Materiality Matrix

> Methodology
> Analysis

 

Methodology

Designed in line with the guidelines laid down in the AA 1000 standard by AccountAbility, the matrix has first been drawn up along geographical lines, before being consolidated with the Group’s strategy. Initially focused on Europe, the analysis was then extended in the beginning of 2015 to all areas in which ENGIE has operations. In order to keep the balance between the Group’s current geographical presence and its international development strategy, it was decided to give equal weight to these two areas. The matrix thus presents a global picture of the issues at stake for the Group.

The work drew on the mapping of ENGIE’s key stakeholders, which were selected according to their degree of proximity with the Group or their influence over its strategy:

  • Commercial community: corporate and individual customers, industrial partners, suppliers and subcontractors;
  • Financial community: equity/fixed-income/SRI investors, retail shareholders, sell-side analysts, rating agencies;
  • Human resources: all employees, managers, employee representatives;
  • Public sector: local authorities, national government bodies, European and international institutions;
  • Civil society: NGOs and charities, professional associations, neighborhood organizations, academic institutions, media.

ENGIE has identified the key issues and assessed their importance to the Group and to its stakeholders based on an analysis of existing information and internal and external consultations:

  • Internal interviews with Divisions in relations with stakeholders;
  • External interviews in France, the UK, the US, Chile, Peru and Thailand: corporate customers, suppliers, SRI investors, local authorities, NGOs and media;
  • A panel of individual shareholders in France;
  • An electronic survey of the general public in France and in Belgium.

An internal taskforce led by the Environmental & Societal Responsibility Direction with representatives from ENGIE’s five business lines and support divisions (purchasing, finance, ethics, institutional relations, human resources and risk management) was involved throughout the process.

Analysis

The materiality matrix highlights the very high expectations shared both by ENGIE and its stakeholders as regards the Group’s basics, i.e. business conduct, facility safety, health & safety, local acceptance, greenhouse gas emissions and reputation. These issues are intimately linked with the Group’s activities.

The matrix also shows high expectations concerning ENGIE’s goals and how to achieve them, i.e. energy transition, balanced energy mix, customer relationships, employee development, employee development, etc. These issues are crucial for value creation in the short, medium and long-term. ENGIE notes the high expectations concerning dialog with its stakeholders, which confirms the action plans settled by the Group.

Lastly, expectations are also identified concerning prospective issues or matters pertaining to specific stakeholders, i.e. water, waste, personal data protection, etc. These are issues to be monitored closely because their importance to the Group or its stakeholders may change in the short or mid-term.

This exercise is part of ENGIE’s analysis of its markets’ evolutions and thus contributes to its global strategy. Indeed, some issues enter the major global trends identified by the Group, such as the evolution towards energy transition, based on decarbonization, digitalization and devolution of energy system.

Close examination of the results also pointed divergences between the two geographical areas. Issues linked to innovation and personal data protection are indeed considered more important in Europe than internationally for ENGIE’s stakeholders. On the contrary, some environmental issues such as water and waste management appear as crucial for international stakeholders.

The large majority of the issues are already covered by ENGIE’s strategy and policies. The Group has implemented concrete measures concerning in particular the high-priority issues for stakeholders:

  • Adaptability of the business model: ENGIE’s strategy is predicated on a well-balanced and resilient business model, shaped by a long-time focus on international expansion, on liquefied natural gas and on complementary business activities across the value chain.

     

  • Innovation: Daring and risk-taking are part of ENGIE’s culture. In 2014, expenditure on research and technological development amounted to €189 million. In order to stimulate innovation within the Group and to capture new growth drivers, a dedicated new entity « Innovation and new business » was set up in 2014, along with a €100 million investment fund New Ventures, aimed at helping innovative startups involved in energy transition.

     

  • Business conduct: In keeping with its values and commitments, ENGIE seeks in all circumstances to act in accordance with the laws and regulations in force in the countries where it operates. The ethics policy is subject to an annual review procedure leading to the publication of a report which is presented to the General Management Committee and to the Ethics, Environment and Sustainable Development Committee of the Board of Directors. In May 2014, the Group has adopted a Reference Document of Human Rights, putting together its ethical commitments to human rights and planning for the implementation of proper operational processes, in line with the changes in the international context.

    For further information
    Ethics
    Ethics and Compliance

     

  • Local acceptance: The responsible growth model developed by ENGIE integrates societal commitments into creating shared value and sustainable development. This means especially creating direct and indirect jobs, implementing widespread consultation upstream of its projects, and forging partnerships with civil society.

 

  • Reputation: Reputation is an intangible asset built on the Group’s values, its operational excellence and its legitimacy as a utility. Through its policies, organization, procedures and governance, ENGIE endeavors to prevent operational risks and smear attacks that could affect its reputation.

     

  • Health and safety: ENGIE’s health and safety policy aims to protect the physical and psychological health of Group employees and partners, while continuously improving quality of life at work. In 2014, ENGIE has continued to see a decrease in its accident severity and frequency rates beyond the objective set for 2015 (accident frequency rate of less than 4, -45% since 2008).

     

  • Facility safety: ENGIE carries out its industrial activities in compliance with a framework of safety regulations and has implemented a safety management system at each site. Audits of the facilities in question are performed regularly and the risk of industrial accidents is part of the Group’s internal control program. ENGIE has updated its environmental and health risk mapping.

     

  • Greenhouse gas emissions: ENGIE develops a diversified energy mix that promotes renewable energies and designs energy efficiency solutions intended for its own facilities and its customers. In 2013, the Group has set an objective to reduce by 10% the CO2 emission per kWh produced between 2012 and 2020, experiencing in 2014 a decrease of -7.6% of its GHG emissions in comparison to 2013.

     

  • Employee competencies and development: ENGIE has implemented a forward planning of employment and skills to support the changes and transformations, to involve employees and enhance their employability. In 2014, 68.1% of the workforce was trained – in every socio-occupational category – exceeding the target of two-thirds of employees being trained.

     

  • Local recruitment: In 2014, ENGIE hired more than 17 000 new employees across the world. The Group is particularly involved in numerous inclusion and support towards employment programs, especially of vulnerable groups and notably young people. Since its creation in 2013, the French Foundation for Action in favor of Employment (FAPE) has been allocated €577,000 to develop 32 projects presented by various structures for integration. Furthermore, with FACE (Foundation for Action against Exclusion), chaired by Gérard Mestrallet, the Group plays an active role in several innovative projects with the involvement of the employees in the 35 local structures in France and abroad.

      

  • Stakeholder dialog: ENGIE enacts an organized policy of cooperation and dialogue with its stakeholders (associations, NGOs, etc.) in order especially to evaluate the societal and environmental impacts of its projects and activities. The materiality matrix will be used to extend the dialog at Group and business lines level. Furthermore, in 2013, ENGIE launched a community sharing best practice and experiences, in order to improve the coverage of societal issues by the Group’s various divisions and the use of proper tools.

  • Responsible purchasing: ENGIE has adopted a responsible purchasing strategy that aims to promote ethics in supplier relations. All agreements with suppliers include mandatory ethical, environmental and social responsibility clauses. ENGIE is also looking to develop a regular Group-wide measurement system covering the performance of its “strategic” and “preferred” suppliers as part of a continuous improvement program.

 

Taking into account these lessons and the policies already implemented within the Group, action plans will be set up and monitored to assess ENGIE’s performance in the short, medium and long term. The matrix will be reviewed on a regular basis with stakeholders to be adjusted to their expectations. It will especially be reviewed by the consultation body that will soon be set up.

 

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