Page 1

Corporate Responsibility Report 2013


Contents Vaisala at a Glance   Chairman’s Message   Case: A Bold Step into Renewable Energy   CEO: Responsible, Customer-based Innovation   Highlights of 2013   Vision & Mission   Responsible Business   Strategy and Focus Areas   Sustainability Management   Case: CheckTime - Taking the Guesswork Out of Aircraft Deicing   Material Aspects   Case: Stakeholder Survey   Organization   Case: New RS41 Radiosonde, Heart of Fourth Generation Sounding Offering   Vaisala’s Values   Code of Conduct   Supply Chain Management   Quality Management   Product Safety   Case: Protecting SF6 Gas Insulated Equipment  

3 4 5 6 8 8 11 12 13 14 15 16 18 20 21 22 24 25 26 27

Our Stakeholders   Working Together for a Safe Tomorrow   Case: Four Perspectives on Safety in Custome Operations - a Given or a Differentiator?   Case: Vaisala and ITD Awarded for Innovative Performance Measurement  

29 30

Economy and Risk   Financial Overview   Risk Management   Case: Increasing Production Capacity   Case: 30 Years of Lightning Detection  

39 40 42 44 45

Managing Talent   Workforce   Measurable Competence   Case: Come as You Are - A Report on the Giant Leap Internship Program in the US   Case: Vaisala Young Professionals   Case: Gamification Used in Manager Training   Case: Vaisala eLearning  

47 48 49

Environment   Responsibility through Innovation   Environmental Impacts Map   Case: Green Data Center  

61 62 68 69

Society   Case: Development of Weather Infrastructure in Nepal   Community Outreach   Case: Vaisala Celebrates 30 Years in Japan   Case: The Golden Age of Meteorology   About This Report   GRI Content Index   UN Global Compact Reporting   Independent Assurance Report   Vaisala World Wide  

72 72 73 75 76 78 80 84 85 86

34 37

56 58 58 59

This material is subject to copyright protection, with all copyrights retained by Vaisala Oyj. All rights reserved. Any logos and/or product names are trademarks of Vaisala Oyj or its individual partners. The reproduction, transfer, distribution or storage of information contained in this document in any form without the prior written consent of Vaisala Oyj is strictly prohibited. The papers used for the printed report are Munken Polar 300g/m2 and 130g/m2.


11.8

253.2

253.2

231.8

273.2 273.2

2011

588 779 588 779

0 400 0

2009 2010 in Finland

2009 2010

in Finland

2 692

6

692

6

5 3

Dec. 31, 2013 1 600 1 600

605

400 800

2009 2010 2011 2013 20132012 2013 2011 2012 2012 2011 2012 2013

5

2.9

800 1 200

802 605

871

836 282.9

781 264.7

779 278.8

802 286.7

230.2

122.0

7

.8 2.9

6.7 .7

1 600

Personnel

Dec. 31, 2013 1 200 1 600

802

613 264.7

588 278.8

605 286.7

250 MEUR, Dec. 31, 2013 1 200 200 300

692

1 600

Orders Received

606 282.9

Dec. 31, 2013

OrdersOrders Received Personnel Corporate Responsibility Report 2013, Vaisala Corporation Received Personnel Dec. 31, 2013 Personnel Dec. 31, 2013

MEUR, Dec. 31, 2013 Orders MEUR, Dec.Received 31, 2013 MEUR, Dec. 31, 2013 300 300 300 250 250

2012

Personnel

Development (€) (€) Development

30 30

Order Book Book 25 Order 25 MEUR, Dec. 31, 2013 Order Book MEUR, Dec. 31, 2013 20 20

231.8

273.2

293.3

18.1

293.3 293.3

253.2 253.2 293.3

273.6

231.8 231.8

273.6 273.6 273.2

2010

300 1 600

230.2

282.9

264.7 122.0

278.8 105.6273.2 273.2

286.7 134.3 293.3 293.3

230.2 129.0 273.6 129.0 273.6

231.8 231.8

Series A A Share Share Series

2012

MEUR, Dec. 2013 Dec. 31, 31, 2013

0 2009 2010 2011 2013 2011 2009 20102012 2010 2009 2009 2010

MEUR, Dec. 31, 2013 140 140 120

253.2

231.8

2009

Development (€) Development (€) Orders Received Personnel Development (€)

105.6

25% 66.9 M€66.9 M€ 25% Asia Pacific Asia 66.9Pacific M€

20

2011

150 250 800 MonthlyMonthly Trading Trading (1,000 pcs) (1,000 pcs) 60 700 100 100 Monthly Trading (1,000 pcs) 100 200 700 600 40 400 80600 500 50 50 150 20 500 60400 0 0 0 0 100 400 40300 2009 2009 2010 2009 2011 2010 2012 2011 20132012 2009 2010 2011 2012 2013 2010 2011 2012 2013 2009 2013 300 2009 2010 2010 2011 2011 2012 2012 2013 2013 200 50 20 200 100 in Finland Other Countries 0 0 100 0 95.5

40

East and East Africa andMiddleAfrica700 Europe, 100 100 600 East and Africa

500 50 50 400 00 0 Asia Pacific 300 2009 2010 2011 2012 2013 * 2009 20102009 2011 2010 2012 2011 20132012 * 2013200 Impairmentcharges charges **Impairment 100 EUR4.3 4.3million million EUR 0

15 140 15 10 120 10

95.5253.2 253.2

122.0

10 2005 100 200 200 140 5

5 98.6 M€98.6 M€ 0 80 0 150 120 150 150 Europe, 36% Europe, Middle98.6 M€Middle0

36% 80 60

10 10 25% 55 00

105.6

100

134.3

Book South America South America250 Order North and 15 31, 2013 250 120 250 Dec. South America 10 MEUR, 10

120

36%

MEUR,MEUR, Dec. 31, 2013 Dec. 31, 2013 MEUR MEUR 25 20 20 300 300 300 140 20 15 15

134.3

107.8 M€ 39% 107.8 M€ 140 107.8 and M€ 39% North andNorth

30

2010 2013

2009 2012

2011 200

100 0

Order Book Development of Net Sales Sales Orders Received Development of Net 30 25 25

18.1 18.1

20 20 15 15

MEUR, Dec. 31, 2013

129.0 30.2 30.2

30 30 25 25

39%

95.5

40 40 35 35

16.1 16.1

MEUR MEUR

2010

Series Series A Share A Share Series A Share 30

18.118.1

16.116.1 18.1

EUR 4.3 million

2009

Net Sales Region Net by Sales by Region Net Sales by Region 2013 2013 2013 Operating Result Order Book Operating Result

Development (€)

300

30.2 30.2

30.2

11.811.8

Weather

18.1

273.6 30.2

16.1

16.1

11.8

12.0

12.0

30.2

253.2

231.8

18.1

30.2

16.1

11.8

12.0

5 0

11.8

73%

10

12.0 12.0 16.1

15

25% 66.9 M€ 200.0 M€ 73% 200.0 M€ Asia Pacific Weather 200.0 M€ 73% Weather

EUR 4.3 million

30 MEUR Development (€) 15 300 25 300 250 10 250 20 250 107.8 M€ 5 North and 200 15 200 98.6 M€ 0 South America 200 Europe, Middle10 150 (1,000 pcs) 150Trading Monthly Trading (1,000 pcs) Monthly 700 East and Africa 5 150 600 100 100 98.6M€ M€ 0 66.9 500 100 Europe, Middle50 50 Asia Pacific Monthly Trading (1,000 pcs) 400 700 East and Africa 50 0 5 0 0 300 300 600 0 0 200 25% 500 2009 2010 20112010 20122011 2013 2009 2010 20112010 20122011 2013 * 66.9 M€ 2009 2012 2013 * 200 2009 2012 2013 Asia*2011 Pacific 100 2009 2010 2012 2013 2009 2010 2011 2012 2013 * 100 charges * Impairment 400 Impairment charges EUR *4.3 million 0 EUR 4.3charges million 0 Impairment 300 12.0

25

2009 2010

Development of Net of Sales 25 Development Net Sales Series A Share MEUR20 MEUR Development of Net Sales

North and South America

8.8

North and and North South America America South

30

MEUR 40 15 40 35 10 35 39% 30 5 30 36% 0 25 25 20 700 20 15 600 15 36% 10 25% 500 10 400 5

6.7

107.8 M€ 07.8 M€

35

Europe, Middle- 20 Environment East and Africa

4.3

Region Region

27% 73.2 M€73.2 M€ 27% Controlled 73.2 M€ Controlled 36% Environment 98.6 M€ Environment Controlled

40

0

2012 2013 *

30 Development (€)

30

South America

27%

Series A Share

Operating 25 Result Result NetOperating Sales by Region MEUR Operating Result MEUR 2013 20 107.8 M€ 39%

Net Sales Net by Sales by Net39% Sales by 107.8 Business Area 2013 Business Area 2013 M€ and Business AreaNorth 2013

.0

Weather Weather

EUR 4.3 million

* Impairment charges

Net Series Sales by Region A Share 2013

Net Sales by Region 2013

4.3

200.0 M€ M€ 200.0

* Impairment charges

2009 2010 2011

11.8 11.8

Controlled Controlled Environment Environment

5 0

* Impairment charges

Weather EUR 4.3 million

.0

73.2 M€ M€ 73.2

Vaisala Group Key

Vaisala is a global leader in environmental and indusFigures 2013 trial measurement. Building on more than 75 years of Net sales   273.2 M€ experience, Vaisala contributes to a better quality of Operating result    18.1 M€ life by providing a comprehensive range of innovative observation and measurement products and services Return on Equity   6.3% Operating Result of Net Development Sales Developmen Net Operating Sales by Result Net Sales by for chosen weather-related and industrial markets. The share   0.60€ MEUR MEUR MEUR Area 2013 Earnings per MEUR Business Business Area 2013 lives of people all around the world are touched daily 300 Personnel (at40 the end of period)   1,563 300 40 by the work we do and the technologies weNet create. Our by Operating Result Developmen Sales 35 35 250 Offices   34 in 16 countries 250 27% 27% products and services provide our customers with the Area 73.2 M€ 73.2 M€ MEUR MEUR Business 2013 30 30  28.9 M€ ControlledR&D expenditures  Controlled means to influence and better understand their environ200 300 40 200 25 25 Environment Environment Personnel expenditures   104.7 M€ ment in positive ways. 35 150 20 20 150 250 73.2 M€ Curiosity, the desire to meet challenges, and 27% an 30 15 15 Controlled 100 100 200 extraordinary ability for innovation are at Vaisala’s core, 25 Environment 10 10 both past and present. Headquartered in Finland, Vaisala 200.0 M€ 200.0 M€ 73% 73% 50 50 20 150 5 5 Weather Weather employs more than 1500 professionals worldwide and is 0 15 0 0 0 100 listed on the NASDAQ OMX Helsinki stock exchange. 10 20092009 2009 2010 2011 2012 2013 * 2010 2010 2011 2011 2012 2012 2013 *2013 2009 2010 200.0 M€ 73% 50

12.0 12.0

a 2013 2013

Vaisala at a Glance

3


Chairman’s Message Vaisala’s long-term objectives are founded on our history of excellence in producing novel and ground-breaking technological solutions. Our quarter takes a longer view, investing years rather than months to ensure reliable, optimal, and high quality innovations. We are also not afraid to make mistakes, as in science, trial and error are essential to achieving a successful outcome in product development. In 2013 we saw clear progress on strategically important fronts and the outcome of several years’ worth of intensive research and development. Financially the year was not as strong as it was anticipated to be, however we have met key strategic targets. These include positioning ourselves more firmly in the renewable energies sector, as well as bringing game-changing decision support services to the market, and the continuous, sustainable development of the world’s leading humidity sensor. Vaisala released the fourth generation sounding system complete with the new RS41 radiosonde, an exemplary illustration of what world-leading R&D can accomplish when customers are involved from the beginning. Successful partnerships continue to strengthen our Life Science business, which remains a key focus area for Vaisala. These will be the tools for growth in the coming years. My grandfather made scientific contributions to society that continue to impact the way we observe, measure, and analyze the atmosphere. The family’s legacy is still strong today and we believe it takes stability, perseverance, and patience to achieve a position as the global market leader. It has always been important to the company to have a long term view on how Vaisala is managed and that this is done with absolute integrity. We see that Vaisala has an important role and responsibility to supply the international community with reliable instruments independent of short-term economic fluctuations. One part of this process is to maintain profitability in difficult times, which alone safeguards our future ambitions and quality offering. Going forward, Vaisala continues to invest in sciencebased innovation. We are proud to build upon this tradition, constantly looking for opportunities to push the boundaries of both science and technology in order to deliver solutions that help us better understand weather, controlled environments, and the environment. Especially in these times, where the changing climate, and the understanding of the changes around us, is without doubt, the greatest challenge for this generation and for those to come.

Raimo Voipio Chairman of the Board of Directors

4

Corporate Responsibility Report 2013, Vaisala Corporation


Case

A Bold Step into Renewable Energy Vaisala’s strategic goal is to expand its presence in the renewable energy markets. The company’s positioning was strengthened through two acquisitions in 2013 and Vaisala is now well positioned to serve customers in this very demanding industry. The renewable energies market is growing and maturing in the established markets and the developing economies are seeing substantial investments in renewable energy development. Governments are making commitments to increase the proportion of renewable energy sources in an effort to curb climate change resulting in these technologies becoming more competitive with traditional fossil fuel technologies. Uncertainty – The Enemy of Renewables

The industry is wrestling with the fact that the output of many renewable energy projects is less than anticipated, as the planning process for these has been based on poor measurements and invalid assumptions, making many of them mediocre investments. To maximize the value of their assets, developers and utility companies need expert advice in wind resource assessments. Reliable feasibility studies and highquality data based on extensive historical time series, coupled with high quality modelling, are prerequisites. Only then, can a sensible site selection and investment decisions be made. From an operational viewpoint, the problem with renewables is that weather is complicated and uncertain and since renewable energy sources are highly dependent on the weather, the power they produce can be highly variable. To manage the grid efficiently,

operators need accurate forecasts of the renewable energy plant’s output. In other words, they need to know if it will be windy or sunny at any given time in the future to ensure cost-efficient power supply to the grid. World-leading Wind Assessment Technology

Vaisala has had a growing portfolio of products and services for the renewable energy sector as the need for accurate weather observations to allow for reliable planning and forecasting for wind parks, has grown with the industry. Vaisala’s wind energy measurement offering is now complemented with Second Wind’s TRITON remote wind sensing, NOMAD in-situ measuring systems, coupled with SkyServe data services. SkyServe is a strong addition to the company’s information services business, also a key strategic driver for the long term success of Vaisala’s Weather Business Area. The acquisition of 3TIER positions Vaisala to utilize our robust portfolio of measurement capability throughout the life cycle of renewable energy systems. By combining our measurement offering with the expert assessment and forecasting services of 3TIER, we will be positioned as a key player in renewable energy resource assessment and operations markets. Vaisala’s Acquisitions in 2013

Vaisala acquired two companies in 2013 that are both experts in renewable energy business. Second Wind Systems Inc. Second Wind specializes in advanced wind resource assessment technologies. The company’s technology, including the Triton® SoDAR, provides wind farm developers with dependable wind data they need to plan, finance and operate highly efficient wind generation facilities. The company is located in Newton, Massachusetts, USA. 3TIER Inc. is an experienced provider of renewable energy assessment and forecasting services to the largest utilities, energy traders, financiers, and project developers around the world. With a staff of experts in weather, climate, and wind and solar risk, 3TIER helps its clients make profitable energy decisions.

Triton® Sonic Wind Profiler has successfully collected nearly 7 million hours of data in 30 countries across the world.

Corporate Responsibility Report 2013, Vaisala Corporation

5


Responsible, Customer-based Innovation At Vaisala, we seek to deliver quality products through expert staff and efficient, reliable processes. This is our cornerstone for creating customer value. However, this is not enough; we also need to make sure that our offering meets the customer needs of today but also those of tomorrow. To achieve this we need to combine understanding our customers business and their operations with technological insight and expertise. Our reputation is built on being the best in what we do. Vaisala has always believed in the power of innovation and investing into the future. An example launched last year is the next generation sounding system, which is spearheaded by the new and revolutionary Vaisala Radiosonde RS41. Our customers and third party partners have played a pivotal role in the research and development process. Putting the customer first is not only the best way to generate customer value, but also for fine-tuning our key products. Looking at investments, in 2013 we made two acquisitions, one in remote sensing and data services for the wind energy industry, Second Wind Systems Inc.; and one in renewable energy assessment and forecasting services, 3TIER Inc. both in the United States. These acquisitions are part of a strategic objective to establish a strong presence in the weather dependent renewable energy technologies and services. Vaisala is to become a key player in forecasting, resource assessment and operations in growing markets. The combination of technologies that Vaisala has brought under one roof with Second Wind and 3TIER, is not only unique, but it empowers energy utilities and other actors in the domain like never before to design, operate and maintain a successful and profitable wind and solar energy business. In 2014, we look forward to taking full advantage of the portfolio we have built for our Energy business and push for growth in this exciting new area. We also look to further strengthen our position as market leader with new products released, as well as increase momentum for our information system products, continuing on a successful path for growth.

Vaisala as a Responsible Investment Sustainability at Vaisala is embedded in our strategic framework. Our corporate targets are interlinked with those of our sustainable business agenda, aiming for growth with good profitability, without sacrificing our ambitions to be the safest, most reliable and

6

Corporate Responsibility Report 2013, Vaisala Corporation

sustainable partner for our customers. We do take a long-term approach and look beyond the quarters to bring value to shareholders. We may not be the company to invest in for quick wins; instead we provide a solid long term outlook over the years to come with a business that is increasingly meaningful for mankind. While attending the Global Compact Leaders’ Summit in New York last September, I sensed a change among the investor community with many of them speaking so assertively on the benefits of responsible investing. Moreover, for the first time last year, I have been questioned on our environmental, social and governance issues during investor meetings. I am pleased to hear investors gaining interest in these aspects and putting these questions forward to business leaders.

Partnering with Customers Our diverse business portfolio serves customers across a broad spectrum of industries, institutes, public services, research, and authorities. Vaisala is known across many industries and has built a reputation for providing high quality and reliable products. We are continuously working to improve our services and offering, as well as further develop our strategic and operational processes, in order to meet the requirements of our customers. Vaisala is, just like our customers are, dedicated to the safety of people and protection of property. This is demonstrated in the outcome of how our customers apply our technology. We provide the tools for those who are working on the front line, whether this is with extreme weather events or in sensitive controlled environments or by assisting pilots in landing their aircraft safely. This is one reason Vaisala people feel proud coming to work each day – on the surface, we might sell and manufacture electronic devices, but their application safeguards millions of people every day. In addition to safety, quality is a key priority. To achieve the high quality our customers expect and deserve, we have to look beyond the technology. It is important to understand the customer’s business and operations, in order to be able to provide solutions that bring real benefits. We do this by becoming an active partner in our customer’s daily operations. In this equation, we must constantly go beyond customer expectations on quality and service as well as make sure that the latest technological advances are used to provide the highest performance through our offering. Recently, I asked a long-time customer what more can we do to support his operations, he responded that "if it’s


good enough to go to planet Mars, it’s going to be good enough for me". Indeed, for over a year, Vaisala sensors have been onboard NASA’s Curiosity rover, studying the Martian planet and its atmosphere.

The Impact of Our Operations We are aware of the impacts from our own manufacturing sites and in 2013 we achieved two remarkable steps in our environmental management program. First, at our main manufacturing facility in Helsinki, we achieved a zero waste to landfill goal, where all waste is now recycled or recovered. Secondly, three years in advance of our planned schedule, we achieved and exceeded our energy efficiency target of 9% by end of 2016 from a 2005 base level. In 2013, we also made a special effort to raise awareness and generate action among our suppliers on our expectations with regards to fundamental corporate responsibility issues such as our expectations on labor conditions and laws, environmental management and ethical conduct. To support this, Vaisala launched the Supplier Code of Conduct that will become a mandatory part of supplier contracts and the implementation of which is monitored. Through this, we work towards ensuring that our suppliers are operating responsibly both environmentally and socially. The Code of Conduct sets clear expectations that bring transparency through the value chain, from our supplier all the way to our customers.

Doing the Right Thing Looking forward, 2014 will be an exciting year as Vaisala enters the weather dependent part of the renewable energy domain globally. Growth is expected here as well as through regional expansion and new products and services across the Vaisala businesses. I believe there is great value in ‘doing the right thing’ – although the payback may not be in the short term. This approach has been a good formula for success for Vaisala over the decades and clearly brought our customers significant new developments to take their operations and businesses even further. R&D undertakings in our domain can span many years and these would not be possible with a short term approach. We are a responsible company, from our products to our operations, to our ambitions.

Kjell Forsén President and CEO

Kjell Forsén discusses what sustainability means for Vaisala in his video greeting.

http://ow.ly/tUEKB

Corporate Responsibility Report 2013, Vaisala Corporation

7


Highlights of 2013 Although the global financial situation was challenging during 2013, improvement was apparent towards the end of the year, especially in the USA and Japan. However, the slow order intake during the first half of 2013 had a negative effect on the entire year. Weak governmental finances took a toll on the Weather business. Controlled Environment’s net sales were a disappointment in all market areas even though sales volumes increased in China. Order intake for all of 2013 increased by 7% whereas net sales decreased by 7%. Operating profit decreased by 40% due to lower net sales and impairment charges.

June

January

July

Vaisala started the year by displaying the new DigiCora Sounding System MW41 and other leading technologies at the 93rd Annual Meeting of the American Meteorological Society in Austin, Texas in January. Under the general theme of "Knowing What the Weather Will Bring," Vaisala showcased the latest developments in its sounding, weather radar, lightning detection, and other weather technologies. Also in January, Vaisala introduced a new family of humidity and temperature transmitters for the heating, ventilation, and air-conditioning (HVAC) industry. The new transmitters are optimized for reliable operation and easy installation with very little maintenance.

