In 2024, we selected our environmental, social, and economic responsibility indicators for the group, defined their monitoring processes, and determined the necessary actions. Ernst & Young has been our partner in this work.

Employee involvement

The entire staff of our group has participated in the sustainability strategy work through surveys, multiple workshops, and information sessions.

At the start of the strategy process, employees were asked about their expectations for the group’s sustainability efforts. The majority expressed a desire for social, economic, and/or environmental responsibility to serve as drivers in all activities of the Vaasan Sähkö Group.

Stakeholder perspectives

At the beginning of the strategy process, we interviewed representatives of various stakeholders to gain a deeper understanding of their expectations for our work.

We were particularly called upon to take action to protect biodiversity in energy production and distribution, ensure responsible supply chain management, and promote diversity within the workplace.

Olli Arola, Director of Strategy and Corporate Responsibility

Strategic priorities

1.

Customer-centric green transition

2.

Climate and nature protection in energy production and distribution

3.

Health, safety, and well-being

Goals

Customer-centric green transition

• Development of new digital solutions for energy efficiency and a green society without compromising security of energy supply.

Climate and nature protection in energy production and distribution

• Carbon-neutral basic production within this decade, in collaboration with key stakeholders and partners.
• Protection of biodiversity in energy production and distribution.

Health, safety, and well-being

• A diverse, equal, inclusive, and thriving workplace.
• Zero workplace accidents (Lost-Time Injuries, LTI) in our own operations and subcontracting.
• Zero tolerance for violations of human rights and workers’ rights.

Reporting schedule

The EU’s new Corporate Sustainability Reporting Directive (CSRD) will apply to Vaasan Sähkö Group starting from the 2025 reporting year. This means that we will provide detailed reporting on the sustainability of our business operations as part of the annual report published in 2026.

Specific features of the energy sector operating environment

Green transition

The energy sector is currently most influenced by the general efforts to reduce emissions. These efforts are reflected in national economic policies, industry emission targets, and consumer choices. The green transition has introduced new, clean forms of energy production. According to Finnish Energy, in 2023, the share of emissions-free electricity production in Finland was 94% of the total production.

The Finnish government has aimed to promote the transition through various forms of support, including investment in clean energy production. Energy sector regulations are made both at national and European Union levels. For example, legislation will end the use of coal in energy production by 2029.

Emission reduction targets for different sectors

Different sectors have their own emission reduction targets, including large industrial sectors that use significant amounts of electricity in their production processes. Global emission reduction targets also affect these sectors that strive to transition to renewable or emission-free electricity.

Finance

Emission reduction targets and other sustainability considerations also impact various financial instruments, such as available public subsidies and companies’ ability to obtain loans.

Consumers’ own electricity production

In recent years, consumers have increasingly become electricity producers, with the number of solar panels increasing. In Finland, the installation of consumers’ solar panels was accelerated in 2022 due to the energy crisis and the rising price of electricity. According to the Energy Authority, solar power production in Finland grew by over 60% in 2022 compared to 2021. Small-scale production has also increased since then. According to the statistics of the Energy Authority, the output of small-scale solar energy production in 2023 was over 900 megawatts, while in the previous year it was slightly more than 600 megawatts.

Electrification of society

A major global trend influencing the energy sector is the electrification of society, with electric transportation forming an important part of it. An increasing portion of society requires electricity to function. Examples include transportation, data centers, and crypto mining, all of which contribute to increased electricity consumption.

The electrification of society is the key to reducing emissions, but at the same time it sets new requirements for a stronger and more flexible electricity grid. Electricity distribution companies play an important role in this process, enabling the transmission of electricity from producers to consumers and maintaining the balance and reliability of the energy system.

Energy self-sufficiency and security of supply

Geopolitical situations have had a significant impact on Finland’s energy policy. Russia’s invasion of Ukraine in February 2022 led to commercial sanctions, and electricity imports from Russia, which had previously made up a significant portion of Finland’s electricity supply, were halted. The flow of other energy forms also ceased due to sanctions.

Cybersecurity threats and the side effects of the geopolitical situation have highlighted the importance of energy self-sufficiency and security of supply (source: Fingrid).

Green claims

Sustainable communication is increasingly gaining ground in any industry. Consumer confidence in companies’ sustainability claims is weak, which is one of the reasons why it is particularly important to strive for sustainability also in communications. In the energy sector, where emissions from production pose a major challenge, it is essential to pay attention to so called green claims. At Vaasan Sähkö Group, we have therefore started to train content producers and build a greater understanding of the importance of the issue. We are working hard to ensure that our communications are accurate and that we provide facts to support our claims. We also welcome feedback on our communications.

Impact of the specific features on energy sector operators

The phenomena mentioned above are all essential in the energy sector. Emission reduction targets and financial instruments are steering the energy sector towards emissions-free production, which requires significant investments. The size of energy sector investments is such that the return on investment often takes decades to materialize.

New energy production and storage solutions are often aimed at increasing the flexibility of the energy system and smoothing out production and consumption peaks. Additionally, these solutions aim for greater cost efficiency and reduced emissions.

In 2023, the following production and storage solutions, in which Vaasan Sähkö is involved, were implemented:

•  Wind farm: Norsskogen, Närpiö
• Two new electric boilers at Vaasan Voima’s power plant in Vaskiluoto, Vaasa
• Expansion of the thermal storage facility in Vaskiluoto, Vaasa
• A waste heat recovery plant connected to the Pått wastewater treatment facility

Additionally, we announced our involvement in industrial-scale solar park being built in Heinineva, Lapua (scheduled for commissioning in 2025).

The green transition and the increasing share of renewable energy with variable production levels affect the entire electricity market, introducing fluctuations.

There is a need for solutions that enable so-called demand response, i.e., adjusting electricity consumption. Solutions that integrate electricity and heat production, balance consumption peaks, and thereby stabilize prices also contribute to market stability.

The growing electricity demand of society, new renewable energy production methods, and consumer-generated electricity impose new requirements on the development of the electricity grid.

Maintaining a high level of reliability in electricity transmission is essential for societal development.

There are also statutory requirements for delivery reliability for distribution companies. For this reason, investments are needed to strengthen and further develop the electricity grid.

The foundation of a sustainable business

As part of our sustainability work, we have identified the factors that form the foundation of sustainable business practices:

Transparency, good governance, and profitability

• Reporting and transparency
• Active communication
• Stakeholders and supply chain management
• Good governance and compliance with regulations
• Sustainability in daily operations
• Leadership
• Profitability and competitive pricing

Contact person

Olli Arola, Director of Strategy and Corporate Responsibility
olli.arola@vaasansahko.fi