Sustainability: Governance and Reporting
The importance of our ‘governance’ pillar has increased significantly, as it is considered to be a prerequisite and enabler for all areas related to sustainability. We therefore devoted an entire dimension of our Act Now programme to this topic: dimension 5. This dimension aims to strengthen stakeholders’ trust in the Group and in our sustainability activities as a whole.
Governance: warranting accountable rules and processes
Elia Group wants to establish trusting relationships with its stakeholders. Different bodies have been created so that our corporate governance practices are of the highest standards. You can find out more about these on the management bodies webpage. To find out more about our Corporate Governance, you can consult the corporate governance webpage. Moreover, we want to:
- Adopt international, best practice approaches to serve the long-term interests of our stakeholders. Our executive management team and their supervisory functions are therefore separate from our board members (who are elected) and our audit and remuneration committees on the supervisory board.
- Adopt a strategic perspective on sustainability through the establishment of long-term ambitions. Executive salaries are therefore tied to the Group’s performance in terms of sustainability targets.
- Have effective internal controls and external audits in place which lead to prompt actions. We want to have corporate governance practices firmly embedded in our organisational structure, to ensure that the appropriate codes and standards are applied.
ESG Governance Index
Good governance is essential for ensuring our sustainable success in the long term . In addition to designing clear objectives regarding ethics and transparency, an environmental, social, and governance (ESG) index was created to help us embed ESG factors into our business activities and decision-making processes, including the variable remuneration of our workforce.
The ESG Governance Index consists of the following commitments:
0 or 1 Develop an ESG journey, including an annual sustainability governance workshop, with the Board 0 or 1 Provide a bi-annual assessment of the risk situation in every Group entity 0 or 1 Add Sustainability aspects to charter of BoD Committees 0 or 1 Establish an annual Board performance review 0 or 1 Have an ESG expert in the BoD 0 or 1 Create a remuneration Committee within Eurogrid GmbH 0 or 1 Review and publish Severance pay policy for senior executives leaving the company: (1) No specific termination clause, (2) just local regulation applies 0 or 1 Add an Executive-level responsibility for ESG topics both at Group and local levels (GRI 102-20) 0 or 1 Ensure a minimum of 20% for the weight of Act Now objectives in the variable remuneration of EXCO and EGMB members 0 or 1 Set up annual local Exco meeting on how to embed Sustainability in the decision-making process (Budgets, Strategic planning, organisation) 0 or 1 Have all Act Now objectives in the Strategic Business Roadmaps of local entities and allocate required resources (FTE and €) 0 or 1 Bridge 90% of the gaps between Elia/50Hertz's operations and the preselected set of ESG standards published by ratings agencies, investors and regulators ∑ 0 … 12/12 ESG Governance score
Ethics: fostering a sustainable mindset and behaviours
To ensure that sustainability remains one of our key areas of focus and is considered in all of our decision-making, we have to foster a sustainable mindset and set of behaviours. We therefore want to:
- Define clear expected behaviours for our staff, with no tolerance for ethical breaches. Integrity and ethics are a key to our interactions. Through our Code of Ethics, we have defined what is considered to be proper ethical behaviour and have established a set of principles in order to avoid ethical breaches and conflicts of interest.
- Create a culture of speaking out and simple procedures. Through the internal culture programme, Elia Group has defined six behaviours that all employees should embody and demonstrate in their work. You can find more information about these in our annual report.
- Remain independent from any political or religious activities.
- Demonstrate the highest level of integrity towards our contractors and suppliers. Elia Group assumes responsibility for compliance with social standards across the supply chain. For this reason, Elia and 50Hertz are not only members of the United Nations Global Compact, but are also committed to the core labour standards of the International Labour Organization (ILO).
Compliance: conforming to external and internal rules
Due to their legal status as electricity transmission system operators, Elia and 50Hertz are subject to a wide range of legal and regulatory rules in their respective countries. In order to ensure we conform to external and internal rules, we:
- Ensure that we are compliant with all relevant regulatory and internal provisions.
