At Drax, we are committed to conducting business ethically, with honesty and integrity, and in compliance with all relevant laws and regulations. We do not tolerate any form of bribery, corruption, human rights abuse, or other unethical business conduct.
Our business ethics documentation framework consists of principles, policies, and guidance. The principles are set out in our Drax Code of Conduct (Drax Code), which identifies the behaviours expected from permanent and, as relevant, non-permanent workers on a broad range of topics. The importance of complying with policies and guidance forms part of our current terms of employment in the UK. The Drax Code, including a series of training videos, is a mandatory read for all UK and Drax Biomass new starters – both permanent colleagues and, as relevant, non-permanent workers. The consequence of failing to comply with the Drax Code is clearly articulated in the Code itself.
Our business ethics policies and guidance documents provide further instruction. These include our policies relating to Anti-Bribery and Corruption (including conflicts of interest), Anti-Fraud, Anti- Money Laundering and Prevention of Proceeds of Crime and Terrorist Financing, Corporate Criminal Offences (Anti-Facilitation of Tax Evasion), Fair Competition, Financial and Trade Sanctions, Human Rights, Privacy and Speak Up (whistleblowing), and our guides, including topics such as Conflicts of Interest, Gifts and Hospitality, Ethical Due Diligence, Privacy and how to speak up.
Responsibility for Ethics and business conduct
Governance of our business ethics programmes is overseen by the Drax Ethics and Business Conduct Committee (EBCC), a sub-committee of the Executive Committee. The EBCC comprises senior leaders, meets quarterly, and was chaired by the CFO during 2021. A formal report on the activities and decisions of the EBCC is provided annually to the Audit Committee. Everybody at Drax is personally responsible for their ethics and business conduct. Drax managers are responsible for demonstrating leadership on ethical matters and supporting their teams to apply Drax’s ethical principles.
Our Business Ethics team manages our business ethics programmes. They take steps to understand our risk profile as well as developing, deploying, and maintaining where appropriate the associated policies, procedures, awareness raising communications and training materials. The team also monitors and evaluates compliance, and investigates any potential breaches of policy, supporting our internal and external Speak Up (whistleblowing) channels. Our Internal Audit function provides assurance on the robustness of our business ethics programmes and any recommendations for improvement are addressed.
The Business Ethics team conducts annual risk assessments of each of the business ethics programmes. This is to ensure policies and procedures remain fit for purpose and to recommend any further mitigation measures. Our annual review timetable includes a review of Drax gifts and hospitality records and a colleague business ethics declaration, which was completed by 100%* of colleagues in 2022 (covering 2021). [* Excludes employees on long-term absence from Drax during the declaration period, and does not include Pinnacle colleagues joining the business during 2021.]
Results of annual reviews, details of investigations conducted (including Speak Up (whistleblowing) reports), audit outcomes and completion of actions are reported to both the EBCC and the Audit Committee. The Board receives an update on Speak Up (whistleblowing) reports and relevant controls at each meeting.
Working with Others
We are a signatory to the UN Global Compact (UNGC) and maintained our representation on their Modern Slavery Working Group in 2021. This enables us to benchmark our compliance programmes and exchange experience with peers, with a particular focus on our response to the UK Modern Slavery Act.
We seek to work with third parties whose standards are consistent with our own. Third parties are subject to proportionate, risk-based due diligence checks and, where required, are continually monitored throughout the term of the contract via our third-party due diligence system. In cases where concerns are raised, we follow an EBCC-approved escalation protocol. Depending on the nature of the concern raised, we may seek to collaborate on remedial action or on a conditional basis with a third party. However, where necessary, we may decide not to engage with a new third party, or to end an existing business relationship.
Our Supplier Code sets out the commitments and standards we expect of our third parties.
Anti-bribery and anti-corruption
Our internal processes ensure consistency with our zero-tolerance approach to bribery and corruption. Geographic risk is factored into our third-party ethical due diligence process and system. Conducting business in certain higher risk countries must receive prior approval from the EBCC.
Third parties in higher risk countries receive a higher level of initial due diligence and ongoing monitoring. We also screen the affiliates (directors and shareholders) of third parties identified as potentially higher risk and refresh their information on a more frequent basis compared to other suppliers. Ongoing monitoring is performed and new information is provided to the EBCC, as appropriate.
We are committed to conducting our business in accordance with all applicable fair competition laws and we do not tolerate any anti-competitive and anti-trust behaviour or activity.
Our fair competition compliance programme includes a Fair Competition Policy and guide and covers both UK competition law and US anti-trust law. We provide eLearning for colleagues who, through their roles, need to know more and targeted learning for our ‘at higher risk’ teams.
Data privacy and security
We take seriously the privacy and security of the personal data we control. We are committed to maintaining effective privacy and security programmes to ensure that our people, customers and the third parties with which we engage have confidence in our data handling practices.
Our privacy programme is managed by the Data Protection team and overseen by the EBCC. It is implemented through policies, work instructions, privacy notices, data protection impact assessments, third party due diligence questionnaires, contractual terms, awareness raising and training.
We continue to mature our security framework, further embedding security risk management controls into our business change activities, improving cyber technical capabilities and expanding security controls and architecture into our operational technology systems.
We maintain a risk-based security controls framework aligned to industry standards, to protect our business, colleague and customer data and to meet our regulatory requirements. In addition to traditional IT security measures, we use cyber technologies to detect, respond to and resolve cyber threats and attacks. We are conscious that such threats continue to develop quickly and our security programme seeks to evolve our controls and response to cyber threats accordingly.
Labour and human rights
Our commitment to the protection of human rights includes not tolerating the use of underage workers or forced labour. This is set out in our Human Rights Policy, Drax Code and Supplier Code.
Our Supplier Code outlines the standard of ethical business conduct we expect from our suppliers. Businesses in our supply chain should offer a safe workplace for their employees that is free from harm, intimidation, harassment, and fear. The Supplier Code emphasises our requirement for our suppliers to challenge unethical behaviour and promote a “speak up” culture and provides the details of our available Speak Up channels for their use in multiple languages.
Supply chain human rights (modern slavery)
Our Modern Slavery Working Group, chaired by a member of the Business Ethics team, oversees a three-year rolling programme, and reports quarterly to the EBCC.
Speak Up (whistleblowing)
As part of our commitment to transparency, openness and continuous improvement, we actively encourage those working for and on behalf of Drax, or any of our third parties, to raise genuine concerns about practices which could breach laws, regulations or our own ethical standards. Drax has a zero tolerance of retaliation or victimisation and we have processes in place to apply appropriate consequences, should an individual retaliate against or victimise a reporting individual in any way.
During 2021, 14 reports were raised across both our internal and external channels. This is an increase from nine in the previous year and reflects our continued efforts to promote an open and approachable culture of “speaking up” across Drax.
Additional ethics and integrity data is available in our ESG Data Supplement
Corporate Criminal Offences (CCO) (anti-facilitation of tax evasion)
We have designed our ethical due diligence and payment procedures to make sure we conduct our business in accordance with all applicable tax laws. We commit to never knowingly being complicit in a third party evading taxes.
Financial and trade sanctions
We are committed to conducting our business in accordance with relevant financial and trade sanction regimes. This is predominately reflected in our ethical due diligence and contracting processes.