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Letter from the President and CEO

Rajeev Suri

2015 has been an exceptional year for Nokia. While we celebrated our 150th anniversary as a company, we also announced two significant transactions which have put us in an excellent position to tap the future opportunities of the programmable world: the acquisition of Alcatel Lucent, and the sale of our digital mapping and location services business, HERE, to a German automotive industry consortium. We ended the year with net sales up 6%, non-IFRS diluted Earnings Per Share up 67%, and operating margin up 200 basis points.

High integrity is just as important as high performance however. Our focus on high ethical standards means that while our company was transforming once again, our sustainability vision remained the same: to design technologies that expand the human possibilities of the connected world while making it more productive, healthy and sustainable. This vision is influenced by our values, which define our actions as a company, and as individuals: respect, achievement, renewal and challenge.

Our sustainability approach is influenced by key macro trends: the increased importance of privacy and security; the demand for high ethics and transparency; climate change and the sustainable use of natural resources; and the importance of attracting and retaining talent. Because of this, our four key priorities have guided and supported our sustainability agenda: improving people’s lives with technology; protecting the environment; respecting people in everything we do; and making change happen together.

As we look to improve people’s lives with technology we are committed to connecting the unconnected. “Connectivity deserts” remain in far too many parts of the world: rural and urban, rich and poor. We are mindful of the work of the International Telecommunication Union’s Broadband Commission, which aims to expand broadband access in every country. It reports that 20% of households in developed countries – and as many as 66% of households in developing countries – do not have internet access, with more than four billion people in developing countries remaining offline. One of the main reasons for this is cost. Nokia is tackling this challenge in a number of ways, by creating products such as Nokia FastMile, a wireless alternative to fixed broadband in areas where copper or optical connectivity is not available.

Protecting the environment means reducing the environmental impact of both our own operations, and that of our customers. To mention a few examples, we achieved a 12% annual reduction in total emissions from our facilities, including our green electricity purchases which we maintained at around 50% worldwide, and reduced the total amount of waste produced. In early 2015, we launched a Zero CO2 emission base station which helps to decrease base station site energy use by up to 70%. Recently, we complemented our zero emission offering by launching the AirScale Base Station, which consumes zero energy in its radio parts when there is no traffic.

Respecting people in everything we do means running our business in line with internationally recognized ethical and responsible business practices and integrating our high standards in our supply chain. It means working hard to embed gender balance within our workplace. UNESCO reports women graduates in engineering to be well below 50% and this falls further when we look at the number of women inside companies in those industries. Nokia has made improvements this past year and has supported the YFactor initiative aimed at enabling more women to pursue careers in science, technology, engineering, and maths disciplines. Nokia has also supported the StrongHer initiative, an employee network of 1,300 active members in 50+ countries but there is more to be done. We will be taking further concrete action in 2016 to address gender balance more completely.

Respecting people also means fostering a culture where health and safety is a priority, and creating a great place to work for our employees. During 2015, we embedded processes and guidelines supporting sustainable development into company-wide activities. We continued training our employees on ethical business guidelines, with around 98% of employees having completed the training. To ensure our suppliers follow the same ethical standards as we do, we increased our audits through the EcoVadis scorecards. 180 of our key suppliers reported their climate impacts via the Carbon Disclosure Project framework and over 90 of them set emission reduction targets. This helps us plan improvement programs with our suppliers so we can improve the reporting of our emissions. We also made good progress in validating the smelters used in our supply chain as conflict-free. While we have made good progress in health and safety we remain vigilant. In 2015 we experienced tragic incidents where 6 people working for our contractors lost their lives. We take these events seriously – we want to make sure that everyone associated with Nokia business goes home safely at the end of the day. In 2015 we launched our global Life Saving Rules program, making clear that Nokia respects everyone’s right to refuse to do something that they believe is dangerous.

We make the change happen with our key stakeholders, working with various organizations driving sustainable development such as GeSI, the CDP supply chain program, the Telecommunications Industry Dialogue, the Climate Leadership Council, Conflict-Free Sourcing Initiative and Digital Europe. We also added one partner to our NGO network, joining forces with the Finnish Children and Youth Foundation to raise awareness of the importance of thinking positively about oneself and the future. Nokia made a number of donations throughout the year, with our employees choosing one of the targets in December – providing humanitarian relief to Syrian refugees through Oxfam.  

Finally, Nokia contributed to the UN Sustainable Development Goals (SDGs) adopted by the United Nations General Assembly in 2015. Our effort will focus on the goals where we can make most impact such as promoting inclusive and sustainable economic growth; building resilient infrastructure; fostering innovation; taking urgent action to combat climate change and its impact; and revitalizing the global partnership for sustainable development. The SDGs will be further integrated into our sustainability activities, and we will continue to support and measure our sustainability progress against the principles outlined in the United Nations Global Compact as well.

My warm thanks to all the teams and individuals throughout Nokia, and the community partners we work with, who contributed to our progress. I also want to thank our customers, who spur us to further advance our sustainability work, as well as our suppliers, who help us meet the expectations of our customers. We can be proud of the progress we made in 2015, but not complacent – we can and will improve. As a new combined company, we are undertaking a new sustainable materiality analysis in order to create the necessary measurable long term goals to ensure that Nokia’s 2015 success is improved upon. We are a new Nokia, and we will have sustainability goals to reflect this.  

Rajeev Suri
President and CEO