Economic Impacts

 

Economic impacts

OP as a whole has major direct and indirect economic impacts on both Finnish society as a whole and on local households. OP Financial Group's operations are based on cooperative values, a strong capital base, capable risk management and customer respect. Based on its mission, OP Financial Group creates sustainable prosperity, security and wellbeing for its owner-customers and in its operating region by means of its strong capital base and efficiency. In its business role, the Group provides its customers with competitive products and services while ensuring its profitability.

Such indirect financial impacts are created through contributions to local and regional economic vitality, as well as social contributions. Examples of indirect financial impacts include hiring of new employees, purchases, investments, financing and tax payments. The role as a financier and insurer and responsibility for customers are emphasised during difficult economic times in particular.

OP Financial Group is one the largest tax payers in Finland measured by tax on profits. All of the 167 independent OP cooperative banks pay their corporate tax locally in their operating region. By paying taxes in Finland, the Group is contributing to prosperity in the whole of Finland.

In the financial sector, the major social impacts are related to active fighting of financial crime and abuses, including corruption, and removal of anti-competitive behaviour. We are strictly against any anti-competitive behaviour. OP is very serious about conformance to laws and the Code of Business Ethics. OP Financial Group does not support political parties or contribute to the electoral campaigns of individual candidates.

Targets

OP Financial Group, with a cooperative foundation, aims not to maximise profits for its owners but to provide, as efficiently as possible, the services which the cooperative's owner-customers need. A considerable part of business earnings are returned to the owner-customers. What remains of the earnings is used to strengthen the Group’s balance sheet and to ensure our ability to provide credit. We must operate efficiently and competitively while being profitable and having a strong capital base. We must produce the services our customers need at a competitive price.

Financial targets.

Policies and commitments

External reporting is based, for example, on the International Financial Reporting Standards, the Finnish Limited Liability Companies Act, the Act on Credit Institutions, the Insurance Companies Act, the Accounting Act, and the standards and regulations issued by the Financial Supervisory Authority. OP Financial Group’s shared principles are applied in the accounting, financial statements and consolidated financial statements of OP Financial Group companies. Responsibility for the interpretation of, guidelines on and advice on standards, other laws governing the preparation of financial statements and official accounting requirements as well as the preparation of and compliance with common accounting policies rests with OP Cooperative, OP Financial Group’s central cooperative. Whenever necessary, OP Cooperative turns to auditors who give a statement of the selected principles and interpretations.

We are strictly against any corruption and bribery. OP is very serious about conformance to laws and the Code of Business Ethics. OP Financial Group does not support political parties or contribute to the electoral campaigns of individual candidates. The Code of Business Ethics document ratified by the Supervisory Board of OP Cooperative specifies that employees shall avoid any situation that may put them or OP Financial Group under suspicion of bribery. Our fight against money laundering and terrorism is guided by national legislation, official regulations, national practices and the anti-money laundering and prevention of financing of terrorism operating model approved by the senior management.

Management approach

OP Financial Group uses Group-wide financial reporting and risk reporting to monitor the achievement of its business goals and financial targets, and these reports are regularly reviewed at executive management and OP Cooperative's Executive Board meetings. The very same principles apply to the monthly financial performance and risk report prepared by the management. When preparing and examining the report, the management ascertains the accuracy and correctness of the financial results and reporting by analysing the performance and risk exposure and any deviations from targets.

OP Cooperative's Executive Board is the highest decision-making body in matters associated with business control. The Executive Board must ensure that supervision of accounting and treasury is duly organised. It decides on reporting, procedures and qualitative and quantitative indicators used to assess operational efficiency and performance, discusses and approves the consolidated financial statements and interim reports.

The Supervisory Board's Audit Committee is tasked with assisting the Supervisory Board to ensure firstly that the central cooperative and OP Financial Group have in place an adequate and well-functioning control system to cover all operations and secondly that the OP Cooperative's accounting and treasury control is organised appropriately.

As provided by law, auditors shall assess the accuracy of financial reporting.

A compulsory online course for all employees of the Group was implemented to ensure familiarisation with the Code at all levels. The guideline for Handling Conflicts of Interest in OP Financial Group is intended to prevent cases of corruption. All of the Group’s member organisations are responsible for applying the guidelines internally. Each and every executive and employee within the institutions must know the guidelines. Every manager is in charge of supervising compliance with the guidelines, with the CEO and board of each organisation having ultimate responsibility. The guidelines concerning conflicts of interests must be handled by each organisation and its employees on a regular basis, and whenever a new person receives job orientation. OP has a security staff designated for the prevention of abuses, dealing with abuses originating from both within the Group and from outside it. Incidents that fulfil the criteria for crime are always reported to the authorities, to be investigated, and any abuses are reported to the relevant authority, such as the Financial Supervisory Authority, and internally to OP’s Executive Board. As prescribed in the Act on Preventing and Clearing Money Laundering and Terrorist Financing, we have put in place customer due diligence systems, ongoing customer due diligence methods and staff training, guidelines and protection. Any suspicious incidents will be reported to the Money Laundering Clearing House as required by law.

Programmes, projects and initiatives

Our approaches are guided by the UN Global Compact initiative and the OECD Guidelines for Multinational Enterprises, among others.

Appeal systems

Any grievances should be discussed primarily with the supervisor. Incidents that fulfil the criteria for crime are always reported to the policy to be investigated, and any abuses are reported to the relevant authority.

201 Economic Performance

GRI 201-1 Direct economic value generated and distributed

It follows naturally from OP Financial Group's dual role, brought about by customer ownership, that business profits and added value are channelled, via customer relationships, to its members and customers. Member cooperative banks use their profits for the benefit of their customers by providing loyalty benefits and other financial benefits and by maintaining and developing their service capabilities. In 2017, new OP bonuses totalled over EUR 220 million, up by 6% year on year. Furthermore a significant part of OP's economic impacts also involves indirect impacts on local and regional economic vitality. Examples of indirect economic impacts are:

  • Employment (creation of new jobs, work placements, summer jobs)
  • Procurement (purchases from local suppliers and service providers)
  • Investments (properties, maintenance, local infrastructure and building projects)
  • Financing (financing for start-ups, local financing, ethical lending criteria by sector)

Economic value generated and distributed by stakeholder groups:

Finland 2013 2014 2015 2016 2017
Direct economic added value created
a) Income 2,450 2,657 2,808 2,910 3,062
Breakdown of economic value added
b) Operating expenses 619 661 574 640 767
c) Personnel costs 791 741 781 762 758
d) Returns to owner-customers 193 195 195 206 217
e) Income tax 36 308 249 223 223
f) Donations and other community investments 3 4 3 6 2,3
For strengthening capital base and developing business 807 749 1,007 1,073 1,095

The member banks are often some of the largest taxpayers in their local municipalities, and OP as a whole is one of the biggest taxpayers in Finland. OP Financial Group's income taxes for the financial year 2017 totalled 223 million euros (223). The effective tax rate was 20.7% (19.6).

Tax footprint.

GRI 201-2 Financial implications and other risks and opportunities due to climate change

Climate change has extensive effects and it causes notable uncertainty for society. Together with our customers, we will build sustainable economy and support mitigating climate change and adapting to it. OP's direct impact on climate change is minor. Environmental risks, on the other hand, including climate risks, can have direct impacts on OP’s operations, as well as indirect impacts through effects on customers and stakeholders. In emissions and energy intensive sectors, climate change and related regulation may have significant financial effects. Indirect effects on climate change are created through OP financing and investments.

Extreme weather is also an operational risk included in OP's own contingency planning. Concerns related to climate change may pose reputation risks if any conflicts with climate change prevention efforts should be identified in the operations of OP or even those of its partners or customers.

