Environmental & Social Information • Mar 29, 2019
Environmental & Social Information
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2018
Improving our future
To deliver competitive and sustainable solar energy globally, to protect our environment and to improve quality of life through innovative integration of reliable technology
Predictable Working together Driving results Changemakers
| CEO letter | 4 |
|---|---|
| Sustainability reporting | 11 |
| Sustainability priorities | 12 |
| Managing environmental and social impacts | 22 |
| Being a trusted business partner | 31 |
| Health, safety, security and environment | 32 |
| Anti-corruption | 37 |
| Responsible procurement | 42 |
| Our people | 45 |
| Local value creation | 51 |
| GRI index | 62 |
| Appendix | 67 |
With ten projects under construction in eight countries across four continents, our ability to manage risks and challenges in complex markets has been tested on many fronts.
Our rapid global expansion requires tremendous efforts from all our people, to ensure that we maintain high standards while delivering on our commitments.
In 2018, we delivered about 6.3 million working hours without any serious injuries, a remarkable achievement considering that the majority of the nearly 6,000 construction workers recruited from surrounding communities are unskilled. A core element of our sustainability work is local training and knowledge transfer – many of the people we hire have never worked for a corporation before. It becomes our responsibility to train and guide them along the way to support further development in the local communities.
Executing several parallel projects is logistically complex. During 2018, our global procurement teams ensured that approximately 3,000 containers, covering a distance of more than 6 million kilometres by road, were transported safely to their respective project sites.
Our sustainability work was also tested in many ways in 2018. We successfully grid connected the Los Prados plant in Honduras after incidents of social unrest and challenges with local community relations. It was a tough process. Our local project team showed impressive dedication and endurance in getting this project to the finish line. In Mozambique, we implemented a livelihood restoration programme for 220
local households in line with the IFC Performance Standards. Every step was carefully monitored by us and our project partners. We also made significant efforts during the year to raise environmental and social standards in our six projects under construction in Egypt.
Stakeholder engagement is of the utmost importance to us. In addition to our regular and continuous dialogue with our local stakeholders, we see increasing expectations for environmental and social governance from investor communities and other stakeholders. In particular, the requirements from financing and project partners are becoming stricter. We see this as a purely positive development for our industry.
In 2018 we continued our fast-tracked journey for sustainability reporting. We have maintained close dialogue with partners, shareholders, lenders, employees, and other stakeholders to get valuable inputs on their concerns and interests regarding sustainability. Their inputs help us target our reporting and focus on the sustainability issues that really matter to Scatec Solar's business.
In 2017, we began reporting in accordance with the Global Reporting Initiative (GRI). In 2018 we became a signatory to the UN Global Compact. This was a natural step for us. It reinforces our global commitment to responsible business
In 2018 we became a signatory to the UN Global Compact. This was a natural step for us and reinforces our global commitment to responsible business conduct in the four key areas of labour conditions, human rights, environment and anti-corruption.
conduct in the four key areas of labour conditions, human rights, environment and anti-corruption. By operating in line with recognized principles across these areas, businesses make an essential contribution to the Sustainable Development Goals. In 2018, we worked to review and better align our selection of SDGs to our core business, as well as to areas where we see substantial risks and opportunities. The result is that we now focus instead on fewer goals, those with measurable targets and increased impacts.
The more solar projects Scatec Solar develops, the larger positive climate impact we generate. In 2018, our operating solar power plants avoided about 650,000 tons of greenhouse gas emissions. These avoided emissions will more than double when projects currently under construction reach commercial operation. We also began preparations to report to the Carbon Disclosure Project (CDP) by assessing climate-related risks and opportunities and their impacts on our business.
Solar energy remains the fastest-growing renewable energy source in the world. We see substantial opportunities from rapid technology developments that open up for new business models and solutions. Our New Ventures unit is exploring a range of new technologies to offer better solutions to a broader market. Corporate power purchase agreements , robotics, and floating solar are just a few exciting examples.
We are truly enthusiastic to see what 2019 and beyond will bring. One thing is for sure: We will do our utmost to maintain our position as a sustainable company with the mission of lighting up emerging economies worldwide.
Raymond Carlsen (CEO)
Employees:
246
In operation at year end:
Full year 2018 production:
Greenhouse gas emissions avoided 2018:
650,000 tons of CO2
Malaysia
In addition to projects in backlog, Scatec Solar holds a solid pipeline of projects totalling 4,454 MW across Latin America, Africa, Europe & Central Asia and Southeast Asia.
Scatec Solar develops, builds, operates, and owns solar power plants that generate clean and reliable electricity. Electricity is vital for the economic growth of nations and human welfare. We strive to increase access to clean, affordable, and renewable electricity generation in emerging markets.
Sustainability is an integral part of our organisation and is embedded in all business units including project development, solutions/execution, asset management, and operations. The sustainability team in each country consists of both corporate support teams and specialists, as well as fieldworkers who report to the global headquarters and ultimately to the Executive Vice President of Sustainability, who forms part of the Management team reporting directly to the Board of Directors. The sustainability team develops key performance indicators reviewed by the Management annually. When relevant, both the Management and the Board of Directors review specific sustainability topics including health, safety,
security, and environment (HSSE), corruption, procurement, environmental and social impacts, and stakeholder engagement, usually on a monthly basis.
Scatec Solar has developed a policy for each material sustainability topic outlining the key principles and management approach governing the way we operate and address issues. The policy statements and management approach for material topics can be found at the beginning of each chapter of this report. Further information on our corporate governance can be found in the annual report and on our corporate website.
Scatec Solar is committed to operate in line with the Equator Principles and IFC's Environmental and Social Performance Standards to ensure consistent practices across all projects. We work with trusted partners such as the IFC, Norfund, KLP, and several larger development banks that all have high standards for the projects and their associated impacts.
IFC's Environmental and Social Performance Standards define IFC clients' responsibilities for managing their environmental and social risks
www.ifc.org
A risk management framework adopted by financial institutions for determining, assessing and managing environmental and social risk in development projects
www.equator-principles.com
Grid connected 262 MW in 2018 - nearly doubled our installed capacity
emissions reduced from our solar plants in operation in 2018
3.5 GW Targeting 3.5 GW in operation and under construction by the end of 2021
Zero serious injuries Delivered 6.3 mill working hours with no serious injuries
in projects under construction – the majority local and unskilled labour
Diversity Our total global workforce is represented by 32 nationalities
Grid connected the Los Prados plant in Honduras after social unrest locally, in large part caused by misinformation and resolved through a stronger social team and improved dialogue and interactions with the communities
Livelihood restoration programme for 220 local households in Mozambique in line with IFC's Performance Standards
with Environmental & Social management to ensure compliance of all contractors and business partners with international standards and requirements in Egypt and other ongoing projects
Best sustainability reporting: Ranked amongst the top 15 companies of the 100 largest listed companies in Norway by The Governance Group
Global commitment: Became a signatory to the UN Global Compact to reinforce our commitment to its ten principles relating to labour conditions, human rights, environment and anti-corruption
Sustainable Development Goals: Aligning the SDGs with our core business, risks and opportunities and stakeholder feedback
Climate reporting: Preparing for reporting to the CDP (Carbon Disclosure Project) in 2019
2018 has been a year to challenge our company to move closer to best practices in sustainability reporting. We want to make it easier for our stakeholders to evaluate our sustainability work and performance through more relevant and consistent reporting. We continue this effort in 2019.
We pursued several new global initiatives in 2018, including the UN Global Compact and the Carbon Disclosure Project (CDP).
We also spent considerable time engaging with several key stakeholders including partners, shareholders, lenders, and employees to make sure we have a clear understanding of their concerns and interests regarding sustainability.
This report is prepared in accordance with the Global Reporting Initiative (GRI) Core Level. The climate reporting has been externally assured by DNV GL. We regard this report to be our Communication on Progress to the United Nations Global Compact (UNGC). In our opinion, we meet the requirements of the UNGC Active Level. Our ambition is to be a sustainable business with regard to our total impact on the societies where we operate. In line with this ambition, we will continue to listen, learn, adapt, and improve our business operations. We appreciate feedback from our stakeholders on our sustainability reporting and always work for continuous improvement. For comments, questions or suggestions, please contact Julie Hamre, Senior Sustainability Advisor: [email protected]
This is a process of engaging with stakeholders to understand what types of topics and issues concern them.
During 2018 we reviewed our sustainability priorities by reaching out to a range of internal and external stakeholders to get input and feedback on what sustainability issues and topics are most important to them.
Survey to rank sustainability topics for the Company's Board of Directors, Management, and a broad range of employees from business units including Supply Chain, HSSE, Sustainability/Compliance, Business Development, Project Finance, and New Ventures.
