Materiality and value creation
Our corporate responsibility strategy and activities align with our most material topics related to our business and the impact on sustainable development.
At the end of 2019 we began a major review and overhaul of our sustainability strategy, with emphasis on the range of impact, scope, focus areas, and targets. The strategy work is based on a number of factors related to our business and the impact on sustainable development including:
- Global macro trends with impact on sustainable development
- Our regular engagement with various stakeholders
- Requirements and info requests especially from our customers and investors
- Our benchmarking of 23 industry peers and the leaders in sustainability
- Our corporate strategy and Code of Conduct
- Assessments of risks and opportunities through Nokia Enterprise Risk Management system
- Analysis of the economic, environmental and social value we can create throughout our value chain. See below.
- Analysis of UN Sustainable Development Goals and Targets and their relevance to Nokia
- International sustainability frameworks such as SASB, TCFD, the Global Reporting Initiative (GRI) G4 and the UN Global Compact
- Our long history and experience in sustainability
Based on the analysis described above, we revised and clarified our materiality, reduced the total number of topics included in our sustainability scope from 20 to 13, adjusted the contents of the topics and assessed their importance to our business success and sustainable development.
The GSMA¡¯s Mobile Economy 2019 report stated that 5G technologies are expected to contribute USD 2.2 trillion to the global economy over the next 15 years.
Sustainability scope and key topics ¨C impact on our business and sustainable development
Global macro trends
Our strategy reveals the following global technology related megatrends: network, compute and storage, IoT, augmented intelligence, human and machine interaction, social and trust economics, and digitalization and ecosystems.
The human potential of technology
Our technology expertise, breadth of portfolio and ability to connect people and things puts us in an excellent position to play our part in addressing today¡¯s global challenges with the UN Sustainable Development Goals as our North Star.
Our customers¡¯ networks served 6.4 billion subscriptions worldwide by the end of 2019. Connectivity in itself enables increased productivity and potential for economic growth. Nokia Bell Labs have looked at the elements that combined to make earlier major gains in productivity growth possible and concluded that four physical networked technologies, all widely diffused and working together, made the difference in the past. The technologies were in energy, transportation, health and sanitation, and communication networks. Digitalization will play a key role in reducing poverty, increasing industrial efficiency, improving human wellbeing in an equitable way, reducing environmental damage and provide better methods of managing scarce resources.
Growing concern of the risks of technology
As the digital transformation of life touches everyone and changes the way we live, work and play, the potential risks of these massive changes and the potential misuse and purpose of technology are in constant discussion. Over 2019, the discussion increased greatly on privacy and security of future networks and future society, on automation and the changing nature of jobs, the use and potential misuse of AI and the impact on society of smart devices when everything and everyone is connected.
In 2019 global concerns around the issue of privacy and security mounted as the amount of sensitive and personal data grows exponentially on networks. As more IoT and smart devices become connected, data and cyber security concerns increase. Debate has increased on the vulnerability of information systems and the trustworthiness of systems, data fraud and theft, breakdowns in critical information systems and the misuse of technology. Technology designed to mitigate these risks and thwart those who misuse technology is a necessity. Our design for privacy, security solutions and due diligence processes to avoid misuse help to ensure the benefits of the technology will be enjoyed by all. Our trustworthiness and ethical approach are part of who we are as a company.
Climate change and the sustainable use of natural resources
Climate change and its effects took center stage in 2019 and perhaps remains the greatest threat to humanity and our planet. In 2020 we moved into what many are call the decisive decade ¨C the last 10 years to do something to stop the march of climate change. The urgency and magnitude of the needed actions became even more evident with unseen climactic events throughout 2019. There is also an opportunity to make a real difference and to play our part in combatting climate change.
While minimizing impacts from our own operations through excellent housekeeping, we also have the opportunity to help our customers meet the growing demand for communications in an environmentally sustainable way. We design products and services that are more energy efficient, encouraging the use of renewable energy, and helping our customers and other industries reduce their impact, encouraging the enabling effect of communications. Resource efficiency and the use of rare minerals and virgin materials also remains a key challenge.
High ethics and transparency
Development in many countries is restricted by corruption, unethical behavior, and a lack of respect for human rights and acceptable labor conditions. We see increased regulation on the need for greater tranzsparency as well as requirements within our industry. Non-financial sustainability reporting requirements continue to increase. Our unyielding integrity is our most important asset. By working as hard as possible to uphold our high standards of integrity internally and in our supply chain, we can make a positive difference.
Increasing urbanization, aging, and migration will put pressure on existing infrastructure and create demand for new solutions. At the same time, economic and political polarization and countries increasingly focusing on their own interests will challenge economic, social and environmental aspects of sustainability. Connectivity and technology can help manage and solve many societal challenges and enable freedom of expression and opinion when technology is used for its intended purpose, but collaboration across sectors is critical.
Attracting and retaining talent
Attracting, keeping, and motivating the best talent is a must for business success and the market for skilled employees in our business remains extremely competitive. We continue to build a motivational high-performance corporate culture that provides equal opportunity and fosters innovation, inclusion, diversity and continuous learning. A company that leads in profit with purpose will attract new talent as we see sustainability becoming an important criteria for potential employees.
Our impact and influence throughout the value chain
We have a variety of ways through which we achieve economic, environmental and social impact. We have different levels of influence on different parts of our value chain - across suppliers, our own operations, logistics and installation, product use, and reuse and recycling. The diagram below gives a view of where we have impact and influence on sustainable development across our value chain.
We have seen growing interest in quantifying a company¡¯s positive and negative impacts of on the environment, the economy and society as a whole. We have been part of Aalto University CEMS program in Finland, through which an extensive analysis was conducted concerning Nokia¡¯s positive and negative social, environmental, and economic impacts throughout the value chain and translated into a monetary value.
We have worked with the Upright Project which looks at value creation analyses and methodologies across several companies and organizations. In the Upright model shown in the figure below, the negative and positive value creations which have been given a monetary value are analyzed and shown in five main dimensions: economic, environmental, health, social and knowledge. Each of these dimensions are divided into several impact areas.
The conclusions in the chart for the 20 impact areas are from the project. The estimations are based on public data and various assumptions. For example, in the economic area, the values of paid salaries and taxes are based on the reported euro values, and in the environmental area, the Nokia reported GHG emissions, water usage and waste figures are converted by Upright into euro figures, using sources such as The Kering E P&L, carbon tax country-specific pricing, and global water tariff averages. The analysis was completed by The Upright Project and reviewed in both Nokia Responsibility Council and the Nokia Board.
Nine main impacts found for Nokia in 2018
Based on the analysis carried out by The Upright Project, our main impacts were shown to be related to our network technology. It brings major net positive impact through knowledge creation (information infrastructure and related innovations), economic benefits, and job creation throughout the value chain. Moreover, the project showed that in environmental issues, the positive impact of communications technology exceeds the negative impacts of our own operational activities, for example, by enabling other industries to become more energy efficient.