Stedin is a socially responsible enterprise. Accordingly, our ESG performance is inextricably linked to our strategy. Accelerating the energy transition will help the Netherlands achieve its climate ambitions. We therefore want to start earlier and build faster, optimally utilise the grid and keep managing it properly. However, we want to do this in a sustainable way. And our social ambitions and performance go beyond that: we aim to reflect the world we work in and offer a workplace where all our employees can be themselves, are valued and are treated equally. In addition, we do our work with integrity and transparency. By complying with laws and regulations and putting legislative changes on the agenda where necessary, for example if laws and regulations hamper the energy transition, we ensure that these can move in step with our ESG tasks. 

Stedin aims to be a green and sustainable grid manager. An organisation where everyone feels safe and at ease. And a grid manager with integrity, transparency and honesty.

On our way towards an ESG-driven organisation, we recalibrated our ESG strategy at the end of 2023. As part of this new ESG strategy, we formulated new objectives with regard to the Environmental, Social and Governance aspects of our operations.

We are now pursuing a broader sustainability ambition: between now and 2030, we aim to reduce our CO₂ emissions in line with the Paris Climate Agreement, reduce our primary material use in relative terms, lessen our negative impact on biodiversity, remain a good employer and remain compliant with laws and regulations. All in all, we aim to increase our positive impact on society and minimise the negative impact of our business operations. You can read more about this in the published ESG strategy.

This means that this 2023 annual report is the last to present our sustainability results pursuant to the ESG strategy up to and including 2023 (One Planet strategy).

In 2023, we again managed to reduce our CO₂ emissions (excluding gas network losses and relative to 2018 emissions), our purchasing of electricity network losses was 100% green and we gained new insights into how to focus on increasing the circularity of primary asset purchases.

We monitor greenhouse gas emissions in accordance with the Greenhouse Gas Protocol, which is divided into three different categories of greenhouse gas emissions, known as scopes. We will describe these scopes below, including the topics relevant to Stedin. Alongside CO₂, therefore, emissions of other greenhouse gases also occur. To enable a comparison of the potential of these gases to warm up the atmosphere, we express this potential relative to the global warming potential of CO₂ and call this CO₂equivalents. All greenhouse gas emissions generated by Stedin are calculated in CO₂ equivalents. For ease of understanding of this report, we use the term ‘CO₂ emissions’ for total greenhouse gas emissions.

Table of CO₂ emissions, including greening

Explanatory information per scope

Scope 1: direct emissions

Direct emissions are the emissions produced directly by sources within Stedin’s business operations.

Network losses from our gas grid

The largest scope 1 emissions relate to the physical leakage of gas during transmission through our grids. From 2020, we treat these emissions as emissions from one of our sources and report on the network losses from our gas grid. In 2023, we decided to stop using CO₂ offsetting through CO₂ certificates in respect of emissions due to network losses from our gas grid. Instead, we will focus even more on reducing emissions. Network losses from our gas grid showed a 4% decrease compared with 2022. This is due to factors such as residential areas being made natural gas free, brittle gas pipelines being replaced with plastic ones and a further decline in gas transmission. In addition to the existing programme to replace brittle gas pipelines, we will intensify our search for gas leaks in due course.

Natural gas consumption of our buildings and emissions from our vehicle fleet

Natural gas consumption of our buildings has decreased due to factors such as our buildings being made gas-free, lower building occupancy, hybrid working and a reduction in the number of buildings we use. In addition, our ambition is to have a totally emission-free vehicle fleet by 2030. Over 90% of our leased passenger cars are electrified, while the rest will be replaced with an electric variant in 2024. We are gradually replacing the commercial vehicles still running on fossil fuels with an electric version. We investigated whether hydrogen-powered commercial vehicles could be a suitable alternative to fossil-fuelled commercial vehicles. Unfortunately this investigation revealed that the market does not yet meet Stedin’s needs in terms of the product range available.

