Frontpage Common operations Responsibility

Common operations

Responsibility is team work

Our customers can count on the quality and safety of our products. Their responsible choices start when they enter a K-store. Our long-term and committed operations are guided by the general principles of Kesko's corporate responsibility, our responsibility programme and the 'Our Responsible Working Principles' guide.

Impact on society

Kesko's operations generate economic benefits for shareholders, finance providers, personnel, suppliers of goods and services and their employees, as well as municipalities and states.

In 2011, Kesko's salaries and other employee benefits in all operating countries totalled €473 million. Kesko's income taxes were €85 million, and pensions and social security expenses €91 million.

From small food stores to shopping centres

The network of K-food stores is the most extensive in Finland: there were 964 K-food stores in 301 municipalities in 2011. About half of the Finnish population lives within one kilometre of the nearest K-food store. During the year, 78 new K-retailers started business.

Kesko has significant shopping centre projects underway. The Karisma shopping centre, opened in Lahti in November 2011, is one of Kesko's largest retail projects ever. It is the first shopping centre that Kesko has planned and has had built from the very beginning. The Veturi shopping centre will be opened in Kouvola and the revised Ruoholahti shopping centre in Helsinki in late 2012.

We encourage local purchasing

Most of the economic benefit generated by Kesko – 85% of Kesko's net sales – goes to suppliers of goods.

In 2011, Kesko's purchases from Finnish suppliers totalled €5,436 million and from other countries €2,613 million. Retailers' direct purchases from Finnish regions will be presented in the Corporate Responsibility Report.

Sponsorship for children, the young and sustainable development

In 2011, Kesko and its subsidiaries gave financial support amounting to approximately one million euros to various organisations and institutions.

Kesko was the main partner in Your Move, the Sports Event of the Year, organised by the Young Finland Association in Helsinki. The six-day event, targeted at young people aged 13–19, attracted more than 42,000 participants. Kesko's event tent included an area where the young could make birdhouses to be donated to parks in Helsinki. The beanbags and sun beds available for visitors to relax on were donated to the Cancer Clinic.

The theme of Kesko's awards for sustainable development presented in 2011 was materials efficiency. The prizes went to Dodo's urban growers, Netcycler Ltd swapping service, the 'Yritetään yhdessä' (Let's make a joint effort) association, and the Small Green Workshop NY. The total amount awarded was €30,000.

Employee wellbeing

Kesko's programme on wellbeing at work aims to support employee wellbeing and the implementation of Kesko's objectives.

A management model for wellbeing at work was introduced across the Kesko Group in 2011. More information of the model is available in the Human Resources section.

As part of the programme on wellbeing at work, the Occupational Health Service and Human Resources published a guide on wellbeing at work for employees in all the countries where Kesko operates.

The wellbeing of the working community and the quality of management are measured with an annual personnel survey. A similar survey is conducted throughout Kesko and its chain stores. In the 2011 survey, the Kesko Group's results improved from the previous year. Supervisors' performance and equality were estimated to have improved the most; the total average given for supervisors' performance was 3.90, while the implementation of equality in Kesko's operations was rated at 4.11 (scale 1–5).

The 'Our Responsible Working Principles' guide provides a common basis for work

Our Responsible Working Principles guide all K-Group employees to work in accordance with the joint values and the responsible operating practices.

In the 2011 personnel survey, the statement "I act in accordance with our Responsible Working Principles guide" was rated at 4.23 (scale 1–5).

An updated version of the guide will be published in 2012.

Impact on climate change

In the area of environmental responsibility, Kesko is curbing climate change by improving the efficiency of energy consumption and increasing waste recovery.

Environmentally friendly approach in construction

The planning of a new store site or shopping centre is based on sustainable development, an environmentally friendly approach and energy efficiency.

Solutions that reduce the consumption of materials and energy during the life cycle of real estate properties are adopted when building new stores and refurbishing existing ones. The energy efficiency of properties is improved by using condensation heat from store refrigeration equipment, by covering freezers with lids and using LED technology in new illuminated signs.

Kesko works for sustainable building and is a member of the Green Building Council Finland (FIGBC). For the purpose of environmental classification, Kesko has chosen BREEAM (Building Research Establishment Environmental Assessment Method), which is an international standard and best suited for retail properties. The BREEAM method will also be used to assess the environmental impact of the Veturi shopping centre being built in Kouvola.

We increase energy efficiency

In 2011, the K-Group's combined consumption of electricity and heat energy in Finland was 1,071 GWh. Kesko bought 71% of the electricity for the K-Group's properties in Finland on a centralised basis, all of which was carbon-free electricity, produced with nuclear power and renewable energy sources.

In the trade sector energy efficiency agreement, Kesko is committed to cutting energy consumption through different saving measures by some 65 GWh by the end of 2016. This corresponds to the annual energy consumption of 15 K-citymarkets.

The biggest savings are achieved by covering freezers with lids and using LED illuminated signs as well as by adopting adjustable and spot lighting in stores.

Thanks to the recovery of condensation heat, K-food stores won't need distance heat until temperatures drop well below zero. About half of new K-food stores use carbon dioxide collected from industrial processes as coolant in in-store equipment.

