Our sustainability performance
Our CSR efforts are aimed at closing three circles. First of all, Alliander endeavours to contribute towards the energy transition by giving all customers equal access to renewable energy. We also aim to minimise the costs of this transition for society at large. Climate change can only be kept in check through a renewables-only approach. In other words, we must meet all our growing energy requirements from renewable sources such as wind, solar, water and renewable heating. Our contribution towards the green energy drive forms part of our strategy and is our most important CSR pillar. You can read more about this in the 'About Alliander' chapter, which highlights the latest market developments and our mission and vision.
Secondly, Alliander is also seeking to close its own circle by working towards climate-neutral and circular operations. Ultimately, our business operations must exclusively use renewable energy and recycle-based materials. To achieve, changes to our investment and procurement policies will be required.
Thirdly, we see a wider CSR responsibility for our company when it comes to the social circle of recruiting, training and developing people. As a large employer we can offer more than just work. We are responding to vital societal themes by helping people without qualifications into work and by catering to the growing demand for voluntary work in our society. A socially responsible company is an inclusive company, where everyone gets a fair chance to reach their full potential. You can read more about this in the 'Employees' chapter.
Climate-neutral operations in 2023
Alliander has a substantial CO2 footprint totalling 801 kilotonnes. That is equivalent to the CO2 footprint of the entire municipality of Amsterdam. Our ambition is to be fully climate-neutral by 2023 and to report transparently on our progress towards this goal. This is the first year that Alliander applied the sector model for making carbon footprint comparisons between network operators.
In 2015, our CO2 emissions dropped by almost 30 kilotonnes compared to the previous year. A detailed overview of our footprint is included in 'Other information'. 90% of our footprint is attributable to network losses, which largely arise during the transmission of electricity and gas. In 2015, these network losses cost us about €70 million. The greening of network losses is therefore one of our priorities.
Network loss reduction programmes
The total emissions due to technical network losses were lower in 2015 than in 2014. The main explanation is that less energy was transmitted, despite the economy starting to pick up. This could point to increased efficiency. Alliander has initiated a dedicated programme to reduce the technical network losses. This has already produced many quick wins (savings on stations) and policy adjustments. Alongside the reduction programme, Alliander also replaced grey cast-iron gas pipes at various locations for safety reasons and to reduce gas leakages. Finally, we also decided to focus more on network losses in our day-to-day network management.
As a result, our grip on the administrative network losses has improved slightly. Almost all the objectives set for 2015 were achieved. Administrative network losses arise from non-customer energy usage and fraud (e.g. illegal cannabis growing). Clearly, we rely partly on the police and judiciary to give us active and focused assistance in our efforts to fight fraud. However, the digitisation of our networks will make it easier to trace energy fraud in the years ahead.
Stable mobility and buildings emissions
We managed to keep the mobility emissions stable in 2015. Our main investment was in a more efficient vehicle fleet comprising fewer and smaller vans for our engineers. The stricter CO2 criterion for our lease cars (maximum of 110 grams/km) is producing the first visible effects. An experiment with 20 electric Liander vans was started in the Amsterdam region.
The emissions from our buildings showed a slight drop. Besides reducing the number of locations, we are redeveloping and greening our remaining office buildings. We opened our sustainable office building in Duiven and the sustainable renovation of our head office in Arnhem was started up.
Circular renewable office in Duiven
As a sustainability leader, we obviously want our buildings to reflect our ambitions and help us achieve our objectives. Accordingly, our office building in Duiven was redeveloped according to ambitious sustainability standards. Our location in the east of the Netherlands consists of five old office buildings that have been transformed into an energy-positive complex. In line with the circular model, the old materials were largely reused for the renovation or recycled into raw materials for other products. The complex will ultimately generate more energy than it consumes.
Greening of network losses with sustainably generated energy
Apart from reducing emissions from our operations, we are also working to green our network losses by generating additional renewable energy in the Netherlands. Over the past two years, we signed contracts with operators of new Dutch wind farms for this purpose. The first wind farm was opened in 2015 and will be fully operational by mid-2016. The procurement of renewable energy through Guarantees of Origin enabled us to green a small percentage for the first time in 2015. Going forward, this percentage will rise steadily.
Supply chain emissions
In 2015, Alliander's principal focus was on its direct emissions (scope 1 and 2). Our supply chain emissions (scope 3) were determined using a more extensive method and served to help us make good sustainable arrangements with our suppliers. The total supply chain emissions were calculated at about 126,000 tonnes (2014: 118,000 tonnes). A breakdown of these emissions by category is given in 'Other Information'.
The highest step on the CO2 performance ladder
Our CO2 approach and method were externally assessed on the basis of the CO2 performance ladder. Certification on the CO2 performance ladder provides proof of insight into the company's own footprint (level 1), the possible reduction measures (level 2) and the competence to actually implement these measures (level 3), make insights transparent (level 4) and initiate innovations with supply chain partners (level 5). The CO2 performance ladder is often used as a tender award criterion.
A renewed assessment in 2015 saw Alliander rise to level 5. This means that we know the CO2 emissions of our A-suppliers, have achieved the level 3 and 4 objectives, and have publicly committed to the government's CO2 reduction programme. We are proud of this step, but to retain our excellent position on the CO2 performance ladder, we must continue mobilising and challenging our suppliers to reduce emissions throughout the supply chain.
