Responsible business practices
In line with our core value, ‘committed to sustainability’, we aim to incorporate social, economic, and environmental sustainability into all aspects of our operations. We foster good governance and ethical business practices through thick and thin, valuing integrity in all contexts, and striving to protect Outotec’s good reputation.
Outotec’s governance is based on the principles of good governance and transparency, as well as our own group-wide policies and globally harmonized business processes. We follow the Finnish Corporate Governance Code issued by the Securities Market Association for listed companies. Our management system documentation is compatible with and audited against such standards as ISO 9001 for Quality Management, ISO 14001 for Environmental Management, and OHSAS 18001 for Safety Management. In addition, the locations in Finland and Germany are certified to ISO 50001 for Energy Management. Our performance is followed-up regularly through internal and external audits (GRI 103-3).
Outotec’s corporate governance is described in more detail in our Corporate Governance Statement 2017. Our reporting covers Outotec’s premises and employees, our products and services, our contractors, and our suppliers’ operations (GRI 103-1).
We expect our business partners to fully comply with all applicable anti-corruption laws.
Outotec endorses ethical business practices and complies with national and international laws and regulations. We are committed to working against corruption in all its forms. We similarly expect our suppliers, contractors and business partners to follow the same principles and to fully comply with all applicable anti-corruption laws. We have not identified any non-compliance with laws and/or regulations or voluntary codes, neither has the company paid any fines in the social, economic or environmental area in 2017 (GRI 419-1, 307-1, 416-2). Read about product compliance in Our offering.
Our approaches to equal opportunities and labor practices are described in Driving employee engagement.
Code of Conduct
Outotec’s values and Code of Conduct define our common way of working (GRI 102-16). Working according to Outotec values is important in all operations to avoid corruption and bribery related risks. Our Code of Conduct sets out the principles of business conduct and gives guidance on ethics, compliance with laws and regulations, solid governance and management of sustainability and risks. The Code is approved by the Board of Directors, and all employees are expected to follow it. Our SVP – Legal, Contract Management and Corporate Responsibility, who is a member of the Executive Board, has the overall accountability for corporate responsibility including mechanisms to seek advice about and report on behavior. The Chief Compliance Officer reports unethical behavior and non-compliance cases and actions taken quarterly to the Audit and Risk Committee of the Board of Directors. There are no independent mechanisms for advice and concerns about ethics in use.
Outotec’s target is that employees participate in e-learning on the Code of Conduct, or attend the related classroom training on a regular basis. During 2013-2017, 57% of employees have completed Code of Conduct training. In 2017, the focus was on training blue-collar workers, and as a result, 38% of blue-collar workers participated in the Code of Conduct class-room trainings. In 2018, we will launch a new training based on the revised Code of Conduct to all Outotec employees.
Outotec also requires its new sales agents and representatives as well as existing ones upon contract renewal to commit to Outotec’s principles. The company also conducts compliance checks on new customers and project related third parties. All projects of a certain size or complexity are subject to a specific risk assessment which includes various compliance and ethics queries and escalations for the identified risks. They may involve more detailed investigations internally or through a third party, and may result in Outotec declining to bid for certain projects. In addition, unknown and potential risk customers, suppliers or agents are regularly being assessed for compliance risks using a dedicated external tool with escalation paths.
Outotec did not have to pay any fines or fulfil any non-monetary sanctions for non-compliance with anti-corruption laws in 2017 (GRI 419-1). Furthermore, Outotec was not subject to any legal actions for anti-competitive behavior, anti-trust cases or monopoly practices (2016: no cases) (GRI 206-1).
Board of Directors
A knowledgeable and engaged Board of Directors is a significant resource that can help to reach our short- and long-term goals, and create sustainable increase in the shareholder value. The work, duties, composition, committees, and remuneration of the Board of Directors are described in our Corporate Governance Statement 2017. There is no correlation between the compensation for Board members and Outotec’s social or environmental performance.
The Board of Directors’ diversity principles are also detailed in the Corporate Governance Statement. Based on these principles, the Board members must have the necessary knowledge and experience with regard to the business, social, and cultural conditions in the most significant markets to Outotec’s business; while they must also constitute a fair and balanced combination of professional experience, skills, gender, nationality, knowledge, and variety of opinions and backgrounds considering Outotec’s current and future needs.
Outotec’s long-term objective is to have a fair and balanced representation of both genders in the Board. When preparing for nominations to the Board of Directors, Outotec’s Nomination Board aims to ensure that these diversity principles are followed, that the Board functions well as a whole, and that the competence profile of the Board of Directors supports Outotec’s existing and future businesses and is consistent with our strategic goals.
Compliance helpline for raising concerns
Outotec’s compliance helpline is available for anyone to raise concerns related to corruption, human rights or any unethical behavior. All concerns raised are treated confidentially, and there is a clear no-retaliation policy. More severe compliance cases may be submitted to Outotec’s Compliance Board, whose members are the Chief Compliance Officer, the General Counsel, the Chief Financial Officer and the Head of Human Resources. The Chief Compliance Officer reports compliance cases and actions taken quarterly to the Audit and Risk Committee of the Board of Directors.
In 2017, there were two confirmed incidents of corruption, concerning collusion and facilitation payments. These cases were reviewed by management in co-operation with global Human Resources and Legal functions and the Chief Compliance Officer. Agreed remedial actions were implemented, including the termination of one employment contract (GRI 205-3).
