Within the general framework of its missions, the CSR Department redefined the Group's CSR policy in 2020, together with the other departments concerned, and strengthened its risk assessment and management processes for the activities of ENGIE and its area of influence.
Actions are implemented to avoid or reduce the identified risks. Annual performance reviews are used to measure the progress of action plans and to adjust them.
Identification of environmental and societal risks
For several years now, the Group has been implementing an Enterprise Risk Management (ERM) process led by the Risk Management Department, which allows for a cascading (from the sites to headquarters) of risks affecting the Group's activities and an assessment of their status. Through this process, most environmental and societal risks are identified and assessed. Major risks are reported to the Group's top management, i.e. to the Executive Committee and then to the Audit Committee of the Board of Directors, which is responsible for the annual review of Group risks.
In addition, the Group's project appraisal process prior to project launch requires the systematic completion of environmental and societal impact studies and an analysis of the main risks induced by the project using a list of investment criteria, including the consequences in terms of:
- climate change,
- stakeholder engagement,
- acceptance of the project.
Among the main environmental risks identified, the Group has identified climate risks, its contribution to climate change and the impact of climate change on its activities, and other environmental risks related to potential damage to the environment caused by its activities.
Aware of its responsibility in terms of climate change, ENGIE sees the control of its emissions of CO2 and other greenhouse gases (GHG) as a major issue. This has led to the establishment of an early action plan, complemented by international targets and commitments and detailed reporting.
After the adoption of the Paris Agreement at COP21 in December 2015, a universal agreement on the climate, COP22, 23, 24 and 25 provided an opportunity to specify the roadmap of the signatory states. Even though a lot of work remains to be done to finalise the methods for implementation of the agreement, the IPCC's (Intergovernmental Panel on Climate Change, October 2018) 1.5°C report shows that the need to accelerate national policies to combat CO2 emissions is no longer in doubt. The Group is actively preparing for this.
Committed to a trajectory in line with the Paris Agreement, ENGIE is drastically reducing emissions from its industrial activities and has obtained SBT certification of its new 2030 targets, a step towards the group's carbon neutrality:
- reduce the emissions rate per kWh of energy production by 52% between 2017 and 2030
- reduce emissions from the use of the group's products sold by 34% between 2017 and 2030.
These reductions cover 96% of scope 1 emissions and 91% of scope 3 emissions.
The Group is also acting on emissions linked to its entire value chain. Its action includes the definition, with all its entities, of neutrality trajectories for its working methods (building, IT, professional and home-to-work transport, professional catering, etc.) and the definition of action plans with the various supply chains. For its customers, Engie is developing consulting services and decarbonised solutions to become the leader in decarbonisation services. The Board of Directors has therefore set four objectives for 2030: two GHG emission reduction targets for our energy production (target of 43Mt of CO2) and for the use of products sold (target of 52Mt of CO2) in line with our SBT commitments, complemented by systematic decarbonisation offers to all our customers and the priority choice of SBT certified suppliers for all our preferred suppliers.
With regard to adapting to the effects of climate change, the Group's assets, both renewable and thermal, are exposed to climate change generating damage, interruptions in production and supply; these interruptions can range from a few hours/days to longer periods in the event of damage to facilities or transport networks. The aim is to limit the impact and secure the facilities, personnel and customers by implementing adaptation measures.
ENGIE has determined with the operational staff and internal experts the types of climate events that affect its facilities and activities
- increase in temperature,
- heat waves,
- extreme winds
Engie has also entered into a partnership with a renowned meteorological institute (Institut Pierre Simon Laplace, one of the IPCC experts), which has provided us with refined data and maps on the evolution of these 5 types of climate impacts to 2030 and 2050. A tool has been developed to classify the exposure of assets and activities to these climate events. Work on the adaptation plan is underway (implementation of systematic impact reporting, verification of asset exposure levels, study of adaptation actions to be considered to limit exposure). In this context, ENGIE works with local authorities.
Other environmental risks
Given the specific aspects of the environmental field and the diversity of the underlying risks, an analysis of the environmental risks of ENGIE's industrial activities is carried out each year as part of a global approach within the Group. This approach, led by the CSR Department, makes it possible to identify and update the risks for all activities and to define the list of the most exposed industrial sites in terms of water, biodiversity, air quality (NOx, SOx and particles), soil and waste management. The map below presents a summary of the risk analysis results based on the 2020 data.
