Managing of climate risk

CDP, Finsif and Sitra seminar

Helsinki, August 25th 2015

Kari KankaanpääFortum Corporation

Our current geographical presence

2

Nordic countries

Power generation* 49.2 TWh

Heat sales* 10.9 TWh

Electricity customers 1.3 million

Power

generation

Electricity

sales

Heat

PolandPower generation 0.7 TWh

Heat sales 3.4 TWh

Baltic countriesPower generation 0.7 TWh

Heat sales 1.2 TWh

IndiaPower generation 9 GWh

Key figures 2014Sales EUR 4.1 bn

Comparable operating profit EUR 1.1 bn

Balance sheet EUR 21 bn

Personnel 8,200

* In addition, Fortum has a 29.5% share in TGC-1* Including Fortum’s associated company Fortum Värme;

power generation 1.2 TWh and heat sales 7.6 TWh.

OAO Fortum

Power generation 23.3 TWh

Heat sales 26.0 TWh

Russia*

3

Solar EconomySolar based production with

high overall system efficiency

Geothermal

Hydro

Wind

Sun

Ocean

Traditional

energy productionExhaustible fuels that

burden the environment

Coal Gas

Oil

Advanced

energy productionEnergy efficient and/or

low-emission production

Nuclear

today

Nuclear

tomorrow

CHP

CCS

Bio

Copyright © Fortum Corporation

All rights reserved by Fortum Corporation and shall be deemed the sole property of Fortum Corporation and nothing in this slide

or otherwise shall be construed as granting or conferring any rights, in particular any intellectual property rights

Future energy system

Storage

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High Emissions Emission free

Interconnectors

Smart

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64

g CO2/kWh electricity, 2013

2014

64% of Fortum's total power generation CO2-free

94% of Fortum’s power generation in the EU CO2-free

Close to 100% of the ongoing investment programme

in the EU CO2-free

Average 328 g/kWh

200

Fortum's carbon exposure among the lowest in Europe

4

Note: : Fortum’s specific emissions of the power generation in 2014 in the EU were 39 g/kWh and in total 177 g/kWh.

Only European generation except “Fortum total“ which includes Russia.

Source:

PWC & Enerpresse, December 2014

Climate Change and Electricity, Fortum

External assessments valuable for continuous improvement

• External independent assessments of

sustainability and good rankings in

significant indexes are important for us,

because they support the development and

continuous improvement of our operations.

• We believe that accountability for

contributions to climate change is a business

imperative.

• However, assessment metrics has to be

relevant for the issue under consideration

and regional differences should be taken

into account.

• CDP’s extensive database is a profound

global source for independent information.

5

Views on the Electric Utilities report ”Flicking the Switch”

• Environmental metrics of the analysis and SLT diversified and relevant for carbon risk, butwater risk remains discrete

• Scope of the analysis not consistent(partly European and partly global)

• Strong focus (3x weighting) on otherrenewables, undermining the role of hydropower

• Metrics based on installed capacity (MW) of renewables, however, produced energy (MWh) is a real measure of performance and directlyrelated to emissions

• Non-respondents to CDP water disclosure”punished” in the analysis

• Quality control by companies and dialogueduring the preparation of the analysis to berecommended

6

Next generation energy company

Twitter @KariKanka