Modern Slavery Statement 2020 Drax Group Plc 2 Modern Slavery Statement 2020 Modern Slavery Statement 2020 3
Total Page:16
File Type:pdf, Size:1020Kb
Modern Slavery Statement 2020 Drax Group plc 2 Modern Slavery Statement 2020 Modern Slavery Statement 2020 3 Introduction We believe in doing the right thing In this, our fifth Modern Slavery Statement, we outline the progress we’ve made in 2020 and our planned improvements for 2021. We’re making this Statement for the financial year ending December 2020 and according to the requirements of section 54, part 6, of the Modern Slavery Act 2015. Due to the Government's ongoing review of slavery reporting rules, we may need to extend our reporting period to 31 March 2021. This Statement applies to all companies within the Drax Group (“Drax”) that are required to publish a Statement, as listed in the ‘statement approval’ section. For further information on Drax and our earlier Modern Slavery Statements, please see our websites: Drax Biomass Drax Energy Drax Group Haven Power Opus Energy Visit Cruachan 4 Modern Slavery Statement 2020 Modern Slavery Statement 2020 5 Organisational structure Drax operates an integrated value chain across three core areas of Our integrated flexible and renewable value chain. activity in the US and the UK: • Biomass production • Power generation and system support services Pellet production • Business to Business (B2B) energy supply and management solutions Our pellets provide a sustainable, low-carbon fuel Based in North America this business aims to Safety, sustainability and operational excellence underpin all our activities. source that can be safely and efficiently delivered increase capacity from 1.5Mt to 5Mt and reduce through our global supply chian and used by production costs by 2027 to support a long-term Drax's Generation business to make flexible, future for sustainable biomass. Our UK and US biomass production assets include: renewable electricity for the UK. EBITDA Pellets produced Production cost Daldowie Fuel Plant, UK Daldowie Fuel Plant processes sludge from a wastewater 23.5 tonnes of biomass pellets for use as a sustainable fuel £52m 1.5mt $153/t treatment plant and converts it into dry, low-odour fuel source. This safely disposes large volumes of sludge that pellets. Daldowie can convert 1,000 tonnes of sludge into (2019: £32m) (2019: 1.4mt) (2019: $161/t) might otherwise end up in landfill. Drax Biomass, US Drax Biomass International manufactures compressed wood Amite BioEnergy in Gloster, Mississippi; Morehouse Generation pellets produced from sustainably managed working forests BioEnergy near Bastrop, Louisiana; and LaSalle BioEnergy, Drax is the UK largest single source of renewable (in Louisiana, Mississippi and Arkansas) that supply fuel to near Urania, Louisiana. Our multi-site, multi-technology portfolio of electricity and is developing an option for carbon Drax Power Station. A port facility in Baton Rouge, Louisiana manages the flexible, low-carbon and renewable UK power negative electricity using bioenergy carbon Headquartered in Monroe, Louisiana, the company owns shipping of the compressed wood pellets. and operates three wood pellet manufacturing plants: assets provides power and system support capture and storage (BECCS). services to the electricity grid. Our UK power generation assets include: The Group also has options for system support This portfolio provides long-term earnings gas assets and a long-term option for the stability and opportunities to optimise returns potential of pump storage. Drax Power Station Cruachan Power Station from the transition to a low-carbon economy. Drax Power Station is the biggest renewable generator in Cruachan Power Station is one of only four pumped hydro EBITDA % renewable System support and optimisation the UK. It supplies 11% of the UK’s renewable power and storage stations in the UK and has a capacity of 440 MW – generates enough power to keep the lights on in more than enough to power more than 90,000 homes. £446m 77% £118m 6 million homes. Hydro-electric power stations (2019: £408m) (2019: 79%) (2019: £120m) Lanark consists of two hydropower stations – at Bonnington and at Stonebyres – and has a total capacity of 17 MW. Galloway comprises six power stations (Drumjohn, Kendoon, Carsfad, Earlstoun, Glenlee and Tongland), eight dams and a series of tunnels, aqueducts and pipelines that help to control the flow of the water - and has a total capacity of 109 MW. Customers non-generation system support and energy Our UK energy supply businesses include: Our Customers business is principally focused management services in addition to providing on renewable electricity sales to industrial and a route to market for many smaller embedded corporate customers. The business also offers renewable generators. Haven Power Opus Energy EBITDA Haven Power supplies and manages electricity for large Opus Energy supplies electricity and gas to businesses industrial and commercial customers, as well as smaller and has partnerships with over 2,000 independent UK businesses. Haven Power supplies renewable electricity as renewable energy generators. This provides a market for (reflecting the negative standard, and at no extra cost to customers. power from renewable energy sources such as wind, solar, £(39)m impact of COVID-19 with hydro and anaerobic digestion. (2019: £17m) a £(60)m impact.) 