Societal risks are mapped at industrial activity level, in particular through a dialogue process with stakeholders deployed in all Group entities.
The ENGIE Group has made dialogue with its stakeholders a cornerstone of its project management and the maintenance of its activities in order to create sustainable and shared value. ENGIE therefore maintains a continuous and proactive dialogue with all stakeholders around its industrial activities. On the basis of existing approaches, the Group supports its operating entities in extending and structuring their practices. This ranges from setting up dialogue strategies through to their operational deployment in project teams.
The support is based on a Group methodology that adapts to the specific strategic, technical and geographical aspects of the operational activities. It is based on international standards such as ISO 26000, AA1000, the World Bank IFC (International Finance Corporation) and the Equator Principles.
On the one hand, it consists of raising awareness and training employees in structuring dialogue with stakeholders in conjunction with the Group's training entity, ENGIE University.
On the other hand, the methodology involves technical support for the implementation of dialogue action plans adapted to the challenges and expectations of the territories. The objective is to optimise performance and increase value creation by enhancing the understanding of the Group's activities by its beneficiaries.
The main societal risks identified by the Group are:
- the impact of its activities on local populations and the possible need for redress or compensation;
- the violation of human rights, particularly in relation to environmental causes;
- the societal impact of the cessation of some of our activities, in particular those of thermal and coal power plants (just transition).
Aware of its size and the importance of its activities in a given territory, the Group has decided to improve the measurement and monitoring of the socio-economic impacts of its activities, in order to better understand its ecosystem and sphere of influence, to share this analysis in a transparent manner and to constantly improve the responsible conduct of its activities.
Environmental and societal policies
Environmental and societal risks are periodically analysed at all levels of the company. Environmental and societal policies are broken down by BU, subsidiary and site. Their implementation is monitored through objectives and action plans that are reviewed annually. This review process ensures that our environmental and societal vigilance obligations are properly applied.
From an environmental point of view, the major risk for the Group is climate risk, followed by biodiversity, water and pollution risks. These global and local environmental risks are studied annually at headquarters and at the sites in order to establish a list of "at-risk" sites.
The environmental policy fully integrates this risk analysis. Controlling its CO2 emissions is a major challenge for the Group, which has led it to set up a specific action plan. This plan is supplemented by international objectives and commitments that are subject to detailed reporting. The environmental policy also aims to implement action plans to avoid, reduce and, if necessary, offset the environmental impacts of the Group's activities. In 2020, about 670 sites have been analysed and 100% of the sites identified as "at risk" have action plans.
The ENGIE Group's environmental policy states:
- the Group's environmental issues;
- the means implemented by the Group to meet its challenges and improve its performance;
- the governance that contributes to its implementation.
It is complemented by four thematic policies (climate, biodiversity, water and circular economy) which detail the commitments and objectives made specifically in these areas.
While it is undeniable that our projects have a strong impact on communities, it is also increasingly evident that citizens are demanding full stakeholder status and greater consultation and involvement in projects that affect them. In response to this dual observation, ENGIE has taken a proactive approach, ahead of the recent regulatory changes, by placing societal issues at the heart of its business model. ENGIE's raison d'être, stated in its articles of association, is its commitment to having a positive impact on people. Through an in-depth societal policy, the Group has been able to evolve by gradually incorporating the societal dimension as a factor for business optimisation.
The societal policy states:
- The societal issues for the Group
- The means implemented to meet these challenges
- The governance which contributes to the implementation of the Group's societal policy
The Board of Directors, through its Ethics, Environment and Sustainable Development Committee (EESDC), oversees environmental and societal issues within the Group.
Monitoring of the CSR process
For all identified risks, actions are taken in consultation with stakeholders at the most appropriate levels.
In the event of an incident, the procedures in place allow:
- all players concerned within ENGIE to be informed as quickly as possible and mobilised
- discussions with stakeholders and NGOs
- remediation to be implemented without waiting for court decisions.
In terms of the environment, the Group has achieved its 2020 objective of covering 100% of its "at-risk sites" with environmental action plans. In addition, the environmental team has worked to broaden the scope of risk analysis by including services, major projects and sites undergoing dismantling. From 2021, environmental plans will have to be deployed throughout this new scope.