Risk management and internal audit
Outotec’s strategic and operational risks are described at www.outotec.com/investors, and the company’s risk management policies, responsibilities and processes are set out in the Corporate Governance Statement 2017 on pages 9-10.
Our risk management is based on our Enterprise Risk Management Policy. Environmental, social and economic sustainability related risks are covered in the project risk assessment tool, which is used to assess all new projects worth at least one million euros (GRI 205-1). Appropriate follow-up actions are defined based on these findings. The assessments are project specific, for this reason the number and percentage of operations could not be reported. No significant risks related to corruption were identified and escalated from the project risk assessment.
In 2017, two company-wide sales process audits were conducted: key controls in order-to-cash processes in the Shared Service Center and selected projects; and bank account and internet banking access rights. In addition, specific audits were conducted in Canada, USA and Germany, as well as follow-up audits for China and Morocco.
Outotec’s internal and external audit processes take into account any corruption suspicions and fraudulent acts that may occur. We train our employees in connection with audit activities at our market area operations in anti-corruption policies and procedures for preventing misconduct and crimes. Virtual training, processes and guidelines on anti-corruption are also available to all employees (GRI 205-2).
In product management, we use a gated process, in which the first phase of product development includes criteria related to risks and especially opportunities to mitigate climate change, i.e. energy savings, emissions reduction, water savings, waste minimization, improved metals recovery and safety improvement (GRI 102-11).
Respecting human rights
Outotec respects the internationally proclaimed human rights in line with the company’s commitment to the United Nations Guiding Principles on Business and Human Rights. Outotec joined the United Nations Global Compact Initiative in December 2010 and is committed to its principles, as well as the principles of the Universal Declaration of Human Rights. These commitments are re-iterated in Outotec’s Code of Conduct and substantiated in the HR policies, QEHS Policy and Supplier Policy.
In line with our target, a working conditions self-assessment was conducted in our main service and manufacturing sites to assess local working conditions and labor practices. As a result, no major human rights risks were identified. There will be targeted actions based on the findings, e.g. increasing awareness on grievance mechanisms and code of conduct. Further, global guidelines for working conditions of blue-collar workers will be created and implemented to ensure a harmonized approach in different Outotec locations.
We have also identified and mapped our human rights impacts in our own operations in 2017, based on the self-assessment and interviewing representatives of Outotec key functions. Potential risks and human rights impacts in our business relate to project site work in high-risk countries, and there may be unidentified human rights risks or impacts in the supply chain. There were no incidents filed through formal grievance mechanisms related to our suppliers’ human rights impacts (GRI 414-2), impacts on society or labor practices. For more information on supplier audits, see Building a sustainable supplier base.
In 2017, four (2016: two) reported incidents of discrimination were filed through formal grievance mechanisms within Outotec (GRI 406-1). These incidents were reviewed locally, in cooperation with global Human Resources function and/or the Chief Compliance Officer. Remediation action plans were implemented and results reviewed through our routine management review processes. These incidents are no longer subject to action.
Outotec has not identified, through formal grievance mechanisms or in its risk assessments, any significant negative impacts of its operations, products or suppliers with regard to health and safety (GRI 416-2), or local communities (GRI 413-2). During 2017 no issues emerged concerning the rights of indigenous people.
The Code of Conduct, Supplier Policy, HR policies, Donation Policy, as well as Quality, Environment, Health and Safety (QEHS) Policy define the basic requirements for Outotec’s environmental, social and economic sustainability. We continuously train our employees and suppliers on these principles.
Outotec’s Executive Board reviews and approves our Sustainability Agenda (GRI 102-18). The Executive Board additionally approves our sustainability strategy, targets and reporting. The Board of Directors approves our statement on non-financial information covering environment, social and employees, anti-corruption and human rights. Our SVP – Legal, Contract Management and Corporate Responsibility, who is a member of the Executive Board, has overall accountability for corporate responsibility.
Responsibility for the sustainability of our products and services lies with a corporate level Product Board. It oversees and steers Outotec’s approach in product and technology development and the related innovation ecosystem. The Corporate Product Board consists of the Executive Board members, Chief Technology Officer (CTO, acting as the chairman), and business unit representatives. Corporate Product board decides, among other things, the sustainability measures and development targets of Outotec’s products.
Sustainability is integrated into all relevant organizational functions, such as Quality, Environment, Health and Safety (QEHS), Supply, Human Resources & Communications, and Legal & Contract Management. We have a Sustainability Working Group, whose core team coordinates sustainability work and meets frequently whenever needed.
Outotec’s Sustainability Advisory Council, which was established at the end of 2014 and was not part of our formal governance, ceased to convene during 2017. We have continued stakeholder dialogue through our regular engagement tools and mechanisms, see Engaging with stakeholders.
Sustainability-related personal targets are included in the annual bonus plans of the Executive Board members, QEHS managers, and environmental and sustainability managers. Inventors working with new, patentable solutions receive monetary rewards for their inventions. Furthermore, Outotec rewards all employees for making proposals that improve the sustainability of the company’s internal processes.
- Code of Conduct
- Donation Policy
- Supplier Policy
- Risk Management Policy
- Disclosure Policy
- QEHS Policy