Interviews with a range of key external stakeholders including project partners, shareholders, lenders, and experts in the sustainability field.
Our sustainability priorities are derived from close dialogue with key internal and external stakeholders.
National governments and customers
Local governments and communities
Co-investors and partners
NGOs
groups
Our
stakeholder
Financing partners
Shareholders
Norwegian Contractors Employees
See appendix, section 2, for a definition of each topic in the matrix.
Our material topics are selected based on two sources; stakeholder expectations and internal strategic priorities. Stakeholder expectations are mapped through formal interviews, and in dialogue with our local stakeholders as part of our daily business on the ground. We also receive stakeholder feedback at the corporate level through dialogues with investors, regulators, and financiers.
Internal priorities are mapped through a sustainability survey. Topics of high external and internal importance receive the highest degree of management attention. For such topics, clear goals are established, monitored regularly, and reported externally. See appendix, section 1, for more details on stakeholders' interests and concerns. The matrix serves as the basis for our corporate sustainability framework and reporting.
We identify and prioritise the sustainability issues that matter most to our business and stakeholders.
Our overall company goal is to deliver competitive and sustainable renewable energy. Three main sustainability pillars contribute towards achieving this goal:
Our corporate sustainability framework incorporates all material topics of importance to stakeholders and our company. Each topic is defined by a policy, an evaluation of results in 2018, and a set of targets to be measured and to guide our work for 2019.
Key guidance: IFC's Performance Standards, Equator Principles, and the Universal Declaration of Human Rights
Key guidance: International Labour Organization (ILO) and the Universal Declaration of Human Rights
Key guidance: UN Sustainable Development Goals and IFC's Performance Standards
Our Corporate Sustainability Framework is presented on the next page with key ambitions and targets. We are in the process of developing a longer-term approach to the framework and targets.
The United Nations Sustainable Development Goals (SDGs) are a collection of 17 global goals that together represent a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity. Scatec Solar has a fortunate starting point for contributing to several of the SDGs such as Goal 7: Affordable and Clean Energy.
In 2018, we decided to take a step back to review where Scatec Solar can contribute the most to the SDGs. Several important factors were considered:
In 2019, we will work to set more specific targets for our contribution to each SDG and will consider whether we should include additional SDGs.
SDG 7: As a company we contribute directly to SDG 7 "Affordable and clean energy". Access to energy is fundamental for economic development and people's standard of living, which implies that contribution to SDG 7 has a positive impact on several other SDGs.
SDG 8: Providing safe and healthy working conditions for our employees and sub-contractors and protecting labour rights are identified as the most material topics for our business.
SDG 17: Our partnership-based approach is essential to our role as an integrated solar power producer. We aim to select strong and trusted partners with high standards for all projects.
SDG 4: Education is selected as the core focus for our local development programmes. By specialising and gaining valuable experience that can be applied across projects, we escalate the effects of our programmes. We commit to having at least one long-term education-related programme in all our solar projects.
The SDGs we have selected are also linked to our GRI reporting; please refer to our GRI Index, p. 62.
Access to energy is central to nearly every major challenge and opportunity the world faces today. It is fundamental for economic development and people's standard of living.
Scatec Solar's main objective is to deliver competitive and sustainable solar energy globally. We currently have more than 1.6 GW installed capacity in operation and under construction in Europe, Africa, the Middle East, Latin America, and Asia.
By providing access to clean energy and increasing the share of renewable energy in the global energy mix, we contribute directly to SDG 7.
To address the "affordable" element of SDG 7, we have set a target to start implementing
Target 2019: Plan, develop, and implement at least one small-scale community-based solar project
of our business offering in all new solar projects.
Installed capacity
584 MW
Under construction
1,071 MW
Target 2021 3.5
GW
Nearly doubled our installed capacity in 2018
Providing safe and healthy working environments for our employees and subcontractors and protecting labour rights are identified as the most material topics for our business.
Our solar projects contribute to job creation by employing local labourers and subcontractors as much as possible, regardless of whether this is a requirement. This policy supports the reduction of unemployment and transfers knowledge and technical skills to the communities where we are present.
with no serious injuries across ten projects in eight countries
Job creation 2018: 6,000 jobs from projects under construction, where the majority were unskilled from local communities
Our partnership-based approach is essential to our role as an integrated solar power producer. We always aim to select strong and trusted partners such as the IFC, Norfund, Equinor, KLP, and several major international development banks that all have the same high standards as we do for all projects and their associated impacts.
Scatec Solar's key contribution to SDG 17 is multistakeholder partnerships with governments, authorities, developers, financing partners, subcontractors, suppliers, shareholders, NGOs, and other stakeholder groups.
Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources, to support the achievement of the SDGs in all countries, in particular developing countries
CO2 emissions avoided 1) from our solar plants globally:
Plants in operation in 2018 avoided: 650,000 tons of CO2 Plants in operation in 2019 are expected to avoid: 1.5 million tons of CO2
1) Source: Calculated based on local grid mix emission factors.
2) Source: United States Environmental Protection Agency, March 2018: Greenhouse Gas Emissions from a Typical Passenger Vehicle.
The development of solar projects has environmental and social impacts. In alignment with Scatec Solar's policies, requirements of local legislation, and our commitment to international standards and best practices, we endeavour to minimise our negative impacts and to maximize local benefits in positive dialogue with project stakeholders.
We are committed to operate all our projects in line with the IFC's Performance Standards and the Equator Principles. According to the Equator Principles, all projects under construction in 2018 fall under "Category B" projects, meaning that they have "potential limited adverse social or environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures".
Our project activities are conducted in accordance with local laws, corporate Company policies, and requirements defined by international standards including the IFC's Performance Standards and the Equator Principles for specific areas of impact including labour and working conditions, pollution prevention, community health and safety, land acquisition and involuntary resettlement, human rights, biodiversity conservation, indigenous people, and cultural heritage. In 2018, we have worked to strengthen our corporate Environmental and Social Management System (ESMS) by reviewing our processes and management plans in accordance with the IFC's
Performance Standards and the Equator Principles. This work will continue in 2019.
In all our projects, we follow a standardized process for identifying, mitigating, and monitoring our potential risks and impacts. This work forms part of our overall Environmental and Social Management System (ESMS). Key elements of the process are outlined next page.
Category A: Projects with potential significant adverse environmental and social risks and/or impacts that are diverse, irreversible or unprecedented
Category B: Projects with potential limited adverse environmental and social risks and/or impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures Category C: Projects with minimal or no adverse environmental and social risks and/or impacts
Assessments of potential environmental and social impacts from activities during the development, construction, and operations phases of a project
For all our projects we conduct environmental and social impact assessments (ESIAs) and diligence assessments to identify potential environmental and social impacts from our activities.
In 2017, we developed ESIAs for our projects in Brazil, Egypt, and Nigeria and in 2018 for our most recent project in Malaysia.
We also performed Environmental and Social Due Diligence Assessments for two projects in Ukraine.
List of environmental and social actions/measures to reduce impacts identified during the initial assessments (ESIAs) with responsibilities and deadlines
For all our projects, the next step is the establishment of Environmental and Social Action Plans (ESAPs) based on initial Environmental and Social assessments.
The ESAPs are often developed in close dialogue with project and financing partners and usually include the following items:
Regular monitoring and reporting internally in project teams and externally to project and financing partners All our projects have regular Environmental and Social monitoring and reporting procedures in place. Important monitoring measures include:
The degree and types of impacts caused by solar projects vary from project to project based on several factors such as site location, environmental characteristics of the site, and distance to settlements. Most of the environmental and social impacts occur during the development and construction phases of a project.
Noise, air emissions, solid waste, waste water generation, and increased transportation to and from the site area are typical impacts during the construction phase of a project. Each of these impacts is monitored and mitigated by implementing specific management plans. Other examples of main impacts are presented over the following pages.
Scatec Solar respects human rights and recognises our responsibility to avoid infringing rights of employees, local communities, and other stakeholders wherever the company operates. In line with the IFC's Performance Standards, we acknowledge that certain groups might require particular attention in relation to human rights risks (indigenous people, minorities, and vulnerable groups), and we work to mitigate any adverse effects by employing specially designed measures. Meaningful consultations with affected communities and other stakeholders on a regular basis and a well-functioning grievance mechanism that local communities trust are the
main tools for continuous review of risks and for development of appropriate mitigating actions.
Scatec Solar recognises land acquisition as an important process that can impact local communities and place the rights of affected people at risk, unless diligently implemented. The risk is particularly high when physical and/or economic displacement cannot be avoided. In such situations, we follow strict requirements of the IFC's Performance Standards to address and mitigate impacts by developing and implementing resettlement and livelihood restoration plans that require establishment of long-term monitoring mechanisms. Our target is always to ensure that the affected local households are assisted in adapting to the new situation and restoring their livelihoods to pre-project standards at a minimum.
