Annual Report 2016 President & Ceo’S Statement
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ANNUAL REPORT 2 016 SAFER, SMARTER, GREENER CONTENTS COMPANY MARKETS SUSTAINABILITY PERFORMANCE 03 Company 25 Markets 55 Sustainability 104 Performance 04 President & CEO’s 26 Maritime 56 Sustainable 105 Board of Directors’ statement 32 Oil & Gas leadership report 06 Highlights 38 Energy 63 Health and safety 115 Board of Directors' 08 Key figures 44 Business Assurance 70 Business ethics profiles 10 Research and 50 Software and anti-corruption 118 Financial reporting innovation 76 People 126 Notes 13 Group structure 87 Environment 146 Auditor’s reports 14 Main services and climate 147 Information and 15 Executive Committee 92 Sustainable contact 18 Long history, procurement 148 GRI content index global presence 96 Partnerships for 19 From vision to impact sustainability 21 What is important to us COMPANY Driven by our purpose of safeguarding life, property and the environment, DNV GL enables organizations to advance the safety and sustainability of their business. Our origins stretch back to 1864, and our reach today is global. Operating in more than 100 countries, we are dedicated to helping our customers make the world safer, smarter and greener. PRESIDENT & CEO’S STATEMENT LEADING TOWARDS A DIGITAL FUTURE 2016 has been the toughest year for our company Common for all the sectors we work in is an accelerated call for in 30 years because of the continued downturn in the digital transformation. The potential for smarter use of data is maritime and upstream oil & gas markets. Despite enormous. The key to unlocking this potential is trust and the the challenging conditions in many of our markets, ability to operate across silos. This is where we in DNV GL see our position as a company remains strong. I believe ourselves playing a critical role in the era of the internet of things. we are investing wisely and taking positions now I see this as a natural extension of our role as a widely trusted, independent party with deep domain expertise and strong that will allow us to make the best of the world analytics capabilities. when it is trending positive again. To facilitate frictionless connections between different industry expect the challenging market situation for players, domain experts and data scientists, DNV GL is working shipping and offshore oil & gas to continue with Microsoft Azure to launch a secure industry data analytics during the period ahead, even allowing for and data management platform. a more optimistic outlook in selected sectors I such as cruise. At the same time, I believe the We call this platform Veracity and it is designed to help companies renewable energy sector will grow significantly leverage the ever-increasing amount of data amassing from their due to the drop in the cost of both renewable energy and energy assets. We are not looking to own data, but to unlock, qualify, storage, making this combination increasingly competitive. combine and prepare data for analytics and benchmarking. 4 ANNUAL REPORT 2016 PRESIDENT & CEO’S STATEMENT DNV GL’s Veracity data platform will bring industries together in digital eco-systems enabling them to enhance the exchange of data, build new services, create new insights and make better decisions. DNV GL’s business model is based on trust at all levels and Working to create our own industry data platform was not the in all business environments. We strive to only way in which we made progress towards our strategic goals in 2016. Another important step was the launch, through our reflect the DNV GL values in everything Software house, of our first software-as-a-service solution. A we do, demonstrate ethical leadership really tangible feature for the digital era. and uphold our reputation for integrity. We are also delivering services more efficiently through digitali- zation. DNV GL is the first classification society to offer drone- have named DATE – Direct Access to Technical Experts. The based tank surveys, with numerous such surveys already service was used more than 20,000 times in 2016, and 97% completed. This saves cost, avoids coating damage typically of the requests were handled within the agreed time frame. caused by staging work, and reduces the health and safety exposure for the people involved. We have also successfully We have also taken some key decisions to improve our cost piloted digital certificates and are the first classification society position and internal efficiency. Most effects will be seen during ready to roll on that front. 