We reduce emissions from transportation

In 2011, the total distance covered by all transportation managed by Keslog was 37.9 million kilometres. Keslog's target is to decrease carbon dioxide emissions.

A two-tier trailer – the first of its kind in retail distribution – was introduced for test use in transportation to K-food stores in autumn 2011. The new kind of trailer helps us cut transportation-related carbon dioxide emissions by one third.

Waste recovery

Reducing the amount of waste and shrinkage from stores and warehouses and increasing recovery have a major impact on the environment.

In future, Kesko Food's aim is to direct all waste generated to recycling or to the production of energy and fuel. In 2011, Kesko Food developed waste management models for K-food stores located in Kesko's Greater Helsinki Area and Uusimaa districts. In the development project, new technologies for using organic waste, for example, were introduced and the stores' waste management reporting was centralised. At the end of 2011, the waste recovery rates of the K-food stores which had adopted the new model were nearly 90%.

There are 223 recycling points for customers in connection with K-food stores. In 2011, a total of 338 million cans and 111 million recyclable bottles were returned to K-food stores.

Anttila's new logistics centre, located in Kerava, has the ISO 14001 environmental certificate. The centre uses only about one third of the heating energy consumed by the old warehouse in Hämeenkylä, Vantaa. The recovery rate of the new logistics centre will be further improved by increasing the recyclability of the materials used.

Responsible purchasing and sales

Kesko's ethical purchasing principles guide Kesko's responsible purchasing. For support, Kesko has also drawn up sustainability statements, such as a fish and shellfish statement, as well as statements on timber, jeans and palm oil.

Special attention on working conditions in high-risk countries

In product sourcing, Kesko pays special attention to the human rights and working conditions of employees throughout the purchasing chain. Kesko focuses its monitoring on countries where the risks of violations of these rights are the greatest.

In supplier assessment, Kesko uses international auditing systems, BSCI auditing and the SA8000 certification. The aim is to trade in high-risk countries only with suppliers who have passed the audit.

Product safety

Kesko Food's Product Research analyses product samples of food and home and speciality goods, develops new foodstuffs and tastes, and is responsible for product recalls.

The unit's laboratory has ISO 17025 certification. In 2011, the Product Research unit analysed 10,369 product samples and audited 32 suppliers. There were 87 product recalls during the year, most of which were caused by quality, taste, manufacturing or packaging defects.

During the year, information on nutrition values was added to all of more than 4,600 food recipes in the pirkka.fi recipe service. The Pirkka test kitchen produced 670 new recipes for the recipe service in 2011.

Kesko Food's Consumer Service received 20,215 customer contacts in 2011. The issues that generated considerable discussion and questions during the year included different fats, additives, organic food, Fairtrade products, domestic food and the origins of imported products.

Kesko participates in the global compact initiative

Kesko participates in the UN Global Compact initiative and is committed, in its operations and strategy, to observe 10 generally accepted principles related to human rights, labour standards, the environment and anti-corruption.

International recognition for responsibility

Kesko is included in the most important sustainability indexes and ranked among the best companies in the world in its compliance with the principles of sustainable development.

Kesko has been included in the Dow Jones sustainability indexes for nine years in succession. For the period 2011/12, Kesko was included in the DJSI World and DJSI Europe indexes.

Kesko is included in the FTSE4Good Global and FTSE4Good Europe indexes focusing on responsible investment.

The Carbon Disclosure Project (CDP) has selected Kesko to the Nordic Carbon Disclosure Leadership index.

Kesko is included in the STOXX Global ESG Leaders indexes, which consist of the leading companies in the world measured by the criteria of environmental responsibility, social responsibility and responsible governance.

Since 2005, Kesko has been included in 'The Global 100 Most Sustainable Corporations in the World' list. On the list published in January 2012, Kesko's ranking was 43rd, compared with 26th in the previous year.

In the SAM Group's Sustainability Yearbook 2011, Kesko's responsibility work qualified in the SAM Silver Class in the Food & Drug Retailers sector. In the Sustainability Yearbook 2012, Kesko was selected among the sector leaders in sustainable development. Only the top 15% of the companies in the world qualify in each sector for inclusion in the yearbook on the basis of assessment made by SAM.

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Kesko's ranking in other indexes is presented at www.kesko.fi/en/Investors.

Light and energy savings

The Kodin Ykkönen department store in Lielahti, Tampere, received an honourable mention in the 'Lighting Object of the Year 2011' competition. In the design of in-store lighting, special attention was paid to the atmosphere and highlighting of products. As general lighting was reduced, lower power spotlights were sufficient to highlight products. Electricity consumption is some 35% lower compared with previous lighting designs.

Product's path

Customers are increasingly interested in the origins of products. Kesko illustrates product paths, from farm or factory to stores, on the 'Product's path' pages. The map, published on the kesko.fi and pirkka.fi pages, allows consumers to follow the journey of, for example, Pirkka Fairtrade roses, from Kenya to Finland.

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http://www.kesko.fi/en/
Responsibility/Topical/Follow-the-products-path/