In terms of societal responsibility, the Group has also achieved its 2020 objective of covering 100% of its industrial activities through an adapted dialogue and consultation mechanism aimed at strengthening the sustainability of its activities. As of 2021, societal plans will also be deployed on an expanded scope to include services, major projects and sites undergoing dismantling.
2020 was devoted to the establishment of various spaces for dialogue: a Stakeholder Committee in charge of challenging the Group's strategy, a forum for recourse made up of members of civil society, companies and local authorities, in charge of supporting sensitive projects. This culture of listening and dialogue is extended through societal and environmental partnerships with France Nature Environnement, Emmaüs and the ONE Foundation
(Ocean, Nature and Environment) among others. At international level, ENGIE is a member of the United Nations Global Compact in the category Global Compact Advanced.
In order to measure the progress of risk reduction and prevention actions, in 2020, the Group set itself 19 new ambitious targets for 2030 to achieve its CSR commitments by that date. Inspired by the Group's raison d'être, these objectives are part of a continuous improvement process to meet the growing expectations of its various stakeholders, who are concerned about control of CSR risks and aligning the company's performance with national or international sustainable development objectives.
The results of eight of them, referred to as rank 1 and listed in the table below, will be published annually.
The 2020 results of the indicators relating to the 2030 CSR objectives are presented in the following table with the 2019 value when it was available.
|Themes||Indicators||2030 targets||2020 results||2019|
|CO2 Energy Production||GHG emissions (scopes 1 and 3) for energy production (in Mt CO2eq.) in line with SBT commitments||≤ 43||68||75|
|CO2 Gas Sales||GHG emissions from the use of products sold (in Mt CO2eq.) in line with SBT commitments||≤ 52||62||61|
|Renewables||% of renewable energy in the electricity generation capacity mix in line with SBT commitments||≥ 58%||31%||28%|
|Decarbonisation of our customers||% of our offers integrating an alternative contributing to decarbonisation||100%||51%||not available|
|Decarbonisation of our suppliers||% of preferred suppliers (excluding energy) certified or aligned with the SBT initiative||≥ 10%||15%||not available|
|Health and Safety||Workplace accident frequency rate||≤ 2,9||2,7||3,3|
|Gender diversity||% of women in Group management||≥ 50%||24,1%||23,5%|
|F/M equality||Female/Male equality index||Fr. 100|
Progress on operational implementation
In managing their activities, operational projects integrate the structuring of dialogue with their stakeholders in accordance with the Group's methodology.
LPG storage tanks in Ajaccio
For example, as part of the renovation of the LPG storage tanks in the town of Ajaccio in southern Corsica: the project has set up actions to provide information on the industrial activity to the region, and actions for the preservation of the environment. Local residents and environmental associations were informed of the nature and schedule of the work a few months before it began during several information and discussion meetings. In addition, the project has set up a partnership with the Conservatoire des Espaces Naturels de Corse (Association for the protection of natural areas of Corsica) for the delegation of the management of its compensation sites. The University of Corsica is involved in the scientific reflection on the preservation of protected species.
The project provides continuous information on the progress of the project via its website and more directly through the frequent contacts and discussions that the project ensures with its stakeholders.
The Hazelwood power plant in Australia
The Hazelwood power plant in Australia was shut down in March 2017 and since then ENGIE has been conducting a project to rehabilitate the site: The plant is being dismantled and the mine will be turned into a lake.
Dismantling activities at the plant are expected to be completed in the first half of 2018. The latest rehabilitation form for the adjacent mine is subject to extensive consultation with the regulatory authorities, the local community and other stakeholders.
The plant employed 750 people. Regarding the transfer of workers, ENGIE has worked with the unions and local authorities to develop and implement a worker transfer programme to best ensure the employment of laid-off workers at other power plants in the Latrobe Valley.
Communication and stakeholder engagement tools include a dedicated website, quarterly community forums, stakeholder briefings, media coverage, advertisements and public information booths.
ENGIE remains committed to local communities through its extensive long-term partnership programmes, focusing on youth development, education and other support activities in the Latrobe Valley.
Similarly, the Group has rehabilitated an industrial site into a new biodiversity area in Belgium, in the Hénâ region.