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Stakeholders

We are a major local operator, and our activities have an impact on the whole society. We work in tight co-operation with our various stakeholders, and encounter 1.6 million customers every day at our stores. We examine the views of our stakeholders regularly and develop our operations accordingly.

“Our most important stakeholders are future generations. The decisions we make today will have an impact for decades to come. This includes our strategic objectives, climate work, human rights commitment, and long-term efforts to improve the sustainability of our supply chain. We are committed to promoting the UN Sustainable Development Goals in our operations.”

Matti Kalervo, Kesko’s Vice President of Corporate Responsibility

We respond to our stakeholders expectations

Knowing the expectations of our stakeholders requires regular dialogue with them. The following table describes our interaction with key stakeholder groups:

Key stakeholders
Engagement and channels for interaction
Responding to stakeholder expectations

Customers

Read: Customer perspective

  • Daily customer encounters
  • Customer service channels and applications
  • Customer surveys
  • Social media
Customers have to be able to trust the quality and safety of the products, and know that by choosing a K-store, they are making a responsible choice. By utilising customer data, we can offer our customers more personal and interactive multichannel service.

Investors, shareholders and analysts

Read: Investor perspective 

  • General Meeting
  • Results announcements
  • Investor meetings
  • Surveys and assessments
  • Press conferences
  • Investor pages and social media
We provide constant, accurate, up-to-date information for the markets for the formation of Kesko’s share price. We treat all market parties equally and ensure the same information is available to everyone at the same time. Our aim is to increase awareness of Kesko’s operations and the transparency of investor information.

Kesko personnel

Read: Personnel perspective

  • Performance and competence: personnel survey, performance review and daily interaction
  • Co-operation with personnel
  • Intranet and feedback and discussion channels for personnel
  • SpeakUp reporting channel
  • K Code of Conduct
Common values and operating principles form the basis for our work. Our workplace is equal and fair. We are adopting new ways of operating, with the goal of being a workplace with skilled, committed personnel. We set goals for work and activities together with the personnel. We monitor personnel satisfaction and performance, and take measures to improve both based on the results.

Retailers and store staff

Read: Retailer perspective

  • Retailer events and meetings
  • Digital information channels and joint trade magazine 
  • Responsible operating principles for K-retailers and K-stores (K Code of Conduct)
  • K Group’s joint trade event K-Team Päivät
K-stores operate according to common values and responsible operating principles. K-retailer entrepreneurs develop their selections on the basis of customer wishes, responsibly utilising local products and services and working together with local partners. Employer image is built with a long-term focus by actively communicating the versatility of positions available within K Group
Suppliers and service providers

Read: Stakeholder perspective

  • Meetings with suppliers and partner events
  • K Code of Conduct and the Principles and Practice of Socially Responsible Trading
  • Cooperation in accordance with fair trading practices
  • Audits and training
Networking with suppliers of goods and service providers requires that all involved parties accept common values, objectives and operating practices. We are jointly responsible for ensuring our customers can rely on our expertise, services and the quality and safety of our products.

Society (media, authorities, non-governmental and other organisations, and trade unions)

Read: NGO perspective

In accordance with our mission, we create welfare responsibly for all our stakeholders and for all society. We cooperate with non-governmental organisations, authorities and other decision-makers.

 

Customer perspective

The Kylä community gives customers a chance to voice their views

Improving customer experience is a key objective for K Group, which is why we wanted to try a new proactive way to engage our customers in the development of our operations and services. This gave rise to the Kylä customer community.

Kylä (‘Village’) gives our customers the chance to voice their views on topics that matter to them by taking part in a variety of user-friendly surveys and studies. During the 2017 pilot, Kylä hosted some 30 customer studies and surveys for K Group divisions, sometimes innovatively through, for example, real-time discussions on the community platform. This has given us valuable customer insights into various topics.