Working on circular operations
Circular thinking is key to help businesses and society transform towards a genuinely sustainable model. Alliander is keen to do its part. Circular operations can enable Alliander to create optimum financial value from its assets and raw materials, while also reducing its environmental impact. By 2020, 40% of our technical materials should be purchased through circular procurement.
We started an exploratory phase in 2014 and are now embarking on the step-by-step implementation. Tangible examples are our circular procurement objective, the circular redevelopment of our offices in Duiven and Bellevue, and the use of circular office furniture (tables, chairs and lamps) and supplies (coffee cups). In addition, a circular measurement method has been developed, an Advisory Council has been set up, pilots are being carried out with our pipe suppliers, and transformers and stations are being reused. In 2015, circular procurement accounted for 1% of our purchases, which means we are on track to meet our targets.
Circular procurement of the smart meter
Special attention was given to our circular procurement of smart meters. In 2015, we agreed with the suppliers that the new energy meters must be Fair Meters. This means that the primary procurement criteria for the new energy meters were use of sustainable materials, responsibility for the supply chain and origin of materials, exclusion of malpractices such as child labour, and circularity of the meter. Other network operators are also involved in this initiative.
Circular procurement demands intensive cooperation with our suppliers. Underlining our commitment to this policy, we became one of the first 20 signatories of the Circular Procurement Green Deal. The aim of this Green Deal is to learn from each other's experiences by starting up circular procurement processes. Our procurement processes, policy and strategy must be demonstrably circular by no later than the end of 2016.
A sustainable relationship with our suppliers
With an annual procurement volume of about €750 million, we are a major purchaser of products and services in the Netherlands. Together with our suppliers, we can make a major contribution to sustainability. Sustainable procurement is an integral part of our tender criteria. Our outsourcing policy incorporates provisions relating to working conditions, use of raw materials, recycling and/or CO2 emissions. All suppliers contracted by Alliander are required to commit to the ‘Alliander Suppliers Code of Conduct.’ Under this code, which is based on OECD guidelines, our suppliers (and their suppliers and manufacturers) must adhere to ethical and fair business principles. Infringements of the code can lead to sanctions, such as termination of the contract. Regular audits guarantee compliance with the Code of Conduct. When we buy products in low-wage countries, such as in South-east Asia, we carry out on-the-spot audits at these suppliers. Alongside the customary quality and product controls, we pay close attention to CSR elements such as working conditions, safety and the environment. The CSR audit is performed by an independent external party having the knowledge required to assess the local situation. No instances of unethical behaviour were discovered at any of our suppliers in the year under review.
In addition to the Code of Conduct, 66% of our goods and services were purchased on the basis of Socially Responsible Procurement (SRP) statements in 2015 (2014: 61%). This supports our circular procurement objective in the Netherlands and enables us to further streamline sustainability at our suppliers. One tangible result of the SRP statements is that at least 100 people at a distance from the labour market work at our suppliers on our products and services.
In addition to the above initiatives, Alliander is now partnering with FIRA to monitor the sustainability of its smaller suppliers. These suppliers are requested to share their own sustainability results on the FIRA platform. FIRA assures the quality of the information supplied. The platform brings parties together and gives us more insight into the sustainability performance of suppliers. FIRA prepares its reports in conformity with the international CSR standard: ISO 26000.
Credit ratings are no longer all-important for investors. Sustainability ratings matter too. Sometimes investors can only invest in companies if these have a minimum sustainability rating or higher. In 2015, the German sustainability rating agency Oekom awarded Alliander a Prime B rating (on a scale of A+ (highest) to D- (lowest)). This rating is one step below the B+ rating awarded by Oekom last year, but is still in the Prime category.
The downgrade was due to variances in the amount of information that is available to Oekom from one year to the next. Alliander is working to eliminate these differences by making more relevant information permanently available to the public.
Impact of heating network in Nijmegen
De Alliander Duurzame Gebiedsontwikkeling (DGO) works together with businesses, authorities and end users to realise the sustainability ambitions for whole areas. DGO facilitates the entire energy planning and supply process, from the development of sustainable vision documents to the operation of renewable energy networks, such as heating and cooling networks or biogas installations.
One major project concerns the construction of a heating network in Nijmegen for about 3,700 homes in cooperation with the municipality of Nijmegen, Nuon, ARN and the province of Gelderland. Impact measurements show that compared to a conventional gas network (with a connected high performance boiler) the heating network yields significant natural gas savings, leading to lower CO2 and harmful NOx emissions. The CSR measurement quantifies the environmental impact of the heating network in Nijmegen in 2015 as follows:
Description Impact in % Impact in # Explanation Reduction in CO2 emissions 62% lower emissions Emissions about 3,700 tonnes CO2 lower per year The lower emissions are equal to the energy emissions of over 800 households Reduction in fossil fuel consumption (natural gas) 62% lower energy consumption Saving of about 74,000 GJ primary energy per year The saving is equal to the average natural gas consumption of over 1,300 households Reduction in NOx 8% lower NOx ower pollution of about 130 kg NOx per year
Encouraged by these measured impacts, DGO is actively developing and encouraging the realisation of other open networks elsewhere in the Netherlands. By opening up the networks and connecting more producers and customers, we can increase the security of supply and accelerate the move towards local renewable energy generation. This fits our mission to work on an energy supply that gives everyone equal access to reliable, affordable and accessible energy.