In July, Vaisala signed a contract to deliver four dualpolarized weather radars to the Philippines. The Philippines is an island country with a challenging tropical climate, which was witnessed in November when Typhoon Haiyan wreaked havoc in the country. With the help of Vaisala’s weather radars, the goal of the meteorological service is to improve the country’s weather observation and forecasting capability, which is essential for disaster prevention and preparedness.

March

In March, Vaisala’s Roads and Rail business divested three non-weather road transportation product lines that were sold to M.H.Corbin Inc., USA. The value of the contract was EUR 3.4 million. This divestment supports our strategic efforts to simplify the offering, and focus and invest in our core road weather expertise.

During the summer, Vaisala celebrated the 30th anniversary of the U.S. National Lightning Detection Network® (NLDN), which is the most accurate, reliable, and scientifically validated lightning detection network in the United States. The NLDN has provided lightning data since the first location data were recorded on June 1, 1983. It has improved meteorological forecasting of storm activity, protected critical power, utility, and communications infrastructure from lightning damage, enabled the issue of safety warnings, and educated the public about the dangers of lightning.

August

In August, it was announced that following the decisions made in the Annual General Meeting, the Board of Directors would issue a return of capital to shareholders. EUR 1.23 per share was thus returned to shareholders on August 27, 2013. Acquisition of Second Wind Systems Inc., the global leader in remote sensing technology and data services for the wind energy industry, was announced in August. The acquisition of Second Wind was a decisive step forward in expanding Vaisala’s presence in the renewable energy markets.

Vision We focus on being the leading provider of operational value for our customers in targeted segments of weather and controlled environment markets.

Mission We offer high reliability and added value with our products and services by bringing together customer business expertise and our technical expertise.

8

Corporate Responsibility Report 2013, Vaisala Corporation


HUMICAP®, the world’s first thin-film capacitive humidity sensor, has turned 40. HUMICAP was a radical innovation that completely changed the way humidity is measured. Until its introduction, reliable humidity measurement was an unresolved challenge and hair hygrometers were generally used. Although the innovation was originally designed for a new radiosonde, the greatest interest in this revolutionary new sensor came from various industrial customers and sparked the beginning of Vaisala’s industrial business.

November

September

December

Vaisala’s collaboration with the Idaho Transportation Department won a "Best New Innovative Product, Service or Application for 2013" award at the 2013 National Rural ITS Conference in St. Cloud, Minnesota. The award recognizes the Winter Maintenance Performance Index developed in collaboration with ITD and implemented in the Vaisala hosted RoadDSS™ road weather application.

Universum’s annual survey of Finland’s most attractive employers for professionals highlighted Vaisala as one of the most attractive IT and technology employers in Finland. We ranked 8th in the field of technology and 14th in IT. Altogether 7,273 professionals ranked 119 companies in the survey. Vaisala signed a contract for delivery of seven dual polarization weather radars to Turkey. The deliveries will start during the summer of 2014 and will be completed by the end of 2016. We previously supplied six weather radars to Turkey. After installation of the new radars the Turkish State Meteorological Service will be able to serve the entire country with high quality meteorological data and weather forecasts. A new Advanced Total Lightning(TM) sensor, the LS7002, was released. It is the first non-VHF lightning detection sensor capable of detecting total lightning and at the same time correctly differentiating between cloud and cloud-to-ground lightning. The sensor is suitable for meteorological and climatological measurements and also has applications in aviation, telecommunications, power utility, defence, and forestry. Vaisala’s collaboration with the Idaho Transportation Department was recognized by the Road Safety Foundation and the United States Federal Highway Administration (FHWA) with biennial National Roadway Safety Awards. The award winners were chosen for reducing fatalities and injuries on roadways through excellence and innovation in operations, planning, and design. Vaisala announced acquisition of 3TIER Inc, USA, a renewable energy assessment and forecasting services company. 3TIER provides project feasibility, asset management, and forecasting services to companies operating globally in the renewable energy market. While the majority of 3TIER’s business comes from the wind energy market, the company also serves customers in the solar and hydro energy markets. Finally, Vaisala signed a significant contract at the end of the year to deliver radiosondes to one of its long-term customers. The deliveries will start at the end of 2014 and will be completed during the summer of 2018. The sale is valued at EUR 11.0 million.

October

The long-awaited Radiosonde RS41 was unveiled at the Meteorological Technology World Expo in October. The Vaisala Radiosonde RS41 streamlines launch preparations, reduces human errors, and lowers the operational costs of upper-air weather observations, while delivering industry-leading data accuracy. Vaisala KK celebrated the company’s 30 years in Japan. Nearly a hundred persons attended the celebrations. The guests included customers, partners, and visitors from Vaisala Helsinki, as well as current and retired personnel from Vaisala Japan. Sampsa Lahtinen, M.Sc. (El. Eng.), was appointed Executive Vice President of Vaisala’s Controlled Environment business area and a member of Vaisala Management Group on October 22, 2013. Sampsa Lahtinen had previously worked in several managerial positions in Nokia Siemens Networks (NSN), Nokia Networks, and Nokia for over 20 years and has extensive experience in leading global businesses and customer relationships. In October, Vaisala lowered its net sales and operating profit outlook for 2013. Net sales and order intake for the Weather Business area were impacted throughout the year by budget sequestration in the USA and strained governmental finances in Europe. Neither did the net sales and order intake of the Controlled Environment Business area develop as forecast in Japan nor in the USA.

GMW90 Carbon Dioxide, Temperature, and Humidity Instruments equipped with Microglow Technology were released. Microglow is a silicon MEMS emitter infrared source patented by Vaisala. It represents the next generation of infrared technology and will solve many of the challenges faced by conventional infrared sources. For example, the sensor’s operational life was extended by 50% and the intelligent optical design requires fewer components.

Corporate Responsibility Report 2013, Vaisala Corporation

9


Responsible Business Sustainability in Vaisala is managed by various guiding principles. The main principles are Vaisala’s Code of Conduct, Supplier Code of Conduct, Environmental Policy, Anti-Corruption Policy and Community Outreach Policy, together with a number of practical guidelines as well as quality and environmental standards. Vaisala complies with all national laws and regulations wherever it operates.


Strategy We see ourselves as being the leading provider of operational value for our customers in weather and controlled environment markets. We focus on customer value, reliability, and simplification to create value by bringing together our technological expertise and the needs of our customers. We believe that increasingly loyal customers drive us towards long-term profitable growth.

Expanding Markets

Strategic Objectives

Vaisala’s comprehensive offerings range from small industrial probes to comprehensive weather observation solutions such as surface weather networks, aviation weather solutions, and decision-support information systems. The major customer groups are meteorological and hydrological institutes, airports and airlines, road and rail authorities, defense, energy and maritime customers, and life science and targeted industrial applications. During the past decade, there has been an increasing shift from purely meteorological observation solutions and purely industrial instrumentation towards new applications and services on the weather side and more complete systems on the industrial side. Vaisala’s traditional public administration customers are no longer the dominant focus, and the dynamics are shifting towards a stronger emphasis on the private sector. Vaisala’s customer base covers over 150 countries. Geographically, the markets are divided into three regions: Europe, the Middle East and Africa (EMEA), the Americas, and Asia Pacific (APAC). The United States continues to be the single largest market for Vaisala, but sustained growth in other regions, especially Asia Pacific, has reduced its prominence of previous years to some degree. Operations outside of Finland, Vaisala’s domicile, account for 97% of net sales.

Vaisala has three strategic themes for 2013 – 2015: creation of customer value, reliability, and simplification. Each of the themes encompasses strategic objectives for either the two business areas or for the whole Group, and each objective is driven forward by an appointed owner. Our far reaching strategic objective is long-term growth with good profitability. Creation of Customer Value

Investments in establishing Vaisala firmly in the renewable energies sector was the new strategic direction taken in 2013. Our capabilities now include technologies and competences for forecasting, resource assessment and operations to help customers maximize the potential of their renewable energy assets. Moreover, our Weather business seeks growth from information services, expansion of decision support systems, and development of consultancy capabilities. Our industrial segments focus on growing in new regions and developing their offering in key markets. Reliability

The cornerstone of Vaisala’s reputation and success has always been high quality and reliable products coupled with great customer service. Keeping that promise to customers will always be our strategic objective.

Vaisala’s three strategic themes for 2013 – 2015: Creation of Customer Value – Reliability – Simplification

12

Corporate Responsibility Report 2013, Vaisala Corporation


Simplification

This objective aims to improve profitability, project deliveries, manufacturing and repairs, supply chains and lead-times by streamlining processes and methods and reducing complexity in the company.

Vision and Mission We updated our vision and mission in 2012 to better reflect our problem-solving nature and close cooperation with customers, providing them with operational value. Our vision is the following: we focus on being the leading provider of operational value for our customers in targeted segments of weather and controlled environment markets. Our mission is the following; we offer high reliability and added value with our products and services by bringing together customer business expertise and our technical expertise.

Corporate Governance The Board of Directors is responsible for the administration and proper organization of the operations of the company. In accordance with Vaisala Corporation’s Articles of Association, the company’s Board of Directors comprises at least four (4) and at most eight (8) members. Currently the Board of Directors comprises six (6) members. All Board members are appointed by a General Meeting of Shareholders. The Board elects a Chairman and a Vice Chairman from among its members. The majority of the Board members must be independent of the company and at least two members in this majority must be independent of the company’s major shareholders. Vaisala’s President and CEO is appointed by the Board of Directors. The CEO manages the company in accordance with the instructions and orders given by the Board and informs the Board of developments in the company’s business and the financial situation. The CEO is also responsible for organizing the company’s management. Vaisala has from 2013 onwards a single management group, Vaisala Management Group. It consists of seven members, the Executive Vice Presidents for both business areas, Weather and Controlled Environment, the Executive Vice President for Operations, the Executive Vice President for Services, the Chief Financial Officer, and the Senior Vice President for Human Resources. It is chaired by the President and CEO. The Management Group does not exercise any decision making-power as defined in legislation or the Articles of Association. The Management Group addresses Group-wide development undertakings, as well as the Group’s principles and operating practices in general. More information on Vaisala’s corporate governance can be obtained online at www.vaisala. com/investors.

Sustainability Management Sustainability in Vaisala is seen as threefold. Foremost, we comply with a set of strict methods that are characteristic of a responsible company, and insist on the same standard from our collaborators. Secondly, we derive and share value through our stakeholders by being a responsible actor in society and lastly, we seek an advantage in the markets by outdoing the competition with sustainable solutions. The business case for sustainability in Vaisala is founded on information services, which entail close partnering with customers; this allows us to provide decision-support systems that improve efficiencies in customers’ operations. We constantly seek ways in which we can include a sustainability element in our products or services thereby generating added value for our customers and at the same time lessening their environmental impacts through the use of our solutions. Vaisala’s senior management has set an ambition level for the sustainability strategy and formulated a long-term sustainability vision for Vaisala: to become a world-leading sustainable supplier in selected market segments. This requires us to be able to maintain a competitive advantage in our chosen marketplaces and excel in providing sustainable products and services to our customers. Internal sustainability practices are subject to guidance from the Group’s Sustainability Manager in cooperation with all internal stakeholders. The sustainability function has been part of Group Business Development since early 2013, and the SVP of Group Business Development reports to the CEO. In practice, the most important guidance is set out in our Code of Conduct and our other internal policies and emphasized in personnel and leadership training. The company’s functions with the largest impact on our sustainability have been identified as Operations (e.g. manufacturing, sourcing and logistics subfunctions), the Services function, and the Offering units, which are responsible for the entire product creation process and R&D. Our manufacturing sites follow a certified ISO 14001 environmental management system and periodically report on their environmental performance to the Group Quality Manager. We do not currently offer monetary incentives for management or personnel to reach specific sustainability targets.

Corporate Responsibility Report 2013, Vaisala Corporation

13


Case

CheckTime – Taking the Guesswork Out of Aircraft Deicing CheckTime is one of Vaisala’s premier winter weather decision support products. A feature embedded within the AviCast product, CheckTime offers Airlines an improved decision support tool over the current manual methods to define HoldOver times. During winter precipitation airlines deice and anti-ice the aircraft to ensure safe operation. The deicing step removes any contaminants from the wing and the antiicing step covers the wing with a protective anti-icing fluid that absorbs the water of any precipitation to prevent it from adhering to the wing of the aircraft. FAA HoldOver Tables provide an estimated amount of time the aircraft can be exposed to the present environmental conditions to ensure a safe departure. The HoldOver Tables are based on prevailing visibility as a function of precipitation intensity and air temperature, and assume the conditions remain constant. The HoldOver Tables are cumbersome for pilots and cause added distraction among other departure procedures. The tables are also at times inaccurate as they do not factor in the changing weather. Vaisala’s CheckTime solution has made that all easier for the pilot. CheckTime uses precision weather measurement equipment on each airport to measure the Liquid Water Equivalent (LWE, the amount of water in the precipitation) and calculates the deicing and anti-icing fluid saturation point using that information. With the help of real-time environmental data, Vaisala is able to provide dynamic decision support information to the pilot via the airline ACARS computer in the cockpit. No more guesswork or complicated extrapolation tables. The pilot now receives CheckTime (one time) that updates once a minute and the pilot is able to maintain awareness of the state of the deicing and anti-icing fluids on the aircraft. CheckTime accounts for all changes in weather affecting the deicing fluid, and updates the CheckTime each minute to accurately reflect the state of the fluid. Vaisala is currently engaged in an FAA Winter Demonstration for the use of CheckTime with several U.S. based airlines. These five airlines will provide data to the FAA for future authorization and guidance for all airline use. As a thought leader in the aviation industry, Vaisala has installed AviCast Stations at some of the largest winter weather airports in the United States: Anchorage Ted Stevens Airport, Denver International Airport, O’Hare International Airport, Louisville International Airport and Minneapolis St.Paul International Airport in support of the FAA Demo. Vaisala is committed to

14

Corporate Responsibility Report 2013, Vaisala Corporation

continue building a network of AviCast Stations worldwide as the airline demand increases. As a member of the SAE International Committee of Deicing Standards, Vaisala has been in an influential role to set the deicing standards for airlines worldwide. We have received positive feedback from the European Airlines on CheckTime as well. Helsinki airport will be installing an AviCast system in early 2014 to support local operations.

The fundamental purpose of CheckTime is to improve efficiencies of airlines and reduce unnecessary use of deicing and anti-icing chemicals.


Material Aspects The material aspects matrix that guides Vaisala’s sustainability strategy and priorities was updated in 2013. We surveyed our key stakeholders to learn more about how they perceive Vaisala’s sustainability work and which aspects they would like to have us pursue further. The adjacent figure represents the materiality assessment with the impacts for Vaisala and the level of concern to stakeholders. The vertical axis represents the estimated level of stakeholder concern as a whole and the horizontal axis represents the current or potential impact on Vaisala. The matrix is the basis for our sustainability strategy and objective setting and therefore also helps define what needs to be included in our sustainability reports.

Our sustainability vision is to become a world leading sustainable supplier in selected market segments

Level of concern to stakeholders

Material Aspects Diagram • Safety of customers’ operations and products • Best sustainable solutions in chosen market segments

• Quality of products and services • Provide operational value to customers

• Eco-efficient offices

• Waste

• Ethical conduct • Supply chain responsibility • Engaging with customers to address sustainability concerns

• Financial performance • Health, safety and wellbeing

• Community outreach

• University and research cooperation • Energy consumption • Climate change research

• Product life cycles • Export control

• Reducing customers’ environmental impacts • Retaining and attracting talent • Operational efficiency

• Emissions • Labor and human rights

• New regulation

• Environmental management • Good corporate governance

Current or potential impact on Vaisala

Corporate Responsibility Report 2013, Vaisala Corporation

15


Case

Stakeholder Survey We surveyed a broad range of our stakeholders to learn what they think our focus areas should be as we further develop Vaisala’s sustainability strategy. The results include valuable feedback by personnel, customers and suppliers and others on how they see the current situation in Vaisala. Vaisala’s first stakeholder survey with sustainability as the theme was conducted in fall 2013. Nearly five thousand invitations were sent out and with a response rate of 15%, we received a remarkable amount of feedback on our sustainability work. The largest response groups were personnel, customers, suppliers, representatives, governmental organizations, investors and academia. Altogether 46% of all stakeholders thought that Vaisala’s sustainability-related work had improved in the recent years with 45% saying that it had remained unchanged or that they could not decide. Positive comments included the following: sustainability had been brought forward on the corporate agenda more systematically and had been discussed by the top management. Helping Customers with Sustainability Challenges and Ensuring Safety in Operations

We mainly sought the opinions of our stakeholders regarding what topics we should prioritize in our sustainability efforts. We have our own vision and drivers, but we must also properly assess the needs and concerns of stakeholders. Although our own priorities were closely linked with the views of stakeholders, a few issues were brought up more strongly than we had expected. According to the survey, the top five most important aspects Vaisala should concentrate on in its sustainability efforts are the following: 1.  Providing operational value to customers 2.  Providing the best sustainable solutions to customers in chosen segments 3.  Ensuring the safety of customers’ operations and products 4.  Designing new and improved services for customers that tackle sustainability challenges 5.  Engaging with customers, subcontractors and suppliers to address key sustainability concerns Furthermore, a key concern from all stakeholder groups was retaining talented personnel, something many respondents had had negative experiences with in the past.

16

Corporate Responsibility Report 2013, Vaisala Corporation

"The fact you are asking about sustainability makes a statement. We all see the need [to safeguard] the environment for future generations and we are looking at [renewable energies]." -Weather application customer

Reporting on What Matters

The Material Aspects diagram on the previous page was updated after a review by the Vaisala Management Group and the priority of some issues for stakeholders was increased. Examples of these are the safety of customer operations, waste management, eco-efficient offices and supply chain responsibility. Hence, these topics have been further incorporated in to the report according to GRI reporting principles. We Were Praised for this ■■ ■■ ■■ ■■

Eco-efficient Head Office Reliable and long-lasting products Training and the leadership of our managers Development of products that promote sustainable use

We Were Questioned for this ■■ ■■ ■■ ■■

Losing key people Complex supply chains Too many internal procedures Use of packaging materials


Organization Vaisala is organized into a matrix where business and R&D is conducted by two business areas: Weather and Controlled Environment. The business areas are supported by group wide functions of Services, Operations and Support Units. Sales teams are divided into the two business areas, targeting eight defined customer groups.

Weather Weather customers care for the safety and wellbeing of people and effectiveness of operations under all weather conditions. They include meteorological institutes, airports and airlines, road and railroad authorities, renewable energy customers, maritime market segments, as well as defense forces. We bring operational benefits to our customers through a wide offering of products, projects, weather information and services. The Weather business is a partner to customers whose primary interest is the safety and protection of lives and property through effective operations and decision-making support under any weather conditions. Accurate, real-time, uninterrupted and reliable weather data is the cornerstone for efficient operations. Meteorology

National meteorological institutes provide weather forecasts and warnings to safeguard people and property. They use weather observation data also to measure extreme weather phenomena and follow the changing climate. Turnkey projects and capability upgrades for prediction of severe weather are imperative for customers in the developing markets. Vaisala’s offering to the meteorological institutes includes a versatile range of high-end products, integrated measurement systems and services. The Meteorology segment is the trusted partner of meteorological and hydrological institutes whose primary interest is safety and wellbeing of people and safeguarding of property. Customer needs vary from standard weather observation equipment to further automation of weather networks and remote monitoring systems. Airports

Aviation organizations, airport operators and airport service providers are responsible for passenger safety, flight schedules and the overall efficiency of the airports. Vaisala’s aviation weather observation offering provides real-time and reliable observation information to all relevant airport stakeholders under all weather conditions. The Airports segment supports effective operational decision-making to improve the safety, efficiency and environmental compatibility of airport operations.

18

Corporate Responsibility Report 2013, Vaisala Corporation

Roads and Rail

The national and regional road authorities ensure safe and smooth traffic management and maintenance operations. The Vaisala Road and Railroad business helps them to improve mobility and safety by measuring, forecasting and integrating environmental observations to support operational efficiency, and optimized decision-making. Defense

Vaisala weather observation products and systems are also used in defense weather observation applications. Defense forces and security organizations use Vaisala’s weather observation systems and solutions to support operational decision-making and improve safety and efficiency in air, land and sea operations. In addition to their defense functions, many national defense organizations also control civilian airports and contribute to national weather forecasts. Energy

Weather impacts the operations of energy providers all over the world. Energy customers use Vaisala products and services to measure, forecast, and integrate weather information into their operations to improve the effectiveness and reliability of electrical energy systems. In order to ensure efficient and continuous energy production customers rely on Vaisala’s realtime and historical lightning information to increase the reliability of the electrical transmission systems. Renewable energy developers utilize our wind resource assessment offering to understand the future performance of their investment. Renewable energy operators use our high accuracy forecasts to integrate their clean energy into the electrical grid efficiently. Maritime

Safety, security and efficiency are top requirements also in various maritime operations. Accurate and reliable weather information is vital in ensuring safe operations in ports, on ships and offshore platforms. Maritime customers include the shipbuilding industry, offshore oil and gas platforms, and ports. Reliable measurements and environmental observations help customers enhance their operational efficiency and optimize decision-making.


Vaisala Organization Weather

Controlled Environment

Meteorology

Life Science

Airports

Targeted Industrial Applications

Roads and Rail Defense New Weather Markets Project Management Office Weather Sales

Controlled Environment Sales

Weather Offering

Controlled Environment Offering

Services Operations Support

Finance & Control / Human Resources / Communications / Legal and Facilities Marketing / Group Business Infrastructure / Group Business Development

Controlled Environment Controlled Environment serves customers in multiple industries with over 30-year wide industry knowledge. The main drivers for our customers are operational quality, risk reduction, productivity and energy savings. Our customers operate in different types of environments – from small incubators to massive engine rooms and high rise buildings – where reliable measuring and monitoring of the ambient conditions are a prerequisite for successful operations. Customers use our fixed and hand held measurement instruments as well as calibration services for temperature, humidity, dewpoint, carbon dioxide, moisture in oil and pressure. Life Science

Life science customers, such as pharmaceutical, biotechnical, medical device and drug distribution companies operate in demanding research, production, and storage areas under tight authority regulations. Vaisala monitoring systems provide them with continuous data, records, reports and alarms. We also offer support plans and field services for our life science customers.

