Approach to Sustainability - Drax
Building a sustainable business

At Drax, being a sustainable business means achieving a positive economic, social and environmental impact as part of the Group’s strategy.

Ratings and Initiatives

We are a member of FTSE4Good. View certificate [PDF]

CDP is a global environmental disclosure system for investors, business, cities, states and regions. We provided a Group response to the CDP Climate Change and Forests questionnaires in 2018.

We have been a UN Global Compact (UNGC) participant since 2018, demonstrating our commitment to the universal principles on human rights, labour, environment and anti-corruption. The Drax Group Annual Report and Accounts 2018 forms our latest Communication on Progress.

Governance

The Board has ultimate responsibility for the Group’s economic, social and environmental performance. The Executive Committee, chaired by the Group Chief Executive, directs sustainability and oversees performance. Biomass sustainability performance and progress is reviewed formally by the Board and the Audit Committee, once a year. In addition to this formal review, supplementary papers are submitted as required.

The Executive Committee reviews sustainability performance and progress. As required, sustainability issues are referred by the Executive Committee to the Board.

The Group Director of Corporate Affairs leads Drax’s sustainability programme and is a member of the Executive Committee.

The Executive Committee has oversight of risk, ethics and business conduct for the Group. This responsibility is discharged through the risk management framework, as described in the principal risks and uncertainties section in our Annual Report and Accounts 2018.

Renumeration and incentives

Total Recordable Injury Rate (TRIR) is included in the Group scorecard of strategic and Business Plan measures. Scorecard performance is one measure of our long-term incentive plan.

What Matters Most

We have identified non-financial priorities that are material to our business and important to our stakeholders. Our 2018 progress and performance is reported under each priority area as follows:

EnvironmentCustomersPeople
• Carbon emissions
• Environmental impact
• Sourcing sustainable biomass
• Customer service excellence
• Enabling our customers
• Health, safety and wellbeing
• People and culture
• Ethics and integrity
• Positive social impact

Impact on the Sustainable Development Goals

The 17 United Nations’ Sustainable Development Goals (SDGs) are a blueprint to achieve a better and more sustainable future for all. We have identified six SDGs and associated targets where we can have the greatest positive impact.

ENVIRONMENT

Climate Action

We contribute to SDG 13 to take action to combat climate change and its impacts across our business.

Life on Land

We promote the implementation of sustainable forest management in all working forests that we source from.

CUSTOMERS

Affordable and Clean Energy

We contribute to increasing the share of renewable energy in the global energy mix.

Sustainable Cities and Communities

We contribute to SDG 11 to make cities and human settlements inclusive, safe, resilient and sustainable.

PEOPLE

Industry, Innovation and Infrastructure

We contribute to upgrading infrastructure and retrofitting industries to make them sustainable, with increased resource efficiency and adoption of clean and environmentally sound technologies.

We contribute to upgrading the technological capabilities of our sector, encouraging innovation and contributing to research and development spending.

Partnerships for the Goals

We proactively collaborate and engage with all stakeholders and seek partners to achieve our purpose of ‘Enabling a zero carbon, lower cost energy future’. This directly enhances the global partnership for sustainable development to support the achievement of the SDGs.

Stakeholder Relations

Identifying stakeholders

Like many businesses, we have a diverse group of stakeholders who are affected by our activities across the United Kingdom, Europe and the US. These include our shareholders, employees, customers, suppliers, communities, government regulators and policymakers, academia, non-governmental organisations (NGOs), opinion formers and the media.

We communicate with different audiences regularly and keep track of stakeholder relationships. We use stakeholder feedback to inform the planning and delivery of our business activities.

We conduct an ongoing mapping exercise to assess how the stakeholder landscape is developing and to ensure we are recognising the expectations of a broad range of stakeholders and to ensure that across our businesses we do the right thing every day.

Communicating with stakeholders

We recognise that to enable a zero carbon, lower cost energy future we need to work with a diverse range of partners. That is why we spend time talking with and listening to our stakeholders. We use the most appropriate communication channels to listen to our stakeholders and ensure they can access the information they need about our policies, practices and strategic direction.

Here we highlight how our external engagement in 2018 has informed the way we operate our business.

Communities and local authorities

Over the course of the year we engaged regularly with the communities around our businesses through quarterly community meetings, supporting local initiatives and formal drop-in sessions focused on our planning projects.

> Outcomes in 2018

We amended the design of our Repower planning application in response to feedback from local residents.

