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ROOPAL GUPTA
TANUJA SHARMA

FORTUM INDIA: RESPONSIBLE LEADERSHIP IN


TIMES OF CRISIS
Varinder Singh, Chief Manager of Human Resources at Fortum India Pvt. Ltd. (Fortum India),
was unable to grasp the reality of the images shown on his television screen. Every Indian
channel was showing footage of thousands of migrant workers and their families carrying the
few things they owned. They were moving on foot from the urban centers where they were
employed to the distant villages where they had originally come from in search of jobs [see
Exhibit 2]. The visuals, running 24/7, were drawing viewer attention to how trade and industrial
employers in Indian cities were unable to secure the livelihoods of their migrant workers. Worse,
it was highlighting how Indian business establishments had seemingly no empathy for the
hardships their employees were facing as a result of the national lockdown imposed by the
Indian central government in response to COVID-19.

COVID-19 had originally surfaced in December 2019 as an acute respiratory illness. In mid-
February 2020, the World Health Organization (WHO) named the illness coronavirus disease:
2019 (COVID-19).1 On March 11, WHO declared COVID-19, which had by then spread to
more than 200 countries and led to more than 5.9 million cases worldwide, a pandemic due to
its global nature.2 Governments worldwide were soon imposing lockdowns in their respective
geographies in a bid to limit the spread of the contagion.

Varinder thought that what he was witnessing on television was contrary to the values he held
dear. It was contrary to what the parent company Fortum Oyj (Fortum), a Finnish enterprise in
clean energy successfully running operations in India since 2012, had outlined in its
International Code of Conduct [see Exhibit 3]. What was unsettling for him was that he himself
had no choice but to fully shut down the operations of Fortum India to comply with the official
mandate.

1
“Naming the Coronavirus Disease (COVID-19) and the Virus that Causes It,” World Health Organization, accessed 16 July
2020, www.who.int/emergencies/diseases/novel-coronavirus-2019/technical-guidance/naming-the-coronavirus-disease-(covid-
2019)-and-the-virus-that-causes-it.
2 Qiulan Chen et al., “Active Case Finding with Case Management: The Key to Tackling the COVID-19 Pandemic,” The Lancet

396, no. 10243 (4 July 2020): 63–70.

Roopal Gupta and Professor Tanuja Sharma prepared this case for class discussion. This case is not intended to show effective or
ineffective handling of decision or business processes. The authors might have disguised certain information to protect
confidentiality. Cases are written in the past tense, this is not meant to imply that all practices, organizations, people, places or
fact mentioned in the case no longer occur, exist or apply.

© 2022 by The Asia Case Research Centre, The University of Hong Kong. No part of this publication may be digitized, photocopied
or otherwise reproduced, posted or transmitted in any form or by any means without the permission of The University of Hong
Kong.
Ref. 22/749C

Last edited: 12 December 2022

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22/749C Fortum India: Responsible Leadership in Times of Crisis

The news about the migrant workers could not have come at a more stressful time for Varinder.
Only in December 2019 had Fortum India acquired land in the city of Jaisalmer in the state of
Rajasthan, India, to build its first 250 megawatt (MW) solar plant. Construction was underway.
While Fortum India was able to ensure raw material procurement even during the lockdown,
the exodus of migrant workers was a nightmare for which it was not prepared. Nor had it
factored in the human costs of the suffering imposed on its workforce.

Fortum India was relying on the steady availability of unskilled, semiskilled, and skilled
workers at its construction site in Jaisalmer. But, unsure when the lockdown would be lifted,
its workers, as elsewhere, were packing up and leaving the site [see Exhibit 1]. They did not
know whether they would return to work, if their jobs were secure, and what indeed lay ahead.

