CEO statement on Eltel progress to comply with the UNGC ten principles
The last 12 months have been spectacular in Eltel’s 14 years of history. During this period we prepared and implemented a very successful IPO on Nasdaq Stockholm on 6th of February 2015. This event has further highlighted the right profiling of Eltel, our contribution to old and new stakeholders. All this has highlighted even more the increased need and interest of transparency in the company’s operations.
Since summer 2014 we have updated earlier policies and group instructions, or added new ones, to a total number of 21. Today these provide a good background to develop further Eltel governance and sustainability management. In August 2014 Eltel became a signatory in the UN Global Compact. Needless to say that this was very much supported by some of our biggest customers with whom we often share common values and caring for the lifelines of our society in Power, Communication, Transport and Security. In December 2014 we published our first Eltel Sustainability Review. The focus here was to communicate our values, report KPIs but even more to present practical cases how we fulfill sustainability in everyday life. In 2014 we implemented an e-learning program to 700 of Eltel’s key employees on four most critical policies, namely accounting and controlling policy, compliance policy, authorization policy and competition policy.
In our first progress report on the ten UNGC principles we are happy to note that Eltel has performed well by these principles. The new practice of quarterly reviews of our 40 legal companies started in Q4 2014 is a great tool to report the ongoing events, disputes or court cases in countries. In the last 12 months we have not had cases that have violated the compliance of the ten principles. Our company has whistle blower system in use since several years helping to solve potential problems in a timely and effective manner.
However our work in sustainability is wider and will continue progressively in the next years. Our next step in 2015 is to communicate new target setting in occupational health and safety, emissions reduction of our extensive fleet and how to include subcontractors and suppliers (third parties) better in our reported practices. The time frame for the new targets is until 2017. These are all top priorities in the industry that Eltel represents. At the same time we continue to contribute at a higher level to a more sustainable environment e.g. by implementing smart grids, renewable energy projects and smart metering rollouts.
Eltel is fully committed to support the ten principles of UN Global Compact and we shall integrate this effort as one part in Eltel’s overall Sustainability programmes.
Axel Hjärne, CEO Eltel

1. Disclosure of Eltel’s relevant policies
As part of the IPO listing process Eltel has reviewed all of its policies in 2014. The outcome was a revision of a number of existing policies and establishment of new ones in order to meet the stock exchange requirements of Nasdaq in Stockholm.
The most important updates approved by OMX auditor and Eltel Board were the following:
- Replacement of Corporate Governance Policy with Policy over Policies
- A new Instruction for Financial Reporting
- A new Instruction for Information Handling
- A new Log Book Instruction
- A revision of Communications Policy
- A revision of Rules of Procedure for the Board of Directors
- A revision of the CEO Instruction/the CEO Instructions
- A revision of Charter for the Remuneration Committee
- A revision of Work Order for the Audit Committee
The Eltel hierarchy of policies and instructions is the following:
1. Policy over policies
2. Group level policies
3. Group level instructions
4. Local/country level policies/instructions
5. International Business Unit manuals
Eltel’s policy portfolio is well up-to-date and it meets all the relevant international requirements.
One of Eltel’s three drivers for the organizational development is empowerment. This means that the roles and responsibilities of people/employees are well defined. We give people the power to act, realize their professional capacity and their ambitions, and make decisions at regarding their work. Eltel supports people to ensure they are successful in their work. This is very important for Eltel since it thrives to be a successful service company.
2. Eltel procedures
Eltel’s compliance policy sets the stage for the compliance and the Code of Conduct at Eltel. The policy contains the following sections:
- Ethical standards
- Anti-corruption measures
- Division of responsibilities deriving from compliance policy
Eltel obliges its subcontractors and suppliers contractually to apply the principles expressed in the compliance policy. The Code of Conduct on the company’s external website informs all external parties about this commitment.
The ethical standards deal, among others, with legal compliance, respect for different cultures and customs, the environment and human rights.
Since several years, aligned with the internationalization and growth of Eltel Group, the company has improved the “One Eltel” governance and behavior. This is cascaded down from the Group level to the different functional areas like for example the HR and further to Eltel’s six international business units. The Eltel Way is the model and description of how Eltel manages the service business. The elements of Eltel Way are:
- Structure: specific roles and responsibilities, 400 specialized teams, ground up approach to build and support organization
- Reporting: uniform reporting standard, rigorous monthly project and business review process, one ERP system
- Operational efficiency: best practices shared across divisions and regions, monitoring KPIs, continuous improvement programmes to meet stakeholder needs
- People and culture: offering opportunities for personal and organizational growth and development, customer interface at all levels of organization, cross border teams
In the recent IPO of Eltel, the internationally recognized advisors concluded that one of the most important differentiating factors and cornerstones for the success of Eltel has been the systematic implementation of Eltel Way throughout its operations.
Business Unit manuals describe the governance at the business level, structures, processes, reporting and how the business unit implements Eltel Way, among other topics.
In order to ensure a good understanding and a proper enforcement of its policies, Eltel carried out in 2014 a policy e-learning program to 700 of its key managers and employees. The program will be continued in 2015-16 with enhanced features. All policies and instructions are communicated on Eltel internal websites and the Code of Conduct for subcontractors and suppliers is published on Eltel’s external website.
At the end of 2014 Eltel started a quarterly practice of “Legal company reviews” consisting of questions to its 40 legal subsidiaries to report on legal disputes, claims or the like. Eltel has a well established risk management practice to report systematically from team level up to Eltel board.

