Vaisala Corporate Responsibility Report 2013

Corporate Responsibility Report 2013

Vaisala at a Glance 3Chairmans Message 4Case: A Bold Step into Renewable Energy 5CEO: Responsible, Customer-based Innovation 6Highlights of 2013 8Vision & Mission 8

Responsible Business 11Strategy and Focus Areas 12Sustainability Management 13Case: CheckTime - Taking the Guesswork Out of Aircraft Deicing 14Material Aspects 15Case: Stakeholder Survey 16Organization 18Case: New RS41 Radiosonde, Heart of Fourth Generation Sounding Offering 20Vaisalas Values 21Code of Conduct 22Supply Chain Management 24Quality Management 25Product Safety 26Case: Protecting SF6 Gas Insulated Equipment 27

Our Stakeholders 29Working Together for a Safe Tomorrow 30Case: Four Perspectives on Safety in Custome Operations - a Given or a Differentiator? 34Case: Vaisala and ITD Awarded for Innovative Performance Measurement 37

Economy and Risk 39Financial Overview 40Risk Management 42Case: Increasing Production Capacity 44Case: 30 Years of Lightning Detection 45

Managing Talent 47Workforce 48Measurable Competence 49Case: Come as You Are - A Report on the Giant Leap Internship Program in the US 56Case: Vaisala Young Professionals 58Case: Gamification Used in Manager Training 58Case: Vaisala eLearning 59

Environment 61Responsibility through Innovation 62Environmental Impacts Map 68Case: Green Data Center 69

Society 72Case: Development of Weather Infrastructure in Nepal 72Community Outreach 73Case: Vaisala Celebrates 30 Years in Japan 75Case: The Golden Age of Meteorology 76About This Report 78GRI Content Index 80UN Global Compact Reporting 84Independent Assurance Report 85Vaisala World Wide 86

This material is subject to copyright protection, with all copyrights retained by Vaisala Oyj. All rights reserved. Any logos and/or product names are trademarks of Vaisala Oyj or its individual partners. The reproduction, transfer, distribution or storage of information contained in this document in any form without the prior written consent of Vaisala Oyj is strictly prohibited.

The papers used for the printed report are Munken Polar 300g/m2 and 130g/m2.

Contents

87Corporate Responsibility Report 2013, Vaisala Corporation

Offices contact details: www.vaisala.com/en/contact/offices

in Finland Other Countries

231.8

253.2

273.6

293.3

273.2

12.0

11.8

16.1

30.2

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0

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20132012201120102009

Development ()

Monthly Trading (1,000 pcs)

200.0 M

73.2 MControlledEnvironment

Weather

98.6 M

107.8 M

Europe, Middle-East and Africa

North andSouth America

66.9 MAsia Pacific

73%

27%

36%

25%

39%

05

10

15

20

25

30

230.2

286.7

278.8

264.7

282.9

95.5

129.0

134.3

105.6 122.0

802

779

781

836

871

605

588

613

606 692

**

MEUR

MEUR, Dec. 31, 2013 Dec. 31, 2013

MEUR

MEUR, Dec. 31, 2013

0

400

800

1 200

1 600

Series A Share

Development of Net SalesOperating Result

Orders ReceivedOrder Book Personnel

Net Sales byBusiness Area 2013

Net Sales by Region2013

Impairment chargesEUR 4.3 million


231.8

253.2

273.6

293.3

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20132012201120102009

Development ()


200.0 M


Weather

98.6 M

107.8 M



66.9 MAsia Pacific

73%

27%

36%

25%

39%

05

10

15

20

25

30

230.2

286.7

278.8

264.7

282.9

95.5

129.0

134.3

105.6 122.0

802

779

781

836

871

605

588

613

606 692

**

MEUR

MEUR, Dec. 31, 2013 Dec. 31, 2013

MEUR

MEUR, Dec. 31, 2013

0

400

800

1 200

1 600

Series A Share







231.8

253.2

273.6

293.3

273.2

12.0

11.8

16.1

30.2

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0

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140

20132012201120102009 20132012201120102009 20132012201120102009

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20132012201120102009

Development ()


200.0 M


Weather

98.6 M

107.8 M



66.9 MAsia Pacific

73%

27%

36%

25%

39%

05

10

15

20

25

30

230.2

286.7

278.8

264.7

282.9

95.5

129.0

134.3

105.6 122.0

802

779

781

836

871

605

588

613

606 692

**

MEUR

MEUR, Dec. 31, 2013 Dec. 31, 2013

MEUR

MEUR, Dec. 31, 2013

0

400

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1 200

1 600

Series A Share







231.8

253.2

273.6

293.3

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12.0

11.8

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0

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20132012201120102009 20132012201120102009 20132012201120102009

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200

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20132012201120102009

Development ()


200.0 M


Weather

98.6 M

107.8 M



66.9 MAsia Pacific

73%

27%

36%

25%

39%

05

10

15

20

25

30

230.2

286.7

278.8

264.7

282.9

95.5

129.0

134.3

105.6 122.0

802

779

781

836

871

605

588

613

606 692

**

MEUR

MEUR, Dec. 31, 2013 Dec. 31, 2013

MEUR

MEUR, Dec. 31, 2013

0

400

800

1 200

1 600

Series A Share







231.8

253.2

273.6

293.3

273.2

12.0

11.8

16.1

30.2

18.1

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20132012201120102009 20132012201120102009 20132012201120102009

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20132012201120102009

Development ()


200.0 M


Weather

98.6 M

107.8 M



66.9 MAsia Pacific

73%

27%

36%

25%

39%

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230.2

286.7

278.8

264.7

282.9

95.5

129.0

134.3

105.6 122.0

802

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836

871

605

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613

606 692

**

MEUR

MEUR, Dec. 31, 2013 Dec. 31, 2013

MEUR

MEUR, Dec. 31, 2013

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Impairment chargesEUR 4.3 million in Finland Other Countries

231.8

253.2

273.6

293.3

273.2

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20132012201120102009 20132012201120102009 20132012201120102009

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20132012201120102009

Development ()


200.0 M


Weather

98.6 M

107.8 M



66.9 MAsia Pacific

73%

27%

36%

25%

39%

05

10

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230.2

286.7

278.8

264.7

282.9

95.5

129.0

134.3

105.6 122.0

802

779

781

836

871

605

588

613

606 692

**

MEUR

MEUR, Dec. 31, 2013 Dec. 31, 2013

MEUR

MEUR, Dec. 31, 2013

0

400

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Series A Share







231.8

253.2

273.6

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11.8

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20132012201120102009 20132012201120102009 20132012201120102009

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20132012201120102009

Development ()


200.0 M


Weather

98.6 M

107.8 M



66.9 MAsia Pacific

73%

27%

36%

25%

39%

05

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230.2

286.7

278.8

264.7

282.9

95.5

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802

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836

871

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606 692

**

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MEUR, Dec. 31, 2013 Dec. 31, 2013

MEUR

MEUR, Dec. 31, 2013

0

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Series A Share







231.8

253.2

273.6

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30.2

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20132012201120102009 20132012201120102009 20132012201120102009

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20132012201120102009

Development ()


200.0 M


Weather

98.6 M

107.8 M



66.9 MAsia Pacific

73%

27%

36%

25%

39%

05

10

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30

230.2

286.7

278.8

264.7

282.9

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613

606 692

**

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MEUR, Dec. 31, 2013 Dec. 31, 2013

