Stakeholder engagement is a fundamental part of a successful sustainability approach. By identifying the most important sustainability issues together with our stakeholders, we are able to focus our efforts on what really matters.
Understanding our stakeholders
Every day we engage with thousands of stakeholders – private and business customers, government officials, owners and investors, suppliers, and more. The topics discussed, and the outcome of the interactions, have an impact on our sustainability work and help us understand expectations, risks and opportunities related to how we run our business both in the short and long term. We need to identify the best ways of engaging with our stakeholders to create value not only for the company but for society and the communities in which we operate.
See www.teliasonera.com/sustainability/impacts/key-stakeholders for more information about how and on which issues we engage with our key stakeholder groups.
To ensure that our work, reporting and communication regarding sustainability is aligned with our stakeholders' expectations and understanding of what is most important, we conducted a materiality review together with an independent third party. Considering the criticism against TeliaSonera and our clear focus on improving mainly ethics and anti-corruption practices, we have only conducted small-scale materiality reviews as our priorities have been clear. The review this year helped us gain valuable input to the ongoing work of formulating the new sustainability strategy, as it focused on identifying business opportunities and issues where shared value creation is in focus.
The review consisted of three steps:
1. Relevant sustainability issues were identified based on a wide range of industry and global trends, analysis by industry experts and a benchmark of peers, as well as insights from the business strategy and priorities.
2. First step prioritization of issues was carried out through internal interviews and workshops with representatives from all parts of the organization, where the issues were discussed from a risk and opportunity perspective and their relevance to the overall business strategy.
3. The most relevant issues were discussed with key external stakeholder groups to validate the prioritization, further identify risks and opportunities and understand expectations. Surveys, interviews and roundtables were conducted in Sweden and Lithuania and with the management team in region Eurasia.
In summary, the following issues or areas were identified as the most material:
Ethics and anti-corruption
Freedom of expression in telecommunications
Health and safety in the supply chain
Protection of children
Going forward, many of the areas currently managed mainly as risks, such as customers’ privacy and freedom of expression, have big opportunities both for business and social development. The discussions also showed that we have not succeeded in getting the message across on our work and impact, especially regarding the positive environmental impact of our services.
We will draw on the findings from the materiality review as we develop a more comprehensive stakeholder engagement approach. Protection of children and digital inclusion, which present big opportunities for business and social value creation, were rated higher in this stakeholder review compared to last years’ more limited reviews. It is clear that these issues require a more focused engagement approach.
Employee commitment survey
Since 2004 we conduct an employee commitment survey annually to support our business by indicating where we have made progress, and where we still can improve our performance at all levels of the organization.
The survey results have improved every year since 2007. 2014 we reached an overall score of 77 (75) out of 100.
For the second year the ECS survey included questions on sustainability. Employees were asked how they perceive our sustainability work, if we take enough action and if they think that they get enough information on what is happening. The overall score was 67 (59), a significant increase from previous year. All regions increased their score but the biggest positive changes were found in group functions, highlighting that employees in all parts of the organization now feel that TeliaSonera is both better at working with, and communicating internally, our sustainability work.
ECS – Employment commitment survey¹
Swedish and Finnish state ownership
The Swedish and Finnish governments, who at the date of this report together hold 40.5 percent (37.3 and 3.2 percent respectively) of the shares in TeliaSonera, both have sustainability high on the agenda.
The Swedish government requires state-owned companies to define and adopt sustainability targets and develop business plans where sustainability is integrated into business strategies and day-to-day management. The sustainability targets are followed up through dialogue in the same way that financial objectives are already monitored.
Solidium, the Finnish state holding company owning the shares, believes that a high-quality sustainability policy is one of the prerequisites for successful business and for generating long-term financial value. Good management of sustainability issues provides efficient risk management.
Both the Swedish and Finnish governments expect companies in which they have ownership to report on their sustainability work using the Global Reporting Initiative (GRI) guidelines.
TeliaSonera has an active dialogue with both state owners and meet their representatives regularly to discuss the risks and opportunities associated with sustainability.
Significant events in 2014
- In September, TeliaSonera organized an investor trip to Kazakhstan and Uzbekistan. The purpose of the trip, in which most of the biggest shareholders and investors in Sweden and Finland participated, was to in a transparent way meet with local representatives of TeliaSonera’s local companies Kcell and Ucell to discuss critical sustainability issues such as corruption and freedom of expression. After the trip, a follow-up session to answer further questions was arranged.
- A sustainability update for owners and investors was carried out in August, with focus on anti-corruption. It also served as briefing for the investor trip, with presentations from external experts on Kazakhstan and Uzbekistan regarding the history and conditions of the countries.
- TeliaSonera participated in a number of events related to its anti-corruption commitments, and several local companies received awards for their anti-corruption work. See Anti-corruption.
- The Industry Dialogue and Global Network Initiative held their second round of joint learning forums on the topic of transparency reporting. The learning forums enable civil society organizations, academics, investors, government officials, international organizations and ICT companies to share their perspectives on current challenges relating to freedom of expression and privacy. TeliaSonera presented its work on transparency at the UN Internet Governance Forum and at the ID/GNI learning forum. See Freedom of expression.
Criticism from stakeholders
TeliaSonera has received criticism from many stakeholders, mainly relating to business ethics and corruption and human rights, particularly related to freedom of expression and privacy. We acknowledge that although much has been done to strengthen our approach and daily management of the most critical issues, much work remains. We aim to be transparent and to proactively communicate with all stakeholders regarding our challenges and how we manage these.
- Transactions in Uzbekistan have been the main focus for several years, and a number of investigations are ongoing. Additionally, other irregularities which need to be addressed have been identified through internal and external checks and controls. TeliaSonera has responded to the criticism. A large number of actions have been taken as a result of strenghtened internal control and a better understanding of where governance and third party management has failed. Work with further strengthening control is ongoing. For more information on actions taken, see Anti-corruption, Sustainability in TeliaSonera, section "Whistle-blowing cases in 2014" and Board of Directors’ Report, section"Group development in 2014" and Corporate Governance Statement, section "Review of Eurasian transactions and related liability issues."
- We operate in challenging markets where the freedom of expression and privacy of our customers can be restricted or violated. Network shutdowns or surveillance of individuals are often highlighted by human rights NGOs and media. For more information about events during the year and our response, see Freedom of expression.
- TeliaSonera was criticized in Swedish media for supporting the Uzbekistan national cotton harvest, a nation-wide labor mobilization system accused for child and forced labor and other human rights violations. Previously, decisions regarding the local company Ucell's contribution to the cotton harvest were taken in the Uzbek regions, in dialogue between Ucell and local authorities. In 2014, the decision was escalated to group level with the purpose of improving control and minimizing corruption and human rights risks, resulting in Ucell providing local cotton pickers with food distributed by a local event agency which had undergone strict due diligence. Some international organizations claim that the child and forced labor situation during the cotton harvest has improved, while others do not support this view. We continue to see our involuntary support and participation to the cotton harvest, which is not linked in any way to our business, as problematic and undesirable. In 2015, we will engage in close dialogue with human rights NGOs and other key stakeholders to define our position and approach.
- In some countries, it has proved difficult to establish the ultimate beneficial ownership of certain companies that are minority owners in local operations, and thus business partners, of TeliaSonera. During the year criticism from Swedish media was directed mainly at the unclear ownership of a minority shareholder in Azercell in Azerbaijan. We continue looking into these issues in order to bring clarity and to better evaluate associated risks.