Scatec Solar sees labour management and ensuring good working and living conditions for its own and subcontractors' workers as a priority area for all projects during the construction phase. By developing management plans for labour recruitment, training, and accommodation and by conducting regular inspections, the goal is to ensure continuous compliance with IFC's Performance Standards and to avoid any practice harmful to workers' rights.
| Background: | The Mocuba project resulted in an economic displacement of 223 households. The acquisition of land and the obstruction of access to natural resources required mitigating actions to address the loss of income sources and means of livelihood. |
|---|---|
| Compliance: | Mozambican law and recommendations in line with IFC Performance Standard 5 for projects involving economic displacement. |
| Target: | To ensure that local households are assisted in adapting to the new situation and in restoring their livelihoods to pre-project standards at a minimum. |
| Mitigation: | Development of a Livelihood Restoration Plan and a Simplified Land-use and Compensation Plan. A survey in combination with stakeholder engagement identified eligible households and provided agricultural land and monetary compensation for the loss of crops in the local community. The Livelihood Restoration Plan included the following: |
| Agricultural activity support Programme Providing seeds and tools, yield measurement, training in post-harvest handling and storage of produce, evaluating the level of adoption of promoted technology, and governance training. |
|
| Domestic awareness Training in business planning and management, savings and loan procedures, and follow-up with involved groups. |
|
| Status: | Successfully implemented the Livelihood Restoration Plan. A separate plan for the most vulnerable project-affected people is still ongoing because additional support and training were needed to make sure conditions are left at pre-project standards or better. Both programmes are being implemented under regular supervision and monitoring of Scatec Solar and third party experts. |
Scatec Solar engages security personnel at its operational sites to protect employees, assets, and local communities close to the company's projects and plants. This is also an area that requires awareness and compliance with international standards. All plant-based security personnel are subcontracted from a third party but are considered part of our plant teams. We recognise the risk of misconduct, and we try to mitigate this risk by training security staff on human rights and Company policies.
Approximately 60% of security personnel contracted by Scatec Solar globally have been trained in principles related to human rights. The training is conducted annually. We are currently working to review and further develop our training offerings relating to human rights to ensure that all our security teams globally receive such training.
Water is a scarce resource in many areas, and therefore is an important aspect of our environmental management, particularly in the operation phase. One of our targets for 2018 was to start reporting on water withdrawal by source and volume in projects located in water-stressed areas. Accordingly, a closer review of volumes of water used at all our operational plants took place in 2018 to monitor each plant's water-use performance and to avoid any negative impact on local communities if there is any reliance on the groundwater in water-stressed areas.
Water conservation awareness, minimizing water use for dust suppression by maintaining road conditions, and monthly monitoring for identifying causes of abnormal volumes are among the management considerations implemented at all our plants.
Our main use of water is linked to cleaning modules. Different water supplies are used for our projects at different locations, including groundwater and tanked water from municipal water networks. The amount of water needed depends on vegetation, module soiling, natural cleaning due to precipitation, and cleaning method. Efficiency is sought by cancelling unnecessary washing cycles and using effective washing methods like spraying. We are looking into possibilities of dry-cleaning techniques for our plants in Egypt that are currently under construction.
Amongst our plants, Linde, Kalkbult, and Dreunberg in South Africa and Oryx and Ejre/Glae in Jordan are in areas of medium or high water risk defined by World Resources Institute's "Aqueduct Water Risk Atlas". In South Africa, the source of water is groundwater. Boreholes are located close to the plants which are surrounded by only livestock farming activities, with no nearby settlements. Water-use licences for each facility are issued by the Department of Water and Sanitation, depending on the aquifer's size and other uses. Water volumes withdrawn for our plants are considerably below the volumes authorised by the licences.
Installing solar parks requires land-clearing, which might impact biodiversity by causing loss of habitats and disturbance of species. Biodiversity assessments are therefore part of baseline impact and Environmental and Social Due Diligence assessments. If an impact is unavoidable, we implement measures to minimize impacts and restore biodiversity. Habitat enhancement and creating new conservation areas are options to be considered whenever impacts cannot be fully mitigated. In Honduras for example, we carried out monthly biodiversity inspections during 2018 for the Agua Fria project and a bird monitoring campaign totalling 100 hours of observation for the Los Prados project.
By providing clean electricity, our solar plants contribute to reducing greenhouse gas emissions in every country where we operate. However, we acknowledge that our own operations and the construction of our solar plants produce greenhouse gas emissions.
One of our 2017 targets was to improve the quality of our Company's reporting of greenhouse gas emissions. In 2018, we started preparations to report to the Carbon Disclosure Project (CDP) with a timeline of completion by May 2019.
CDP is a global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.
| EMISSIONS REPORTING | 2018 TONS OF CO2 EQUIVALENT 1) |
|---|---|
| Scope 1: Total direct CO2 emissions | 4,886.5 |
| From offices and sites | 840.1 |
| From vehicles | 4,046.4 |
| Scope 2: Total indirect CO2 emissions from purchased electricity and heat |
1,196.9 |
| Location-based | 1,196.9 |
| Market-based | 1,247.0 |
| Scope 3: Total other indirect CO2 emissions | 4,328.5 |
| From air travel | 4,328.5 |
1) See appendix, section 3, for a detailed description of the methodology used.
Issue date: March 26, 2019
The purpose of this document is to clarify matters set out in the process of verifying CO2 emissions for Scatec Solar ASA. We do not accept or assume any responsibility or liability on our part to CDP or any other party who may have access to this letter or related documents.
Scatec Solar ASA commissioned DNV GL Business Assurance Norway AS to provide an independent third-party limited assurance verification for 2018 of their worldwide operations for CDP reporting. ISO 14064-3 has been used in this work. The scope of the work included:
• Scope 1 CO2 emissions (ref. CDP report point C 6.1)
• Scope 2 CO2 emissions (ref. CDP report point C 6.3)
The verification was conducted in March 2019 and included document review, interviews with personnel at the main office, review of calculation methods, routines (gathering, aggregation and consolidation) for activity data used in the calculations. The scope for 2018 included Scatec Solar activities in 10 countries. Aggregated emissions data:
Scope 1: Data as reported in C 6.1.: Total CO2 scope 1 emissions: 4 886,5 metric tonnes CO2
Scope 2: Data as reported in C 6.3: Total CO2 scope 2 emissions (location based): 1 196,9 metric tonnes CO2
The verification is done with limited assurance. During the verification, nothing has come to our attention that causes us to believe that the reported CO2e emissions for Scatec Solar ASA in the mentioned countries are not fairly stated.
Place and date: Høvik, March 26, 2019 DNV GL BUSINESS ASSURANCE NORWAY AS
Thomas Haug Ole A Flagstad Technical reviewer Lead Verifier
DNV GL Business Assurance (Norway) AS, Veritasveien 1, 1322 Høvik, Norway. Tel: +47 67 57 99 00. assurance.dnvgl.com
This reporting will lead to more transparency on how we manage climate-related risks and opportunities, as well as emission-related targets and performance. The total greenhouse gas emissions from our activities in 2018 were 10,412 tons of CO2 emissions. This total includes scope 1 emissions, market-based scope 2 emissions and Scope 3 emissions from air travel
Given the international nature of our company's business and operations, we are aware of our significant footprint related to air travel and local transportation. We aim to reduce this figure. 2018 was the first year we produced a complete carbon footprint, and considerable effort was made to ensure data quality and understand emission sources. In 2019 we will use this knowledge to develop a climate strategy with concrete reduction targets and programmes.
Furthermore, we are aware of the industry efforts to address climate risk and we intend to implement measures towards more comprehensive climate risk disclosures, based on the recommendations from the Task Force for Climate Related Financial Disclosures (TCFD). We enter into local communities for 20–25 years and it is important to try to foresee and evaluate potential climate related risks to and opportunities for our people, business, and physical assets. The most serious climate-related risks relates to the physical impacts of extreme weather, including droughts and floods. We work to have procedures in place to evaluate potential climate effects related to our sites, and develop mitigation plans where necessary.
Simultaneously, we see substantial opportunities related to the solar energy industry in the transition to a low-carbon economy. Technology is developing rapidly, enabling solar panels and other equipment to become more efficient and competitive. We take advantage of the emissions reductions resulting from our solar plants in operation
and our projects continue to be registered with the United Nations Framework Convention on Climate Change (UNFCCC) for verification and certification of electricity generation. This displaces fossil-fuel use, leading to improved access to climate finance and lower-cost implementations for solar projects.