On the other hand, the general improvement in environmental awareness is bringing new business opportunities, for example in the form of investment products that emphasise environmental responsibility, and diverse property insurances. Our non-life insurance business continuously monitors the development of risks posed by climate change from the viewpoint of our existing and future insurance products. Our aim is to cover all insurable risks as extensively as possible, also in constantly changing circumstances. OP assesses the financial implications of climate change risks in its annual response to the CDP survey.

203 Indirect economic impacts

GRI 203-1 Infrastructure investments and services supported

OP’s nationwide network of banking and non-life insurance services seeks to ensure that customers have equal opportunities to carry out transactions. The service network covers both digital service channels (op.fi, OP-mobile and Pivo), telephone services and the network of branch offices. We are further developing our services by listening to our customers and their changing needs.

Pohjola Health Ltd has four Pohjola Hospitals that provide basic healthcare and special healthcare services, examinations, surgery and rehabilitation on an extensive basis. The hospital network will be completed in May 2018 when a Pohjola Hospital unit opens its doors in Turku.

GRI 203-2 Significant indirect economic impacts

To read more about indirect economic impacts and assessment of social and local impacts, go to the Local Impact of cooperate banks- section.

In 2017, the combined purchase volume of products, services, rights and the claims service partner network was approximately 1,700 million euros, provided by over 20,000 suppliers. Apart from this, the Group’s functions look after their own fundraising and investment-related acquisitions. OP is also a significant purchaser of goods and services.

 

 

205 Anti-corruption

205-1 Operations assessed for risks related to corruption

The organisations of OP Financial Group apply a guideline entitled Procedures for Managing Operational Risk. In 2017, the central cooperative drew up a risk assessment plan by process. If necessary, the entities to be analysed can be agreed with the Group’s member organisations. OP Financial Group annually carries out risk assessments which also cover risks related to corruption.

The Group’s member organisations update their operational risk analyses annually based on the procedural guidelines. The risk analyses are based on the organisations’ self-evaluations concerning operational risks and their management. In line with the analysis process, each organisation identifies and evaluates the most important risks affecting its operations. To assist in identification, the Group has a shared risk library which lists diverse risks subdivided into seven risk categories. The Internal Abuse category includes the risk ‘Giving and Receiving Bribes’. Bribery has not been a significant risk in any of the risk assessments.

205-2 Communication and training about anti-corruption policies and procedures

The Code of Business Ethics document ratified by the Supervisory Board of OP Cooperative specifies that employees shall avoid any situation that may put them or OP Financial Group under suspicion of bribery. A compulsory online course for all employees of the Group was implemented to ensure familiarisation with the Code at all levels. By the end of 2017, the course had been taken by 89% (100) of the personnel in Finland.

The guideline for Handling Conflicts of Interest in OP Financial Group is intended to prevent cases of corruption. All of the Group’s member organisations are responsible for applying the guidelines internally. Each and every executive and employee within the institutions must know the guidelines. Every manager is in charge of supervising compliance with the guidelines, with the CEO and board of each organisation having ultimate responsibility. The guidelines concerning conflicts of interests must be handled by each organisation and its employees on a regular basis, and whenever a new person receives job orientation.

In supplying services or goods to OP Financial Group, suppliers must comply with CSR supplier requirements, OP Financial Group's General Procurement Terms and Conditions and Code of Business Ethics as well as applicable laws and international agreements.

206 Anti-competitive behaviour

206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices

On 7 March 2017, the Finnish Financial Supervisory Authority issued a public warning to, and imposed a penalty payment of 400,000 euros on OP Helsinki due to shortcomings in investment advice related to the obligation to obtain information. The reason for sanctions was that OP Helsinki’s investment advice service had not made any adequate analysis of customers’ investment objectives, financial standing and investment experience before providing customers with investment advice. Furthermore, the bank had not documented and stored information on the investment advice given to customers so that such information could have been used to verify the courses of events afterwards. Corrective measures have been implemented at Group level: systems used in selling investment products have been further developed to ensure documentation and procedures complying with regulation. Furthermore, the Group’s investment advice guidelines were updated and additional training was provided to personnel.

Late in 2015, OP was requested to respond to allegations that it was engaged in monopoly practices. According to a competitor, OP has a monopoly position in retail banking services and is abusing this position by combining retail banking services with non-life insurance services. OP has also been claimed to offer non-life insurance services below production costs. This case is still under investigation, and OP wants to cooperate with the Finnish Competition and Consumer Authority and provide them with any information they may need.

Procurement

Target

The goal of OP's procurement function is to ensure that any products, services or rights that are acquired are on the whole cost-effective, of high quality and reliable and ethical and that suppliers are managed professionally to the benefit of OP Financial Group and its customers.

Policies and commitments

OP’s purchases and orders are based on Group-level framework agreements negotiated by OP Procurement or on OP Financial Group’s General Procurement Terms and Conditions. These agreements require that suppliers comply not only with OP’s CSR requirements for suppliers but also with OP’s Code of Business Ethics and with the Global Compact initiative, as well as with all the applicable laws and regulations.

Management approach

Suppliers evaluate themselves in terms of corporate social responsibility for the first time when they take part in competitive tendering, and thereafter during cooperation with OP on a regular basis in accordance with the operating model agreed with OP Procurement. OP audits suppliers in accordance the annual CSR auditing plan.

Continuous follow-up of CSR audits forms part of OP’s supplier and CSR management model. This includes regular meetings with designated purchasing managers. OP’s CSR requirements for suppliers have been incorporated in purchase agreements since 2015. 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.

Programmes, projects and initiatives

UN Global Compact

Appeal systems

Any suspected breach of rules or regulations by suppliers can be reported to the Vice President responsible for purchasing or to the responsible procurement manager. Such a report may also concern actions that are against OP Financial Group’s core values.

204-1 Proportion of spending on local suppliers

OP Financial Groups´s most significant locations of operation are in Finland. In 2017 about 90 % of procurement is spent locally in Finland.

 

 

 

Environmental Impacts

 

Environmental impacts

Climate change has extensive effects and it causes notable uncertainty for society. Together with our customers, we will build sustainable economy and support mitigating climate change and adapting to it. We will develop products and services which will encourage our customers to act in a responsible and environment-friendly manner and take into account the effects of our operations on the diversity of nature. We will reduce our climatic stress and help our customers carry out actions to support the environment. We wish to reduce the risk caused by climate change to our customers. We will provide information on climate change and offer solutions to its negative effects.

We take environmental and climatic effects into account in our operations. We promote a circular economy as well as resource and energy efficiency in our business. We develop low-emission premises, generate and utilise renewable energy and promote low-emission mobility. We take environmental aspects into account when making purchases. OP's own operations result in greenhouse gas emissions.

OP also has indirect impacts through its operating environment, causing greenhouse gas emissions. OP provides investors with a carbon risk indicator to support them in selecting a mutual fund by publishing the carbon intensity figures of OP equity funds. Furthermore, OP equity funds publish quarterly fund-specific ESG analyses that cover areas such as the fund’s positive environmental impact. OP Wealth Management provides three environmentally themed mutual funds: OP-Low-carbon World, OP-Clean Water and OP-Climate.

With respect to waste, OP’s primary objectives are to prevent waste creation, recycle waste, convert waste into energy by burning it, and only if no other alternative is available, take waste to a landfill site.

Targets

The mitigation of climate change requires personal commitment and actions from each and every one of us. We will reduce our climatic stress and help our customers carry out actions to support the environment. We wish to reduce the risk caused by climate change to our customers. We will provide information on climate change and offer solutions to its negative effects.

We take environmental and climatic effects into account in our operations. Our aim is to make the central cooperative carbon positive by 2025.

Policies and commitments

The Code of Business Ethics defines OP’s key environmental commitments. OP reports on its greenhouse gas emissions as CO2 equivalents in accordance with the Greenhouse Gas Protocol (GHG). OP's operations are not involved in emissions trading. OP Wealth Management is committed to the Montreal Pledge.

