Impact on people and planet

Human-driven climate change is leading to the disruption of nature around the world and has a huge impact on the lives of billions of people. Even if global warming is limited to 1.5 degrees, there will be widespread losses and damage. This is the conclusion of the international scientific panel the IPCC. The most recent report from the World Wildlife Fund - The Living Planet Report 2022 - also shows that nature is under greater pressure than ever before. The dry summer of 2022 has underlined the urgency of combating climate change and loss of biodiversity. Accordingly, municipalities and other stakeholders are prioritising improvements to sustainability. This is increasingly reflected in requirements such as the ecological integration of stations or measures aimed at climate adaptation and the quality of life in built-up areas. Stedin recognises that climate change adaptation and biodiversity policy is essential to help us prepare for the effects of climate change. At Stedin, we feel the urgency of setting more ambitious targets as part of the revision of our sustainability strategy.

Sustainability strategy

In 2022, we added biodiversity as a strategic theme and further positioned climate adaptation as a theme within our organisation. We expect to complete the revision of our sustainability strategy in early 2023. This concerns the further reduction of our scope 3 CO₂ emissions (chain emissions), increasing circularity in our business operations, greening of our gas network losses, the addition of KPIs on biodiversity and climate adaptation, and policy for sustainable new-build of our stations and working further on being a diverse and inclusive organisation. Part of this revision entails the external validation of the sustainability strategy by the Science Based Targets Initiative, which will assess whether the revision brings Stedin in line with the maximum 1.5 degree warming scenario.

KPIs for sustainability

We concentrate our efforts on those areas in which our impact is greatest: CO₂ and particulate matter emissions, use of raw materials and an inclusive society. The steps that Stedin Group is taking as part of its commitment to working for equal opportunities and long-term employability for all are described in the ‘Good employment practice’ section.

1. * Reduction target compared with base year 2018
2. * Without gas network losses, to enable a fair comparison. From 2020, grid managers are responsible for making gas network losses more sustainable. Carbon emissions including gas network losses have declined by 27% since 2020.

EU Taxonomy

The ‘Financial and economic performance’ Section states how much of our activities underlying the part of our revenue, capital expenditure and operating expenditure that we have qualified as sustainable is actually ecologically sustainable in accordance with the EU Taxonomy.

Climate

CO₂ and particulate matter emissions

Stedin uses the Greenhouse Gas Protocol (GHG), which is divided into three scopes, to monitor its CO₂ emissions. The following table contains a description of these scopes, including the topics we take account of in our internal business operations (insofar as we can exercise control over them). Alongside CO₂, emissions of other greenhouse gases also occur. These emissions are translated to CO₂ equivalents to produce a comprehensive overview of Stedin Group’s emissions. In this report, we use the term ‘CO₂ emissions’ to denote these combined greenhouse gases.

Explanatory information per scope

Scope 1: As of 2020, the grid managers are responsible for purchasing gas for gas network losses as well as for the reporting of the related CO₂ emissions. The possibilities for effective compensation for gas network losses were identified in 2022. A decision will be taken on the strategy to compensate for these losses in 2023. We reduce gas network losses mainly by replacing brittle pipelines with plastic pipelines from which there is less gas leakage during transmission. The CO₂ emissions from Stedin Group’s business operations, excluding gas network losses, decreased by 48% compared with the base year 2018. That is well within the targets we have set (-36%). While most switchgear is leak-proof, a limited quantity of SF₆is emitted each year. In 2022, Stedin added 31 kg of SF₆ (2021: 19 kg).

Scope 2: Each year, Stedin Group compensates 100% of the CO₂ emissions arising from the electricity that we purchase for our electricity grid losses. Since 2021, we have purchased 40% of the electricity for our network losses through power purchase agreements; this involves us purchasing green electricity directly from a sustainable source, such as a wind or solar farm. 60% of these network losses are compensated by purchasing Guarantees of Origin (GoO). Stedin strives to achieve 80% compensation of its electricity grid losses via power purchase agreements by 2030.

Scope 3: We are committed to reducing emissions from network components wherever possible. More information is available on commuting, business travel and public transport use under the heading ‘Reduction of CO₂ and particulate matter emissions via our mobility’. The KPI for circular purchasing is based on the raw materials passport, which we request as part of our purchasing processes.

Under ‘Additional information’, you can find an overview of Stedin Group’s CO₂ emissions classified by the various scopes.

