Corporate social responsibility (CSR) is an integral part of OP's business and strategy. CSR is based on our mission and joint values, supported by our customer-owned business model.
Our business must promote the prosperity of our customers and our operating environment. Our social role directs us to set an example for others. We develop products and services which encourage our customers to act in a responsible and environment-friendly manner. OP aims to be a pioneer in CSR in the financial sector. The Code of Business Ethics, which was updated in December 2017, contains OP Financial Group’s CSR principles which all those employed by OP Financial Group, whatever their role, position or location, must observe. The Code of Business Ethics also includes the Group’s environmental principles. The Code is supplemented by more detailed rules and guidelines.
OP Financial Group’s corporate governance practices mostly cover actions related to CSR management. The main management approaches are defined in OP Financial Group's Corporate Governance Principles. Our operations are guided by good banking and insurance practices. We comply with laws, standards and regulations and adhere to the principles of honest and fair operations. The Operational Risk and Compliance function oversees risks and compliance related to CSR, and it also bears overall responsibility for providing advice on CSR principles. The function operates independently of the business areas.
OP’s CSR actions and targets are guided and coordinated by the Corporate Social Responsibility Programme, which was updated in 2017.
As reporting principles, OP follows the GRI Standards and the UN Global Compact and is developing its reporting in the direction of the IIRC framework. OP Financial Group’s sustainability reporting is mainly performed within the same boundaries as the Group’s financial reporting. Any deviations or limitations in the boundary are reported next to the applicable data.
CSR policies and guidelines are approved by the Supervisory Board. Strategic CSR management is the responsibility of the Executive Board of OP Cooperative, which also makes strategic decisions on CSR matters. On the OP Cooperative Executive Board, CSR comes under the Chief Communications Officer’s remit. CSR issues are discussed regularly, not only in the Executive Board but also in business divisions’ executive boards. Day-to-day work concerning CSR and the implementation of the CSR Programme is carried out by CSR working groups in the business divisions.
Leadership methods will be assessed as part of general leadership practices. Targets and operating principles will be updated should there be any changes in the operating environment, for example.
”We support the UN Global Compact initiative and promote human rights, labour standards, environmental protection and anti-corruption.”
In addition to laws and regulations, OP undertakes to comply with international commitments that guide operations. OP signed the Global Compact initiative in 2011, becoming committed to the Initiative's ten principles on human rights, labour standards, environment and anti-corruption. The Global Compact principles have been integrated into OP's new supplier contracts. The principles of Global Compact have also been taken into account in online training for personnel concerning the Code of Business Ethics and corporate social responsibility.
OP was among Finland's first asset management companies to sign the UN Principles for Responsible Investment in 2009. Since then, the Group has developed responsible investment practices with even greater determination, and participated in wider development efforts in the sector. OP is also one of the founding members of Finland’s Sustainable Investment Forum (FINSIF). OP is also involved in the Global Compact Nordic Network, the corporate responsibility network Finnish Business & Society (FIBS), the Corporate Social Responsibility and Co-operative Affairs Working Group of the European Association of Co-operative Banks (EACB) and the CSR working group of the Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE).
We actively follow the development of guidelines intended for the financial sector as part of the OECD Guidelines for Multinational Enterprises. The OECD guidelines comprise voluntary CSR principles and standards, as well as instructions for applying legislation to international business operations.
OP has signed the Equator Principles initiative in order to ensure the responsibility of its project financing. As in previous years, OP responded to the CDP survey, which gathers information from large corporations on the effect of climate change on their business and any actions they have taken to combat climate change and reduce greenhouse gases. In 2017, OP achieved score B+ on a four-step scale from A to D. Score B means that the Company has taken actions to address environmental issues beyond initial screenings or assessments.
In its role as an investor, OP Wealth Management has signed CDP’s climate change and water initiatives and the deforestation initiative.
The purpose of the CSR materiality analysis is to identify the aspects of CSR that are the most central to OP and its stakeholders.
The CSR materiality analysis was carried out in late 2016. Stakeholders’ opinions were collected with two stakeholder surveys in which the respondents were asked to evaluate, for example, the materiality of responsibility-related aspects and OP’s role in this work. This materiality analysis guides the updating of and goal setting for the CSR programme.
No products, services, business models and systems will be introduced before they have been assessed for potential risks and changes. Major new products, services and operating models or significant changes to existing ones are, when necessary, assessed by OP Cooperative's Executive Board, which ultimately decides on whether they should be adopted. The Executive Board is informed of significant realised risks as a part of monthly risk reviews. Risk maps, updated annually, are used to identify the critical risks affecting operations, including environmental, social and corporate governance (ESG) risks. These maps are used to conduct an analysis on the basis of which the executive management are informed of critical phenomena. The effectiveness of the risk and solvency management efforts of OP and its organisations is evaluated on an annual basis. Internal audits are conducted each year to examine the state of internal controls and capital adequacy management.
Internal controls cover all operations, involving all OP Financial Group entities and sites. The nature and extent of operations and, whenever necessary, special characteristics related to international operations are taken into consideration in specifying internal controls. Internal control covers all organisational levels. Internal control in its most extensive form primarily takes place at the operational level, characterised by continuous processes and forming part of daily routines. Internal control is complemented by the opportunity of anyone employed by OP Financial Group to report through an independent channel if they suspect that rules or regulations have been violated (whistle blowing).
OP Financial Group as a credit institution is supervised by the European Central Bank (ECB). The Finnish Financial Supervisory Authority oversees OP Financial Group's investment firms and insurance companies in Finland as prescribed in legislation governing financial and insurance markets. OP Financial Group's operations in Estonia, Latvia and Lithuania are supervised to an applicable extent by the national regulators.
OP’s suppliers are mainly based in Finland, and they produce services mainly in Finland. Therefore, OP can manage the CSR risk level related to procurement through transparent and well-managed supplier cooperation. OP’s CSR requirements for suppliers have been incorporated in purchase agreements. Suppliers’ CSR performance is monitored as part of OP’s supplier management model.