EC1 – Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings and payments to capital providers and governments
|Employee wages and benefits
|Payments to providers of capital
|Payments to government
|Economic value retained
1) Restated due to implementation of revised IAS 28 Investments in Associates and Joint Ventures.
EC2. Financial implications and other risks and opportunities for the organization's activities due to climate change.
Yara has considered climate change and the risks and opportunities it presents to the company. However, Yara has not yet quantitatively estimated the financial implications of climate change, but acknowledges that it is expected to have a profound impact on world agriculture and consequently on Yara's activities and on Yara's customers. Climate change also offers significant business opportunities, particularly in the area of improving the efficiency of farming while reducing emissions.
The European Emission Trading Scheme (EU ETS) entered phase III in 2013. This will lead to added costs for the already energy-efficient fertilizer industry in Europe. Over time, reducing the competitiveness of already low-emitting European industry can lead to carbon leakage, in particularly in the absence of a meaningful and comparable international agreement on climate change mitigation.
Yara's goal was to achieve a 45% reduction in its GHG emissions by 2013 from a 2004 baseline. This goal was exceeded, as Yara reached a 51% reduction in 2014.
The intertwined issues of food security and climate change are particularly relevant to Yara's business strategy, market position and societal role. Also, the complex issue of resource scarcity, particularly with regard to the availability of land and water, is of vital importance to Yara - and to society.
Food security and Climate change
Yara's business is directly linked to food production. With its agronomic solutions, Yara contributes to improving food security mainly by enhancing cropland productivity i.e. increasing yields. By increasing farm output, Yara also contributes to improving the profitability of farming, which is a prerequisite for sustainable agricultural development. Yara's operations depend heavily on the use of fossil energy, causing emission of GHGs. But with its technology solutions Yara has reduced its emissions and improved its energy efficiency. Also, by improving agricultural productivity, Yara helps to stall land use change for agriculture, a main driver of climate change.
Throughout 2014, Yara held a position on the board of the World Economic Forum (WEF) project New Vision for Agriculture. In 2010, a group of 17 global companies launched a road map with ambitious goals - namely to increase agricultural productivity, decrease GHG emissions and reduce rural poverty by 20% every decade.
The World Economic Forum's New Vision for Agriculture initiative has engaged more than 350 organizations in its work to strengthen collaboration among relevant stakeholders. At a global level, the WEF initiative has partnered with the G7 and G20, and facilitated high-level informal dialogues. At the regional and country level, it has developed multi-stakeholder partnerships in 16 countries in Africa, Asia and Latin America, including a regional partnership called Grow Africa. Together, these efforts have mobilized more than USD 10 billion in investment commitments and have engaged more than 3.6 million farmers as of end 2014.
EC3. Coverage of the organization's defined benefit plan obligations.
See note 23 in the Financial Report 2014, pages 105-110 (PDF, 4.17MB).
EC4. Significant financial assistance received from government.
The Norwegian government is the largest shareholder, with the Ministry of Trade and Industry holding 36.21% of the shares.
Government grants related to assets have been recognized as deduction to the carrying value by reducing "Addition at cost" with NOK 20 million in 2014 (2013: NOK 9 million).
EC5. Range of ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation.
EC6. Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation.
Our geographic definition of local for this indicator is by country. Yara does not have a global policy related to spending guidlines on locally-based suppliers. The suppliers are chosen according to quality, cost, lead-time and compliance requirements.
For specific locations there may be programs in place, e.g. to reduce a fly-in, fly-out modus operandi.
EC7. Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation.
Yara aims to recruit senior management that reflects its business needs, presence in local markets and composition of employees. The strategy in regard to locally recruited senior management is generally decided locally. We give preference to qualified internal candidates whose competencies are on par with external levels. This is also why we have a transparent internal job market where all positions are advertised, and a global recruitment process that deals effectively with internal applications in a professional and fair manner.
Indirect Economic Impacts
EC8. Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.
Yara's operations worldwide are engaged in, and support, a wide variety of community projects and local initiatives that benefit the general public. Yara's total community investments amounted to NOK 13.5 million in 2014.
More significant, however, is Yara's business approach, which focuses on sharing its agronomic knowledge with farmers. Yara's mission is to deliver increased yield and value to its owners, customers, farmers and society at large.
Improving cropland productivity and increasing food production depends on the application of agronomic knowledge. Yara possesses extensive knowledge, which it shares with farmers as part of its crop nutrition solutions. In addition, Yara contributes to knowledge development and knowledge dissemination through several global initiatives and partnership projects, such as: Grow Africa, Grow Asia, (both linked to the WEF New Vision of Agriculture); Ghana Grains Partnership, initiated by Yara in 2008, and the Southern Agricultural Growth Corridor of Tanzania (SAGCOT), founded by the Tanzanian Government, Yara and other partners in 2010.
In 2014, agriculture and food security remained high on the global agenda, with a growing emphasis on climate change and the need to promote Climate Smart Agriculture (CSA). Yara has actively taken part in the global dialogue, arguing the case of improved agricultural productivity as a way to increase food security and, at the same time, reduce global warming, while also promoting responsible business conduct. We were a founding member of the multisectoral Global Alliance for CSA, launched at the UN General Assembly in September 2014.
Public-private partnerships and value chain collaboration have increasingly become avenues to obtain investments to improve productivity. Yara has been a pioneer in developing the concept of agricultural PPPs and food value chains.
Chronicle in Impact Review 2014, pages 11 - 24 (PDF, 2.9MB).
EC9. Understanding and describing significant indirect economic impacts, including the extent of impacts.
As the world's leading producer of mineral fertilizers, Yara is a key player in improving agricultural productivity and securing a profitable, viable business for farmers around the world. Therefore, Yara understands the indirect and direct economic impacts it can have by providing its products, solutions, knowledge and technology to promote farming efficiency and profitability.
This approach is described in Yara's Financial Reporting 2014 as well as the Impact Review 2014.
Yara offers a wide range of fertilizer products - and extensive agronomic knowledge - which are shared with the farming community. The company has supported development programs worldwide and works closely with customers all over the world to help them use Yara's plant nutrients appropriately to boost their yields.
More information on adding sustainable value to the agricultural sector can be found here:
Yara's concept of Agricultural Growth Corridors is a prime example of how Yara utilizes its knowledge and engages with other stakeholders to create shared value: