Transporting electricity and maintaining the security of electricity supply in a responsible manner are critically important for a modern, well-functioning society.
We strive to make choices that benefit people and the planet, at the same time as generating an adequate return for our capital providers. In doing so, we not only aim to fulfil our company's role, but also our responsibilities to our stakeholders and help to fulfil national and international agreements and goals, such as the UN SDGs. How we want to achieve this is set out in our Corporate Social Responsibility (CSR) ambition plan 2025.
With this plan we aim to:
- Contribute to society, creating maximum impact for people working for us and impacted by us;
- Commit to the environment, avoid, minimise and compensate for our environmental impact on the planet;
- Ensure an affordable cost of electricity supply for society and an adequate return on capital for our capital providers.
Our CSR plan includes clear ambitions in seven areas where we believe we can make a difference. We have set, or are in the process of setting, key performance indicators (KPIs) and targets for each ambition area to demonstrate our progress to our stakeholders, showing how we are reducing our negative impacts, and maximising the positive ones.
In this chapter we show how we address our responsibility as a company with regard to our people and planet ambition. Our performance against our profit ambition is presented in the financial section of our integrated annual report.
Our people ambition
1 We are currently developing a new KPI for the society impact area.
We consider our employees to be our most valuable asset. They are essential to our ability to fulfil our purpose in society and live up to our promises and ambitions. This is why we aim to create a safe and inclusive working environment where our employees can thrive and perform to the best of their ability.
|Internal employees (headcount)||3,409||3,187||3,040|
|External employees (headcount)||1,129||871||631|
As our business plays a role in helping society tackle far-reaching challenges – including the transition to a low-carbon economy – TenneT needs to attract a larger workforce. In 2018 our workforce grew from 3,187 to 3,409. However, recruiting talent is getting harder, particularly in the technology sector where there is strong competition for good people. To overcome this, we invested in initiatives such as the Power Minor – a module in which bachelor-level students can learn more about technology and the energy sector. In 2018, this initiative was nominated for the Pro-Motor award, an annual award for innovative solutions where governments, companies and higher education work together. We have also invested in attracting female talent through university and career events.
Diversity is an important area of our people ambition, as we strive to create an inclusive environment with equal opportunity for all. We recognise diversity in its wider sense – not only in terms of gender, religion and culture, but also socio-economic backgrounds, skills, knowledge, personality and experience. We believe that a diverse working environment helps us perform better as a company and deliver better value for our stakeholders and society.
For now, we focus on gender diversity in our CSR ambition plan, as we believe we can improve on this front. We are not alone in our sector in facing this challenge, including at senior management level. In 2018, we saw positive developments for all of our diversity ambitions and in 2019, we intend to maintain this focus and momentum. That is why we have developed a diversity road map, outlining the steps we need to take to achieve our goals. These include building further diversity awareness and discussion around diversity within TenneT and further embedding it in our recruitment activities. We have introduced various initiatives to improve gender equality, including a female leadership training programme and diversity workshops in Germany and the Netherlands. We recognise it will take considerable time to make significant progress, but we are making progress here. Additional information can be found in our Supervisory Board report.
We consider safety to be among the highest priorities for everyone who works for us, whether directly or indirectly. We are building a company-wide safety culture, introducing it to employees when they join the company, and reinforcing it on a daily. An example of this is further embedding the Safety Culture Ladder (SCL) – a NEN (Dutch Standardisation Institute) certification which allows us to assess the safety culture within a company. We request our suppliers to adhere to this standard. In 2018 65 contractors were certified, with more expected in 2019. We also measure ourselves against this standard, which has resulted in a SCL level 3 certification. We have developed our Safety ambitions further in the new TenneT Safety Vision 2022 (Act Safe, Stay Safe), which primarily focuses on Safety Leadership and Safety Execution. Recognising that our suppliers play a big part in our overall safety performance, we continue to seek dialogue and close cooperation with our suppliers on improving safety performance, by sharing best practices, working on joint programmes and creating a pro-active safety culture. Developing a safety culture starts with building a common awareness on all levels within the company. TenneT organises this by mobilising safety initiatives and awareness bottom up, and organising top down via Safety Leadership. In 2018 TenneT rolled out two Safety Leadership pilot programs within the Business Units Grid Service Offshore and Grid Service Onshore Netherlands, covering management and employees. Further roll out of Safety Leadership initiatives are embedded in TenneT Safety Vision 2022 and Safety Roadmap.
To measure the impact of these efforts, we use the Lost Time Injury Frequency (LTIF). In 2018, this was 2.36, which is an improvement compared to 2.53 in 2017. Starting in 2019, we will replace LTIF as our key performance indicator (KPI) for safety with Total Recordable Incident Rate (TRIR) as it counts all incidents, not only the Lost Time Injuries. In 2018, the TRIR was 3.1.
Our aim is to engage with all stakeholders impacted by our activity. We track this through the number of stakeholder engagements we hold during the year in local communities. We are currently working on updating our goals and KPIs regarding this ambition. More on how we engaged with our stakeholders is disclosed in the Engage stakeholders section.
Other people developments
To be a sustainable employer of choice, we also support our employees in their personal and professional development, helping them to learn and grow, on and off the job. We do this through formal training, on-the-job learning and regular discussion and feedback. We organise leadership trainings for new potentials and career development workshops where we want to think together with our employees how we can ensure their employability. For instance, we discuss with employees in different stages of their life and working care on how we can enable them to continue working in a sustainable manner.
We also offer a competitive reward package. Currently 83% of our employees in the Netherlands and Germany are covered by our CLA. In December 2018, we reached a new agreement with a term of 18 months. In Germany, a new 'Vergütungstarifvertrag' was also negotiated early 2018. This agreement ends in June 2019.
Our remuneration ratio, compares the organisation's highest-paid individual to the median annual total compensation for all other employees. Due to the salary cap of our shareholder, the ratio in 2018 dropped to 5.6 compared to 7.5 in 2017. In the appointment of our new CEO we have complied with our shareholders' policy. The median of the annual total compensation did not change significantly this year.
We consider employee wellbeing to be an important aspect, which is why we support initiatives that maintain a healthy balance, between body and mind. These include encouraging our people to stay active with a sports membership and to participate in our Always Energy health and vitality programme. In 2018, a number of workshops were held to help our people build and maintain a healthy body and mind. In our new Bayreuth campus in Germany, which opened in February 2018, we have built a designated active health facility, where health courses and trainings are offered.
Our Planet ambition
Our Planet ambition relates to the actions we take to have a positive impact on the environment, while minimising our negative impact. In going about our business, we generate emissions, create waste, use non-renewable materials, and have an impact on the natural environment around us. This is why we have included three main impact areas in our Planet ambition: Climate, Circularity and Nature.
1 Not applicable as 2020 will be our base year.
2 This KPI is currently in progress.
|Gross carbon footprint (ton CO2 e)/transported electricity (GWh)||10.5||10.8||9.3|
|Grid losses (GWh)||5,040||5,080||4,212|
As we facilitate the energy transition, we work to protect against climate change by connecting more renewable energy sources. However, we also accept that through our infrastructure we are responsible for greenhouse gas (GHG) emissions, which are mostly the result of electricity produced to compensate for grid losses in our network. The electricity we use in our own operations and some leakage of sulphur hexafluoride (SF6) – used as an insulating gas in high-voltage equipment – account for the majority of the remainder. We will 'green' our electricity use with green certificates to the maximum extent permissible by law, we report a gross carbon footprint (without greening) and a net carbon footprint (with greening). As we work to minimise these factors, we are striving to become carbon neutral in 2025. To get there, we have set a milestone to be climate neutral for our substations, offices and mobility by 2020.
To reach our climate goals, we save energy and green our consumption. We use Internal CO2 Pricing (also known as internal carbon pricing) to place a monetary value on greenhouse gas emissions. This allows us to factor the carbon cost (30 euros per tonne) into our investment decisions and business operations. This is especially useful when taking grid design decisions. With respect to leakage of SF6, a greenhouse gas that is over 20,000 times more pollutive than CO2, we continue to experiment with replacement alternatives and have taken action to reduce leakage across our network. During 2018 we also introduced measures to green our energy at several of our substations and are in the process of installing solar panels at our Redwitz substation in Germany.
We also realise that unfortunate incidents might occur, where SF6 is leaked. In 2018, we have had an incident in Germany at our Siems substation, which is the main reason for the slight increase of percentage of SF6 leaked in 2018 (0.30% compared to 0,28% in 2017). We will keep focussing on our efforts to avoid leakage of SF6 in the next years to reduce our environmental impact and reach our 2020 target.
As a large player in the energy transition we use copper, steel, aluminium and many more materials to expand our grid. In working with these materials, we aim to reduce our impact taking our next steps with respect to circularity. For our raw material use, we focus on copper as it is expected to become scarce in the near future and we have a high dependency on it in our operations. Regarding our waste, we have set a new target (refer to the table above) to reduce non-recyclable waste as we want to contribute to closing the material loop.
To reach this goal, we have set a new target (refer to the table above) for our virgin copper use and non-recyclable waste, to reduce both by 25% in 2025 compared to 2020. To obtain insight into our current virgin copper use, we will apply a raw material passport in our tender procedures and identify all sources of waste. This will set the basis for our reference year 2020. Pilot projects are designed to make progress on these focus areas, including a 2018 project at our Emmeloord Zuidervaart station to identify the value of waste streams for re-use.
It is essential to consider our impact on the environment. As our assets are located throughout the Netherlands and Germany, often in areas of natural beauty, we are aware our business has an impact on biodiversity, ecosystems and landscape.
As a responsible company, we strive to reduce our negative impact while stimulating positive impacts. We have included our initiatives in this respect in our Green Charter. Examples include creating better nesting spaces for kestrels and owls and ‘insect hotels’ to improve biodiversity, two of these are located around our Arnhem and Bayreuth offices. Our Green Charter is regularly updated with new initiatives.
In addition, we work with external partners, including Natuurmonumenten and the Vlinderstichting, to care for the flora and fauna near our stations and cables. For our offshore projects, we are working together with Stichting de Noordzee and Natuur & Milieu to join forces regarding the challenges at sea. Next to this, we are a member of the Renewables Grid Infrastructure, which is a unique collaboration of NGOs and Transmission System Operators (TSOs) from across Europe. The aim of this Initiative is to promote transparent, environmentally sensitive grid development to enable the further growth of renewable energy and the energy transition.
Unfortunately, we sometimes encounter environmental incidents during our operations, such as oil leakages from our transformers and cables. This year, we had 55 environmental incidents and 6,379 litres of litres of oil spilled. The environmental incidents have increased compared to 2017, where we had 44 incidents. The oil leakages show a small decrease compared to last year, where we have reported 6,860 litres of oil leaked in 2017 and this year this is 6,379 litres. We consider every incident to be one to many and are aiming to further reduce this in the next years.
Impact on our supply chain
At TenneT our supply chain starts with the raw materials that are mined to eventually build and maintain our assets. Main raw materials are copper and aluminium, mining of these metals has negative environmental and social impact. We are aware of this impact and for that reason we start in 2019 with asking our suppliers to provide us with more insights in the raw materials they use, by a so called 'raw material passport'. We purchase our components on world-wide markets and acknowledge that in other parts of the world different social and environmental standards may apply. Construction of our assets is being executed by local, national and international contractors. These activities impose risks for social and environmental aspects. For both our suppliers and contractors we request them to comply with our Supplier Code of Conduct.
Assets are being operated and after reaching the end of their lifetime, we decommission our assets in a responsible way, e.g. by considering if it is possible to reuse the scarce materials used as much as possible. We strive to positively contribute to help improve the way other stakeholders in our supply chain act responsibly in doing their business.
To further ensure sustainable practices among our suppliers, we updated our Supplier Code of Conduct in 2018. The code has now also been extended to include more anti-corruption related content. We ask our suppliers and their subcontractors to commit to this code and standards that reduces environmental impact and support moral and ethical standards and which is based on the principles of the United Nations Global Compact (UNGC). TenneT has been a member of UNGC since 2015 and our commitment includes our approach to human rights, which is particularly important in our supply chain. Our suppliers provide parts for our grid assets, e.g. power lines. We want to be sure that none of these suppliers is involved, directly or indirectly, in child labour or any other human rights, ethical or environmental abuse. This is particularly crucial if suppliers work in countries where these types of abuse tend to occur more frequently. Our policy is to visit suppliers, ask them detailed questions on these issues and discuss with them how to make improvements where necessary. It is our policy that suppliers who fail to meet our standards will no longer be accepted. In 2018 we did not conduct any supplier visits, because no new framework contracts were signed. In 2019 we will execute these supplier visits, which will give us insights in the current CSR performance of our suppliers.