Reduction of CO₂ and particulate matter emissions via our mobility

At Stedin Group, mobility is comprised of car use, commuting and business travel. We aim to have all our commercial vehicles fully electrified by 2030. The target is to achieve 25% of this by 2023. Our results on mobility in 2022:

• 83% of our 764 passenger cars are electric (2021: 73%). An electric passenger car fleet of this size is exceptional. Due to supply issues in the automobile industry, this percentage was lower than foreseen. Without these issues, the percentage would have been 91%. We expect to catch up on this during 2023.

• 210 electric commercial vehicles were ordered, of which 43 were delivered in 2022. Delivery is dependent on the availability of materials.

• We are closely monitoring the market for large commercial vehicles. We keep ourselves informed of the latest innovations to ensure we are at the front of the queue when suitable alternatives become available.

• We have introduced a lease bicycle scheme at Stedin, which we hope will persuade more employees to bike to work. 122 employees now make use of this scheme.

In 2022, steps have been taken to organise mobility centrally at Supply Chain Services. This enables even more efficient management of Stedin’s broad mobility needs and the related strategic objectives.

Based on the replacement profile for our passenger cars, we can realistically expect that 100% of our passenger cars will run on electricity in 2023. In the category of small and medium-sized commercial vehicles, electric vans will be rolled out further and no new fossil-fuel vans will be added to our fleet. However, some fossil-fuel vans will still be used under shorter-term contracts. The government is developing legislation for 2023 that will make the registration of CO₂ emissions by companies with more than 100 employees compulsory. This registration will apply to all forms of mobility, including commuting. We are studying how we can set up this registration efficiently.

Privately registered vehicles by fuel type

This concerns commercial vehicles (carrying the Stedin logo) and company lease cars.

Litres of fuel used and kWh consumption

We have seen a decrease in the use of fossil fuels and an increase in electric charging. In 2022, we used 179,995 litres less fossil fuels (petrol, diesel, LPG) for our commercial and lease vehicles than in 2021 (-8%). Electric charging of our commercial and lease vehicles increased by 887,816 kWh (33%) compared with the previous year.

1. * The comparative figures for 2020 and 2021 have been adjusted on the basis of revised calculations because certain elements were incorrectly included in previous calculations.

Commercially registered vehicles by fuel type

These are commercial vehicles in the small, medium and large categories.

Reduction of CO₂ and particulate matter emissions via our premises

15% less energy use

The European Commission has published a plan for reducing demand for gas. From 1 August 2022 to 31 March 2023, demand for gas has to be reduced by 15%. This year, we reduced our gas use by 43% compared with the average use over the past five years. We achieved this by optimising our real estate portfolio and improving the sustainability of our premises. Simple short-term measures can also deliver extra savings. For example, we have set the thermostat in our buildings two degrees lower and on warm days we save electricity by setting the air conditioning temperature two degrees higher.

Sustainable premises

In addition to direct management of energy use, we are investing in making our office and business premises more sustainable, including by installing solar panels and making our buildings gas-free. Our offices at Goes were made gas-free during the renovation in 2021.  Besides reducing its gas use, Stedin has also taken measures to reduce its electricity use. By setting the air conditioning temperature two degrees higher, for example, we make savings in warm periods. The flip side of the reduction of our gas use and our large-scale electrification of vehicles and internal heating is a significant 21% increase in electricity use. For example, we now have more than 200 charging points at our office premises. Where possible, we try to offset this increased electricity use with sustainable generation from our own solar panels, and by reducing use through energy-efficient solutions.  We will continue to reduce our energy use in 2023 by making other buildings gas-free, installing more solar panels and possibly selling some buildings.

Risks for Stedin associated with climate change and adaptation

Extreme weather conditions, with intense rainfall alternating with long periods of drought and high temperatures, are becoming more common and also more extreme. There is also an increased likelihood of flooding as a result of rising sea levels. Hence, Stedin not only embraces measures to prevent climate change, but is also taking steps to prepare for the risks of a changing climate. We refer to this as climate change adaptation.

Flooding

The Delta Decision on Spatial Adaptation (Deltabesluit ruimtelijke adaptatie) makes it mandatory for managers of vital infrastructure to conduct research into the impact of flooding on the functioning of that infrastructure. They are required to take appropriate control measures where necessary. The impact of a potential flooding on the functioning of the electricity grid has received much attention in recent years, and has been the subject of numerous case studies in our service area. Using advanced calculation models, we identify the infrastructure that could be affected and what the effect would be on the electricity supply.

Together with Netbeheer Nederland, we have analysed the vulnerabilities in our grids. We have carried out tests in cooperation with the TU Eindhoven where components in our low and medium voltage grids were submerged. Among other things, these tests showed that a low voltage installation can continue to function for a long time if it is submerged in fresh water. But with salt water, the power supply is interrupted almost immediately. These insights help us to assess the impact of flooding scenarios on our business operations.