Management approach

OP has in place the WWF's Green Office system. Green Office is applied at the Vallila campus and three banks. Our target is to expand Green Office into more banks. Green Office is one way of increasing our employees’ environmental consciousness. As practical tools, our operating premises are also equipped with energy monitoring system, waste reporting, and environmental certification for buildings (LEED). OP has carried out an energy audit, recommended for large enterprises, in accordance with the Energy Efficiency Directive.

Programmes, projects and initiatives

The UN Global Compact, the Montreal Pledge, the Climate Action 100+ engagement programme.

Appeal systems

We welcome feedback through our customer service channels.

302 Energy

302-1 Energy consumption within the organisation and 302-3 Energy intensity

The total energy consumption covers OP Financial Group's heat, electricity and fuel consumption in all countries where the Group operates. In 2017, the total energy consumption was 142 585 (138,230) MWh, up by 3.1 % from the previous year. Consumption on sites not covered by consumption monitoring has been calculated on the basis of specific consumption by type of real property. These sites account for approximately half of the consumption. The electrical energy for the Vallila campus and the data centres is generated entirely through wind power.

In 2017, the energy intensity, or total energy consumption per employee, of OP Financial Group offices increased to 11.6 (11.3) MWh/year/person.

Energy consumption

  2014 2015 2016 2017
District heating 77,716   73,400 72,050 70,635
District cooling 2,868 2,670 5,360 5,140
Fuels (Heating and reserve power) 6,946 7,060 3,780 4,700
Electricity 80,311 59,230 57,040 62,110
Total (MWh) 167,841 142,360 138,230 142,585

In 2017, renewable electricity consumption accounted for 18,800 MWh, or 13%, of all energy consumption. Fuel conversion is based on the Ecoinvent 3.3 multipliers.

305 Emissions

305-1 Direct (Scope 1) GHG emissions, 305-2 Energy indirect (Scope 2) GHG emissions and 305-4 GHG emissions intensity

Direct (scope 1) greenhouse gas emissions are created by fuel consumed by standby generators for OP’s own premises. Energy indirect (scope 2) greenhouse gas emissions are the result of electricity and heating energy consumption in the premises. In 2017, electricity for the Vallila campus was generated entirely by renewable energy forms.

The energy emission factors used in emission calculations are based on the 2016 Electricity generation statistics by Statistics Finland, the 2016 District Heating Statistics, the IEA district heating and electricity data for 2015 (excluding Finland), the Ecoinvent 3.3 database and, with respect to green electricity, data provided by the Finnish Green Building Council (FIGBC).

Scope 1 and 2 emissions (tonnes CO2e)
  2014 2015 2016 2017
Scope 1 1,800 5 3 48
Scope 2, market-based 37,114 23,446 18,556 20,918
Scope 2, location-based - 27,178 26,088 25,259
Intensity, CO₂e-tonnes/person 3 1.93 1.52 1.70
Intensity = Scope 1 + Scope 2 (market-based) / OP Financial Group employees.

305-3 Other indirect (Scope 3) GHG emissions

Scope 3 emissions (tonnes CO2e)
  2014 2015 2016 2017
Purchased products and services 2,266 2,508 2,612 2,034
Waste from operations 598 609 129 298
Business travel 2,408 2,622 3,841 3,712
Employee commuting     951 1,142

Purchased products and services include emissions generated by office stationery, mail transport services, external data centres and customer magazines.

With respect to indirect emissions, we also calculate emissions generated by equity funds. Read more.

305-5 Reduction of GHG emissions

According to OP’s Corporate Social Responsibility Programme, our aim is to become carbon positive by 2025. The direct greenhouse gas emissions from OP’s own operations (Scopes 1 + 2) totalled 20,964 CO2e-tonnes (18,559), or 1.7 tonnes (1.52) per person. These emissions (Scopes 1 + 2) have decreased by approximately 40 % from 2011 (comparative 2011: 34,847 tonnes of CO2e). The main reason for this was the removal to new, energy-efficient offices and the increase in the use of renewable energy. In 2017, the electricity consumed by the Vallila premises was generated entirely by wind power.

The CO2 emission limit for the OP central cooperative's company cars is 120 g/km. At the end of 2017, the average CO2 emissions of company cars equalled 122 g/km (125). Business travel in 2017 resulted in 3,712 tons of CO2 emissions (3,841). OP uses video and online conferencing technology to reduce business travel. Its travel guidelines state that trains or buses must be favoured for travel within Finland. OP Cooperative employees have access to travel cards to encourage the use of public transport for commuting.

OP is an indirect opinion leader in encouraging customers to take environmental impacts into account when making financing, insurance and investment decisions, and in recommending the use of e-services and electronic documents.

306 Effluents and waste

306-2 Waste by type and disposal method

In 2017, the OP offices managed by OP-Services in the Helsinki Metropolitan Area generated a total of 713 tonnes waste (289).

With respect to non-hazardous waste (708 tn), 94 tons was reused as raw material, 575 tons was recycled and 39 tons was converted into energy by burning it. The amount of hazardous waste was 4.3 tons, 3.2 tons of which was recycled and the remaining 1.1 tons was disposed in accordance with the requirements concerning hazardous waste.

 

 

 

Social Impacts

 

Social impacts

Impacts on labour practices and decent work are considerable because OP Financial Group is a major employer in Finland.

Target

OP aims to be the most attractive employer in the financial sector and among the most highly regarded large employers in Finland. In HR matters, we focus on the renewal and development of our competencies, management and corporate culture. Highly skilled and motivated employees are a success factor, enabling OP to meet the challenges of the changing operating environment and digitalisation. OP considers diversity as an asset and guarantees equal opportunities, rights and treatment to all.

Policies and commitments

Impacts related to labour practices and decent work are led through strategic HR alignments and OP Financial Group’s HR Policy. Cooperation between personnel and the employer is based on local legislation. Responsibility for occupational safety lies specifically with the employer. Occupational safety is based on prevention and planned ways of working.

Management approach

Employees are treated equally in areas such as remuneration, recruitment and career advancement. We monitor on an annual basis the distribution of personnel in various task groups by factors such as gender, pay and age. We take safety and security into account in all of our operations related to personnel and working conditions.

The Group's practical management tools include OP Financial Group’s Good Business Practices, OP Financial Group’s Principles of Good Leadership, the remuneration system and policy, OP Financial Group’s Equality and Non-discrimination Framework Plan, competence development models, personnel surveys, and the Procurement Policy and Supplier Requirements for OP Financial Group’s suppliers.

Group-level procedures have been agreed for threatening situations, to be applied locally. Procedures and reporting procedures have been agreed for bank robberies. Procedures have been agreed for serious threats in terms of aftercare arrangements and protecting personnel. Customer service personnel must go through the procedures as part of the induction, with annual refresher training. Realised threat situations are entered in the operational risk management system and reported to the Executive Board at regular intervals. The staff's experiences of threatening customer service situations are also monitored by means of personnel surveys. Serious threats are reported to the police. Bank robberies are reported to the Executive Board in real time and entered in the operational risk management system.

Programmes, projects and initiatives

Global Compact, Diversity Charter Finland and its Charter.

Appeal systems

Any grievances should be discussed primarily with the supervisor, HR, the shop steward or the occupational health and safety officer.

102-8 Information on employees and other workers

OP Financial Group has 11,847 (11,787) employees in Finland, of whom 5,998 (5,319) work in the central cooperative consolidated, 5,120 (5,755) at member cooperative banks and 729 (713) at OP-Kiinteistökeskus. In addition, the OP Financial Group has 422 (440) employees outside Finland, in Estonia, Latvia and Lithuania. In addition to its own staff, OP Financial Group had 1,511 (1,089) temporary agency workers at the end of 2017. As a result of business transfers related to consolidation arrangements, a total of 314 persons transferred from member cooperative banks to the central cooperative. These worked in the Central Cooperative Consolidated, mainly in development and service provision tasks. During the summer of 2017, OP Financial Group employed a total of 439 (492) summer employees and trainees whose average age was 25.4 (24.4) years. 55% (56) of the summer employees were women.

