynnä
Master of Laws, b. 1956
Head of Company Development
Harri Pynnä
Master of Laws, b. 1956
Head of Company Development

Degree:
Master of Laws

Experience:
18 years of experience in energy business

Previous positions:

1998-2013 General Counsel of Fortum Corporation
1994-1998 Industrial Counsellor for Ministry of Trade and Industry
1982-1994 Legal Counsel and Senior Vice President, Corporate and Investment banking                                    Union Bank of Finland

Tommi Saikkonen
M.Sc. (Economics), b. 1966
Head of HR
Tommi Saikkonen
M.Sc. (Economics), b. 1966
Head of HR

Degree:
M.Sc. (Economics)

Experience:
5 years of experience in Nordic electricity distribution, 25 years in HR

Previous positions:

2009-2013 VP Human Resources, Electricity Solutions & Distribution, Fortum Oyj
2008-2009 VP Human Resources, Distribution, Fortum Oyj
2000-2008 HR Manager / Director, Human Resources, Nokia Ltd
1997-2000 HR Consultant / HR Manager, ICL Data Ltd
1995-1997 Training Manager, Local Insurance Mutual
1992-1995 Training Consultant / Manager, Federation of Finnish Insurance Companies
1990-1992 Training Consultant, Helsinki School of Economics

Jyrki Tammivuori
M.Sc. (Economics), b. 1971
CFO
Jyrki Tammivuori
M.Sc. (Economics), b. 1971
CFO

Degree:
M.Sc. (Economics)

Experience:
member of management team since 2015, over 18 years of experience in finance

Previous positions:

2013-2014 Acting Chief Financial Officer, Stora Enso Oyj
2008-2014 Group Treasurer, Stora Enso Oyj
1999-2008 several other finance positions at Stora Enso Oyj in Brussels, London and Helsinki
2012-2015 Member of the Board of Directors, Tornator Oyj
2010-2012 Deputy Member of the Board of Directors, Tornator Oyj
2009-2014   Non-executive Member of the Board of Directors, Thiele Kaolin Company, GA USA

Henna Tuominen
MA, b. 1976
Head of Communications
Henna Tuominen
MA, b. 1976
Head of Communications

Degree:
MA (Intercultural business communication)

Experience:
management team member since 2014, over 15 years of experience in communications

Previous positions:

2009-2014 Communications Manager, Elisa Oyj
2001-2009 Manager, PR and reputation   management agency Pohjoisranta

Operative organisation

Caruna operates three business units: Asset Management, Network Operations, and Customer Relations. The business operations are supported by support units and each unit’s head reports directly to the CEO.

Organisation

Corporate responsibility

Caruna’s corporate responsibility is guided by the company’s vision, values, and strategy. Responsibility is one of Caruna’s core values, visible in all our planning and operative activities.

Safety and environment are prioritised in all our activities.

For us in Caruna responsibility means that we work in a reliable and responsible way with our customers, business partners and owners for the good of the Finnish society and that safety and environment are prioritised in all our activities.

In 2015, we outlined the most significant factors of our operations, defined our key responsibility themes and set goals for our corporate responsibility.

  • Our goal is to be Finland’s most responsible electricity distributor, which generates added value to its customers, owners and the society.
  • We provide a reliable electricity network for the safe and environmentally responsible distribution of electricity.
  • We reach our vision by conducting our work ethically and in cooperation with our trusted, long-term partners.

Key corporate responsibility themes

We defined the most significant impacts of our operations from our stakeholder’s perspective by conducting the materiality analysis in the summer and autumn of 2015. The process began with internal definition of Caruna’s operations from the point of view of corporate responsibility. This stage also involved identifying a wide range of themes related to accountability. The following stage consisted of a responsibility survey where we asked both internal and external stakeholders to share their views of Caruna’s operations, accountability and responsibility and the most important development areas.

The stakeholders involved in the survey were business customers, private customers, contractors and other partners, municipal decision-makers, government authorities, regional administrations, rescue departments, universities, industrial associations and our personnel.

