A sustainable build-out of green energy

Sustainability report 2020 2 Ørsted Sustainability report 2020 3

Challenges to a sustainable Contents build-out of green energy

The world is on the cusp of an unprecedented build-out of renewable energy. 6 How we transition to a world that runs entirely on green energy In the coming years, we as an energy industry will have to address a number of challenges to drive a rapid and sustainable build-out. 10 Our sustainability compass: Understanding the world around us 12 A systematic and programmatic approach to sustainability Throughout this report, we spotlight how we work systematically and pro- 16 Our 2020 portfolio of sustainability programmes grammatically to identify and assess the sustainability challenges which are 17 Key industry challenges to a sustainable green energy build-out most important to our stakeholders and our business. 18 Our response to three decisive sustainability challenges 20 Supply chain decarbonisation programme picks up speed 22 Biodiversity management supports accelerated green build-out We don’t have all the answers or full visibility of the 24 Systematic engagement to build shared benefits with local communities journey we have ahead of us to create a sustainable 26 Our progress across sustainability programmes society. That shouldn’t prevent us from taking decisive 28 Dashboards with key performance indicators action now to stop climate change and create a better 32 Programmes to catalyse the green energy transformation tomorrow. After all, that’s what leadership is about. 36 Programmes to address the sustainability impacts of the green energy transformation 38 Programmes to ensure responsible business practices Mads Nipper, CEO

44 Sustainability governance 45 Sustainability ratings and memberships Our strategic approach to sustainability

A range of sustain- We identify We develop pro- We aspire to have ability challenges and prioritise grammes to address a transformative impact our business key challenges key challenges impact on SDGs 7 and our stakeholders and 13

High Most important sustainability challenges

– Biomass sustainability – Climate action –­ Sustainable finance – Biodiversity impacts and – Green energy for heavy industry changes to ecosystems Other annual reports 2020 Low High and transport – Local community impact Annual report ESG performance Remuneration

– Business partner and human rights – Safety, health, and well-being Ørsted Ørsted Ørsted due diligence Annual report ESG performance Remuneration 2020 report 2020 report 2020

– Information security and cyberattacks – Use of sea and land for green energy – Reuse and recycling of materials – Employee attraction and development – Energy efficiency – Diversity and equal opportunity – Minerals and metals for green energy – Reliable energy systems Importance to our stakeholders to Importance This report constitutes Ørsted’s compliance deployment – Business ethics and transparency with the statutory disclosure on corporate – Responsible tax social responsibility, see the Danish Financial Statements Act, section 99a and 107d.

Importance to our business 4 Ørsted Sustainability report 2020 5

A world that runs entirely on green energy starts with ourselves. Decarbonising our We work every day to decarbonise our own operations and energy generation (scopes 1 and 2) and to reach carbon total carbon footprint neutrality in our total carbon footprint (scopes 1-3).

2020 data¹ (1 kt = 1,000 tonnes of CO2 equivalents) Ørsted’s activities

Scope 3 Scopes 1-2 Scope 3

Supply chain Construction Energy generation Operations Administration Energy sales (1,099 kt in total) (166 kt in total) (1,811 kt in total) (26 kt in total) (63 kt in total) (23,910 kt in total)

Emissions mainly² come from manufacturing and The main emission Emissions mainly come from Emissions mainly come Some emissions, e.g. from company cars, result directly from Emissions mainly transport of offshore wind farm components and source is the fuel for burning coal at combined from fuel used for the ves- our daily business administration (scope 1). The majority is in- come from wholesale secondly from mining and transport of coal which we the vessels used by our heat and power plants. In sels we charter during op- directly linked to our activities, such as the emissions from the buying and selling of will have phased out entirely in 2023. contractors to install 2023, we will have phased eration and maintenance production of the energy we buy for our own consumption natural gas. offshore wind farms. out coal entirely, bringing of offshore wind farms. (scope 2), and the goods and services we buy (scope 3). the emissions from genera- tion close to zero.