Targeted Industrial Applications

Other industrial customers represent industries such as power generation and transmission, automotive, semiconductor, electronics and building automation. They all use Vaisala instruments for accurate and stable real time measurements to extend equipment lifetime, improve processes and end-product quality, as well as to optimize energy consumption and indoor air quality. Group-wide Functions and Support Units

Vaisala’s matrix organization also contains Groupwide functions for Services and Operations, and the Group-wide support units Finance & Control, Human Resources, Communications, Legal and Facilities, Marketing, Group Business Intelligence, and Group Business Development. The operational sales functions and research and development teams are within the business areas. To ensure an efficient way of working and two-way information sharing in the matrix model, the organizational reporting structure includes several dotted line roles that link the business areas and functions together.

Corporate Responsibility Report 2013, Vaisala Corporation

19


Case

New RS41 Radiosonde, Heart of Fourth Generation Sounding Offering Customer feedback has been the driving force in the development of the new easy to use, high quality, and reliable sounding system. At the heart of the 4th Generation Sounding System, the Vaisala radiosonde RS41 features upgraded data consistency and improved usability, applying the best metrological practices and error prevention solutions. Over the past 80 years the Vaisala radiosonde has been developed in response to customer needs, all the while focused on improving the quality of measurements, as well as the reliability of the device. Today, the radiosonde is a fine-tuned measurement instrument which is able to withstand extreme weather conditions, while conducting accurate measurements. When development of the 4th generation sounding system began, Vaisala went to its customers with a simple objective, to give customers what they want in order to maximize the value of soundings for their operations. Vaisala Soundings System MW41 was launched in mid-2012 followed by Vaisala Radiosonde RS41 launch in October 2013 to meet these requirements. The RS41 radiosonde and MW41 soundings system entity, while

delivering industry-leading data accuracy, streamlines launch preparations, reduce the possibility of human error, and lowers operational costs of upper-air weather observations. Customer-Driven R&D

Over 1,000 test soundings were conducted during the development of the RS41, in five different countries around the globe to cover different climates. The new radiosonde has been honed to perfection through laboratory and sounding tests. The development team has observed customers in action, to better understand how the each step of the sounding is done in various environments, under different conditions. The findings played an important part in the design and development program. "The RS41 has definitely been developed in association with customers; field observations, feedback on concepts, usability testing and field testing were conducted in five countries with 17 customer organizations, in four applications areas and involved over 50 people." Johanna Lentonen, Product Area Manager, Soundings, explains. The new RS41 features upgrades to the humidity and temperature sensors which ensure greater data reliability, and accuracy, that customers expect from Vaisala. The streamlined radiosonde launch process with the new maintenance-free ground check device, clear and logical use of MW41 soundings system as well as remote use of MW41 are examples of new features that were added based on customer cooperation. The new compact radiosonde design is easier to handle and 60% lighter, allowing 20% more launches using the same quantity of gas as needed with the RS92.

Read more about Vaisala’s new 4th generation radiosonde in the Vaisala News Magazine No.192/2014 http://ow.ly/tUDIl

20

Corporate Responsibility Report 2013, Vaisala Corporation


Vaisala’s Values Our way of operating is innovative and driven by the following six values. They are the basis of all our activities, both within Vaisala and with our partners and customers. Customer Focus

Personal Growth

We seek out and solve customer problems. We want to be proactive with our customers, to understand their needs now and in the future, and to develop solutions for those needs. Our customer base covers the whole world.

We work in a knowledge-intensive business where the fastest learner thrives. To be competitive, we are committed to continually improving our abilities. Continuous learning benefits both us and our organization. We contribute to an environment that provides the support, encouragement and motivation for each of us to reach our full potential.

Science-based Innovation

Our approach to our customers’ problems is systematic, and based on sound scientific knowledge. In our application of science, we favor creativity and innovation. Our focus is always on the high quality of our workmanship. Goal Orientation

We participate in the planning and setting of personal and Group-wide goals. Personal entrepreneurship, participation and commitment to shared goals are vital to our success.

Focus on Greater Good

We prioritize total optimization over suboptimization in our actions among ourselves and our customers. Our emphasis is on shared resources, group benefit and mutual cooperation. Fair Play

We demonstrate integrity in what we do. We only promise what we can deliver, and interact honestly among ourselves, our partners and customers. The confidence and trust we enjoy is valuable to us, and we do not want to risk it.

Corporate Responsibility Report 2013, Vaisala Corporation

21


Code of Conduct To further promote and ensure responsible business practices, Vaisala has a Code of Conduct which is to be followed by all employees. This Code translates our values and responsibility into actions taken by our staff every day. The Code highlights important issues such as the environmental aspects of our operations, anti-corruption and anti-trust legislation, human rights issues, workplace behavior and safety. The Code of Conduct was first introduced to the organization in 2008. Since then, all members of staff have been required to complete an online training module which is also part of the orientation program for new employees. The module has proven to be a popular and efficient method for training staff in ethical conduct and corporate responsibility. Last update of the e-learning was in fall 2012 and required the whole staff to retake the new module. At the end of the reporting period, 95.4% of current Vaisala personnel had completed the Code of Conduct online training module.

Vaisala’s Code of Conduct 1. We comply with national laws and regulations

Vaisala Oyj ("Vaisala") and its subsidiaries, offices and agencies will obey and abide by any national laws in their respective countries, whether Vaisala is stationed therein or doing business in that country. Vaisala respects local legislation and regulations, whether they are business related or other. Where differences exist between local laws, regulations, customs, norms or this code – Vaisala strives to apply which ever sets the highest standard. 2. We encourage fair and lively competition in the marketplace

Vaisala is a strong supporter of fair competition worldwide – irrespective of any national or international competition regulations. Vaisala does itself comply with any and all regulations concerning competition and encourages its competitors and associates to do the same. Healthy competition in the marketplace is necessary for the development of the whole industry, thus benefiting customers and shareholders. 3. We respect the environment and treat it with care

Vaisala takes environmental matters to heart and attends to them with care. Vaisala wants to be involved in establishing a sound foundation for better quality living, environmental protection and conservation, safety and productivity. Vaisala complies with generally accepted international environmental standards and often exceeds legal requirements. Vaisala strives to continually improve environmental performance of its

22

Corporate Responsibility Report 2013, Vaisala Corporation

products and is committed to reduce the company’s impact on the environment. All employees are responsible for Vaisala’s environmental performance. 4. We treat our suppliers and customers fairly

Vaisala strives for long term partnerships both with its suppliers as well as customers. We give our partners a good insight into our demand forecasting, constructive performance feedback as well as our support and help. We treat our suppliers and customers in a professional and ethical manner and follow through our obligations and agreements promptly. We want to share our success with our collaborators and create benefits for all parties. 5. We collaborate with subcontractors and suppliers that meet international standards in ethics and sustainable development

Vaisala pays special attention to the ethical and environmental issues when validating suppliers. We monitor and encourage our current suppliers to comply with the requirements of international human rights and environmental laws and practices. 6. We treat our employees with respect and guarantee a safe working environment

Vaisala’s central value is ‘fair play’ which shows in all our undertakings, whether it is towards our staff, suppliers or our customers. Beyond this, Vaisala respects the employees’ right to peaceful assembly, freedom of association, collective bargaining and a safe working environment. Vaisala does not accept any child, bonded or forced labor in any parts of its supply chain. Vaisala ensures that all of its safety measures are up to date and is committed to continuous improvement. 7. We encourage professional and personal growth of our employees

Vaisala invests continuously in the professional and personal learning and growth of its employees in order to realize their full potential. This is achieved by emphasizing on-the-job learning supported by internal and external personal development programs. Furthermore, Vaisala encourages its employees to actively manage their work-life balance as this has been recognized to improve work capacity and well-being at work. 8. We contribute to the communities we live in

Vaisala believes in a world where environmental observations improve daily life. As the global leader in environmental measurement and active member of society, Vaisala has a responsibility to act as a good corporate citizen. Vaisala’s overall objective for Community Outreach is to support organizations and projects that advance environmental awareness and science education. All our outreach activities should be in line with Vaisala’s values and resonate well with environmental issues such as climate, weather,


environmental measurement, industrial impact and environmental sciences. 9. We respect human rights and we retain high moral standards in whatever we do

People should be treated equally and fairly irrespective of ethnic origin, nationality, ancestry, religion or creed, political views, gender, sexual orientation, marital status, medical condition, disability or age. Vaisala respects these rights and condemns discrimination and intolerance of all kinds. Vaisala endorses the United Nations’ Universal Declaration of Human Rights, The International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, The OECD Guidelines for Multinational Enterprises, and the Ten Principles of Global Compact. Furthermore, Vaisala recognizes the value of diversity, teamwork, fair compensation, innovation, health and safety at the work place, environmental awareness, and community involvement and strives to contribute in these fields for the benefit of the company and its stakeholders. 10. We condemn all corruption

Vaisala will neither accept nor tolerate any form of corruption. Vaisala has a strict anti-corruption policy which, if not followed, will result in disciplinary actions against its violator and any accomplices. Vaisala endorses the UN Global Compact and thus pledges to work against corruption in all its forms. Employees must not use a contractor, agent, consultant or other third party to perform any act which conflicts with Vaisala’s Code of Conduct. We will seek to influence our suppliers and collaborators to adopt similar principles, if they do not already do so.

Regulatory Compliance We believe that responsible business conduct is based on fairness and integrity. Vaisala complies with all national laws and regulations, and does not respond to suspicious business proposals. We continuously follow up changes in legislation and keep our staff informed through internal communication, such as the company intranet. Vaisala was audited by the US General Services Administration (GSA) in 2011 on radiosonde sales and concluded that there had been inaccuracies in the sales monitoring system resulting in overbilling. A settlement was negotiated in May 2013, leading to Vaisala reimbursing the GSA $342,000 in overbilling and compensation. Apart from the settlement done with GSA, there were no other identified complaints, incidents or sanctions by authorities during 2013. Specifically, no incidents of corruption, anti-competitive behavior, anti-trust or monopoly practices or any other breach of legislation or regulations were identified during 2013. Furthermore, there were no reported concerns or breaches of human rights, labor rights, or environmental legislation in the adjacent supply chain.

Compliance Committee Vaisala has a compliance committee whose task is to oversee that all parts of Vaisala’s operations are in line with the Code of Conduct as well as all other legislation and regulation. The committee has members from the Legal Department, Finance & Control and Human Resources and is headed by Senior Vice President for Compliance and Risk Management.

Corporate Responsibility Report 2013, Vaisala Corporation

23


Supply Chain Management We believe that by actively engaging with our suppliers to bring sustainability topics forward, there will be a mutually beneficial impact on both our suppliers’ and our own performance. We rely on hundreds of suppliers in our operations, and therefore we have recognized sustainable supply chain management to be an important element in deploying our vision. We also believe that by actively engaging with our suppliers to bring sustainability topics forward, we can contribute to tangible improvements in both our suppliers’ and our own performance.

Engaging Suppliers With the purpose of communicating our sustainability expectations better and ensuring a responsible supply chain from materials sourcing all the way to our distributors, Vaisala initiated a Supply Chain Sustainability Development program in 2013. The scheme is intended to be a long-term process for better identifying and managing risks and opportunities, aligning our supply chain partners’ sustainability efforts with our own, and encouraging continuous development and closer collaboration through a constructive dialogue. Key components of the program: ■■ ■■ ■■ ■■ ■■

Supplier Code of Conduct Supplier ESG Self-answer Questionnaire Audits and quarterly meetings with key suppliers ESG-guidance for suppliers and Pilot with selected key suppliers to improve the guidance

Rating Suppliers on ESG-metrics Vaisala introduced the Supplier ESG Self-answer Questionnaire (SAQ) as part of the development program. The SAQ rates the supplier by asking a series of questions relating to the governance of the supplier and its adherence to standards and labor and environmental laws. The scoring categories are between the supplier exceeding expectations to being far below expectations. If a supplier scores in the lowest category, a corrective action plan must be put in place at once. The SAQ-scoring is discussed annually or when needed with each direct supplier. At the end of 2013, Vaisala had 856 direct suppliers. Our target is that at least 80% of total euros spent would be covered by SAQ-responses, the target for 2013 was not quite reached, leaving us at 76.7%.

24

Corporate Responsibility Report 2013, Vaisala Corporation

Supplier Code of Conduct The Supplier Code of Conduct reflects Vaisala’s values and the Vaisala Code of Conduct, and is based on principles created by the International Labor Organization (ILO), the United Nations Global Compact initiative, and the Electronic Industry Citizenship Coalition (EICC). The Code of Conduct contains language from standards and policies formulated by the above-mentioned organizations, as well as those of the Business Social Compliance Initiative (BSCI) and Social Accountability International (SAI).

Compliance to Human Rights and Labor Laws Vaisala does not condone human rights abuses or breaches of labor laws in any part of its supply chain and takes appropriate measures to ensure that the risks of any violations of the company’s Code of Conduct or its Supplier Code of Conduct are minimized in the adjacent supply chain. Moreover, due to the enforcement of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, suppliers to Vaisala must ensure that proper precautions are taken in order not to source any materials that have their origin in conflict areas, including but not limited to the tin, tungsten, tantalum, and gold mined in the Democratic Republic of Congo (DRC) or in adjoining countries.

Vaisala’s Supplier Code of Conduct

http://www.vaisala.com/en/sustainability/ responsiblevaisala/suppliers/Pages/default.aspx


Quality Management Quality is a key element in Vaisala’s strategy. For Vaisala, quality means delivering products or services that ensure great customer satisfaction by means which are also feasible from an internal perspective. Quality also means that our people can feel pride in their work. A balanced combination of people and processes results in customer satisfaction and healthy financial results. A certified Quality Management System is the basis for maintaining and improving our quality capability and supporting achievement of our business goals.

Designing Quality into Products and Services When new products and services are being planned, quality must be designed into them from the very beginning. During the design phase we make the most significant decisions that will impact the quality perceived by customers and the reliability and cost effectiveness of the supply chain during the entire life cycle of the product or service. It is much more costly, and sometimes impossible, to rectify failures afterwards. Likewise, good design considers both customer needs and internal needs, and for example makes manufacturing easier and faster. Hence we are actively looking at new and better ways to embed quality in our designs. Competent, innovative personnel are also a strong competitive advantage for us in this field.

Delivering Quality All our processes must absolutely deliver consistent quality; this applies to product quality, service quality, and on-time capability. Careful supply chain and service management are essential to ensure stable performance and quick response in both Vaisala’s internal operations and in work with our suppliers and partners. We aim to have robust internal delivery

processes with effective quality assurance across the board, working in close co-operation with our suppliers.

Measuring and Monitoring Quality Vaisala implements a series of quality metrics to measure actual performance at any given time. A shared view on key quality metrics allows us to effectively deploy targets, monitor progress, and take corrective actions in a timely manner. A quality analysis system was established in 2013 and it has already boosted our improvement efforts in several areas.

Continual Improvement Continual improvement is essential for guaranteeing our success in the future. We engage everyone at Vaisala in the philosophy of systematic, continual improvement in everything we do. The actions vary from major development projects to smaller everyday improvements. Getting everyone to participate and contribute ideas is a fundamental element of this process. The well-known Plan-Do-Check-Act cycle is a robust and simple concept that can be used in almost every area of the company. In 2013 significant progress was made in implementing PDCA in manufacturing teams and engaging operators in continual improvement.

Facts:

Vaisala Quality Policy

◾◾ Group-wide Certified ISO9001 Quality Management System and

We ensure customer satisfaction through reliability and continual, measurable improvement of processes.

◾◾ Certified ISO14001 environmental management system ◾◾ Certified AQAP-2110 ◾◾ ISO17025 accredited calibration services

Corporate Responsibility Report 2013, Vaisala Corporation

25


Product Safety Vaisala’s product safety policy is rooted in our Code of Conduct and conforms with international regulations and standards and also local legislation as applicable. The standard set of requirements our products must adhere to are based on EU regulations, with the addition of local U.S. and Canadian regulations on product safety. In general, Vaisala’s strict product safety criteria meet the requirements of customers throughout the world. We constantly monitor safety standardization and development in official regulations and update our procedures accordingly. The compliance procedures are also linked to Vaisala’s risk management process, and product safety is a recognized factor in our risk assessments. Product testing plans are determined as part of the product creation process, guaranteeing that each product will comply with the full set of regulations specified in the product requirements.

Testing to ensure uniform quality The purpose and goal of testing is to provide sufficient information to determine that the quality and functionality of Vaisala products and systems are on the

26

Corporate Responsibility Report 2013, Vaisala Corporation

required level. Customer needs and product requirements are verified and validated by selected and prioritized tests during development and manufacturing. As quality and reliability in demanding applications is very important to Vaisala’s customers, testing competencies, tools and processes are continuously being developed and improved. Testing activities are performed at every point in the development and maintenance lifecycle. This is accomplished by having test engineers engaged early in the product development projects or maintenance tasks and starting testing immediately when applicable. Testing verifies requirements, specifications and design documents. Internal audits are also an important part of the whole quality assurance. Vaisala uses and develops its own test facilities. These include EMC, environmental and system testing facilities. In addition to our own personnel and facilities Vaisala uses third party test laboratories, partners and experts for selected testing areas. The majority of the testing activities are performed in-house but as an example, accredited laboratories are being used to determine the electrical safety of our products. Lately investments have been made especially in software testing to ensure quality in Vaisala’s software intensive products and systems.


Case

Protecting SF6 Gas Insulated Equipment The electric power industry uses sulphur hexafluoride (SF6), a powerful greenhouse gas, for insulation purposes. Vaisala offers a multiparameter transmitter, a unique innovation that allows for online monitoring of the condition of the SF6 gas and its performance. Sulphur hexafluoride (SF6) is used as an insulating gas in transmission and distribution equipment such as switchgears and circuit breakers and other equipment used in electricity transmission and distribution. It effectively prevents arcing during switch-offs and protects equipment from failures. In order to maintain the insulation properties of SF6 and to reduce the formation of corrosive by-products from SF6 decomposition, the amount of water vapor in gas-insulated high-voltage equipment must be kept to a minimum. Although initially filled with dry gas and being closed equipment at elevated pressure with no external gas flow, the high penetration ability of water molecules may increase the moisture level, especially as equipment ages. Also, the SF6 system needs to be pressure tight for best insulation performance and safe operation of the equipment. Traditionally, moisture level has been checked using periodically taken gas samples, but in recent years condition-monitoring systems that incorporate online instrumentation for measuring the dew point of SF6 have become increasingly common.

SF6 and cause rapid deterioration. Spotting minor leaks in time helps preserve the gas as safety equipment typically only give warnings when major leaks occur. Online monitoring also removes the need for sampling and minimizes the risk of SF6 gas being released into the atmosphere. When one single instrument monitors seven different parameters, fewer mechanical connections are needed, thus reducing the risk of leakages. Moreover, the instrument’s long calibration interval means practically service-free operation, contributing to fewer incidents were SF6 could be released unintentionally.

Industry First – Seven Parameters with One Meter

The Vaisala Multiparameter Transmitter DPT145 for SF6 Gas is a unique innovation that measures dew point, pressure and temperature directly, and provides calculated values for density, normalized pressure, dew point in atmospheric pressure and ppm online. The dew point measurement combined with the pressure measurement provides an excellent assessment of the condition of the SF6 and its performance. Online monitoring helps minimize on-site visits by detecting sudden and minor leaks remotely as online dew point measurement alerts the operator to moisture issues, which can weaken the insulation properties of

SF6 is a potent greenhouse gas which has a global warming potential of 22,800 relative to CO2 in the atmosphere IPCC 4th Assessment Report, 2007

The best part – the solution reduces the need for gas sampling, effectively reducing the risk of SF6 gas getting released into the atmosphere.

Corporate Responsibility Report 2013, Vaisala Corporation

27


Our Stakeholders We recognize our responsibility towards our stakeholders, the people and organizations affected by our actions. We engage many of our stakeholders in dialogue, whether it is to come up with new solutions for society or to improve the relationship with customers, communities and suppliers. Our overarching goal is to improve daily lives through accurate environmental observations. Our stakeholders expect us to provide them with the most accurate measurement tools and data available, every day.


Working Together for a Safe Tomorrow Vaisala wants to have an engaging relationship with its stakeholders, as they are the ones who influence the future of our business. We strive to be open and transparent, responding to stakeholders’ needs to our best abilities. We are active in many corners of society and want to influence and convince people with our expertise. Working with environmental issues is a priority in our scope of societal affairs and it is in these forums we believe we have the most to offer.

Stakeholder Process We identify and evaluate our stakeholders as part of our risk management and corporate responsibility processes. Both of these assessment methods are carried out internally and are part of corporate-wide processes. We determine the impact of various stakeholder groups on us and analyze how our actions in turn affect our stakeholders. We actively seek partnerships and joint opportunities with partners, customers, suppliers, academia, research institutes, and other parties. We recognize that not all our stakeholders will either want to or be able to take part in our sustainability communication and do not voice their opinions about what they feel is material to our reporting. We try to fill this gap by keeping abreast of good reporting practices in other companies in our industry. In this chapter we discuss our relationship with what we regard as our key stakeholders. In 2013, we commissioned a broad sustainability stakeholder survey for the first time. The results clarified stakeholders’ expectations and since then we have been able to better align the Group’s sustainability prioritizations with those of our stakeholders. This report can function as a foundation for dialogue, as it often does. We seek to engage academia, the scientific community, customers and partners, and the media and various organizations in dialog with us in order to convey to them what it is we do best and why Vaisala is worth their attention. Our customers are our most vocal stakeholder group and it’s important that we have a continuous dialog with them.