OP Financial Group maintains its personnel data in a centralised information system. This provides data that supports our human resources management. The system covers the companies included in the Group’s consolidated financial statements, excluding five companies that have a total of 160 employees. The data is combined into comprehensive personnel statistics for the Group’s CSR Report.

Employees

Number of personnel by type of employment Men Women Total
Permanent full-time employees 3,351 7,392 10,743
Permanent part-time employees 67 691 758
Fixed-term full-time employees 167 384 551
Fixed-term part-time employees 82 135 217
Total 3,667 8,602 12,269
Number of employees by country Men Women Permanently employed Employed for fixed term Total
Finland 3,549 8,298 11,098 749 11,847
Estonia 44 136 178 2 180
Latvia 28 83 108 3 111
Lithuania 46 85 117 14 131
Total 3,667 8,602 11,501 768 12,269

401 Employment

401-1 New employee hires and employee turnover

In 2017, OP Financial Group recruited 1,345 new employees (1,236). The annual turnover of permanent employees was 8.7% (7.9). Voluntary staff turnover was 4.8% (3.7). During the year, a total of 59 (42) employment relationships ended, 21 (14) for production-related reasons and 38 (28) through voluntary arrangements. In 2017, a total of 357 (388) employees retired at an average age of 62.1 years (61.7). As a result of business transfers related to consolidation arrangements, a total of 314 persons transferred from member cooperative banks to the central cooperative. Business transfers resulted in the transfer of 5 employees to non-Group companies.

New first-time employment relationships by age group, gender and country.

Finland Men Women Total Men Women Total
Under 30 years 287 377 664 56% 37% 44%
30–39 years 143 159 302 13% 7% 9%
40–49 years 107 131 238 13% 8% 10%
Yli 49 years 42 50 92 4% 1% 2%
Total 579 717 1,296 16% 9% 11%
Estonia Men Women Total Men Women Total
Under 30 years 1 4 5 25% 27% 26%
30–39 years 0 0 0 0% 0% 0%
40–49 years 0 0 0 0% 0% 0%
Yli 49 years 0 1 1 0% 2% 2%
Total 1 5 6 2% 4% 3%
Latvia Men Women Total Men Women Total
Under 30 years 3 7 10 75% 30% 37%
30–39 years 2 1 3 15% 3% 6%
40–49 years 0 1 1 0% 5% 4%
Yli 49 years 0 0 0 0% 0% 0%
Total 5 9 14 18% 11% 13%
Lithuania Men Women Totla Men Women Total
Under 30 years 7 12 19 54% 52% 53%
30–39 years 0 6 6 0% 14% 9%
40–49 years 1 1 2 25% 13% 17%
Yli 49 years 2 0 2 67% 0% 14%
Total 10 19 29 22% 22% 22%

 Terminated employment contracts by age group, gender and country.

Finland Men Women Total Men Women Total
Under 30 years 333 442 775 66% 44% 51%
30–39 years 114 183 297 10% 8% 9%
40–49 years 52 117 169 6% 7% 7%
Yli 49 years 145 416 561 13% 12% 13%
Total 644 1,158 1,802 18% 14% 15%
Estonia Men Women Total Men Women Total
Under 30 years 2 5 7 50% 33% 37%
30–39 years 0 3 3 0% 7% 6%
40–49 years 0 4 4 0% 12% 8%
Yli 49 years 1 2 3 11% 4% 5%
Total 3 14 17 7% 10% 9%
Latvia Men Women Total Men Women Total
Under 30 years 4 3 7 100% 13% 26%
30–39 years 1 6 7 8% 17% 14%
40–49 years 0 3 3 0% 15% 11%
Yli 49 years 0 1 1 0% 25% 13%
Total 5 13 18 18% 16% 16%
Lithuania Men Women Total Men Women Total
Under 30 years 4 15 19 31% 65% 53%
30–39 years 5 7 12 19% 16% 17%
40–49 years 1 1 2 25% 13% 17%
Yli 49 years 1 0 1 33% 0% 7%
Total 11 23 34 24% 27% 26%

 

 

401-3 Parental leave

In 2017, a total of 1,018 (1,089) people were on family leave, 718 (793) of whom were women and 300 (296) men. 279 of the men (275) and 315 of the women (354) whose family leave ended in 2017 returned to work. The return rate was 100% (99) for men and 90% (93) for women. Of those who had returned to work from family leave in 2016, 247 (257) men and 333 (299) women continued to work after 12 months from their return. The retention rate was 90% (92) for men and 94% (94) for women. The figures are for Finland, excluding the personnel of OP-Kiinteistökeskus.

402 Labour/management relations

402-1 Minimum notice periods regarding operational changes

OP Financial Group abides by local legislation in all its operations. In Finland, the main regulations concerning corporate reorganisations are found in the Act on Co-operation within Undertakings. According to the Act, in cases of business transfer, staff representatives must be given one week’s notice. Written proposals for personnel negotiations must be submitted to staff representatives five days prior to the start of negotiations.

403 Occupational health and safety

403-1 Workers representation in formal joint management–worker health and safety committees

The following cooperation groups operate at OP Financial Group level and in OP’s central cooperative: OP Financial Group's cooperation team, OP central cooperative’s cooperation committee, and OP central cooperative’s empolyer/employee cooperation team. The purpose of these teams and committees is to develop the companies’ operations and working conditions and to improve the opportunities of personnel to contribute to the decision-making that affects them, in accordance with the Finnish Act on Co-operation within Undertakings.

At OP Financial Group, the percentage of the total workforce represented in health and safety committees is 89% (88) of the entire Group personnel. The central cooperative has its own health and safety committee, and so do all banks with more than 20 employees.

At OP Financial Group, staff representation in the administrative bodies of companies that belong to the central cooperative has been arranged by nominating staff representatives to OP Cooperative’s Supervisory Board, each for a term of three years.

403-2 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities

The aim of OP Financial Group’s operating model for the management of employee wellbeing is to increasingly ensure, through close and well-organised management of occupational safety and health and wellbeing at work, the work ability and labour market competency of older employees and those at risk of work disability. Key employee wellbeing elements include the early support model, occupational health care, rehabilitation, flexibility at work and diversity management, among others. The health and wellbeing questionnaire annually sent to employees enables us to identify priorities and needs for our employee wellbeing activities from the employee perspective.

In 2017, OP Financial Group recorded 10 occupational accidents causing a sick leave. These led to a total of 237 lost calendar days. The accident rate (LTA1) was 0.6. There were no work-related deaths or accidents leading to disability. OP applies a systematic procedure for the reporting of occupational accidents and hazardous situations. Any occupational accidents are reported to the immediate supervisor without delay. After immediate corrective measures, the supervisor files an accident report. Based on the accident reports, the occupational health and safety committee monitors the number and type of occupational accidents and the resulting costs on a regular basis.

In 2017, sickness absences accounted for 3.3% of regular working hours (3.5). For men, the proportion of sick leaves was 1.8% (1.8) and for women 4.0% (4.1). Sickness absences have remained at the same level throughout the 2010s. The figures are for Finland, excluding the personnel of OP-Kiinteistökeskus.

Group-level procedures have been agreed for threatening situations, to be applied locally. Procedures and reporting procedures have been agreed for bank robberies. Procedures have been agreed for serious threats in terms of aftercare arrangements and protecting personnel. Customer service personnel must go through the procedures as part of the induction, with annual refresher training. Realised threat situations are entered in the operational risk management system and reported to the Executive Board at regular intervals. The staff's experiences of threatening customer service situations are also monitored by means of personnel surveys. Serious threats are reported to the police. Bank robberies are reported to the Executive Board in real time and entered in the operational risk management system.

