CSR Seminar, Riga 1-2.12 2004
18/04/05
Contribution of Corporate Social Responsibility to Building a Sustainable Energy Sector
Contribution of Corporate Social Responsibility to Building a Sustainable Energy Sector
1.-2.12.2004 Riga, Latvia, Riga Congress Center
Main Conclusions
The energy sector has addressed CSR –type issues for years in all of these countries. The challenge is to give names to the issues and to link the CSR aspects into business management. This Escobalt / Senet –program is an initiative to support this task. The Baltic countries and energy sector companies have mainly worked with new regulations and big questions concerning privatisation, sharing of responsibilities between different actors on the field, sharing of costs and in the end – the right energy price for different users. CSR aspects are connected to this work, but it is difficult to identify them or bring them to the discussion and public reporting. This conference provided good cases, some tools and a discussion forum for people working on this sector. Arto Nuorkivi from Helsinki University of Technology was one of the chairmen in the conference and conluded the discussion as follows:
-CSR concept is consistent with the profit driven operations in a company. It saves resources in running the business.
-Energy sector is a key player in adapting these consepts as emitting a lot to the environment and using resources (fuels, financing).
-Measuring the performance. We should provide real numbers of what we have done and how we have managed. In public discussion it is significant to give facts instead of opinions.
-We have potential in all our countries. It was seen even in the PwC CSR survey among the biggest Finnish companies that quarter of the companies did not recognise the concept of CSR in their web pages at all, which indicates that there is still lot work to be done.
”Drivers of Corporate Social Responsibility (CSR)”
Chair: Ugis Sarma, Director of Energy Department, Latvian Ministry of Economy
Welcome words by
Ugis Sarma, Director of Energy Department, Latvian Ministry of Economy
Latvia has launched a state program for utilising the EU Structural Fund financing. The program emphasises commercial solutions, which mean in practise that different management systems on different levels should work together. The challenge is how to develop regulation that supports the practical systems.
In Latvia there are several different solutions, which cause the challenges for example how to divide the costs so that every flat in a house pay equally for their energy use covering all the necessary costs. From the legislative point of view the local governments should not be the quaranteers of energy supply but the organisers of the systems. The responsibilities should be addressed so that the interfaces between different actors are clear: what shall the operator take care of, what is the responsibility of householders and so on. The regulators shall compromise in their preparation so that all the interests, needs and resources go together. CSR approach offers one solution to take care of necessary needs and thus gives us possibilities.
Opening Speech:
Corporate Social Responsibility; changing the way we think and live?
Deputy Mayor Martti Lipponen, City of Vantaa.
City of Vantaa is 4th largest in Finland. The Finnish State only takes care a few issues and municipalities and private companies are mostly responsible for the infrastructure. Vantaa is gateway for Helsinki metropolitan area and wants to be the logistic center for the area. Population growth has been enormous during the last 50 years: from 15 000 on 1950 to 184 000 now and still projected 220 000 until 2010. Vantaa airport is the biggest in Scandinavia serving 10,2 million passengers per year. Location is the strength – it’s faster to reach Beijing from New York via Helsinki than via Los Angeles. An Aviapolis area of 42 km2 is to be developed.
About CSR: According to the survey, prepared by PricewaterhouseCoopers Finland and Communication Agency Pohjoisranta, CSR is considered very high on public sector – opennes and democracy supports this approach. In companies’ policies CSR is growing. Environmental and personnel reporting is already high and CSR reporting is growing. Energy sector has the same challenges as other industries. Kyoto protocol supports the efficiency, as it needs to cut down GHG emissions.
Vantaa energy has done a lot and good development on CSR area, but of course there is still lot to do.Does CSR change thinking: yes – especially in energy sector the public pressure requires action.
Presentation: Lipponen.pdf Article: Article Lipponen
Clear demand for CSR; the changing and turbulent business environment
Jorma Immonen, Counsellor (Legal Affairs), Ministry of Trade and Industry, Finland
CSR has come to the discussion recently, but the approach is not very new in Europe and Nordic countries. The Public authorities have already taken a significant role in taking care of CSR issues and companies see their roles quite clearly. It is more a question on how to take the necessary voluntary actions.
