Wärtsilä Corporation Annual report 2014

Materiality assessment

Identified material aspects and boundaries

Entities included in the organization's consolidated financial statements (G4-17)

The entities included in Wärtsilä’s Consolidated Financial Statements are listed in the Notes to the Consolidated Financial Statements 32. Subsidiaries.

All the Group companies are included in Wärtsilä’s Sustainability reporting. The report covers Wärtsilä's businesses. At the company level, the report includes the parent company and its subsidiaries as well as its manufacturing, service and sales units. The report excludes Wärtsilä's associated companies, joint ventures and supply chain companies.

Process for defining report content and aspect boundaries (G4-18)

Wärtsilä's Sustainability Reporting 2014 is prepared according to the GRI (Global Reporting Initiative) sustainability Reporting Guidelines (G4) and the Reporting Principles for Defining report content. This report has been prepared in accordance with the G4 sustainability reporting procedures defined by the Global Reporting Initiative (GRI). The report corresponds to the ‘Comprehensive’ level in the G4’s reporting framework. This means that our reporting covers all the Standard Disclosures of the G4 framework and all the sustainability aspects we have identified as material in our operations.

During the autumn of 2014 Wärtsilä updated the assessment of material sustainability topics. The process included an assessment of economic, environmental and social aspects from the stakeholders’ point of view and as an impact to Wärtsilä’s business. Stakeholder views were collected through a questionnaire answered by 96 key stakeholder contacts in various Wärtsilä units and functions worldwide. The aim of the stakeholder questionnaire was to evaluate how important different sustainability aspects are for assessments and decision-making of Wärtsilä’s stakeholders. Sustainability aspects for the stakeholder evaluation were identified based on Wärtsilä’s previous experience on material sustainability topics, industry peer review and analysis of significant economic, environmental and social impacts in Wärtsilä’s value chain. Focus on stakeholder assessment was in investors and financiers, major customers, personnel, local societies and media.

The significance of identified aspects was then analysed as a current or potential business impact on Wärtsilä. The business implications of identified sustainability aspects were evaluated based on direct financial impacts as well as risks and opportunities. In addition the level of internal policies or practices were used as an indication of potential business impact.

As a result of the materiality assessment, the following aspects were identified as material for Wärtsilä:

  • Environmental impacts of Wärtsilä’s products and services,
  • Compliance with laws and regulations,
  • Economic impacts to stakeholders,
  • Personnel skills and development,
  • Anti-corruption and –bribery, and
  • Occupational health and safety.

In addition to the identified material aspects Wärtsilä discloses sustainability data on several other areas, because they are frequently asked by Wärtsilä’s stakeholders or they are considered important on the basis of continuity of sustainability reporting.

Aspect boundaries for the identified material aspects were then evaluated in reflection to the sustainability context that is based on the significance of their economic, environmental and social impacts in our value chain. A more detailed description of the aspect boundaries and completeness of data collection for the identified material aspects can be found in the G4-20 Aspect boundary within the organisation and G4-21 Aspect boundary outside the organisation.

Material aspects (G4-19)

From a sustainability impact point of view, product-related environmental issues are the most significant for Wärtsilä. The use of Wärtsilä’s products has an environmental impact both locally and globally. Other dimensions of sustainability mainly have a local impact.

Sustainability impact Local Global
Economic icon-gri-black-dot.png  
Environmental    
- Product related icon-gri-black-dot.png icon-gri-black-dot.png
- Operational icon-gri-black-dot.png  
Social icon-gri-black-dot.png  

The following GRI G4 aspects were identified as material for Wärtsilä’s sustainability reporting:

