TeliaSonera strives to balance strong financial results with long-term sustainable value creation and to be an attractive investment. Responding to expectations on TeliaSonera to conduct our business in a fair and responsible way, we always seek to provide information to the investor community in an honest, fact-based and transparent manner.
With their respective share holdings of 37.3 percent and 13.7 percent, the Swedish and Finnish States are the largest shareholders in TeliaSonera. In addition, there are a number of institutional investors and funds among the more influential shareholders.
The TeliaSonera has more than 600,000 shareholders, primarily in Sweden and Finland. However, during 2010, the shareholding outside Sweden and Finland increased from 13.8 percent to 17.6 percent.
Risk, opportunities and long-term sustainable growth
The main concern of investors and owners is for TeliaSonera to keep delivering long-term sustainable growth, while at the same time presenting quarterly profits.
In dialogue with investors, TeliaSonera has identified a number of topics that investors believe to affect TeliaSonera’s success, and which are closely intertwined with CR aspects, for instance
- Network integrity
- Fair business practices
- Supply Chain
- Routines in entering new markets
Eastern expansion important for growth
TeliaSonera’s operations in the Baltic region and Eurasia have grown significantly and their share of the group results has increased steadily. Eurasia generated some 40 percent of the TeliaSonera group’s operating income in 2010.
Some investors forward this as a risk in financial terms, partly because of the exposure to higher risk emerging markets, but also in terms of ensuring fair business practices.
Upholding fair business practices are critical and the management’s top priority. TeliaSonera acknowledges that hypothetically, a severe incident of corruption could cause TeliaSonera’s “license to operate” be put in question, and thus materialize into a business risk.
A pre-condition for addressing these issues is a robust governance model and an internal auditing system that covers all relevant entities of the group. The group-wide Code of Ethics and Conduct presents a shared platform to act as a group with a uniform approach to fair business practices. TeliaSonera has also clarified its position and intention to remain and further develop its business in the Nordic, Baltic and Eurasian countries and in Spain.
Bridging the digital divide
Another emerging issue identified by the investment community is the importance of bridging the digital divide. Developing the accessibility of telecom services means expanding TeliaSonera’s business. Currently the highest potential for this is presented by the Baltic and Eurasian markets, where both the digital divide and the market growth potential are significant.
This signals that investors consider a basic level of CR work to be fundamental and a basic condition for investments.
Well-prepared companies may move into emerging markets or regions without compromising investor confidence. On the other hand, companies that do not address these issues risk ending up outside the investment universe when it comes to large institutional capital.
Shareholders in TeliaSonera with ESG commitments
To confirm the importance of CR issues and the growing expectations for companies to communicate about their performance in the field, TeliaSonera continues to estimate the proportion of ethical investors among our shareholders. At the end of 2010, approximately 12 percent of the total shares in TeliaSonera were held by Principles for Responsible Investments (PRI) signatories.
Sustainability indices and ratings
Inclusion in a sustainability index is a quality indicator and recognition of a company’s CR work, and at the same time it provides a benchmark on how the company performs as compared to its peers. Inclusion in a sustainability index exposes the company shares to funds and members of the investor community that pick stock specifically from such indices.
For these reasons it is important to TeliaSonera to be included in both regional and global sustainability indices.
- FTSE4Good TeliaSonera is included in FTSE4Good, one of the world’s most recognized sustainability indices,
- Oekom PRIME rating TeliaSonera has a prime rating from oekom research, based on an assessment of our environmental and social performance.
- Carbon Disclosure Project TeliaSonera is rated as the top Nordic telecom operator and shared position number four among global telecom operators. The initiative is designed to evaluate companies’ environmental performance reporting and assess how well companies address the risks and opportunities related to climate change.
- OMX GES Sustainability Based on TeliaSonera’s preparedness in environmental, social and governance matters, the TeliaSonera share is qualified for inclusion in the two indices OMX GES Sustainability Sweden and OMX GES Sustainability Nordic.
- Nordic Sustainability Stars TeliaSonera is included among the 25 companies that form the universe for the index SIX STAR which is a joint project between Ethix and SIX.
Read more about our owner and investor relations in the Corporate Responsiblity report 2010