For all projects, dialogue with a broad range of stakeholders, including the local communities, is commenced at the early stages of a project. Such dialogue provides a better understanding of a project's impacts and ensures that inputs are integrated into the project development process. Engagement with local communities is a continuous process during the entire life of a project. The objective is to identify and mitigate impacts and to maintain a good relationship based on openness and trust. Stakeholder engagement plans are developed for all projects. These plans specify the requirements regarding consultation needs, frequency of consultations, and methods of communication. The work of a locally appointed Community Liaison Officer to bridge the dialogue between the local people and the project is central to success of the project. Grievance mechanisms are also established at all projects as a channel for continuous communication and facilitating opportunities for Scatec Solar and communities to identify challenges and develop solutions together.
We will increase our efforts to further strengthen and standardize our corporate environmental and social management system (ESMS) for all projects. In addition, we have the following key targets for 2019:
Health, Safety, Security and Environment (HSSE) are key priorities for Scatec Solar. We take responsibility, set requirements, and monitor HSSE performance in the development, construction, and operations phases of our projects. We define and communicate the health and safety standards to our employees and subcontractors.
We delivered approximately 6.3 million working hours with no fatalities or serious injuries involving disabilities in 2018. The year was characterised by significant expansion, with a high level of construction activities across ten projects in Brazil, Honduras, Argentina, Malaysia, South Africa, Mozambique, Egypt, and Ukraine. We recruited nearly 6,000 workers for the construction periods, of whom the majority were local and unskilled labour.
The rate of recordable work-related injuries amounted to 4.4 per million working hours, up from 3.4 in 2017. The increase reflects our entrance into new geographical areas with new projects, combined with efforts for and encouragement of a stronger reporting culture. None of the recordable injuries were classified as serious injuries. The main types of work-related injuries involved incidents that resulted in minor injuries, such as a person being hit by an object or people suffering small injuries from handling machinery and construction tools.
No cases of work-related occupational diseases were registered among our employees or our subcontractors' workers in 2018. However, six cases of heat stress in Egypt and several cases of Malaria in our Mocuba project in Mozambique were reported. In 2018, we kicked off a malaria vector control programme for the project to cover all workers on site and their respective households. The programme aims to raise awareness and prevent incidents of malaria by providing control measures such as indoor residual spraying of households.
A key focus in 2018 was to encourage better reporting practices across all projects. During the year, 13 incidents were reported as high-potential incidents and 45 close calls were registered in our reporting system. Several projects have had incentive systems in place to encourage the reporting of unsafe conditions and acts, including near misses. Encouragement of better reporting will continue and be further strengthened in 2019.
Jan 2018 Dec 2018
| KEY PERFORMANCE INDICATOR | TARGETS 2018 | ACTUAL 2018 | ACTUAL 2017 |
|---|---|---|---|
| Fatalities | 0 | 0 | 0 |
| Serious injuries with disabilities | 0 | 0 | 0 |
| LTIF (Lost time injury frequency) | ≤ 1.7 | 3.0 | 2.0 |
| TRIF (Total recordable injury frequency) | ≤ 3.4 | 4.4 | 3.4 |
| Number of HSSE observations including near misses | > 1 | 0.4 | 0.1 |
| Sick leave 1) | ≤ 2% | 0.8% | 1.4% |
| Working hours including subcontractors | - | 6,368,975 | 1,180,650 |
All figures include hours from subcontractors except for sick leave. Rates are calculated per million hours worked. 1) Sick leave includes hours from full-time employees, short-term employees, and consultants.
2 0
One of our 2018 targets was to obtain an external certification of our HSSE and Quality Assurance systems by year's end. We engaged DNV GL to perform external audits related to our Quality, Health, Safety, and Environment (QHSE) systems through selected site visits globally. The focus of the audits was the implementation of ISO 9001, ISO 14001, and ISO 45001. Scatec Solar has been certified for all three standards.
We continuously work to monitor that all our subcontractors operate in accordance with our principles. Our Supplier Code of Conduct and Labour Policy for site personnel are integrated into all our subcontracts to ensure that these principles are respected, even in the parts of the value chain we do not control directly. This is identified as a critical risk area for our company and strong efforts have been made in 2018 to improve our systems and monitoring activities.
| Project information: |
Six projects totaling 400 MW located in BenBan, Upper Egypt |
|---|---|
| Challenge: | Keep consistent and high performance related to HSSE |
| Main issues: | • Aligning contractors' services to international standards and requirements • Acquiring compliant services such as water and sewage disposal, transportation, and equipment • Achieving a high percentage of local labour and full compliance with local and international labour requirements • Difficult to find accommodation that complies with requirements |
| Measures implemented: |
• Thorough review of the IFC's Performance Standards with contractor management teams • Recommend contractors to use compliant services and increase collaboration and monitoring • Implement resource use and waste disposal logging with regular inspections of records and processes • Regular vehicle and equipment inspections and awareness sessions regarding seatbelt use • Use of lender-approved worker accommodations and monitoring and improvement of other accommodation options used |
We work systematically to strengthen our approach to security management and emergency preparedness. In 2018, we continued to develop our partnerships with our two globally recognised third-party security companies. Measures in 2018 include biannual emergency drills with the management and updates of training modules for all employees.
One of the most serious risks we face when travelling abroad is related to traffic. The number of fatal traffic accidents in many of the countries where we are active is high. In 2018,
we registered one recordable injury related to motor vehicle accidents. During the year, we established a Transportation Safety Management Plan that also requires all our subcontractors to have a plan for transportation safety.
We work continuously for zero harm to personnel, assets, and the environment, and we believe that all incidents can be prevented through awareness, training, and preparedness. Our main goal for 2019 is to have zero fatalities and serious injuries with disabilities and reach our remaining HSSE targets shown in the table below.
| KEY PERFORMANCE INDICATOR | TARGETS 2019 |
|---|---|
| Fatalities | 0 |
| Serious injuries with disabilities | 0 |
| LTIF (Lost time injury frequency) | ≤ 2.5 |
| TRIF (Total recordable injuries frequency) | ≤ 3.9 |
| Number of HSSE observations including near misses | > 1 |
| Sick leave 1) | ≤ 2% |
All figures include hours from subcontractors except for sick leave. Rates are calculated per million hours worked 1) Sick leave includes hours from full-time employees, short-term employees, and consultants.
We depend on a sustainable business environment and always seek to comply with high standards of business ethics. The selection of, and cooperation with, business partners including suppliers, consultants, local partners, banks, governments, and local authorities is vital to ensure a non-corruptive business environment.
We undertake thorough assessments of the potential host country, region, and partners before we decide to conduct our business. We always perform due diligence of potential partners and suppliers through a screening process to identify heightened risks or blacklisted individuals and organisations. This effort includes using renowned third-party international risk specialists to conduct background checks of business partners and individuals. Some of our main financial collaborators such as Norfund, the International Finance Corporation (IFC), members of the World Bank Group, and other leading Development Banks are widely acknowledged for having high ethical standards and rigorous due diligence requirements.
"We work systematically to prevent corruption and unethical practices in all projects and operations".
Snorre Valdimarsson, EVP Legal Counsel
| (20–39) HIGH RISK |
(40–59) HIGH-MEDIUM RISK |
(60–79) MEDIUM |
(80–100) LOW |
|---|---|---|---|
| Mozambique (23) | Argentina (40) | Norway (7) | |
| Honduras (29) | South Africa (43) | ||
| Ukraine (32) | Malaysia (47) | ||
| Egypt (35) | Rwanda (48) | ||
| Brazil (35) | Jordan (49) | ||
| Czech Republic (59) | |||
Scatec Solar is committed to develop all projects in accordance with the IFC's Performance Standards and the Equator Principles. This commitment includes, for example, the screening of all potential partners against the World Bank Listing of Ineligible Firms & Individuals. All subcontractors and suppliers must adhere to our Supplier Conduct Principles.