Customers Vaisala’s major customer groups are: ■■ ■■

30

Meteorological and hydrological services Airport authorities and airlines

Corporate Responsibility Report 2013, Vaisala Corporation

■■ ■■ ■■ ■■ ■■ ■■

Road and rail organizations Defense forces Energy industries Maritime Life science companies Industrial companies and integrators

Stakeholder activities: ■■

■■ ■■

■■

Annual customer satisfaction survey across markets and regions. Ongoing online survey for industrial customers. Monthly online survey on technical support and services. Ongoing feedback surveys on customer training and field service operations.

Partners and Representatives Due to the nature of Vaisala’s global business, we rely on an extensive network of representatives in regions where Vaisala is not represented by a regional sales office. Having a close relationship is mutually important for both parties to gain first-hand market intelligence from the regions on one hand and the latest technological offering from Vaisala on the other. Stakeholder activities: ■■

We have some 80 representatives and distributors around the world whom we summon to a Distributor Meeting biannually. Last such meeting took place in our Head Office in 2012.

Environment The environment is not only at the core of our business, it is also an important stakeholder for us. We have always regarded the natural environment as something captivating and something we need to measure carefully. As our products are directly linked with natural


phenomena, we find it important to understand these phenomena and relate to them in our work. Stakeholder activities: ■■

We encourage our staff to take a general course in meteorology and arrange expert talks in our offices and in conferences.

Employees Vaisala employs more than 1,500 professionals and their wellbeing is important to us. Our goal is a work environment that encourages innovation and offers the opportunity for long-term professional development. The corporate culture at Vaisala emphasizes reasonable hours and workloads. Furthermore, we believe that success comes from the work of dedicated employees who take care of their own well-being. We regularly

monitor our staff for perceptions on their work. The results have shown us that not only are the members of our staff motivated by their assignments, but that they are proud to work for Vaisala and feel that their work is meaningful and rewarding. We are proud of these results and want to develop the company further, embracing our employees’ commitment. Stakeholder activities: ■■

■■

■■

Annual staff survey for the entire staff and pulse surveys mid-year. Performance and Development Cycle which incorporates annual development discussions, objective setting and performance review as well as a People Forum. Internal development programs for managers and subject area experts, Vaisala Business Learning Program, LEAD-training and mentoring.

Corporate Responsibility Report 2013, Vaisala Corporation

31


Suppliers Vaisala seeks long-term partnerships with its suppliers and wants to build mutual trust between its partners. We do this by giving our partners a good insight into our demand forecasting, constructive performance feedback as well as our support and help. In return, we expect our suppliers to respect our values and vision, and enable our commitment to quality and sustainable production to preserve our reputation and high quality of our products. Stakeholder activities: ■■

We conduct regular on-site audits at our main suppliers and advise them on our ESG-criteria

Governments and Governmental Organizations Various government bodies such as meteorological institutes, research centers and road authorities are our substantial customers and research partners.

Universities and Research Collaborators Research and development activities are a key prerequisite for Vaisala’s success. We place a special emphasis on the continuous development of our expertise. Vaisala collaborates closely with a number of meteorological authorities and research bodies around the world, such as the Finnish Meteorological Institute, VTT Technical Research Centre of Finland, Aalto University, School of Science and Technology, the US National Center for Atmospheric Research, the US National Oceanic and Atmospheric Administration, the American Meteorological Society, and the International Civil Aviation Organization. Vaisala is also an active member of the UN World Meteorological Organization, WMO. Stakeholder activities: ■■

Vaisala grants research scholarships to universities, students and researchers every year in the United States and Finland. Read more about our cooperation in the Society chapter of this report.

Vaisala’s Scientific Co-operations ◾◾Aalto University, School of Science and Technology ◾◾American Meteorological Society ◾◾ Chinese Academy of Sciences – Xian ◾◾ CLEEN Oy ◾◾ CO-LABS (Colorado) ◾◾ Colorado State University ◾◾ Deutscher Wetterdienst / GRUAN Lead Centre ◾◾ European Corporation for Lightning Detection ◾◾ European Meteorological Society ◾◾ Environmental Prediction in Canadian Cities (EPiCC) research consortium ◾◾ Finnish Meteorological Institute ◾◾ Karlsruhe Institute of Technology (KIT) ◾◾ Lappeenranta University of Technology ◾◾ MeteoSwiss / GRUAN ◾◾ MIKES – The Centre for Metrology and Accreditation ◾◾ National Center for Atmospheric Research (NCAR) ◾◾ National Oceanic and Atmospheric Administration ◾◾ National Research Council’s Board on Atmospheric Sciences and Climate ◾◾The Network of European Meteorological Services

32

Corporate Responsibility Report 2013, Vaisala Corporation

◾◾ NSF Engineering Research Center for Collaborative Adaptive Sensing of the Atmosphere (CASA) ◾◾ Royal Meteorological Society ◾◾ Shanghai Meteorological Bureau ◾◾ South Dakota School of Mines & Technology ◾◾ Stanford University ◾◾Tampere University of Technology ◾◾Tekes – the Finnish Funding Agency for Innovation ◾◾ University of Arizona ◾◾ University of Eastern Finland ◾◾ University of Florida ◾◾ University of Hawaii ◾◾ University of Helsinki ◾◾ University of Hohenheim ◾◾ University of Massachusetts ◾◾ University of Oklahoma School of Meteorology ◾◾ University of Oulu ◾◾ University of Tampere ◾◾ VTT Technical Research Center of Finland ◾◾The Weather Coalition ◾◾ World Meteorological Organization


Investors, Owners and Financial Institutions Vaisala Oyj is a publicly listed company on the NASDAQ OMX Helsinki stock exchange. One of the largest individual owners is the Finnish Academy of Science and Letters. The foundation donates its earnings from Vaisala shares to the Yrjö, Vilho and Kalle Väisälä Fund, which supports research in natural sciences. Other large shareholders include descendants of founder Professor Vilho Väisälä, private households, private companies, institutional investors and non-profit organizations. Foreign ownership amounts to 14.1% of share capital. Stakeholder activities: ■■

■■

We arrange an interim results presentation and Q&A to investors, analysts and the media each quarter We also set up meetings with institutional investors and organize events for analysts. The previous Capital Markets Day was held in Vaisala’s Head Office in 2011.

Media Our goal is to ensure that Vaisala is recognized as a responsible and innovative thought leader in environmental monitoring by generating positive coverage with clear and consistent messages and establishing relevant media relationships. As a publicly listed company, Vaisala also guarantees that timely, accurate and transparent financial communications are available to all its stakeholders. Stakeholder activities: ■■

■■

Continuous effort to maintain dialogue with media in main markets Media visits to Helsinki Head Office arranged regularly (2 in 2013) to strengthen top management’s relationship with the media

Finnish energy and environment cluster. The center’s objective is to facilitate the development of innovation and globally competitive technologies and service products through its stakeholders. CLEEN’s shareholders include around 40 leading Finnish companies, Finnish universities and research institutions. The main areas of research include carbon-neutral energy production, sustainable fuels, efficient energy use, resource-efficient production technologies and services, recycling of materials and waste management, and assessment of environmental efficiency. Vaisala is also a member of the Finnish Water Forum, a joint public-private cooperation platform that represents the variety of actors in the Finnish water sector. Moreover, Vaisala is a member of the Association of the HydroMeteorological Equipment Industry and a founding partner of FIRWE, Finnish Road Weather Excellence collaboration project. Also, Vaisala is part of the Finnish Corporate Responsibility Network, FIBS. Vaisala is a Sustaining Member of the American Meteorological Society and is a sponsor of its Freshman and Undergraduate Scholarship Program. Stakeholder activities: ■■

Activities depending on organizations’ and working groups’ planned activities.

General Public The general public is dependent on reliable weather forecasts. Farmers, sailors, motorists, pilots and event organizers are just a few examples of people who rely on weather forecasts to support their activities. Vaisala is indirectly providing the general public with accurate and reliable weather data through meteorological institutes. Many other Vaisala products also benefit the general public, although often in ways that are unrecognized. For example, Vaisala’s early warning systems improve passenger safety at airports, on high-speed trains and on highways.

Industrial Organizations, Associations and NGOs Vaisala is a member of the Federation of Finnish Technology Industries, and has members in several of the Federation’s expert working groups. Vaisala’s CEO Kjell Forsén is a member of the Board for the International Chamber of Commerce Finland (ICC) and Vaisala participates in ICC’s working groups. Mr. Forsén is also a Board member for VTT Technical Research Centre of Finland, and he is Chairman for the Research and Innovation Committee at the Confederation of Finnish Industries. Vaisala is a shareholder of CLEEN Oy, the strategic center for science, technology and innovation of the

Corporate Responsibility Report 2013, Vaisala Corporation

33


Case

Four Perspectives on Safety in Customer Operations – a Given or a Differentiator? Our recent stakeholder survey results made it clear that Vaisala enables safety in its customers’ operations. We sat down with four directors to discuss what matters most when it comes to safety in Vaisala’s various businesses.

1. Please describe the key safety needs and concerns of customers in your industry. 2. How would you describe how we fulfill this request for our customers today? 3. Could you give a concrete example of how Vaisala’s products help ensure safety for our customers and end-users? 4. Future outlook of safety, what are the future solutions? 5. What do you see as the future driving forces relating to the safety of our customers’ operations and products? 6. What is the link between safety and sustainability from your perspective? Pirjo Kortteisto, Director, Life Sciences

1. Medical industries are under increasing pressure from regulators to ensure the safety and efficiency of pharmaceutical products, from manufacturing all the way to the end-user. Moreover, conditions in laboratories are highly controlled, which not only serves the process taking place, but also the safety of employees. 2. Let me start by dividing the needs into customers’ products and their employees. On the product side, we ensure that what the customer manufactures, e.g. medicines or vaccines, are safe and effective by confirming that the storage conditions have been in compliance with the industry’s strict regulations. Secondly, some of our devices are designed to ensure the safety of indoor-air in laboratories or clean rooms and to protect personnel from contamination or exposure to hazardous gases or other substances.

34

Corporate Responsibility Report 2013, Vaisala Corporation

3. Vaccines and biomedical products spoil easily when exposed to the wrong temperatures and sometimes humidity conditions during transport and storage. Without tracking temperature and humidity, there is no way for the doctor or patient to know whether the treatment given is effective. Our solution provides an accurate description of these conditions along the entire logistics chain, so that the manufacturer can be sure that the product is effective and safe to use when it reaches the patient. 4. The markets for biopharma products are on the rise, which translates into increased demand for accurate and stable conditions in manufacturing and storage facilities. Biopharma, i.e. medicines based on living cells, are more likely to spoil than synthetic drugs if not stored in the right conditions. 5. Firstly, personalized medicine in hospitals will increase. That is when a sample is taken from a patient, treated with a biopharma product, and then inserted back into the patient. The treatment can be effective but is subject to biocontamination if treated improperly. Secondly, numerous important patents are soon coming to an end, allowing manufacture of generic titles. Patient safety is a real concern throughout the industry and regulators, also in developing countries, are doing their best to address the potential risks of generic medicines. Thirdly, the costs of healthcare increase dramatically with improved welfare and this drives manufacturing and storage to new geographical regions. 6. I would definitely say zero waste. There must be a reliable procedure in place that tells you with certainty whether you have to scrap a truck full of your merchandise or not because it might have become ruined in transit. We take the uncertainty out of the equation and give our customer proof of whether the shipment survived. All of this is a step towards getting better and safer healthcare for people and improving cost efficiency in the medical industry.


Case Antero Järvinen, Director, Roads and Rail

1. Our customers, the departments of transportation (DOTs) and related authorities have an obligation and mission to safeguard lives and property on roads and rail, in a very cost conscientious manner I might add. When you consider the scope of this task, you will soon realize it is enormous. In the United States alone, more than 30,000 fatalities occur on roads annually; around a quarter of those are weather-related. DOTs have to fight budget cuts and increasing traffic and at the same time provide a better and more efficient service. 2. We provide DOTs with the market’s broadest range of weather observation technology to help manage their road network. Our focus is on providing a complete family of products and services to support our customers decision making in order to secure maximum friction and traffic flows during adverse weather conditions. This includes eliminating loss of friction on the road, ice as we also call it, and secondly, to enable decision making support based on accurate in-situ measurements and reliable forecasts. Moreover, we have helped our customers in their dire financial circumstances by providing solutions with significant cost-efficiencies for road maintenance operations. 3. We use remote sensors that measure the road condition including a friction value, without having to embed a sensor into the pavement. This accurate non-intrusive technology also improves safety and efficiency for the maintenance crew, since servicing traditional in-pavement sensors requires pavement rework and traffic control, which place personnel at risk. Together with a forecasting service, the road weather station network alerts operators in time for them to issue warnings and conduct pro-active maintenance operations, such as applying anti-icing chemicals. 4. The market for advanced road weather application tools and maintenance free solutions for road operators is increasing. However, to protect their budgets DOTs have a need to improve and measure their own performance. To meet these growing needs we are continuously investing in RoadDSS™ software service optimized for road weather and maintenance information management. A new functionality integrated with RoadDSS is an automated maintenance performance index that has been co-developed with our key customer, the Idaho Department of Transportation. Moreover, our technology development also focuses on reliable roadside and sensor solutions that require

minimum maintenance or utilize remote service technologies. 5. One of the most important current topics in road condition monitoring is the emergence of mobile friction and weather monitoring. We at Vaisala have recently released a comprehensive vehicle-mounted system (DSP310) targeted to road operators. The system measures the road condition and atmospheric parameters including pavement state, friction value, pavement and air temperature, humidity and dew point. This is supported by a cloud data storage and web-based visualization solution. Intelligent and connected vehicles are another related area that has been widely researched within EU programs, by national governments as well as by car manufacturers. The idea is that cars are already equipped with sensors that can help determine environmental conditions such as air temperature, ABS brakes on, windshield wipers on, and more. By collecting this high density information we could form an accurate picture of current road conditions. Furthermore, various plans exist to make cars talk to each other and to the infrastructure (such as with a Vaisala Road Weather Station) in order to warn about road hazards in real time. This is an exciting development in safety enhancement, especially with the recent news about self-driving cars in mind. We at Vaisala follow these developments closely and are planning various technologies and solutions for use in the future’s connected world of cars. 6. There are several direct links between them including reduced traffic flow that causes increased vehicle emissions during adverse weather events if the roads are not properly maintained. Perhaps most prominently the over-use of road treatment chemicals is not sustainable and does not increase safety. Too many road operators still rely on a just-in-case-method with limited road weather and maintenance information tools. Pekka Ravila, Director, Targeted Industrial Applications

1. Our industrial instruments are used in a very broad range of applications and customers’ needs naturally vary. Safety needs can arise from ensuring timely maintenance of customers’ machinery and equipment, thus avoiding costly breakdowns, ensuring consistent quality and yield of the end-product e.g. in drying applications, improving energy efficiency or controlling CO2 levels in production facilities.

Corporate Responsibility Report 2013, Vaisala Corporation

35


Case 2. By choosing our products, customers look for accuracy, long product lifetime, quality, robustness, and reliability. Although we don’t manufacture instruments classified as industrial safety equipment, the outcome of using these accurate measurement devices result in increased operational efficiency and safety on a general level. 3. One area that comes to mind is CO2 measurements. Some customers measure CO2 levels in breweries, warehouses, and refrigerated areas where fermentation or gas leakage can produce CO2 levels harmful for humans working in these areas and thus need reliable monitoring. Nevertheless, our products are mostly used to ensure the quality of the product being manufactured, the efficiency of customers’ processes, and the longevity of their equipment. 4. We will continue to provide solutions for risk mitigation and long term maintenance support for various sorts of industrial applications. It is unlikely that we would seek to position our products specifically into the industrial safety category in the foreseeable future. 5. From our perspective, it is to help improve customers’ processes through accurate measurement instruments, minimizing downtime, product quality problems, and improving maintenance planning and production yield. 6. Sustainability and safety work well together, I think. If you can avoid accidents, machine breakdowns, chemical and gas leaks and so forth, you can minimize or at least maintain your environmental impacts. Kenneth Hörhammer, Director, Airports

1. One could say that everything in the aviation industry starts with safety. As we see it, safety in this industry is determined by three aspects. Firstly, it’s the human aspect consisting of e.g. adequate personnel training and human-friendly technology design. Secondly, the operational aspects cover for example coping with changing weather conditions and deploying reliable and accurate technology. Thirdly, the aviation industry is highly governed by international regulations and agreed working practices, and the regulatory aspect includes for example compliance with ICAO, EUROCONTROL and FAA standards and recommended practices. 2. We combine weather, technology and understanding of airport operations. We build and deploy airport weather solutions that take into consideration

36

Corporate Responsibility Report 2013, Vaisala Corporation

the operational, human, and regulatory aspects. In addition, the airports and the whole aviation industry are constantly under pressure to perform more efficiently while still taking the environmental impact into consideration. As we cannot control weather, Vaisala provides the operational decisionmakers with the required accurate, reliable and timely weather information in a form that is optimized for them. 3. Problems caused by wind are the single most dangerous variable. Vaisala’s Airport Weather Observation Systems (AWOS) are computerized systems that automatically measure weather parameters, analyze the data, prepare a weather observation consisting of the parameters measured, and broadcast the observation to pilots and air traffic control. This ensures that both pilots and air traffic control know when a safe landing is possible. 4. Our work will increasingly involve improving inefficiencies related to weather. These include deicing of airplanes, in which we can save significant amounts of chemicals; we can increase awareness of wind shear and therefore improve landing efficiency, which can save enormous amounts of aviation gasoline; we know when runways will freeze before they do, so that they can be treated in time. Improving such efficiencies both reduces the costs of operating the airport or flying the aircraft, and they also have a direct link to reduced environmental impacts. 5. Air traffic is still increasing globally. New markets in Africa and Asia are expanding their infrastructure. In the developing regions the focus is primarily on increasing safety in their flight operations. In the developed regions restrictions on expansion of infrastructure as well as the airspace drive development towards more efficient use of existing infrastructure. There is an effort to increase safety performance globally, but at the same time aircraft are getting larger and turnaround times are shrinking. To ensure the safety of all parties, we need to stay ahead of the game despite the growing traffic. 6. Especially in North America and Europe, the three key topics in the aviation industry are safety, efficiency, and sustainability. They always go hand in hand. The industry is under pressure because of its large environmental impacts and looks to find efficiencies across the board while at the same time increasing its safety. Vaisala is in an outstanding position to deliver all three aspects to its airport customers now and in the future.


Case

Vaisala and ITD Awarded for Innovative Performance Measurement The state of Idaho in United States is Vaisala’s flagship customer for non-intrusive pavement sensors, DSC111 and DST111. Harsh winters and strong demands from the customer, put the sensors under constant pressure to perform. Images courtesy of Risto Hölttä

Vaisala’s collaboration with the Idaho Transportation Department has won a "Best New Innovative Product, Service or Application for 2013" award at the 2013 National Rural ITS Conference in St. Cloud, Minnesota. The award recognizes the Winter Maintenance Performance Index developed in collaboration with ITD and implemented in the Vaisala hosted RoadDSS™ road weather application. The Idaho Transportation Department, using Vaisala’s non-intrusive pavement sensors that calculate grip or friction values, discovered that this value can also be used to measure the success of the department’s winter road maintenance operations. Idaho personnel developed several benchmark indexes that calculated operational performance, and were able to normalize any variance caused by storms and seasons. Vaisala supported this development by integrating the indexes into the RoadDSS™ Navigator software which allows decision-makers to quickly review the indexes alongside their other decision-making tools. "Vaisala strives to develop and apply the latest technological advancements, not only on our own, but by helping solve the challenges our customers face", says Paul Bridge, Offering Manager and Meteorologist for Vaisala Roads. "We are very proud to hear that our technology has been acknowledged as the most innovative in the industry". Vaisala’s road weather system provides real value to winter maintenance operations in Idaho. "We had a pretty significant year, this year (2012–13), and preliminary estimates, appears that we have had a 10–20% reduction in our seven (7) million dollar chemical usage budget," says Dennis Jensen, Mobility Services-Winter Maintenance Coordinator, Idaho Transportation Department.

Facts:

◾◾The world’s largest single install base of Vaisala’s non-invasive highway sensing technology: DST111 Surface Temperature Sensor and DSC111 Surface State Sensor. ◾◾ More than 60,000 miles of road to cover ◾◾ Network of 49 Vaisala Road Weather Information System stations across the State. ◾◾ ITD has estimated that it can save 40 percent of the winter maintenance material costs with Vaisala’s technology, such as the RoadDSS software. For more information on the ITS award: http://www.nritsconference.org/ruralawards.html

Corporate Responsibility Report 2013, Vaisala Corporation

37


Economy and Risk Sound financial development and performance is the foundation of a sustainable company. Together with prudent risk management, we can leverage our opportunities and risks for maximum benefit. For us, economic responsibility means creating added value to the company’s stakeholders, managing finances and resources efficiently, and securing long-term profitable growth and financial stability.