 

Materiality assessment process

The stakeholder survey’s key results were analysed by Caruna’s HSE work group, Management Team, and HSE Committee. The themes and their contents were adjusted and defined further. At the last stage of the process, we summarised and grouped our accountability and responsibility themes and aspects into six groups and several sub-groups. The stakeholder survey results and internal workshops (HSE work group and Management Team) resulted in the following definitions of the key focus areas and aspects of Caruna’s corporate responsibility:

Themes and aspects of corporate responsibility

We improve our operations and report on it focusing on the essential themes of corporate responsibility. We also take the results of this process into account when planning and implementing stakeholder collaboration.

Management of corporate responsibility

Caruna’s Board of Directors and the Board-appointed HSE Committee are responsible for the strategic monitoring and steering of corporate responsibility in the entire company. The CEO, the Head of Communications and the Head of Sustainability, as well as the HSE Manager report the corporate responsibility goals and results to the Board. Corporate responsibility is discussed regularly in Caruna’s Management Team.

Caruna’s Management Team and Board define and approve the focus areas, goals, and key actions of corporate responsibility. Planning, coordination and implementation related to corporate responsibility is carried out by the HSE work group with members from all Caruna’s business units. The HSE Manager and the Head of Communications are responsible for more detailed planning and implementation of matters related to corporate responsibility within their own responsibilities.

Corporate responsibility principles

Caruna’s corporate responsibility principles are described in the company’s Health, Safety and Environment (HSE) policy. They are as follows:

  • Our company, all our employees and business partners comply with laws, regulations, best codes of practice and industry standards.
  • We develop our distribution network by taking HSE aspects into account both in daily operations as well as in long term development.
  • All our employees and business partners shall have the opportunity to work in a healthy, safe and motivating work environment.
  • Our products and services are safe, of a high quality, and easily available.
  • We promote a culture of health, safety, and wellbeing in all of our activities by setting goals, targets and action programmes in accordance with the spirit of continuous improvement.
  • We identify the environmental impacts of our assets and operations and manage them promptly. We take into account the entire network life cycle.
  • We prevent and minimize any damages to people and environment by systematic risk assessments.
  • We commit our employees and business partners to our responsible approach and common objectives.
  • We cooperate with municipalities, authorities, private landowners and other external stakeholders.
  • Our operations are characterised by open internal and external communication, which creates trust among our customers, business partners and other stakeholders.

Corporate responsibility goals

Caruna has set goals for selected corporate responsibility-related key indicators for 2016. The following table lists the key indicators and goals related to Caruna’s main responsibility themes. This list will be expanded in the future.

Theme

Indicator

2016 goal

Reliability of supply

  • SAIDI*

  • KAH**

  • Cabling rate

  • Customers covered by the network compliant with the reliability of supply requirement (%)

  • 117 minutes

  • MEUR 23.6

  • 42%

  • 67%

Customers and the society

  • Customer satisfaction (NPS)

  • Reputation survey results

  • Stakeholder collaboration

  • 18%

  • Improvement from the previous measurement

  • Active stakeholder collaboration

Safety

  • Injury Frequency of own personnel (TRIF***)

  • Injury Frequency of contractors (LWIF****)

  • Electricity-related injuries to third parties (reported to the Finnish Safety and Chemicals Agency, Tukes)

  •  2
  • 9

 

  • 0

Personnel

  • Employee satisfaction

  • Training days

  • Absences through sickness

  • 74

  • 2 work days/person

  • less than 2.5%

Environment

  • Number of oil spills

  • Further processing of dismantled networks*****

  • Number of pole-mounted secondary substations at groundwater areas

  • Decrease in the number of overhead lines

  •  30

  • 15%

 

  •  830

 

  • -3,200 km

Responsible procurement

  • Description of supply chain and procurement practices

  • Goal for audits in 2016

  • Completed

  • Five contractors audited

Openness, ethical business principles and good corporate governance principles

  • Pass rate for Caruna’s Code of Conduct online training

  • 100%


*SAIDI = System Average Interruption Duration Index. Average duration of power supply interruptions per customer.

**KAH = Inconvenience caused by the interruption. The indicator reflects the amount of cost for power supply interruptions caused to customers.

***TRIF = Total Recordable Injury Frequency. The indicator reflects the ratio of occupational accidents to Caruna’s employees, requiring medical treatment or leading to absences from work, in relation to work hours (incidents/million realised working hours).