Scatec Solar operates in partnerships and seeks equity co-investments on a project basis to enhance value and reduce risks whenever feasible. The large-scale solar energy industry is characterized by high-value investment and significant government interaction through the awarding of power purchase agreements, either through public tenders or bilateral negotiations, concessions, and regulations. In addition, companies operating in the solar power industry need licenses and permits to operate in a given country, to rezone land, and to be allowed to produce and sell power. Most of the projects Scatec Solar undertakes involve an inherent risk of corruption. A high-level list of risk areas identified for our company is outlined in the table on next page, which applies to all our projects (alphabetical order).
| RISKS | BRIEF DESCRIPTION | KEY MITIGATING ACTIONS |
|---|---|---|
| Customs | Customs processes are vulnerable to corruption. Scatec Solar can be held liable for corruptive behaviour on the part of its suppliers, distributors, and agents when importing goods and services during the construction phase. |
• Anti-corruption training for all employees including project teams during construction phase • Responsible procurement policy • Country risk assessment • Trial shipment of components pre-execution of project to verify document requirements upfront |
| Employment | Employment opportunities through Scatec Solar, especially where there are local content requirements, can be misused for private gain. |
• Screening of all potential recruitments • "One-over-one" approval principle for new hires |
| Foreign exchange controls | Several of the countries where Scatec Solar operates have foreign exchange operations susceptible to manipulation and informal exchange processes, which may include corrupt practices. |
• Due diligence, control and authorization procedures • Country risk assessment • Trial transfer of funds pre-construction to verify document requirement upfront |
| Gifts and hospitality | Practice of giving or receiving gifts and/or hospitality in exchange for advantage as an inducement to something which is illegal or a breach of trust. |
• Anti-corruption training for all employees • Ethic's Policy that specifies limits on gifts |
| Licenses and permits – lobbying | Projects are dependent on a range of permits and licenses, which make Scatec Solar vulnerable to solicitation, collusion or other forms of corruption. |
• Perform due diligence of all permits, licenses and awards. • Monitor, flag and clear deviations in the permitting process • External due diligence report / legal opinion on process • Transfer funds through accounts held by the recipient under their name in a bank located in the host country. • Anti-corruption clauses and obligations for the counterparty in all contracts |
| Stakeholders and Partners | The selection of local partners may expose Scatec Solar to their previous actions that may be sanctionable. Social investments a mean for embezzlement and/or elite capturing. |
• Perform integrity due diligence of all parties involved, including due diligence questionnaire and background checks on key partners • Screen company, board, managers, key employees and ultimate owner/beneficiary through RDC • Transfer funds through accounts held by the recipient under their name in a bank located in the host country. • Anti-corruption clauses and obligations for the counterparty in all contracts |
| Power Purchase Agreement | Power Purchase Agreements in high risk countries are vulnerable to corrupt practices with regard to contracting. |
• Pre-determined auction rules Public auction • Due diligence of criteria and external legal assessment on transparency/lender's due diligence |
| Procurement | Sourcing of engineering, procurement, and construction services and components from suppliers exposes Scatec Solar to several corruption risks including selection of local vendors. |
• Management screening of framework agreements • Adherence to our Supplier Code of Conduct • Four eye principles |
| Community investments | Solar projects subject to political and governmental interests with regard to concessionary and licensing processes. Underlying risk of political corruption in form of donation or favoritism. |
• Zero tolerance principle • Anti-corruption training for all employees • Country risk assessment |
All operations, including projects and business partners of Scatec Solar, were assessed for risks related to corruption in 2018. Projects moving from opportunity, development, and structuring to the delivery and power-production phases are assessed through Decision Gates. There are four Decisions Gates with clear criteria and requirements
related to screening, compliance, and risks of corruption (see illustration below).
During 2018, all projects passing Decision Gate 3 were screened for risks related to corruption: three projects in Ukraine, one project in Argentina, and three projects in South Africa.
During 2018, we worked to make our internal reporting channels more accessible to employees. This work involved setting up a new platform on our Company intranet that compiles all reporting channels into one channel. We registered a total of four reported incidents through our whistle-blower channel, of which three related to corruption and one related to discrimination. The investigation of the three concerns related to corruption did not result in any confirmed incidents of corruption.
In line with one of our main goals from 2017, we started mandatory anti-corruption training for all employees, offered quarterly, which increased the availability of the course and encouraged new and existing employees to update their knowledge whenever necessary. In addition, we organised specific anti-corruption and integrity due diligence training for particularly exposed business units including our Supply Chain and Business Development units.
We will continue to raise awareness of corruption and of the high expectations we have for our employees and business partners. In 2019 we will:
• Review, audit, and update our Anti-Corruption programme and ensure that our Ethics Policy, Anti-Corruption
programme and Partner Conduct principles are available and known by all stakeholders
Scatec Solar's legal team was listed as one of the most influential and innovative in-house legal teams working in the Nordic region by the Legal 500 GC Powerlist.
suppliers, partners, and clients of the company through by BDO, a neutral third party. All whistleblowers have
All incidents reported in 2018 were received anonymously by BDO and investigated according to the established investigation procedure.
No breach of policies or regulations was detected.
corruption relating to the process of awarding contracts in a project. Both concerns were investigated
corruption linked to an allegedly private sale of damaged solar panels in a project. The concern was thoroughly investigated and cleared, as the sale was approved by
Scatec Solar purchased goods and services for approximately NOK 3.3 billion in 2018. Responsible procurement is therefore an important part of our sustainability efforts, and we seek to select and develop suppliers with strong sustainability practices. Our Supplier Code of Conduct is based on internationally recognised principles and outlines our requirements regarding ethical conduct and sustainable business practices.
Scatec Solar purchases goods and services from a wide variety of suppliers, from large international organisations to specialist local suppliers worldwide. We seek to form mutually beneficial and trusted relationships with our suppliers, and to treat all suppliers fairly, as well as to provide them with regular and honest feedback.
We regularly assess sustainability risks within our supply chain. The main risks include corruption, violations of labour rights, and poor social and environmental performance. We seek to mitigate these risks through our supplier development programme, transparent and fair tender processes, robust contracting, pre-production audits, and monitoring during production.
We source services and components mainly during the development and construction phases of our projects. The main procurement items include:
Our procurement process consists of several steps of initial information gathering. Before suppliers are invited to tender, they must pass a desktop due diligence that includes QHSE systems and sustainability aspects, and suppliers are shortlisted based on their scores.
Our supply chain department is responsible for ensuring compliance with Scatec Solar's Ethics policy, Procurement policy, Sustainability policy, and with the Operating System requirements. Our Supplier Code of Conduct includes more than 20 compliance topics such as compliance with laws, safety and security requirements, the anti-corruption policy, human rights laws, environmental practices, and restrictions on the use of drugs and alcohol.
The screening process involves a three-stage approach as illustrated on the next page.
2 Desktop due diligence of the documents listed in step 1 for the pre-qualification and during the bid
3 Final audit and in-depth due diligence on shortlisted vendors prior to recommendation to award
After the screening process, we seek to continuously monitor and control our work with and relationship to our suppliers. Before commencing their scope of work, all suppliers must sign our Supplier Code of Conduct and confirm conformance with the IFC's anti-corruption guidelines which we integrate into all our contracts, in addition to HSSE requirements, environmental and social requirements, and quality assurance and quality control requirements.
We appoint dedicated resources to follow up directly on quality and on implementing policies during the construction phase.
All new suppliers were screened for social and environmental criteria in 2018, and went through a financial and legal due diligence, screening both the company and the board members. All of them have also confirmed conformance to our Supplier Code of Conduct and to the IFC's anti-corruption guidelines.
According to our policy, we audited all suppliers in our major categories from whom we have procured in 2018. One logistics supplier was suspended from all procurement processes after we received an alert that the company was under investigation for corruption. We undertook 17 audits of subcontractors during 2018, including all main contractors in projects under construction. We completed at least one site audit for each project.
In 2018, we rolled out a Supplier Development Programme for key qualified suppliers. The programme focuses on pro-actively working with our key suppliers to enhance their social and environmental performance. Before they could enter the programme, we screened all participating suppliers on compliance with our environmental and social criteria. Together with the suppliers, we define new environmental and social targets to be evaluated annually.
During 2018 we have initiated a process to ensure that all our main suppliers and sub-suppliers have policies and measures in place to ensure that their products are free from conflict minerals.
For our South African operations, we have drafted a socio-economic development framework for procurement to support the economic empowerment goals of the South African government towards empowering and developing local businesses.
For training and development, all new team members of the supply chain received anti-corruption and anti-bribery training, a workshop on contracts (organised by our legal department), and personal- and team-development sessions.
We will continue to work with suppliers to optimize products to reduce their carbon footprints and to promote sustainable business practices. In 2019, our main goals are:
"In 2018, we rolled out a Supplier Development Programme for key qualified suppliers. The programme focuses on pro-actively working with our key suppliers to enhance their social and environmental performance".
Pål Helsing, EVP Solutions
The people of Scatec Solar make up who we are. A highly skilled and motivated workforce is essential to the success of our Company, to the execution of our strategy, and to our continued growth. A competent and motivated workforce driving towards the same goals is vital to our success.
2018 was a year of strong growth, reflected both in projects and people. The number of full-time employees reached 246, an increase of 32% compared to last year. In addition, we had 88 short-term employees and 107 consultants hired to deliver on our projects. Scatec Solar continues to develop a strong presence in key markets such as Egypt, Brazil, South Africa, Malaysia, and Ukraine. During the year, we recruited 68 highly skilled full-time employees and the turnover rate was 12%, slightly down from 13% in 2017.
