State-owned Cos must remain committed to climate targets: Minister

Minister for European Affairs and Ownership Steering Tytti Tuppurainen on Wednesday stressed that the Government Resolution on State Ownership Policy requires state-owned companies to take into account the Government’s objective of a carbon-neutral Finland by 2035 and the targets set in the Paris Agreement to limit global warming to 1.5 degrees Celsius.

“State-owned companies must remain committed to their ambitious corporate sustainability and climate targets even during times of crisis,” Tuppurainen told the CEOs and chairs of the boards of directors of state-owned companies at a sustainability seminar hosted by the Prime Minister’s Office, said an official press release.

“These expectations have not gone anywhere; on the contrary, they are now more important than ever. We have been seeing very worrying news about the pace of biodiversity loss and climate change and the extreme conditions occurring as a result. All of us – politicians and business leaders alike – need to take determined action in the fight against climate change. We have no time to lose. Now is the time to turn promises and speeches into concrete actions and results,” Tuppurainen emphasised.

In its Resolution on State Ownership Policy, the Government also outlines that it expects companies to incorporate sustainability into their management remuneration schemes and to report on this to the State owner at their general meetings.

In spring 2022, the Ownership Steering Department of the Prime Minister’s Office conducted a survey among state-owned companies to find out how they have incorporated sustainability incentives into the remuneration of management.

“Almost all state-owned companies have introduced some kind of sustainability incentive. According to the results of the survey, the sustainability indicator accounts for an average of around one quarter of the management’s performance bonuses. This shows me that state-owned companies take sustainability seriously, and I would like to express my gratitude to the boards of directors of these companies,” Tuppurainen added.

The Government Resolution on State Ownership Policy notes that state-owned companies are expected to be leaders in corporate sustainability. “This sets the bar high, both for the State as an owner and for the companies,” Minister Tuppurainen said.