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MEUR, Dec. 31, 2013

0

400

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1 200

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Series A Share







231.8

253.2

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12.0

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200.0 M


Weather

98.6 M

107.8 M



66.9 MAsia Pacific

73%

27%

36%

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39%

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230.2

286.7

278.8

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802

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836

871

605

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613

606 692

**

MEUR

MEUR, Dec. 31, 2013 Dec. 31, 2013

MEUR

MEUR, Dec. 31, 2013

0

400

800

1 200

1 600

Series A Share





Impairment chargesEUR 4.3 million in Finland Other Countries

231.8

253.2

273.6

293.3

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12.0

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20132012201120102009 20132012201120102009 20132012201120102009

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20132012201120102009

Development ()


200.0 M


Weather

98.6 M

107.8 M



66.9 MAsia Pacific

73%

27%

36%

25%

39%

05

10

15

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25

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230.2

286.7

278.8

264.7

282.9

95.5

129.0

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105.6 122.0

802

779

781

836

871

605

588

613

606 692

**

MEUR

MEUR, Dec. 31, 2013 Dec. 31, 2013

MEUR

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Vaisala Group Key Figures 2013Net sales 273.2 M

Operating result 18.1 M

Return on Equity 6.3%

Earnings per share 0.60

Personnel (at the end of period) 1,563

Offices 34 in 16 countries

R&D expenditures 28.9 M

Personnel expenditures 104.7 M

Vaisala is a global leader in environmental and indus-trial measurement. Building on more than 75 years of experience, Vaisala contributes to a better quality of life by providing a comprehensive range of innovative observation and measurement products and services for chosen weather-related and industrial markets. The lives of people all around the world are touched daily by the work we do and the technologies we create. Our products and services provide our customers with the means to influence and better understand their environ-ment in positive ways.

Curiosity, the desire to meet challenges, and an extraordinary ability for innovation are at Vaisalas core, both past and present. Headquartered in Finland, Vaisala employs more than 1500 professionals worldwide and is listed on the NASDAQ OMX Helsinki stock exchange.

Vaisala at a Glance

4 Corporate Responsibility Report 2013, Vaisala Corporation

Chairmans MessageVaisalas long-term objectives are founded on our history of excellence in producing novel and ground-breaking technological solutions. Our quarter takes a longer view, investing years rather than months to ensure reliable, optimal, and high quality innovations. We are also not afraid to make mistakes, as in science, trial and error are essential to achieving a successful outcome in product development.

In 2013 we saw clear progress on strategically important fronts and the outcome of several years worth of inten-sive research and development. Financially the year was not as strong as it was anticipated to be, however we have met key strategic targets. These include positioning ourselves more firmly in the renewable energies sector, as well as bringing game-changing decision support services to the market, and the continuous, sustainable develop-ment of the worlds leading humidity sensor. Vaisala released the fourth generation sounding system complete with the new RS41 radiosonde, an exemplary illustration of what world-leading R&D can accomplish when custom-ers are involved from the beginning. Successful partner-ships continue to strengthen our Life Science business, which remains a key focus area for Vaisala. These will be the tools for growth in the coming years.

My grandfather made scientific contributions to soci-ety that continue to impact the way we observe, measure, and analyze the atmosphere. The familys legacy is still strong today and we believe it takes stability, persever-ance, and patience to achieve a position as the global market leader. It has always been important to the com-pany to have a long term view on how Vaisala is managed and that this is done with absolute integrity. We see that Vaisala has an important role and responsibility to supply the international community with reliable instruments independent of short-term economic fluctuations. One part of this process is to maintain profitability in difficult times, which alone safeguards our future ambitions and quality offering.

Going forward, Vaisala continues to invest in science-based innovation. We are proud to build upon this tradition, constantly looking for opportunities to push the boundaries of both science and technology in order to deliver solutions that help us better understand weather, controlled environ-ments, and the environment. Especially in these times, where the changing climate, and the understanding of the changes around us, is without doubt, the greatest challenge for this generation and for those to come.

Raimo VoipioChairman of the Board of Directors

Case


Triton Sonic Wind Profiler has successfully collected nearly 7 million hours of data in 30 countries across the world.

A Bold Step into Renewable EnergyVaisalas strategic goal is to expand its presence in the renewable energy markets. The companys positioning was strengthened through two acquisitions in 2013 and Vaisala is now well positioned to serve customers in this very demanding industry.

The renewable energies market is growing and maturing in the established markets and the developing econo-mies are seeing substantial investments in renewable energy development. Governments are making commit-ments to increase the proportion of renewable energy sources in an effort to curb climate change resulting in these technologies becoming more competitive with traditional fossil fuel technologies.

Uncertainty The Enemy of Renewables

The industry is wrestling with the fact that the output of many renewable energy projects is less than an-ticipated, as the planning process for these has been based on poor measurements and invalid assump-tions, making many of them mediocre investments. To maximize the value of their assets, developers and utility companies need expert advice in wind resource assessments. Reliable feasibility studies and high-quality data based on extensive historical time series, coupled with high quality modelling, are prerequisites. Only then, can a sensible site selection and investment decisions be made.

From an operational viewpoint, the problem with renewables is that weather is complicated and uncer-tain and since renewable energy sources are highly dependent on the weather, the power they produce can be highly variable. To manage the grid efficiently,

operators need accurate forecasts of the renewable en-ergy plants output. In other words, they need to know if it will be windy or sunny at any given time in the future to ensure cost-efficient power supply to the grid.

World-leading Wind Assessment Technology

Vaisala has had a growing portfolio of products and services for the renewable energy sector as the need for accurate weather observations to allow for reliable planning and forecasting for wind parks, has grown with the industry. Vaisalas wind energy measurement offer-ing is now complemented with Second Winds TRITON remote wind sensing, NOMAD in-situ measuring sys-tems, coupled with SkyServe data services. SkyServe is a strong addition to the companys information services business, also a key strategic driver for the long term success of Vaisalas Weather Business Area.

The acquisition of 3TIER positions Vaisala to uti-lize our robust portfolio of measurement capability throughout the life cycle of renewable energy systems. By combining our measurement offering with the expert assessment and forecasting services of 3TIER, we will be positioned as a key player in renewable energy resource assessment and operations markets.

Vaisalas Acquisitions in 2013

Vaisala acquired two companies in 2013 that are both experts in renewable energy business.

Second Wind Systems Inc. Second Wind specializes in advanced wind resource assessment technologies. The companys technology, including the Triton SoDAR, provides wind farm developers with dependable wind data they need to plan, finance and operate highly efficient wind generation facilities. The company is located in Newton, Massachusetts, USA.

3TIER Inc. is an experienced provider of renewable energy assessment and forecasting services to the largest utilities, energy traders, financiers, and project developers around the world. With a staff of experts in weather, climate, and wind and solar risk, 3TIER helps its clients make profitable energy decisions.


Responsible, Customer-based InnovationAt Vaisala, we seek to deliver quality products through expert staff and efficient, reliable processes. This is our cornerstone for creating customer value. However, this is not enough; we also need to make sure that our offering meets the customer needs of today but also those of tomorrow. To achieve this we need to combine understanding our customers busi-ness and their operations with technological insight and expertise. Our reputation is built on being the best in what we do.

Vaisala has always believed in the power of innova-tion and investing into the future. An example launched last year is the next generation sounding system, which is spearheaded by the new and revolutionary Vaisala Radiosonde RS41. Our customers and third party partners have played a pivotal role in the research and development process. Putting the customer first is not only the best way to generate customer value, but also for fine-tuning our key products.