Renewable energy assets (592 kt) Work-related travel 3 kt

Gas sales 21,980 kt Buildings Goods and services 2 kt 47 kt

Resource Refinement Transport Offshore wind farm Offshore wind Crew transport and extraction vessels construction farms service vessels 53 kt 25 kt Heating Power Work equipment Food and Power sales drinks 1,930 kt

Onshore Steel Cement Production wind farm Company cars Employee commute of goods construction Onshore wind 1 kt 9 kt 12 kt farms Solar farms Service vehicles 1 kt

Transport Waste vehicles 1 kt

Combined heat and power plants (507 kt) Sustainable biomass-fired Carbon-neutral by 2025 50 % carbon reduction in 2032 Carbon-neutral by 2040 Sustainable Processing Wood Wood plants Scopes 1 and 2: Direct emissions from Scope 3: Indirect emissions from our Scopes 1-3: All direct and indirect biomass pellets chips Equipment and our energy generation, operations, supply chain, construction contractors, emissions from our business. components and administration (scope 1); and wholesale buying and selling of natural 101 kt indirect emissions from our energy gas, and administration. consumption (scope 2).

¹ Our carbon emissions accounting follows the Greenhouse Gas Protocol. This illustration shows the main sources of emissions per category. Emission sources not illustrated make up 111 kt of our total carbon footprint from a variety of miscellaneous sources. For our detailed emis- sions accounting, please see our ESG performance report 2020, pages 16-17. Resource Refinement Gas Coal Oil Fossil-fuelled power plants extraction (coal phased (coal phased out 2023) ² Supply chain emissions from energy sales activities are accounted for under the 'Energy sales' category. out 2023) 1,811 kt 6 Ørsted Sustainability report 2020 7