6 Modern Slavery Statement 2020 Modern Slavery Statement 2020 7 Governance Working together Risk Our assessment anti-modern Speak up culture Due diligence slavery Policies and Training programme procedures Supplier contracts Employment practices 8 Modern Slavery Statement 2020 Modern Slavery Statement 2020 9 “The MSWG continued its work to deliver Drax’s ongoing improvement programme, as reported throughout this statement” Governance Our Modern Slavery Working Group (MSWG) • Is responsible for making sure Drax takes • The EBCC approved a detailed remediation is responsible for the appropriate steps to investigate and plan (to be used should modern slavery be remediate the risk of modern slavery, discovered in Drax’s supply chain) development and delivery both within our own business and our of our anti-modern slavery supply chain • Drax’s Employee Forums were engaged to establish the effectiveness of Drax's anti- programme and provides No cases of modern slavery have been modern slavery programme a quarterly report on its escalated to the EBCC to date. We continue to work with our colleagues and suppliers to raise activity to our Ethics awareness and promote transparency in our and Business Conduct supply chains. In 2021, we plan to: Committee (EBCC). • Increase the frequency of our communication on the topic of modern Our EBCC, a sub-committee of our Progress in 2020: slavery, following feedback from our Executive Committee, oversees our Employee Forums programme. It provides an annual report • The EBCC, in addition to the Executive on its decisions and activity to our Audit Committee and Board, approved a new Drax • Research suitable ‘in-country’ Non- Committee, which comprises executive and Code of Conduct (‘Drax Code’) and Supplier Governmental Organisations (NGOs) and/ non-executive directors. Code of Conduct (‘Supplier Code’) or other partners to support Drax should an issue occur that requires the EBCC approved The EBCC: • The MSWG continued its work to deliver remediation plan to be put into action Drax’s ongoing improvement programme, • Has approved a protocol and remediation as reported throughout this statement plan, based on guidance from the Home Office, that we must follow if we discover modern slavery in our business or supply chain 10 Modern Slavery Statement 2020 Modern Slavery Statement 2020 11 Risk assessment We’re committed to Lithuania, Russia, Ukraine, and Belarus (sub tier Non-fuel supply: 1) to be higher risk for modern slavery. We carry identifying and addressing out additional due diligence on these supply The following graphic provides statistics on Progress in 2020: chains as described above. our 2020 non-fuel procurement activity, by modern slavery that could percentage of spend and geography, on our tier • Completed an annual risk assessment, in line be connected to both our 2020 fuel procurement by country: 1 supply. It shows that 92% of our spend is with with Home Office guidance, and reported it to tier 1 suppliers based in the UK. the EBCC business and supply chain. Biomass procurement by country 2020 • Updated the Group-wide modern slavery risk Due to the controls and practices we’ve Top 6 tier 1 countries of register. Like the risk assessment, the register adopted (as described in the ‘Employment origin based on spend was subject to the EBCC's review Practices’ section below), we believe the risk of 63% % of 2020 non-fuel supply modern slavery in our own business is very low. United States spend by country • Issued the modern slavery questionnaire 4.7 million tonnes to appropriate third parties and assessed Our wider supply chain is varied and complex, 92% responses, following up as required meaning the risk of modern slavery is higher. UK We have almost 4,000 suppliers across 17% 1% • Progressed work to map the supply chain of Canada Estonia our procurement activities and engage our top categories of non-fuel spend 1.2 million tonnes <0.1 million tonnes 1.2% with many different industries, including USA forestry, manufacturing, freight and logistics, • Enhanced our risk assessment toolkit by engineering, construction, IT, and site services. 9% 1% purchasing and implementing a new third Latvia Lithuania 1% 0.7% party system, ELEVATE 0.7 million tonnes The Global Slavery Index, which is incorporated <0.1 million tonnes