Looking at investments, in 2013 we made two acqui-sitions, one in remote sensing and data services for the wind energy industry, Second Wind Systems Inc.; and one in renewable energy assessment and forecast-ing services, 3TIER Inc. both in the United States. These acquisitions are part of a strategic objective to establish a strong presence in the weather dependent renewable energy technologies and services. Vaisala is to become a key player in forecasting, resource assessment and operations in growing markets. The combination of technologies that Vaisala has brought under one roof with Second Wind and 3TIER, is not only unique, but it empowers energy utilities and other actors in the domain like never before to design, operate and maintain a successful and profitable wind and solar energy business.

In 2014, we look forward to taking full advantage of the portfolio we have built for our Energy business and push for growth in this exciting new area. We also look to further strengthen our position as market leader with new products released, as well as increase momen-tum for our information system products, continuing on a successful path for growth.

Vaisala as a Responsible Investment Sustainability at Vaisala is embedded in our strategic framework. Our corporate targets are interlinked with those of our sustainable business agenda, aiming for growth with good profitability, without sacrific-ing our ambitions to be the safest, most reliable and

sustainable partner for our customers. We do take a long-term approach and look beyond the quarters to bring value to shareholders. We may not be the com-pany to invest in for quick wins; instead we provide a solid long term outlook over the years to come with a business that is increasingly meaningful for mankind.

While attending the Global Compact Leaders Summit in New York last September, I sensed a change among the investor community with many of them speaking so assertively on the benefits of responsible investing. Moreover, for the first time last year, I have been ques-tioned on our environmental, social and governance issues during investor meetings. I am pleased to hear investors gaining interest in these aspects and putting these questions forward to business leaders.

Partnering with Customers

Our diverse business portfolio serves customers across a broad spectrum of industries, institutes, pub-lic services, research, and authorities. Vaisala is known across many industries and has built a reputation for providing high quality and reliable products. We are continuously working to improve our services and offering, as well as further develop our strategic and operational processes, in order to meet the require-ments of our customers.

Vaisala is, just like our customers are, dedicated to the safety of people and protection of property. This is demonstrated in the outcome of how our customers apply our technology. We provide the tools for those who are working on the front line, whether this is with extreme weather events or in sensitive controlled envi-ronments or by assisting pilots in landing their aircraft safely. This is one reason Vaisala people feel proud com-ing to work each day on the surface, we might sell and manufacture electronic devices, but their application safeguards millions of people every day.

In addition to safety, quality is a key priority. To achieve the high quality our customers expect and deserve, we have to look beyond the technology. It is important to understand the customers business and operations, in order to be able to provide solutions that bring real benefits. We do this by becoming an active partner in our customers daily operations. In this equa-tion, we must constantly go beyond customer expecta-tions on quality and service as well as make sure that the latest technological advances are used to provide the highest performance through our offering. Recently, I asked a long-time customer what more can we do to support his operations, he responded that "if its


Kjell Forsn discusses what sustainability means for Vaisala in his video greeting.

good enough to go to planet Mars, its going to be good enough for me". Indeed, for over a year, Vaisala sensors have been onboard NASAs Curiosity rover, studying the Martian planet and its atmosphere.

The Impact of Our Operations

We are aware of the impacts from our own manufactur-ing sites and in 2013 we achieved two remarkable steps in our environmental management program. First, at our main manufacturing facility in Helsinki, we achieved a zero waste to landfill goal, where all waste is now recycled or recovered. Secondly, three years in advance of our planned schedule, we achieved and exceeded our energy efficiency target of 9% by end of 2016 from a 2005 base level.

In 2013, we also made a special effort to raise aware-ness and generate action among our suppliers on our expectations with regards to fundamental corporate responsibility issues such as our expectations on labor conditions and laws, environmental management and ethical conduct. To support this, Vaisala launched the Supplier Code of Conduct that will become a mandatory part of supplier contracts and the implementation of which is monitored. Through this, we work towards ensuring that our suppliers are operating responsi-bly both environmentally and socially. The Code of Conduct sets clear expectations that bring transpar-ency through the value chain, from our supplier all the way to our customers.

Doing the Right Thing

Looking forward, 2014 will be an exciting year as Vaisala enters the weather dependent part of the renewable energy domain globally. Growth is expected here as well as through regional expansion and new products and services across the Vaisala businesses.

I believe there is great value in doing the right thing although the payback may not be in the short term. This approach has been a good formula for success for Vaisala over the decades and clearly brought our customers significant new developments to take their operations and businesses even further. R&D undertakings in our domain can span many years and these would not be possible with a short term approach. We are a responsible company, from our products to our operations, to our ambitions.

Kjell ForsnPresident and CEO

http://ow.ly/tUEKB


Although the global financial situation was challeng-ing during 2013, improvement was apparent towards the end of the year, especially in the USA and Japan. However, the slow order intake during the first half of 2013 had a negative effect on the entire year. Weak governmental finances took a toll on the Weather business. Controlled Environments net sales were a disappointment in all market areas even though sales volumes increased in China. Order intake for all of 2013 increased by 7% whereas net sales decreased by 7%. Operating profit decreased by 40% due to lower net sales and impairment charges.

January

Vaisala started the year by displaying the new DigiCora Sounding System MW41 and other leading tech-nologies at the 93rd Annual Meeting of the American Meteorological Society in Austin, Texas in January. Under the general theme of "Knowing What the Weather Will Bring," Vaisala showcased the latest developments in its sounding, weather radar, lightning detection, and other weather technologies.

Also in January, Vaisala introduced a new family of humidity and temperature transmitters for the heating, ventilation, and air-conditioning (HVAC) industry. The new transmitters are optimized for reliable operation and easy installation with very little maintenance.

March

In March, Vaisalas Roads and Rail business divested three non-weather road transportation product lines that were sold to M.H.Corbin Inc., USA. The value of the contract was EUR 3.4 million. This divestment supports our strategic efforts to simplify the offering, and focus and invest in our core road weather expertise.

June

During the summer, Vaisala celebrated the 30th an-niversary of the U.S. National Lightning Detection Network (NLDN), which is the most accurate, reliable, and scientifically validated lightning detection network in the United States. The NLDN has provided lightning data since the first location data were recorded on June 1, 1983. It has improved meteorological forecasting of storm activity, protected critical power, utility, and communications infrastructure from lightning damage, enabled the issue of safety warnings, and educated the public about the dangers of lightning.

July

In July, Vaisala signed a contract to deliver four dual-polarized weather radars to the Philippines. The Philippines is an island country with a challenging tropical climate, which was witnessed in November when Typhoon Haiyan wreaked havoc in the country. With the help of Vaisalas weather radars, the goal of the meteorological service is to improve the countrys weather observation and forecasting capability, which is essential for disaster prevention and preparedness.

August

In August, it was announced that following the deci-sions made in the Annual General Meeting, the Board of Directors would issue a return of capital to sharehold-ers. EUR 1.23 per share was thus returned to sharehold-ers on August 27, 2013.

Acquisition of Second Wind Systems Inc., the global leader in remote sensing technology and data services for the wind energy industry, was announced in August. The acquisition of Second Wind was a decisive step forward in expanding Vaisalas presence in the renew-able energy markets.

Highlights of 2013

VisionWe focus on being the leading provider of operational value for our customers in targeted segments of weather and controlled environment markets.

MissionWe offer high reliability and added value with our products and services by bringing together customer business expertise and our technical expertise.


HUMICAP, the worlds first thin-film capacitive hu-midity sensor, has turned 40. HUMICAP was a radical innovation that completely changed the way humidity is measured. Until its introduction, reliable humidity measurement was an unresolved challenge and hair hygrometers were generally used. Although the innova-tion was originally designed for a new radiosonde, the greatest interest in this revolutionary new sensor came from various industrial customers and sparked the beginning of Vaisalas industrial business.