- Prevent any kind of fraud or abuse. We regularly provide all employees involved in procurement and financial processes with training on the basics of procurement, anti-corruption and compliant behaviour. Since 2018, Elia has had a policy in place that regulates the external reporting point for business integrity breaches (this is carried out via an external whistleblowing system). If internal staff and external stakeholders anonymously report suspected integrity violations, an internal committee is immediately convened to deal with the case and take further internal action if necessary. The committee reports to Elia’s management team annually and also on an ad hoc basis, as issues arise. No violation of any law, whether internal or external, is tolerated; all such violations are firmly sanctioned.
- Detect compliance issues at an early stage and implement prompt corrective actions. Elia Group has drawn up an Engagement Programme which was approved by the Corporate Governance Committee. Any violations of our company codes can be reported to the Compliance Officer, who handles them in an objective and confidential manner. The Compliance Officer reports to the relevant regulatory bodies on an annual basis.
Next to the ESG governance index, a compliance index, which guides us in introducing the right measures to ensure compliance with all relevant legal and regulatory requirements, was created. The index consolidates key requirements needed to ensure that we are not only compliant with all relevant regulatory requirements but also prevent any kind of fraud or abuse, detect compliance issues at an early stage, and implement prompt corrective actions.
The Compliance Index consists of the following commitments:
0 or 1 Assign one Compliance coordinator in 50Hertz and ETB 0 or 1 Set-up an anti-bribery and corruption policy for all Group entities 0 or 1 Write a conflict of interest policy for all Group entities 0 or 1 % employees having followed the training on anti-bribery and corruption and conflict of interest > 80% 0 or 1 % of the procurement volume spent from suppliers having signed the supplier Code of Conduct > 80% 0 or 1 Report according to IIRC as from 2023 and TCFD from 2024 0 or 1 Is the % of timely implemented internal audit recommendations > 95%. If yes, 1; else 0 0 or 1 No confirmed incidents of corruption and actions taken (GRI 205-3) 0 or 1 No non-compliance with environmental laws and regulations notified by authorities or certification body (GRI 307-1) 0 or 1 No Legal actions for anti-competitive behavior, anti-trust, and monopoly practices (GRI 206-1) 0 or 1 No data breaches notified to the data protection authorities (GDPR violations) 0 or 1
Publication of a corporate tax disclosure (GRI 207)
∑ 0 … 12/12 Compliance score
Both indexes are forward-looking and composed of twelve commitments we want to achieve in the coming years. We consider improving our governance and compliance a running target on challenges that will evolve over time. Thereby, we make sure that we always aspire to the highest standards.
Transparency: openness and meaningful stakeholder dialogue
We have always been focused on being open and transparent. As a result, we continuously develop our external reporting processes and will continue to do so, in order to better reflect the positive impacts and contributions we make to society, in line with our important societal role. To this end, we have decided to:
- Provide full, fair, accurate, timely, understandable useful information. To this end, we have a transparency management team and we are compliant with data publication requirements. We are also listed on the EU transparency register.
- Carry out our reporting in accordance with recognised international standards. We currently use the GRI Standards for our annual reporting and aim to further-develop our approach in line with international best-practice.
- Proactively communicate with our stakeholders. When considering all grid extension projects, we prioritise informing, listening and having constructive conversations with the residents impacted by our infrastructure. To find out more, visit our stakeholder webpage.
Bribery & corruption
As part of our Code of Ethics, we produced a policy regarding bribery and corruption. The Code of Ethics outlines what we understand by bribery and corruption. The Code of Ethics explicitly states that Elia Group prohibits bribery in any form, alongside abuses of advance knowledge and market manipulation. Elia Group and its employees do not accept gifts or hospitality to gain competitive advantage. Elia Group does not allow facilitation payments. Disguising gifts or hospitality as charitable donations is also a violation of our Code of Ethics. Elia also focuses on capacity building for our employees. Training allows our employees to recognise behaviours or incidents where bribery or corruption may be at play, and provides them with information about how to access the safe, anonymous space set up to report any such matter (via our whistleblower programme).