Financial Overview of 2013 Challenging economic conditions and especially tight governmental austerity measures characterized weather and industrial measurement solutions market in 2013. Order intake slowdown started in 2012 and continued during the first half of 2013. Further, appreciation of the euro weakened the competitiveness of Vaisala in export markets. As a result, net sales of both Vaisala’s Business Areas decreased in 2013. Positively, during the second half of the year early signs of market revival were registered and order intake improved. Vaisala Group’s net sales were EUR 273.2 (293.3) million and showed a decrease of 7% from 2012. Weather Business Area net sales were EUR 200.0 (218.0) million and decreased by 8% year-on-year mainly due to lower purchase volume of governmental customers. Controlled Environment Business Area net sales were EUR 73.2 (75.3) million decreasing by 3% year-on-year mainly due to appreciated euro and challenging economic conditions. Net sales were in the Americas EUR 107.8 (108.6) million in January-December 2013 and it decreased by 1% year-on-year, in EMEA EUR 98.6 (107.6) million and it decreased by 8% year-on-year, and in APAC EUR 66.9 (77.2) million and it decreased by 13% year-on-year. Operations outside Finland accounted for 97% (98%) of net sales. Operating result for 2013 was EUR 18.1 (30.1) million. The operating profit decreased by 40% year-on-year. The decrease in operating profit was mainly caused by lower net sales and the impairment charge of EUR 4.3 million. The impairment charge is related to goodwill and intangible assets originating from the acquisitions of Veriteq Instruments Inc. in 2010. This impairment charge was mainly due to delayed Life Science business growth as markets in all geographic areas have not developed according to expectations. Vaisala’s operating profit also included a net gain of EUR 1.5 million from the sale of three non-weather road transportation product lines. Operating expenses excluding other income and expenses were EUR 113.6 (115.7) million and they decreased 2% from previous year. Main reasons were lower sales and marketing expenses as well as decreased bad debt provision. Profit before taxes for 2013 were EUR 17.2 (29.1) million and income taxes were EUR 6.2 (7.4) million. Net profit was EUR 10.9 (21.7) million. Effective tax rate of 36.4% (25.6%) is high mainly due to non-tax deductibility of the impairment charge. Earnings per share for the year were EUR 0.60 (1.20). Vaisala’s financial position remained strong at the end of the December 2013. Cash and cash equivalents amounted to EUR 45.8 (74.8) million at the end of

40

Corporate Responsibility Report 2013, Vaisala Corporation

December 2013 and Vaisala did not have any material interest bearing liabilities. The balance sheet total was EUR 225.6 (257.0) million. The solvency ratio at the end of the December 2013 was 72% (75%), the decrease was mainly caused by capital return. Vaisala’s cash flow from business operations was EUR 28.2 (48.2) million and the decrease is mainly related to lower operating profit and higher income taxes paid. In 2013, Vaisala spent EUR 12.3 million in acquisitions as well as paid shareholders EUR 16.2 million dividend in April and EUR 22.2 million capital return in August. In 2013 research and development expenses totaled EUR 28.9 (28.0) million, representing 10.6% (9.5%) of net sales. The goal is to keep the share of research and development expenses at around 10% of net sales. Research and development grants from governmental organizations amounted to EUR 0.6 million. The average number of people employed in the Vaisala Group in the financial year was 1 485 (1 422). The number of employees at the end of the financial year was 1 563 people, with 44% of the personnel based outside Finland. The total personnel expenses in 2013 were EUR 104.7 (104.5) million. On May 3, 2012 the Board of Directors resolved for the key employees a share-based incentive plan that is based on the development of profitability in calendar year 2012 and it will be paid partly in the Company’s series A-shares and partly in cash in spring 2015. The cash proportion will cover taxes and tax-related costs arising from the reward to a key employee. No reward will be paid, if a key employee’s employment or service ends before the reward payment date. In 2013, Vaisala established a new share incentive plan for the group key employees’ that is based on the development of group’s profitability in calendar year 2013. It will be paid partly in the Company’s series A shares and partly in cash in spring 2016. The cash proportion will cover taxes and tax-related costs arising from the reward to a key employee. No reward will be paid, if a key employee’s employment or service


Key figures EUR million

2009

2010

2011

2012

2013

Net sales

231.8

253.2

273.6

293.3

273.2

Operating costs

210.4

229.0

245.0

247.9

237.8

Operating profit R&D expenditure % of net sales Income taxes

12.0

11.8

16.1

30.2

18.1

12.2%

12.4%

10.2%

9.5%

10.6%

3.4

4.2

4.2

6.4

6.6

2009

2010

2011

2012

2013

63.3

68.8

77.8

87.0

84.7

0.4

0.6

6.9

8.0

8.1

7.6

8.8

Personnel expenses EUR million Total payroll & benefits Share-based remunerations Social costs Pension expenses, net

6.8

8.1

8.2

9.4

10.6

76.9

84.9

94.1

104.5

104.7

EUR 1,000

2009

2010

2011

2012

2013

EMEA

1,963

4,698

3,683

4,430

4,397

1,533

4,245

3,341

4,067

4,089

524

-1,539

-185

1,523

1,563

Total

Gross taxes by geographical area

of which Finland Americas of which United States APAC Total

524

-1,475

-97

1,526

1,319

983

1,020

722

416

684

3,443

4,179

4,220

6,369

6,644

2009

2010

2011

2012

2013

3.7%

5.6%

5.7%

11.7%

6.3%

Financial ratios Return on equity (ROE) Solvency ratio

82%

76%

74%

75%

72%

Earnings per share (EUR)

0.38

0.56

0.57

1.20

0.60

Dividends per share (EUR)

0.65

0.65

0.65

0.90

0.90*

2009

2010

2011

2012

2013

209

691

689

873

616

Financial assistance from governments EUR 1,000 Investment grants, R&D grants or other grants

Direct economic value generated EUR million

2009

2010

2011

2012

2013

Revenues

231.8

253.2

273.6

293.3

273.2

-133.5

-180.1

-150.9

-143.5

-133.1

Employee wages and benefits

-76.9

-48.9

-94.1

-104.5

-104.7

Payments to providers of capital

-16.4

-11.8

-11.8

-11.8

-16.2

Economic value distributed Operating costs

Payments to government

-3.4

-4.2

-4.2

-6.4

-6.6

Community investments (donations)

-0.2

-0.4

-0.7

-0.3

-0.1

1.4

7.8

11.9

26.8

12.5

Economic value retained * Board’s proposal to the Annual General Meeting


ends before the reward payment date. There will be no reward payment based on Group’s profitability in calendar year 2013. Vaisala’s A-shares are listed on the Mid Cap list of the NASDAQ OMX Helsinki stock exchange under Industrial Goods & Services sector. Vaisala is included in the OMX GES Sustainability Finland index. The index is a benchmark index comprising of Finnish listed companies, all leaders in terms of sustainability. The index criteria are based upon international guidelines for environmental, social and governance (ESG) issues and support investor considerations to the UN Principles for Responsible Investment (PRI).

Risk Management Vaisala has a risk management policy which has been approved by the Board of Directors, and which policy covers the company’s business, operational, hazard, and financial risks. The policy aims at ensuring the safety of the company’s personnel, operations and products, as well as the continuity and compliance of business operations. Risk management is integrated into business processes and operations. This is accomplished by the risk management process, which consists of risk

identification, risk assessment, risk treatment, followup, and risk reporting. The most significant risks are reported to the Audit committee and to the Board of Directors annually, and as needed. Vaisala’s Risk Management Steering Group, represented by key internal stakeholders, is responsible for the oversight of the risk management process and ensuring that all significant risks are identified and reported, and risks are acted upon on all necessary organizational levels and geographical locations. Risks typical to international manufacturing business affect Vaisala’s operating environment. The most significant of these are changes in the global economy, currency exchange rates, supply chain, and production. These may affect Vaisala’s business both in the short and in the long term. Vaisala monitors these risks and prepares for them in accordance with the company’s risk management policy. Vaisala’s risks have been assessed relatively minor from environmental and social perspectives. Global insurance programs cover risks relating to property damage, business interruption, different liabilities, transportation, and business travel. In general, Vaisala’s ability to tolerate risks is good due to strong capital structure. Read more about our risk management, corporate governance and investor relations on our website www.vaisala.com/investors

42

Operating costs

Employee wages and benefits Payments to providers of capital Payments to government Community investments (donations)

Economic value retained +12.5M€

Corporate Responsibility Report 2013, Vaisala Corporation

-133.1 M€

-104.7 M€ -16.2 M€ -6.6 M€ -0.1 M€

Economic value distributed

Direct economic value generated

Revenues +273.2M€


Case

Increasing Production Capacity by +20% with Zero Increase in Energy Consumption Valio, solely owned by the Finnish dairy farmers, is the largest dairy company in Finland. The company is represented by 8,000 milk producers who own and operate family farms, each having on average 30 milk cows. Valio, operating in the world’s northernmost agricultural region, is faced with many challenges. High feed costs, a direct result of the short growing season, set the price of milk quite high. Careful cost control is imperative to remain competitive. Valio concentrates much effort on developing innovative added-value products such as lactose-free, protein rich and functional dairy items to maximize the value of milk products. Demineralized Whey – From a By-Product to Added-Value Raw Material

Evidence of Valio’s innovativeness is found in its demineralized whey product. A by-product of cheese making, whey is composed of nutritionally beneficial whey protein, lactose and minerals. Due to its high mineral content, it has traditionally been used in animal feed. Whey can be used for human consumption only after lowering its mineral content using ion exchange, electrodialysis and membrane filtration. This demineralized whey is dried and can then be used in baby foods, infant formulas, confectionaries, dairy products, ice cream and bakery goods. With a production of 40 million kgs in 2012 Valio is one of the world’s largest producers of demineralized whey powder. From Over – Drying to Optimized Process Controls

Demineralized whey is spray-dried. There is seasonal variation in the humidity of the inlet air. Due to lack

of efficient process control, the dryers were forced to run with a safety margin to ensure adequate drying. This led to high energy consumption and costly over-drying. To optimize the drying process, Valio implemented controls based on on-line humidity measurement. The chosen humidity sensors needed to withstand +80 … +100°C and to tolerate some dust; (the outlet air is filtrated). The accuracy and easiness of cleaning were also important selection criteria. The dryers were equipped with two Vaisala HUMICAP® Humidity and Temperature Transmitter HMT333 units; one in the inlet and the other in the outlet air. The inlet air humidity data is used to steer the process. The outlet air humidity data correlates with the moisture content of the powder, thus it can be used as an indicator for the final product quality. Optimized Drying Brings Benefits

Marko Outinen, R&D Manager at Valio, describes the benefits of the optimized dryer controls: "By the implementation of humidity controls the production capacity was increased by at least 20% without increasing energy consumption. As drying is the most expensive unit operation in the powder processing, this naturally has a huge economical impact on total profitability. In addition, optimizing the drying process makes it possible to fine-tune important product properties, such as powder particle size, a critical factor for dusting and solubility. At the same time, the water content of the final product was optimized for maximum yield."

Whey condensate to dryer

Measurements in the inlet air • Temperature • Relative humidity • Absolute humidity

Measurements in the outlet air • Temperature • Relative humidity • Absolute humidity

+20% increase in yield

44

Corporate Responsibility Report 2013, Vaisala Corporation


Case

30 Years of Lightning Detection Throughout the NLDN’s 30-year history, Vaisala has continued to develop the technology further, making a number of upgrades to improve the network’s detection efficiency, location accuracy and overall performance. The first lightning location data recorded and archived by the NLDN was on June 1, 1983. Since the first lightning location data was recorded, the NLDN has contributed 30 years of lightning data for purposes ranging from meteorological forecasting of storm activity, protection of life and property at airports and for defense operations, utility infrastructure planning and historical analyses, insurance claim investigation, maritime applications, and many others. Today we know much more about lightning detection and safety, and agencies such as the National Weather Service, major U.S. utility companies, and many U.S. airports have come to rely on the accuracy of Vaisala’s NLDN data and the reliability of the network. "The NLDN has a unique history, from its early development where researchers and agencies partnered together to create the first lightning networks, to the advancements in lightning data applications, to today where Vaisala’s NLDN is the most accurate, validated and innovative lightning detection network in the U.S.," says Melanie Scott, Meteorologist in Vaisala.

The NLDN’s history is presented on Vaisala’s website at www.vaisala.com/nldn30

Scientifically Quantifying Lightning for 30 years

30 Greatest Moments of the NLDN

As part of our celebration of this event we commemorated the greatest moments of the NLDN last summer. These moments highlight the innovations, technological advancements, people and organizations who envisioned the benefits of a national lightning detection network for safety and protection of assets. To learn more about the NLDN30 campaign, visit www.vaisala.com/nldn30 and explore the interactive timeline and map, find interesting lightning statistics, and view lightning maps for well-known weather events.

http://www.youtube.com/watch?v=5GlIAWbZwbE

Corporate Responsibility Report 2013, Vaisala Corporation

45


Managing Talent Vaisala’s success is built on the skills and knowledge of its people. Our personnel are highly valued and we want to see them develop in their careers. Fair Play is one of our most cherished values. We work according to the spirit and letter of this value and it is reflected in each decision we make.


Workforce Personnel by Geographical Area

Personnel by Gender Distribution

59% Finland

Management Group Gender Distribution 79% Male

70% Male

7% Other Europe

25% Americas 30% Female

21% Female

9% Asia and

Australia

Personnel by Age Group -19

0.4%

20-24

3% Comprehensive 8.1% 13.2%

30-34 35-39

16.7%

40-44

16.6%

60-

17% Commercial,

13% College/

58% Technology

65% University degree

10% Natural Science

Social Science

vocational school

12.5%

50-54

17% High school/

vocational institute

15.2%

45-49

7.9%

55-59

8% General Programs

school

4.3%

25-29

Personnel by Area of Education

Personnel by Level of Education

7% Other Professional

2% Doctoral degree

5.2%

Covers 80% of Group's personnel

Covers 77% of Group's personnel

Total Workforce Employees at end of period Finland

2009

2010

2011

2012

2013

1 407

1 367

1 394

1 442

1 563*

57.3%

56.6%

55.5%

57.3%

55.7%

Rest of Europe

8.6%

8.2%

8.2%

7.7%

7.0%

Americas

27.1%

27.9%

27.6%

26.3%

29.2%

Asia, Australia and Oceania

7.0%

7.3%

8.7%

8.7%

8.1%

Women

28.1%

28.7%

28.4%

29.5%

30.3%

Men

71.9%

71.3%

71.6%

70.5%

69.7%

R&D staff

20.1%

20.4%

19.4%

19.5%

19.8%

* Includes personnel from 2013 acquisitions

48

Corporate Responsibility Report 2013, Vaisala Corporation


Measurable Competence Motivated and highly educated staff are a cornerstone of Vaisala’s success. Retaining creative and skilled people is not necessarily simple, and we want to make every member of our staff feel valued and respected. Although on average, employees stay with us for more than a decade, we do not take this for granted but aim for highly motivating career plans. This kind of long-term commitment has provided us with extremely competent staff dedicated to developing superior technology and long-term customer relationships.

Preferred Employer of the Future A reputation and image as a good employer are important to us when competing for talented individuals. We want to be acknowledged as a great company to work for and want potential employees to learn about the opportunities that we offer. Technology- and research-intensive companies like Vaisala are reliant on a constant and growing talent pool on the job markets.To attract talent to Vaisala, we engage researchers, academics and students, and focus on retaining critical expertise in the company and constantly develop our personnel. Risks and opportunities relating to personnel are part of our risk management, and our Code of Conduct lays down the basic principles regarding our treatment of personnel.

Recruitment and Turnover At the end of 2013, our staff had increased by 121 employees compared with the situation a year earlier. The total staff count at the end of the reporting period was 1,563 (1,442 in 2012). The average age of personnel was 42.0 years. Personnel growth in 2013 was highest in Vaisala’s operations in Finland and the North American Head Office in Boulder, Colorado. The continued centralization of operations in Helsinki and Boulder contributed to staff increases at these locations. The total figures reported include 86 new members of staff from the two acquisitions made in 2013 and are only represented in the geographical distribution and the total headcount in the adjacent table; other statistics will appear in 2014 when we finalize the integration of both acquisition projects in June 2014 according to their integration plans.

Major Changes during the Reporting Period In 2013, Vaisala acquired two companies both headquartered in North America. This resulted in an increase of 86

members of staff. During the year, Vaisala divested nonweather related roads products from its portfolio. The divestment affected seven people directly and resulted in closing of the office in Durham, North Carolina. These products and the Durham office were part of a previous acquisition in 2009.

Safety at Work Vaisala is responsible for the health and safety of its staff. We believe that accidents are avoidable if necessary precautions have been made. Vaisala has trained health and safety supervisors in all its production and service facilities, and we strictly follow local regulations on health and safety issues. Furthermore, all supervisors are trained in health & safety legislation and responsibilities. Regular health & safety training is provided for all employees that require it in their work. Both employees and managers are required to pay close attention to identifying potential hazards in the workplace. Injury and accident statistics are prudently monitored and work at Vaisala is generally low-risk. Activities that have a higher level of risk include work near live traffic, work on construction sites, railways or airports, working at height, working at night or in poor visibility, and working with ladders, drills, saws, solders and other tools. Risk assessments have been carried out for all working environments at Vaisala and we provide training for employees that need to carry out work that involves a higher rate of risk. Injuries recorded in 2013 totaled 21 (17 in Finland, 3 in the U.S. and one in Germany). We define workplace injury as an incident after which an employee needs medical attention, whether or not it will result in lost days, restricted work or medical treatment beyond first aid. Near misses are defined as an opportunity to improve safety, health, environmental and security of an operation based on a condition or an incident with potential for more serious consequence. Most work related injuries sustained in the Helsinki office are

Corporate Responsibility Report 2013, Vaisala Corporation

49


strains, small wounds, bumps and bruises. About half of the injuries are recorded on trips either to or from work and are caused mostly by slips due to icy pathways in the winter and in sports events arranged by Vaisala’s sports clubs. There were no incidences of occupational diseases identified in 2013. Vaisala recognizes the importance of preventive work for both accidents and illnesses. Therefore, the company promotes healthy and active lifestyles by subsidizing sports and exercise expenses for a multitude of Vaisala sports clubs and events, offering onsite fitness facilities and encouraging people to cycle to work.

employer representative. The committee’s responsibilities include monitoring and developing the work environment in order to minimize the risk for work related accidents and illnesses. In 2013, the committee held altogether eight meetings where they among other things, named responsible persons for maintaining first-aid equipment, carrying out health and safety audits, and monitoring near miss incidents. During the year, the committee organized five first-aid training sessions, four forklift trainings, and eight sessions on early prevention process for managers.

Health and Safety Committee at Head Office

Collective Agreements and Trade Unions

A health and safety committee convenes quarterly at our Head Office and whenever necessary. This committee is formed by nine representatives including five workers, three clerical staff representatives and one

Vaisala recognizes the Federation of Finnish Technology Industries as its trade union. Vaisala’s employees in Finland are covered by three collective agreements: the collective agreement for employees

Staff Survey To obtain a better understanding of what our employees throughout the company are thinking and to keep abreast of possible changes and trends in their attitudes, employee satisfaction and well-being are measured regularly at Vaisala. The survey is conducted by a contracted research company to guarantee the confidentiality of the responses. The response rate in 2013 was 84%. As in previous years, the results showed that Vaisala employees are proud to work for Vaisala, find their work meaningful and experience professionalism in their own area of expertise. Also, their immediate superiors were very highly respected for their leadership qualities. In general, Vaisala people are committed to their work and to Vaisala as an employer. In addition to the annual Staff Survey, a global Pulse Survey was conducted to further map employee well-being at Vaisala. Pulse is a focused follow-up study to the Staff Survey that is conducted annually each fall. It provides complimentary feedback and development to the Staff Survey that is carried out each spring. In addition to employee well-being, this year’s Pulse Survey focused on our strategic theme of creating customer value. As a positive finding, Pulse results demonstrated that Vaisala employees feel they are personally able to contribute to positive customer experiences. Feedback obtained from surveys is used to continually develop Vaisala’s ways of working and our work environment. Group meetings where results are studied and development actions agreed on are the most important phase in the process. The reports and team discussions held each year provide valuable feedback for team leaders and support team development. Top 5 highest scores on Staff Survey 2013 ◾◾ I have the competences required to do my work ◾◾ I am familiar with the objectives of my group/team ◾◾ My supervisor’s positive attitude to initiatives and ideas ◾◾ I am proud that I work for Vaisala ◾◾ I am familiar with Vaisala’s values

Corporate Responsibility Report 2013, Vaisala Corporation

51


Turnover 2013* Recruitment (+) Turnover (-)

Temporary

Permanents

230

88

142

176

75

101

Turnover rate %

Turnover rate, permanent employees

11.9%**

6.0%***

* turnover and recruitment numbers do not include the 86 new members of staff from the 2013 acquisitions ** number of employees leaving the company in the reporting period divided by total number of employees at the end of the period *** number of permanent employees leaving the company in the reporting period divided by total number of employees at the end of the period

Turnover by age group Permanents

Recruitments per age group All

Recruitments by region

 – 19

20 – 29

30 – 39

40 – 49

50 – 59

60 – 

2

19

30

25

11

14

 – 19

20 – 29

30 – 39

40 – 49

50 – 59

60 – 

15

120

51

31

12

1

Finland

Other Europe

Americas

Asia and Australia

152

12

49

17

Finland

Other Europe

Americas

Asia and Australia

96

11

55

14

All

Turnover by region All

Turnover by gender All

Number of retired, Finland All

Male

Female

113

63

2013 9

Average age

Staff turnover 2009 – 2013 Employees +/Turnover

62.9

2009

2010

2011

2012

2013

+334/-135

+248/-171

+203/-161

+234/-151

+230/-176

9.6%

12.5%

11.5%

10.5%

11.9%

3.1%

9.0%

5.4%

6.2%

6.0%

Turnover, permanent employees

Development discussions Rate of total staff that has had a development discussion with their supervisor during the last 12 months (February 2014)

2009

2010

2011

2012

2013

76%

88%

90%

92%

95%

Quotes from Staff Survey Answers "Dedication to employees and their development, positive work environment." Support Units, US "Fair treatment of employees. Longer term financial thinking than many other multinational companies. Accepting and even promoting personal way of thinking/working." Services, Finland "The balance between work and family is a greatly appreciated and motivating factor." Weather Business Area, US "Vaisala is considerate and respectful to employees and try to provide a good working environment." Support units, US

52

Corporate Responsibility Report 2013, Vaisala Corporation


in technology industries, the collective agreement for salaried employees in technology industries, and the collective agreement for senior salaried employees in technology industries. Health and safety topics are included in these agreements but are also covered by Finnish legislation in the Occupational Health and Safety Act 2002. Information is not available for Vaisala’s operations outside of Finland where local agreements are used. Salaries paid by the company are based on local collective and individual agreements, individual performance and the demand level of each job. The base salaries are supplemented by results-based bonus systems, which cover all Vaisala personnel. Minimum notice periods are based on labor legislation in each country we operate. For Finland this means a minimum notice period from two weeks to six months depending on the length of employment.

