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Finnairin matka kohti integroitua raportointiaKati Ihamäki, Vice President Sustainable Development

Mari Reponen, Director, IR and Financial Communications

Finnair today

20.5.2014 | © Finnair | ProComin Vuosikertomuspäivä2

• Focused on Asia-Europe traffic• More than 9 million passengers and 2.4

billion EUR in revenue in 2013• Modern, fuel efficient and streamlined fleet • Operationally one of the best airlines in

the world• Selected as Best Airline, Northern Europe

by World Airline Awards 2010, 2011, 2012, 2013

• Member of oneworld• Goal: Asian revenue to double between

2010 and 2020

Finnair’s strategy supports sustainability


• “Ecosmart” - Choice of quality and environmentally conscious air travellers

• Via Helsinki concept means– the shortest route– a smooth and uncongested transit

and – cutting travel to comfortable sections

generating fewer emissions• Energy and material efficiency• Open communication and constant

dialogue

A business can only manage what it measures

• Six years in worldwide Carbon Disclosure Project (CDP)– Finnair is the leading airline – First airline to reach leadership index– 2013 result 96/100

• One of the first airlines to publish GRI (Global Reporting Initiative) corporate responsibility report – Environmental reporting for over 15 years – Sustainability reporting since 2008 - social, ecological and financial dimensions– Internationally recognised GRI reporting – Targets to improve the transparency of corporate activity

Towards Integrated reporting 20.5.2014 | © Finnair | ProComin Vuosikertomuspäivä4

Integrated reporting<IR>

5 20.5.2014 | © Finnair | ProComin Vuosikertomuspäivä

What is Integrated Reporting (<IR>)?

• It is creating, capturing and communicating value– Ties together the multiple dimensions of performance that create value– Shows how a company takes into account other value than financial value– Shows how a company minimizes and controls risks– Enhances the quality of information given to investors and other stakeholders

“<IR> is a process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time and related

communications regarding aspects of value creation. An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value

in the short, medium and long term.”


Source: www.theiirc.com

Source: www.theiirc.org7 20.5.2014 | © Finnair | ProComin Vuosikertomuspäivä

Guiding principles and Content elements

Fundamental conceptsHow the organization creates and sustains value


Finnair’sapproach to IntegratedReporting

2005

Finnair’s reporting history

1990 2000 2010 2012

1996–2007: Separate environmental report

Annual Report since late 1950s

2008: Sustainability

report in line with GRI

2005–2012: SeparateFinancial Review

2005–2010: Separate Annual

Review

Annual Review and Sustainability Report combined

2005

2011

2013

20081996

2013: TowardsIntegratedReporting

2014

Annual Report divided to Business and Financial Reviews

CDP reportingsince 2007

2007

1996


Finnair targets and priorities for the 2013 report• Better Finnair story discussing our

– Business model, value creation, targets and performance – External and internal growth drivers and opportunities and risks– Finnair’s role in the society– Combining GRI with other reporting

• Materiality– In the spirit of GRI4

• Internal targets– Smooth process– Cost and time efficient reporting– Relevant, future oriented information


Shift in focus: more forward looking, more content on value creationTypical reporting mismatch* Case Finnair

• Due to our GRI reporting history, we wanted to include also GRI 3 data to the report – Integration of two reports instead of

developing one annual report

• More data on industry growth drivers (megatrends) and Finnair’svalue creation (internal processes)

• These combined with impacts to the society at large

• “Finnair in the world”


*Source:IIRC

Key milestones

• June 2013: Decision to move toward Integrated Reporting• September 2013: Internal workshops

– The objective of the workshop was to understand: • What external factors in the external environment affect Finnair, and how.• How the organization tailors its business model and strategy to respond to the opportunities and risks

that arise from the external environment. What are Finnair’s strategic strengths and weaknesses in relation to these risks and opportunities?

• Identify and provide insight into the capitals Finnair uses and affects through its business models. – Some 30 participants from different businesses and support functions. One Executive Board member.

• October 2013: Materiality analysis – Conducted among 6 stakeholder groups and Finnair Executive Board– Questions classified to four categories: Environmental, Social, Economic, Product

• November 2013: final decision on report structure


Project calendar

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Internal brainstormingCR+IR

Meetings with. Big4 sustainability-professionals,

among others

RFP to four agencies

Preparation of RFP, including Finnair’s proposal on the

strcuture of its first Integrated Report

Meeting agencies, partner selection

Workshops

Preparation and implementation of materiality analysis, and modifying

content plan according to workshop outcomes

Preparation of workshop report, commenting rounds, and modifying content plan

according to workshop outcomes

Text production / Customers, Operations,

Employees, Socity, Governance

Text production/ Strategy, Finance

Layout plan incl. New financial statements structure

Report published 5 March 2014

Executive Board’s

comments to infographs

Key phases- Learning about <IR>, identifying what it means for

Finnair?- Workshops- Materiality analysis13 20.5.2014 | © Finnair | ProComin Vuosikertomuspäivä

Open dialogue with stakeholders


Employees

Authorities

NGOs

Media

Investors

Customers

Employees

The most material issues for stakeholdersand management


Safety

Network growth and securing the connections

Future competitivenessFuel efficiency

Finnair team and responsibilities

• Project lead:– Mari Reponen, Director, IR and Financial Communications. Strategy, Finance, Governance content. SLOT I– Elina Ämmälä, Manager Media Relations. Customers, Operations, Employees, Society, (Other.) SLOT II

• Content owners:– Elina Ämmälä, Kati Ihamäki, VP Sustainable Development. SLOT II– Mari Reponen, SLOT I

• Others involved :– Joseph Knowles, Communications Specialist. SLOT II– Outi Merilä, Inflight Supervisor, SLOT II – Kati Kaksonen, IRO. SLOT I – Elina Stråhlman, VP Group Accounting, SLOT I

• Pictures, visuals:– Manti Väätäinen-Pereira, Communications Specialist.


Key take aways

• Integrated reporting requires integrated thinking• Management support is a key• Planning phase extremely important!

– There are no ready models how to do an integrated report– Integrated Report is more company specific than typical

annual reports material issues very from company to company even in the same industry

• Integrated Reporting forces a company to evaluate its business and communications from a new angle – It will improve the company’s story– It may also help to develop the business and give holistic

picture of operations in changing business environment



Finnair 2013 report

Next steps

• Defining the gaps and benchmarking• Set the goals and team for 2014 report• Executive Board workshop/personnel workshops Aug-Sept preferably• Actual content planning based on these results• Develop existing material further



Thank you• Kati Ihamäki

VP, Sustainable Developmenttel. +358 9 818 4101

Mari ReponenDirector, IR and Financial Communicationstel. +358 9 818 4054

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