Vestas

As part of its sustainability strategy , Vestas sources a 100% of renewable electricity for its own operations since 2020, which has contributed to significantly decreasing its scope 2 emissions. Additionally, the company produces wind turbines that are 85% recyclable, with a target of reaching 100% recyclability by 2040.

No leading practices were identified for this company.

No leading practices were identified for this company.

No leading practices were identified for this company.

Vestas has set a target to reduce its scope 1 and 2 emissions by 100% by 2030, with an interim target of 55% reduction by 2025 compared to 2019, without the use of carbon offsets. This target has been validated by the SBTi as consistent with a 1.5°C pathway. The company has also committed to reducing its scope 3 emissions intensity by 45% by 2030 compared to 2019. However, since the company only began disclosing its scope 3 emissions in 2019, this data was insufficient to provide a meaningful assessment of its historic emissions intensity trend and its alignment with a 1.5°C pathway. Vestas aims to produce zero waste turbines by 2040.

The company currently generates more than 90% of its revenue from low-carbon activities. In 2022, Vestas reported that 96% of its revenue, related to wind turbine manufacturing and construction and service activities, was aligned with the EU taxonomy. Although global wind power capacity is expected to grow according to forecasts by the International Energy Agency (IEA), Vestas struggled to remain profitable in 2022 due to geopolitical uncertainties, high inflation levels in the supply chain and reduced wind power installations in Europe, among other reasons. However, the company plans to develop and strengthen its business model to include onshore and offshore wind projects and services and become the global leader in the market. The company does not have a formal transition plan, but it has developed comprehensive elements of transition planning informed by climate scenario analysis that considers the implications of a 1.5°C scenario. Additionally, the company has implemented board-level oversight of and incentives for managing the low-carbon transition. Vestas can improve its performance by putting in place a process to review and update its low-carbon transition plan.

Vestas has identified the most important sources of upstream emissions linked to its sold products and has set up interventions, such as the decarbonisation of steel production. The company has committed to purchase at least 10% near-zero emissions steel by 2030. Further, the company’s low-carbon capital expenditure (CapEx) in 2022 accounted for 91% of its total CapEx and was reported by the company as being aligned with the EU taxonomy.

The company requires nearly 50% of its suppliers to commit to using 100% renewable electricity and to set targets for reducing their scope 1 and 2 emissions. Beyond reducing GHG emissions, the company can recommend its clients to increase their research and development (R&D) spending on low-carbon technologies, undertake climate change scenario testing, support relevant climate policies and develop low-carbon business models. Vestas can improve transparency around its client engagement strategy by disclosing the proportion of clients the strategy targets based on client-related revenue or scope 3 emissions.

Vestas has set a target to reduce its scope 1 and 2 emissions by 100% by 2030 without the use of carbon offsets. This target has been validated by the SBTi as being consistent with a 1.5°C pathway. The company has also committed to reducing its scope 3 emissions intensity by 45% by 2030 compared to 2019. Vestas aims to produce zero waste turbines by 2040, moving up from 85% wind turbine recyclability.

The company discloses robust evidence of transition planning, such as detailed short- and long-term actions to achieve its emissions reduction objectives, described by the scope of emissions. Moreover, Vestas has linked financial incentives within the company to its long-term climate-related targets.

Vestas sources a 100% of renewable electricity for its own operations since 2020. The company is investing in the recyclability of its wind turbines, aiming at producing 100% recyclable turbines by 2040.

The company’s reported scope 1 and 2 emissions showed a decrease from 2017 to 2022 aligned with the company’s 1.5°C pathway. However, its reported scope 3 emissions are insufficient to assess its future alignment with a 1.5°C pathway.

Vestas’ reported data on targets, strategy and emissions intensity suggests a full commitment to the low-carbon transition. The company invests more than 80% of its R&D expenditure and more than 90% of its total CapEx on low-carbon activities.

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 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 discloses the actions it takes to generate 10.3 million net new jobs by 2030. However, no public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action 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. No public commitment by the company was found stating its intention to reskill and upskill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company re-skills and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

The company identifies the impacts of the low-carbon transition on social protection for workers and affected stakeholders through its social due diligence process. However, no relevant disclosure was found to show if the company 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. The company discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks, such as rights related to labour conditions and community engagement and land rights. However, it is unclear whether the company uses this process to identify human rights that are at risk of being impacted by its business relationships. No evidence was found that the company takes action to mitigate these risks in its own operations and supply chain, nor does it engage with affected stakeholders. 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. While the company discloses that it respects ILO conventions on labour standards on working hours, no evidence was found that the company discloses the proportion of its direct workforce covered by collective bargaining agreements. The company discloses some indicators of workforce diversity, including the age and gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. 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 the corporate income tax paid for each relevant jurisdiction. Moreover, the company has a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. However, no evidence that the company has a lobbying and political engagement policy, nor does it specify that it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.