 

 

404 Training and education

404-2 Programs for upgrading employee skills and transition assistance programs and 404-3 Percentage of employees receiving regular performance and career development reviews

OP offers all employee groups a variety of ways to develop their competencies. The basis for development is to understand OP’s strategy and how OP’s strategic transformation will affect one’s own work, activities and competence needs. During 2017, OP Financial Group has been building an operating model to update employee competencies. Such a model is being built since digitisation and automation will destroy some of the existing jobs in the financial sector. Meanwhile, digitisation and automation also create new jobs which require new competencies. The operating model for updating competencies aims to encourage and steer employees to keep their own labour market value up to date.

OP Financial Group implements its strategy and annual plan through annual employee performance reviews. They are an integral part of performance management and include the goal-setting review, performance review and competence and follow-up review. The first review of the year includes an assessment of the employee’s performance during the past period and setting targets for the coming period. The second review focuses on competencies and includes the drawing up of a development plan on the key areas in need of improvement. Furthermore, the realisation of targets in the current period is discussed. The entire OP personnel in Finland and abroad have annual performance and career development reviews. Furthermore, in accordance with the Finnish Act on Co-operation within Undertakings, personnel and training plans are drawn up in those companies of OP Financial Group that regularly have more than 20 employees. The training plan must include an estimate of the professional competencies of the whole personnel, any changes in the competence requirements and the background for this and, based on these estimates, an annual plan by employee group or in another appropriate manner.

In 2017, OP Financial Group used an average of 15 hours per person for training.

OP Financial Group implements its strategy and annual plan through regular employee performance reviews. They are an integral part of performance management and include the goal-setting review, performance review and competence and follow-up review. The first review of the year includes an assessment of the employee’s performance during the past period and setting targets for the coming period. The second review deals with competencies and the realisation of targets in the current period. The purpose of the competence review is to draw up a development plan on the key areas in need of improvement.

According to the OP Financial Group’s remuneration principles, all employees are covered by a performance-based bonus system, and each employee has performance and goal-setting reviews.

OP Financial Group has two types of organisation-wide personnel surveys: an extensive Personnel Survey and a more fast-paced Personnel Pulse. The Personnel Survey is carried out every two years; the next survey will take place in 2019. The results of the 2017 Personnel Survey were good. According to the survey, OP’s key success factors are customer focus, confidence in the future and value-based performance.

405 Diversity and equal opportunity

405-1 Diversity of governance bodies and employees

OP wants to provide equal opportunities to all employees. At the end of 2017, 70% (2016: 71) of personnel was women and 30% (29) men. The average age of personnel was 43.4 years (43.6) with an average employment time of 13.4 years (14). Of the members of OP Financial Group’s governing bodies, 63% (64) were men and 37% (36) women. At the end of 2017, the average age of these persons was 53.8 years (52.8). 32% (31) of the members of the governing bodies were under 50 years old.

OP Financial Group by personnel group and gender

Personnel group Men Women
Management 77% 23%
Supervisor 4% 59%
Expert 48% 52%
Employee 16% 84%
Total 30% 70%

OP Financial Group by personnel group and age group

  Under 30 years 30–49 years Over 49 years
Management 0% 34% 57%
Supervisor 2% 56% 42%
Expert 7% 59% 34%
Employee 19% 44% 38%
Total 13% 50% 37%

 OP Financial Group’s administrative bodies by age group and gender

  Men Women
Under 30 years 48% 52%
30–49 years 55% 45%
Over 49 years 66% 34%
Total 63% 37%

In June 2017, OP Financial Group set a diversity target based on the principles of good corporate governance. According to the said target, persons in the Group’s executive positions have a wide range of knowledge, skills and experience. A balanced representation of genders and age groups is required in such a manner that both genders are represented in proportion of 60/40. The indicator applied is the proportion of each gender in executive positions. In 2017, the share of women in executive positions was 21% and that of men 79%. The gender distribution in executive positions in the central cooperative is 30% women and 70% men, in member cooperative banks 14% women and 86% men. Furthermore, we aim and monitor that OP Financial Group personnel’s knowledge, skills and experience in each gender and age group is sufficiently diverse to meet the strategic goals and requirements of business operations.

405-2 Ratio of basic salary and remuneration of women to men

We aim and monitor that OP Financial Group administration, management and personnel’s knowledge, skills and experience in each gender and age group are sufficiently diverse to meet the strategic goals and requirements of business operations. Diversity is taken into account in HR planning, and its materialisation is monitored through HR reporting.

OP Financial Group has drawn up an equality and non-discrimination plan in collaboration with employee representatives. The plan is revised every two years, and the implementation of measures based on the plan is monitored regularly through various indicators and statistics. The Group monitors areas such as the equality of remuneration between age groups and gender, on the basis of job grades. For example, within comparable job grades, the average pay of women is 90–105% of the average pay of men. However, the purpose of monitoring and measures taken is not only remuneration, but also management, leadership, employee wellbeing, career development and training opportunities, which all contribute to the achievement of OP Financial Group’s diversity and non-discrimination targets.

Non-discrimination,
Freedom of association and collective agreements,
Child and forced labour

These principles, which apply to the whole OP Financial Group and its administration, are firmly based on our basic mission and values and form an important part of the responsibility of our operations. OP’s own operations do not involve any direct human rights risks or impacts of significance. Indirectly, such impacts may arise from the supply chain or from the operations of investees and financed parties.

Target

OP aims to prevent discrimination in all its activities. OP seeks to prevent human rights violations and support the elimination of child labour and forced labour throughout its business operations and supply chain.

Policies and commitments

OP's operations are controlled by good banking and insurance practices and financial sector regulations as well as OP’s Code of Business Ethics. OP Procurement’s supplier requirements define the CSR requirements for suppliers. Prevention of discrimination and protection of human rights are referred to in, for example, the UN Global Compact, UN PRI and ILO’s Declaration on Fundamental Principles and Rights at Work.

Management approach

The Group's practical management tools include OP Financial Group’s Good Business Practices, OP Financial Group’s Principles of Good Leadership, the remuneration system and policy, OP Financial Group’s Equality and Non-discrimination Framework Plan, the Procurement Policy, and Supplier Requirements for OP Financial Group’s suppliers. According to the supplier requirements, suppliers have to manage the issues described in OP Financial Group's CSR requirements for suppliers in an active and goal-oriented manner and to ensure that their own suppliers also comply with these requirements. OP audits suppliers in accordance with the annual CSR auditing plan. Suppliers must report the practical realisation of the ethical principles they apply to OP. Continuous follow-up of CSR audits forms part of OP’s supplier and CSR management model. This includes regular meetings with designated purchasing managers.

Programmes, projects and initiatives

Global Compact, Diversity Charter Finland

Appeal systems

Personnel may report any suspected cases of discrimination to the Audit function. Any deviations from the Code of Business Ethics should be raised with HR, your immediate supervisor or Compliance. You can also make an anonymous report on a suspected breach of rules and regulations to OP Financial Group’s Chief Audit Executive through the so-called whistle blowing channel. Such a report may also concern actions that are against OP Financial Group’s core values. Any suspected breach of rules or regulations by suppliers can also be reported to the Vice President responsible for purchasing or to the responsible procurement manager. Any cases of discrimination reported by customers reach us primarily through requests for clarification sent to us by the authorities. OP expects product suppliers and service providers to conform with OP's Corporate Social Responsibility supplier requirements, Code of Business Ethics and any applicable legislation and international agreements.

406 Non-discrimination

406-1 Incidents of discrimination and corrective actions taken

One notification of gender discrimination was filed with OP Financial Group in 2017. The case was investigated in accordance with the Act on Equality Between Women and Men and a report was drawn up and submitted to the Ombudsman for Equality.

407 Freedom of association and collective agreements

OP Financial Group is a unionised employer. The Group companies apply three collective labour agreements: the collective agreement for the finance industry in banking operations, the collective agreement for the insurance industry in insurance operations, and the collective agreement for the medical services industry at Pohjola Hospital. These agreements contain regulations on, for example, the implementation of cooperation in occupational safety and health matters and the status of industrial safety delegates and ensuring their operating conditions. As a large-scale employer, OP Financial Group plays a major role in developing the industry.