We are currently working on a human rights scan in our supply chain. This will identify salient issues, helping us take necessary steps to address them. Based on the outcomes of this project, we will issue KPIs to track our progress. As part of our tender procedures, we ask our suppliers to adhere to the Supplier Code of Conduct. We are proud to help suppliers further enhance their sustainable working practices, contributing to better ways of working in our industry.
A clear dilemma for our organisation is the realisation of our ambitious CSR plan while at the same time managing our investment portfolio and our ongoing operations. We realise this requires complex decision making in an already complex environment. This is however, the only way forward. We need to be smart in the way we execute our projects and at the same time live up to our CSR goals. This in the end, will deliver best value for people, planet and profit.
In our decision-making process around investments, we already consider CSR aspects to guarantee the most sustainable decision. This is however, work in progress, since this is new to our people, which means that in our proposals we need to improve and in our decision making we need to take these aspects even far better into account.
|1||Current labour market challenges with respect to attracting sufficient talent. This is becoming more and more difficult especially with respect to recruiting a futureproof workforce that has the right skills. There is a high demand within the market place for technically skilled talent which creates a challenge for us.||To make our workforce futureproof, we consider diversity to be an important element in our recruitement strategy. To attract sufficient and the right people, we increase interaction with potential employees, actively participating in career events and interacting with students during their studies. We invest in our future talent pipeline, which include initiatives to attract potential employees such as our International Trainee Programme and our High Voltage Trainee programme. Furthermore, we launched an employer branding campaign in the Bayreuth and Lehrte area to generate more awareness of TenneT.|
|2||Limits to the natural resources; in our regular course of business, we construct and maintain our assets. With this, we make use of natural resources such as copper and aluminium, which are becoming scarce, our challenge is to facilitate the energy transition whilst limiting our ecological footprint.||We are increasing our efforts to use the natural resources we need in our daily operations with maximum efficiency and to boost our circular ambitions. That is why we strive to reduce the use of virgin copper in our activities. We first focus on getting insight in our copper usage and we will use this information to determine proper actions to reach our goals.|
|3||As Tennet, we strive to make choices that contribute to a more sustainable future. The direct financial impact of these choices are a challenge as we need to balance this against ensuring affordable cost for society.||Investigate and identify opportunities where the business case is beneficial from both a short- and long-term value creation. Furthermore, we also aim to embed a broader sense of costs in our investment decisions, as we use carbon pricing to make sure we make choices that have considered both the financial bottom line, as well as a sustainable impact.|
The world around us is changing fast, driven by megatrends such as resource scarcity, climate change and changing demographics. These factors create risks and also opportunities for TenneT. With respect to our investment portfolio, the availability of natural resources is a risk to successfully finalizing our projects as we use significant amounts of these resources, such as copper.
Regarding climate change, physical risks such as extreme weather conditions can affect our assets and operations. For example, the drought in 2018 caused delays with respect to our projects, as supply vessels carrying essential parts were not able to navigate parts of the river Rhine. We have taken the first steps in incorporating core elements of recommended climate-related financial disclosures as described by the Taskforce for Climate-Related Financial Disclosures (TFCD). These relate to our governance regarding CSR, which includes our ambitions towards climate. Furthermore, we have started to include climate-related risk and opportunities in our annual risk identification and assessment process.
Also, we see that changing demographics have an impact on our workforce, as society and the labour market are changing. Life expectancy is higher than it used to be which could impact the average age of our workforce in the future. This creates some risk for TenneT in terms of succession planning and having the right skills available at the right time.
During 2018, we took significant steps to realise our 2025 CSR ambition and we will continue to take additional steps in the years ahead to make sure we deliver on our promises. This includes working closely with our stakeholders to ensure we maintain a sustainable impact with respect to people, planet and profit. We are confident that our actions will make a difference, helping us execute our business activities in a more sustainable way. Since much of our impact is also located in our supply chain, upstream and downstream, cooperation with our supply chain stakeholders is essential.