Stakeholder analysis

Stakeholder groups' expectations of Kesko, Kesko's activities to meet these expectations, and indicators measuring the results are described in the stakeholder group analysis of the Group's responsibility work.

Stakeholders

The company's financial performance is usually considered from the shareholders' point of view. When estimating performance in terms of corporate responsibility, there are several stakeholder groups with their own expectations which may also be contradictory. A responsible company must be able to balance between different expectations, to allow all stakeholder groups to feel that the company has succeeded in its corporate relations.

At Kesko, a stakeholder analysis and action plans concerning stakeholders are included in the units' annual and long-term planning. Success in co-operation is measured in many ways. The table below presents Kesko's activities concerning each stakeholder group, their expectations concerning Kesko, and the indicators to assess performance.

Authorities (EU, state, local authorities)

Kesko's activities
Practical expertise for developing the operational base of the trading sector and economy. Direct and indirect taxes and fees contributing to the wellbeing of society. Cooperation with local authorities for developing and maintaining the store network.

Stakeholders' expectations
Strict compliance with legislation. Good tax-paying ability, stable employment. Maintenance of a comprehensive store and distribution network.

Indicators
Amount of taxes paid, number of jobs, payroll, investments, structure and regional coverage of the store network.

Personnel

Kesko's activities
Participation of personnel in the planning and development of operations. Improving the quality of management. Maintenance of work ability, in-house job rotation, continuous training, promotion of wellbeing in the working community, motivating pay.

Stakeholders' expectations
Activities that maintain and develop job satisfaction and safety. Results that contributes to the appreciation of job and workplace. In-service training, promotions, permanent jobs.

Indicators
Job satisfaction survey, performance and appraisal discussions, in-house customer satisfaction survey. Employment disputes, turnover, absenteeism, accidents, training statistics, retirement age. Attraction as a workplace.

Shareholders

Kesko's activities
Contacts with shareholders (TradeMaker magazine for stakeholders) and representatives of the capital market. Plenty of information about financial performance and operations, usually on web pages. Competitive dividend policy.

Stakeholders' expectations
High annual dividend yield. Management of corporate governance, social and environmental risks.

Indicators
Number and structure of shareholders, share trading, annual dividend yield, listings in sustainable development indices, trading sector comparisons.

Suppliers of products and services

Kesko's activities
Goods from agricultural producers, manufacturers, and importers. Store network planning and construction services. Furnishings, equipment, supplies, information systems, training and advertising for own and K-retailers' businesses.

Stakeholders' expectations
Business growth, good liquidity, long-term business relationships.

Indicators
Development and breakdown of purchases by country/area. Number of suppliers, concentration of purchases. Terms of payment of invoices.

K-retailers and wholesale customers

Kesko's activities
Vertical cooperation agreement between Kesko and K-retailers. Kesko is responsible for developing the Group's operating system and retail concepts, for store sites, information systems, marketing, training, etc. Kesko also sells and delivers products to many wholesale customers.

Stakeholders' expectations
K-retailers expect competitive store sites, retail concepts, selections and prices as well as services and other solutions contributing to competitiveness. Wholesale customers expect competitive prices and service.

Indicators
Customer satisfaction surveys. Concentration of K-retailers' purchases in Kesko. Trends in K-chains' market shares. Development of sales to wholesale customers.

Consumers

Kesko's activities
In cooperation with the K-retailer chains, retail concepts, product selections, marketing campaigns that interest and satisfy customers. Plussa customer loyalty programme, Pirkka magazine for customers, customer feedback systems.

Stakeholders' expectations
Overall responsibility, easy shopping, help and advice. Opportunities to make ethical consumption choices, recycling etc. services.

Indicators
Customer satisfaction surveys. Trends in K-chains' sales and market shares. Corporate image surveys. Amount and quality of feedback.

Non-governmental organisations and trade unions

Kesko's activities
Presentation of activities, contacts in the preparation and implementation of operating principles, policies and systems. Cooperation agreements, financial support to socially important organisations and institutions.

Stakeholders' expectations
Overall responsibility, clear operating principles and sourcing policies, reliable results reporting, open and regular communications.

Indicators
Corporate image surveys. Amount and breakdown of support going towards the public good.

News media

Kesko's activities
Information about operations required by the Rules of the Securities Exchange and other information. Annual Report, Corporate Responsibility Report, Internet pages, stock exchange and other releases, presentation material, news conferences, services of district communications officers.

Stakeholders' expectations
Open, comprehensive, reliable and fast communications.

Indicators
Daily media monitoring, corporate communications surveys, comparisons ("competitions") of annual reports, investor communications, corporate responsibility reports.

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