I am grappling with three dilemmas. How should we at Fortum India manage


the crisis by being both compliant with the official mandate and being true to
the parent company’s International Code of Conduct? How should we ensure
the completion of construction at Jaisalmer site on time? How should we
secure the livelihood of the migrant workers and keep them safe within the
budgeted project costs? In short, how should we display responsible business
leadership during an unprecedented crisis?
- Varinder Singh, Chief Manager, HR, Fortum India

Clean-Energy Industry
Clean energy was electricity produced from renewable natural resources. Comprising solar,
wind, hydro, geothermal, and biomass, the natural sources were considered renewable because
they were replenished by nature faster than they were consumed. A focus on clean energy had
been on the international agenda for many years, primarily because burning fossil fuels to
produce thermal energy accounted for 90% of all carbon dioxide emissions, making thermal
energy manufacturing a major contributor to addressing climate change. The United Nations
Sustainable Development Goal 7, entitled “Affordable and Clean Energy,” aspired to provide
clean electricity to every household around the globe by 2030. 3 However, as of 2022, 789
million people remained deprived of electricity. While clean energy had the potential to meet
90% of the world’s electricity demands, only 29% of all electricity consumed came from clean
sources in 2022.4 Factors like the affordability of producing clean electricity, the abundance of
clean resources, and reliability, sustainability, and health benefits of clean energy made
economic sense for governments and policymakers to include clean energy in their national
plans.

Globally, solar power generation increased by 22% in 2021 and exceeded the 1,000 TWh
(Terawatt-hours) mark, making it the second-largest absolute source of new clean-energy
generation after wind.5 The impetus to adopt clean solar energy became an international call to
all governments to harness the abundantly available heat from the sun, especially with the steep
rise in gas and coal prices. India set its renewable energy capacity target at 500 GW by 2030,
with a view to substantially increase its solar and wind power capacity, at the United Nations
Climate Change Conference held in 2019. As of March 2020, 37% (or 135 GW) of all electricity

3
“Ensure access to affordable, reliable, sustainable and modern energy,” United Nations Sustainable Development Goals,
accessed 4 October 2022, https://www.un.org/sustainabledevelopment/energy/.
4
“Renewable energy – powering a safer future,” United Nations, accessed 4 October 2022,
https://www.un.org/en/climatechange/raising-ambition/renewable-energy.
5
“Solar PV: more efforts needed,” The International Energy Agency (IES), accessed 4 October 2022,
https://www.iea.org/reports/solar-pv.

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22/749C Fortum India: Responsible Leadership in Times of Crisis

generated came from renewable sources in India. Solar power accounted for 10.61% (or 38.8
GW) of the total installed capacity.6

China was the largest manufacturer and consumer of solar energy, producing 340 GW of solar
energy in 2021.7 The cost of electricity from solar power fell drastically by 85% between 2010
and 2020.8 India had the world’s third-largest solar energy program, after China and the US,
with an ambition to increase solar capacity to 100 GW by 2022.9 Due to its commitment to solar
power, the installed solar capacity grew more than 11 times between 2014 and 2019, from 2.6
GW to 30 GW, respectively, adding 9,255 megawatts (MW) of solar energy in 2017, with
another 9,627 MW of solar energy projects under development, and large-scale auctioning of
additional solar power capacity undertaken by the government in 2020.10

Fortum Oyj—Company Background


Fortum was an energy company based in Espoo, Finland. Founded in 1998, Fortum was a state-
owned company that provided products and services spanning the energy spectrum. The
company developed and offered products and services for customer solutions in electricity and
the allied processes of heating and cooling. It also provided solutions to improve resource
efficiency. Its growth businesses focused on clean power, low-carbon energy, and the
infrastructure for a future hydrogen economy. Fortum also designed solutions to help
companies and cities reduce their environmental footprint. The company operated in Nordic
and Baltic countries, Poland, Russia, and India.

In 2021, the company employed nearly 20,000 employees with activities in more than 40
countries and reported a sales figure of €112.4bn.11

Fortum was the “third largest CO2-free power generator in Europe, third largest power
generator in Europe and Russia, third largest nuclear generator in Europe and fourth largest gas
storage operator in Europe.”12 The company had a clearly articulated purpose: “to drive the
change for a cleaner world. We are securing a fast and reliable transition to a carbon-neutral
economy by providing customers and societies with clean energy and sustainable solutions.”13

Fortum had allegiances with many international organizations, including the United Nations
(UN) Global Compact [see Exhibit 4], OECD Due Diligence Guidance for Responsible
Business Conduct (Guidance), the International Bill of Human Rights (adopted in 1948), Core
conventions of the International Labour Organization (ILO, first published in 2002), and the
UN Guiding Principles on Business and Human Rights (2011). Along with Fortum’s own
Values and International Code of Conduct, they were all adopted by its subsidiaries worldwide.