Some economic problems (like Enron) have waked up further challenges. New legislation has been made in the US and for example Ecofin council is going to launch a new directive where it requires an audit committee for all listed companies.
OECD has made common guidelines for the business community. They are the only international set of instruction supported by governments, trade unions, NGO’s and business. They are aimed at support both the companies and the society.
In Finland there is a programme for Corporate Responsibility. The Ministry of Trade and Industry has given own guidelines, which are aimed at promoting CSR at a local, regional and international level.
Presentation: Immonen.pdf Article: Article Immonen
Ministry Guidelines on Promotion of Corporate Responsibility
”From words to facts; building CSR into systems and processes”
Chair: Ugis Sarma, Director of Energy Department, Latvian Ministry of Economy
Corporate Social Responsibility; from a general framework and concepts to practical tools, Global trends in CSR
Senior Manager Sirpa Juutinen, PricewaterhouseCoopers
Definition of CSR is “a voluntary approach to integrate environmental, economic and social considerations into all business activities” (according to the European Multistakeholder Forum). The basis is to follow the law but also do other good and right things going over and above laws in order and addition to that not to go to the grey area where there might appear issues causing problems in the future.
Stakeholder discussion is essential. A stakeholder is a person or group to whom the company has influence on or who can have influence on the company. Generally it’s important to make the difference between different countries, as the infrastructures especially on the social sector are so different. Here Ms Juutinen used the example of questionnaires, where for example the workers’ childrens day-care is asked. The companies organising day-care in societies where it is not organised by others are credited. The companies not organising it, but located in societies where day-care is organised by the municipality, are not credited. Thus the results are not comparable.
The PwC survey on CSR in Finland highlighted the issues, which are seen under the headline of CSR. It discussed how companies report both in their reports and on their web pages (see Mr Lipponens presentation too).
A social checklist can be used for example according to the Global Reporting Initiative (GRI, see more at http://www.globalreporting.org/). That is in order to ensure that we cover the necessary issues.
CSR can be integrated into practise by identifying the business drivers for CSR. First you have to identify the needs and then define the benefits, which support your competitiveness. This can be described as loop beginning with strategy then implementation and after that assessment. After going it once through, you begin from the start again. Both core processes and support processes in an organisation have to be gone through in the light of CSR.
CSR gives better competitiveness, creates trust and gives an opportunity to live up with one’s values.
Presentation: Juutinen.pdf Article: Article Juutinen
12.00 – 12.30 Joining forces, sharing results; Energy and Environment in the EU
Director General Markku Nurmi, Ministry of Environment
Johannesburg summit was a big happening fostering many projects also on the area of energy and environment where Finland has been active. EU has been a forerunner on these arenas. There are many directives for energy efficiency and renewable, intelligent energy. CHP and district heating are parts of the energy efficiency, which we all are familiar with.
Mr Nurmi showed some general statistical information and reporting from Europe. Population is getting older, transportation is growing, waste problem is big – level of recycling is lower in the new EU member countries. The share of renewable energy shall be improved.
Environmental statistics from Finland: In the Environmental Sustainability Index (see more at http://www.yale.edu/ycelp/esi.htm) Finland is number one and Baltic countries are also well placed. In the Eco-efficiency Ireland is high. In the CHP utilisation index Denmark, Netherlands and Finland are the top three countries. Finlands sulphur emissions have decreased 90 % in 20 years. NOx emissions have not decreased that much because of for example the traffic. Pulp and paper industries’ load to the rivers have decreased significantly. That concerns also air emissions except nitrogen.
Climate change. Changes in Arctic area can already be seen. Ice is smelting earlier and also in Central Europe’s ski resorts the seasons are shorter year by year. Floods cause problems and temperatures rise. In the EU ETS the CO2 decrease burden is shared between countries according to political negotiations.
Finland was one participator in the Pakri Wind Park in Estonia.
Mr Nurmi showed some comparison about total energy consumption per GDP and population and other environmental indicators, which higlighted the country distinctions.
A question was made from the audience: The massive flow of directives is problematic. Wouldn’t it be easier to take some good technical initiatives to foster good technologies like for example EU ETS is supporting? Answer: The practical solutions should be primary.
