Materiality

Central to our Sustainability Framework is the principle of double materiality. This approach considers sustainability issues relevant in terms of their potential impact on the financial performance of Drax, but also in terms of how our business activities affect the environment and society.

Building on our single materiality assessment in 2023, results of which can be found in our 2023 Annual Report and Accounts, in 2024, we completed a Double Materiality Assessment.

This assessment evaluates the risks and opportunities that may arise from sustainability factors – those that may influence our operations and those that may be influenced by them. The process in 2024 involved reviewing the external landscape and single materiality completed in 2023 to determine a list of 22 material themes. The themes, aligned with the Corporate Sustainability Reporting Directive (CSRD), were evaluated in workshops with the sustainability team, and wider stakeholders. Using these themes, we interviewed colleagues to gather diverse perspectives from across Drax. The process also included external interviews across key stakeholder groups. An employee survey, issued to a sample of colleagues, asked them to rank the relative importance of the 22 topics based on their impact and financial materiality.

The 22 topics presented below (A-Z) all represent materially relevant topics to Drax. The relative impact and financial materiality determined by the stakeholders who took part is demonstrated by the score (out of 4), presented in columns “Impact Materiality” and “Financial Materiality”. There is generally a strong correlation between the topic scores for impact and financial materiality, indicating that topics scoring high on impact also tend to score high on financial materiality.

The assessment identified six topics that are deemed as our more pressing sustainability priorities:

• Climate change mitigation and adaptation;
• Air pollution;
• Community impact;
• Corporate culture, ethics and compliance;
• Employee health, safety and wellbeing; and,
• Responsible procurement and sourcing.

These six represent areas where Drax has the most significant impact, and/or where our associated monitoring, and management programmes have the greatest financial sway (both positive/negative). This assessment was important to the development of our 2030 Sustainability Framework and reflects pressing issues that enable us to identify key focus areas for action and guiding sustainability efforts with clarity and purpose for the next years.