****LWIF = Lost Workday Injury Frequency. The indicator reflects the ratio of occupational accidents to contractors or subcontractors while they work for Caruna or are within Caruna’s premises, leading to a disability of at least one working day, in relation to working hours (number/million working hours).

*****Materials recycling has been outsourced to Kuusakoski Oy from August 2015. The Kuusakoski collaboration concerns new contractor agreements. The goal is to achieve a 15%-recycling rate for materials from dismantled network sections sent to Kuusakoski by 2016. For older agreements, contactors are still responsible for the recycling of dismantled material. The recycling rate is set to increase in the future as more contract agreements will be covered by Kuusakoski collaboration.

The electricity market in Finland

Electricity production and distribution

Electricity is produced by power plants operated by nuclear, hydro, wind power or various fuels. There are some 120 power producers and 400 power plants operating in Finland. Over half of the plants are hydroelectric.

The national grid and distribution networks transmit electricity from power plants to private homes and other users. Fingrid Oyj, established in 1996, is in charge of the transmission of electricity over the national grid, which transmits the electricity from producers to electricity distributors and industrial companies.

The networks operated by electricity distributors are connected to the electricity networks of private homes and other buildings. In residential buildings, the electricity arrives to the main switchboard or meter-reading centre, and from there to sub-switchboard in apartments. In detached houses, the sub-switchboard is part of the main switchboard.

Caruna’s operational environment

The Finnish electricity distribution market is strictly regulated and monitored. The purpose of the Finnish Electricity Market Act is to secure the continuity of supply, competitive prices, and reasonable service practices to end users.

Due to Caruna’s natural monopoly position as an electricity distributor, our operations require a specific network licence from the Energy Authority. The Energy Authority monitors the operations of electricity distributors and calculates the allowed return for the distribution of electricity. The electricity distributors then use this value as a basis for their distribution prices.

The Electricity Market Act is the key regulation of the electricity retail market. It is based on the premise that electricity networks constitute a marketplace which, on equal and reasonable terms, offers services to all electricity trade parties, both suppliers and buyers. Network operators, such as Caruna, are required to utilise, develop, and maintain their networks in accordance with the electricity market’s needs. This means that network operators must secure the functionality and continuity of the power supply system, and meet the customers’ reasonable network service needs. Network operators must also offer the services required to access the network (connection and distribution service) on equal and reasonable terms to all customers who need them.

Data management is an important element of electricity market activities. As the legislation governing electricity market activities stipulates, Caruna is under a specific obligation to remain impartial and share necessary data between all market parties. On the other hand, we are also tied by the regulations on management of personal information. One of the core requirements is that consumers must always have the right to manage any information concerning them.

The Electricity Market Act was amended in 2013, with the aim of improving the reliability of electricity supply.

The Electricity Market Act was amended in 2013, with the aim of improving the reliability of electricity supply. The renewed act specifies that interruptions caused by storms or snowfall must not exceed six hours in urban or suburban areas, or 36 hours in any other areas.

All electricity network operators must improve the reliability of their supply so that the required level of reliability can be achieved by the end of 2028 at the very latest, unless a company is granted an extension to the transition period by the Energy Authority (a maximum of eight years). To Caruna, this translates into significant investments to improve our reliability of supply in future years, such as cabling overhead lines and increasing network automation. Further investments are needed also to renew aging network assets.

Electricity networks in the future

We always strive to improve our services to enable us to better respond to the expectations and wishes of our customers. New opportunities emerging within the market, such as emerging technologies, energy storages, and decentralised energy production, are also going to continue changing the roles and business models of distribution network operators in the future, which ultimately benefits the consumers and businesses as well.

Finnish electricity networks are currently becoming more intelligent, which enables a more efficient use of energy in new ways and supports the adoption of a more ecological method of energy production. Intelligent electricity networks greatly improve the opportunities of electricity consumers to impact their own energy consumption. From the beginning of 2014, nearly all electricity delivery sites are equipped with smart meters that enable features such as hourly reading of electricity consumed by private homes. Future homes and electric networks will be so intelligent that they will be able to adjust themselves to be more energy-efficient.