As a global company, rapidly expanding into new regions, Scatec Solar continues to be characterised by great diversity. Our total global workforce is represented by 32 different nationalities, up from 31 in 2017. Diverse backgrounds and experiences help our organisation to remain flexible and agile, and ultimately to be better equipped for responding to fluctuating and complex markets and environments.
"Our global workforce is represented by 32 different nationalities. A diverse workforce is key to our success".
Toril Haaland, EVP People & Organisation
The gender diversity and age groups of the Executive Management, the Board of Directors, and Scatec Solar in total are presented in the table below.
In 2018, we increased the female representation at the Executive Management level to 14%. Our 2017 target of increasing the number of females globally by 10% from 2017 to 2018 was exceeded. However, due to a significant increase in employees the relative share of females declined from 2017 to 2018. This signals a need to continue our focus on gender diversity for the coming years. See appendix, section 5, for more information on employees and other workers.
Scatec Solar targets a value-based high-performance culture and encourages employees to take responsibility for their own development. We facilitate their doing so by providing a variety of learning and development opportunities throughout the employees' careers to ensure their continuous professional growth .
We regularly report and monitor the health and working environments of our employees. An overview of the sickness absence rate is shown in the table below. The rate has been stable for the total company for the last four years.
| GOVERNANCE BODY | GENDER (% FEMALE) | AGE GROUP (%) 2018 | |||||
|---|---|---|---|---|---|---|---|
| 2018 | 2017 | 2016 | 2015 | Under 30 | 30–50 | Over 50 | |
| Management | 14% | 0% | 0% | 0% | 0% | 57% | 43% |
| Board of Directors | 40% | 40% | 40% | 40% | 0% | 20% | 80% |
| Headquarters (Norway) | 47% | 44% | 40% | 31% | 7% | 80% | 14% |
| Total company | 33% | 37% | 28% | 26% | 18% | 71% | 11% |
| SICKNESS ABSENCE RATE (%) * | ||||
|---|---|---|---|---|
| 2018 | 2017 | 2016 | 2015 | |
| Headquarters (Norway) | 2.1% | 2.5% | 2.4% | 2.3% |
| Total company | 2.0% | 2.1% | 2.2% | 2.4% |
* Includes full-time employees (FTEs) and short-term employees (STEs)
New Online Learning Portal: Launched a new online learning and development portal to enhance internal learning across multiple departments and countries, offering both e-learning and classroom courses. Our mandatory courses totalled 1,129 training hours in 2018.
Performance Management: Strengthened and formalised our annual PDA (Performance, Development and Appraisal) process for all employees. Improvements included a new online platform and mandatory participation.
Leadership Development Programme: Established a new programme, with 30 leaders participating in the first round of the programme. The first workshop was kicked off in January 2019 in Oslo, Norway.
The Company's Global HR policy and related procedures are applicable to all employees, emphasising fair salary levels in accordance with local laws and regulations. In countries where labour unions and labour rights are not effectively enforced, we aim to find mechanisms for workers to express their grievances and protect their rights.
In 2019, we will work to further develop and operationalise our new People platform and the recently established Leadership Development Programme. We will maintain a strong focus on diversity throughout our recruitment processes globally. The following targets have been set for 2019:
of new joiners experienced their first day as welcoming and informative.
experienced the organisation as helpful in getting them up and running during their first
Our goal is to positively impact the communities in which we operate, both directly and indirectly. We strive to employ local labour, to identify needs in the local communities for our community development programmes, and to maintain open and transparent dialogue with relevant stakeholders.
Solar power plants impact local communities. Changes are usually positive, bringing social, economic, and infrastructure improvements. But the possibility of unintended consequences cannot be overlooked. Potential impacts include physical and economic displacement, changes in vegetation and infrastructure, and increased activity levels in the area. Impacts during construction such as traffic, noise, and dust are considered limited and effectively mitigated if and where nearby communities exist.
We often operate in countries where legal frameworks and governing structures do not necessarily protect the communities we might impact to the same extent as in more mature economies. Solid interaction with our project neighbours and establishing good relations are therefore essential. In all our operating projects, we have local community engagement and impact assessments. If dialogue with affected parties is not carried out in a timely and integrated manner, misinterpretations and concerns in local communities might arise.
Since our founding, we have gained considerable experience in working with local communities in different countries. We follow the IFC's Performance Standards when we develop our stakeholder engagement analyses and plans for all projects.
In 2018, we entered several new communities to construct solar plants across eight countries. Our key efforts were focused around stakeholder and community engagement, local recruitment processes, handling grievances, and planning and implementing new development programmes. We also worked to ensure that our stakeholder engagement plans and procedures are aligned with international standards across projects.
Without income generation, no community is stable or sustainable. Scatec Solar is strongly committed to contributing to job creation, and we employ local labour and suppliers as
far as possible, regardless of whether this is a requirement. This practice contributes to reducing unemployment rates and provides knowledge and technical skills transfer to the communities where we are present.
Most of the jobs created through our projects originate during the construction phase, which usually lasts 6–14 months. Workers are provided with important technical skills and experience that make them more eligible for future jobs.
In 2018, we generated approximately 6,000 jobs from our projects under construction, with the percentage of local employees averaging about 70–80%.
in 2018 from projects under construction – majority local and unskilled labour
We also try to hire locally for the permanent positions in the various stages of our value chain including engineers, plant managers, HSSE experts, civil and mechanical workers, security personnel, and community liaison officers , to mention a few. The table below shows some examples of permanent local job creation on a senior management level and other positions across our projects in operation for the last two years.
Project: Apodi with a capacity of 162 MW Number of jobs created during the peak construction period: 1,400 Percentage of local employees (citizens): 80%
Scatec Solar strives to use and strengthen local supply chains and entrepreneurs to the extent possible in our local operations. We seek to procure and contract between 20-30% of local goods and services such as accommodation, vehicles, staff, fencing and civil contractors, depending on the country and availability of goods and services. Once a solar plant is in operation, we usually achieve a minimum level of 60–80% of local contracts of goods and services.
| PERMANENT EMPLOYEES | 2018 | 2017 |
|---|---|---|
| Senior management level | ||
| Plant Managers | 11 | 9 |
| Other Levels | ||
| Operation & Maintenance operators | 48 | 32 |
| Community Liaison Officers | 10 | 8 |
"To perform our business in a sustainable way is the only way to ensure success for our projects and a respectful experience for the neighbors we affect".
Roar Haugland, EVP Sustainable Business & HSSE
There are various ways in which projects engage with local communities. To inform the communities about the project and about potential impacts, manage expectations, and to ensure local support and understanding of our projects, regular meetings with local leaders and representatives from local communities are held in all communities where we have a presence.
We usually experience a lot of engagement in local communities during the initial project phases of development and construction.
Topics and issues raised during local stakeholder meetings that are considered material are communicated to the management through biweekly progress reports, usually from project managers or other project team members.
Scatec Solar has a publicly available grievance mechanism for all projects through the corporate website and at each local project site. The total number of grievances received during 2018 for projects in operation, under construction, and under development totalled 92. We see a large increase in the number of grievances from 2016 to 2017, while there was a decline from 2017 to 2018. The higher numbers in 2017 and 2018 are primarily explained by additional projects under development or construction, which usually represents the
phases with most feedback and concerns from stakeholders of the projects.
Of the total number of grievances, 54 were related to the Mocuba project in Mozambique and 17 were related to our projects in Malaysia. The remainder were related to our projects in Brazil, South Africa, Egypt, and Honduras.
Most grievances in Mozambique were connected to the construction period, when workers raised concerns with subcontractors regarding salary payments, miscommunication, and other work-related issues. Some of the grievances were also linked to the final stage of the resettlement programme. All such grievances were solved during the year. Most of the grievances in Malaysia involved concerns related to impacts such as dust and minor damage to local roads and compensation payments for impacts on agricultural production.
The majority of grievances were solved by engaging with the local communities regularly and communicating our processes and principles. At the end of the year, five grievances in Mozambique and four grievances in Malaysia were still being resolved. Nine of these were resolved during the first month of 2019. The remaining four unresolved grievances from other locations are still being addressed and are expected to be resolvedin the near future.
| 2018 | 2017 | 2016 | 2015 | |
|---|---|---|---|---|
| Percentage of operations with implemented local community engagement, impact assessments, and development programmes |
100% | 100% | 100% | 100% |
| Number of grievances received | 92 | 118 | 16 | 19 |
| Number of grievances addressed and resolved | 79 | 103 | 10 | 19 |
The grievance mechanism is targeted towards individuals, communities, and companies who have feedback or concerns regarding our projects. It is a channel to present issues to the administration of the projects and is directly supervised by the sustainability unit.
All grievances are taken seriously and processed according to our procedures. We aim to have a response time of a maximum of 30 workdays. The mechanism is available at each local project site and in five different languages on our website: English, Arabic, Spanish, Portuguese, and French, and represents a valuable platform for engaging with communities.
