‘Always be hungry to be a bit better’: Fortum reveal leading Tax Responsibility and Transparency Index score
Nordic energy company Fortum have decided to publish their score in the Tax Responsibility and Transparency Index, revealing a high ranking and score of 74/100.
The Tax Responsibility and Transparency Index is a benchmarking tool for multinational companies developed by the Fair Tax Foundation and CSR Europe. It assesses businesses in five key areas of tax conduct and is a high-bar benchmark, with top-scoring companies so far receiving scores around 70%.
Businesses can compare their performance against that of an anonymised leadership pool of multinational companies and opt to publicise their scoring and ranking should they wish to, as Fortum have now done.
In this video, Fortum Vice-President Corporate Tax Reijo Salo, Director Group Tax Anna Wrzesinska and Director Business Tax and Tax Controversy Katariina Lehtimäki discuss why they decided to get involved, their experience going through the Index assessment and their plans for the future.
“It’s a great opportunity to set some sort of benchmark for ourselves,” Salo says. “We started our public tax reporting in 2012 and we faced some issues, for example there were multiple expectations for this kind of reporting – different stakeholders are expecting different things, sometimes using the same terms for different expectations, so it’s really difficult.”
In-depth process
The team therefore decided to become involved with the Index, the process of which Wrzesinska describes as “very thorough and in-depth”.
“The challenging aspect is confirming we can illustrate and demonstrate that we are actually behaving responsibly in our tax matters,” she adds.
The five areas assessed in the Index are Policy and Strategy; Management and Governance; Stakeholder Engagement; Transparency and Reporting; and Contribution and Narrative. In their 2024 Tax Footprint report Fortum published their scores of 21/25 for Transparency and Reporting and 18.5/25 for Contribution and Narrative.
“From the beginning we have always targeted to explain what kind of taxpayer we are and the outcome of that,” Lehtimäki says.
“We try to focus on the relevant parts and explain the topics and areas that would add value and understanding of our tax management and also our tax positions to different stakeholders.”
Striving for better
Looking ahead, Salo says Fortum will renew the Index next year and see whether the company can develop even further.
“Governance will be an area where we do some work,” he says.
“We don’t need a lot of improvements, but you need to always be hungry to be a little bit better. ‘Perfect’ is something that will never be in place, but [you can] be a bit better and say now we are good enough.”
If you are interested in undergoing an Index assessment for your business, get in touch to discuss it here.
