Our progress

Growing our business while lowering the pressure to the environment

Lowering carbon intensity

We are committed to reducing the carbon intensity of our operations. Below is the current status of our progress towards achieving our targets:

Actions taken to reduce CO2 emissions in Telko transports as of August 2024:

• We have developed a calculation model for emissions from all inbound and outbound transports, covering 80% of sales orders and 90% of purchase orders.
• We now receive measured CO2 emissions data for 60% of our transports, an improvement from 45% in 2023.

Achievements in logistics optimization and planning:

• Since June 2024, all packaged goods in Finland have been transported exclusively using biodiesel, reducing greenhouse gas emissions by nearly 90% compared to the previously used fossil fuels.
• Sustainability considerations are now integrated into all logistics-related tenders.

Greenhouse Gas (GHG) inventory for 2023:

We have completed the first version of our Greenhouse Gas (GHG) inventory for 2023, in line with the requirements of standards. In this initial stage, we used generic emission factors from the DEFRA and Ecoinvent databases for our calculations. Activity-based calculations were applied to applicable emission sources, such as purchased products, while spend-based calculations were used for categories like purchased services. Our goal is to gradually obtain measured CO2 emission data from our value chain and replace the calculated figures with more precise data in the future.

The total calculated emissions for 2023 operations are 211 737 tons CO2e, 1002,07 tCO₂e per million EUR (MEUR). Purchased products and services (Scope 3, Category 1) account for approximately 90% of our total emissions, while goods transportation (Scope 3, Categories 4 and 9) contributes around 8%. Scope 1, Scope 2, and other Scope 3 categories collectively produce less than 2% of our emissions. Through this calculation work, we identified areas in our earlier reporting where not all emissions had been fully captured in our Scope 1 and Scope 2 categories. Using 2023 data as our new baseline, our updated emissions figures are for Scope 1: 2.00 tCO₂e per MEUR and for Scope 2: 1.28 tCO₂e per MEUR.

The results of the 2023 GHG inventory are presented in the image below. We are continuing our work by actively refining our inventory to align with the Science Based Targets initiative (SBTi) requirements.

CO2 Footprint Data:

• A mapping of CO2 footprint data availability is scheduled for October–December.
• Work is underway to build a system for collecting and reporting product-specific CO2 emission data. Our goal is to have tools in place by early 2025, enabling us to share order-specific GHG emission data with customers.
  
  

Preparations for Science Based Targets (SBTi):

• We are actively preparing to commit to Science Based Targets (SBTi) to guide our future carbon reduction efforts.
  
  

Improving recycling and waste management 

Our organization is committed to continually reducing waste. In 2023, we significantly reduced product waste compared to the previous year. In 2023, the hazardous raw material waste generated by our operations was 0,16 tons per million euros (MEUR) of net sales, a decrease from 0,26 tons/MEUR in 2022. The absolute amount of hazardous waste generated was 33,8 tons. This waste is classified as hazardous regardless of its chemical composition. The total amount of non-hazardous waste from our operations was 30,9 tons in 2023.

At our chemical terminal in Finland, we manage significant quantities of organic solvents. As a result of these operations, we generate VOC (volatile organic compound) emissions. In 2023, our VOC emissions totaled 1364 kg, compared to 1671 kg in 2022.

For all packaging operations, we assess the availability of recycled materials that can be used without compromising safety, quality, or risk of generating additional waste.

The quantity of recycled raw materials sold is included in the figures provided in the next section.

Driving sustainable innovations 

Depending on the business segment, our sales teams focus on identifying products with a positive CO2 handprint or promoting the sales of these products. Our plastics segment has been tracking sustainable product sales for several years, and the sales of sustainable plastics have consistently increased. In 2023, bio-based and recycled plastics accounted for 2.7% of our total plastics sales. While we are still in the early stages quantitatively, the trend is very encouraging.

Improving the Telko experience for people in our value chain

Ensuring employee safety 

We are committed to improving the safety culture within our company and are working step-by-step to achieve this goal. The following measures have already been implemented to support our targets:

1. Emergency Instructions: Emergency instructions are available on the intranet for all our premises.
2. Visitor Safety Briefing: Personnel are instructed to begin meetings with visitors by reviewing the emergency procedures.
3. Regular First Aid Training: Our HR team ensures that mandatory safety trainings are organized regularly and that a sufficient number of employees are always trained. We also provide first aid training in smaller offices where official requirements do not apply. For example, in 2023, we organized voluntary first aid training for our employees in Kazakhstan and Uzbekistan, with nearly all staff participating.
4. Safety Walks: In 2023, we aimed to conduct two safety walks at all our locations and subcontracted warehouses, completing about 87% of these. While safety measures are generally well managed, we identified areas for improvement in some cases. Only one location required significant improvements, which have been successfully implemented.
5. Incident Reporting Tool: In late 2022, we introduced a new tool for reporting safety incidents and observations. Given the low number of blue-collar workers in our company, only five safety incidents were reported by the end of August 2024 by our employees. However, in our newly acquired subsidiary, Swed Handling, where a significant portion of employees work in production and transport operations, the reporting of safety issues is actively utilized.
6. Incident Investigations: All reported incidents have been thoroughly investigated. In one case, we introduced preventive measures, including defining the necessary personal protective equipment (PPE) for each employee and ensuring access to the required gear. Another incident led to a revision of emergency preparedness across all our offices.
7. Certifications: Required safety certifications for each employee are tracked in our HR management system. Supervisors are responsible for ensuring that their team members maintain valid certifications.
8. PPE Assignment: At the beginning of 2024, we defined the necessary PPE for each employee and ensured they received the appropriate equipment. We are currently developing a tool within our HRM system to ensure the same for all new employees.
9. PPE Management Tool: A tool for defining and managing PPE requirements is under development in our HRM system and will be operational in 2024.