OP Financial Group performs all cooperation procedures in compliance with the Act on Co-operation within Undertakings and other local legislation governing such procedures. OP Financial Group has arranged cooperation with employees through a cooperation group that convenes on a quarterly basis. The group discusses OP Financial Group's finances and performance, along with other current matters concerning the entire Group. All Group companies have arranged their own cooperation procedures in accordance with legislation.

Society

OP carries out its mission in two roles: business role and social role. In our business role, we bear responsibility for our capital adequacy and operational efficiency. In our social role, we have responsibility for the long-term wellbeing of our owner-customers and operating environment. We have a wide-ranging presence in Finland both digitally and physically and we participate in promoting local success, welfare and security wherever we operate.

Target

OP promotes regional vitality in line with its mission and its Corporate Social Responsibility Programme.

Policies and commitments

OP Financial Group does not support political parties or contribute to the electoral campaigns of individual candidates. The Code of Business Ethics document ratified by the Supervisory Board of OP Cooperative guides all our operations.

Management approach

OP manages its social role alongside its business role. A compulsory online course for all employees of the Group has been implemented to ensure familiarisation with the Code of Business Ethics at all levels.

Programmes, projects and initiatives

Our approaches are guided by the UN Global Compact initiative and the OECD Guidelines for Multinational Enterprises, among others.

Appeal systems

Customer feedback channels and customer communities.

Local communities

FS13 Access points in low-populated or economically disadvantaged areas by type

OP Financial Group’s service network comprises branch, online, telephone and mobile services. The Group provides personal customer service both at branches and digitally. OP has Finland's largest network of banking and non-life insurance services. This network seeks to ensure that customers have equal opportunities to carry out transactions. Our cooperative banks and their offices across Finland enable effective interaction with customers and the local community. At the end of 2017, the Group’s member banks had approximately 407 (469) branches as well as some 1,340 Otto ATMs (shared between Finland’s banks) around the country. OP-mobile is the main channel for customers’ daily banking, with visits totalling over 18 million during one month. The number of visits to op.fi amounted to almost 9 million.

FS14 Initiatives to improve access to financial services for disadvantaged people

We provide comprehensive services in Finnish and Swedish, but among corporate customers as well as in growth centres and the Helsinki Metropolitan Area in particular, there is a great demand for services in English. For our English-speaking customers, we provide electronic services (op.fi, OP-mobile and Pivo) for carrying out their daily transactions for banking and insurance. With respect to other services, we develop our service capabilities in English in line with customer needs. Some OP-Kiinteistökeskus branches also offer service in Russian. In the Baltic countries, our branches serve customers in local languages, while our electronic services are available in English.

The text version of op.fi website (pda.op.fi) is widely used by people with vision impairments, enabling the use of disability aids such as a speech synthesizer. Customers can log in to OP-mobile using fingerprint authentication. Furthermore, OP provides key code lists in Braille, enabling the use of the eService.

415 Public policy

415-1 Political contributions

OP Financial Group does not support political parties or contribute to the electoral campaigns of individual candidates.

Product liability

OP's salaried employees and members of governance bodies are bound to confidentiality by law in terms of all customer data. We respect bank and insurance secrecy, the confidentiality of customer and patient data, and secrecy obligations of agreements in all of our operations. Our practices guide us to take data protection comprehensively into account in all personal data processing. Through our data protection practices, we protect the personal data of our customers, personnel, partners and other parties interacting with OP. OP is committed to responsible marketing and advertising. By law, customers have to be told certain conditions, properties or risks related to a product or service.

Target

Customer-related information is processed with due care as required by the relevant legislation. We ensure data protection proactively and comprehensively in all our business processes, information systems and product and service development throughout the life cycle of a piece of personal data. We maintain the customer's rights by communicating in an open and intelligible manner.

OP aims to provide all information on products and services that may be of importance to customers when making decisions. OP encourages its customers to improve their financial literacy. Marketing directed at children and young people is highly restricted. OP takes account of this group’s general inexperience and limited capacity to act.

Policies and commitments

In accordance with the obligation to disclose information, our communications are governed by legislation, decrees and other binding regulations as well as guidelines issued by authorities and marketplaces. In this respect, we provide the market with a true, reliable and fair view of OP Financial Group's status and operations. We will not use incorrect or misleading information in our marketing communications. We follow the marketing guidelines defined by the International Chamber of Commerce, the good marketing practice and marketing guidelines within our sectors. We take pride in the quality of health care and patient security and we process patient data with absolute confidentiality.

Instructions have been provided for conflicts of interest in the Code of Business Ethics and in the Group-level guidelines ”Managing Conflicts of Interest at OP Financial Group”. The Act on Credit Institutions defines obligations regarding bank secrecy, encompassing the secrecy obligation concerning a Group customer or personal data in connection with other activities. OP's salaried employees and members of governance bodies are bound to confidentiality by law; bank and insurance secrecy guarantees the confidential processing of all customer data. Employees may process customer information only to the extent required by their duties.

Management approach

OP complies with industry regulations, good banking and insurance practices, good stock market practices and good data processing practices. In addition, OP adheres to several acts, as well as regulations and guidelines issued by supervisory authorities. The Code of Business Ethics provides an ethical foundation for all those employed by OP, whatever their role, position or location. Principles are followed as part of normal processes. The principles are updated whenever necessary. OP Financial Group's risk and capital adequacy principles are confirmed by the Supervisory Board.

OP is taking part in a nationwide project to improve young people's financial literacy. The purpose of this is to prevent serious financial problems among young people and to support their financial management. In 2016, the number of payment default entries reached a record-high level. The right kind of support helps to prevent financial problems and payment defaults. Local banks give lessons at schools to teach financial skills.

Programmes, projects and initiatives

UN Global Compact; the EU General Data Protection Regulation whose application will be begin on 25 May 2018. The regulation will apply to the processing of personal data in all EU member states. Its aim is to create a uniform level of protection of personal data throughout the European Union. The regulation will bring openness and transparency to the processing of personal data and give private individuals more control over their personal data. A data protection project is underway at OP to ensure that we will meet the requirements of the new regulation and, in this way, to further improve our services.

Appeal systems

In 2017, OP Financial Group appointed a Group-level data protection officer whose role is in line with the EU Data Protection Regulation. Data subjects may contact the data protection officer with regard to all issues related to processing of their personal data and to the exercise of their rights under the regulation. Employees should discuss any grievances primarily with their immediate supervisor. Furthermore, OP Financial Group has an electronic notification channel for internal use, through which any suspected breaches can be reported.

417 Marketing and labelling

417-1 Requirements for product and service information and labelling

OP Financial Group complies with legislation which requires that customers be informed of certain terms, properties or risks related to a product or service.

417-3 Incidents of non-compliance concerning marketing communications

On 8 March 2017, the Finnish Financial Supervisory Authority issued a public warning to, and imposed a penalty payment of EUR 400,000 on OP Helsinki due to shortcomings in investment advice.

418 Customer privacy

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

In 2017, OP Financial Group received 26 substantiated customer complaints concerning the processing of personal data or breaches of customer privacy. In calculating the total amount of complaints, the complaints related to one and the same event (for example, a mailing error), were considered as one complaint. In two individual cases, the data protection authority issued written instructions to OP Financial Group. In 2017, OP Financial Group identified in its operations a total of 72 cases in which customers’ privacy was compromised in some way (e.g. leakage, theft or loss of personal data, or accidental or illegal access to personal data).

419 Socioeconomic compliance

419-1 Non-compliance with laws and regulations in the social and economic area

Sustainable investment and ownership

OP manages customers’ assets worth in excess of EUR 78.0 (74.5) billion. OP follows the principles for responsible investment in its asset management.