September

Vaisalas collaboration with the Idaho Transportation Department won a "Best New Innovative Product, Service or Application for 2013" award at the 2013 National Rural ITS Conference in St. Cloud, Minnesota. The award recognizes the Winter Maintenance Performance Index developed in collaboration with ITD and implemented in the Vaisala hosted RoadDSS road weather application.

October

The long-awaited Radiosonde RS41 was unveiled at the Meteorological Technology World Expo in October. The Vaisala Radiosonde RS41 streamlines launch prepara-tions, reduces human errors, and lowers the opera-tional costs of upper-air weather observations, while delivering industry-leading data accuracy.

Vaisala KK celebrated the companys 30 years in Japan. Nearly a hundred persons attended the celebra-tions. The guests included customers, partners, and visitors from Vaisala Helsinki, as well as current and retired personnel from Vaisala Japan.

Sampsa Lahtinen, M.Sc. (El. Eng.), was appointed Executive Vice President of Vaisalas Controlled Environment business area and a member of Vaisala Management Group on October 22, 2013. Sampsa Lahtinen had previously worked in several manage-rial positions in Nokia Siemens Networks (NSN), Nokia Networks, and Nokia for over 20 years and has extensive experience in leading global businesses and customer relationships.

In October, Vaisala lowered its net sales and op-erating profit outlook for 2013. Net sales and order intake for the Weather Business area were impacted throughout the year by budget sequestration in the USA and strained governmental finances in Europe. Neither did the net sales and order intake of the Controlled Environment Business area develop as forecast in Japan nor in the USA.

November

GMW90 Carbon Dioxide, Temperature, and Humidity Instruments equipped with Microglow Technology were released. Microglow is a silicon MEMS emitter infrared source patented by Vaisala. It represents the next generation of infrared technology and will solve many of the challenges faced by conventional infrared sources. For example, the sensors operational life was extended by 50% and the intelligent optical design requires fewer components.

December

Universums annual survey of Finlands most attractive employers for professionals highlighted Vaisala as one of the most attractive IT and technology employers in Finland. We ranked 8th in the field of technology and 14th in IT. Altogether 7,273 professionals ranked 119 companies in the survey.

Vaisala signed a contract for delivery of seven dual polarization weather radars to Turkey. The deliveries will start during the summer of 2014 and will be com-pleted by the end of 2016. We previously supplied six weather radars to Turkey. After installation of the new radars the Turkish State Meteorological Service will be able to serve the entire country with high quality meteorological data and weather forecasts.

A new Advanced Total Lightning(TM) sensor, the LS7002, was released. It is the first non-VHF lightning detection sensor capable of detecting total lightning and at the same time correctly differentiating between cloud and cloud-to-ground lightning. The sensor is suitable for meteorological and climatological measure-ments and also has applications in aviation, telecom-munications, power utility, defence, and forestry.

Vaisalas collaboration with the Idaho Transportation Department was recognized by the Road Safety Foundation and the United States Federal Highway Administration (FHWA) with biennial National Roadway Safety Awards. The award winners were chosen for reducing fatalities and injuries on roadways through excellence and innovation in opera-tions, planning, and design.

Vaisala announced acquisition of 3TIER Inc, USA, a renewable energy assessment and forecasting services company. 3TIER provides project feasibility, asset management, and forecasting services to companies operating globally in the renewable energy market. While the majority of 3TIERs business comes from the wind energy market, the company also serves custom-ers in the solar and hydro energy markets.

Finally, Vaisala signed a significant contract at the end of the year to deliver radiosondes to one of its long-term customers. The deliveries will start at the end of 2014 and will be completed during the summer of 2018. The sale is valued at EUR 11.0 million.

Responsible BusinessSustainability in Vaisala is managed by various guiding principles. The main principles are Vaisalas Code of Conduct, Supplier Code of Conduct, Environmental Policy, Anti-Corruption Policy and Community Outreach Policy, together with a number of practical guidelines as well as quality and environmental standards. Vaisala complies with all national laws and regulations wherever it operates.


StrategyWe see ourselves as being the leading provider of operational value for our customers in weather and controlled environment markets. We focus on customer value, reliability, and simplification to create value by bringing together our technological expertise and the needs of our customers. We believe that increasingly loyal customers drive us towards long-term profitable growth.

Expanding MarketsVaisalas comprehensive offerings range from small in-dustrial probes to comprehensive weather observation solutions such as surface weather networks, aviation weather solutions, and decision-support information systems. The major customer groups are meteorologi-cal and hydrological institutes, airports and airlines, road and rail authorities, defense, energy and maritime customers, and life science and targeted industrial applications.

During the past decade, there has been an increasing shift from purely meteorological observation solutions and purely industrial instrumentation towards new applications and services on the weather side and more complete systems on the industrial side. Vaisalas traditional public administration customers are no lon-ger the dominant focus, and the dynamics are shifting towards a stronger emphasis on the private sector.

Vaisalas customer base covers over 150 countries. Geographically, the markets are divided into three regions: Europe, the Middle East and Africa (EMEA), the Americas, and Asia Pacific (APAC). The United States continues to be the single largest market for Vaisala, but sustained growth in other regions, especially Asia Pacific, has reduced its prominence of previous years to some degree. Operations outside of Finland, Vaisalas domicile, account for 97% of net sales.

Strategic ObjectivesVaisala has three strategic themes for 2013 2015: creation of customer value, reliability, and simplifica-tion. Each of the themes encompasses strategic objec-tives for either the two business areas or for the whole Group, and each objective is driven forward by an appointed owner. Our far reaching strategic objective is long-term growth with good profitability.

Creation of Customer Value

Investments in establishing Vaisala firmly in the renew-able energies sector was the new strategic direction taken in 2013. Our capabilities now include technolo-gies and competences for forecasting, resource assess-ment and operations to help customers maximize the potential of their renewable energy assets. Moreover, our Weather business seeks growth from information services, expansion of decision support systems, and development of consultancy capabilities. Our industrial segments focus on growing in new regions and develop-ing their offering in key markets.

Reliability

The cornerstone of Vaisalas reputation and success has always been high quality and reliable products coupled with great customer service. Keeping that promise to customers will always be our strategic objective.

Vaisalas three strategic themes for 20132015: Creation of Customer Value Reliability Simplification


Simplification

This objective aims to improve profitability, project deliveries, manufacturing and repairs, supply chains and lead-times by streamlining processes and methods and reducing complexity in the company.

Vision and Mission

We updated our vision and mission in 2012 to better reflect our problem-solving nature and close coopera-tion with customers, providing them with operational value. Our vision is the following: we focus on being the leading provider of operational value for our custom-ers in targeted segments of weather and controlled environment markets. Our mission is the following; we offer high reliability and added value with our products and services by bringing together customer business expertise and our technical expertise.

Corporate Governance

The Board of Directors is responsible for the administra-tion and proper organization of the operations of the company. In accordance with Vaisala Corporations Articles of Association, the companys Board of Directors comprises at least four (4) and at most eight (8) mem-bers. Currently the Board of Directors comprises six (6) members. All Board members are appointed by a General Meeting of Shareholders. The Board elects a Chairman and a Vice Chairman from among its members. The ma-jority of the Board members must be independent of the company and at least two members in this majority must be independent of the companys major shareholders. Vaisalas President and CEO is appointed by the Board of Directors. The CEO manages the company in accordance with the instructions and orders given by the Board and informs the Board of developments in the companys business and the financial situation. The CEO is also responsible for organizing the companys management.

