Ørsted

Ørsted’s targets are significantly more ambitious than its 1.5°C pathway. As a purely energy generation company, Ørsted will have effectively decarbonised its scope 1 and 2 emissions by 2025 and is aiming for 50 GW of renewables capacity by 2030. Ørsted has set a target to reduce scope 1, 2 and 3 emissions intensity by 99% by 2040 compared to 2018. Ørsted’s speed of decarbonisation leads the sector and has been driven by ambitious near- and long-term targets validated by the Science Based Target initiative (SBTi).

Ørsted’s rapid drop in emissions intensity between 2017 and 2022 and its intention to achieve a 98% decrease in its scope 1 and 2 emissions by 2025 demonstrate the effectiveness of its low-carbon transition planning and strategy. With the closure of its remaining coal capacity by the end of 2024, coupled with a 99% low-carbon energy portfolio by 2025, Ørsted will have fully transitioned to a sector-leading, low-carbon electric utilities company. Ørsted’s investment into low-carbon activities leads in comparison to all the other companies in the benchmark. Currently, Ørsted allocates 99% of its capital expenditure (CapEx) to low-carbon activities, and this share is expected to increase to 100% over 2023 and 2027.

Ørsted’s revenues from low-carbon activities constitute 73% of its total revenue. The company has evolved from oil and gas activities to being one of the largest renewables companies in the world. By 2030, Ørsted aims for significant additional growth on top of its existing sector-leading levels of awarded and installed renewables capacity. Ørsted’s existing business models mainly focus on offshore and onshore wind and solar power, bioenergy from sustainable biomass and energy storage. The company has also been exploring green hydrogen and e-fuels.

Ørsted does not detail how it works with its clients to reduce emissions and energy demand. The company can improve its performance in this area by creating a client engagement strategy governed by a clear policy and integrated into its business decision-making. Ørsted offers renewable electricity and heating to its customers. However, it can also offer energy efficiency services, such as providing personalised energy efficiency audits or engaging with its customers through information sharing, compensation or collaboration. This is an opportunity for Ørsted to use its established experience and engage with its customers to further influence and drive reductions in energy demand.

Ørsted has set a target to reduce its scope 1 and 2 emissions intensity by 98% by 2025 and by 100% by 2040, compared to 2006. Ørsted has also set a target to reach net-zero emissions by 2040. This target has been validated by the SBTi in line with its net-zero standard. Supporting its decarbonisation ambition, Ørsted is aiming for 50 GW of low-carbon energy generation by 2030.

Ørsted is the largest offshore wind developer globally and aims to be the largest, sector-leading, low-carbon electric utilities company. Ørsted aims to grow its offshore and onshore wind and solar power, sustainable biomass and energy storage capacities. It is also investigating floating offshore wind technologies. It targets a low-carbon portfolio share of 99% by 2025 and 50 GW of low-carbon capacity by 2030. Due to government intervention, it has been instructed to postpone closing down its remaining coal assets and phase out by the end of 2024.

The company currently has 22.2 GW of awarded and installed low-carbon capacity. Ørsted’s revenues from low-carbon activities constitute 73% of its total revenue. This share is expected to rise to 89% by 2030. Further, 99% of Ørsted’s CapEx and 100% of its R&D investment are allocated to low-carbon technologies and activities. Additionally, 91% of Ørsted’s current portfolio is from low-carbon sources and the company uses 100% sustainable biomass.

The company’s emissions intensity trend between 2017 and 2022 decreased by a rate greater than that required by its 1.5°C pathway between 2022 and 2027. Between 2017 and 2022, Ørsted more than tripled its wind generation. In 2017, low-carbon sources accounted for approximately 64% of the company’s generation. Whereas in 2022, this share increased to more than 90% of the Ørsted’s overall generation.

Decarbonisation is deeply embedded in Ørsted’s strategy. Its actions and decisions demonstrate a consistent focus on further decarbonising its energy portfolio. Ørsted aims to achieve net-zero emissions by 2040. It has firm commitments to expand its low-carbon energy generation capacity, supported by investments entirely targeted to its low-carbon activities and vision. Consequently, Ørsted is projected to remain well within its 1.5°C carbon budget for the period 2022-2037.

No evidence was found to show the company’s commitment to social dialogue or disclose the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking 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 create green and decent jobs as apart of its just transition strategy, through its pre-apprenticeship programme. However, no evidence was found to show if the company has actions to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company has a commitment to re- and up-skill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it has re- and up-skilling schemes and on the job training in the renewable energy sector. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders 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.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. Additionally, evidence was found to show the company has a process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. However, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. However, no evidence was found of a time-bound target for paying all workers a living wage. The company does not disclose the proportion of its direct workforce covered by collective bargaining agreements. There is relevant disclosure available, however, stating the company’s required working hours are 48. The company discloses some indicators of workforce diversity, including gender. However, no relevant disclosure was found of additional indicators of workforce diversity. Nevertheless, the company commits to gender equality and women’s empowerment.

The company commits to protecting personal data. However, no evidence was found of a privacy statement regarding the collection, sharing and access to personal data. The company discloses its global tax strategy, and additionally, relevant disclosure was found to show 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, the company does not have a lobbying and political engagement policy, and it does not specify that it does not make political contributions. Yet, no relevant disclosure was found of the company’s expenditure on lobbying activities.