Green energy for the planet and its people

Sustainability challenge

Business partner due diligence, and labour rights for contractors

Companies have a responsibility to run their business and supply chain free from labour and human rights violations, corruption, and environmental risks to mitigate adverse impacts on workers, communities, and the natural environment, and to meet legislative requirements.

Our approach

Our Responsible Business Partner Programme (RPP) is based on a systematic due diligence process used to assess our partners’ and suppliers’ adherence to our code of conduct (COC) for business partners. We identify performance gaps through screenings and assessments, and we act on our findings through supplier-driven corrective and preventive improvement plans.

Our progress

• We have updated our code of conduct for business partners to better describe requirements and aspirations.
• To further strengthen implementation and reporting, we have established a new ESG Supplier Due Diligence Steering Committee with broader scope and business representation.
• We have piloted a worker interview approach focusing on migrant workers in high-risk countries to improve our workplace assessment.
• We have helped develop a self-assessment questionnaire standard for the wind industry through WindEurope, aiming at reducing the future due diligence burden on suppliers and improving transparency.
• We have implemented onboarding training targeting all new employees in Procurement to strengthen programme implementation.
• We have completed the onboarding of our US Onshore procurement function in the RPP with new screening principles.
• We have updated our due diligence procedure for biomass suppliers to better reflect supplier risks.

Actions for the future

Strengthen our adherence to the UN Guiding Principles by bolstering our human rights impact assessment of our suppliers and new markets. We must also strengthen our screenings and assessments of business partners where we could be linked to adverse impacts.

Sustainability challenge

Business ethics and transparency

Corruption, bribery, and other fraudulent practices can impact society by destabilising institutions and undermining fair business competition.

Our approach

We have zero tolerance of all forms of bribery, corruption, and kickbacks, given or received, direct or indirect. Adherence to our good business conduct is a key focus, both internally and with our business partners, and is promoted through policies, procedures, and reporting mechanisms.

Our progress

• We continue to make efforts to strengthen our ‘Know your counterparty’ screening programme against sanctions, government watch lists, adverse media etc., and the performance of risk-based due diligence of business partners, including suppliers, key customers, and joint venture partners.
• As we expand our global footprint, we are continously assessing how local customs and best practices – in relation to gifts and entertainment, for example – compare to group policies and procedures to ensure continuous adherence to our good business conduct while understanding the local environment.

Actions for the future

We will continuously strive to improve our compliance set-up to meet regulatory obligations as effectively as possible whilst aligning with best practices in the countries where we operate.

Sustainability challenge

Responsible tax

By paying tax and supporting international tax reform, companies contribute to the development of the societies where they operate as well as the creation of well-functioning tax systems and stable institutions conducive to business.

Our approach

We are transparent in our tax reporting and voluntarily disclose country-specific information on our tax position in our annual report. We aim to comply not only with the law, but also with the underlying intent to ensure that we pay the right amount of tax in the countries where we operate. We engage with stakeholders and cooperate with the authorities in the markets where we operate to support effective tax systems.

Our progress

• We have continued to develop our reporting of tax practices in our annual report, inspired by the new indicator GRI207.
• We have engaged in dialogue with the Danish government and the Danish Ministry of Taxation on the detailed implementation of new CFC rules, with OECD on Pillar II, with HMRC in the UK on revised transfer pricing documentation requirements, and with various NGOs in the Tax Dialogue Framework.
• Our dispute with the Danish Tax Agency relating to the taxation of offshore wind farms in the UK has been extended to an additional wind farm. Ørsted has taken steps to ensure that the two involved tax authorities will initiate negotiations and, if needed, defer the case to arbitration to avoid double taxation of Ørsted.
• We have made submissions to the OECD on the connection between tax policy and environmental policy in relation to the so-called Pillar II work, where we still have some concerns on the interplay between the proposed global minimum tax and deferred taxes and US tax credits.
• Our Head of Tax was ranked the best in-house tax director in EMEA by International Tax Review for being a leading voice on tax and sustainability. We were also ranked best company in Denmark on tax transparency and governance by the Danish magazine Økonomisk Ugebrev.

Actions for the future

To meet increasing compliance and reporting requirements, we will maintain our focus on transparency and accountability in tax payments and reporting.

Sustainability challenge

Sustainable finance

To reach the goals of the Paris Agreement, the energy sector must double its annual investments in renewable energy towards 2050 as a minimum. Mobilisation of institutional and private capital is necessary to tackle this challenge.

Our approach

We exclusively deploy green and sustainable financing to advance our green transformation and renewable energy build-out, and we align our reporting with recognised ESG frameworks and ratings.

Our progress

• For the first time, we have issued a sustainability-linked revolving credit facility (RCF) together with 17 participating banks and Nordea Bank as coordinator and agent, whereby our sustainability performance will have direct financial effects. The RCF is linked with two strategic sustainability KPIs, namely our science-based target for carbon reductions and our taxonomy-eligible green investments (CAPEX).
• We have reported on our taxonomy-eligible activities, which will provide investors and other stakeholders with a uniform approach for determining the sustainability of our activities.
• We have begun preparing a taxonomy-alignment assessment of all our eligible activities by determining if they: i) contribute substantially to climate change mitigation, ii) do no significant harm to the other environmental objectives, and iii) comply with minimum safeguards. Provided that our approach aligns with upcoming guidance from the EU and emerging industry best practices, we expect our eligible activities to be reported as aligned in 2022.
• We continuously work to maintain best-in-class ESG ratings by applying a systematic approach to strengthening ESG performance throughout the business.
• We have continued our green debt financing by allocating proceeds of DKK 31.7 million to eligible green bond projects.

Actions for the future

Continue to use only sustainable financing instruments for all our future financing and align business activities and reporting with relevant ESG frameworks such as the EU taxonomy.

Sustainability challenge

Cyber security

As information and cyber security threats increase, companies must understand the associated risks and continue to improve security to protect critical infrastructure and important information assets.

Our approach

We work to ensure the security of corporate information and critical infrastructure through a risk-based approach and in close collaboration with our business partners. We provide tailored compliance support, training, and awareness to the businesses so they can incorporate and apply security measures in their daily operations.

Our progress

• Our people are our most important asset, which is why we continue to drive Ørsted’s information and cyber security awareness culture. People represent information and access points for adversaries, so Ørsted’s employees need to stand as a human firewall.
• We continue to drive strategic risk mitigation across IT and operational technology (OT) based on quantitative risk assessments and to optimise our resource usage related to information and cyber security.
• We work closely with our frontline regional colleagues on various initiatives and activities through our network of regional information security officers.

Actions for the future

Continue to monitor and assess current and emerging cyber security threats and ways to adequately adapt and respond to protect our assets.