Strategic risk management solution in a Finnish energy group

Pohjolan Voima is a power generation group established in 1943 that produces electricity and heat by hydroelectric power, thermal power, and nuclear power. Over its 75 years of history, the company has developed into an important, sustainable operator that generates well-being broadly across the entire society.

Pohjolan Voima’s organization comprises 11 subsidiaries, 25 power plants from different parts of Finland, and some 100 employees. As an organization owned by its shareholders, Pohjolan Voima is a versatile combiner of resources that aims to strengthen the competitiveness of its clients on the energy market.

Pohjolan Voima operates on the Mankala model and generates some 20% of all electricity consumed in Finland. The company’s basic mission is to generate energy for its owners, which include companies from the forestry, energy and chemistry sectors; the owners finance the construction and maintenance of the power plants and, in return, receive energy at cost price. Producing effective and innovative energy services is deep within the core of Pohjolan Voima’s operations.

Pohjolan Voima’s vision is to be the most competitive large-scale energy producer on the market for its clients, which makes it very natural for risk management to play a key role in the different areas of business.

Energy industry operators have an essential role in terms of the functioning of the entire society, so it is no wonder that the role of risk management does not need to be separately justified.

Pohjolan Voima studies the different aspects of its operations from several different viewpoints. Risk management is important for energy production and even stipulated by law on the environmental management side, since receiving environmental licenses requires that the organization’s risk management meets the requirements.

Risk management is also important for production facilities, and the Pohjolan Voima group’s companies systematically monitor the development of the risk situation.

Risk management within Pohjolan Voima is focused on guiding risk management across the entire organization, supporting the development of risk management work in the subsidiaries, and performing risk management at the group level. In this work, special emphasis is laid on the company’s strategic risks, and Pohjolan Voima utilizes Granite’s flexible and easy-to-use solutions for assessing and processing them.

Risk management is not a new area in Pohjolan Voima’s operations, but fruitful risk management was somewhat challenging prior to Granite’s introduction.

The company’s risk management was based on an internally developed risk management model for which a custom solution had been acquired. However, this did not promote the creation of a risk-aware company culture, as the solution's functionalities were too inflexible from the users’ point of view.

Any risk management system that guides operations must be sufficiently simple to use in order to motivate the responsible individuals to perform fruitful disk management. The benefits from systematic risk management are achieved as part of the organization’s normal operations, and the usability of the risk management system must not act as an obstacle to achieving the set goals.

The further development of Pohjolan Voima’s existing risk management system to meet the needs of developing strategic risk management would have been impossible without significant additional cost, which made the transfer to Granite’s risk management service very natural in the end.

Pohjolan Voima uses Granite for group-level strategic risk management. Granite’s risk management service is also an important tool for the boards of directors of Pohjolan Voima’s subsidiaries. The subsidiaries assess the risks that occur in their operations, while providing the group with simple and clear visibility of the company’s overall situation.

Granite allows Pohjolan Voima to gather all the strategic risks from its large organization centrally into a single system. Comparing the situation between the subsidiaries is simple, which makes developing risk management at the group level a smooth process.

The advanced, simple and easy to use user permissions management in Granite’s risk management service allows the persons in charge of the subsidiaries to only see the relevant information even though all risks are contained in a single system.

Deploying Granite’s risk management service brought with it substantial changes to Pohjolan Voima’s risk management work. In particular, the system’s ease of use has increased general interest in performing risk management.

The assessment of the organization’s risks has become clearer, but it is also much more systematic and harmonized than before.

Granite's system allows management actions to be set in a guided manner, which has also expedited their implementation.

Risk work across the entire group has become more efficient as Granite's versatile risk management service has done away with the need for deploying, learning and maintaining different systems. The saved energy and resources can be redirected towards fruitful risk management work.

Granite's comprehensive reporting tools have provided understandable and clear insight into the organization's overall situation and its development, making it easier to identify problems and develop operations.