Diversity and Inclusiveness We demonstrate equal employment opportunity in all recruitment, hiring, and working practices such as training and development. In North America, Vaisala Inc. is an Equal Opportunity Employer (EOE). Qualified applicants are considered for employment without regard to age, race, color, religion, sex, marital

Absentee rates throughout Vaisala Group

2013

Office/Region Australia

0.94%

China

0.77%

Finland

2.28%

France

0.44%

Germany

3.64%

UK

0.80%

Training hours, average per employee Australia China Finland France

Employee

Supervisor

Total*

N/A

N/A

10

16

25

18

N/A

N/A

6

0

23

-

Germany

25

23

-

Japan

28

40

-

US

N/A

N/A

3

UK

14

28

19

*Total, where distinction not technically possible

Corporate Responsibility Report 2013, Vaisala Corporation

53


status, national origin, sexual orientation, disability, or veteran status. If an applicant needs assistance or an accommodation during the application process because of a disability, the company is pleased to provide it. No applicant will be penalized as a result of such a request. Equality and fairness is an important element of Vaisala’s compensation policy. We do not distinguish between gender or other non-professional attributes in employee compensation or benefits plans.

job losses, we may offer outplacement assistance packages that support the person’s future employability and help with career transition. In the last couple of years, such packages have been offered to employees in the U.S. and Canada who have been made redundant due to structural changes. In the United States, Vaisala supports the ongoing education of its employees’ children through the Vaisala Student Scholarship Gift. This one time gift is intended to give children of Vaisala employees the incentive to continue their education beyond high school.

Grievance Mechanisms Vaisala provides an internal grievance mechanism for its employees through a dedicated channel, the Fair Play Forum. The channel operates by e-mail and regular mail and accepts both anonymous and signed messages. Responsibility for the channel and actions taken on cases put forward in the forum lies with a compliance committee, which has members from Human Resources, the Risk and Compliance team, the Legal Department and Finance & Control. Cases are handled confidentially by the committee. The Fair Play Forum also acts as a medium for clarifying questions about our Code of Conduct or the Code of Conduct training. All Vaisala employees take part in e-learning covering the Code of Conduct.

Training and Development Development of our staff’s skills, knowledge and behavior as individuals and teams is vital to achieving Vaisala’s strategic aims. It is our objective that all Vaisala employees should have regular development discussions with their supervisors to discuss their work duties, career aspirations, competence requirements and professional development. We offer several internal training programs in both personnel management and business skills, collaboration skills, extensive language training and much more. Vaisala launched a comprehensive e-learning platform recently that takes the range of courses to a whole new level. To develop our people further, we promote job rotation between our business units and offices in different countries. Staff training costs amounted to approximately EUR 900 per employee in 2013. Due to several local sources of training records, there is no precise overall statistic on the number or duration of training events, but approximate training hours are reported in the adjacent table. Whenever we face a situation in which there are job losses or personnel relocations, we draw up a plan on the types of training and support that we can arrange. In some cases where organizational changes result in

54

Corporate Responsibility Report 2013, Vaisala Corporation

Occupational Safety and Health Awareness Training and Oversight Continues for all North American Offices A total of 1,156 occupational safety and health or OSH training hours were delivered in 2013 through a combination of classroom, onsite, and online training activities. Training sessions included continuing OSH awareness and refresher training; fall protection training; first aid, CPR, and AED training; defensive driving training for our field service engineers, globally harmonized system (GHS) training, advanced safety certification training, and temporary traffic control training also for our field service engineers. The following four activities account for 80% of all training hours delivered during the year: mandatory temporary traffic control training (287 hours or 25% of total), general OSH awareness training (265 hours or 23% of total), mandatory GHS training (256 hours or 22% of total), and advanced safety certification training (120 hours or 10% of total). As in previous years, our risk management function once again conducted comprehensive internal OSH assessments at our North American sites.


Injuries, Finland Injuries, total

2009

2010

2011

2012

2013

13

22

30

15

17

At work

8

12

11

3

8

During commute and outside workplace

5

10

19

12

9

Lost days due to injury

43

136

250

69

41

Injury rate (injuries/million working hours)

10.2

15.9

21.5

10.7

11.6

Fatalities due to workplace injury (Group)

0

0

0

1

0

Training EUR 1,000

2009

2010

2011

2012

2013

Total employee training cost

1 697

1 355

1 543

1 271

1 318

1.3

1.0

1.1

0.9

0.9

Average training cost per employee

Corporate Responsibility Report 2013, Vaisala Corporation

55


Case

Come as You Are – A Report on the Giant Leap Internship Program in the US "The Giant Leap program in the Boulder office in 2013 was a great success", Kelly Schmidt, Human Resources Manager recalls. "We had four interns working on four very different projects. Two of our projects were business related and two were science related. Although each intern had one specific project to accomplish, they each quickly began to work together and share different skillsets". Kelly sums the four interns’ projects Christie Moore graduated from Brandeis University with an MBA with an emphasis on Sustainability. Christie’s project was twofold – First she was asked to perform an analysis of the performance based service contracts we have in the US and determine the best business model to make the contracts profitable. The second portion of the project was to deliver a recommendation on how Vaisala could begin a "loyalty" program" for service contract customers. Christie spent 3 months visiting customers and analyzing our service contracts to determine if a "loyalty" program was a good idea for Vaisala. Christie had this to say about her experience in the Giant Leap Program. "People here are great! My manager was extremely helpful and I enjoyed working with Vaisala."

Tristan Nelson was pursuing his Ph.D in Industrial Organizational Psychology from Colorado State University. Tristan’s project was to collect available material and produce multimedia material under an already established global e-learning platform. He was to help create the training program to be input into our training module. The outcome could be an e-learning training tool to be used by our Field Service Engineers. Tristan spent several weeks learning the product and talking with Field Service Engineers to understand the training that was available already and the direction to go with an e-learning program. Tristan had this to say about his experience in the Giant Leap Program. "It was a great experience. My manager was great. I couldn’t have asked for a better experience."

The already traditional ’Giant Leap’ at the end of the summer at Helsinki Office.

56

Corporate Responsibility Report 2013, Vaisala Corporation


Case

Jessica Taheri graduated from Millersville University with a Bachelors of Science in Meteorology. Jessica’s project was a verification study focused on a onedimensional energy balance model(s). The project entailed setup and execution of the energy balance model(s) at selected sites over a defined study period. She used observational atmospheric data (e.g. a "perfect" forecast) to drive the model(s), and then compared the results against observed surface observations using various verification techniques. Jessica had this to say about her time at Vaisala. "When I started, I knew that Vaisala was a well-known company in meteorology and has a great reputation in the field. My opinion has not changed. This was the best internship I have ever had. I really felt a part of the company. My manager was great. He always made me a priority." Candace Wood graduated with an MS in Atmospheric Science from Texas Tech University. Candace’s project was to analyze wind turbine manufacturer’s failure records and compare these records with Vaisala’s lightning records to develop an understanding of the spatial and temporal correlation of lightning with failures in wind turbines and supporting infrastructures. Candace worked closely with turbine manufacturers in collecting data and then analyzing this data. Candace had this to say about Vaisala: "I have always regarded Vaisala highly. I have used Vaisala instruments and have been impressed with the breadth of the operation.

The interns at the Boulder Office worked with real-world business and science projects during the summer.

Each intern hit the ground running learning all they could about Vaisala and the specific products and processes involved. Three months went by very quickly and the time came to present their findings and recommendations. They first presented their findings to all US employees, who engaged the interns in a thought-provoking debate. Then, the final presentations were given to the Vaisala Management Group. After the presentations, each Giant leap manager was interviewed on their opinion on the internship program. The outcome of one such interview is described below.

Experiences from Field Services Head of Global Field Service Paul Gowing shares his experience on one of the 2013 projects. "The Giant Leap program offered many new opportunities for us in the Global Field Services team. Firstly, we were able to review and select from an impressive candidate pool of upcoming graduates who offered a fresh perspective on delivering a quality training program. We were very aware that we had the content available to us already, but what we wanted to achieve was a measureable methodology to transfer this knowledge to our own Field Service Engineers, Certified Service Partners and also paying customers. Through this Giant Leap internship we were able to understand many aspects of a quality training program. We understood how to select the critical information to ensure that the trainees left the class with the appropriate level of knowledge to accomplish the tasks ahead of them. We were also able to ensure that this level of understanding was measurable so that we could qualify the learning event. Ultimately, we have moved the understanding and capability of training the technical elements of field service activities forward, so the overall program was a success. Of course there is still a great deal to accomplish as Vaisala has such an enormous portfolio of technical information to share and we will continue to evolve the training capability with time."

Corporate Responsibility Report 2013, Vaisala Corporation

57


Case

Vaisala Young Professionals Vaisala Young Professionals (VYP) is an open community that unites young employees and recent recruits within Vaisala through activities such as seminars and networking events. VYP’s mission is to increase cooperation across different business units and provide an atmosphere where young like-minded people can spend more time together both professionally and socially. The community has been active since 2012 and currently consists of approximately 80 members. VYP has arranged events from official seminars, workshops and company excursions to more unofficial events such as go-kart racing, beach volley tournament and sauna evenings. A great example of the fresh

insights provided by VYP was a workshop in December 2013 where VYP participated in the development of the Weather business area’s mission and strategic objectives, while also touching upon Vaisala’s vision and mission. The idea of professional networking is not unique as such, and many other companies have established networks of young professionals in recent years. In 2011, some of those companies decided to join forces by creating the Finland Young Professionals network, which has proved a huge success. FYP organizes several interesting and entertaining events annually. In 2013 Vaisala was excited to join FYP and is now a member along with Cap Gemini, Ernst & Young, Fortum, IBM, KONE, Konecranes, Nokia, Nordea, Outotec, SOK, Tieto and VTT.

Gamification Used in Manager Training This year, well-being at work was a key theme at Vaisala. As one tool for fostering employee well-being, we use an early care model to encourage managers and team leaders to recognize behavior changes in their team members early on and to learn how to address wellbeing at work. The model emphasizes proactive care and concern for team members and seeks to identify possible concerns in employees early on, so that issues can be dealt with before they get out of hand. To highlight the importance of well-being of Vaisala employees, a new and engaging training module was introduced for all middle-managers at the Helsinki office. Groups of around a dozen managers participated in half-day interactive sessions where gamification techniques were used to discuss and share best practices with fellow managers on topics such as well-being at work, motivation, work-life balance, feedback to employees and much more.

58

Corporate Responsibility Report 2013, Vaisala Corporation

Well-being at work was a key theme at Vaisala last year and 110 managers took part in the new training module.


Case

Vaisala eLearning Developing Fresh Training Methods for Customers, Employees, and Representatives. Vaisala eLearning was first piloted in our Weather Sales Organization in 2012. Following a successful pilot and recognizing multiple and diverse training needs across the organization, the online learning environment entered an active development phase. The platform and content were developed throughout 2013 and the grand opening of the entire learning environment took place in January 2014. Vaisala eLearning is an online learning environment of over 30 different modules meant for induction and refresher training. The environment hosts various interactive e-learning modules related to our business segments, product and service offering, business tools and processes, safety at work and other topics important to everyone in Vaisala. Modules include short videos, animations, quizzes, and other training material to support on-the-job learning. The modules are intended to support managers’ work when new team members join Vaisala or when people need refresher training on our product and service offering or any of the other numerous topics. During the project, existing standalone e-learning modules were integrated into the online learning environment.

Added Value to Customers and Representatives

When defining Vaisala’s approach to e-learning, taking customer training to the next level was high on the list of priorities, together with further educating our representatives all over the world in an efficient manner. The e-learning modules form a part of the extensive training portfolio offered by Vaisala to its customers and e-learning is increasingly offered as part of our face-to-face customer training sessions. Our training experts constantly develop the training methods and will continue to find the best solutions for high quality customer training with this blended learning approach. Moreover, as our internal training modules are available for our representatives, we can support their refresher and induction training needs and make sure they have the latest information directly from our product experts.

Developing Competences Around the Clock

With e-learning we are able to provide easy access for everyone to updated training content. In this sense, e-learning means flexibility as learning modules are available globally 24/7. We are also supporting internal trainers’ work with e-learning by developing meaningful content. E-learning brings cost efficiency as resources are saved from excess traveling costs. We are also integrating e-learning modules with existing face-to-face training activities, thereby enhancing learning. Highlighting Quality in Vaisala’s Business – Case Quality eLearning

As quality plays a vital role in Vaisala’s business, a quality-specific e-learning module was produced during fall 2013. The Quality – Road to Reliability e-learning module highlights the importance of quality in Vaisala’s business and defines how it is understood in our organization and how to best accomplish high quality in our products. The e-learning module was introduced together with the launch of the e-learning environment and is mandatory for all Vaisala employees. The content was developed together with a cross-functional project team with members from the quality organization, human resources, and marketing.

The comprehensive e-learning platform now takes the range of courses available for Vaisala personnel to a whole new level.

Corporate Responsibility Report 2013, Vaisala Corporation

59


Environment At Vaisala, we are passionate about weather and the climate. We consider the environment to be our key stakeholder and we live by that notion in our daily work. We believe it is our duty to provide means for accurate measurements of both the natural and built environments and we consider operational efficiency a key value driver in all our development activities.


Responsibility through Innovation Vaisala wants to be involved in establishing a sound foundation for a better quality of life, environmental measurement, safety, and productivity. Accordingly, the main purpose of many of our products is to contribute to the quality of the environment and the safety of people and property. Our industrial products and solutions provide our customers with the means to improve their operational performance, and our weather measurement systems increase safety and predictability in weather critical operations. Vaisala has lately been taking great strides in developing technology and its offering; these have vast implications for improving operational efficiencies for its customers. Advancements in information services have enabled us to increase customer value by providing unique software and service-based solutions that improve customers’ operations and also reduce their costs and environmental impacts. Moreover, progress towards serving the utilities sector with decision support and optimization services for renewable energy assets is creating significant efficiency improvements in energy production.

Environmental Management The Environmental Management System (EMS) is an integral part of our global management system structure. The ISO14001 standard has already been the foundation of our certified EMS for 10 years. The certification covers not only all manufacturing sites but many other offices as well. In fact as many as 94% of all Vaisala employees work in our ISO14001-certified offices. The purpose of our EMS is to ensure that environmental aspects are taken into account in everything we do that might have an impact on the environment. Its goal is also to improve our environmental performance, mainly by focusing on both energy and material efficiency and

water and waste management. We have a two-way approach towards an environmentally sustainable future. First we are improving the efficiency of our portfolio, business operations, and supply chain in order to have as little impact on the natural environment as possible. We do this by continually improving our processes and ways of working. Managing our own operations and activities is the cornerstone and starting point of our commitment to environmental sustainability. We can see even bigger opportunity in reducing the total environmental impacts throughout the world by working together with our customers. Vaisala is pioneering the field of environmental and industrial measurements and providing innovative solutions to customers that will help them lower their environmental impacts. Our industrial products and solutions provide our customers with means to improve their operational performance, and our weather measurement systems increase safety and predictability in weather-critical operations while for example providing essential tools for climate researchers.

Improving Energy Efficiency Although Vaisala is not part of an energy-intensive industry, we continuously strive to improve the energy

Highlights in 2013 • Head Office reached zero waste to landfill target mid-year. • We reached our 2016 energy efficiency target early. • Improved scoring in Carbon Disclosure Project (CDP). • Two new offices formed green teams. • Global Green IT Project.

62

Corporate Responsibility Report 2013, Vaisala Corporation


efficiency of our offices and production facilities. In 2008 we subscribed to the energy efficiency program of the Federation of Finnish Technology Industries. The goal is for each participant to improve its energy efficiency by 9% from the 2005 level by 2016. Through a series of energy improvement actions taken, we accomplished the 9% target in 2013 and even went beyond it. By the end of 2013 our efforts had resulted in an approximately 10% improvement in energy efficiency at our Head Office in Finland. We have estimated that the Head Office accounts for 77% of Vaisala’s total energy consumption. During the past couple of years Vaisala has made various investments in facilities in order to enhance operating conditions and increase energy efficiency. The following have been the most significant energy efficiency improvement actions: ■■ ■■

■■ ■■ ■■ ■■

LEED Gold certified Head Office building Utilization of geothermal energy for heating and cooling Solar panel installations in Helsinki and Boulder Green data center in Helsinki Various heat recovery improvements Lighting improvements and installation of motion detectors

Environmental Policy: We improve daily life by continual measurable improvement of the environmental aspects of our offering and operations. We comply with all applicable legal and other requirements.

Vaisala Head Office is part of the WWF Finland Green Office Network.

Corporate Responsibility Report 2013, Vaisala Corporation

63


Approximate distribution of Vaisala offices’ energy consumption, our main environmental impact.

Consumption of electricity at the Head Office amounted to 9.86 GWh, a decline of 1.4% from 2012. Weather corrected district heating at the Head Office totaled 4.80 GWh and maintained levels of the previous year. The main building’s geothermal power system produced all the required heating in the winter and cooling in the summer without the purchase of additional district heating. Solar panels in our Vantaa and Boulder sites generated a total of 0.23 GWh of solar energy. The total solar energy generation remained unchanged from the previous year. Electricity and heat for the Head Office is procured from Vantaan Energia, a local Finnish energy company, which co-produces and purchases energy from a mix of sources. In their most recent report from 2012, Vantaan Energia stated that 37% of the electricity they provide comes from fossil fuels, 32% from nuclear and 31% from renewable sources. Electricity consumption in our second largest site in Boulder increased from the previous year and amounted to 1.96 GWh. The Boulder site purchases energy from Xcel Energy, which also obtains its energy a mix of sources. Based on their latest Corporate Responsibility Report (2012), approximately 19.5% of the generated or purchased energy was from renewable sources, 57.7% from coal and 22.8% from natural gas. Vaisala’s water consumption in 2013 was approximately 23,150 m3. All water used by Vaisala is municipal tap water and is discharged to waste water systems according to local regulations.

Waste (Group)

Helsinki

Other

10%

77%

13%

2010

2011

2012

2013

Waste to landfill (tons)

143.92

165.61

42.96

31.72

Recoverable waste (tons)

157.89

280.43

287.31

284.42

Waste recovery rate (%)

52.3%

62.9%

84.5%

90.0%

301.80

446.04

277.03

316.14

0.57

0.61

0.15

0.12

13.90

17.50

18.13

20.31

6.22

15.78

3.56

5.42

Biowaste (tons)

-

10.70

42.72

33.93

Energy Waste (tons)

-

10.10

38.13

43.66

Combustible waste (tons)

-

-

-

26.03

Total waste (tons) Waste to landfill, tons/€M sales, Group Hazardous waste (tons) WEEE (tons)

Purchased Packing Materials (Group)

2010

2011

2012

2013

Paper, Carton, Wood Fibers (tons)

81.48

105.97

128.81

120.08

Plastic (tons)

0.40

4.00

6.30

9.50

Wood (tons)

51.91

49.45

54.99

93.09

Metals (tons) Other (glass, foams etc.) (tons) Total packing materials (tons)

64

Boulder

Corporate Responsibility Report 2013, Vaisala Corporation

1.42

1.67

1.95

2.35

0.00

0.60

0.50

0.70

135.20

161.69

192.54

225.72


Energy

(Group, GWh)

GWh/M€

20

0.1

16

0.8

12

0.6

8

0.4

4

0.2

0

0 2010

2011

2012

2013

Water (Group, 1 000m3)

1 000m3/M€

40

0.20

30

0.15

20

0.10

10

0.05

0

0 2010

2011

2012

Waste

2013

Recovery rate

(Group, tonnes) 500

100%

400

80%

300

60%

200

40%

100

20% 0

0 2010

2011

Waste to landfill

2012

2013

Recoverable waste

Vaisala’s Head Office in Helsinki houses the majority of the Group’s manufacturing and service operations, research and development function and support units.

Responsible Waste Management Material efficiency and waste management are important aspects for us at Vaisala. For the last couple of years we have been increasing our capability to utilize waste materials that would otherwise go to landfills. The best way to deal with waste is to identify and minimize it at the source. The second best option is to reuse or recycle the waste material somewhere else. When that has not been an option we have sought ways together with our waste management partner to convert the waste material into energy by incineration. We have estimated that our Head Office is responsible for 82% of the total waste that we produce. Our efforts in waste sorting practices and capabilities have resulted in good progress over the last four years; our waste recovery rate has increased from 51% to 100%. This means that since May 2013, we have not shipped any waste to landfills from our Head Office and main manufacturing site. Our zero-waste-to-landfill goal was achieved by for example carefully sorting out all the waste we produce so that it could be processed further and utilized as material or energy in the waste management system. Despite our good sorting practices the total weight of waste increased from 277 tons to 316 tons for the whole Group. Modification of the factory layout at our largest manufacturing site during 2013 which has had negative impacts on the total waste volume. We are looking to shift our focus from waste management to material efficiency in the future.

Our Products and the Environment Vaisala’s products are built to last and withstand extreme environmental conditions year after year. From field services to calibrations, our professional service organization assists our customers in keeping their products working as they should. The upgradability and modular design of our products helps the customer to keep up

Corporate Responsibility Report 2013, Vaisala Corporation

65


with the fast developing technology without necessarily having to invest in totally new equipment so often. This is also important from an environmental perspective. Our studies have demonstrated that when an electronic product has a long life cycle, energy efficiency becomes one of the most significant factors in the total environmental footprint. We certainly pay attention to this and even use solely solar energy from small photovoltaic panels to power some of our products in the field.

Supply Chain Controlling and assessing the supply chain from an environmental standpoint is essential in today’s globalized markets. In 2013 Vaisala developed a Supplier Code of Conduct in order to communicate requirements and expectations for its suppliers and subcontractors. To get a better understanding of how Environmental, Social and Governance (ESG) aspects are managed in our supply chain we also surveyed most of our direct suppliers. We want to raise sustainability standards throughout the supply chain by working with our suppliers to help them improve their management systems and put in place similar processes to work with their own suppliers.

For more about our supply chain management see page 24.