Category Aspects Identified material aspect for Wärtsilä, reported in accordance with GRI G4 Other aspects included in Wärtsilä Sustainability Reporting Excluded from Wärtsilä Sustainability Reporting*
Economic        
  Economic performance icon-gri-black-dot.png    
  Market presence   icon-gri-black-dot.png  
  Indirect economic impacts     icon-gri-black-dot.png
  Procurement practices     icon-gri-black-dot.png
Environmental        
  Materials   icon-gri-black-dot.png  
  Energy   icon-gri-black-dot.png  
  Water   icon-gri-black-dot.png  
  Biodiversity     icon-gri-black-dot.png
  Emissions   icon-gri-black-dot.png  
  Effluents and waste   icon-gri-black-dot.png  
  Products and services icon-gri-black-dot.png    
  Compliance icon-gri-black-dot.png    
  Transport     icon-gri-black-dot.png
  Overall   icon-gri-black-dot.png  
  Supplier environmental assessment   icon-gri-black-dot.png  
  Environmental grievance mechanisms   icon-gri-black-dot.png  
Labor practices and decent work        
  Employment   icon-gri-black-dot.png  
  Labour/ management relations   icon-gri-black-dot.png  
  Occupational health and safety icon-gri-black-dot.png    
  Training and education icon-gri-black-dot.png    
  Diversity and equal opportunity   icon-gri-black-dot.png  
  Equal remuneration for women and men     icon-gri-black-dot.png
  Supplier assessment for labour practices   icon-gri-black-dot.png  
  Labour practices grievance mechanisms   icon-gri-black-dot.png  
Human rights        
  Investment     icon-gri-black-dot.png
  Non-discrimination     icon-gri-black-dot.png
  Freedom of association and collective bargaining     icon-gri-black-dot.png
  Child labour     icon-gri-black-dot.png
  Forced and compulsory labour     icon-gri-black-dot.png
  Security practices     icon-gri-black-dot.png
  Indigenous people     icon-gri-black-dot.png
  Assessment   icon-gri-black-dot.png  
  Supplier human rights assessment     icon-gri-black-dot.png
  Human rights grievance mechanisms   icon-gri-black-dot.png  
Society        
  Local communities   icon-gri-black-dot.png  
  Anti-corruption icon-gri-black-dot.png    
  Public policy   icon-gri-black-dot.png  
  Anti-competitive behaviour   icon-gri-black-dot.png  
  Compliance icon-gri-black-dot.png    
  Supplier assessment for impacts on society     icon-gri-black-dot.png
  Grievance mechanisms for impacts on society   icon-gri-black-dot.png  
Product responsibility        
  Customer health and safety   icon-gri-black-dot.png  
  Product and service labelling   icon-gri-black-dot.png  
  Marketing communications     icon-gri-black-dot.png
  Customer privacy     icon-gri-black-dot.png
  Compliance icon-gri-black-dot.png    
* Several Compliance-related indicators under the excluded GRI aspects have also been included in the reporting in order to supplement a comprehensive description of the overall importance of compliance to Wärtsilä.

Wärtsilä’s sustainability reporting provides a full standard disclosures of the Management approach and Performance indicators defined by the GRI G4 Guidelines.

Aspect boundary within the organisation (G4-20)

The aspect boundary for the material aspects is all Wärtsilä companies. The economic performance data covers all Wärtsilä companies. The data on environmental and social performance covers all Wärtsilä companies except the following:

Wärtsilä Projects Oy
Wärtsilä Solutions Oy
Antigua Energy Operators Ltd
Wärtsilä Operations Guyana Inc.
Wärtsilä Yuchai Engine Co. Ltd.
Wärtsilä Egypt Power S.A.E
Wärtsilä Tanzania Ltd

These companies will be included in Wärtsilä's sustainable development reporting in the forthcoming years. Wärtsilä's Sustainability Reporting is an integrated part of its annual reporting, and therefore Wärtsilä publishes its sustainability data annually.

Coverage of operational data

Operational data, % of Wärtsilä companies

  2014 2013 2012 2011 2010
Economic 100 100 100 100 100
Environmental 94 93 79 92 93
Social 100 93 79 92 93

Operational data, % of personnel

  2014 2013 2012 2011 2010
Economic 100 100 100 100 100
Environmental 98 99 94 98 98
Social 100 99 94 98 98

Operational data, % of product manufacturing

  2014 2013 2012 2011 2010
Economic 100 100 100 100 100
Environmental 100 99 93 100 100
Social 100 99 93 100 100

Aspect boundary outside the organisation (G4-21)

Wärtsilä’s Sustainability Report does not cover performance data collected outside the Group companies.

Explanation of the effect of any re-statements of information provided in earlier reports (G4-22)

There are no major restatements of information provided in previous reports.

Significant changes from previous reporting periods (G4-23)

There are no significant changes from previous reporting periods in the reporting scope and aspect boundaries. Performance data 2014 covers continuing operations following the financial accounting rules. Historical data covers all entities that were part of Group at the end of each reporting period.

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