SSE PLC SUSTAINABILITY REPORT 2020 SUSTAINABILITY REPORT ABOUT THIS REPORT Contents SSE plc is a UK-listed energy company that operates throughout the UK Chief Executive’s Statement 2 and Ireland. The disclosure of SSE’s most material sustainability impacts is integrated throughout its Annual Report 2020. The Sustainability Report Our business model 4 aims to provide enhanced disclosure of SSE’s key policies, management Our purpose and strategy 4 and performance of its economic, social and environmental impacts. What we do and who we do it for 5 Sustainability approach and governance 6 SSE’s sustainability approach is aligned to the United Nations’ Sustainable Development Goals (SDGs). Identifying material issues 8 Reporting against the SDGs most material to SSE’s Emerging trends 8 business can be found on the following pages of this Working for and with stakeholders 10 report: Group Principal Risks 12 Global frameworks and partnerships 13 Aligning to the UN's SDGs 15 The scope of this report is generally focused on performance data for the financial year ending 31 March 2020. However, the period between Taking meaningful climate action 16 SSE’s year end and the publication of this report was dominated by the Embedding climate action 19 coronavirus emergency and therefore some activities during this period Measuring performance 22 have also been included. Climate-related financial disclosure 24 On occasion the report refers to activities of SSE’s joint ventures and Protecting the natural environment 32 in these instances it is made clear that this is the case. For a full list of Managing environmental impacts 32 SSE’s subsidiary undertakings, partnerships, joint ventures and associates, Using resources efficiently 34 please refer to pages 252 to 259 of SSE’s Annual Report 2020. Providing affordable and clean energy 36 In 2020, SSE sought assurance on its greenhouse gas emissions, carbon Delivering clean energy for net zero 39 intensity, water and Green Bond data from professional services firm Serving distribution customers 40 PwC. PwC also undertook the economic analysis of SSE’s contribution Low-carbon solutions for customers 42 to the UK and Irish economies. Investing in industry, innovation and infrastructure 46 SSE welcomes feedback on this report, please contact [email protected]. Sustainable investment in infrastructure 49 Embedding sustainability in electricity networks 51 Leading the charge on electric vehicles 52 Forging innovative partnerships 53 Innovation in SSE’s business units 54 AT A GLANCE Committed to decent work and economic growth 58 Contributing to GDP, jobs and the public purse 62 Investing in local communities 64 SSE’s science based Carbon intensity of electricity generated Taxes paid A sustainable approach to procurement 66 carbon targets page 23 UK Embedding a responsible employer ethos 69 SSE adopted a new target 288gCO e/kWh Health and safety 71 to cut carbon intensity of 2 £421.6m Human rights and modern slavery 72 electricity by 60% by 2030. Business ethics and culture 74 Ireland Inclusion and diversity 75 Economic contribution Reporting SSE’s gender pay gap 78 Full TCFD disclosure UK pages 24 to 31 €18.1m Working towards a just transition 80 A report of SSE’s climate-related £7.7bn risks and opportunities mean Ireland Total renewable generation output Data and performance SSE has, for the first time, met (inc. pumped storage, biomass and GB SSE’s Green Bond reporting 83 the recommendations of the €650m constrained off wind) Executive remuneration – non-financial performance 84 Taskforce on Climate-related Environmental data 86 Financial Disclosures in full. 11.4TWh Economic data 88 Median gender pay gap – UK Social data 90 The power of innovation to SSE’s UK gender pay gap 92 meet net zero pages 53 to 57 18.4% An accelerated green recovery from the economic impact of coronavirus means that innovation in smart, low carbon Note: information for SSE Energy Services, which was sold to OVO Energy Ltd on 15 January ANNUAL REPORT 2020 SSE PLC SSE PLC ANNUAL REPORT energy is more important 2020, is generally excluded from this report but where it is included this has been highlighted. For a better energy world of 2020 The SSE plc Sustainability than ever. Report 2020 is complemented Disclaimer: The Adjusted Performance Measures SSE uses for financial reporting purposes by SSE’s Annual Report 2020 are consistently applied and are explained and justified in the Annual Report 2020, which can be found online pages 164 to 169. at sse.com. SSE plc Sustainability Report 2020 1 SUSTAINABILITY REPORT CHIEF EXECUTIVE’S STATEMENT that support; we have borne the solutions to the problems of people and clean energy; SDG 9: Industry, commercial implications of the virus and planet. That’s not to say profit innovation and infrastructure; and SDG THE POWER OF in the short term and foresee further has no purpose. It supports pensioners 13: Climate action. financial impacts to come. We have and savers, which is important for a resilient