Together with municipalities, security regions and large businesses such as the Port of Rotterdam Authority, Stedin has also carried out area studies to share and identify the impact of flooding on a region-by-region basis. This regional approach is useful and necessary, because the location, differences in land use and the flooding probabilities are determining factors for the effectiveness for adaptation measures. The studies show the electricity grid is more robust than most people think; transmission of electricity does not cease immediately, and outages usually remain limited to the area that is actually under water. We also see that due to the relatively low probability of flooding, it is not cost-effective to make changes to our stations in this respect. Therefore, the challenge is to look for logical times when climate-proofing of these stations can be carried out, such as when new stations are built or existing stations are expanded.

Extreme temperatures

Extreme temperatures can have a negative effect on the useful life of our infrastructure. The temperature in our stations can rise to the point where our installations cannot easily disperse the heat. We have developed sensors to monitor this effectively. These give us better insight into issues such as temperature and humidity in our electricity stations. This information is used to implement measures aimed at improving set-up conditions, which ensures the optimal performance of stations and the preservation of their maximum useful life. We have installed around 100 sensors in all, distributed between 30 transmission stations and some medium voltage stations. We aim to install sensors in the secondary and telecommunication spaces of all our transmission stations next year: a total of approximately 600 units. Extra attention will also be devoted to the heat issue in new build. This will involve the insulation of roofs and façades, better ventilation and the use of green roofs. For a pilot project in 2021, we installed a green roof on the transmission station at Benjamin Franklinstraat in Rotterdam. We are now seeing the results of this: there have been no critical heat reports since the installation of the green roof and the improvement to the ventilation.

In 2023, we will continue to pursue innovations in building and construction, and we will develop policy aimed at modifying existing infrastructure where necessary and developing new construction or expansion of stations in such a way that climate risks are minimised.

For more information on the physical and transition risks of climate change, click here.

Circularity

We aim to maximise circularity both with a view to sustainability and in the interest of prolonging the useful life of our assets. We purchase products with as much recycled raw material content as possible, challenge suppliers to deliver products that facilitate maximum recycling at the end of their useful life, and work with our waste processors to ensure the highest-grade recycling of products.

KPI for circular purchasing and the raw materials passport

Since 2021, our policy of requesting raw materials passports has provided us with good insight into the circular performance of our primary assets such as transformers, pipelines, pipes, stations and switchgear installations. We do this by analysing the data from the raw materials passports. Together with our suppliers, we are working to make our assets more circular.

The percentage of circularity in our purchasing of primary assets in 2022 was 36%. This figure is below the target of 40%.

We are engaged in a strategic revision of our sustainability targets and a redefinition of circularity. A new KPI will be formulated after the revision in early 2023. For this reason, no target will be set for 2023.

Aiming for circularity in tenders

Our sustainability ambitions play an important part in tenders for our assets. We have accordingly developed a CO₂ asset tool in cooperation with CE Delft and other grid managers. The tool enables us to calculate the environmental impact of our assets. It also enables us to include the outcomes in sustainability weighting in the tendering process. This gives us better insight into our impact in the chain and enables us to work on improvements in cooperation with suppliers and the sector.

Phase-out of SF₆ in switchgear installations continues

We are further reducing the use of the insulating gas SF₆ in our switchgear installations in our medium voltage and transmission grids. In 2022, 428 SF₆-free switchgear installations were installed (2021: 166). The switchgear installations are installed in our medium voltage grid and qualify for a subsidy. We will start in 2023 with the installation of 57% of newly tendered SF₆-free 24kV switchgear installations in our transmission and distribution stations. This will avoid an increase of the current quantity of SF₆ by on average 7.8 kilotonnes of CO₂-equivalent per year. In our Innovation Lab, we are conducting a Proof of Concept with two suppliers in order to identify leaks earlier. The aim here is to limit SF₆ losses and the consequent negative environmental impact. A tender for large switchgear installations in transmission stations has already produced a supplier for these SF₆-free switchgear installations. The second supplier in this tender has a circularity score of 85%. This means that virtually the entire switchgear installation consists of recycled materials and that the materials will also be recyclable after use.

