Operations and supply chain
 

Nokia has a marine fleet related to our subsea cables business, Alcatel Submarine Networks (ASN). ASN contributes to Nokia’s main target to reduce GHG emissions by 50% by 2030. The ASN fleet represents around 63% of our scope 1 emissions. Although ASN’s marine fleet CO2 emissions have increased globally, when broken down by vessel there is an average reduction of 4.5% engaging our suppliers per vessel compared to 2022. 

ASN has a green charter in place and continues to look at five important strategic areas: the rejuvenation of its marine fleet, the use of shore power when at port, the optimization of transit routes using AI, the mobilization of regional-based chartered vessels to reduce transits, and next-generation cable ships with the latest technology in terms of propulsion and power generation.  

With our employee transportation, we aim to reach the target from our own operations by introducing low-emission vehicles and alternate mobility options.

In 2023 GHG emissions from our global car fleet decreased by 14% compared to the previous year and are now 35%  less than in 2019. 

Building on our detailed review of waste during 2023, we focused on key sites to review the facility waste management arrangements, aimed at increasing the percentage of waste that is recycled and aligned with our circularity waste target. Site closures and disposals contributed to the overall waste reduction. Improved Nokia product repair data collection from external repair suppliers in 2023 resulted in increased e-waste data reporting over 2022 data.  
 
Operational waste also includes Nokia product repair waste. In 2023 our total operational waste decreased by 25% compared to 2022. We recycled, reused or recovered energy from 93% of all operational waste.  

All electronic waste generated in our facilities and other operations, including asset recovery, can only be shipped to processing facilities that have gone through our health, safety and environmental (HSE) liability assessment. The requirements for the HSE liability assessment vary based on risk, which is dependent on waste quantity, shipment frequency, waste type/toxicity, waste treatment technology, environmental management system (EMS), location, legal requirements and prior assessments. 

Our goal is to maintain the minimum number of approved waste-processing facilities needed to meet required services and minimize environmental liability. In 2023 we completed 10 environmental health and safety liability assessments of e-waste recycling facilities located in Poland, Turkey, Brazil, Hong Kong, Austria, Mexico, Saudi Arabia and the US.  

Life cycle assessments (LCAs) show that the predominant water withdrawal value chain results from the generation of electricity used to power our products in our customers’ networks. As our products consume electricity during their relatively long design lifetime, our biggest influence on water withdrawal is to reduce power consumption over the products’ use time. 

Water utilization within our facilities is typically associated with sanitary use, cleaning, and landscaping activities. In 2023 we used 967 000m3 of water in our facilities, a reduction of 7% compared to 2022.

Total water withdrawal was 943 000m0 which is less than the total water consumption, as 2.6% of the withdrawn water was recycled. 

We implemented our water reduction action plan, installing waste saving devices including low flow taps, reduced flush WCs and flow controls to appliances. We also selected more sites outside of water-stressed countries to review best practices and identified further opportunities for 2024.

We address supplier categories where water may be a material risk through a water assessment program that includes awareness raising, annual data collection, target setting and follow-up.  

In 2023, 247 of our manufacturing suppliers completed the CDP’s water security questionnaire, representing 53% of our total supplier spend. Out of the participating suppliers, 80% had undertaken a water-related risk assessment for their direct operations. They identified actual water-related risks in their operations such as flooding or increased water stress or scarcity, potentially resulting in the reduction or disruption of production capacity or increased operating cost.

48% of suppliers had structured targets related to water consumption, discharge or withdrawals. Targets were mostly related to internal efficiencies rather than being contextual (e.g. water basins facing challenges related to high-risk areas or shared sources of water). Our supplier water risk map relevant to our manufacturing locations is below.

Besides meeting the requirements stated in the Nokia Substance List (NSL), suppliers product documentation must also provide us with a list of any EU REACH candidate substance of very high concern present in a product. Furthermore, products, parts, modules, and components must not contain any substance listed as To be Avoided in our Substance List to the extent technically and economically possible. See more on restricted substances in our REACH declaration. 

In 2021 we expanded our work on aluminum content in our products to look at the closed loop development for gold used in the products. We started working with our electronics waste recyclers in determining the destination of gold from our obsolete products and matching those companies with the ones that our suppliers use for gold purchases to close the loop. We plan to expand our program to cover copper in the next phase.  

Suppliers product documentation must also provide us with a list of any EU REACH candidate substance of very high concern present in a product

We work with our suppliers to reduce emissions, setting targets across our supply chain. Our target for our final assembly suppliers is part of our SBT climate target and requires that the final assembly suppliers achieve zero emissions by 2030 for the portion of their manufacturing allocated to Nokia. All final assembly suppliers have detailed roadmaps on a factory level, and we track their execution at business review meetings. We have also set a 50% reduction target by 2030 for other suppliers.

In 2023, we extended our close collaboration on our 2030 roadmap with our Joint Design Manufacturing (JDM) suppliers as well as supplier categories with high emission intensity such as suppliers of integrated circuits, semi-discretes and printed wiring boards.
 