Vaisala has from 2013 onwards a single management group, Vaisala Management Group. It consists of seven members, the Executive Vice Presidents for both busi-ness areas, Weather and Controlled Environment, the Executive Vice President for Operations, the Executive Vice President for Services, the Chief Financial Officer, and the Senior Vice President for Human Resources. It is chaired by the President and CEO.

The Management Group does not exercise any decision making-power as defined in legislation or the Articles of Association. The Management Group addresses Group-wide development undertakings, as well as the Groups principles and operating practices in general. More information on Vaisalas corporate governance can be obtained online at www.vaisala.com/investors.

Sustainability ManagementSustainability in Vaisala is seen as threefold. Foremost, we comply with a set of strict methods that are char-acteristic of a responsible company, and insist on the same standard from our collaborators. Secondly, we derive and share value through our stakeholders by be-ing a responsible actor in society and lastly, we seek an advantage in the markets by outdoing the competition with sustainable solutions.

The business case for sustainability in Vaisala is founded on information services, which entail close partnering with customers; this allows us to provide decision-support systems that improve efficiencies in customers operations. We constantly seek ways in which we can include a sustainability element in our products or services thereby generating added value for our customers and at the same time lessening their environmental impacts through the use of our solutions.

Vaisalas senior management has set an ambition level for the sustainability strategy and formulated a long-term sustainability vision for Vaisala: to become a world-leading sustainable supplier in selected market segments. This requires us to be able to maintain a competitive advantage in our chosen marketplaces and excel in providing sustainable products and services to our customers.

Internal sustainability practices are subject to guidance from the Groups Sustainability Manager in cooperation with all internal stakeholders. The sus-tainability function has been part of Group Business Development since early 2013, and the SVP of Group Business Development reports to the CEO. In practice, the most important guidance is set out in our Code of Conduct and our other internal policies and empha-sized in personnel and leadership training.

The companys functions with the largest impact on our sustainability have been identified as Operations (e.g. manufacturing, sourcing and logistics sub-functions), the Services function, and the Offering units, which are responsible for the entire product creation process and R&D. Our manufacturing sites follow a cer-tified ISO 14001 environmental management system and periodically report on their environmental performance to the Group Quality Manager. We do not currently offer monetary incentives for management or personnel to reach specific sustainability targets.

Case


During winter precipitation airlines deice and anti-ice the aircraft to ensure safe operation. The deicing step removes any contaminants from the wing and the anti-icing step covers the wing with a protective anti-icing fluid that absorbs the water of any precipitation to prevent it from adhering to the wing of the aircraft. FAA HoldOver Tables provide an estimated amount of time the aircraft can be exposed to the present envi-ronmental conditions to ensure a safe departure. The HoldOver Tables are based on prevailing visibility as a function of precipitation intensity and air temperature, and assume the conditions remain constant. The HoldOver Tables are cumbersome for pilots and cause added distraction among other departure procedures. The tables are also at times inaccurate as they do not factor in the changing weather.

Vaisalas CheckTime solution has made that all easier for the pilot. CheckTime uses precision weather measurement equipment on each airport to measure the Liquid Water Equivalent (LWE, the amount of water in the precipitation) and calculates the deicing and anti-icing fluid saturation point using that information. With the help of real-time environmental data, Vaisala is able to provide dynamic decision support informa-tion to the pilot via the airline ACARS computer in the cockpit. No more guesswork or complicated extrapola-tion tables. The pilot now receives CheckTime (one time) that updates once a minute and the pilot is able to maintain awareness of the state of the deicing and anti-icing fluids on the aircraft. CheckTime accounts for all changes in weather affecting the deicing fluid, and updates the CheckTime each minute to accurately reflect the state of the fluid.

Vaisala is currently engaged in an FAA Winter Demonstration for the use of CheckTime with several U.S. based airlines. These five airlines will provide data to the FAA for future authorization and guidance for all airline use.

As a thought leader in the aviation industry, Vaisala has installed AviCast Stations at some of the largest winter weather airports in the United States: Anchorage Ted Stevens Airport, Denver International Airport, OHare International Airport, Louisville International Airport and Minneapolis St.Paul International Airport in support of the FAA Demo. Vaisala is committed to

CheckTime Taking the Guesswork Out of Aircraft DeicingCheckTime is one of Vaisalas premier winter weather decision support products. A feature embedded within the AviCast product, CheckTime offers Airlines an improved decision support tool over the current manual methods to define HoldOver times.

continue building a network of AviCast Stations world-wide as the airline demand increases.

As a member of the SAE International Committee of Deicing Standards, Vaisala has been in an influential role to set the deicing standards for airlines worldwide. We have received positive feedback from the European Airlines on CheckTime as well. Helsinki airport will be installing an AviCast system in early 2014 to support local operations.

The fundamental purpose of CheckTime is to improve efficiencies of airlines and reduce unnecessary use of deicing and anti-icing chemicals.

Level of con

cern to stakeh

olders

Current or potential impact on Vaisala

Material Aspects Diagram

Quality of productsand services

Provide operational value to customers

Financial performance

Health, safety and wellbeing

Ethical conduct Supply chain responsibility

Engaging with customers to address sustainability concerns

Safety of customers operations and products

Best sustainable solutions in chosen market segments

Waste

Reducing customers environmental impacts

Retaining and attracting talent

Operational eciency

Product life cycles Export control

University and research cooperation

Energy consumption Climate change research

Community outreach

Emissions Labor and human rights

Eco-ecient oces

New regulation Environmental management

Good corporate governance


Our sustainability vision is to become a world leading sustainable supplier in selected market segments

Material AspectsThe material aspects matrix that guides Vaisalas sustainability strategy and priorities was updated in 2013. We surveyed our key stakeholders to learn more about how they perceive Vaisalas sustainability work and which aspects they would like to have us pursue further. The adjacent figure represents the materiality assessment with the impacts for Vaisala and the level of concern to stakeholders. The vertical axis represents the estimated level of stakeholder concern as a whole and the horizontal axis represents the current or potential impact on Vaisala. The matrix is the basis for our sustainability strategy and objective setting and therefore also helps define what needs to be included in our sustainability reports.

Case


Vaisalas first stakeholder survey with sustainability as the theme was conducted in fall 2013. Nearly five thousand invitations were sent out and with a re-sponse rate of 15%, we received a remarkable amount of feedback on our sustainability work. The largest response groups were personnel, customers, sup-pliers, representatives, governmental organizations, investors and academia.

Altogether 46% of all stakeholders thought that Vaisalas sustainability-related work had improved in the recent years with 45% saying that it had remained unchanged or that they could not decide. Positive comments included the following: sustainability had been brought forward on the corporate agenda more systematically and had been discussed by the top management.

Helping Customers with Sustainability Challenges and Ensuring Safety in Operations

We mainly sought the opinions of our stakeholders regarding what topics we should prioritize in our sustain-ability efforts. We have our own vision and drivers, but we must also properly assess the needs and concerns of stakeholders. Although our own priorities were closely linked with the views of stakeholders, a few issues were brought up more strongly than we had expected.

According to the survey, the top five most important aspects Vaisala should concentrate on in its sustainabil-ity efforts are the following:

1. Providing operational value to customers2. Providing the best sustainable solutions to

customers in chosen segments

3. Ensuring the safety of customers operations and products

4. Designing new and improved services for customers that tackle sustainability challenges

5. Engaging with customers, subcontractors and suppliers to address key sustainability concerns

Furthermore, a key concern from all stakeholder groups was retaining talented personnel, something many respondents had had negative experiences with in the past.

Stakeholder SurveyWe surveyed a broad range of our stakeholders to learn what they think our focus areas should be as we further develop Vaisalas sustainability strategy. The results include valuable feedback by personnel, customers and suppliers and others on how they see the current situation in Vaisala.

