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.