Targets

OP observes the principles for responsible investment by taking into account relevant responsibility issues in its investment decisions and operations. OP also takes the role of active owner, encourages its target companies and cooperation partners to do business responsibly, and promotes responsible investment in the sector.

Policies and commitments

OP Wealth Management has signed the UN Principles for Responsible Investment (UNPRI). We expect our active investment targets to conform with generally accepted international standards such as the Global Compact and OECD's guidelines for multinational companies.

OP Fund Management Company exercises the voting rights of the mutual funds managed by it, in accordance with the ownership policy approved by the company's Board of Directors. With respect to companies listed in Finland, the Group does its best to discuss grievances directly with the companies prior to AGMs, so that, as a general rule, it will be possible to support the Board’s proposal if it comes to voting. OP Fund Management Company increasingly exercises voting rights in the AGMs of companies listed outside Finland through proxy voting.

Management approach

The main policies of responsible investment are approved by the executive committee of OP Wealth Management. Decisions in line with these policies are made by the ESG unit and the Committee for Responsible Investment, which is chaired by the head of the security investment department. The actual implementation of the ESG strategies is carried out on a case-by-case basis by fixed-income investments, equity investments, real estate investments or the ESG unit or, alternatively, through collaboration between the ESG unit and the said functions.

Sustainable investment activities are carried out through various strategies for sustainable investment. These strategies include the consideration of sustainability issues in investment decision-making, keeping up with international standards, active ownership and engagement, negative screening and positive thematic investment. OP Fund Management implements its ownership policy by actively participating in the general meetings of companies listed in Finland. One of the most important ways for OP to obtain information on and assess the responsibility of companies to invest in, are meetings with the companies’ executives. Systematic monitoring and supervision of ESG criteria of potential and existing investments is carried out through an international partner. If their active investments include companies with violations of international standards or other operations which are not responsible or in line with the investor’s long-term interests, we will address the situation to correct it. If this does not produce the desired effect, the Committee for Responsible Investment may decide to sell the investment.

Programmes, projects and initiatives

OP has signed the Montreal Pledge initiative that encourages investors to report the carbon footprint of their investments. OP Wealth Management is involved in CDP’s climate change, water and deforestation initiatives. OP Wealth Management has also signed the UN Principles for Responsible Investment (UNPRI). At the end of 2017, OP Wealth Management joined the international Climate Action 100+ initiative. The signatories to this initiative engage with the world’s largest corporate greenhouse gas emitters.

Appeal systems

Opinions on OP’s principles for responsible investment and ownership policy may be given at branches and to OP Fund Management Company. Unitholders may also give their opinions at the unitholder meeting of OP Fund Management Company.

 

 

FS10 Percentage and number of companies held in the institution’s portfolio with which the reporting organisation has interacted on environmental or social issues

OP Fund Management implements its ownership policy by actively participating in the general meetings of companies listed in Finland, in particular. One of the most important ways for OP to obtain information on and assess the responsibility of companies to invest in, are meetings with the companies’ executives. At year-end 2017, the OP funds managed by OP Asset Management contained shares from 67 companies listed in Finland. OP Asset Management discussed environmental and social responsibility issues with 21% of these during the year.

OP also has other ways of influencing companies. If their active investments include companies with violations of international standards or other operations which are not responsible or in line with the investor’s long-term interests, OP will influence them to address the situation. If this does not produce the desired effect, the Committee for Responsible Investment may decide to sell the investment.

FS11 Percentage of assets subject to positive and negative environmental or social screening

Positive screening

OP Financial Group encourages its investees and partners to operate responsibly and in line with international standards. Primarily, the most attractive investment targets in any fund are issuers whose operations are irreproachable in relation to international ethical standards. Positive screening is particularly visible in the OP Climate, OP Clean Water and OP Low-carbon World funds. The OP Climate Fund portfolio includes companies whose business benefits from preparedness to climate change. OP Clean Water, in turn, invests particularly in companies that focus on solutions safeguarding the sufficiency of clean water. OP Low-carbon World Fund invests in companies which stand out from the competition on the basis of lower carbon intensity. At the end of 2017, the total value of these funds was EUR 368.4 million or 4.5% of OP Fund Management’s equity fund capital.

Negative screening

OP actively monitors the fulfilment of international standards by investment targets in line with OP Asset Management’s Principles for Responsible Investment, both when making the investment decision and during the time of ownership. Investment vehicles are screened for violations of international standards. Furthermore, OP ensures that its portfolios do not include manufacturers, sellers or marketers of weapons (anti-personnel mines, cluster and nuclear weapons) banned by certain treaties. This screening is performed biannually by an external analysis company. The screening applies to all active OP equity funds and corporate bond funds that make direct investments as well as discretionary client portfolios that make the above-mentioned investments. Furthermore, OP has excluded dozens of high-carbon companies from the above-mentioned funds and client portfolios. This applies to, for example, coal mining companies that make more than 25% or their net sales from energy coal production, and to electricity producers that use plenty of coal to produce electricity. A high-carbon company can avoid exclusion if it takes measures or has a plan in place to considerably reduce its coal dependency. A list of the excluded companies is available on OP’s website.

In 2016, OP Fund Management introduced the OP-Sustainable World balanced fund. The fund applies negative screening to various products and functions. For example, the fund does not invest in tobacco or alcohol manufacturers. At the end of 2017, capital invested in the fund totalled EUR 43.6 million.

 

 

 