A world that runs entirely We were also happy to see the increasing How we transition to a on green energy number of companies joining the Science As a global society, we have 30 years Based Targets initiative (SBTi) to take sci- to undertake a systemic shift, on a scale ence-based action to reduce their emis- never before seen, to create a net-ze- sions. Over the course of 2020, more than world that runs entirely ro world. Since 73 % of global carbon 365 businesses joined SBTi, and more emissions come from the use of energy, than 1,000 companies now work with the rethinking the way we power our world initiative to reduce their emissions. These on green energy lies at the centre of this transformation. companies are setting emission reduction From power and heat generation sys- targets in line with what is necessary to tems to cooling, transport, and industrial meet the goals of the Paris Agreement, processes, every technology we use must and, together, they represent an inspiring In a year marked by crisis, 2020 has change its energy source from fossil fuels global movement, making up 20 % of the reminded us how forces beyond our to renewable energy. Global Fortune 500. immediate control can profoundly shape and impact our lives. It has reinforced the To reach net-zero emissions, we need The need to propel action with policy urgency to change the way we treat our to create a world that runs entirely on By the end of the year, it was reassuring planet – our home. green energy. And the action need- to learn from the ’Climate Action Tracker’ ed is clear: We need to significantly that with the new governmental carbon 2020 will be remembered first and increase the build-out of green power emission reduction targets, the goals foremost for the COVID-19 pandemic. generation, accelerate the phase-out of of the Paris Agreement are now within In the space of one year, more than fossil-fuelled power generation, increase reach. However, to limit global warming 80 million people were infected by the green electrification in sectors currently to 1.5 °C, more commitments are needed, virus, almost two million lost their lives, running on fossil fuels, and continue to and they must be followed up with deci- and more than 100 million people were increase energy efficiency in all parts of sive action across our society. pushed into extreme poverty. There was society. Crucially, that action must take scarcely an economy or a community in place now. More governments around the world the world that was not impacted by the must set greenhouse gas emission reduc- virus in some way. Global climate action in 2020 tion targets that are aligned with what 2020 witnessed increased global climate science deems necessary to stay Climate change also impacts many lives climate efforts and progress towards within the 1.5 °C threshold. And all long- as it continues to pressure our global low-emission societies. Some of the term 2050 targets must be supported by ecosystems and threatens to fundamen- world’s biggest emitters set new targets more immediate ones to ensure emis- tally change the conditions for life on our to reduce their carbon emissions: China sions are reduced adequately to keep the planet. 2020 became yet another year in announced its aim to be carbon-neutral required pace. recent history marked by the increased by 2060; Japan announced an ambition frequency and severity of extreme to be carbon-neutral by 2050; and, in But setting targets alone is, in itself, not a weather events. We saw the area cov- early 2021, the US re-joined the Paris guarantee that they will be delivered on. ered by artic sea ice reach a historic low. Agreement. In Europe, the European Meeting the targets requires that com- We saw record-breaking wildfires rage Union’s heads of state agreed to cut EU’s panies, investors, and households decide through Australia and the West Coast emissions by 55 % by 2030, paving the to phase out fossil fuel-based assets and of the United States. We saw unusually way for climate neutrality by 2050. replace them with green energy assets. heavy monsoon flooding ruin millions of Today, too often, those decisions are not homes in India and South and East Asia. The acceleration towards a low-car- made because companies, investors, and According to the UN’s ‘United in Science bon society was further helped by the households all make their decisions in a 2020’ report, the concentration of green- continued decreasing cost of renewable societal context that in different ways house gasses in the atmosphere reached energy, with offshore wind, onshore favour fossil fuels over renewables. record levels in 2020, and the world is set wind, and solar power outcompeting to see its warmest five years on record. fossil-based electricity in most parts of Governments can make the right decisions the world. At the same time, we see that happen. They can identify the specific bar- The need to build a more sustainable global capital is increasingly channelled riers that favour fossil fuels and hold back world has never been greater. To avoid into investments in the global energy green energy. And they can lay out and catastrophic and irreversible consequenc- transition. More than 30 of the world’s execute on a detailed policy plan for how es of climate change, science tells us that largest pension funds and insurers – to address these barriers. The sooner they global warming must be limited to 1.5 °C representing more than USD 5 trillion of develop such a plan, the sooner compa- above pre-industrial levels. This requires assets under management – are now nies, investors, and households can make the world to reach net-zero emissions by part of the UN-convened Net-Zero Asset sustainable choices, scale green technolo- 2050. Owner Alliance. gies, and bring us closer to a 1.5 °C world. 8 Ørsted Sustainability report 2020 9

We are on track to becoming carbon-neutral already in 2025 Carbon intensity of energy generation and operations (scopes 1 and 2)

Companies are instrumental to a global green g CO2e/kWh transformation. They need to transform their 500 business models and ensure that their products and operations contribute positively to limiting 400 global warming to 1.5 °C.

