Corporate citizenship

Suominen operates in a responsible and globally aligned manner. We support responsible operations in our supply chain and in the society at large by respecting human rights, being a good corporate citizen and mitigating environmental impacts caused by our own operations. We adhere to high ethical standards in all our activities.

Suominen is a global company with operations on three continents. We collaborate with a significant number of stakeholders in a multicultural environment every day. We develop our stakeholder relationships in a fair and responsible way and promote transparency in our communications.

Through global operations we provide employment and business opportunities, generating a positive economic contribution to the surrounding society. Our tax footprint arises from the business operations in the countries where we operate.

We are committed to full compliance with all applicable national and international laws, regulations, and generally accepted practices. We support UN Global Compact. Suominen refrains from all unfair business practices, such as fraud, corruption, and bribery.

Stakeholder dialogue

 

Suominen’s stakeholders are entities or individuals that have an impact on or are impacted by our business. Our stakeholder groups differ greatly and thus the focus areas and the channels of communication vary according to each groups’ interests and needs.

Continuous interaction with our stakeholders is a key aspect of Suominen’s approach to sustainability. Stakeholder dialogue provides important insights into the expectations and concerns our stakeholders have and helps us to identify the opportunities and risks in our operating environment. We want to engage in open and continuous dialogue with our stakeholders and strive to transparent communication through various channels.

Suominen conducts a stakeholder survey every other year and the latest survey took place in 2019. At that time, a public web-based survey for all our stakeholders was conducted to assess expectations and to collect information and insights into how we can develop our sustainability work further. The web-based survey was supplemented with in-depth interviews with selected key stakeholders. The results were analyzed in internal workshop and as a result, six material topics were defined: eco-friendly products, health and safety, energy efficiency, waste prevention, financial stability and employee engagement.

In October 2020 Suominen conducted a global employee engagement survey, gaining an overall participation rate of approximately 80 percent of all employees. The survey identified both positive areas of impact on employee engagement, as well as areas of the greatest opportunity for improvement. The results are used as a basis for creating concrete development plans. Overall, Suominen’s employee engagement is at a good level.

Tax footprint

 

Suominen’s tax footprint represents the economic impact on society arising from Suominen’s operations in the countries where it operates. Suominen’s business operations result in liabilities to pay taxes and similar payments, as well as  in a liability to collect and remit taxes and similar payments that arise from the business activities of the group companies.

Suominen’s tax footprint arises from the business operations in the countries where it operates. Suominen has not entered into any arrangements aiming to change or rearrange its tax burden from what arises from normal business operations. The trading of goods between Suominen group companies is extremely limited. The group companies receiving intra-group services are charged a service fee. The pricing of the service fee is in line with the arm’s length principle.

Suominen has companies only in those five countries – Brazil, Finland, Italy, Spain and the USA – where it has both production and sales operations. In respect of taxes and similar payments, Suominen applies the laws and regulations of each country. Suominen’s tax footprint includes not only the taxes and similar payments that are group companies’ costs, but also  the taxes and similar payments which the group companies collect and remit, such as indirect taxes. Deferred taxes which arise from the timing differences between taxation and accounting and are recognized in accounting are not included in the tax footprint.

The main markets of the Finnish group companies are abroad. Due to this, the export sales of these companies significantly exceed their domestic sales. No value added tax is levied on export sales. This leads to a situation where the Finnish group companies’ deductible value added tax on their purchases subject to value added tax is considerably higher than the value added tax they remit based on their taxable sales. As a result, Suominen receives a refund of value added tax in Finland.

In 2020, Suominen employed on average 689 people in its operations. As a result, Suominen generated a positive economic contribution to the surrounding society in the form of employees’ income taxes, as well as social security contributions both by the company and the employees. Thus, Suominen’s tax footprint includes also the collected and remitted employees’ income taxes as well as social security contributions, but the employer’s taxes are clearly separated from the employees’ taxes and payments in the report.