Purchased Packing Materials 250

225.7t

225

192.5t

200

120.1t

150

Paper, Carton, Wood Fibers

161.7t

175

135.2t 9.5t

Plastic

125

100

93.1t

Wood

50

2.4t

Metals

0.7t

25

Other (Glass, foams...)

0

2010

66

2011

2012

2013

Corporate Responsibility Report 2013, Vaisala Corporation

Raising Awareness To support awareness building for environmental issues throughout the company, we have a program in place to help our offices in "going green." The participating offices, now four in total, all have their own green team that drives an independent environmental program for the office. Although the focus has been on conserving energy and minimizing waste, the offices have also come up with numerous actions including cell phone recycling, green commuting events, and supporting wildlife on company premises. The Helsinki Office underwent a third party audit to renew its status as a WWF Green Office. The audit which is renewed every three years, was passed; only minor corrective actions had to be taken.

Carbon Footprinting Vaisala calculates a carbon footprint for its operations using well-known methods such as the Greenhouse Gas Protocol. The footprint includes direct emissions from facilities and the service fleet, purchased electricity and heat, shipping of finished goods and business travel, to name a few. The footprint is reported annually to CDP (the former Carbon Disclosure Project), which is an independent, not-for-profit organization that maintains the largest database of primary corporate climate change information in the world. The database is used by institutional investors to evaluate companies’ risk management abilities when it comes to climate change. Our calculated carbon footprint increased in 2013 and amounted to 11,559 tons CO2 equivalents. The increase was accounted for by a change in methodology and improved data collection. The largest increases were noted in electricity use and business and service flights, and we accounted for more service trucks than in the previous year. Scope 2 emissions, which cover purchased energy, increased slightly, partly due to inclusion of two new offices in the reporting scope. The 2013 figures were assured by a third party assurance provider for the first time last year. We also restated the 2011 figures, as there was previously an error in the Scope 1 figure, and we reported significantly higher emissions than was the case. Emissions accounting covers all offices with more than 10 members of staff, except for shipped goods and waste, which are only accounted for in Finland. The environmental data has been checked for accuracy and small changes have been made from previous year’s figures.


Carbon Disclosure Project

Helsinki and Boulder sites together account for 87% of Vaisala Group’s total energy consumption, 85% of our total water consumption and 90% of total waste.

The CDP score rose to 80 points from last year’s 74 and we moved up to the B Performance Band, which shows a clear improvement not only in our ability to report our figures and risk assessments transparently, but also that we have stronger initiatives and capabilities to reduce our future emissions than before. We also respond to the CDP Supply Chain Program as requested by our customers. The Nordic average disclosure score is 69 points out of a possible 100 and the average for the supply chain request is 49 points. Vaisala’s operations are non-carbon-intensive and predominantly assembly work at the end of the supply chain. Nevertheless, we will continue assessing the impacts of our operations and taking part in the Carbon Disclosure Project. Vaisala’s answer to the CDP’s information request is disclosed publicly and it can be accessed at www.cdproject.net.

Greenhouse Gas Emissions tons CO2 equivalents (CO2e) 12 000 11 000

Scope 3 Business Travel, Shipped Goods and Waste

10 000 9 000 8 000 7 000 6 000 5 000

Scope 2 Purchased Electricity and Heat

4 000 3 000 2 000

Scope 1 Service Fleet

1 000 0

2009

2010

2011

2012

Greenhouse Gas Emissions, tons CO2 equivalents (CO2e)

2013 2009

2010

2011

2012

2013

Scope 1 | Service fleet

1,840

1,377

1,685

792

601

Scope 2 | Purchased electricity and heat

5,530

4,814

4,630

5,318

6,462

Scope 3 | Business travel, shipped goods, waste

2,900

2,293

2,884

4,352

4,495

Scope 3 includes waste figures from Finland since 2013 and emissions from shipped goods since 2012.

Corporate Responsibility Report 2013, Vaisala Corporation

67


Environmental Impacts Vaisala’s Head Office in Finland houses nearly 60% of the company’s employees and is responsible for most of our manufacturing activities. Our other manufacturing site is located in Boulder, Colorado. These two sites can be considered the primary contributors to all direct environmental impacts. We have estimated that Helsinki and Boulder sites together account for approximately 87% of our total energy consumption, 85% of our total water consumption and 90% of the total waste volume. The impact map below describes the figures for Helsinki and Boulder. The most significant environmental aspects are related to energy consumption and waste. Despite the fact that our operations consist predominantly of product assembly and calibration processes, we

still consider energy consumption to be one of our most significant environmental aspects. Vaisala uses a number of service vehicles around the world; this also adds to our total carbon footprint. Having customers in more than 150 countries and offices around the world means we travel extensively even though online meetings are a common practice among Vaisala employees. Although we are able to measure our own activities effectively, it is safe to say that we still have work to do when looking at the entire value chain and impacts on a larger scale. We are working to improve the visibility of the environmental impacts that are beyond our own direct control, suppliers and products being the most important areas.

16.6GWh

Extraction of Natural Resources

229t

23 150m3

Packing Materials Water Used Consumption

Energy Consumption by Sites Energy Used for Business Travel

Energy Consumption during Product Use

VAISALA

1 068t

752 t

Products Shipped incl. Packing

Materials Used incl. Packing

20t

Hazardous Waste

32t

Waste to Landfill

284t

Waste Recovered

430t

(CO2 -eqv.)

CO2 Emissions from Vaisala Vehicles

0.23GWh

Solar Energy Generation

1 628t

(CO2 -eqv.)

CO2 Emissions from Business Travel

4 923t (CO2 -eqv.)

CO2 Emissions from Energy Consumption Recycled Materials from Disposed Products

68

Energy Used in Logistics and Transportation

Corporate Responsibility Report 2013, Vaisala Corporation

Logistics and Transport

2 232t (CO2 -eqv.)

CO2 Emissions from Logistics and Transport

Product Use

CO2 Emissions from Product Use

Waste


Case

Green Data Center As we grow our business and deliver more services to our customers around the globe we need to constantly expand our data center infrastructure. This means rising energy consumption for us and requires focus on energy efficiency now and in the future. Most of the world's data centers operate inefficiently. In general, they use nearly as much overhead energy as they do to power their servers. In 2013 Vaisala updated and reorganized its Global IT data centers. With these improvements we aimed to reduce our operating costs and environmental footprint. The total number of servers was reduced by 51%; this was enabled through virtualization and implementation of new energyefficient blade servers. Globally, this reduced our energy consumption by 355 MWh last year alone which is a significant reduction for us. Now we have plenty of room to grow in highly efficient settings. In addition, we moved most of the servers to our green data center located in our LEED gold certified Head Office in Finland. This data center uses partly renewable energy sources like geothermal energy for cooling and solar energy for power. Keeping the internal

temperature of a data center at the right level is critical for healthy functioning of computers and servers. To ensure data center efficiency, cooling typically requires a considerable amount of energy, and we are particularly proud of improvements on that front. Instead of cooling the entire volume of the data center, we control the temperature in each server rack individually with energy-saving water cooling systems. This also makes the data center very quiet because heavy air conditioning is no longer necessary. Building HVAC systems recover excessive heat as needed and use it to maintain a stable temperature in office space. The data center is equipped with motion detectors which make sure that lights are off when no one is inside. Although our work with data centers will continue, these improvements will facilitate any future expansion of server capacity in the future.

Our office in Tucson, Arizona houses the Network Control Center for the National Lightning Detection Network (NLDN).

Corporate Responsibility Report 2013, Vaisala Corporation

69


Society Since the company’s foundation more than 75 years ago, Vaisala has been an active member of society and especially devoted to the scientific community and academia. Today, we are a significant contributor to universities and numerous research programs. We engage scientists and students through research partnerships and sponsor several graduating students annually.


Case

Development of Weather Infrastructure in Nepal In 2010, the Finnish Meteorological Institute (FMI) launched a cooperation project (FNEP), financed by the Finnish Ministry of Foreign Affairs, with the Department of Hydrology and Meteorology (DHM) of Nepal. The aim of this project has been to improve Nepalese meteorological expertise and operational preparedness for natural disasters. Nepal is extremely vulnerable to the effects of climate change with natural disasters increasing steadily. Every year natural disasters claim an average of 950 lives and cause approximately EUR 11.4 million in material damage. A country of 27 million people, Nepal faces serious climate risks. Based on the Climate Change Vulnerability Index, it is the 4th most climate vulnerable country in the world, with poverty and adaptive capacity being some of the key determining factors. Weather conditions in Nepal are challenging; drought and flooding caused by torrential rains may occur simultaneously in different parts of the country. Annually, about 30 people are killed by thunderstorms alone. However, the greatest damage is caused by floods and landslides. Floods also have other health effects since they make it difficult to secure a supply of clean water. Epidemics caused by the lack of clean water annually result in an average of 400 deaths. Well-developed weather and climate services would allow for more effective management of adverse impacts on the Nepalese economy and population brought about by extreme weather phenomena. Purposeful Cooperation

Irma Ylikangas, Business Development Manager at Vaisala, had an opportunity for job rotation at the Finnish Meteorological Institute (FMI) in 2010–2013. She had a position in FMI’s Expert Services unit, which is responsible for international cooperation

projects and targets developing countries. Irma worked closely with the Department of Hydrology and Meteorology (DHM) of Nepal and had a chance to visit the country 13 times during her three years at FMI. "Job rotation between FMI and Vaisala is a unique opportunity for meaningful knowledge exchange between two expert organizations", praises Harri Pietarila, Head of Expert Services at FMI. During the project, FMI experts, Irma included, made future development plans for the meteorological network of Nepal, a socio-economic study, climatological services and developed an early warning strategy. An automated weather station was installed in Pokhara as part of the project. As a sign of goodwill, Vaisala provided its GLD360 Lightning Dataset for a trial period during the project. During the trial period FMI trained DHM personnel in the principles of lightning location data, as well as actual hands-on training for the operational DHM forecasters. This was the first time DHM had been able to utilize lightning data. "The meteorological network of Nepal needs to be updated," Irma says assertively. The World Bank pilot project ’Building Resilience to Climate Related Hazards’ will provide the needed budget of some USD 17 million to refurbish the entire meteorological infrastructure. According to the FMI experts, the necessary meteorological instrumentation include weather radar, several Automatic Weather Stations, sounding stations, and a lightning detection network. The hydrological network will also be updated. "In FMI’s Socio Economic Study it was estimated that every dollar invested in the development of DHM will result in a 7-to-11-fold return for Nepalese society," Irma points out. The second phase of the project, FNEP2, will proceed in 2014. For more information, please contact: Ms. Irma Ylikangas, Business Development Manager irma.ylikangas@vaisala.com Mr. Harri Pietarila, Head of Expert Services, FMI, harri.pietarila@fmi.fi

An inaugural session of the weather station was arranged in Pokhara on World Meteorological Day on 22nd March in 2012.

72

Corporate Responsibility Report 2013, Vaisala Corporation


Community Outreach Vaisala believes in a world where environmental observations improve daily life. As the global leader in environmental measurement and an active member of society, we acknowledge that the company has a responsibility to support its stakeholders in society and the research community. Vaisala may provide charitable donations of products, funding or services to non-profit organizations through its Community Outreach Program. The Program’s overall objective is to support organizations and projects that advance environmental awareness and science education. All our outreach activities should be in line with Vaisala’s values and resonate well with environmental issues such as climate, weather, environmental measurement and environmental sciences. In 2013, donations were EUR 75,000 globally. Our objective is to focus our donations and continuously correlate them with the community outreach policy. Vaisala does not donate funds to political parties, causes or campaigns.

Current Sponsorships Following the guidelines set by Vaisala’s Community Outreach Program, we sponsor a variety of different causes.

The Vilho, Yrjö and Kalle Väisälä Fund granted donations to 92 researchers in 2013

of Science and Letters. These shares were used to establish the Vilho, Yrjö and Kalle Väisälä Fund. The Fund provides grants annually for research in mathematics, physics, geophysics, meteorology and astronomy. In 2013, the Fund granted a total of EUR 1.4 million to 92 researchers. The Fund’s available grants are dependent on Vaisala’s profits and thus the company has an economic responsibility towards the Fund. Scholarships and Research Collaborations

Vaisala funds the bi-annual Professor Vilho Väisälä Award. The award was established in 1985 to encourage and stimulate interest in research in the field of environmental measurement instruments and methods of observation. It is administrated by the World Meteorological Organization, which selects the winners on a biennial basis. The award consists of a medal, diploma and a cash prize of USD 10,000. The twentyfourth award will be presented in 2014. In 2004, the WMO Executive Council decided to establish a second Professor Vilho Väisälä Award. The main focus of this new award is meteorological instrument work in developing countries and countries with economies in transition. At the same time, the WMO Executive Council adopted new guidelines for granting the Professor Vilho Väisälä Awards. Both awards are granted biannually in connection with the WMO TECO/METEOREX conference and carry a cash prize of US$ 10,000. More information about the awards: www.wmo.int

Vaisala participates in the TEKES-funded Finland Distinguished Professor Programme (FiDiPro) at University of Helsinki and supports its costs. In Finland, Vaisala annually sponsors the Master’s theses of ten university students. Over many years, Vaisala has partially sponsored meteorology students selected by the American Meteorological Society. Furthermore, we sponsor an annual student-led Atmospheric and Interdisciplinary Research conference at the University of Arizona. Vaisala has also a research & development cooperation with the University of Arizona in the field of lightning detection. Moreover, the company supports the research on radar meteorology at the Colorado State University. Vaisala also continues its cooperation with the Universities of Massachusetts, Oklahoma, Colorado State, and Puerto Rico-Mayaguez by supporting their joint CASA program. CASA is a 10-year research program whose goal is to develop an adaptive remote sensing system based on low-power, low-cost, dualpolarization Doppler weather radars. Vaisala is a contributor to the Millennium Technology Prize, a bi-annual technology award issued by Technology Academy Finland.

Vilho, Yrjö and Kalle Väisälä Fund

Disaster Relief

In the 1960’s, Professor Vilho Väisälä, the company’s founder, donated Vaisala shares to the Finnish Academy

Vaisala supports disaster relief through its Community Outreach Program. In 2013, the disastrous Typhoon

Professor Vilho Väisälä Award

Corporate Responsibility Report 2013, Vaisala Corporation

73


Haiyan that swept over the Philippines on the 8th of November was one of the strongest tropical storms ever recorded. As a gesture of support and to help the reconstruction work in the disaster stricken areas, Vaisala donated two mobile weather stations to safeguard the relief work of the Philippine weather service, PAGASA. The weather stations contribute to the safe landing and take-off of helicopters, as well as provide weather data in areas where infrastructure has been damaged or destroyed.

media several times a year and try to raise awareness frequently on various forums. Vaisala partners with Heureka Science Centre in Finland in order to increase awareness of atmospheric sciences among children and adolescents. As an example, Vaisala sponsors the development of the Science on a Sphere exhibition at Heureka.

Raising Awareness

Science education

Helsinki Climate Forum: Arctic Urgency is a high-profile conference on climate change organised by the Student Union at the University of Helsinki. In 2013 the Forum brought together inspiring thinkers and doers with differing approaches, but a shared willingness to act on climate change. Vaisala was one of the event sponsors and our experts delivered several expert talks at the conference. Vaisala takes part in the United States’ National Weather Service’s Lightning Safety Awareness Week as well the local Thunderstorm Safety Awareness Week in Arizona, by sponsoring events and providing expert talks. Our weather experts give interviews and statements concerning extreme weather phenomena in the

Students and their teachers, in contexts that promote natural sciences, innovation, and environmental awareness. Universities, scientists and researchers who help increase the understanding of environmental observations and their implications. Scholarships paid in the form of salary are outside the scope of this program.

Global Donations EUR 1,000

74

Focus Areas

Non-profit organizations working in environmental disaster prevention and recovery

Non-profit organizations that protect lives and assets – particularly in connection with the prevention of environmental hazards. Impartial and neutral humanitarian organizations that provide protection and assistance to people affected by disasters.

2009

2010

2011

2012

2013

159

375

664

259

75

Corporate Responsibility Report 2013, Vaisala Corporation


Case

Vaisala Celebrates 30 Years in Japan In spring 1983, Vaisala’s Board of Directors made at that time a substantial judgment call. They decided that Vaisala was to establish an office in Japan the same year to pursue the industrial humidity instruments markets, the second largest in the world, even then. Vaisala had started selling humidity instruments to Japan already in 1974. One of the first applications was a 200 meter high meteorological observation mast located in Tsukuba, which was equipped with Vaisala HUMICAP humidity probes and other sensors.1 Vaisala KK was officially registered in May 1983 and operations began the following September in the Tokyo office. Japan was seen as the frontrunner of high technology and state-of-the-art electronics, and thus as a natural location to promote newly introduced Vaisala industrial instruments. The 30th anniversary of Vaisala Japan was celebrated in early October at the Embassy of Finland in Tokyo. Nearly hundred persons joined the celebrations. The guests included customers, partners and visitors from Vaisala Helsinki, as well as current and retired personnel of Vaisala Japan. The guests were welcomed by the host of the evening, recently nominated Ambassador Mr. Manu Virtamo, who was already very familiar with Vaisala from his previous posts in USA. Vilho Väisälä's Two Principles

Raimo Voipio, Chairman of the Board of Directors, brought the greetings and compliments of the board. He reminded of the two principles that were introduced already by his grandfather Professor Vilho Väisälä: to understand the customers’ needs to make right kind of products, and not to leave the customers alone when they need our help. He said that is good to remember in the future as well, to succeed for the next 30 years and beyond.

In his speech, CEO and President Kjell Forsén brought up the fact of demanding Japanese customers, who expect high quality and excellent product performance as a minimum requirement to start doing business in Japan. Though painful it may sometimes be, it has also helped us to make better products. Japanese Life Science Market, the Second Largest in the World

"When Vaisala opened the office in Japan, the aim was set to industrial instruments. Now 30 years later, we are well established on the Japanese instruments markets. However, we are again in a kind of new starting point, as we are rolling out our new offering to the life-science market" said Veli Solehmainen, President for Vaisala Japan at the time. "The Japanese life science market is the second largest in the world. Many innovations in medical equipment, pharmaceuticals and biotechnology are coming from Japan. It is an exciting and growing market for us, and we believe that we have excellent products and services to offer for life science customers also here in Japan", Kjell Forsén summed up. At the end of the more formal part of the program, Mr. Solehmainen expressed his appreciations to valuable customers and partners and extended his gratitude to current and retired Vaisala Japan personnel for their successful work in building the company in one of the toughest markets in the world. 1

Fifty Years of Environmental Measurement, Vaisala Oy, 1986

Vaisala Japan personnel together with Ambassador Virtamo and guests from Helsinki.

Corporate Responsibility Report 2013, Vaisala Corporation

75


Case

The Golden Age of Meteorology Walter Dabberdt, Corporate Science Adviser for the Vaisala Group, takes a moment to speak with us about his background, meteorology, technology, and climate change. Dr. Dabberdt is well-known as a leading meteorologist, scientist and thought leader. He is an American Meteorological Society (AMS) member and Fellow, and served as AMS President in 2008. Walt is also a Fellow of the Royal Meteorological Society, as well as a past member of the National Academy of Sciences’ Board on Atmospheric Sciences and Climate. He also serves on several institutional advisory boards. Dr. Dabberdt spent his early career at the Stanford Research Institute (now SRI International), before joining the National Center for Atmospheric Research (NCAR) as a Scientist and Facility Manager, and later as the NCAR Associate Director. Finding Meteorology

"It’s not a straight line that brought me to Vaisala. When I was in high school, thinking about university or college, I decided that the maritime field interested me because of the adventure with the opportunity to do training cruises to Europe each summer, which I thought would be fantastic." So Walt began his education at the State University of New York (SUNY) Maritime College studying to be a licensed ship officer. But after just a few years into his studies, he decided that he should pursue something a bit different. "At that time I was taking some course work in Admiralty Law and also Meteorology, and I thought, maybe I would pursue a career in one of those areas. I really couldn’t see myself as an admiralty lawyer working in Manhattan, and so I decided to give meteorology a try. It seemed like something dynamic, important and interesting. So that’s when the weather bug first bit me." Walt eventually went on to complete his Master’s degree and PhD at the University of Wisconsin. "I actually got quite lucky. When I arrived at the university I was informed that Professor Heinz Lettau would be my adviser, which turned out to be my great fortune because he was the pre-eminent micrometeorologist in the world. I learned a great deal from him and that has served me well throughout my career." Going to California

Walt joined the Stanford Research Institute in a role with a job description that read "like I had written it myself." Walt soon found himself at the cutting edge of environmental research, studying the role of weather in air pollution. "I was able to do that with great

76

Corporate Responsibility Report 2013, Vaisala Corporation

people, conducting some very exciting field work and modeling studies in very interesting places." One of the first campaigns Walt worked on literally put him on the edge of environmental research, measuring carbon monoxide and how it dispersed in the urban environment. "At that time, there were very limited controls on automobiles and one of the big concerns back then was carbon monoxide. My task on that project was to make measurements of the spatial distribution of CO in and around the cities of San Jose and St. Louis. To do this we had to position the equipment on a pod mounted on the outside of a helicopter. So for about 40 hours I was flying around those cities with no door on the side of the helicopter, strapped in with a seatbelt and adjusting the measurement system which was literally outside the helicopter." Joining Vaisala

After 15 years at SRI, Walt was given the opportunity to join NCAR. It was at this point in time that Walt began working with Vaisala products. "While at NCAR I got to know Jan Hörhammer, who later was largely responsible for having me come to Vaisala. We knew each other on a general level through collaborations relating to the dropsonde we were developing at NCAR, which ultimately led to a license agreement with Vaisala." Walt explains that when he later became the Associate Director at NCAR, his focus was largely on management issues. After four or five years in that role, he felt that is was time to get back into the hands-on, measurement side of things. "I actually thought that I had a better chance of doing that at Vaisala, which turned out to be the case. Jan was the bridge between CEO Pekka Ketonen and myself. I recall very well when Pekka came to Boulder to talk about whether there might be a match for me at Vaisala. It turned out that there was literally a perfect agreement between his objectives and mine, which made it an easy decision to leave NCAR for Vaisala." Walt describes the past decades as a ‘golden age’ for meteorology. "If you stand back and take a longer view, I can really say that the last forty years have been the golden age for meteorology. Obviously our ability to make numerical predictions has improved dramatically and you could surmise that is due to advancements in computing architecture, the ability to write better code and to better parameterize atmospheric physics, but much if not all of that has been enabled by advances in our measurement capabilities. Sensing systems


Case

have improved, particularly in the remote sensing area -- both ground based and satellite based systems. But what really allowed us to take advantage of those improvements are the data assimilation systems. These are able to assimilate measurement data in a way that they can be optimally used in today’s weather prediction models." According to Walt, without the advances in assimilation methods the benefit of those observing systems would not have been realized. "These developments are all inter-related. The advances over the years have been phenomenal and we can see it in the quality of today’s weather products." The Changing Climate

Walt recalls a meeting of the American Geophysical Union roughly 30 years ago. "It was in San Francisco, and I attended a climate session where scientists were starting to present the results of their climate modeling studies. And if you look back at those model results you’d say this is unusable, because it was so

coarse and simplistic," Walt explains. "Today, we’ve got global climate models that are no longer just atmospheric models -- they are truly coupled models that simulate the interactions between the atmosphere and the oceans and land surfaces, sea ice, glaciers, and so on." "It’s truly impressive that this can be done a century out into the future and with reasonable certainty concerning the changes in atmosphere conditions due to changes in gaseous and particulate emissions. This is really a grand challenge that is being successfully addressed." And the science is solid, "When you evaluate the performance of these climate models by applying them in reverse over the past 100-plus years, the degree of accuracy that these models have achieved is remarkable. Are they perfect? Of course not. Will they ever be perfect? No. But will they be good enough to support the making of sound political decisions? I think yes." According to Walt, Vaisala can, does and will continue to play an important role in the climate debate. He explains that much of the so-called climate data is actually data that was collected for weather measurement purposes, for which we have a long data record. But there are other measurements that we will need to further improve our understanding of the atmosphere for climate prediction purposes. "I believe what Vaisala is doing in the area of the reference radiosonde is a prime example of where we will be truly recognized as the global leader of upperair climate measurements -- not only upper-air weather measurements. Water vapor data, in particular, is an important gap in our knowledge for both weather and climate. On the weather side we’re developing new systems to measure water vapor in the lower troposphere, while at the same time, with the reference radiosonde, we are developing an instrument that makes high-quality measurements of water vapor into the lower stratosphere. And that is really important for understanding the total climate system, because water vapor is a major greenhouse gas."