6
“Renewable energy in India,” Wikipedia, accessed 4 October 2022,
https://en.wikipedia.org/wiki/Renewable_energy_in_India#cite_ref-capacity_21-0.
7
“China solar installations more than double in first half – assn,” Reuters, 21 July 2022, accessed 4 October 2022,
https://www.reuters.com/business/energy/china-solar-installations-more-than-double-first-half-assn-2022-07-21/.
8
“Renewable energy – powering a safer future,” United Nations, accessed 4 October 2022,
https://www.un.org/en/climatechange/raising-ambition/renewable-energy.
9
“Overview- Solar Energy,” Ministry of New and Renewable Energy, Government of India, accessed 4 October 2022,
https://mnre.gov.in/solar/current-status/
10
“Solar power by country,” Wikipedia, accessed 4 October 2022, https://en.wikipedia.org/wiki/Solar_power_by_country.
11
Fortum, “Fortum in 2021,” accessed 4 October 2022, ”https://www.fortum.com.
12
Fortum, 2022 Investor/Analyst Material, p. 5, https://www.fortum.com/files/fortum-investor-presentation-march-
2022/download, accessed 21 September 2022.
13
Fortum, “This is Fortum,” accessed 4 October 2022, https://www.fortum.com/about-us/our-company.

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22/749C Fortum India: Responsible Leadership in Times of Crisis

Fortum India
Fortum entered the Indian market in 2012 and was headquartered in Gurugram in the state of
Haryana. Fortum India operated as a producer of solar energy. It was one of the leading clean-
energy companies in India that developed and offered solutions in primarily three spaces: (1)
electricity and allied processes, including heating and cooling; (2) improving energy resource
efficiency; and (3) reducing the negative environmental impact of the power generation
industry. The company promoted sustainability by providing solutions for consumers so they
could be smarter in their energy choices.

Fortum had successfully established itself in India as a sustainable energy company. During
nine years of its tenure, Fortum India had constructed solar plants with a capacity of more than
650MW of electricity annually, operated 180+ EV charging points, and was making
breakthrough innovations in the production of biofuels and the reduction of NOx emissions
from power plants.14

Fortum India adopted the core values of its Finnish parent company: curiosity, responsibility,
integrity, and respect. The values provided a foundation for the company culture. They served
as a compass in evaluating opportunities and guiding decision-making at Fortum India. Fortum
followed an open work culture where everyone was free to voice their opinion, share ideas, and
work in a cooperative and cohesive work environment. The Indian subsidiary had some of the
country’s best employee practices, including an additional four weeks of parental leave over
and above the period stipulated by Indian law. The parent company’s International Code of
Conduct emphasized the practice of treating others with respect and doing business and
engaging with the world responsibly while providing a transparent means of voicing concerns.

Fortum India prided itself in being among one of the first organizations to proactively prepare
for the pandemic. Until April 2020, it had had zero COVID cases across its Indian sites and
offices. Guided by the parent company, Fortum India had deployed COVID taskforces to secure
the physical and mental well-being of its employees, contract workers, and their families alike.
From dispatching personal protection equipment (PPE) kits, sanitizers, and face masks to
employees at their residences to ensuring a seamless transition to working from home, Fortum
India had undertaken all precautionary measures. In addition, COVID-specific interventions
were introduced under an umbrella program “Fortum WeCare” to provide mental wellness
sessions to white-collar employees, The company was also providing health-care services and
living spaces, in partnership with NGOs.

Our people and our community have been our greatest assets in our journey in
India. We strive to provide a healthy and safe working environment for all our
people. Fortum complies with fair employment practices and honors
internationally accepted human and labor rights and labor standards. The
well-being of our employees is of utmost importance to us. Our health and well-
being initiatives are aimed at elevating the quality of life of our people. We
have undertaken several initiatives to ensure that the communities thrive in the
furtherance of our business.
- Ranabir Chakraborty, Chief HR Officer, Fortum India

14
“Good Health and Wellbeing” BRICS Solutions for SDGs Awards 2021, p. 2, company document received from Varinder
Singh.