Reporting on What Matters

The Material Aspects diagram on the previous page was updated after a review by the Vaisala Management Group and the priority of some issues for stakehold-ers was increased. Examples of these are the safety of customer operations, waste management, eco-efficient offices and supply chain responsibility. Hence, these topics have been further incorporated in to the report according to GRI reporting principles.

We Were Praised for this Eco-efficient Head Office Reliable and long-lasting products Training and the leadership of our managers Development of products that promote sustainable use

We Were Questioned for this Losing key people Complex supply chains Too many internal procedures Use of packaging materials

"The fact you are asking about sustainability makes a statement. We all see the need [to safeguard] the environment for future generations and we are looking at [renewable energies]."

-Weather application customer


WeatherWeather customers care for the safety and wellbeing of people and effectiveness of operations under all weath-er conditions. They include meteorological institutes, airports and airlines, road and railroad authorities, re-newable energy customers, maritime market segments, as well as defense forces. We bring operational benefits to our customers through a wide offering of products, projects, weather information and services.

The Weather business is a partner to customers whose primary interest is the safety and protection of lives and property through effective operations and decision-making support under any weather conditions. Accurate, real-time, uninterrupted and reliable weather data is the cornerstone for efficient operations.

Meteorology

National meteorological institutes provide weather fore-casts and warnings to safeguard people and property. They use weather observation data also to measure extreme weather phenomena and follow the changing climate. Turnkey projects and capability upgrades for prediction of severe weather are imperative for custom-ers in the developing markets.

Vaisalas offering to the meteorological institutes includes a versatile range of high-end products, integrated measurement systems and services. The Meteorology segment is the trusted partner of meteo-rological and hydrological institutes whose primary interest is safety and wellbeing of people and safeguard-ing of property. Customer needs vary from standard weather observation equipment to further automation of weather networks and remote monitoring systems.

Airports

Aviation organizations, airport operators and airport service providers are responsible for passenger safety, flight schedules and the overall efficiency of the airports. Vaisalas aviation weather observation offering provides real-time and reliable observation information to all relevant airport stakeholders under all weather conditions. The Airports segment supports effective operational decision-making to improve the safety, efficiency and environmental compatibility of airport operations.

Roads and Rail

The national and regional road authorities ensure safe and smooth traffic management and maintenance opera-tions. The Vaisala Road and Railroad business helps them to improve mobility and safety by measuring, forecasting and integrating environmental observations to support operational efficiency, and optimized decision-making.

Defense

Vaisala weather observation products and systems are also used in defense weather observation applications. Defense forces and security organizations use Vaisalas weather observation systems and solutions to support operational decision-making and improve safety and efficiency in air, land and sea operations. In addition to their defense functions, many national defense organi-zations also control civilian airports and contribute to national weather forecasts.

Energy

Weather impacts the operations of energy providers all over the world. Energy customers use Vaisala prod-ucts and services to measure, forecast, and integrate weather information into their operations to improve the effectiveness and reliability of electrical energy systems. In order to ensure efficient and continuous energy production customers rely on Vaisalas real-time and historical lightning information to increase the reliability of the electrical transmission systems. Renewable energy developers utilize our wind resource assessment offering to understand the future perfor-mance of their investment. Renewable energy operators use our high accuracy forecasts to integrate their clean energy into the electrical grid efficiently.

Maritime

Safety, security and efficiency are top requirements also in various maritime operations. Accurate and reliable weather information is vital in ensuring safe operations in ports, on ships and offshore platforms. Maritime customers include the shipbuilding industry, offshore oil and gas platforms, and ports. Reliable measurements and environmental observations help customers enhance their operational efficiency and optimize decision-making.

OrganizationVaisala is organized into a matrix where business and R&D is conducted by two business areas: Weather and Controlled Environment. The business areas are supported by group wide functions of Services, Operations and Support Units. Sales teams are divided into the two business areas, targeting eight defined customer groups.

WeatherMeteorology Life Science

Targeted Industrial Applications

Controlled Environment

Services

Operations

Support Finance & Control / Human Resources / Communications / Legal and FacilitiesMarketing / Group Business Infrastructure / Group Business Development

Weather Sales

Project Management Oce

Controlled Environment Sales

Weather Oering Controlled Environment Oering

Airports

Roads and Rail

Defense

New Weather Markets

Vaisala Organization


Controlled EnvironmentControlled Environment serves customers in multiple industries with over 30-year wide industry knowledge. The main drivers for our customers are operational quality, risk reduction, productivity and energy savings. Our customers operate in different types of environ-ments from small incubators to massive engine rooms and high rise buildings where reliable measuring and monitoring of the ambient conditions are a prerequisite for successful operations. Customers use our fixed and hand held measurement instruments as well as calibra-tion services for temperature, humidity, dewpoint, carbon dioxide, moisture in oil and pressure.

Life Science

Life science customers, such as pharmaceutical, bio-technical, medical device and drug distribution compa-nies operate in demanding research, production, and storage areas under tight authority regulations. Vaisala monitoring systems provide them with continuous data, records, reports and alarms. We also offer support plans and field services for our life science customers.

Targeted Industrial Applications

Other industrial customers represent industries such as power generation and transmission, automotive, semiconductor, electronics and building automation. They all use Vaisala instruments for accurate and stable real time measurements to extend equipment lifetime, improve processes and end-product quality, as well as to optimize energy consumption and indoor air quality.

Group-wide Functions and Support Units

Vaisalas matrix organization also contains Group-wide functions for Services and Operations, and the Group-wide support units Finance & Control, Human Resources, Communications, Legal and Facilities, Marketing, Group Business Intelligence, and Group Business Development. The operational sales func-tions and research and development teams are within the business areas. To ensure an efficient way of working and two-way information sharing in the matrix model, the organizational reporting structure includes several dotted line roles that link the business areas and functions together.

Case


Over the past 80 years the Vaisala radiosonde has been developed in response to customer needs, all the while focused on improving the quality of measurements, as well as the reliability of the device. Today, the radio-sonde is a fine-tuned measurement instrument which is able to withstand extreme weather conditions, while conducting accurate measurements.

When development of the 4th generation sounding system began, Vaisala went to its customers with a simple objective, to give customers what they want

in order to maximize the value of soundings for their operations. Vaisala Soundings System MW41

was launched in mid-2012 followed by Vaisala Radiosonde RS41 launch in October 2013 to

meet these requirements. The RS41 radiosonde and MW41 soundings system entity, while

New RS41 Radiosonde, Heart of Fourth Generation Sounding OfferingCustomer feedback has been the driving force in the development of the new easy to use, high quality, and reliable sounding system. At the heart of the 4th Generation Sounding System, the Vaisala radiosonde RS41 features upgraded data consistency and improved usability, applying the best metrological practices and error prevention solutions.

delivering industry-leading data accuracy, streamlines launch preparations, reduce the possibility of human error, and lowers operational costs of upper-air weather observations.

Customer-Driven R&D

Over 1,000 test soundings were conducted during the development of the RS41, in five different countries around the globe to cover different climates. The new radiosonde has been honed to perfection through laboratory and sounding tests. The development team has observed customers in action, to better under-stand how the each step of the sounding is done in various environments, under different conditions. The findings played an important part in the design and development program. "The RS41 has definitely been developed in association with customers; field obser-vations, feedback on concepts, usability testing and field testing were conducted in five countries with 17 customer organizations, in four applications areas and involved over 50 people." Johanna Lentonen, Product Area Manager, Soundings, explains.