GRI Index

GRI content index

All standards: version 2016  
Disclosure Number Disclosure Title Location Omissions Global Compact
102-1 Name of the organization Financial Statements, Note 1: General    
102-2 Activities, brands, products, and services OP Year 2017: OP business segments    
102-3 Location of headquarters Helsinki    
102-4 Location of operations Financial Statements, Note 49    
102-5 Ownership and legal form Financial Statements, Note 49    
102-6 Markets served OP Year 2017: OP business segments    
102-7 Scale of the organization OP Year 2017: Key figures and ratios; OP Year 2017: Personnel    
102-8 Information on employees and other workers GRI information: Social impacts    X
102-9 Supply chain OP Year 2017: Value chain; GRI: Economic impacts    
102-10  Significant changes to the organization and its supply chain Financial Statements, Report by the Executive Board: Changes in OP Financial Group’s structure    
102-11 Precautionary Principle or approach Financial Statements, Note 2: OP Financial Group’s risk and capital adequacy management principles    
102-12 External initiatives GRI information, Corporate social responsibility management    
102-13 Membership of associations GRI information, Corporate social responsibility management    
102-14 Statement from senior decision-maker OP Year 2017: Review by the Supervisory Board; OP Year2017: Review by the director in charge of corporate social responsibility    
102-16 Values, principles, standards, and norms of behavior OP Year 2017: Strategy    X
102-18 Governance structure Corporate Governance: Supervisory Board and its committees    
102-40 List of stakeholder groups OP Year 2017: Stakeholders    
102-41 Collective bargaining agreements In Finland, 91% of OP Financial Group personnel are covered by universally binding collective labour agreements. No binding collective agreements exist in the sector in the Baltic region.    X
102-42 Identifying and selecting stakeholders Corporate social responsibility management at OP, OP Year 2017: Stakeholders    
102-43 Approach to stakeholder engagement OP Year 2017: Stakeholders    
102-44 Key topics and concerns raised OP Year 2017: Stakeholders    
102-45 Entities included in the consolidated financial statements Financial Statements, Note 49    
102-46 Defining report content and topic Boundaries GRI information: Corporate social responsibility management    
102-47 List of material topics GRI information, Materiality    
102-48 Restatements of information No restatements    
102-49 Changes in reporting No restatements    
102-50 Reporting period 1 Jan 2017–31 Dec 2017    
102-51 Date of most recent report 28 Feb 2017    
102-52 Reporting cycle Annual    
102-53 Contact point for questions regarding the report https://uusi.op.fi/op-financial-group/corporate-responsibility/contact-information    
102-54 Claims of reporting in accordance with the GRI Standards GRI information, GRI content index    
102-55 GRI content index GRI information, GRI content index    
102-56 External assurance Independent assurance report    
Management approach  
103-1 Explanation of the material topic and its Boundary Corporate social responsibility management at OP, GRI    
103-2 The management approach and its components Corporate social responsibility management at OP, GRI   X
103-3 Evaluation of the management approach Corporate social responsibility management at OP, GRI    
Topic specific content  
Topic specific content is reported regarding aspects identified as material.
Economic impacts  
201 Economic Performance
201-1 Direct economic value generated and distributed Economic impacts    
201-2 Financial implications and other risks and opportunities due to climate change Economic impacts Information unavailable about economic impacts or costs. OP investigates the possibility to report it in the future.  X
201-3 Defined benefit plan obligations and other retirement plans Financial Statements, Note 33    
201-4 Financial assistance received from government OP Financial Group received no significant financial assistance from the government in 2017.    
203 Indirect Economic Impacts
203-1 Infrastructure investments and services supported Economic impacts    
203-2 Significant indirect economic impacts Economic impacts, OP Year 2017: Local impact of cooperate banks, Tax footprint    
  Procurement Practices  
  Proportion of spending on local suppliers Economic impacts    
205 Anti-corruption
205-1 Operations assessed for risks related to corruption Economic impacts    X
205-2 Communication and training about anti-corruption policies and procedures Economic impacts Information unavailable in part. OP investigates the possibility to report it in the future.  X
205-3 Confirmed incidents of corruption and actions taken No cases in 2017.    X
206 Anti-competitive Behavior
206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices Economic impacts    
Environmental impacts  
302 Energy
302-1 Energy consumption within the organization Environmental impacts   X
302-3 Energy intensity Environmental impacts   X
305 Emissions
305-1 Direct (Scope 1) GHG emissions Environmental impacts   X
305-2 Energy indirect (Scope 2) GHG emissions Environmental impacts   X
305-3 Other indirect (Scope 3) GHG emissions Environmental impacts   X
305-4 GHG emissions intensity Environmental impacts   X
305-5 Reduction of GHG emissions Environmental impacts   X
306 Waste
306-2 Waste by type and disposal method Environmental impacts Data available only on the Helsinki premises. X
Social impacts  
401 Employment
401-1 New employee hires and employee turnover Social impacts   X
401-3 Parental leave Social impacts Information unavailable about the number of men entitled to parental leave. OP investigates the possibility to report it in the future. X
402 Labor/Management Relations
402-1 Minimum notice periods regarding operational changes Social impacts   X
403 Occupational Health and Safety
403-1 Workers representation in formal joint management–worker health and safety committees Social impacts    
403-2 Types of injury and rates of injury, occupational diseases,
lost days, and absenteeism, and number of work-related fatalities
Social impacts Information unavailable about more detailed breakdown. OP investigates the possibility to report it in the future.  
404 Training and Education
404-2 Programs for upgrading employee skills and transition assistance programs Social impacts   X
404-3 Percentage of employees receiving regular performance and career development reviews Social impacts   X
405 Diversity and Equal Opportunity
405-1 Diversity of governance bodies and employees Social impacts   X
405-2 Ratio of basic salary and remuneration of women to men Social impacts Information unavailable about more detailed breakdown. OP investigates the possibility to report it in the future. X
406 Non-discrimination
406-1 Incidents of discrimination and corrective actions taken Social impacts   X
  Local communities  
FS13 Access points in low-populated or economically disadvantaged areas by type Social impacts Reported at Finland’s level only.  
FS14 Initiatives to improve access to financial services for disadvantaged people Social impacts    
415 Public Policy
415-1 Political contributions Social impacts   X
417 Marketing and labelling
417-2 Incidents of non-compliance concerning product and service information and labeling No cases in 2017.    
417-3 Incidents of non-compliance concerning marketing communications Social impacts    
418 Customer privacy
418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data Social impacts    
419 Socioeconomic Compliance
419-1 Non-compliance with laws and regulations in the social and economic area No cases in 2017.    
Active ownership  
FS10 Percentage and number of companies held in the institution’s portfolio
with which the reporting organisation has interacted on environmental or social issues
Social impacts    
FS11 Percentage of assets subject to positive and negative environmental or social screening Social impacts    
         
 

 

Assurance report

 

Independent Assurance Report

This document is an English translation of the Finnish report

To the Management of OP Cooperative

We have been engaged by the Management of OP Cooperative to provide limited assurance on the OP Financial Group’s corporate social responsibility information from the reporting period 1.1.–31.12.2017. Corporate social responsibility information has been presented in the OP Financial Group’s annual report OP Year 2017, in the “Corporate Social Responsibility and GRI” section’s GRI Index (hereafter Corporate Social Responsibility Information).

The Management of OP Cooperative is responsible for the preparation and presentation of the Corporate Social Responsibility Information in accordance with the GRI Sustainability Reporting Standards.

Our responsibility is to carry out an engagement to express an independent conclusion on the information subject to the assurance based on the work performed. We conducted our engagement in accordance with the International Standard on Assurance Engagements ISAE 3000 (Revised). We are independent from the corporation according to the ethical requirements in Finland and we have complied with other ethical requirements, which apply to the engagement conducted. We apply the International Standard on Quality Control 1 (ISQC 1) and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.We do not accept or assume responsibility to anyone other than OP Cooperative for our work, for this assurance report, or for the conclusions we have reached.

The evaluation criteria used for our assurance are the GRI Sustainability Reporting Standards.

Limitations of the engagement

Data and information related to corporate responsibility are subject to inherent limitations applying to data accuracy and completeness, which are to be taken into account when reading our assurance report. The presented Corporate Social Responsibility Information is to be considered in connection with the explanatory information on data collection, consolidation and assessments provided by OP Financial Group. Our assurance report is not intended for use on its own in evaluating OP Financial Group’s performance in executing the corporate social responsibility principles OP Financial Group has defined. To assess the financial state and performance of OP Financial Group, OP’s audited Financial Statement for the year ended 31 December 2017 is to be consulted.

The work performed in the engagement and our conclusion

Our assurance procedures are designed to obtain limited assurance on whether the Corporate Social Responsibility Information is presented in accordance with the GRI Sustainability Reporting Standards in all material respects. A limited assurance engagement consists of making inquiries, primarily of persons responsible for the preparation of the Corporate Social Responsibility Information, and applying analytical and other evidence gathering procedures, as appropriate.

In our engagement we have performed the following procedures:

  • Interviews with members of the Management of OP Cooperative to reassert our understanding of the connection between OP Financial Group’s corporate social responsibility procedures and OP Financial Group’s business strategy and operations as well as corporate social responsibility objectives;
  • An assessment of the Corporate Social Responsibility Information’s conformity with the principles of the GRI Sustainability Reporting Standards for defining content and reporting quality;
  • An assessment of coverage of the material aspects selected for the Corporate Social Responsibility Information and the definition of reporting boundaries in the context of OP Financial Group’s business operations and sector;
  • An assessment of data management processes, information systems and working methods used to gather and consolidate the presented Corporate Social Responsibility Information, and a review of OP Financial Group’s related internal documents;
  • Comparison of the presented Corporate Social Responsibility Information to underlying rules of procedure, management and reporting systems as well as documentation;
  • A review of the performance data and assertions presented in the Corporate Social Responsibility Information, and an assessment of information quality and reporting boundary definitions;
  • Testing of data accuracy and completeness through samples from OP Financial Group’s information systems and original numerical information received from the Group’s member institutions;

Based on the assurance procedures performed, nothing has come to our attention that causes us to believe that the information subject to the limited assurance engagement is not, in all material respects, prepared in accordance with the reporting criteria GRI Sustainability Reporting Standards.

Helsinki, 23 February 2018
KPMG OY AB

(signed)
Raija-Leena Hankonen
APA

(signed)
Niina Turri
Senior Manager, Advisory