Generator units

Stedin deploys generator units at locations that suddenly have no or insufficient electrical power, for example in the event of a small-scale but long-term outage, or in situations where a planned interruption would result in an unsafe medical situation for one of our customers. Since 2022 we have used blue diesel for this purpose, which generates lower CO₂emissions.

SF₆ gas feed-in

Finally, in scope 1 we report on the impact of SF₆. SF₆ is a very powerful greenhouse gas, which is used as an insulating gas in some types of switchgear. While most switchgear is leak-proof, a number of types on the high-voltage grid emit a limited quantity of SF₆ .

Scope 2: indirect emissions

Indirect emissions are the emissions produced during the generation of the electricity we purchase. This involves the electricity we use for purposes such as heating or cooling our buildings, as well as electricity that was ‘lost’ during transmission through our grid to our customers.

Electricity and heat consumption of our buildings 

In order to reduce our electricity consumption, we have implemented several energy-saving measures in our buildings. Over 90% of our own buildings now have an energy label ‘A’ or better. For example, we added insulation to buildings, installed solar panels on worksites, installed new charging points, increased the use of LED lighting and conducted a pilot with adaptive climate control at our Utrecht location. The positive effects of this are reflected in a reduction in our consumption of electricity (-4%), gas (-20%) and heat (-16%). Through active energy management, we have gained more insight into our consumption and can take more targeted measures to reduce this consumption. 

Electricity network losses and greening

We offset the CO₂ emissions from purchasing our electricity network losses. We purchase 40% of our network loss through a Power Purchase Agreement with our partner Eneco, under which we buy ‘Dutch wind power’ directly from the Borssele 3 & 4 wind farm. We offset the remaining 60% of this network loss by purchasing Guarantees of Origin (GO) relating to wind power produced in the EU. The table below shows the quantities of electricity transmitted and the associated network losses. 

Scope 3: value chain emissions

Value chain emissions are the emissions produced by mobility regarding commuting and business travel and by the business operations of companies in our (supply) chain.

Purchasing

The CO₂ emissions relating to purchasing are nearly 80% of the total net emissions in scopes 1, 2 and 3. Until now, we have estimated these emissions on the basis of key figures and our purchasing volume. We aim to further develop the underlying calculation methods in 2024, so that results of initiatives to make the value chain more sustainable are also reflected in the scope 3 emissions. The initiatives that are in place to make materials more sustainable are currently reported under ‘circularity’.

Commuting and business travel

Emissions from commuting and business travel show a slight increase, which is due to the expansion of our activities and workforce.

Circular use of materials and waste management

For a number of years, we have aimed to maximise circularity with a view to sustainability. Where possible, we purchase products containing recycled raw materials, 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. 

Circularity 

Since 2023, we focus on reducing the use of primary materials. After all, this accounts for a large part of our environmental impact, mainly because of the long average useful life of our assets. We have therefore further developed the KPI ‘Circular business operations’, on which we reported in previous years. Earlier, this KPI related to the percentage of recycled material at the time of purchase and the percentage of recyclability during processing. This was no longer adequate because: 

• no distinction was made between the rungs on the ‘R ladder’; 

• the ‘recyclability during processing’ percentage could not be properly ascertained because of the long average useful life of our assets; 

• not all the materials purchased were included in the KPI calculation. 

At the same time, we see that circularity goes beyond purchasing (recyclable) assets. It also relates to the redeployment and scrapping of assets and the degree of circular design. We will report on this from 2024 onwards.

Material passport

The material passport provides insight into the composition of the raw materials used in our assets. The data from the material passport is being used more frequently and intensively. We therefore developed a certification procedure in the past year, so that we may assume that the data entered is correct. We did this in cooperation with Kiwa and other grid managers. Kiwa certification means that the circularity data provided is independently assessed, and is validated and confirmed through the issuance of a Kiwa certificate. The project for cables has currently been completed. In 2024, we will expand the scope to other asset categories. 

