The Harmony of Energy Sustainability Report 2014 K-Electric Limited Third Floor, KE House 39-B Sunset Boulevard Ext Phase II, DHA, Karachi +92 21 3263 7133 +92-21-3870 9132 ke.com.pk Contents About the Report 03 Harmonizing Environment An Independent Assurance Statement 05 Green Management Framework 103 A Message from the CEO 07 Climate Change Policy Framework 105 Energy Conservation 107 Harmonizing Governance Climate Change Policy – Progress 109 Vision, Mission and Values 12 Lowering Emissions 111 Corporate Governance 13 Energy Efficiency Initiatives 121 Leadership Team 16 The Board of Directors Role 17 Harmonizing Stakeholder Management Compliance 21 An Engaged Business 128 Stakeholder Universe 129 Harmonizing Growth About K-Electric 26 Annexure Performance Overview 27 Management Approach 139 Generation – Re-energizing Energy 32 GRI Reference Table 141 Transmission – Progress in Reliability 37 Financial Summary 161 Distribution – Leading Progress 41 Customer Services 47 Investments for the Future 49 Redefining the Future of Transmission 53 Redefining the Future of Distribution 55 Awards & Recognition 57 Financial Value Creation Financial Sustainability 61 Harmonizing Shared Value Shared Growth – Human Resource 65 Shared Protection – Health and Safety 75 Shared Progress – Supply Chain 83 Harmonizing Shared Impact Social Impact 87 Our Sustained Impact 89 Social Investments 92 Shared Impact – Sports 99 Sustainability Report 2014 About the Report This report celebrates our strong transparency with its stakeholders. communicating and broadcasting any performance against our environmental The report covers activities that are substantial changes in measurement and social commitments, as it is located within KE’s direct space and assumptions and analyses in its future KE's first externally audited the ones related to its community and sustainability reports. sustainability report. The purpose respective stakeholders. The report of this assessment is to provide a focuses on the organisation’s licensed The report was compiled by the ESG benchmark for comparing the network area. In this way we have and Sustainability department of KE, combination of the organisation’s limited the scope of this report to the in collaboration with Distribution, social, economic, governance, and activities of KE in the direct sense, not Generation, Transmission, Human GRI has confirmed that the report was prepared according environmental performance against including analyses of outsourced Resources, Finance, Corporate Affairs, to the GRI G3.1 Guidelines, at Application Level A+ established standards and across operations and sustainability-related HSEQ, Strategy and Marketing and time. In doing so, the report activities of the entities working on the Communications departments with communicates externally verified commercial supply and demand sides of some assistance from external K-Electric Limited (KEL) 2013-14 Sustainability Report has been prepared in accordance with the Global information on the organisation’s KE operations. We hope to expand our consultants. In compiling this report, Reporting Initiative (GRI) sustainability reporting Guidelines, version 3.1. GRI Report Services has determined performance utilizing the Global sustainability-related monitoring and the team’s goal was to satisfy the that KE’s 2013-14 Sustainability Report fulfills the requirement of GRI G3.1 application level A+. Reporting Initiative (GRI), G3.1. KE disclosure capacities to account for our disclosure standards stipulated in plans to use the results and suppliers as well by the next reporting cycle. GRI, G3.1, Level A+, as a tool for The GRI Application Level Service confirms that the required set and number of disclosures for the application level have conclusions reached in this report to both external disclosure and internal been addressed in the reporting and that the GRI content index demonstrates a valid representation of the required further improve its sustainability KE follows basic and widely used assessment for future planning. disclosures. The use of the GRI Application Level Service icon serves as the formal confirmation. performance in the future. international standards in its data Despite all the challenges that the measurement, compilation, and organisation faced in its recent past, This year, KE presents the second calculations. Moreover, the information the reforms conducted in relation to its report that ensures further assurance needed to asses our performance in management systems were such that to our stakeholders through obtaining relation to GRI, G3.1 generally require it is now able fully to report on most of Application Level 2015 a third party verification by KPMG. The straightforward measurements and the GRI, G3.1 disclosure