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22/749C Fortum India: Responsible Leadership in Times of Crisis

Migrant Workers in India


Interstate migration in India occurred when people in resource-deprived regions moved to other
states in search of a livelihood. These people were usually uneducated. A majority sought work
in sectors like construction, manufacturing, services, and farming; others were engaged as
domestic help, sanitation workers, and street vendors. The living conditions of these workers
and their families were miserable, because they had meager incomes and no job security. They
were unable to access government schemes like the Public Distribution System (PDS), health-
care facilities, and employment guarantee schemes because their registered addresses (in home
states) were different from their current addresses (destination states). These workers also lost
their civic identity, voting rights, and access to proper mechanisms for redress upon interstate
migration because the country did not provide portable social security schemes across states.
They were not covered by any labor laws. This subjected them to lower wages, exploitation,
and poor working conditions, making them one of the most vulnerable and marginalized sectors
of working India.15

At the onset of the COVID-19 pandemic, there were 453.6 million migrant workers in India
who were set to be impacted by the reverse migration caused by the lockdown.16 Since they had
traveled long distances to find employment in other states, their movement to return home
became extremely chaotic. Many migrant workers were stranded because of the lack of timely
government support and the panic that the businesses had created by laying them off. They
faced evictions, lack of transportation, shortage of food and clean drinking water, and lack of
hygienic sanitation facilities [see Exhibit 2].

The Challenge
The original project deadline for Fortum’s Solar project in Jaisalmer was 18 months from
concept to commissioning. It was a typical renewable plant construction project. The operations
plan in Jaisalmer included operatives working in cyclical fashion, with new laborers frequently
joining the workforce from different states. At its peak, 800 construction workers were planned
for deployment at the construction site.

But with the national lockdown announced on 24 March 2020, all commercial activity across
India stopped. In mid-April, the government of India announced relaxation in construction
activities in renewables amid the lockdown17 [see Exhibit 1]. Yet, major power companies had
already either suspended their construction plans or were contemplating extension to the date
of commissioning.18 This was primarily because of a shortage in supply of solar modules from
China and additional restrictions on interstate movement of logistics.

Large numbers of laid-off migrant construction workers started returning to their respective
towns or villages. When the government arranged to transport these workers back to their
hometowns or villages, a total of 900,000 migrant workers signed up to leave from or return to
Rajasthan. The state recorded the highest number of migrants—27,000—in a single day on 30

15
S. Upadhyay & M. N. Agarwal, “The Revelio Charm: The Invisible Migrant Labour of India,” in Responsible Leadership for
Sustainability in Uncertain Times, eds. T. Sharma, R.S. Ray, and N. Mitra (Springer Nature, 2022), 127–156.
16
International Labour Organization, “India’s migrant construction workers: An analysis of their welfare framework,” 6 October
2021, accessed 14 November 2022, https://apmigration.ilo.org/news/india2019s-migrant-construction-workers-an-analysis-of-
their-welfare-framework
17
Aarushi Koundal, “COVID-19: Govt allows construction of renewable energy projects in revised guidelines,” ET
EnergyWorld. 15 April 2020, https://energy.economictimes.indiatimes.com/news/renewable/covid-19-govt-allows-
construction-of-renewable-energy-projects-in-revised-guidelines/75164060, accessed 21 September 2022.
18
Rakesh Ranjan, “Implications of COVID-19 Lockdown on Indian Solar Industry,” Mercom India, 8 April 2020,
https://mercomindia.com/implications-covid-lockdown-indian-solar-industry/, accessed 21 September 2022.

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22/749C Fortum India: Responsible Leadership in Times of Crisis

April 2020, and an additional 8,000 workers two days later.19 This migration happened too
quickly and without proper transportation or rehabilitation facilities for the migrant workers.
The country watched with dismay as people from the lowest rung of the workforce pyramid
traveled on foot, with children and whatever belongings they could carry, without food and
water for miles and days, and with little hope of making it to their homes20 [see Exhibit 2].

Amid the shortage of workers, the government of Rajasthan announced the extension of work
hours to 12 hours per day for a period of three months.21 However, Fortum India remained
noncommittal on leveraging this provision because the company abided by the UN Global
Compact [see Exhibit 3].

