Fortum considers climate change and biodiversity loss as the biggest sustainability challenges for humankind. We strongly support the goals of the Paris Agreement to limit the average rise in global temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit it to 1.5°C. We also welcome the recent decisions by COP28 on energy transition and targeting net zero by 2050 as key developments in climate action. We have set both long- and short-term climate targets in our company, and we are committed to implementing our climate policy lobbying in line with the goals of the Paris Agreement.
We want to be at the forefront of corporate transparency, which is also requested by institutional investors and non-governmental organisations. We are committed to the objectives of the Climate Action 100+ initiative, which has significant influence on how climate-related corporate activities will be disclosed in the future.
Climate policy developments in 2023
In 2023, there were many notable developments in climate policies at an international, EU and national level. The global climate negotiations at COP28 in December resulted in energy transition decisions that are paving the way for the non-fossil fuel era. A key issue was the first global stocktake of the commitments under the Paris Agreement.
The EU Fit for 55 legislative package to implement the EU 2030 climate and energy targets was adopted in 2023 and has proceeded to national implementation in the member states. The EU 2040 target consultation was implemented in 2023, and the Communication from the Commission on the 2040 target and 2030-2050 carbon budget is expected in early 2024.
We believe that our advocacy – either directly to governments or through industry associations and coalitions – has contributed to positive outcomes at various levels.
Climate Lobbying Reviews 2021-2022
In December 2021, we published Fortum’s first Climate Lobbying Review of 15 industry associations in which Fortum is a member in Europe, Russia and India. The objective of the review was to assess how aligned the industry associations are with the goals of the Paris Agreement and our key climate advocacy principles. As part of the Climate Lobbying Review, we also sought to review our own climate lobbying positions in relation to the same climate advocacy principles set for the association reviews. Similar to the association reviews, also the review of our own positions was conducted independently by a third-party actor.
In 2022, we continued our dialogue with four European associations that were only partially aligned in order to encourage them to take development actions. As a result, two more associations were found to be fully aligned with the Paris Agreement and Fortum’s climate advocacy principles.
Continued dialogue with partially aligned associations in 2023
In 2022–2023, our corporate structure changed significantly as a result of the divestment of Uniper in Germany and the exit from our Russian operations and business relationships. The sale of our ownership in Uniper SE to the German State was concluded in December 2022, and the Russian assets were deconsolidated in 2023, fully written down, and the operations classified as discontinued. Consequently, the industry associations in Germany and Russia are no longer within the scope of our Climate Lobbying Review.
In 2023, we continued discussions with two Polish associations that our 2022 review update identified as still being only partially aligned: the Chamber of Commerce Polish District Heating (IGCP) and the Polish Association of Professional Heat and Power Plants (PTEZ). We continue to believe that the advocacy of these two associations is evolving, and we welcome both PTEZ’s and IGCP’s support for the goals of EU climate policy and the Fit for 55 legislation in 2023. However, as the national implementation of the revised EU ETS, the Renewable Energy Directive, the Energy Efficiency Directive and the Energy Performance of Buildings Directive is starting in Poland, and taking into account the national priorities and emphases, we are not yet convinced of IGCP’s and PTEZ’s full alignment with our climate advocacy principles. In particular, the national ambition and speed of decarbonisation remain a challenge due to the high dependence on fossil fuels.
We will continue to engage with these two industry associations and work constructively with them on climate-related policies. We will urge these associations to engage in continued and constructive advocacy with the Polish Government in support of the EU 2040 target and reaching net-zero emissions by 2050. We also encourage the associations to analyse the results of the recent COP28 summit and how its decisions on the global energy transition should be considered in the Polish context.
The role of Climate Lobbying Reviews to be defined in Fortum’s Public Affairs strategy
Fortum published its new company strategy in March 2023. Following the new strategy, we have started preparing a new Group-level Public Affairs strategy, including our approach to new and existing industry organisations, coalitions and stakeholder groups. We have also launched a mapping of all of Fortum’s industry association memberships and aim to have a thorough assessment ready in 2024.
The role and scope of the Climate Lobbying Review as a transparency tool in our climate advocacy will be defined as part of this development work. We have taken notice of the gaps in our lobbying activities as identified by the latest InfluenceMap assessment (April 2023). However, in this 2023 limited review it has not been possible to develop a framework for addressing the misalignment and further investigating the industry association memberships potentially misaligned with the Paris Agreement (the two associations listed by InfluenceMap were not in the scope of our original review). We aim at addressing those gaps as part of the upcoming development work. More information will be published on our website during 2024.