Dr. Walter Dabberdt works closely with many of Vaisala’s foremost research and operational partners.

Corporate Responsibility Report 2013, Vaisala Corporation

77


About This Report This report is Vaisala Group’s sixth annual Corporate Responsibility Report. Since the first report was issued in 2009, it has become apparent time and time again that sustainability reporting is appreciated among many stakeholder groups. Naturally, the positive response encourages us to try harder and ensure our reporting includes as much relevant information as possible and is transparent. Increasingly, those who are interested in our work seek us out not only in reports, but also on our website, in social media, at trade fairs and exhibitions and by directly contacting us. At the same time, we look for new ways of interacting with our audience and getting the Vaisala message out. We are also increasingly substituting the term corporate responsibility with the more encompassing concept of sustainability. This may be just a technical detail for many, but for us both terms have their place, though they have often been used almost interchangeably. We have relied on the Global Reporting Initiative’s (GRI) guidelines since we first started these reports, and the guidelines are still of significant value. We have self-declared this report to comply with the GRI G3 Application Level B+. PricewaterhouseCoopers Oy has checked our reporting and has confirmed it to be Application Level B+. A content index is provided at the end of the report for cross-reference. For some indicators, we refer to Vaisala’s Financial Statements and the Corporate Governance Statement on our website www.vaisala.com. You can also find further information on our website that is not incorporated in this report. In particular, we encourage you to have a look at the sustainability section of the website. (www.vaisala.com/sustainability). This is the second time we have sought assurance for the report from a third party assurance provider.

PricewaterhouseCoopers Oy conducted a limited assurance engagement on quantitative sustainability indicators in our sustainability reporting. The fundamental purpose of sustainability reporting is, we believe, to communicate non-financial information, as well as financial information to all parties that may be affected by our actions. This is why, we choose to voluntarily report on our corporate responsibility and familiarize our stakeholders with Vaisala. Public reporting offers not only examples of sustainable business behavior, but also allows us to improve our internal processes and achieve our business objectives. We also feel that the report reaches different stakeholders than those we normally attract with corporate publications such as financial reporting. We welcome feedback on our reporting and sustainability efforts. You are kindly invited to contact us at responsibility@vaisala.com.

Information Gathering and Data Management Vaisala is committed to continuous sustainability reporting. Reports are published annually at the end of the first quarter, and the reporting covers the previous calendar year in full. Following the GRI boundary guidelines, our financial and human resource data is reported for the entire Group, but our environmental data is limited to our manufacturing sites, as these make up around 87% of Vaisala’s combined environmental footprint. Therefore, when we refer to the Group’s environmental figures we mean the combined figures of our two manufacturing sites. The materiality of reported key performance indicators has been determined according to guidelines

follow us on

78

facebook.com/Vaisala

linkedin.com/company/vaisala-oyj

twitter.com/VaisalaGroup

ow.ly/tUFFl

Corporate Responsibility Report 2013, Vaisala Corporation


given by the GRI. The content index at the end of the report lists all indicators that we have determined to be material in our sustainability reporting and our operations and the level of importance for us is determined by assigning a materiality level for each indicator (high, medium or low). In 2013, our materiality matrix which steers our prioritization of topics to be covered in both sustainability management and reporting, was updated. After conducting a stakeholder survey, we reassessed the Group’s priorities and have now a much better alignment with what developments we are driving and stakeholders’ expectations. The updated materiality matrix is presented in this report under the heading Sustainability Management. Data gathering is a substantial part of reporting and we have internal processes and practices in place to ensure the validity of our figures. Vaisala uses the Oracle e-Business Suite for its personnel figures and Hyperion Financial Management for its financial figures. Vaisala’s environment figures are managed in spreadsheets.

Sustainability Contacts in Vaisala If you have questions or comments regarding the report or Vaisala’s corporate responsibility activities, please feel free to contact us. Tomi Rintanen Sustainability Manager tomi.rintanen@vaisala.com +358 9 8949 3059 Vaisala Oyj Sustainability P.O. Box 26 FI-00421 Helsinki, Finland responsibility@vaisala.com www.vaisala.com/sustainability

Corporate Responsibility Report 2013, Vaisala Corporation

79


GRI Content Index The Global Reporting Initiative content index is provided to assist the reader in navigating through the report and to compare it to the GRI G3 Guidelines. We have self-declared this report to comply with GRI application level B+. The report has gone through a limited assurance process by a third party assurance provider. The idenpendent assurance report is on page 85 of this report. For more information about the guidelines or the application levels, please see www.globalreporting.org

Standard disclosures Description

Reference

Reported

1.1

Statement from the most senior decision-maker of the organization.

4, 6-7

Fully

1.2

Description of key impacts, risks, and opportunities.

7, 12-13, 15, 42

Fully

2.1

Name of the organization.

3

Fully

2.2

Primary brands, products, and/or services.

18-19

Fully

2.3

Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.

18-19

Fully

2.4

Location of organization’s headquarters.

86

Fully

2.5

Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

3, 86-87

Fully

2.6

Nature of ownership and legal form.

3

Fully

2.7

Markets served.

3, 18-19

Fully

2.8

Scale of the reporting organization.

3, 18-19

Fully

2.9

Significant changes during the reporting period regarding size, structure, or ownership.

8-9, 49

Fully

2.10

Awards received in the reporting period.

9

Fully

3.1

Reporting period (e.g., fiscal/calendar year) for information provided.

Calendar year

Fully

3.2

Date of most recent previous report (if any).

March 2013

Fully

3.3

Reporting cycle (annual, biennial, etc.)

78

Fully

3.4

Contact point for questions regarding the report or its contents.

78-79

Fully

3.5

Process for defining report content.

78-79,12-13, 15

Fully

3.6

Boundary of the report.

78-79

Fully

3.7

State any specific limitations on the scope or boundary of the report.

79

Fully

3.8

Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.

We report on fully owned subsidiaries that are part of Vaisala Group.

Fully

3.9

Data measurement techniques and the bases of calculations.

78-79

Fully

3.10

Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement.

78-79. Re-statements are explained within the text where applicable.

Fully

3.11

Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.

78-79. No significant changes.

Fully

3.12

Table identifying the location of the Standard Disclosures in the report.

80-82

Fully

3.13

Policy and current practice with regard to seeking external assurance for the report.

78, 85

Fully

4.1

Governance structure of the organization.

Corporate Governance Statement

Fully

4.2

Indicate whether the Chair of the highest governance body is also an executive officer.

Corporate Governance Statement

Fully

4.3

For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.

Corporate Governance Statement

Fully

4.4

Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.

Annual General Meeting. Instructions are given in the invitation to the AGM. Fully

4.5

Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization’s performance (including social and environmental performance).

15, and Corporate Governance/ Remuneration

Fully

Processes in place for the highest governance body to ensure conflicts of interest are avoided.

Corporate Governance / Corporate Governance Statement

Fully

4.7

Process for determining the composition, qualifications, and expertise of the members of the highest governance body and its committees, including any consideration of gender and other indicators of diversity.

The Board of Directors seeks new board members and proposes them to the AGM. The AGM decides on Board members by voting.

Fully

4.8

Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation.

8, 13, 21-23

Fully

4.9

Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles.

42. Part of the Risk Management Process

Fully

4.10

Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.

Corporate Governance Statement

Fully

4.11

Explanation of whether and how the precautionary approach or principle is addressed by the organization.

42, 24-26

Fully

4.12

Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.

84

Fully

4.6

80

Corporate Responsibility Report 2013, Vaisala Corporation


4.13

Memberships in associations and advocacy organizations in which the organization: has positions in governance bodies; participates in projects or committees; provides substantive funding beyond routine membership dues; or views membership as strategic.

32-33

Fully

4.14

List of stakeholder groups engaged by the organization.

30-33

Fully

4.15

Basis for identification and selection of stakeholders with whom to engage.

30

Fully

4.16

Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

30-33

Fully

4.17

Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.

30-36, 51

Fully

Performance indicators Economic

Description

Materiality

Reference

Reported

12-13, 40-42

Fully

Economic performance Management approach to economic responsibility

EC1

Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

High

41-42

Fully

EC2

Financial implications and other risks and opportunities for the organization’s activities due to climate change.

Medium

42,62

Partially

EC3

Coverage of the organization’s defined benefit plan obligations.

Medium

41 and Financial Statements

Partially

EC4

Significant financial assistance received from government.

Medium

41

Fully

Materiality

Reference

Reported

62-66

Fully

Environmental

Description Management approach to environmental responsibility EN1

Materials use by weight or volume.

Medium

64,66

Partially

EN4

Indirect energy consumption by primary source.

High

63-65, 67

Partially

EN5

Energy saved due to conservation and efficiency improvements.

High

62-63

Fully

EN8

Total water withdrawal by source.

Low

64, 67

Fully

Fully

EN16

Total direct and indirect greenhouse gas emissions by weight.

Low

66-67. Scope 1, 2 & 3 emissions are reported as 11,559 t CO2 equivalents

EN17

Other relevant indirect greenhouse gas emissions by weight.

Low

66-67

Partially

EN22

Total weight of waste by type and disposal method.

High

67

Fully

Low

23. No recorded incidents in 2013.

Fully

Materiality

Reference

Reported

22-23, 31, 42, 49, 51

Fully

Monetary value of significant fines and total number of non-monetary sanctions EN28 for non-compliance with environmental laws and regulations.

Labor Practices and Decent Work

Description Management approach to labor practicies LA1

Total workforce by employment type, employment contract, and region.

High

48-49

Partially

LA2

Total number and rate of employee turnover by age group, gender, and region.

High

52

Fully

LA3

Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.

Medium

51, 53-54

Fully

LA4

Percentage of employees covered by collective bargaining agreements.

Medium

51, 53

Fully

LA5

Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements.

Medium

53

Fully

LA6

Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.

High

51, Arranged according to local legislation. 55.7% of total staff is represented within the Finnish H&S committee.

Fully

LA7

Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region.

High

51, 54-55

Fully

LA8

Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.

Low

49, 5, 53-54

Partially Fully

LA9

Health and safety topics covered in formal agreements with trade unions.

Medium

51, 53, Arranged according to local legislation

LA10

Average hours of training per year per employee by employee category.

High

55

Fully

LA11

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

Medium

53-54

Fully

LA12

Percentage of employees receiving regular performance and career development reviews.

High

52

Fully

LA13

Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity.

Medium

48

Partially

Corporate Responsibility Report 2013, Vaisala Corporation

81


Human Rights

Description

Materiality

Reference

Reported

22-24

Fully

High

22

Partially Fully

Management approach to human rights

HR3

Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.

HR4

Total number of incidents of discrimination and actions taken.

High

23. No recorded incidents in 2013.

HR5

Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.

Medium

22-23, 42

Partially

HR6

Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor.

Medium

22-23, 42

Partially

HR7

Operations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of forced or compulsory labor.

Medium

22-23, 42

Partially

HR9

Total number of incidents of violations involving rights of indigenous people and actions taken.

Medium

23. No recorded incidents in 2013.

Fully

Description

Materiality

Reference

Reported

22-23, 73-74

Fully

Society

Management approach to society SO3

Percentage of employees trained in organization’s anti-corruption policies and procedures.

High

22

Fully

SO4

Actions taken in response to incidents of corruption.

High

23. No recorded incidents in 2013.

Fully

SO5

Public policy positions and participation in public policy development and lobbying.

High

73, 32-33

Fully

SO6

Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.

High

73

Fully

SO7

Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes.

Medium

23. No recorded incidents in 2013.

Fully

SO8

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.

Low

23

Fully

Materiality

Reference

Reported

25-26, 42

Fully

Product Responsibility

Description Management approach to product responsibility

PR1

Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.

Medium

42

Partially

PR2

Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes.

Medium

23. No recorded incidents in 2013.

Fully

PR3

Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.

Medium

42

Partially

PR4

Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.

Medium

23. No recorded incidents in 2013.

Fully

PR5

Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.

High

Published in Vaisala News magazine after each survey.

Partially

PR7

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes.

Low

23. No recorded incidents in 2013.

Fully

PR9

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.

Low

23. No recorded incidents in 2013.

Fully

Financial Statements, http://www.vaisala.com/en/investors/reports Corporate Governance statement, http://www.vaisala.com/en/investors/corporategovernance/Pages/default.aspx

82

Corporate Responsibility Report 2013, Vaisala Corporation


UN Global Compact Vaisala joined the UN Global Compact in 2008 and has committed itself to following the ten guiding principles of the initiative. Consequently, we report on our progress on annual basis. Vaisala is an active member in its local UNGC network, The Global Compact Nordic Network. Engaging in the local network gives us the possibility to learn about the initiative and benchmark our efforts to other companies. Vaisala’s first Corporate Responsibility report was chosen for the Notable COPs program in 2009 and we have qualified for the Global Compact Advanced differentiation level since its introduction in 2010. Vaisala is also an active member according to the intiative’s new definition. Human Rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights.

Embedded in Vaisala’s Code of Conduct and Supplier Code of Conduct. Mandatory Code of Conduct training for entire personnel.

Principle 2: Make sure that they are not complicit in human rights abuses.

Mandatory Code of Conduct training for entire personnel.

Labor Standards Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.

Embedded in Code of Conduct and Supplier Code of Conduct. Employee representatives, according to local legislation.

Principle 4: The elimination of all forms of forced and compulsory labor.

Covered in Code of Conduct and Supplier Code of Conduct.

Principle 5: The effective abolition of child labor.

Covered in Code of Conduct and Supplier Code of Conduct.

Principle 6: The elimination of discrimination in respect of employment and occupation.

Covered in Code of Conduct and Supplier Code of Conduct.

Environment Principle 7: Businesses should support a precautionary approach to environmental challenges.

We systematically identify and evaluate our environmental impacts and hazards to mitigate any negative effects they might incur.

Principle 8: Undertake initiatives to promote greater environmental responsibility.

Signatory of The Federation of Technology Industries’ Energy Conservation Agreement. Participates in WWF Finland’s Green Office program and refurbishes facilities to meet green standards.

Principle 9: Encourage the development and diffusion of environmentally friendly technologies.

Vaisala is constantly developing Best Available Technology (BAT) products to meet the increasing demand for highly accurate measuring instruments, e.g. for climate change research.

Anti-Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Covered in Code of Conduct, Supplier Code of Conduct and Vaisala’s International Anti-Corruption Policy. Vaisala’s management enforces a strict zero-tolerance policy on any forms of bribery and corruption.

Local Network and National Cooperation Vaisala is part of a Global Compact local network, The Nordic Network, which has Global Compact participants from Denmark, Finland, Greenland, Iceland, Norway and Sweden. The network provides a learning forum for its members, displaying best practices in corporate responsibility as well as in implementing the ten principles. The network convenes twice per year in a member country. Vaisala is also represented in the network’s Steering Group. In order to benchmark with other industrial companies, Vaisala also takes part in discussions between other Finnish signatory companies. A group of companies meets on a regular basis to exchange best practices with each other and to promote Global Compact for companies that are not yet Global Compact members. More information about The Nordic Network: www.gcnordic.net

84

Corporate Responsibility Report 2013, Vaisala Corporation


Independent Assurance Report To the Management of Vaisala Oyj We have been engaged by the Management of Vaisala Oyj (hereinafter also the ‘Company’) to perform a limited assurance engagement on the quantitative information on economic, social and environmental responsibility for the reporting period of January 1, 2013 to December 31, 2013, disclosed in Vaisala Oyj’s Corporate Responsibility Report 2013 (hereinafter ‘CR Reporting’). Management’s Responsibility

The Management of Vaisala Oyj is responsible for preparing the CR Reporting in accordance with the Reporting criteria as set out in the Company’s reporting instructions and the G3 Sustainability Reporting Guidelines of the Global Reporting Initiative. Practitioner’s Responsibility

Our responsibility is to express a conclusion on the CR Reporting based on our work performed. Our assurance report has been made in accordance with the terms of our engagement. We do not accept, or assume responsibility to anyone else, except to Vaisala Oyj for our work, for this report, or for the conclusions that we have reached. We conducted our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 ‘Assurance Engagements Other than Audits or Reviews of Historical Financial Information’. This Standard requires that we comply with ethical requirements and plan and perform the assurance engagement to obtain limited assurance whether any matters come to our attention that cause us to believe that the CR Reporting has not been prepared, in all material respects, in accordance with the Reporting criteria. In a limited assurance engagement the evidencegathering procedures are more limited than for a reasonable assurance engagement, and therefore less assurance is obtained than in a reasonable

assurance engagement. An assurance engagement involves performing procedures to obtain evidence about the amounts and other disclosures in the CR Reporting. The procedures selected depend on the practitioner’s judgement, including an assessment of the risks of material misstatement of the CR Reporting. Our work consisted of, amongst others, the following procedures: •• •• ••

••

••

••

Interviewing senior management of the Company Visiting two sites in the United Kingdom and Finland Interviewing employees responsible for collection and reporting of the information presented in the CR Reporting at the Group level and at the different sites where our visits took place Assessing how Group employees apply the Company’s reporting instructions and procedures Testing the accuracy and completeness of the information from original documents and systems on a sample basis Testing the consolidation of information and performing recalculations on a sample basis.

Conclusion

Based on our work described in this report, nothing has come to our attention that causes us to believe that the CR Reporting has not been prepared, in all material respects, in accordance with the Reporting criteria. When reading our assurance report, the inherent limitations to the accuracy and completeness of corporate responsibility information should be taken into consideration. Helsinki, 24 February 2014 PricewaterhouseCoopers Oy

Sirpa Juutinen Partner Sustainability & Climate Change

Maj-Lis Steiner Director, Authorised Public Accountant Sustainability & Climate Change

Corporate Responsibility Report 2013, Vaisala Corporation

85


Vaisala World Wide Finland

• Head office

Vaisala Oyj P.O. Box 26, 00421 Helsinki Street address: Vanha Nurmijärventie 21, 01670 Vantaa Switchboard: +358 9 894 91 Corporate communications: info@vaisala.com Business ID 0124416-2

United Kingdom Vaisala Ltd • Birmingham • Bury St Edmunds

France

Panama

Vaisala SAS • Paris • Lyon

3TIER, a Vaisala company • Panama

Sweden

United Arab Emirates

Vaisala Oyj • Malmö • Stockholm

Vaisala Oyj • Dubai

Germany

India

Vaisala GmbH • Hamburg • Uhingen • Bonn

Vaisala Oyj • Bangalore • New Delhi

Canada

Malaysia

Vaisala Canada Inc. • Vancouver

Vaisala Sdn Bhd • Kuala Lumpur

United States Vaisala Inc. • Boston, MA • Boulder, CO Head Office, North America

• • • • • • • •

Houston, TX Minneapolis, MN Newton, MA San Jose, CA Seattle, WA St. Louis, MO Tucson, AZ Westford, MA

Brazil Vaisala Servicos De Marketing Ltda • Rio de Janeiro Research and development

86

China Vaisala China Ltd • Beijing • Shanghai • Shenzhen

Korea Vaisala Oyj • Seoul

Japan Vaisala KK • Tokyo

Australia Vaisala Pty Ltd • Melbourne

   | Production   | Service   | Sales   | Administration   | Representative Office  

Corporate Responsibility Report 2013, Vaisala Corporation


Offices contact details: www.vaisala.com/en/contact/offices

Corporate Responsibility Report 2013, Vaisala Corporation

87


C210083EN

www.vaisala.com


Vaisala Corporate Responsibility Report 2013  

Annual corporate responsibility report for Vaisala Group

Advertisement
Read more
Read more
Similar to
Popular now
Just for you