Suominen’s corporate income taxes are significantly affected by tax losses generated in the past in certain countries where Suominen operates. Based on local tax laws and regulations, tax losses are normally carried forward and deducted from the taxable profits generated in the future. At the moment, Suominen’s taxable result does not incur corporate income tax payments in Finland, as it has tax losses carried forward from past years. Suominen is subject to group tax consolidation methods in several countries based on each country’s tax laws and regulations, which effectively means that Suominen’s local companies are taxed on the local consolidated taxable income.

In 2020, Suominen utilized in the USA the COVID-19 related tax reliefs which allowed companies to carry back losses to past years. This resulted in Suominen receiving a federal corporate income tax refund from prior years and decreased the total federal corporate income taxes for 2020.

The group companies also pay property and real estate taxes based on the land and buildings they own, as well as different fiscal payments levied, for example, on manufacturing operations. Suominen does not consider these as indirect taxes to be collected and remitted, but as taxes that are costs for the Group companies.

 

Taxes and similar payments borne

 

2020 

2019 

EUR thousand 

Finland 

Other countries 

Finland 

Other countries 

Corporate income tax, tax on profit* 

-2 

-2,851 

0 

-1,351 

Property taxes 

-73 

-984 

-73 

-952 

Employer contributions and taxes 

-1,786 

-10,215 

-1,490 

-9,925 

VAT as expense 

-20 

-5 

-20 

-2 

Custom duties on export** 

- 

-22 

- 

-23 

Custom duties on import** 

-450 

-1,305 

-606 

-1,792 

Excise duties 

-18 

-151 

-236 

-126 

Other taxes and similar payments 

-21 

-525 

-25 

-210 

Total

-2,370 

-16,059 

-2,450 

-14,380 

Taxes and similar payments collected and paid 

 

2020

 2019

EUR thousand

Finland 

Other countries 

Finland 

Other countries 

Net VAT 

3,355 

-4,887 

3,510 

-4,010 

Payroll taxes and similar payments collected and paid 

-2,936 

-8,650 

-2,881 

-8,912 

Withholding taxes on various payments 

-150 

-121 

- 

-114 

Total

269 

-13,658 

629 

-13,036 


* Corporate income taxes do not include any deferred taxes.

** Custom duties are borne by the company importing or exporting goods and not collected and/or paid by some other tax payer. For these reasons custom duties are reported as taxes borne.

 

Ethical guidelines

 

Human rights

Suominen is committed to the United Nations (UN) Guiding Principles on Business and Human Rights and the International Labor Organization (ILO) Declaration on the Fundamental Principles and Rights at Work. In our Code of Conduct Suominen commits to respecting human rights as an employer. Suominen does not tolerate any kind of discrimination, any form of forced or compulsory labor, or the use of child labor.

Suominen works consistently to ensure that human rights are respected across the value chain. Suominen requires its raw material suppliers to commit to ethical conduct, full compliance with all applicable national laws and international treaties, and to respect human rights as set forth in internationally recognized standards and treaties.

Code of Conduct

Our daily operations are guided by Suominen’s Code of Conduct and other related policies which are the cornerstones of our sustainable business practices. Suominen renewed its Code of Conduct during 2020 and it was published in the first quarter of 2021. The Code of Conduct states Suominen’s expectations for doing business responsibly, ethically and consistently, according to our values, our policies, and the law. The Code of Conduct addresses issues such as fair business practices, financial regulations, human rights, and environment. The Code is adopted by the Suominen Corporation and its subsidiaries and it applies to everybody working for the company, wherever they are in the world. A mandatory training program about the renewed Code of Conduct will be arranged for all employees in 2021.

Our requirements for our suppliers are described in the Supplier Code of Conduct, which discusses issues such as human rights, wages and working hours, child labor and forced labor, corruption and bribery and the environment. We expect our business partners to act responsibly and all our suppliers to comply with our Supplier Code of Conduct.

In accordance with the renewed sustainability agenda’s targets, we will establish a process for third party supplier sustainability audits.