Kylä has hosted studies and surveys on a wide range of topics. The building and technical trade division, for example, turned to the community for views on how to create a good customer experience, while the grocery trade division has gathered opinions on a new brand, the importance of neighbourhood stores, and ways to make everyday life easier. The Kylä community members have also been involved in developing K-Plussa and the K-Ruoka mobile app.

Customers have welcomed these new ways of engaging and survey response rates have been high. Kylä members cite the chance to make a difference and voice their opinion as the best things about the community, but are also motivated by the communal aspects, a sense of belonging, and interaction.

The successful pilot means we will continue to utilise Kylä.

Hanna Kortström, Kesko’s grocery trade division, Store operations

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Investor perspective

Varma incorporates responsibility systematically in all investment operations

Varma Mutual Pension Insurance Company invests the assets collected as pension contributions profitably and securely for current and future pensions. Responsibility is an integral part of Varma’s strategy and we incorporate responsibility systematically in all our investment operations.

Responsible investment provides a framework for incorporating environmental, social and corporate governance criteria into investment operations and ownership policies, acknowledging that these issues may have a major impact on investment returns in the longer term.

We require that our investees comply with international agreements and standards, the most important of which are the UN Global Compact initiative on corporate responsibility, the OECD guidelines for multinational enterprises and the ILO labour conventions. In addition to this Varma excludes tobacco and nuclear weapons from its investments and has also set climate policy, which details how the company will achieve a lower-carbon portfolio. Varma supports comparable and well reported data and initiatives like Science Based Targets and TCFD.

Many other global megatrends come under responsible investment umbrella like product sustainability and cyber security. What is relevant from investor’s perspective depends on the industry investor invest in. For example in analyzing a consumer brand owner or a retailer, responsible investors focus on the supply chain control and transparency of the supply chain, working conditions and the traceability of the products as well as waste management and energy efficiency. 

So happy to continue to follow how Kesko develops these topics!

Hanna Kaskela, Director, responsible investment

 

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Personnel perspective

Building K-Kampus and a new workplace culture

K-Kampus will be completed in Kalasatama, Helsinki in the spring of 2019 and will offer us innovative new premises and tools.

The move gives us a chance to rethink our common ways of doing work and to improve the workday experience while also making work more meaningful, and we intend to utilise it as fully as possible. K-Kampus Work is a project for developing a new kind of working environment. It gives all Kesko employees the chance to take part in shaping our workplace culture. Together, we aim to create an agile, open and interactive work community that enables results and positive workdays.

A ​Value Scout survey was conducted in June-August 2017 to find out how the people of K Group view our current workplace culture and what they think an optimal workplace culture would be like. Both personnel and management agreed that there should be less bureaucracy and rigidity and more enthusiasm and flexibility. 

Respondents felt an ideal workplace culture would be open and open-minded, efficient, dynamic, direct, relaxed and should promote collaboration. Encouragement and humour were also seen as important aspects of an ideal workday.

Personnel involved in the planning

The planning for solutions to be implemented on K-Kampus began in working groups that gathered ideas and user experiences from both within and outside K Group. The work now continues in expert teams that are creating solutions related to space, practices and tools, while also trying to find innovative new solutions for everyday work.  

Work has also began in the K-Kampus change network, which consists of 26 personnel members who were chosen to act as change agents. They will lend support and act as development partners during the project at all locations and organisations. The agents will also participate in the testing of new solutions and help to create and promote new rules for K-Kampus.

The work towards establishing a new workplace culture continues as we seek and promote concrete ways to improve our workdays together.

Let’s create a great workplace!

Hanna Laavainen, Kesko, Manager, Workplace Innovations

 

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Retailer perspective

The advantages and challenges of the multi-store model

The integration of former Siwa and Valintatalo stores, acquired through Suomen Lähikauppa, into the K-Market network continued with good results in 2017. All the stores will be transferred to K-retailers by summer 2018, ahead of schedule.

At least 400 former Siwas and Valintatalos in total will become K-Markets. The multistore model is becoming increasingly common and experiences so far have been positive. Nearly half of all K-food stores now operate under the multi-store model.