indicators. K-Electric Limited verified report is grade checked by GRI analyses. Assumptions regarding Jul at A+ level, which is the highest measurements in this report are, We look forward to your feedback, Service disclosure level checked by the global therefore, unlikely to affect the suggestions and queries on our organisation. This report is a manifestation information provided or pose problems second sustainability reporting of KE's commitment to achieve the for future performance comparison. initiative, which can be directed to: highest levels of disclosure and KE is likewise committed to [email protected] 04 Sustainability Report 2014 Independent Assurance Report to the Board of Directors Scope work. We conducted our work in sustainability goals and the progress Limitations aspiration, expectation, aim or material respects, in accordance with We have been engaged to perform accordance with the International made during the reporting period Our scope of work did not involve: future intention and national or the framework adopted by the company limited assurance engagement on the Standard on Assurance Engagement global socio-economic and in line with sustainability report Sustainability Report (”the Report”) of 3000 “Assurance Engagements other • Reviewed the company’s approach • Aspects of the report other than those environmental aspects guidelines of the Global Reporting K-Electric Limited (”the Company”) than Audits or Reviews of Historical to stakeholder engagement and mentioned above Initiative (GRI 3.1) and supported by for the period 01 July 2012 to 31 Financial information”. processes for determining material • Data and information on economic the company’s internally defined December 2014 prepared by the issues through interviews and review • Data and information outside the and financial performance of the procedures, as described in th GRI management of the company. The standard requires that we of associated documents defined reporting period (01 July 2012 Company, which, we are informed, are Reference Table of the report and the comply with ethical requirements to 31 December 2014) from the company’s financial records guidelines issued by the Securities and plan and perform the • Reviewed relevant documents and and Exchange Commission of Management’s assurance engagement, under systems for gathering, analyzing and • Technical information/data which Conclusion Pakistan for the period 01 July 2012 Responsibility consideration of materiality, in aggregating sustainability performance required an expert for its verification Based on our limited assurance to 31 December 2014. The company's management is order to provide our conclusion data in the reporting period engagement, nothing has come to our responsible for the preparation and with limited assurance. In a limited • The company’s statements that attention that causes us to believe that presentation of the report in assurance engagement, the • Reviewed major anomaly within the describe expression of opinion, brief the report is not fairly presented, in all accordance with the requirements of evidence gathering procedures are report as well as between the report the framework adopted by the company more limited than for a reasonable and source data/information in line with the Sustainability Reporting assurance engagement, and Guidelines of the Global Reporting therefore, less assurance is obtained • Verified the transcription of data, Initiative (GRI 3.1) and supported by the than in a reasonable assurance. internally verified by the company company’s internally defined Accordingly, the procedures selected procedures, as described in the GRI were based on our professional • Reviewed the reliability of the KPMG Taseer Hadi & Co. KPMG Taseer Hadi & Co. Reference Table of the report and judgment. Within the scope of our information, assessing related Chartered Accountants Chartered Accountants CSR Voluntary Guidelines 2013 (the work, we performed, amongst other, controls and their operation Sheikh Sultan Trust Building No. 2, Moneeza Usman Butt Guidelines) issued by Securities and the following procedures: effectiveness Beaumont Road, Karachi, 75530 Pakistan Date: 20 August, 2015, Karachi Exchange Commission of Pakistan. • Interviewed selected key senior • Reviewed the Company’s plans, Telephone +92 (21) 3568 5847 personnel of the company to policies and practices, pertaining to Fax +92 (21) 3568 5095 Auditors’ Responsibility understand the current processes their social, environmental and Internet www.kpmg.com.pk Our responsibility is to express a in place for capturing sustainability sustainable development conclusion on the report based on our performance data, the company’s 06 Sustainability Report 2014 CEO’s Message Sustainability is