Circularity in replacement of brittle pipelines

We use a specific type of connection for the replacement of the brittle pipelines in our gas grid. Replacing a pipeline route in a project takes several weeks, and each time we replace another part of the brittle pipelines. The connections are used for the transition from the brittle pipeline sections to the new pipeline until all the brittle pipeline sections have been replaced. We can use these connections several times, and then refurbish them. We put out a tender in 2022 in which the assessment of reusability and suitability for refurbishment was a major factor in our decision. As a result, we now need 60% fewer connections, leading to a lower CO₂ footprint of almost 5.5 tonnes CO₂-equivalent. The refurbishment of these connections will be carried out in due course by our Service Team Operations, where young people with an occupational disability are employed. This successful prioritisation of sustainability in the tender has also delivered a financial saving of at least 33% (approximately €3 million).

Redeployment

Redeployment of assets is an initiative aimed at upscaling the reuse of pipelines and transformers, for instance. We make the components released from the grid suitable for reuse and store them. We register them in an ordering portal so that we can reuse them. In 2022, we redeployed around 150 transformers, 5,400 smart meters, 27 compact stations, one transmission station and one high voltage transformer. A welcome addition to our inventory given the current shortage of materials. We also ensure that older components which can no longer be ordered from the manufacturer remain available. Finally, this generates cost savings in the form of avoided purchase costs. These savings amounted to approximately €2.6 in 2022. We expect these savings to increase in the coming years to more than €5 million per year. 

Waste (in kg)

The table shows the amount of waste from Stedin Group. The rise in the percentage of non-recyclable materials relates to asbestos. In 2020, 2021 and 2022, Stedin had to undertake remediation work in Utrecht involving the removal from the ground and disposal of asbestos. 770,375 kg of asbestos was removed in Utrecht this year. In the rest of Stedin’s service area, excluding Zeeland, 641,400 kg of asbestos was removed. In Zeeland, 672,620 kg of asbestos was removed. Cast iron accounts for a large proportion of the materials that are recycled. This is due to the accelerated replacement of our cast-iron gas pipelines. In 2022, we disposed of 2,967,900 kg of cast iron (2021: 2,861,725 kg). Cast iron is always recycled.

1. * Stedin Netbeheer
2. * Stedin Netbeheer + Enduris

Biodiversity

Biodiversity is the variety of life in an area: the plants, animals and (micro)organisms that collectively form an ecosystem. As human beings, we depend on these ecosystems for our food, water purification and storage and climate regulation. In a densely populated and built-up country like the Netherlands, biodiversity is under severe pressure. Within the EU, the Netherlands has one of the lowest scores in this area. In December 2022, a global UN biodiversity summit was held, COP15, where the participating countries committed to protect at least 30% of land and water on earth over the next 7 years. By taking joint action, they hope to prevent the further extinction of plant and animal species.

Stedin is also committed to strengthening biodiversity. We are increasingly gaining insight into ways we can strengthen biodiversity in and around our infrastructure. Natural solutions can contribute to climate adaptation and reduce heat stress. At the same time, we see that public authorities are setting stricter requirements for the greening of our stations, and ecological integration in the environment is increasingly becoming an element in permitting procedures. Accordingly, we gave this theme a prominent place in our new strategy in 2022. Together with other grid operators in the Next Generation Infrastructure (Verbond van Brede Welvaart) initiative, we will measure the impact of our business operations on biodiversity and then determine how this should be managed.

Green Grids

Green Grids (Groene Netten) is a collaboration in the area of sustainability between MVO Nederland and the eight largest infrastructure operators in the Netherlands, including Stedin. Naturalis (the scientific institution for biodiversity) and the Dutch Butterfly Conservation foundation are helping Green Grids to identify the best opportunities for improving biodiversity around our infrastructure. These opportunities will be identified by intelligent combining of information from the Green Grids parties and biodiversity data for the Netherlands as a whole. This will concern biodiversity in a broad sense. We will consider threatened species, birds and mammals, as well as bees, butterflies, dragonflies and plants.

The opportunity map for the province of Zuid-Holland was completed in 2022. Together with our Green Grids partners, we will begin the first actual projects for the Ecological Main Infrastructure in 2023. For example, a joint design for biodiversity has been developed for the construction of a transmission station in the Zuidplaspolder, which will be built by Alliander, Stedin and TenneT together. Ecology management per location is another opportunity for strengthening biodiversity. Stedin is currently studying with Naturalis how we can use the opportunities for ecology management around our stations.

List of infra-nature measures

Together with around 40 ecologists and biologists, we developed 50 specific nature-inclusive measures for in and around our infrastructure this year. This list of infra-nature measures can be applied broadly in decision-making on construction, adaptation and management. In this way, we will strengthen biodiversity and contribute to a healthy and future-proof infra-nature.