Conclusion of the chairman: For example Latvia has from a wide view some serious challenges but in practical sense shows very good performance. Thus the bottom-up approach can be emphasised.
”Wanted: transparency!”
Chair: Arto Nuorkivi, Helsinki University of Technology
Networking responsibly; true value of stakeholder dialogue
Marja-Liisa Virtanen, TeliaSonera Finland
In TeliaSonera the CSR begins of values (“Add Value, Make It Happen, Show Respect”). All the values support CSR thinking but the last one – Show Respect – maybe the most important from the CSR point of view. That concerns all the stakeholders in practise. After the values a CSR Policy statement was created. The CSR is split into four: Environment, Community, Workplace and Marketplace.
From the stakeholder point of view the company equals with its workers. On the other hand all the stakeholder groups both represent and guide the company. However the workers count the most. The competitiveness of the company is mainly based on the employees. Another important stakeholder group is the customers. They are the number ones to maintain the business. The telecom sector is heavily regulated, which makes the communication with authorities very important.
Customer dialogue is heavy and communication is had every day. Some groups are not active themselves and that is why TeliaSonera has organised formal dialogue (for example lunch meetings) with those, who need special care. Those groups are for example blind, deaf, elderly users, parents being worried about their children using the Internet and so on. Virtanen.pdf
Energy solutions of sustainable development
Jouni Tolonen, Adviser (Electricity production and electricity market),
Finnish Energy Industries Federation FINERGY
Finergy published a CSR guide for the energy industry already on 2001. That was kind of an amendment to the general guide published by the Confederation of Finnish Industry and Employers. During the publication process several drivers for emphasing the issue were identified, like: the industry reputation, the security of supply, age structure – need for new employees.
The economic growth needs energy. Finland is quite energy intensive country due to heavy industry use. Fortunately the energy mix is sustainable as none of the sources is dominating the field.
Some indicators on Economic responsibility. There are many paths which lead economic well being from energy companies to the society. However, although energy is heavily taxed, Finland is the second cheapest country in the EU (household prices) and supply security has enhanced very well.
Environmental indicators. Renewable energy sources have developed in Finland. That concerns also the share of CHP production. The emissions to air have decreased. There is a system, where companies can make voluntary energy conservation agreements (see Mr Silvonen’s presentation). 75 % of energy volume is covered by these agreements.
Social indicators. Finergy has a project with schools and institutions, where energy sector provides summer jobs and practitioning possibilities to the students.
The information to the stakeholders has to be honest and the actions and communication shall meet each other in all situations.
”Communicating responsibility”
Chair: Arto Nuorkivi, Helsinki University of Technology
Measuring and reporting corporate social responsibility according to the Global Reporting Initiative - Case Vantaa Energy Ltd:
Managing Director Ismo Jauhiainen, Vantaa Energy Ltd
Vantaa Energy has a long history of environmental conscience having used CHP for 35 years, installed methane use collected from an old landfill and bought significant portions of hydro and wind power. The ISO 14001 Environmental Management System has been in use for 8 years and the Environmental report has been produced since 1997. The HR report has been made for internal use and the CSR report was made for the first time on 2002. It was disclosed as a supplement to the company’s annual report and done according to the GRI guidelines – not literally but slightly modified.
Vantaa Energy has found many issues to support the need for CSR reporting.
Vantaa Energy CR report was awarded in the CSR reporting competition in Finland.
Levels of CSR according to Vantaa Energy are: compliance with legislation, response to stakeholders’ expectation, spontaneous responsibility, and competition benefits. All levels should be reached.
Presentation:Jauhiainen.pdf Article Jauhiainen2.pdf:
Case Kesko - Head of Corporate Responsibility, Jouko Kuisma, Kesko Corporation
CSR was started on 1940 when the company was established. It has taken care of its duties: paid bills, salaries and taxes and also dividents every year except 1967. The first GRI report was published on 2001. Kesko thinks this has nothing to do with charity, but to support the business. The information systems have a significant role – to get real data, to use it in a right way in order to show and emphasise right issues (facts, risks and also failures).
The report also has to be utilised efficiently. One means of enhancing the usability and credibility of the report is external assurance.
Kesko has introduced some new and very interesting indicators on the Economic Performance. Those are for example the economic benefits distributed to different stakeholders and divided by Finnish Regions.