• 8 ECD practitioners trained towards a full NQF Level 5 qualification
• Quarterly information sessions at 5 schools in the communities
Project: 40 MW project located in Mocuba, Mozambique Background: High risk malaria area Program partnership: Funded by Scatec Solar and Norfund. Implemented by IMCC (Integrated Malaria Control Consulting) and Scatec Solar.
Local job creation: Recruited four individuals from the local communities surrounding the project site to become spray operators in the first phase of the programme.
Current status: The first phase was kicked off in late 2018 with training of local spray operators. The local team is currently initiating indoor residuals spraying of households, for phase I.
To increase local job creation, we recruited four individuals from the local communities to become spray operators in our malaria programme in Mozambique.
Location: Quixere in the state of Ceará, Northeast region of Brazil Purpose: Establish an innovation and knowledge hub for existing and new entrepreneurs locally Partners: Partnership with CIEDS – NGO specialising in education and training with more than 20 years of experience Total budget: USD 88,000
Community mapping: Developed a Social Diagnosis Report mapping demographics, local challenges, and skills and education levels. Local authorities were involved in the mapping phase and an open dialogue was established to explore where we can contribute the most.
Current activities: Established a local project group and selected 20 established contractors and 50 new entrepreneurs to become part of the network, with access to specialists in their relevant fields.
Goal: To support the group with their local challenges and improve their existing businesses and new business proposals
Our targets for 2019 and onwards are outlined below:
• Hire 70–80% local workers in every project during the construction period
| INDICATOR | DESCRIPTION | PAGE NUMBER OR LINK |
|---|---|---|
| GRI 102 102-14 | Statement from senior decision maker | Page 4-5 |
| Organisational profile | ||
| GRI 102-1 | Name of the organization | Scatec Solar ASA |
| GRI 102-2 | Activities, brands, products and services | Annual Report. Pages 6-7 Corporate website: www.scatecsolar.com/about |
| GRI 102-3 | Location of the organisation's headquarters | Karenslyst Allé 49, 0279 Oslo, Norway |
| GRI 102-4 | Location of operations | Pages 6-7 Corporate website: www.scatecsolar.com/portfolio |
| GRI 102-5 | Ownership and legal form | Corporate website: www.scatecsolar.com/investor/share |
| GRI 102-6 | Markets served | Pages 6-7 |
| GRI 102-7 | Scale of organization | Pages 6-7 Annual Report |
| GRI 102-8 | Information on employees and other workers | Pages 46-48 + Appendix, Section 5 |
| GRI 102-9 | Supply chain | Pages 42-44 |
| GRI 102-10 | Significant changes to the organisation and its supply chain |
Pages 10, 42-44 |
| GRI 102-11 | Precautionary Principle or approach | As a signatory to the UN Global Compact we respect Principle 7 and it represents a guiding principle in assessing and managing risks related to the environment, HSSE, the supply chain, and other areas as described throughout this report. |
| GRI 102-12 | External initiatives | UN Sustainable Development Goals Global Reporting Initiative (GRI) UN Global Compact |
| GRI 102-13 | Membership of associations | Oslo Renewable Energy and Environment Cluster (OREEC) Norwegian Energy Partners (NORWEP) South African Photovoltaic Industry Association (SAPVIA) |
| GRI 102-41 | ||
| Collective bargaining agreements | 11% percent of the workforce are covered by collective bargaining agreements. Page 49 |
INDICATOR DESCRIPTION PAGE NUMBER OR LINK
| Report profile | ||
|---|---|---|
| GRI 102-45 | Entities included in the consolidated financial statements |
Appendix, Section 4 |
| GRI 102-46 | Defining report content and topic boundaries | Unless stated otherwise, the scope of the report includes the company Scatec Solar ASA: all employees, offices, and operations. |
| GRI 102-47 | List of material topics | Page 14 + Appendix, Section 2 |
| GRI 102-48 | Restatements of information | Not applicable. |
| GRI 102-49 | Changes in reporting | Not applicable. |
| GRI 192-50 | Reporting period | FY 2018 |
| GRI 102-51 | Date of previous report | FY 2017 |
| GRI 102-52 | Reporting cycle | Annually |
| GRI 102-53 | Contact point | Julie Hamre, Senior Sustainability Advisor [email protected] or [email protected] |
| GRI 102-54 | Claims of reporting in accordance with the GRI Standards |
This report has been prepared in accordance with the GRI Standards "Core option". |
| GRI 102-56 | External assurance | The climate reporting has been externally assured by DNV GL. |
| Stakeholder engagement | ||
|---|---|---|
| GRI 102-40 | List of stakeholder groups | Page 13 |
| GRI 102-42 | Identifying and selecting stakeholders | Pages 12-14 |
| GRI 102-43 | Approach to stakeholder engagement | Pages 12-15 |
| GRI 102-44 | Key topics and concerns raised | Pages 14–17 + Appendix, Section 1 |
| GRI 102-18 | Governance structure | Page 8 |
| GRI 102-16 | Values, standards, principles, and norms | Page 8 and throughout the report |
| INDICATOR | DESCRIPTION | PAGE NUMBER OR LINK |
|---|---|---|
| Indirect Economic Impacts | ||
| GRI 203-2 | ||
| Significant indirect economic impacts | Pages 51-60 | |
| Procurement Practices | ||
| Suppliers are defined as suppliers and service providers of goods | ||
| GRI 204-1 | Proportion of spending on local suppliers | and services to Scatec Solar Solutions (project execution) unless otherwise specified. Pages 42-44, 53-54 |
| Supplier Environmental and Social Assessment | ||
| GRI 308-1 | New suppliers that were screened using environmental criteria |
100%. Pages 42-44 |
| GRI 414-1 | ||
| New suppliers that were screened using social criteria |
100%. Pages 42-44 | |
| Anti-corruption | ||
| GRI 205-1 | Operations assessed for risks related to corruption |
All Scatec Solar's operations are assessed for risks related to corruption. Page 40 |
| GRI 205-3 | Confirmed incidents of corruption and actions taken |
No confirmed incident of corruption registered in 2018. Page 40 |
| Water | ||
| GRI 303-1 | Interactions with water as a shared resource | Page 27 |
| GRI 303-2 | Water withdrawal | We aim to report fully on water withdrawal from our operations in 2019. Page 27 |
| Emissions | ||
| GRI 305-1 | ||
| Direct (Scope 1) greenhouse gas emissions | Pages 21, 28-30 | |
| GRI 305-2 | ||
| Energy indirect (Scope 2) greenhouse gas emissions |
Pages 21, 28-30 | |
| GRI 305-3 | ||
| Other indirect (Scope 3) greenhouse gas emissions |
Pages 21, 28-30 |
| INDICATOR | DESCRIPTION | PAGE NUMBER OR LINK |
|---|---|---|
| Environmental and Socio-economic Compliance | ||
| GRI 307-1 | Non-compliance with environmental laws and regulations |
No significant fines or non-monetary sanctions for non-compliance with environmental laws and/or regulations in 2018. |
| GRI 419-1 | Non-compliance with laws and regulations in the social and economic area |
No significant fines or non-monetary sanctions for non-compliance with social and economic laws and/or regulations in 2018. |
| Employment | ||
| GRI 401-1 | New employee hires and employee turnover | Page 46, Appendix section 5 |
| Training and education | ||
| GRI 404-2 | ||
| Programmes for upgrading employee skills and transition assistance programmes |
Pages 48-49 | |
| Diversity and Equal Opportunity | ||
| GRI 405-1 | Diversity of governance bodies and employees | Page 48 |
| Non-discrimination | ||
| GRI 406-1 | Incidents of discrimination and corrective actions taken |
One reported incident of discrimination in 2018. Page 40 |
| Occupational Health and Safety | ||
| GRI 403-2 | ||
| Types of injuries and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities |
Pages 32-36 | |
| Freedom of Association and Collective Bargaining | ||
| GRI 407-1 | Operations and suppliers in which the right to freedom of association and collective bargaining might be at risk |
The percentage of full-time and short-term employees who are covered by formal collective bargaining agreements is 11%. Page 49 |
| INDICATOR | DESCRIPTION | PAGE NUMBER OR LINK |
|---|---|---|
| Security Practices | ||
| GRI 410-1 | Security personnel trained in human rights policies and procedures |
Page 27 |
| Human Rights Assessments | ||
| GRI 412-1 | Operations that have been subject to human rights reviews or impact assessments |
Page 23-25 |
| Local Communities | ||
| GRI 413-1 | Operations with local community engagement, impact assessments, and development programmes |
100%. Pages 22-30, 51-60 |
| GRI 413-2 | Operations with significant actual and potential negative impacts on local communities |
Pages 23-30, 51-60 |
| Public Policy | ||
| GRI 415-1 | Political contributions | No political contributions in 2018. |
Key topics and concerns that have been raised through stakeholder engagement, including:
| STAKEHOLDER GROUP | ENGAGEMENT (102-43) | KEY CONCERNS (102-44 I) | RESPONSE (102-44 II) |
|---|---|---|---|
| National governments and customers |
Close dialogue with national governments is a natural part of our operations and our projects often involve regular dialogue. This dialogue is usually conducted by our project development team or community liaisons. |
The main concern of governments in host countries, that will often also be our customers, is local impacts and value creation, which usually include the economic value of the projects, increased access to energy, the potential for direct and indirect job creation. |
Refer to chapter 3 |
| Local government and communities |