Getting to work in practice

We are also strengthening biodiversity in practice in an increasing number of locations. Where possible, we use ecological mowing, so that herbs and flowers can reappear. We are also installing an increasing number of green roofs. This year, on Gerbrandyweg in Rotterdam, we started the construction of a station that will be ecologically integrated in its environment. In 2022, we included the strengthening of biodiversity as a tender criterion, for instance for the tender for multidisciplinary working with Evides.

Impact in the purchasing chain

Stedin Group accepts its social responsibility for sustainability in its chain. We do this by means of active management aimed at our ambitions for CO₂ emissions, raw materials, particulate matter, biodiversity and social working conditions. We bear this responsibility both in our tendering procedures and in our collaboration with suppliers. The principles for this are set out in our Socially Responsible Purchasing Policy (Maatschappelijk Verantwoord Inkoopbeleid).

With a purchasing volume of €962 million in 2022, Stedin Group has a significant impact. Almost the entire purchasing volume (99%) is realised with suppliers having an office located in the Netherlands. The remaining (very small) proportion of our procurement comes from 14 EU member states, Canada, the United States, Turkey, Norway, the United Kingdom and Switzerland.

Supply chain responsibility

All our contracted suppliers are expected to sign the Stedin Supplier Code of Conduct (Stedin Gedragscode voor leveranciers). By signing this Code of Conduct, they commit to the basic principles concerning human rights, working conditions, fair and honest business practices (including the prevention of fraud and corruption), safety and integrity and the goals formulated in our sustainability strategy. Our Code of Conduct is based on the OECD (Organisation for Economic Cooperation and Development) guidelines, the Universal Declaration of Human Rights and the labour standards and working conditions drawn up by the International Labour Organization (ILO). We also expect our suppliers to ensure that their suppliers and the third parties that they engage comply with national and international legislation and regulation and our code of conduct.

We take responsibility for our chain emissions, such as the emissions that occur at our contractors or that arise during the production as well as the transport of the components and assets that we purchase. In our purchasing processes, we consider the CO₂ footprint as well as other factors, such use of materials and social working conditions. They form the basis for the selection of suppliers. The Code of Conduct has been signed by parties covering 54% of our expenditure. Signing the Code of Conduct is mandatory in all new tendering procedures. No self-assessments or (online) audits were carried out in 2022.

Governance in relation to the supply chain

The Supply Chain department reports directly to the Board of Management. The reporting is based on a KPI dashboard and monthly MT reviews related to insight and performance. Supply Chain reports particulars and deviations in the monthly Business Review. These may concern inventory positions, availability indications from the market, price fluctuations, risk management and sustainability risks.

Recovery procedures

There is regular consultation with stakeholders in the various categories (contractors and services, materials and smart meters, ICT and services). We initiate recovery procedures where necessary. The discussions involve matters such as materials availability, market developments, rate-setting, indexation and possibilities for sustainability. We did not perform any recovery procedures in 2022.

Governance in relation to sustainability policy

The Board of Management is responsible for the ambitions and objectives that have been formulated for Stedin Group. The Board of Management has approved the ambitions that provide direction for Stedin Group’s sustainability policy towards becoming a climate-neutral organisation by 2030. The strategy and results were also discussed with the Supervisory Board in 2022. Results on the KPIs are reported to the Board of Management and the directors of the business units concerned every quarter. A quarterly analysis is also carried out of strategic risks and opportunities, which includes the topic of sustainability. The strategic risks (of ‘Own excessive environmental impact’ and ‘Environmental pollution’) are included in the table ‘Strategic risks and opportunities’.

ESG Committee

As of 1 January 2023, Stedin will have an ESG committee. This will be our next step towards becoming an ESG-driven organisation, and ensure consistency in the activities we undertake in line with our (sustainability) strategy and how we inform our stakeholders in this respect.

The ESG committee will advise and put forward proposals to the MT Strategy in the areas of strategy, planning and reporting on sustainability issues and will support developments in sustainability throughout Stedin Group’s value. Its main duties will concern the development of:

• Sustainability policy focused on value creation for all stakeholders in the medium and long term.

• Guidelines, targets and processes relating to sustainability, including reporting on related financial and non-financial figures.

The committee will meet regularly and will consist in any case of the E, S and G leads. They will be assisted by internal, and possibly external, experts in the field of reporting and impact measurement.

In 2023, the committee will focus on the following (ESG) topics, among others:

• Further reduction of CO₂ emissions;

• Greening and nature-inclusive construction;

• Diversity and inclusion;

• Reuse and recycling of materials;

• Influencing and monitoring human rights and working conditions in the chain; and

• Further development of the EU Taxonomy and implementation of the Corporate Sustainability Reporting Directive (CSRD) legislation.