Kesko has reported and is concerned about the emissions rates of their energy use. When Finland and Baltic countries are compared, it can be seen that the emissions are much higher in the Baltic countries than in Finland. In the near future Kesko will require declarations from the energy suppliers also in Baltic countries in order to decrease the emissions levels caused by energy production.
Kesko has been awarded in the Finnish reporting competition every year since 1998. The prices range from best newcomer to best overall reporter (three times). Kesko has also had success in international comparisons. This year in the Global Reporters Survey Kesko was 14th overall and number 1 in trading sector.
Presentation: Kuisma.pdf Article: Article Kuisma
Situation and tasks of local and regional authorities in lights of EU energy policy
Andris Akermanis, Latvian District heating association
There are three main problems in Latvia: geographical location, low incomes (41 % of EU average), and energy consumption.
The tariff structure is developed so that the big users will have it on cheaper price. This gives competitive advantage to the district heating companies.
Wood chips have become more expensive because of the market influence caused by export of wood chips to Sweden.
Latvia is heavily depending on the import of electricity from Russia, Estonia and Lithuania. However Estonia and Lithuania are closing two big nuclear stations, which are causing challenges to Latvia.
Riga is the heavy user of energy in Latvia and 52 % of energy is produced, supplied and used in Riga.
Fuelling of distric heating is dominated by gas (80 % today), oil goes down, and the green sector goes up slowly.
District heating tariffs vary from the rate of 10 LVL/MWh in Riga to 23 LVL/MWh in smaller cities.
In Latvia all the energy related regulation is mainly on one Energy Law. Other legislation is subacts and policies on different issues.
CSR in Latvia: The first steps should be that each operator takes their place in the supply chain (reference to the opening remarks of Mr Sarma). The legislation should be rationalised from that respect. Local renewables use should be supported. The municipalities should ensure the income levels of local people in order to be able to pay their energy bills. The heating enterprises should provide higher energy efficiency. The housing companies should secure energy efficiency in their own premises. Generally environmental issues, economical efficiency, and security of supply are the main factors.
Presentation: Akermanis.pdf Article: Article Akermanis
Conclusion by the chair Arto Nuorkivi:
-CSR concept is consistent with the profit driven operations in a company. It saves resources in running the business.
- Energy sector is a key player in adapting these consepts as emitting a lot to the environment, using resources (fuels, money).
- Measuring the performance. To provide real numbers of what we have done and how we have managed. In public discussion it is significant to give facts instead of opinions.
-We have potential in all our countries. It was seen even in the PwC CSR survey among the biggest Finnish companies that quarter of the companies did not recognise the concept of CSR in their web pages at all, which indicates that there is still lot work to be done.
Inside CSR; values, ethics, brand and business image
Chair of CSR Sweden, Former Managing Director of Johnson&Johnson, Ragnar Svensson.
Mr Svensson explained the management principles of J&J. The company has CSR incorporated into its core principles more or less since 1940’s. The company credo was written on 1942. The same core values are implemented all over the world in all J&J working places. The credo is also reviewed every second year. The main question is “How do you rate the company concerning the responsibility of Credo”. The results have developed very well since 1990 (from 61% to 85 %). When it is put together with the result curve they go hand in hand. No scientific proof of their correlation can be established, but anyway, it happens to be so.
Presentation: Svensson.pdf Article: Article Svensson
”Development of Energy management in Eastern Germany after the reunification.”
Kuno Schallenberg, Energieplus e.V
The energy use of former GDR was based on lignite mined in the south and southeast. It was centrally managed, inefficient and had bad environmental perfomance. Energy was rather cheap to the users and energy use was not recognised as a problem. The heat was included in the rents and people were not motivated to save energy. After the reunification the energy bills are allocated according to the use thus resulting to individual interest of using less. Also thermal insulation is stipulated in the law. The Energy Management Act supports competition and gives consumers the freedom to choose their energy supplier. However this system is still under development as the transmission costs have appeared to be too high to allow proper competition. Also tax controlling has been used to support RES as well as a RES law, which quarantees the compensation to regional RES energy suppliers.