A social impact assessment is conducted in planning all projects and based on this assessment, a plan for stakeholder engagement is developed. Scatec Solar emphasises continuous dialogue with local and regional communities to manage and meet expectations. A dedicated community liaison officer (CLO) is appointed in all our locations. |
The main concern of local governments and communities is also local impacts and value creation, specifically job creation, local content, and education/training. |
Refer to chapter 3 |
| Co-investors and partners |
A detailed dialogue regarding expectations is the starting point for all partnerships, and is detailed in our agreements. Depending on the partnership, we maintain a close dialogue with our partners. |
Co-investors and partners are concerned that we be a trustworthy business partner who applies international best-practice standards such as the IFC's Performance Standards and the Equator Principles to manage environmental and social impacts. Investors with a specific impact-investment focus are also concerned with the local value creation, and with promotion of green energy. Some of our partners are also concerned with our ability to promote Norwegian exports |
Refer to chapters 2 and 3 |
| Financing partners | Financing partners are mainly engaged prior to providing capital, and often have very specific requirements regarding how environmental, social, and governance factors are assessed and managed. |
Financing partners also focus on our business conduct and on our efforts to ensure that we are a trustworthy business partner. Local financiers and financiers with an impact focus are also concerned with our local impact and value creation regarding, for example, access to energy and job creation. |
Refer to chapters 2 and 3 |
| Shareholders | Existing and potential shareholders are engaged on a regular basis and often express their concerns and expectations directly to top management. |
Shareholders are concerned with the ability to create value in the short and longer terms and with governance aspects such as anti-corruption and being a trustworthy business partner. |
Refer to chapter 2 |
| Employees | Our employees make up our company and who we are. |
Many of our employees are proud of our social and environmental impact through promoting renewable energy and our ability to demonstrate local value creation. Employees are also concerned about own working conditions, health and safety, and about opportunities to develop competencies and their career paths. |
Refer to chapters 1, 2 and 3 |
| Contractors | Contractors concerns are heard as part of the project they are involved with and our contractors are considered as if they were our own employees when on our sites. |
Contractors that work on our projects are concerned with their working conditions, fair wages, health and safety and opportunities to develop competencies. |
Refer to chapter 2 |
| STAKEHOLDER GROUP | ENGAGEMENT (102-43) | KEY CONCERNS (102-44 I) | RESPONSE (102-44 II) |
|---|---|---|---|
| Norwegian government and regulators |
The Norwegian government is engaged through the various institutions that are interested in our efforts in Norway and in other countries. |
The Norwegian government regulates our efforts and is also interested in supporting the positive impacts of our efforts in Norway and abroad. |
Refer to chapters 1 and 3 |
| Suppliers | Supplier visits are undertaken each year to monitor and establish a platform for good dialogue and feedback. |
Our suppliers are concerned with fair pricing, working conditions, and health and safety. |
Refer to chapter 2 |
| NGOs | NGOs that represent local communities are engaged through each phase of the project. Environmental NGOs in Norway are engaged through collaboration with regard to promoting renewable energy. |
NGOs in the local communities are concerned with our ability to create local value. Norwegian environmental NGOs support us in our efforts to promote renewable energy. |
Refer to chapters 1 and 3 |
Promoting solar energy: Take on a role to promote solar energy and contribute to the reduction of greenhouse gas emissions. Share knowledge and experiences of the benefits of renewable energy in dialogue with policy makers, local authorities, investors and other partners.
Climate risk and opportunities: Identify, evaluate and respond to potential climate-related risks and opportunities to our people, business and physical assets
Innovative and green finance solutions: Explore and leverage on innovative ways to raise capital such as carbon and climate finance.
Biodiversity: Avoid and minimize negative impacts on biodiversity (ecosystems, plants, animals) and ensure that this is sustainably managed and conserved for future generations
Water management: Promote responsible and efficient use of water in sourcing of materials, construction and operations
Waste management: Prevent or minimize the impact of waste
Greenhouse gas (GHG) emissions: Report on our company's greenhouse gas emissions to establish an overview of our own emissions and how to potentially reduce them
End-of-life management: Ensure that our solar energy systems can be reused, recycled or disposed safely through designing recyclable modules, implementing take-back systems etc.
Land resettlement: Avoid involuntary resettlement wherever possible and minimize the impact on individuals displaced through mitigation measures such as fair compensation and improvements to living conditions.
Stakeholder engagement: Interact with and influence project stakeholders to the overall benefit of the project and its advocates through consultation, communication, negotiation, compromise, and relationship building
Human rights: Respect human rights and recognize our responsibility of avoiding the infringement of rights of local communities or other stakeholders wherever the company operates
Local job creation and training: Contribute to local job creation and skills transfer to the communities where we operate
Local development programs: Implement community development programmes in the local communities where we have operations addressing local needs and social challenges
Community engagement: Ongoing communication in communities about the project and potential impacts, manage expectations and ensure local support and understanding of our projects
Ensure continuous focus on a zero-tolerance approach to bribery and corruption and strive for high standards of business ethics.
Select suppliers based on relevant sustainability criteria including high environmental standards and performance, strong social performance (related to e.g. health and safety and working conditions and respect for human rights) and strong scores on transparency and anti-corruption.
Health, Safety, Security and Environment (HSSE) Health, safety and environment: Continuously work for zero harm to personnel, materials and the environment
Labour conditions (employees): Ensure fair working hours, wages and physical conditions for all employees working on site
Labour conditions (contractors): Ensure fair working hours, wages and physical conditions for all contractors' employees working on site
Contractor safety and monitoring: Define and communicate our health and safety standards to contractors and monitor their performance
Security and emergency preparedness: Prepare for and be able to respond to emergencies and minimize all consequential impacts/losses
Talent attraction and retention: Have systems in place to attract new talents and retain existing talent
Human capital development: Develop human capital (knowledge, skills and abilities) in our organization through relevant training and education
Diversity and equal opportunity: Provide equal opportunities and value diversity of people (gender, cultural background and age)
Freedom of association & collective bargaining: Support the right of workers to organize unions and associations to pursue their interests and take collective action
Scatec Solar uses The GHG Protocol - Corporate Accounting and Reporting Standard to calculate its emissions. Direct greenhouse gas emissions reported under Scope 1 include those resulting from onsite backup generators, Scatec Solar vehicles and other maintenance activities. Emissions factors for fuels are from the UK Government's Conversion Factors for greenhouse gas reporting,2018. Indirect emissions reported under Scope 2, are reported for offices and onsite maintenance facilities, with emissions factors from the IEA's statistics with a 3 year rolling average from 2014-2016, CO2 Emissions from Fuel Combustion 2018 edition. Scope 2 emissions are reported using both the market-based and location-based method. Scatec Solar does not purchase any guarantees of origin (GoO). Scope 3 emissions are currently reported for business related flights using an average factor from the UK government conversion factor list.
Refer to the Annual Report 2018 for a complete list of all the entities included in the organisation's consolidated financial statements.
See tables on next page for information on employees and other workers.
| MEN | WOMEN | TOTAL | |
|---|---|---|---|
| Permanent employment | 164 | 82 | 246 |
| Temporary employment | 148 | 35 | 183 |
Temporary employment=Short term + consultants
| EUROPE | AFRICA | LATIN AMERICA | MENA | ASIA | TOTAL | |
|---|---|---|---|---|---|---|
| Permanent employment | 90 | 91 | 30 | 13 | 22 | 246 |
| Temporary employment | 55 | 36 | 29 | 43 | 20 | 183 |
Temporary employment=Short term + consultants
| MEN | WOMEN | TOTAL | |
|---|---|---|---|
| Full time | 305 | 114 | 419 |
| Part time | 7 | 2 | 9 |
| Total | 312 | 116 | 428 |
| AGE | TURNOVER 2018 % |
|---|---|
| 18 - 29 | 2.8 |
| 30 - 49 | 12.6 |
| 50 - 70 | 20.4 |
| GENDER | TURNOVER 2018 % |
|---|---|
| Male | 10.1 |
Female 15.2
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