3. Activities and plans vis-à-vis UNGC four issue areas

3.1 Human rights

• Principle 1: Support and respect the protection of internationally proclaimed human rights
• Principle 2: Make sure that we are not in complicit in human rights abuses

The goal of Eltel is to be a good citizen in all its operating areas. Many of Eltel’s operating principles are based on the European and Scandinavian values, on belief in democratic rights of people and their inclusion in company’s operations.
Eltel’s current markets comprise of ten European countries, nine of which are members of the EU and Norway as a non-EU country. Another geographical area where Eltel operates is Africa. The company has a 50 year experience in delivering mainly electrification projects in approx. 15 countries. These have included countries such as Mozambique, Tanzania, Zambia, Angola, Botswana, Ethiopia and Ghana.
Eltel works closely with Nordic government controlled guarantee institutions, meaning that both the countries and projects are carefully selected before any business engagements are agreed. With few exceptions, the customers of electrification projects in Africa are government owned power companies.
The success factors of Eltel in Africa are the following:
- being a prequalified bidder in projects that can receive financing
- competences to manage large turnkey electrification projects
- experience to execute projects in Africa
The execution model of projects in Africa is based on combining the extensive experience of Eltel to deliver such projects during tens of years and utilizing local partners understanding local rules and conditions and therefore ensuring compliance at the local level. Project management is taken care of by Eltel’s experienced Nordic and/or European executives. The project execution is perfomed by local well-established and known subcontractors.
All these partners need to comply with various Eltel policies and they also need to fulfill Eltel’s due diligence requirements. Eltel has in June 2015 updated its third party process description and due diligence templates in its Power transmission business unit.
The instruction states the following: “No Intermediary shall be appointed before a due diligence is performed. The due diligence must include a face-to-face meeting with the Intermediary in order to understand whether it performs proper and relevant commercial activities and what these are… After the data has been collected, it needs to be verified and validated. Once data has been properly verified and validated, a certain degree of judgement will be necessary to determine whether or not to move forward with the proposed third-party business relationship”.

Eltel recognizes that operations in Africa form a potential risk factor related to Eltel’s compliance and generally approved standards. The company has taken several measures in its activities from partner selection and due diligence to reporting any deviations from the established standards. The long history of Eltel in Africa and regular due diligence at various stages of projects, both by Eltel and external parties, have helped Eltel to become and remain a trusted and compliant partner on the continent.
In its Compliance policy, updated in August 2014, Eltel is committed to respecting the internationally proclaimed human rights and is committed to not being directly or indirectly involved in human right abuses. Eltel will continue the inclusion of its subcontractors and suppliers even more deeply to its sustainability reporting. A group wide program is being establishedon how the partners will be integrated with the Eltel system more systematically from 2016 onwards in all Eltel’s geographical areas.
Outcomes

After three rounds of quarterly reporting Eltel notices that no cases in violation of the Human Rights principles have been issued against Eltel during the 12 months from August 2014.

3.2 Labour Standards
• Principle 3: The freedom of association and the effective recognition of the right to collective bargaining
• Principle 4: The elimination of all forms of forced and compulsory labour
• Principle 5: The effective abolition of child labour
• Principle 6: The elimination of discrimination in employment and occupation
In the Compliance Policy Eltel is committed to promoting decent and fair working conditions for all of its employees, directors and officers as well as among its subcontractors, suppliers and other contracting parties in all countries in which Eltel performs its business.
Eltel’s culture and way of working is manifested in the Eltel Way. Eltel’s core value is to respect its employees’ rights and their capacity to make a positive contribution to everything Eltel does. Eltel encourages people to be proactive and to participate in developing the company and their workplaces. Eltel’s ambition is to offer the best workplace in the Infranet services industry. Employee surveys are carried out regularly and actions agreed on regarding improvements.