Since 1990 GNP has increased 20 %, primary energy consuption has remained more or less the same, but energy related CO2 –emissions have decreased 20 %. When the energy consumption is presented as curves for industry, trade and business and households, it can be seen that money is the best consultant: tax law seems having had the best influence on energy consumption. That can also be seen after introduction of the RES act, which quite clearly supported the construction of wind, hydro, biomass, biogas, solar and other RES.
Comment from audience: We should be very fare concerning the German side and comparisons of different years. The structure change in East Germany has made the major decrease of CO2 and has also major effect on other changes we saw here.
Mr Schallenberg agreed the comment in some extent.
Presentation: Schallenberg.pdf Article: Article Schallenberg
”Efficient use of energy”
Chair: Karl-Heinz Lesch, Graz, Austria
Energy conservation agreements; how to make more from less?
Seppo Silvonen, Motiva.
Mr Silvonen thinks that voluntary energy conservation agreements (VA) have an indirect but clear influence to CSR performance thus belonging well to the agenda of this conference.
The system started on 1992, but quite little happened until 1997. The system was revised on 1996 and since 1997 the succes started.
The VA concept is incorporated into the Finnish Climate Change strategy. The industry is well covered by the VA, 81%, as well as the power production where 90 % is involved. There is still space for increase in housing, buses and coaches and property and construction sector.
All the sectors have bot individual and common features in the agreement. All sectors have also targets and duties, which have been set by the program. Targets and duties are set for all levels operating in the program – the ministry, Motiva, municipalities, branch organisations and participating organisations.
All the functions in the VA program are designed and documented in a detailed way. Motiva provides the data administration and it collects all the results in databases.
The conserved energy has increased well and the reporting shows that companies are still making actions as having both implemented them, made decisions concerning new actions and still considering other new actions. It is said that about two development ideas of three found in the energy audits are put into practise. It is estimated that VA has a remarkable role in implementing the energy efficiency programs.
Comment from audience: It seems that nuclear power program is more or less equivalent to the CO2 decrease having achieved by this program.
Presentation: Silvonen.pdf Article: Article Silvonen
Sustainable world demands sustainable energy solutions – Building Efficiency
Karl-Heinz Lesch, City of Graz
“As long as we follow the path we are going, we will end up where it headed.” (Old Chinese Proverb).
It is important to concentrate more on energy services than in kilowatt-hours in order to decrease consumption. There is the programme KEK (Kommunales Energie Konzept) in City of Graz fostering better energy efficiency.
The targets of intelligent planning in Graz have been set for constructing and equipping the houses on a concept of sustainable building.
The City of Graz examined throroughly other similar projects before starting their own and tried to learn by them. The project targets until 2010 are: 50 % decrease of CO2, -60% classical pollutants, -18 % electricity, and +40% share of RES.
So far there are 150 different participants in the programme.
Other building blocks of the KEK program in Graz in addition to Energy conscious building are Ökodrive, Solar Initiatives, Clean Heat, Thermoprofit, Ökoprofit-energy and Municipal Energy Management.
Graz was awarded as the European Sustainable City award on 1996.
More information is available at http://www.graz.at/umwelt
Idea of Energy saving in Poland – Current achievements and regulations
Ewa Blaszczak- Brzozowicz, House of Europe
On 1990 a new energy law was given in Poland. The primary aims of the law are to ensure the security of supply, to take into account the consumer interests and to modernise the heating systems.
In Poland the increasing use of energy produced by traditional sources is identified as the problem no 1. However, the results in improving the situation are promising. New renewable sources have identified and the main option is hydropower. So far there are 170 large hydro energy stations in Poland and 300 small private stations. Also water mills are used. The interest to wind power is increasing. Thermal energy is also an option. That is supported by geothermal auditings, where the resources are assessed and remarkable capacity has already been identified. Solar power is an opportunity for local heating demands and solar collectors have also been installed in large scale on private houses. Heat pumps would give energy to houses, but the capital need makes it difficult to utilise.
The increase of using different biofuels has been studied and they have been taken into use. Forests and wood processing waste provide the most remarkable biofuel resources. It is used by power stations but also households and small municipality boilers are big wood users. Straw is collected from swamps and there are 5 companies in Poland providing machinery for utilising straw as a fuel. Poland does not have own technology for utilising biogas, but the technology is imported. So far 15 landfills have been equipped with methane recovery systems.