2017 and I expect to see the full effect in 2018. Sadly, we have had to take additional steps to adapt to the decline in the activity Another example is related to our safety risk management level in our core industries, including headcount reductions. services. By using MyQRA, we can deliver QRA studies much We are now almost 2,500 fewer colleagues than we were just more efficiently, in addition to improving the impact of our two years ago. deliverables. With this backdrop, I am however very pleased to see that our We have also been hired to do a ground-breaking Real Time health and safety performance is stable and on benchmark with Networks project for one of the UK’s key gas distribution oper- our industry peers, and that the enablement, empowerment, ators. Here, we are combining our expertise in pipelines, sensors, organization and collaboration of our staff continue to exceed the software, data analytics and digital solutions to enhance system global norm. I have high expectations for our performance in this performance. area and will ensure our continued focus on this topic going forward. DNV GL’s business model is based on trust at all levels and in all business environments. We strive to reflect the DNV GL values in everything we do, demonstrate ethical leadership and uphold The excellent customer feedback we our reputation for integrity. received throughout the year warms my heart. This referred not least to our round- During 2016, we took an important step towards our ambition the-clock technical centres for ship owners of becoming carbon neutral in relation to our travel and office and managers that we have named DATE buildings by 2020. A pilot project was run in Norway and through various measures and offsets we managed to achieve carbon – Direct Access to Technical Experts. neutral operations. Our results have been verified by an inde- pendent third party. In the Life Science area, we have secured the BIGMED project, We continue our support for the UN Global Compact principles where we are cooperating with leading universities and hospitals and are working to deliver on the UN’s 17 Sustainable Develop- to establish DNV GL as an internationally recognized data ment Goals together with customers and partners. Our purpose custodian and enabler of precision medicine. of safeguarding life, property and environment is more valid than ever before, and I’m confident that DNV GL is well positioned Collaborative innovation continues to be a cornerstone for our to be at the forefront in all our industries. company. One out of many joint industry projects we launched in 2016 is on standard-setting for floating wind turbines. The project In this world of flux and change, our customers are increasingly is run together with 14 companies from the wind, oil & gas and turning to us for advice about the long term. Our two foresight maritime sectors. studies issued in 2016, Technology Outlook 2025 and Future of Spaceship Earth, have been very well received in all markets across To further strengthen our energy services, we acquired power the world. It is a source of great pride to me that DNV GL is so systems expert Gothia Power in Sweden and Green Power well qualified to help manage the risks that truly matter and to Monitor in Spain. This strengthened not only our energy position, turn risks into opportunities. but also our ‘digital power’ position. Green Power Monitor is a leading harvester of data from solar plants and uses this to provide insight and give advice to operators. The excellent customer feedback we received throughout the year warms my heart. This referred not least to our round-the- clock technical centres for ship owners and managers that we Remi Eriksen, Group President & CEO 5 ANNUAL REPORT 2016 HIGHLIGHTS In the oil and gas industry, all players have been forced Challenging markets to take painful cost-cutting measures by reducing their capital expenditure and headcount. Several companies throughout the value chain are making strategic shifts In the maritime world, 2016 presented a set of particularly in their portfolio towards lower-cost projects, shorter challenging market conditions for most shipping segments as investment cycles and higher levels of flexibility. well as the offshore segment. Rates remained under substantial pressure, asset values continued to deteriorate and 2016 was the third-highest year ever for scrapping. Going carbon neutral During 2016, we took an important step towards our ambition of becoming carbon neutral in relation to our travel and office buildings by 2020. A pilot project was run in Norway and through various measures and offsets we managed to achieve carbon neutral operations. Our results have been verified by an independent third party. Our new energy-efficient office building at our Group Headquarters was completed in November 2016. 6 ANNUAL REPORT 2016 Building an industry digital platform Collaborative innovation To facilitate frictionless connections between different industry Collaborative innovation continues to be a cornerstone for our players, domain experts and data scientists, DNV GL started company. One out of many joint industry projects we launched working with Microsoft Azure and other partners to launch Veracity, in 2016 is on standard-setting for floating wind turbines. a secure industry data analytics and data management platform.