Safety at work is crucial in the kind of work Eltel executes at sites. The risks relate mainly to electricity and working at heights, and to some extent to traffic. An example is presented below on how H&S is reporting monthly in the company. One of the critical requirements e.g. in H&S is that Eltel’s employees have the right attitude, use required personal protection equipment and work according to correct procedures. Eltel is committed to complying with the OHSAS 18001 standard.
Eltel’s plan is to continue the subsidiary reporting on compliance regarding the labour standards. A more vivid dialogue with subcontractors and suppliers is also planned. As an international company Eltel sees that it can make a positive impact in countries where the standards or working cultures are not at the same level as e.g. in the Nordic countries.

Outcomes
No cases of violations against labour standards have been reported by or against the company during the 12 months from August 2014.

3.3 Environment
• Principle 7: Support a precautionary approach to environmental challenges
• Principle 8: Undertake initiatives to promote environmental responsibility
• Principle 9: Encourage the development and diffusion of environmentally friendly technologies
In terms of Environment Eltel sees the following areas of primary interest:
- implementation of environment friendly technologies
- environmental assessments in connection to project and site planning
- Eltel’s own CO2 footprint

Eltel’s engagement with environment is defined in the Health, Safety & Environment policy. Detailed HS&E principles are discussed in the HSE Management System, which is a Group level instruction for all Eltel subsidiaries and units.
Eltel contributes to a more sustainable society through one of its core businesses, which is increasing energy efficiency by building and fine-tuning smart grids and smart metering systems. Eltel has started to implement smart metering in Finland and Sweden already in 2006 and has installed by today approx. 3.5 million smart meters in the Nordic region.
Norway has a window to implement smart metering by the beginning of 2019 and Eltel has booked new orders to install over 800,000 of such meters. Eltel implements wind power projects and e-traffic solutions like installing charging stations for electric vehicles. Eltel has implemented electrification projects in Africa during 50 years contributing to transportation of electricity from generation plants to consumers and thus reducing the need for aggregators using fossil fuels.
Electrification projects in Africa brings electricity to homes, schools, hospitals and enterprises. They are a necessary vehicle to raise the standard of living and economy, safety and less emissions. Having the availability of electricity means that generators using fossil fuels can be replaced by cleaner energy sources like e.g. hydro power.
Altogether 600 million people in the sub-Saharan Africa do not have electricity, and investments in power, and infrastructure in general, is one of the top priorities. Sources of energy, e.g. hydro power plants, may be distant to the cities and very long power transmission infrastructures are needed. Also the urbanization of the continent sets big challenges to provide the required services.

All of these examples contribute positively to achievement of the global decarbonizing goals. As part of the project and site planning Eltel is engaged in environmental assessments. This is often the case for example when a new power line is being built across scenery. In these cases Eltel works closely with the customer, the authorities and with private citizens.

The most important area where Eltel can contribute to its own footprint is the sizeable vehicle fleet that the company uses to implement its customer orders.
Eltel policy is to ensure compliance with the international standard ISO 14001 as well as with the local legislation. The Group instruction includes a section “Hazards and Effects Management Process” for critical operations and installations. These instructions also apply to environmental hazards, effects and risks. Eltel business units (BU) update the risk reports monthly or quarterly depending on the nature of the risk and the Group Management Team reviews the risk report bi-annually. Eltel’s audit committee and main board discuss the risk report once per year.
Eltel has been following the emissions of its fleet in the Nordic countries and will implement a reporting system by which the whole European fleet can be reported in 2016. The company has set a goal to reduce emissions per vehicle by 2 to 4 percent per year.

Outcomes
Eltel makes a positive contribution to a more sustainable environment across the countries where it operates. Often the company has pioneered in these efforts together with its most advanced customers.
No cases regarding Eltel’s environmental responsibility have been reported by or against the company during the 12 months from August 2014.

Anti-Corruption
• Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery
In the Compliance policy Eltel defines the anti-corruption measures and implementation throughout the organization. The areas cover the following aspects: appropriate behavior, third party conduct, monitoring and whistle-blowing, managing bribery risks and due diligence, due diligence on associated persons, hospitality and gifts, and training.
In terms of managing bribery risks and due diligence, Eltel carries out due diligence based on one or more of the following aspects:
- country risk
- transactional risk
- business opportunity risk
- business partnership risk
A special section is devoted to hospitality and gifts. The policy provides clear instructions of e.g. monetary value of gifts and sets out the process to handle these situations correctly.

Eltel’s area of the highest risk for corruption is obviously the African countries. Some of the measures that limit the risks are a careful selection of countries of operation, customers’ public procurement practices, customers’ own and improving control mechanisms and control of money transactions during the project by financiers or guarantee institutions. Eltel has a comprehensive set of tools in its own control including authorization policy, accounting and financial controls and regular financial and management reporting throughout all organizational levels.

Outcomes
No cases related to corruption have been reported by or against the company during the 12 months from August 2014.