The new RS41 features upgrades to the humidity and temperature sensors which ensure greater data reliability, and accuracy, that customers expect from Vaisala. The streamlined radiosonde launch process with the new maintenance-free ground check device, clear and logical use of MW41 soundings system as well as remote use of MW41 are examples of new features that were added based on customer cooperation. The new compact radiosonde design is easier to handle and 60% lighter, allowing 20% more launches using the same quantity of gas as needed with the RS92.

Read more about Vaisalas new 4th generation radiosonde in the Vaisala News Magazine No.192/2014 http://ow.ly/tUDIl


Customer Focus

We seek out and solve customer problems. We want to be proactive with our customers, to understand their needs now and in the future, and to develop solutions for those needs. Our customer base covers the whole world.

Science-based Innovation

Our approach to our customers problems is systematic, and based on sound scientific knowledge. In our application of science, we favor creativity and innovation. Our focus is always on the high quality of our workmanship.

Goal Orientation

We participate in the planning and setting of personal and Group-wide goals. Personal entrepreneurship, participation and commitment to shared goals are vital to our success.

Vaisalas ValuesOur way of operating is innovative and driven by the following six values. They are the basis of all our activities, both within Vaisala and with our partners and customers.

Personal Growth

We work in a knowledge-intensive business where the fastest learner thrives. To be competitive, we are committed to continually improving our abilities. Continuous learning benefits both us and our organization. We contribute to an environment that provides the support, encouragement and motivation for each of us to reach our full potential.

Focus on Greater Good

We prioritize total optimization over suboptimization in our actions among ourselves and our customers. Our emphasis is on shared resources, group benefit and mutual cooperation.

Fair Play

We demonstrate integrity in what we do. We only promise what we can deliver, and interact honestly among ourselves, our partners and customers. The confidence and trust we enjoy is valuable to us, and we do not want to risk it.


Code of ConductTo further promote and ensure responsible business practices, Vaisala has a Code of Conduct which is to be followed by all employees. This Code translates our values and responsibility into actions taken by our staff every day. The Code highlights important issues such as the environmental aspects of our operations, anti-corruption and anti-trust legislation, human rights issues, workplace behavior and safety.

The Code of Conduct was first introduced to the organization in 2008. Since then, all members of staff have been required to complete an online training module which is also part of the orientation program for new employees. The module has proven to be a popular and efficient method for training staff in ethical conduct and corporate responsibility. Last update of the e-learning was in fall 2012 and required the whole staff to retake the new module. At the end of the report-ing period, 95.4% of current Vaisala personnel had completed the Code of Conduct online training module.

Vaisalas Code of Conduct 1. We comply with national laws and regulations

Vaisala Oyj ("Vaisala") and its subsidiaries, offices and agencies will obey and abide by any national laws in their respective countries, whether Vaisala is stationed therein or doing business in that country. Vaisala respects local legislation and regulations, whether they are business related or other. Where differences exist between local laws, regulations, customs, norms or this code Vaisala strives to apply which ever sets the highest standard.

2. We encourage fair and lively competition in the marketplace

Vaisala is a strong supporter of fair competition world-wide irrespective of any national or international competition regulations. Vaisala does itself comply with any and all regulations concerning competition and encourages its competitors and associates to do the same. Healthy competition in the marketplace is neces-sary for the development of the whole industry, thus benefiting customers and shareholders.

3. We respect the environment and treat it with care

Vaisala takes environmental matters to heart and attends to them with care. Vaisala wants to be involved in establishing a sound foundation for better quality living, environmental protection and conservation, safety and productivity. Vaisala complies with generally accepted international environmental standards and often exceeds legal requirements. Vaisala strives to continually improve environmental performance of its

products and is committed to reduce the companys impact on the environment. All employees are respon-sible for Vaisalas environmental performance.

4. We treat our suppliers and customers fairly

Vaisala strives for long term partnerships both with its suppliers as well as customers. We give our partners a good insight into our demand forecasting, constructive performance feedback as well as our support and help. We treat our suppliers and customers in a professional and ethical manner and follow through our obligations and agreements promptly. We want to share our success with our collaborators and create benefits for all parties.

5. We collaborate with subcontractors and suppliers that meet international standards in ethics and sustainable development

Vaisala pays special attention to the ethical and envi-ronmental issues when validating suppliers. We moni-tor and encourage our current suppliers to comply with the requirements of international human rights and environmental laws and practices.

6. We treat our employees with respect and guarantee a safe working environment

Vaisalas central value is fair play which shows in all our undertakings, whether it is towards our staff, sup-pliers or our customers. Beyond this, Vaisala respects the employees right to peaceful assembly, freedom of association, collective bargaining and a safe working environment. Vaisala does not accept any child, bonded or forced labor in any parts of its supply chain. Vaisala ensures that all of its safety measures are up to date and is committed to continuous improvement.

7. We encourage professional and personal growth of our employees

Vaisala invests continuously in the professional and personal learning and growth of its employees in order to realize their full potential. This is achieved by em-phasizing on-the-job learning supported by internal and external personal development programs. Furthermore, Vaisala encourages its employees to actively manage their work-life balance as this has been recognized to improve work capacity and well-being at work.

8. We contribute to the communities we live in

Vaisala believes in a world where environmental observations improve daily life. As the global leader in environmental measurement and active member of society, Vaisala has a responsibility to act as a good corporate citizen. Vaisalas overall objective for Community Outreach is to support organizations and projects that advance environmental awareness and science education. All our outreach activities should be in line with Vaisalas values and resonate well with environmental issues such as climate, weather,


environmental measurement, industrial impact and environmental sciences.

9. We respect human rights and we retain high moral standards in whatever we do

People should be treated equally and fairly irrespective of ethnic origin, nationality, ancestry, religion or creed, political views, gender, sexual orientation, marital status, medical condition, disability or age. Vaisala respects these rights and condemns discrimination and intolerance of all kinds.

Vaisala endorses the United Nations Universal Declaration of Human Rights, The International Labour Organizations Declaration on Fundamental Principles and Rights at Work, The OECD Guidelines for Multinational Enterprises, and the Ten Principles of Global Compact. Furthermore, Vaisala recognizes the value of diversity, teamwork, fair compensation, innova-tion, health and safety at the work place, environmental awareness, and community involvement and strives to contribute in these fields for the benefit of the company and its stakeholders.

10. We condemn all corruption

Vaisala will neither accept nor tolerate any form of corruption. Vaisala has a strict anti-corruption policy which, if not followed, will result in disciplinary ac-tions against its violator and any accomplices. Vaisala endorses the UN Global Compact and thus pledges to work against corruption in all its forms.

Employees must not use a contractor, agent, con-sultant or other third party to perform any act which conflicts with Vaisalas Code of Conduct. We will seek to influence our suppliers and collaborators to adopt similar principles, if they do not already do so.

Regulatory ComplianceWe believe that responsible business conduct is based on fairness and integrity. Vaisala complies with all national laws and regulations, and does not respond to suspicious business proposals. We continuously follow up changes in legislation and keep our staff informed through internal communication, such as the company intranet.

Vaisala was audited by the US General Services Administration (GSA) in 2011 on radiosonde sales and concluded that there had been inaccuracies in the sales monitoring system resulting in overbilling. A settlement was negotiated in May 2013, leading to Vaisala reimburs-ing the GSA $342,000 in overbilling and compensation.

Apart from the settlement done with GSA, there were no other identified complaints, incidents or sanctions by authorities during 2013. Specifically, no incidents of corruption, anti-competitive behavior, anti-trust or mo-nopoly practices or any other breach of legislation or regulations were identified during 2013. Furthermore, there were no reported concerns or breaches of human rights, labor rights, or environmental legislation in the adjacent supply chain.

