KONE Sustainability Report 2017

KONE 2017 | SUSTAINABILITY REPORT Enabling our partners and societies to prosper 4 3 During the reporting year we devel- oped and piloted a new risk engineering audit concept that covers for example: • Facility risks such as fire risks and risks related to the main machinery • Production risks such as production transfer possibilities, buffer stocks and business continuity management • IT risks such as cyber risks • Natural hazards • Second tier supplier risks • Financial risks. Assessing supplier performance We monitor the performance of our main suppliers of our direct production materials through a monthly KPI measurement and follow-up process. We also run a supplier scorecard system that evaluates key sup- pliers of direct materials. The results of the scorecards represent a balanced view of quantitative and qualitative performance criteria from a number of angles, such as quality, cost and logistics, for example. We regularly discuss performance evaluations with our suppliers. When their performance does not meet our expec- tations, we initiate corrective actions or development projects and conduct follow-ups. Supplier Excellence Certification We aim to maintain a supply base that complies with international quality and environmental standards as well as the standards of KONE. We expect all of our key suppliers’ factories to attain Supplier Excellence Certifications. KONE’s Supplier Excellence Certifica- tion Program assesses key suppliers’ sites, examining aspects that include environ- mental and quality management systems, performance scorecards, and supplier audit results. ISO 14001 and ISO 9001 compliance are also assessed. In 2017, 97% of our strategic supplier factories were ISO 9001 certified, and 93% of them had ISO 14001 certifications. SUPPORTING LOCAL COMMUNITIES The KONE Centennial Foundation (KCF), an independent, non-profit organiza- tion founded by KONE in celebration of its 100th anniversary in 2010, focuses on innovative programs that advance and support developmental, educational, and cultural activities for children and youth around the world. KCF cooperates closely with local partners and a designated pro- ject coordinator in each country to plan and monitor projects, aiming to ensure efficient resource allocation and respect for local culture and priorities. Wherever possible, KCF chooses projects where local KONE units can contribute practical sup- port and KONE volunteers can participate in their spare time. Supporting programs globally Currently, KCF is supporting programs in China, Finland, India, Mexico, South Africa and Thailand. In addition, KCF con- tinues to support teacher exchanges and exceptional schools such as the Dande- lion School in Beijing as well as providing matching funds for appropriate fund-rais- ing initiatives by KONE employees around the world. The Foundation’s first project was the creation of a mobile library serving chil- dren of migrant workers in China’s cities. Now in its seventh year of operation, the mobile library continues to bring the joy of reading to thousands of children with severely limited access to books. Through cooperation with the Hangzhou Children’s Library and the Beijing Normal University, the mobile library has expanded its ser- vices to children with limited access to appropriate reading material. After four years of cooperating with the Rotary Club of Madras to support a youth center located in an inner-city slum in Chennai, KCF’s focus shifted at the end of 2016 to an area closer to the new KONE India factory. KCF and KONE India, in collaboration with the Single Teacher Schools organization, now support 20 micro-schools in rural villages. Support is expanding to include sanitation facilities and other improvements in these commu- nities, which will create a better living envi- ronment for the children and their families. The Westbury Youth Centre (WYC), located between downtown Johannes- burg and Soweto, was founded in 2012 in an initiative backed by KCF and Fin- land’s Ministry of Foreign Affairs. Located in a secondary school hostel that had been empty for years, WYC serves hun- dreds of school-leavers and unemployed youth as well as students from the West- bury Secondary School. Programs range from classes in computer skills, media production and entrepreneurship to actual start-up creation and incubation, urban gardening and theatrical productions. In Mexico City, KCF has been sup- porting Xico Arte, a local archeology and art-against-violence collective, since 2015. The organization sends young trainees into schools in troubled communities in the surrounding Valle de Chalco to teach local history and traditions and hold art workshops. With help from KCF, Xico Arte has formalized its status as a not-for- profit association in 2017 and improved its operating procedures and administra- tive practices. In 2017 KCF began supporting the Zero-to-Hero (Z2H) Foundation’s child development program in the rural Na Yom region of Thailand, north of Bang- kok. This innovative program combines Finnish early childhood development best practices with a deep understanding of local Thai culture and traditions to involve the population of entire villages in pro- viding educational opportunities for local children and ensuring a healthy start to their lives. The refugee crisis unleashed by the war in Syria brought more than 32,000 asylum seekers to Finland in 2015. KCF joined forces in 2017 with The Shortcut, a community organization in Helsinki that promotes diversity as an engine for growth. KCF agreed to provide funding for coding and entrepreneurship courses for young asylum seekers and immigrants run by The Shortcut out of its facilities in the tech center located in the former Maria Hospital. Cooperation with KONE companies and KONE volunteers Although KCF is an independent entity, cooperation with KONE companies and the participation of KONE volunteers are central to its ability to meet its objectives. KCF welcomes enquiries and initiatives from KONE employees and appreciates the enthusiastic cooperation it receives from KONE companies in the countries where it supports ongoing projects.