Iberdrola

In 2022, Iberdrola invested 86.5% of its CapEx in low-carbon technologies. Iberdrola’s total low-carbon CapEx spending is expected to increase to 90% by 2025, and to 99% by 2030. Iberdrola is expecting that in the period 2023-2025, its total low-carbon investment will be USD 50 billion. Of this total spending, the company will allocate 54% to improving grid infrastructure, 34% on expanding its renewables portfolio, and 6% in low-carbon products. Between 2020 and 2030, Iberdrola expects to invest USD 158 billion in total on low-carbon technologies.

In 2017, Iberdrola announced the complete closure of its coal-fired power capacity, which included the closure of its last coal-fired power plants in Spain, Lada (Asturias) and Velilla (Palencia). These assets represented a combined capacity of 874 megawatts (MW). Since 2020, coal has not accounted for any of the company’s electricity generation. Iberdrola is one of the few companies assessed in this benchmark that has achieved a full-scale coal phase-out.

Iberdrola’s emissions intensity trend decreased between 2017 and 2022 at almost the rate required by its 1.5°C pathway. Projections indicate Iberdrola’s emissions intensity is expected to decrease further between 2022 and 2027, driven by a small increase in its renewable energy capacity. However, the company needs to accelerate the rate of its emissions intensity reduction as it is not currently expected to align with its 1.5°C pathway. Iberdrola is projected to exceed its total 1.5°C carbon budget for the period 2022-2037. In 2023, Iberdrola signed a memorandum of understanding to sell 55% of its gas business in Mexico. However, Iberdrola is still expected to rely on a small proportion of gas in the long-term.

Between 2018 and 2022, Iberdrola has invested 100% of its USD 1.3 billion research and development (R&D) expenditure in low-carbon technologies. Iberdrola’s total R&D expenditure since 2019 has focused on four key strategic areas: 24% on generation and customers, 33% on networks, 22% on renewables and 21% on systems. Iberdrola’s R&D expenditure includes investment in smart grid technologies, energy storage and green hydrogen. However, the company does not appear to invest in any R&D into carbon capture storage (CCS) or carbon capture, utilisation and storage (CCUS) technologies. As the company plans to continue to generate electricity using gas, it should apportion part of its R&D budget towards CCS/CCUS investments.

Iberdrola reports a life cycle intervention relevant to its onshore wind turbine blades. The company is undertaking a research project with FCC Ámbito, called EnergyLOOP, to lead the recycling of blade components from onshore wind renewable energy facilities. As this project is not yet in operation, it is difficult to estimate any measurable impact from this project in reducing the company’s emissions from its wind assets. However, Iberdrola has a target to recycle 50% of its wind turbine blades by 2025 and 100% by 2030, if a commercial feasible solution is available.

Iberdrola has an overall target to achieve net-zero scope 1, 2 and 3 emissions across its value chain by 2039 compared to 2020. Although this target has been validated by the Science Based Target initiative (SBTi), it is not consistent with a 1.5°C pathway, which would require the company to be net zero by 2035. Iberdrola has set an interim target to reduce its scope 1 and 2 emissions from power generation by 83% per kilowatt-hour (kWh) by 2030 from its set base year of 2020. This SBTi validated target is aligned with the company’s 1.5°C pathway.

Iberdrola is aiming to reach 10 gCO2e/kWh for its scope 1 and 2 emissions by 2030 and to achieve net-zero scope 1, 2 and 3 emissions before 2040. It is also planning on tripling its installed renewables capacity as well as producing approximately 85,000 tonnes of green hydrogen by 2030. Between 2020 and 2025, Iberdrola is planning to significantly increase its installed renewables capacity. The company expects to increase its solar photovoltaic (PV) energy by 7.5 times, onshore wind power by 1.4 times, offshore wind power by 3.1 times and hydroelectric power by 1.1 times its current capacity.

In 2022, Iberdrola invested 86.5% of its CapEx in low-carbon technologies. This figure is expected to increase to 90% by 2025, and to 99% by 2030. Iberdrola currently has almost 60 projects in the pipeline to produce more than 60,000 tonnes of renewable hydrogen per year. Iberdrola’s R&D expenditure includes renewable hydrogen and smart grid projects. Its total R&D expenditure since 2019 has focused on four key strategic areas: 24% on generation and customers, 33% on networks, 22% on renewables and 21% on systems.

In 2017, Iberdrola announced the complete closure of its coal-fired power capacity. Since 2020, coal has not accounted for any of its electricity generation. However, in 2022 gas accounted for 30% of its installed energy capacity. In 2022, Iberdrola acquired its largest onshore wind farm in the world, with a capacity of 1,000 MW, in Australia. In the same year, Iberdrola was awarded 7,000 MW of offshore wind power in Scotland.

Although Iberdrola states it is committed to a coal phase-out, in 2020 the company tried to acquire PNM Resources, a company which generates electricity from coal in Mexico. However, the acquisition was blocked by US regulators. As well as having a strong policy engagement strategy, a number of Iberdrola’s senior executives are on the board of Solar Power Europe and Wind Europe. However, Iberdrola is also a member of two non-climate-aligned associations related to gas energy development, the American Gas Association, and the Gas Technology Institute.

The company publicly discloses a commitment to engaging in social dialogue with workers and unions. However, no relevant disclosure was found regarding the categories of stakeholders it engages with on a just transition. Nor was there any evidence to show the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found that the company undertakes low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. Furthermore, it discloses the actions it takes to generate 12,000 new hires in the next three years. Furthermore, there is evidence that the company has promoted these jobs in a way that ensures gender balance and inclusion of vulnerable groups.
Furthermore, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company discloses the measures it takes to provide training and education opportunities on STEAM projects that embed equality of opportunity for women and vulnerable groups. However, no evidence was found of the company having a process for identifying skills gaps for workers and stakeholders affected by the low-carbon transition or a public commitment to help workers displaced by the transition to re- or up-skill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

While the company commits to respecting human rights and the ILO fundamental rights at work, no evidence that it expects its business relationships to respect the ILO fundamental rights at work. The company discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks. While the company takes action to mitigate these risks in its own operations and supply chain, no evidence and examples found that it engages with affected stakeholders. The company does, however, have a grievance mechanism available to workers and external stakeholders.

While the company expects its business relationships to the health and safety of its workers, no evidence was found that the company itself demonstrates the same commitment. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity, including the age and gender of its workforce by employee category. Furthermore, the company discloses additional indicators of workforce diversity. The company also commits to gender equality and women’s empowerment.

The company commits to protecting personal data. Moreover, the company has a privacy statement regarding the collection, sharing and access to personal data. The company also discloses its global tax strategy as well as the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. However, no evidence was found that the company has a lobbying and political engagement policy, nor does it specifies that it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.