Energy efficiency and savings are also important. There are effective techniques available for isolation of houses (walls, roofs, windows, doors) and the heating systems are modernised. New equipment gives possibilities to use energy more efficiently for example when household machinery is taken into use and the house technology installed (radiator regulators etc). Authorities have organised financing for thermal insulation investments. Ms Blaszczak- Brzozowicz gave lots of practical examples of technical solutions for better insulation and energy efficient technology. Those concerned walls and windows solutions, regulation of heat and good piping solutions, new generation boilers and efficient use of modern electric heaters.
In Poland an energy audit system has been established. An own law dated 2/2002 regulates the energy audits. The auditors are authorised and the list of auditors can be found from a ministry web site.
Presentation: Blaszczak- Brzozowicz.pdf Article: Article Blaszczak- Brzozowicz
Special Features of District heating in the CSR
Marjatta Talsi Finnish district heating association (FDHA).
Finnish DHA was involved in making the booklet (ref. Finergy / Tolonen’s presentation). They however think, it was on quite a common level. It seems, that most of CSR issues are already on the agenda, but not in a structured way.
DH is mostly local business and this brings it near to communities. When FDHA made a questionnaire among its members, they found out that DH itself is CSR. What was a bit amazing, it came out that the end users didn’t know much about DH. So the FDHA and companies have realised the challenge to raise the profile of DH among its customers.
In the CSR study they did not find anything new, but the issue is to communicate it more efficiently.
The role of the regional and local authorities in district heating sector in Estonia
Ülo Kask, Estonian Power and Heat Association
Aare Vabamägi, Union of Estonian Associations of local authorities
90 % of power in Estonia is produced with oil shale. There is environmental pressure to switch the production to more environmentally friendly fuels. National policy emphasises self-sufficiency, increase in use of RES and use of CHP. The EU joining agreement will open the market for competition on 2008 at the latest.
The new DH act forms new administrative areas and set more detailed requirements to the DH sector.
In 13 years 80 % of companies have been privatised.
According to the law every local government organisation has to have an energy plan. It should cover for example fuel mixes, the most efficient production method on that region and so on. One part of that is to form the district heating regions. Also pricing is regulated and determined either on local or state level depending on the capacity and use of the network. The price shall be right to keep the DH enterprises alive.
Presentation: Kask+Vabamaki.pdf Article: Article Kask & Vabamägi
”Minimizing adverse impacts, maximising benefits”
Development and implementation of State district heating policy and legislation in Lithuania Prof. Edvards Tuomas, Lithuanian District heating association.
In Lithuania municipalities own still 58 % of DH. Households are the biggest user of DH thus enabling the network operators to keep the temperatures relatively low. Natural gas is the main fuel at the moment. The prices of DH vary a lot. The lowest prices are in Vilnius and the highest in small cities. The network is rather old in some extent (lots of losses) thus needing renovation investments.
There is a target to increase the share of CHP (electricity up to 35% on 2020, heat up to 75% on 2020).
National price commission will set the prices.
Presentation: Tuomas.pdf Article: Article Tuomas
Conclusion and Discussion
Large companies have implemented and taken their benefit from CSR. Small companies have done a lot but maybe not that good in communicating. Thus there is need and possibilities to develop for both big and small players.
The chairman thanked Vantaa Energy and the City of Vantaa for initiating this event, the interpreter for her good work and District Heating Association of Latvia for the arrangements.
Roundtable & Press Conference
In the discussion it came out that the challenges in Baltic countries concerning CSR development are somewhat different from those for example in Finland or concerning global companies. The development needs in whole society and infrastructures dominate the discussion. The issues and the approach, which mainly have been discussed here, may come to the agenda a bit later.
However, the identification of the challenges in Finland and elsewhere offers a chance to tackle them more efficiently already in the earlier stage of development. This concerns both the legislators and the companies operating on the energy sector. As Mr Lesch said in his presentation: Its better to learn about the mistakes others have made in order not to make the same mistakes again by oneself.
The practical issues needing most of the efforst today are quite similar in all of the accession countries.