We require our suppliers to have a documented environmental management system (EMS). We also require key suppliers to be ISO 14001 certified, which we track. We have worked with the CDP Supply Chain Climate program for more than 12 years and together create programs to drive continuous improvements in our upstream scope 3 emissions.

We encourage our key suppliers to report their emissions, set reduction targets and roadmaps, get data verified and cascade emission reduction expectations and due diligence also to the next tiers. By following up with suppliers on improvement areas, we also share our good practices and help them reach their targets.

We send out an annual climate assessment questionnaire via CDP to nearly 600 suppliers, supported by practical guidance and sessions on how to measure CO2 and how to fill out the required information. CDP (formerly known as Carbon Disclosure Project), is a global not-for-profit organization that helps cities and companies like ours disclose their environmental impact, with the aim of making environmental reporting and risk management a business norm for all. Following these assessment rounds, results are communicated with suppliers and tailored advice is shared as part of the suggested next steps, based on their performance. When it comes to our final assembly suppliers, data collection and monitoring take place on a much more stringent monthly basis. Performance and reduction projects track and benchmark impact within our own factories.
 
In 2023, 458 of our key suppliers, representing 65% of our total procurement spend, responded to the CDP’s request to disclose their climate performance information. All suppliers whose CDP performance was below expectations were provided with improvement requirements and recommendations on next priorities.
Every year, we host the Nokia Supplier Climate webinar where we share our expectations, 2030 targets and good practices coming from different stakeholders within Nokia such as R&D, Logistics, Travel and Fleet and Real Estate. The aim is to cultivate good practice across our supplier networks and find innovative new approaches for our suppliers to work on each year.

In 2023, our scope 3 emissions from our supply chain (part of scope 3 category 1) were approximately 540 500 tons CO2e. These emissions are estimated by using our suppliers’ scope 1 and 2 emissions allocated to us based on the volume of products and services we purchase from them. We received the emissions data from 63% of our supplier spend through the CDP Climate Change program, and we scaled up the emissions allocated to Nokia to cover 100% of our suppliers.

In 2023, we continued to address the data quality challenges (accuracy) in emissions allocations by comparing the supplier-reported data with life cycle assessment (LCA) data tools and addressing quality issues with suppliers with significant deviations from sector-average and LCA values.

Our Supplier Diamond Awards in 2023 again recognized suppliers across several categories. Expert juries judged supplier presentations, and the best were announced at our annual supplier event. The winning supplier in the sustainability category in 2023 was one of the leaders in sustainable semiconductor manufacturing – examining the decarbonization of its own operations, establishing a net-zero target for 2040 and collaborating with Nokia to reduce the emissions of our products.

We work with our suppliers to reduce emissions, setting targets across our supply chain

We aim to save space, reduce packaging materials and maximize transport efficiency, thereby reducing inbound and outbound shipments. The continuous optimization of our manufacturing and supplier network across the regions will not only enable us to deliver a more rapid response to our customers’ needs, but also decrease transportation costs and reduce CO2e emissions. The reuse of packaging materials also contributes to reductions in the use of new packaging material. In 2023, we reduced the use of new packaging materials in terms of weight by 2 100 tons by reusing transportation packaging.  

In terms of our logistics, we look to explore and use the most efficient product transportation options. In 2023, our scope 3 GHG emissions related to upstream transportation and the distribution of our products stood at around 140 900 tons CO2e, a decrease of 57% compared to 2022.  

This significant drop in the above CO2e emissions is partly due to our continuous efforts to reduce air transportation while increasing sea, road and multimodal modes (e.g. combining sea and air) and partly to the regionalization that moves activities closer to customers. As a result, in the last two years we have nearly halved our air transportation deliveries. However, a considerable part of the reduction in transported volumes related to a decrease in our deliveries. 

As one of the emission reduction methods in our transportation activities, we have explored carbon in-setting, which is similar to carbon offsetting except the activities that lead to carbon footprint reduction take place within the context of the value chain. In 2023, we continued applying our sustainable aviation fuel (SAF) carbon in-setting model, which aims at a direct carbon mitigation of the transport system. This is one of the most sustainable ways to reduce carbon emissions in air freight, as it saves any additional energy consumption arising from compensation measures. We further engaged with our logistics partners on our requirements related to the offering of SAF and have expanded the collaboration on SAF to four logistics partners.  

For 2024 our focus will be on continuing to improve the environmental efficiency of our transportation by collaborating with the biggest contributors (for example logistics providers, partners or customers) and concentrating on minimizing the most environmentally detrimental modes of transport. 

In terms of our logistics, we look to explore and use the most efficient product transportation options

We aim to contribute to a long-term solution to the issue of conflict minerals that ensures responsible and conflict-free sourcing via legitimate trade that brings sustainable improvements in those countries where the risks are greatest. We demand that our suppliers commit to sourcing these key materials from environmentally and socially responsible sources. We work with the Responsible Minerals Initiative (RMI) and Public Private Alliance to increase impact through industry wide collaboration.