Redeployment

By redeploying assets, we can reuse high-voltage cables and transformers on a larger scale. In this way, we help reduce the use of raw materials and CO₂ emissions. In 2023, redeployment was extended to include high-voltage and gas components. On an annual basis, this involves around 150 transformers, 2,000 smart meters, 25 grid stations and various high-voltage and gas components. Given the current shortage of materials, redeployment is a welcome addition to our inventory. We also ensure that older components which can no longer be ordered from the manufacturer remain available. Finally, this also leads to cost savings in the form of avoided purchase costs of around € 4 million.

Waste management

The table below shows the amount of waste from Stedin. In line with our ever-increasing task, the amount of work we performed in 2023 - and therefore also the quantity of waste in absolute terms - has increased. Replacing non-sustainable infrastructure by sustainable infrastructure and expanding sustainable infrastructure creates more waste. In 2023, we therefore processed an average of 182 tonnes more waste per month than in 2022. On average, we process over 1,100 tonnes of waste per month. Around 13% of the total waste stream consists of asbestos (2022: 19%). In the non-recyclable waste stream, asbestos makes up 37% (2022: 74%). At around 57%, 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 2023, we disposed of 2,837 tonnes of cast iron (2022: 2,967 tonnes). Cast iron is always recycled. 

Biodiversity

In 2023, we conducted a biodiversity impact assessment. This assessment revealed that, as well as a minor impact at and around our own stations, we have a significant impact on biodiversity especially in the supply chain. We will therefore focus on biodiversity loss in the supply chain and will further explore opportunities to positively influence this in 2024.

This does not mean that we are not mindful of biodiversity at and around our own stations. We take this into account because of our social responsibility, and because our stakeholders are setting stricter requirements for the greening of our stations. For instance, ecological integration is increasingly becoming part of planning permission procedures. In 2023, we therefore: 

• worked on standardised ‘installation criteria’ in respect of biodiversity, which we will apply to our larger stations in the future. These criteria describe how we can apply biodiversity measures to our assets, with due regard for their safety. Examples include green roofs, nesting boxes, swales and and the use of hedges. 

• conducted studies and pilots with ‘ecological green space management’. Around 16% of our ‘spatial footprint’ is ‘green’, and therefore offers opportunities for improving the local ecology. The study was conducted so that we would be able to formulate measures, such as an expansion of sinus mowing and abolition of the use of pesticides. In 2024, we will invite ecological tenders for green space maintenance based on these initiatives. 

Green Grids and the Nature Inclusive Agenda

Green Grids (Groene Netten) is a collaboration in the field of sustainability between MVO Nederland and the eight largest infrastructure operators in the Netherlands, including Stedin. In the past year, we worked with these infrastructure operators on the ‘Nature Inclusive Agenda’, which was developed under the guidance of the Ministry of Agriculture, Nature and Food Quality. This agenda states that infrastructure operators should make nature-inclusive the ‘standard’ in new construction and renovation projects and carry out green space management in an ecological manner. A ‘sector agreement’ will be signed early in 2024 to ratify these arrangements. 

In order to ensure proper implementation of these arrangements, Green Grids cooperates with Naturalis Biodiversity Center and Dutch Butterfly Conservation. For example, we have developed an ‘opportunity map’ that shows the opportunities for cooperation between the Green Grids partners in the area of biodiversity improvement. We expect that we can develop a first project with our partners in 2024. 

Where are we coming from

Further global warming must be counteracted by all means. Under the Paris Climate Agreement, the European Union must be climate neutral by 2050. Partly for this reason, the EU has developed a step-by-step plan to facilitate funding of sustainable growth. As part of this step-by-step plan, the EU has adopted a taxonomy. This taxonomy should clarify which business activities are environmentally sustainable and which are not, and reduce the possibilities for greenwashing. As a public interest enterprise (PIE), Stedin has reported since 2021 on the (environmentally) sustainable part of its turnover, operating expenditure (OpEx) and capital expenditure (CapEx), based on the Taxonomy Regulation of 18 June 2020 (EU Regulation 2020/852). In order to determine the (environmentally) sustainable part of our turnover, OpEx and CapEx, we assess whether, in performing our business activities, we contribute and do no harm to the following six environmental objectives:

• climate change mitigation;

• climate change adaptation;

• sustainable use and protection of water and marine resources;

• the transition to a circular economy;

• the prevention and combating of pollution; and

• the protection and recovery of biodiversity and ecosystems.