Share of responsibilities maybe the number one challenge. The regulators, individual energy companies (district heating and others) either private or state owned, building owners and individual householders – all them should recognise their own roles and responsibilites in generating, transferring and using energy. This is also an issue where CSR aspects should be taken into account. For example security of supply is a contract issue, but it is also a social issue as an individual consumer can expect to have warm house every day. Pricing is also a social issue: energy fees should be in a range that even the poorest pensioners can afford them and still having money left for other personal needs.
Another challenge is the technical infrastructure. This concerns especially the district heating networks as well as generation facilities. They should be renovated in many locations and it’s financing is a big question. From the CSR point of view this can be discussed both under social aspects as well as economical aspects. Another important view here is to be able to share the capitals to the balance sheets of different companies, as the EU energy directives require. The need to separate generation/sales and transmission is both a challenge and a threat. On the other hand it forces to sound competition and transparent pricing (social aspect), but on the other it limits the use of flexible financing mechanisms in case of big investment needs and developing energy markets (economic aspect).
Environmental challenges, as the third issue, are closely linked to the infrastructure questions. It is local question from the pollution point of view, but it is also a competitiveness question. Companies buying electricity and heat are more and more concerned about the environmental performance of their energy suppliers and require soud reporting, continual improvement and so on. Generally the environmental performance needs development and that includes a question of efficient use of modern technology. Technology could be enhanced by the modern infrastructure, but with efficient transmission and energy use as well.
Energy efficiency and savings are among the main objectives of SENET and ESCOBAL programs. They are the key measures as the energy fee is based on generation and transmission (which need renovation) cost, but the energy need is based on cubic meters/insulation/radiator regulation of houses and degree-days, energy use of household and industry machinery etc. If the transmission losses can be decreased and the energy saved in end-use, they cut the energy need and thus provide more opportunities for development in the infrastructure. This issue is relevant for all CSR aspects – social, economical and environmental – either directly or indirectly.
As there was a good number of Latvian participants in the seminar, it was proposed that similar seminars, but in smaller scale, could be arranged also in Estonia and Lithuania.
In the press conference the following issues where discussed:
What is the meaning of CSR in Latvia?
Mr Akermanis: It has already been developed for years. Heat consumption is high and costly. The issue is very important to all and both the state and companies should make further activities.
What is the return on investment of CSR?
Mr Silvonen: Voluntary Agreement system has indicated feasible potentials. ROIs have been in the feedback data followed. Average payback time in buildings, industries etc. is ranging 2 years.
How to measure that CSR is growing?
Mr Svensson: It is always a challenge. Primarily a dialogue among all stakeholders is needed. After that you should use the information and track the results from one year to another. This is long-term involvement and results shall not be expected in too short periods.
What are the outcomes of this congress so far?
Mr Harjunen: Reference to the conclusions made by the chairman Arto Nuorkivi yesterday:
1. CSR concept is consistent with the profit driven operations in a company. It saves resources in running the business.
2. Energy sector is a key player in adapting these consepts as emitting a lot to the environment, using resources (fuels, money).
3. Measuring the performance. To provide real numbers of what we have done and how we have managed. In public discussion it is significant to give facts instead of opinions.
4. We have potential in all our countries. It was seen even in the PwC CSR survey among the biggest Finnish companies that quarter of the companies did not recognise the concept of CSR in their web pages at all, which indicates that there is still lot work to be done.
The CSR challenges in accession countries differ slightly from those of the older members. It is however useful to learn from each other.
Where are we going in other Baltic countries?
Estonia: CSR itself is normal thing, but there is of course lot to do. The role of municipalities is very big. The companies should benefit the work also.
Lithuania: The concept is relatively new, but this has clearly been done on other names. The social pillar was well considered in the privatisation process including the society infrastructures.
The ecological houses in Germany – is the use of synthetic materials allowed for example in insulation?
Mr Lesch: When selecting construction materials, life cycle approach is taken into account as practicle. In insulation the use of recycled materials is preferred.
Isn’t the coal use one of the major challenges in Poland?
In some parts of the country it is the main industry. According to the EU joining agreement RES should be 7 % of fuel use until 2011. Small bio fuel plants are established. The level of coal mining has decreased siginificanlty. We have 45 minings today in Poland as a few years ago there where about 100.