business model and believe social and economic wellbeing – never The fourth is SDG 8: Decent work and PURPOSE IN A CRISIS we should do everything we can to more so than in these uncertain times economic growth. That’s because stand on our own two feet as we do – and it contributes to public services people ultimately determine the success SSE’s core purpose is to provide energy needed today our bit by developing, operating through the payment of corporation or otherwise of every business, and SSE while building a better world of energy for tomorrow; and owning critical national tax. is only as good as the talents, skills and infrastructure. values of those of us employed by the it has never felt so vital. Our Fair Tax Mark accreditation is a company. Just because we have not furloughed badge we have worn with honour for employees or taken government six years and the point I want to make I have never felt so proud to be part of A unique opportunity for change flexible community funds to deal with Furthermore, a new set of carbon targets loans, does not mean that we clearly is this: SSE as I have so far in 2020. The teams Achieving the right balance between the immediate crisis and we worked aligned to the Paris Agreement and do not rely on the critical services working to keep electricity networks recording our sustainability performance closely with key suppliers behind the verified by the Science Based Target provided by the public sector When times are tough, businesses – to operating and generate the electricity during the 2019/20 financial year scenes. initiative place these investments within through the crisis or in other, more a greater or lesser extent – rely on the needed, as well as many others who and recognising the human, social, a robust framework from which SSE will normal times: we do. Health and care public sector; when things are good, have adapted to working effectively from economic and environmental impact of But the immediacy of providing energy meet its goal to take meaningful climate services, local and municipal services the least we can do is pay our fair share home, have done a remarkable job. the coronavirus pandemic in 2020/21 needed in a time of national crisis has action. and education provision have been towards that public sector. was the key challenge for this report. not distracted us from the second part under enormous strain, operating in the It is important to me that our investors of our purpose. Building a better world Creating value through an ESG toughest of circumstances. We draw on Committing to decent work and stakeholders know just how valuable SSE’s 2019/20 financial year was largely of energy for tomorrow recognises proposition all of these public services to maintain SSE intends to create value for the teams in SSE are and unaffected by the crisis, but we expect it the existential threat posed by climate Investors are increasingly recognising our operations and, in return, we shareholders and society through focus how proud we are of them. will have a substantial, albeit temporary, change, and the important part SSE has the long-term value associated with contribute to the public purse to support on four goals for 2030, aligned to four adverse effect on our businesses in in tackling it. good environmental, social and them as part of our social contract. of the UN’s Sustainable Development Alistair Phillips-Davies 2020/21. As we emerge from the worst governance (ESG) credentials. I like At SSE we believe the purpose of good Goals (SDGs). Three are clearly linked Chief Executive of the pandemic and start to rebuild our Aligning business and social objectives to think that SSE was an early adopter corporations is to produce profitable to SSE’s business: SDG 7: Affordable 9 July 2020 battered economies, we are presented SSE has long engaged with government of careful ESG management, and the with a unique opportunity to do on an ambitious decarbonisation agenda increasing focus on ESG metrics is a everything better than we did before. that seeks to go further and faster. trend we wholeheartedly welcome, Coming out of lockdown, that has added for two reasons: The way we work, the way we do impetus. The time is ripe for a green-led • Firstly, we agree that there is long- business, even the way in which we lead economic recovery; one that is in all term value for both shareholders our lives, can all change for the better. our interests and sustainable in every and society encapsulated in good sense. That’s why SSE has published ‘A sustainability performance. Showing purpose in a crisis greenprint for a cleaner, more resilient • Secondly, we also understand SSE’s core purpose is to provide energy economy', available on our website, there is a virtuous cycle: the more needed today while building a better which provides a set of 15 practical we identify, articulate and disclose world of energy for tomorrow; it has proposals for government in the UK ESG data and performance via the never felt so vital.