Customers

In B2B Energy Supply, we engaged with our customers through channels including social media, our website, telephone lines and our complaints procedure. Our energy services teams offered accelerator workshops that develop tailored energy solutions delivering value to our customers through self-generation, onsite storage and advanced sustainability initiatives.

> Outcomes in 2018

We introduced online quote and join, so small businesses can come on supply via our website. We have turned our Ipswich office into a showcase for our energy services solutions with solar panels, electric vehicle charging points, an electric pool car, and installing energy efficient LED lighting.

Employees

We maintain a regular dialogue with our employees about our strategy, plans and performance and the role they play in delivery. Through our Voice forums, briefings, townhalls, Q&A opportunities and our annual employee survey, colleagues can raise issues that are important to them and provide feedback on our progress towards creating a great place to work.

> Outcomes in 2018

We committed to implement Group and business action plans, to address key themes raised by our employee survey.

Government and regulators

We frequently engage with regulators and policymakers in the UK, Europe and US to ensure our business understands and contributes to the evolving regulatory agenda. Over the course of 2018, we engaged with these audiences on a broad range of topics, including biomass sustainability; carbon pricing; carbon capture and storage policy; industrial strategy; and innovation, training and skills.

> Outcomes in 2018

We signed joint letters with other utilities and NGOs to promote strong carbon pricing in the UK and across Europe. We joined the Powering Past Coal Alliance, to support the UK Government in promoting reduced coal use globally.

Non-Governmental Organisations (NGOs)

We are in regular dialogue with a variety of domestic and international NGOs on energy, climate and forestry issues. They challenge our thinking and help us continue to refine and enhance our practices. In 2018, our outreach included participating in a series of roundtables focusing on our biomass sourcing.

> Outcomes in 2018

We published an online tool, ForestScope, that enables members of the public to track wood fibre consignments across our supply chain in the Southern United States.

Regulator and network businesses

We have engaged with Ofgem and National Grid on the need to deliver a secure and reliable network at least cost to the consumer. This is in addition to promoting efficient investment decisions and market behaviours via the system operator incentive scheme, industry licence code and charging arrangements.

> Outcomes in 2018

We agreed to engage with National Grid’s Price Control RIIO-2 work.

Schools

We engage with schools local to our businesses on Science, Technology, Engineering and Mathematics (STEM), skills and employability. At Drax Power Station, our tours are focused on learning outcomes and tailored for visitors of all ages.

> Outcomes in 2018

Our outreach to local schools included: Opus Energy delivering interactive renewable energy lessons and Haven Power employees running a ‘Learning About Work Day’, where students practiced interview skills and received feedback on applications and CVs.

Shareholders and investors

Sharing timely and accurate communication with our shareholders and capital markets is central to our relationship with shareholders, investors and other financial stakeholders. We shared this information through a wide range of channels, including our Annual General Meeting and our full-year and half-year results, as part of an ongoing investor relations programme.

We also aim to build strong relationships with all our financial stakeholders.

> Outcomes in 2018

In 2018, we communicated with our major shareholders on changes to our Remuneration Policy.

Suppliers and contractors

We implemented a supplier engagement programme with our sustainable biomass supply chain. Our engagement included following up on claims raised by media monitoring and sharing latest academic reports and best practice.

> Outcomes in 2018

We created a guide for landowners in the Southern United States to achieve their sustainable management goals.

Think tanks and academics

Over the course of 2018 Drax sponsored several PhDs at British universities focusing on topics relating to a low carbon energy future including electric vehicles, battery storage and biomass sustainability. In collaboration with Imperial College London and E4tech, we published a series of research reports looking at the future of the energy sector in the UK and globally, including Electric Insights, Energising Britain and Energy Revolution: A Global Outlook.

> Outcomes in 2018

We started working with Forest Research to revise our woody biomass sourcing policy, building on analysis they produced for the European Commission.

Trade and Industry Associations

We are actively engaged with trade bodies focusing on energy and sustainable forestry. These include the Sustainable Biomass Program, Bioenergy Europe, the UK Carbon Capture and Storage Association, Energy UK, Eurelectric and the US Industrial Pellet Association. We are also members of organisations promoting sustainable business practices, including the Confederation of British Industry, POWERful Women and Women in Science and Industry.

> Outcomes in 2018

We participated in several Sustainable Biomass Program working groups, including work on greenhouse gas calculation requirements and streamlining the data transfer system.