Improving the employee experience 

Employee engagement survey. The PeoplePower® index was 80.8 in 2023 exceeding the global general norm 74.3. Telko’s PeoplePower® rating stayed at a very good AA+ level. The response rate of the survey was a respectable 93.9%. The PeoplePower® isn’t the full survey Telko has for its employees. The complete survey consists of eNPS question, Sustainability questions, Open questions and Background questions. Our score in 2023 for social was 3.69, with 4 being the highest possible rating. (benchmark?) Our goal for the 2024 is to maintain at a minimum, our current score.

Mental support. Based on the gathered feedback the used mental health support service has been effective. Our employees have reported an 8.4% increase in their efficiency since the start of the service. They also noted a 23.5% decrease in stress levels. Additionally, 9.2 out of 10 employees expressed satisfaction with the service, and 100% would recommend it.

Improving the customer and principal experience

To further develop our operations, we measure how well we are serving our customers. In 2023, our customer Net Promoter Score (NPS) was 60 (65 in 2022). Our target for 2024 is to measure and analyse how the acquisitions influence on our customer NPS.

On June 13, 2024, Telko hosted a webinar titled “Sustainability in Plastics: Transitioning from Challenges to Opportunities.” The event focused on the polymer industry’s shift towards sustainable practices, addressing the environmental challenges posed by plastic waste and greenhouse gas emissions. Experts from Telko shared valuable insights on green alternatives and the future of the plastics industry. Organizing webinars can be a highly effective way to engage with your customers, share expertise, and build community. For that reason, we are planning to continue to host similar webinars in the future.

Telko have hired university students for summer and part time during winter to give them the opportunity to get professional experience during their studies. Our latest cooperation is with one of our employees, who is writing their master’s thesis in collaboration with Telko. The thesis is about the development of bio-based materials for filament applications. 

Driving sound governance practices at all levels

Sound governance

In 2023 we reached the target of completed annual Code of Conduct and Compliance trainings. We also continued improving our compliance work with process developments and automation including internal controls, quality, and environmental management system and the systematic risk management process.

Our performance in different areas of compliance in 2023 was following:

• Number of whistleblowing cases: 4
• All the four whistleblowing cases were investigated thoroughly. Two of them lead to the corrective actions or refinement of our working methods.
• 100 % of employees completed anti-corruption and anti-bribery training as a part of compliance training.
• No suspected breach of corruption or bribery cases were identified.
• 100 % of employees completed the anti-competitive training as a part of compliance training.
• In total 1514 sanction checks were completed which was 100% of all new partners.
• No suspected breach of sanctions regulation cases was identified.
• Risk assessment was reviewed twice, and mitigation plans were updated accordingly.
• Execution status of risk mitigation plans was monitored four times, and more frequently in the identified risks which has required closer attention to 2023.

Sustainable value chain 

We have successfully completed a pilot project to assess the sustainability risks of our suppliers using an AI-based tool. This assessment included 100 of our largest product suppliers, covering approximately 94% of the products purchased in 2023.

The AI tool performed automatic scoring and risk analysis based on industry and country-specific risks in areas such as labor rights, political unrest, health and safety, human rights, environmental impact, governance, consumer unrest, and strategic development. As a result, we obtained a comprehensive 360° risk score for each supplier, reflecting also aspects like the regulatory environment. The suppliers were positioned in a risk matrix shown below, with the impact factor represented on one axis and the risk score on the other. The tool also displayed the risk score trend over the past two years for each supplier.

The assessment revealed a generally low risk level among our suppliers, with only four suppliers placed in the high- or mid-priority areas of the risk matrix. We conducted an in-depth review of these four suppliers to better understand their actual risk levels.

• The supplier in the high-priority area had an low score only in the environmental category. However, the AI tool found no specific alerts for this supplier, and their score trend was stable. Additionally, the supplier's certifications and policies indicated active engagement with environmental issues.
• Of the two mid-priority suppliers, no alerts were found, and their certifications and policies demonstrated that they were addressing their weaker areas.
• For the third mid-priority supplier, both positive and negative alerts were found online. Historical data showed that this supplier had a very good overall sustainability risk score a year prior, which then suddenly dropped, followed by a gradual and continuous improvement.
  
  

We concluded that there is no immediate sustainability risk with these suppliers that would require actions. We will continue to monitor their risk levels closely.

Looking ahead, we will continue to perform risk assessments, deepen our analyses, and take any necessary mitigation actions. In the future, we also plan to expand this process to include our service providers.

The risk matrix of the 100 largest product suppliers covering approximately 94% of our purchases.

Product Compliance – Palm Oil

In 2024, we began preparations to comply with upcoming EU deforestation regulations. As part of this process, we systematically reviewed our product portfolio to identify any potentially affected products. Based on products purchased between January 1, 2023, and October 31, 2024, we have gathered the following information:

• 62.8% of the identified potentially affected products contain palm oil-based ingredients.
• We have obtained RSPO (Roundtable on Sustainable Palm Oil) certification proof for 64.5% of products containing palm oil-based ingredients. For the remaining products, we are awaiting responses regarding their compliance. All palm oil-based products sold in the EU are already confirmed to be RSPO certified. 
• We are awaiting information on the raw material origins for 6% of products that may contain palm oil-based ingredients. The total purchased quantity of these products was only 5000 kg during 2023-2024. 

• Additionally, we are working to obtain traceability information for palm oil-based products down to the plantation level.

Continuous development of our sustainability programme

We have chosen the EcoVadis sustainability assessment as an objective measure of our sustainability progress. We participate in the assessment annually and have consistently improved our score since 2020.