Compliance Committee

Vaisala has a compliance committee whose task is to oversee that all parts of Vaisalas operations are in line with the Code of Conduct as well as all other legisla-tion and regulation. The committee has members from the Legal Department, Finance & Control and Human Resources and is headed by Senior Vice President for Compliance and Risk Management.


Supply Chain ManagementWe believe that by actively engaging with our suppliers to bring sustainability topics forward, there will be a mutually beneficial impact on both our suppliers and our own performance.

We rely on hundreds of suppliers in our operations, and therefore we have recognized sustainable supply chain management to be an important element in deploying our vision. We also believe that by actively engaging with our suppliers to bring sustainability topics for-ward, we can contribute to tangible improvements in both our suppliers and our own performance.

Engaging SuppliersWith the purpose of communicating our sustainability expectations better and ensuring a responsible supply chain from materials sourcing all the way to our dis-tributors, Vaisala initiated a Supply Chain Sustainability Development program in 2013. The scheme is intended to be a long-term process for better identifying and managing risks and opportunities, aligning our supply chain partners sustainability efforts with our own, and encouraging continuous development and closer collaboration through a constructive dialogue.

Key components of the program:

Supplier Code of Conduct Supplier ESG Self-answer Questionnaire Audits and quarterly meetings with key suppliers ESG-guidance for suppliers and Pilot with selected key suppliers to improve the guidance

Rating Suppliers on ESG-metricsVaisala introduced the Supplier ESG Self-answer Questionnaire (SAQ) as part of the development program. The SAQ rates the supplier by asking a series of questions relating to the governance of the supplier and its adherence to standards and labor and environ-mental laws. The scoring categories are between the supplier exceeding expectations to being far below expectations. If a supplier scores in the lowest cat-egory, a corrective action plan must be put in place at once. The SAQ-scoring is discussed annually or when needed with each direct supplier.

At the end of 2013, Vaisala had 856 direct suppliers. Our target is that at least 80% of total euros spent would be covered by SAQ-responses, the target for 2013 was not quite reached, leaving us at 76.7%.

Supplier Code of ConductThe Supplier Code of Conduct reflects Vaisalas values and the Vaisala Code of Conduct, and is based on prin-ciples created by the International Labor Organization (ILO), the United Nations Global Compact initiative, and the Electronic Industry Citizenship Coalition (EICC). The Code of Conduct contains language from standards and policies formulated by the above-mentioned organizations, as well as those of the Business Social Compliance Initiative (BSCI) and Social Accountability International (SAI).

Compliance to Human Rights and Labor LawsVaisala does not condone human rights abuses or breaches of labor laws in any part of its supply chain and takes appropriate measures to ensure that the risks of any violations of the companys Code of Conduct or its Supplier Code of Conduct are minimized in the adjacent supply chain. Moreover, due to the enforcement of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, suppliers to Vaisala must ensure that proper precautions are taken in order not to source any materials that have their origin in conflict areas, including but not limited to the tin, tungsten, tantalum, and gold mined in the Democratic Republic of Congo (DRC) or in adjoining countries.

Vaisalas Supplier Code of Conduct

http://www.vaisala.com/en/sustainability/responsiblevaisala/suppliers/Pages/default.aspx


Quality ManagementQuality is a key element in Vaisalas strategy. For Vaisala, quality means delivering products or services that ensure great customer satisfaction by means which are also feasible from an internal perspective.

Quality also means that our people can feel pride in their work. A balanced combination of people and processes results in customer satisfaction and healthy financial results. A certified Quality Management System is the basis for maintaining and improving our quality capability and supporting achievement of our business goals.

Designing Quality into Products and ServicesWhen new products and services are being planned, quality must be designed into them from the very beginning. During the design phase we make the most significant decisions that will impact the quality perceived by customers and the reliability and cost effectiveness of the supply chain during the entire life cycle of the product or service. It is much more costly, and sometimes impossible, to rectify failures after-wards. Likewise, good design considers both customer needs and internal needs, and for example makes manufacturing easier and faster. Hence we are actively looking at new and better ways to embed quality in our designs. Competent, innovative personnel are also a strong competitive advantage for us in this field.

Delivering QualityAll our processes must absolutely deliver consistent quality; this applies to product quality, service qual-ity, and on-time capability. Careful supply chain and service management are essential to ensure stable performance and quick response in both Vaisalas internal operations and in work with our suppliers and partners. We aim to have robust internal delivery

Facts:

Group-wide Certified ISO9001 Quality Management System and

Certified ISO14001 environmental management system

Certified AQAP-2110

ISO17025 accredited calibration services

Vaisala Quality PolicyWe ensure customer satisfaction through reliability and continual, measurable improvement of processes.

processes with effective quality assurance across the board, working in close co-operation with our suppliers.

Measuring and Monitoring QualityVaisala implements a series of quality metrics to mea-sure actual performance at any given time. A shared view on key quality metrics allows us to effectively deploy targets, monitor progress, and take corrective actions in a timely manner. A quality analysis system was established in 2013 and it has already boosted our improvement efforts in several areas.

Continual ImprovementContinual improvement is essential for guaranteeing our success in the future. We engage everyone at Vaisala in the philosophy of systematic, continual improvement in everything we do. The actions vary from major development projects to smaller everyday improvements. Getting everyone to participate and contribute ideas is a fundamental element of this process. The well-known Plan-Do-Check-Act cycle is a robust and simple concept that can be used in almost every area of the company. In 2013 significant progress was made in implementing PDCA in manu-facturing teams and engaging operators in continual improvement.


Product SafetyVaisalas product safety policy is rooted in our Code of Conduct and conforms with international regulations and standards and also local legislation as applicable. The standard set of requirements our products must adhere to are based on EU regulations, with the addition of local U.S. and Canadian regulations on product safety. In general, Vaisalas strict product safety criteria meet the requirements of customers throughout the world.

We constantly monitor safety standardization and development in official regulations and update our proce-dures accordingly. The compliance procedures are also linked to Vaisalas risk management process, and product safety is a recognized factor in our risk assessments.

Product testing plans are determined as part of the product creation process, guaranteeing that each prod-uct will comply with the full set of regulations specified in the product requirements.

Testing to ensure uniform qualityThe purpose and goal of testing is to provide sufficient information to determine that the quality and func-tionality of Vaisala products and systems are on the

required level. Customer needs and product require-ments are verified and validated by selected and priori-tized tests during development and manufacturing.

As quality and reliability in demanding applications is very important to Vaisalas customers, testing competen-cies, tools and processes are continuously being devel-oped and improved. Testing activities are performed at every point in the development and maintenance lifecycle. This is accomplished by having test engineers engaged early in the product development projects or maintenance tasks and starting testing immediately when applicable. Testing verifies requirements, specifica-tions and design documents. Internal audits are also an important part of the whole quality assurance.

Vaisala uses and develops its own test facilities. These include EMC, environmental and system testing facilities. In addition to our own personnel and facili-ties Vaisala uses third party test laboratories, partners and experts for selected testing areas. The majority of the testing activities are performed in-house but as an example, accredited laboratories are being used to determine the electrical safety of our products. Lately investments have been made especially in software testing to ensure quality in Vaisalas software intensive products and systems.

Case


SF6 and cause rapid deterioration. Spotting minor leaks in time helps preserve the gas as safety equipment typically only give warnings when major leaks occur. Online monitoring also removes the need for sampling and minimizes the risk of SF6 ga

Documents

Vaisala Corporate Responsibility Report 2013