Vattenfall

In 2022, 81% of Vattenfall’s research and development (R&D) expenditure was spent on low-carbon technologies. The company’s research includes HYBRIT, a project to create a completely fossil-free value chain from mine to finished steel. The company is researching the development of hybrid power plants, feasibility of small modular nuclear reactors and biodiversity-friendly hydropower. Additionally, ten of the company’s 19 patents in the last five years have been related to low-carbon technologies. To perform better in this benchmark area, the company should disclose the proportion of its spending on non-mature low-carbon technologies. 

Vattenfall’s emissions intensity trend between 2018 and 2022 decreased in line with its 1.5°C pathway, as the proportion of the company’s power from low-carbon sources increased from 67% to 85%. However, due to its remaining coal and gas generation (approximately 15% or 14 terawatt-hours (TWh)), the company is projected to significantly exceed its 1.5°C carbon budget between 2022 and 2037. The company has set a coal phase-out date for 2030. It also reports plans to phase out gas but it does not set a timeline for this. To remain within its carbon budget, the company should accelerate its coal phase-out and make clear commitments regarding its gas phase-out across its whole portfolio.

Vattenfall publicly advocates for stronger climate action. The company believes electrification is fundamental to achieving the Paris Agreement goals. As such, it promotes ambitious development of several EU policies. Additionally, at the 26th UN Climate Change Conference, COP26, Vattenfall became a founding member of the First Movers Coalition, which focuses on decarbonising hard-to-abate sectors, including concrete and steel. The company can improve further by developing a public process to ensure that its policy positions remain consistent with the Paris Agreement goals.

Vattenfall is working to reduce emissions across the life cycle of a wind farm. The company has imposed a landfill ban on decommissioned blades from its wind farms and set targets to recycle 50% of blades by 2025, and 100% by 2030. It is also committed to using 10% near-zero cement by 2030 in its wind operations and plans to transition to sourcing 100% net-zero steel by 2040. In 2022, wind power accounted for 11% of the company’s electricity generation. As the company scales up its interventions across this portfolio, its total wind power share will improve. Next to this, the company should also consider interventions for its other low-carbon electricity sources.

Vattenfall has set targets to reduce its scope 1 and 2 emissions intensity by 12% by 2025 and 77% by 2030, compared to 2020 and 2017 respectively. It also aims to reduce its scope 1 and 3 emissions intensity from sold electricity by 77% by 2030 compared to 2017. In the long-term, Vattenfall will reduce its scope 1 and 2 emissions intensity by 93.5% by 2040 and its scope 1 and 3 emissions intensity from sold electricity by 94% by 2040, both compared to 2017. The company plans to reach net zero by 2040 including offsets. The company’s 2030 and 2040 targets have been validated by the Science Based Target initiative (SBTi) as consistent with a 1.5°C scenario.

To reduce its emissions from fossil fuels, Vattenfall has committed to phase out coal in 2030. It plans to phase out gas and is developing carbon capture use and storage (CCUS) for its biomass and waste incineration plant in Sweden. To increase its low-carbon electricity generation, the company plans to expand its solar and wind power capacity from 4 gigawatts (GW) to 16 GW by 2030, increase its battery capacity and continue to support hydro and nuclear power. By 2030 the company plans to produce 125 TWh of fossil-free electricity, compared to 92.5 TWh in 2022.

Vattenfall is currently working to decarbonise the sector value chain. The company was a founding member of the First Movers Coalition, which focuses on decarbonising hard-to-abate sectors. In 2022, over 80% of its R&D spending went towards low-carbon projects. The company has also set targets for its suppliers, including requiring the use of “breakthrough steel” and requiring active reduction of greenhouse gas (GHG) emissions, “preferably in line with the Paris Agreement’s 1.5°C scenario”.

Vattenfall’s emissions intensity trend, for both its own energy generation and its purchased power, decreased between 2018 and 2022 in line with its 1.5°C pathway. The proportion of the company’s own generated power from low-carbon sources increased from 67% in 2017 to 85% in 2022. However, contrary to this growth, in 2023 the company shut down the development of a wind farm off the coast of the UK, citing increase in costs and deterioration of market conditions as the reason.

Though the company’s fossil fuel generation is fairly low (approximately 15%) in proportion to its renewable energy generation, in absolute terms it is still significant. As a result, the company is expected to exceed its carbon budget between 2022 and 2037. The company must accelerate its plans to phase out its fossil fuels, instead of cutting its low-carbon capital expenditure (CapEx), which dropped from 89% in 2022 to 49% in 2023, or stopping development of key low-carbon infrastructure projects.

No evidence was found of the company’s commitment to social dialogue or of 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 just transition planning to mitigate the social impacts of the low-carbon 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 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 and support access to jobs, including connecting employees with new opportunities, and expanding employment as it constructs new renewable energy projects. However, no evidence was found of the company’s 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 reskill and upskill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it offers trainee programmes and continuous upskilling opportunities. 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 reskill or upskill.

The company discloses that it has various programs to provide social protection for the communities, through various community projects and funding. However, 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. 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. Furthermore, the company discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks, including community engagement, livelihoods and cultural heritage. The company takes actions to mitigate these risks in its own operations and in its supply chain. Additionally, the company has 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. Additionally, it discloses some statistics about the diversity of its workforce. However, the company can strengthen its disclosure on these subjects, as well as on its living wage, working hours and gender equality practices.

The company commits to protecting personal data. However, no evidence was found of the company having a privacy statement regarding the collection, sharing and access to personal data. While the company discloses its global tax strategy, no relevant disclosure was found of the corporate income tax it pays in each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its business relationship contracts. However, it can strengthen its disclosure on these subjects, as well as on its lobbying and political engagement.