Where we are now

This year, too, we conclude that Stedin performs economic activities through which it can make a contribution to sustainable development, in particular a contribution to climate change mitigation through the transmission of sustainably generated electricity (activity 4.9 within the EU Taxonomy). We also make a contribution to climate change mitigation by enhancing the sustainability of our mobility (activity 6.5 within the EU Taxonomy) and our buildings (activity 7.7 within the EU Taxonomy). The expansion of Delegated Regulation (EU) 2021/2139 has not led to a different conclusion for Stedin with regard to its taxonomy-eligible activities.

In order to be allowed to report that the abovementioned activities of Stedin are (partly) environmentally sustainable, we have to demonstrate that these activities make a significant contribution to achieving (one of) the previously mentioned environmental objectives, do no significant harm (‘DNSH’) to the other environmental objectives and that while performing these activities we comply with minimum safeguards, which can be summarised as taking good care of employees (throughout the value chain), preventing corruption, bribery and unfair competition, and complying with tax laws to the letter of the law.

Based on a thorough assessment of the EU Taxonomy, Stedin concludes that by transmitting renewable electricity through its grids and enhancing the sustainability of its mobility and buildings, it is making a significant contribution to climate change mitigation. However, Stedin cannot yet sufficiently demonstrate that it meets the minimum safeguards set. We still need to take further steps in implementing a comprehensive human rights due diligence policy. We therefore report that we cannot yet demonstrate that we actually contribute to enhancing environmental sustainability in performing our activities.

Stedin is already doing a great deal in the area of minimum safeguards for its own employees. For example, we work with confidential counselors and have a whistleblower procedure, a code of conduct and a clear procurement policy. However, our safeguards are not always supported by risk analyses and/or documented policies, and we still have too little insight into compliance with human rights in our value chain (e.g. with respect to agency workers). In addition, Stedin has not yet stipulated in all of its contracts that suppliers should provide particular information enabling Stedin to determine whether the products and services they supply meet the DNSH (Does Not Significantly Harm) criteria and to ascertain what measures suppliers are taking to ensure that they meet the sustainability requirements set. We have been provided with a signed code of conduct by 56% of our suppliers. This percentage needs to improve.

In 2024, we will keep gathering proof that our economic activities (partly) make an actual contribution to environmental sustainability. For 2023, our reporting in line with the EU Taxonomy looks as follows:

Explanation of (financial) terms

The terms below were taken from Annex I of the Explanatory Memorandum to Commission Delegated Regulation (EU) 2021/4987, which further explains the content of the KPIs to be reported.

Turnover

Total turnover under the EU Taxonomy is consistent with IFRS reporting standards and hence is equal to the total turnover as presented in the financial statements under note [4] ‘Net revenue’.

Capital expenditure (CapEx)

Total capital expenditure under the EU Taxonomy concerns the investments in property, plant and equipment (note [13] in the financial statements), as well as property, plant and equipment obtained through acquisitions (note [13] in the financial statements, if applicable), investments in intangible assets (note [14] in the financial statements) and leases(IFRS 16) (note [15] in the financial statements).

Operating expenditure (OpEx)

Operating expenditure under the EU Taxonomy is defined as direct non-capitalised costs that relate to the maintenance and repair of assets, short-term leases and all other direct expenditure relating to the day-to-day servicing of items of property, plant and equipment by the company or by third parties to whom activities necessary for the continuous and efficient functioning of such assets have been outsourced. Based on this definition, Stedin has only classified expenditure relating to maintenance and failures as operating expenditure under the EU Taxonomy.

‘Double counting’

The sustainable activities have no overlap. This means that there is no risk of double counting in determining turnover, CapEx and OpEx.