Time for Action


Varinder prepared for the meeting with his leadership team scheduled the next day. On the
agenda was a discussion of Fortum India’s challenge because of the shortage of construction
workers. The team needed to decide on an immediate course of action. Given the new world
order and Fortum's renewed realities, Fortum India needed to review its Business Continuity
Plan to augment, remove, add, and change elements to reflect the current reality. It had to do
so without losing sight of its International Code of Conduct and Values. Varinder was planning
to highlight three major issues in the meeting.

First, the government had declared Fortum India an “essential service” organization.22 That
meant that the construction work should not suffer. The shortage of workers not only stymied
the company’s plans, but also demanded serious attention and monetary resources. Fortum
India was responsible for the safety, health and well-being of the workers at the construction
site in Jaisalmer, which was guided by its International Code of Conduct: “We care about our
employees’ safety, security, and well-being” and Value “Responsibility: never compromise on
safety.” Would the resumption of work during the pandemic mean more monetary outflow for
safety and preventive medical arrangements? There was only a finite budget available for the
project. Investing responsibly in ensuring workers’ availability by paying more, or securing
their lives by way of insurance, medical supplies, and creating containment enclosures for them,
would mean cutting costs somewhere else. If Fortum India decided to keep the construction
work going, it had to do so without jeopardizing human life or the viability of the project.

Second, if Fortum India decided to continue construction, should it employ the construction
workers for a 12-hour workday? The government of Rajasthan had come up with a new
provision to that effect.23 But would the company’s own values and adherence to international
labor forums allow it to do so?

19
Sachin Saini, “Covid19: Over 27,000 workers leave Rajasthan as movement of migrants begin,” Hindustan Times, 30 April
2022, https://www.hindustantimes.com/india-news/covid19-over-27-000-workers-leave-rajasthan-as-movement-of-migrants-
begin/story-SajPyr8KiBLG2QwnP2fKpM.html, accessed 21 September 2022.
20
Vikayta Lalwani, “Coronavirus: ‘Why has Modi done this?’ Rajasthan workers walk back home from Gujarat,” Scroll.in, 26
March 2020, https://scroll.in/article/957245/coronavirus-after-lockdown-migrant-workers-take-a-long-walk-home-from-
gujarat-to-rajasthan, accessed 21 September 2022.
21
Government of Rajasthan, Factories and Boilers Inspection Department, “Order (Notice No: F.3(15)/Legal/F&B/2020/188)”,
11 April 2020. https://drive.google.com/file/d/1MaUpyRcTU_l7RdihhkHHPZF1vLmUDlBc/view, accessed 21 September
2022.
22
Ministry of Power, Government of India, “Essential operation of power generation utilities and permission for material
movement needed by them during the nation-wide lockdown for Covid-19 outbreak.” 25 March 2020,
https://powermin.gov.in/sites/default/files/Essential_operation_of_power_generation_utilities_and_permission_for_material_
movement_needed_by_them_during.pdf, accessed 21 September 2022.
23
Government of Rajasthan, Factories and Boilers Inspection Department, “Order (Notice No: F.3(15)/Legal/F&B/2020/188),”
11 April 2020. https://drive.google.com/file/d/1MaUpyRcTU_l7RdihhkHHPZF1vLmUDlBc/view, accessed 21 September
2022.

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22/749C Fortum India: Responsible Leadership in Times of Crisis

And finally, the Indian leadership had the responsibility to live by Fortum’s values—curiosity,
responsibility, integrity, and respect—to “Protect Fortum’s reputation,” guided by its
International Code of Conduct. On the one hand, zero tolerance for any safety or health
regulation violation was at the core of its values, and any negative incident was ill-afforded. On
the other hand, spending more than the budgeted sum would render the produced power costlier,
which could jeopardize the Power Purchase Agreement (PPA).24 If the company suspended the
construction work and sent the construction workers home, would it take away the livelihood
of an already marginalized community? Was that responsible business?

Construction businesses across India had suspended their projects, there was a nationwide
health alert, and Fortum India had many decisions to take. It needed to decide what its
responsibility was. Did this mean employing the workers and exposing them to health risks or
letting them go at the cost of delay in construction? Should the company employ less manpower
for more hours each day? Would this damage the company’s international brand image as a
responsible employer? Should it revise its business plans to ensure the safety and well-being of
its employees and workers? Was the company able to honor its PPA with the extra cost incurred?
Would that align with the value of responsibility? Could Fortum India achieve its business
objectives while ensuring the safety and well-being of its employees?