When Kesko decided that individual retailers could run several stores, it gave us the chance to take charge of stores acquired earlier from Suomen Lähikauppa. We now have five K-Markets. 

The new multi-store model enables profitable operations. At the same time, developing store-specific business ideas and tailoring each store to meet local demands presents us with interesting challenges.

We are able to save costs by concentrating some functions and by moving staff resources between the stores when necessary. We also get better purchase conditions from our suppliers when we make orders for five stores instead of one. We can offer extra shifts to our staff members, as all our stores are fairly closely located and all staff members can easily work at any of the stores. We currently have over 30 employees. As our business is bigger than that of just one smaller store, the multi-store model also enables us to get better offers from banks, insurance companies and the providers of refrigeration unit maintenance.

Over the course of the year, we took over the stores gradually. We have been happy with our decision to take on the multi-store model and we look forward to the future.

Retailers Henri and Reetta Puromäki
K-Market Aittorinne
K-Market Halssila
K-Market Jyskä
K-Market Vaajakoski
K-Market Äijälä

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Stakeholder perspective

Towards a more transparent supply chain

Kesko and the Swedish ICA have worked together on the sourcing of home and speciality goods via ICA Global Sourcing (IGS) in Asia since 2016. The cooperation concentrates on the sourcing of home and speciality goods sold at K-food stores. The local IGS corporate responsibility team is, together with Kesko, in charge of assuring the social responsibility of factories.

ICA Global Sourcing (IGS) has offices in China, Hong Kong, Vietnam, Bangladesh and India, with over 100 employees.

Assuring the social responsibility of suppliers’ factories and securing product quality form a central part of the cooperation. In addition to third-party social audits such as amfori BSCI, IGS has developed its own social auditing tools, the ICA social audit. The pragmatic approach of the ICA social audit allows for easier communications between factory representatives and IGS auditors.

ICA social audit has four steps:

  • Management interview
  • Factory and dormitory tour
  • Document review
  • Confidential employee interview

Social responsibility issues are a challenge in high-risk countries. In India, for example, working at home and subcontracting are prevailing. Therefore, we strive for transparency rather than perfection in our supply chain. We can only demand continuous improvement from the factories if we know their actual situation.

In case any critical findings are identified during the auditing of a factory, the IGS CR team will communicate with Kesko’s purchasing team and CR team within 24 hours. If required, a red alert meeting will be called for, in which all parties will discuss the best possible solution to handling the specific case.

The combination of the ICA social audit and third-party audits has proved to be an excellent way to promote the transparency of the supply chain. The sourcing cooperation enables wider and high-quality selections of home and speciality goods, and, thus, creates added value to Kesko and the customers of K-stores. Thanks to the efficient process, Kesko now has a good command of their supply chain.

Cindy Chan, Social Compliance Manager of ICA Global Sourcing

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NGO perspective

Mating belongs to all

The situation is dire for Finnish migratory fish as obstacles in rivers and streams block their passage to suitable spawning grounds. As a result, the sea trout, for example, is now critically endangered.

K Group and WWF Finland began a multi-year collaboration in 2017 under the heading ‘Mating belongs to all’. The objective is to map out and remove unnecessary structures such as small damns or culverts that prevent migratory fish from rising upstream, and to increase general awareness about Finnish migratory fish. We began the work to remove small barriers in rivers and streams in co-operation with K Group, local organisations, landowners and volunteers. During the autumn, we were able to open up some 20 kilometres of new living and spawning grounds for species living in flowing waters, including trout. We also created areas for shelter, wintering and spawning. Our collaboration with K Group has brought the plight of the Finnish migratory fish to the attention of the general public and expanded the reach and impact of our work for flowing water restoration.

We have been happy to see how people from K Group and people reached through K Group have joined the volunteer effort to help our migratory fish. With K Group, we have been able to achieve greater visibility for this issue than we otherwise would have.

Leena Oiva, Development Manager, WWF Finland

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