As a responsible leader, what should Varinder do?

24
Power Purchase Agreement is an agreement between the producer and consumer of power to provide electricity to the
consumer at a predefined rate for a specified period of time.

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22/749C Fortum India: Responsible Leadership in Times of Crisis

EXHIBIT 1: TIMELINE

1. December 2019: Fortum acquired land in Jaisalmer and commenced solar power plant
construction.
2. 24 March 2020: Nationwide lockdown under section 144 announced in India by the
government.
3. 25 March 2020: Government of India waived section 144 and related restrictions of
lockdown for essential services, including power generation.
4. 11 April 2020: Government of Rajasthan allows 12-hour workday at factories for a period
of three months.
5. 15 April 2020: Government of India allows construction of renewable energy projects in
the face of extended national lockdown.
6. 20 April 2020: Fortum resumes construction at Jaisalmer site.
7. 30 April 2020: Migrant workers’ movement begins from Rajasthan; state of chaos ensues.

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22/749C Fortum India: Responsible Leadership in Times of Crisis

EXHIBIT 2: MIGRANT WORKERS DURING NATIONAL LOCKDOWN: PHOTOS

Source: Created by authors, based on data from “Coronavirus | Centre tells States to set up
camps for migrant workers,” The Hindu, 28 March 2020,
https://www.thehindu.com/news/national/centre-tells-states-to-set-up-camps-for-migrant-
workers/article31194860.ece, accessed 21 September 2022; Manavi Kapoor, “Charted:
Lockdown is only the beginning of misery for India’s migrant labourers,” Quartz India, 7 April
2020, https://qz.com/india/1833814/coronavirus-lockdown-hits-india-migrant-workers-pay-food-
supply/, accessed 21 September 2020; Harshita Sinha, “Falling Through the Gap: migrant
workers in the Indian Informal economy,” International Development (Blog), 20 April 2020,
https://blogs.lse.ac.uk/internationaldevelopment/2020/04/20/falling-through-the-gap-migrant-
workers-in-the-indian-informal-economy/, accessed 21 September 2022; “Hit by lockdown,
stranded on roads: Migrant labourers walk for days to reach home,” India Today, 26 March
2020, https://www.indiatoday.in/india/story/coronavirus-outbreak-lockdown-migrant-workers-
condition-1659868-2020-03-26, accessed 21 September 2022; “Heartbreaking Photos of Migrants
Struggling To Go Home,” News18, 29 May 2020,
https://www.news18.com/photogallery/india/heartbreaking-photos-of-migrants-walking-
hundreds-of-kilometres-to-go-home-2547983.html, accessed 21 September 2022.

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22/749C Fortum India: Responsible Leadership in Times of Crisis

EXHIBIT 3: FORTUM’S INTERNATIONAL CODE OF CONDUCT

I. How we treat others


1. We respect human and labor rights
2. We are an inclusive and fair employer
3. We care about our employees’ safety, security and well-being
4. We do not accept abusive or intimidating behavior
5. We protect our personal information

II. How we do business


1. We conduct business legally and ethically
2. We avoid conflicts of interest and ensure that Fortum’s interests are a priority
3. We do not tolerate corruption or bribery in any form
4. We are transparent in offering and receiving gifts and hospitality
5. We do not misuse corporate resources
6. We protect all business assets, including information, technology, and facilities
7. We communicate and market our products truthfully and responsibly
8. We interact appropriately with civil servants and decision makers
9. We collaborate openly with our suppliers
10. We protect ourselves against fraud, involvement in money laundering, and other
forms of illegal acts

III. How we engage with the world


1. We protect Fortum’s reputation
2. We support the common good in society
3. We protect the environment in our operations

Source: Created by Authors from Fortum’s Code of Conduct.

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22/749C Fortum India: Responsible Leadership in Times of Crisis

EXHIBIT 4: 10 PRINCIPLES OF UN GLOBAL COMPACT

Source: Authors, based on data from United Nations Global Compact (2000),
https://www.unglobalcompact.org/what-is-gc/mission/principles, accessed 21 September 2022.

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