300

Science Based Targets initiative’s 200 1.5 °C pathway for greenhouse gas We are transforming our company vest in carbon-removal projects that are The challenges to a sustainable reductions in the energy sector Companies are instrumental to a global verified and certified to remove carbon build-out green transformation. They need to from the atmosphere. The deployment of renewable energy Ørsted’s carbon transform their business models and has gathered speed globally over the 100 intensity of ensure that their products and operations The main driver for reducing emissions past decade – with 1,600 GW, excluding energy generation contribute positively to limiting global from our energy generation is to elim- hydro, of renewable capacity installed and operations warming to 1.5 °C. Like governments, inate our use of coal. We are on track by the end of 2020 – and is expected to they also need to set clear long- and to phase out coal in 2023. However, almost triple in the next decade, totalling 0 short-term carbon emission reduction 2020 showed a marginal increase in our more than 4,300 GW. But even though 2010 2015 2020 2025 2030 2035 2040 2045 2050 targets in line with climate science and absolute scope 1 carbon emissions due renewable energy is the key solution to take tangible immediate action, shifting to a temporary increase in our use of climate change, we know that accelerat- capital and talent away from fossil fuels coal at our power stations in Esbjerg and ing the deployment of renewable energy and conventional business, and driving the Studstrup, Denmark. Our legal service poses important sustainability challeng- sustainable business models of the future. obligations in Denmark require us to es that we, as an energy industry, must provide ancillary services that maintain a find ways to solve. This requires that with local communities in a collaborative Assessing, prioritising, and effectively As the new CEO of Ørsted, I greatly look At Ørsted, we know first-hand that this reliable electricity system at the lowest we balance the climate impacts of the way that realises the shared benefits of integrating sustainability challenges and forward to working with the dedicated transformation is possible. Over the past possible cost. When coal is the cheaper transition to a global green energy sys- renewable energy. opportunities into business strategy and and talented Ørsted team to help create decade, we have transformed from one alternative to sustainable biomass, we tem with the impacts it will have on our operations is no simple task. It is still a a world that runs entirely on green ener- of Europe’s most carbon-intensive energy are legally required to use coal to ensure natural environment and societies. None of these three challenges have a field in its infancy. We believe that only gy. It is my aspiration that Ørsted will be companies to a global green energy reliability. Our commitment to end our convenient or complete ‘quick fix’, but by by sharing and engaging in dialogue a catalyst for change and inspire climate leader. We are now on track to becoming use of coal by 2023 remains unchanged, At Ørsted, we have integrated this using a programmatic and systematic about company practices, we can help action beyond our own company. While carbon-neutral in our energy generation and we are on track. Until then, we may responsibility into our business through a approach, we will continue to improve each other advance how we work on we may not have all the answers or full and operations by 2025, making us the see fluctuations in coal consumption systematic annual assessment of our key the sustainability of our solutions. sustainability. That is why we chose, this visibility of the path ahead, it should not first major energy company to trans- driven by market and weather conditions. sustainability challenges. We base our year, to provide a much greater level of prevent us from taking decisive action form from fossil fuels and reach net-zero assessment on dialogues with our stake- Sharing our approach detail on our approach to sustainability now to create a better tomorrow. After emissions. Since we are fully on track to become holders and our own view of the most It is a tremendous honour to have been than in our previous reports. all, that is what leadership is about. And carbon-neutral by 2025, we launched the pressing sustainability challenges. ranked among the world’s most sustain- one day, we will look back and realise To become carbon-neutral across our en- next major phase of our decarbonisation able companies by Corporate Knights We must realise a decade of delivery that we were able to accomplish much ergy generation and operations, (scopes journey: Reaching net-zero emissions in With our plans to decarbonise our energy for three years in a row. In 2021, we were At Ørsted, we are committed to taking a more than what we thought possible. 1 and 2), we will reduce our carbon emis- our entire carbon footprint (scopes 1-3) by generation, gradually phase out natural again named the most sustainable ener- leading role in fundamentally reshaping sions by at least 98 % by replacing fossil 2040. Our scope 3 emissions primarily re- gas from our business portfolio, and sig- gy company in the world and the second how the world produces and consumes fuels with green energy. The remaining late to activities in our supply chain and nificantly scale up renewable energy, we most sustainable of all companies energy. As such, all our work is informed 2 % come from a variety of sources our wholesale of buying and selling natu- are currently focusing on three sustain- worldwide. This ranking underlines that it by a strategic commitment to the UN where it is currently challenging to make ral gas. Today, we are gradually reducing ability challenges that are at the core is possible to undergo a sustainable busi- Sustainable Development Goals and reductions. These include our obligations our wholesale activities towards a 50 % of driving a sustainable green energy ness transformation while creating value based on the United Nations Global to ensure security of supply by keeping reduction in absolute scope 3 emissions build-out: Firstly, how to drive decar- for stakeholders and shareholders alike. Compact’s (UNGC) ten principles for cor- gas-fired back-up capacity available at from 2018 to 2032, and, consequently, we bonisation throughout our supply chain; porate sustainability. In 2020, among a our combined heat and power plants. will not renew or enter into new long- secondly, how to balance existing usage While last year’s report laid out our ac- select group of companies, we obtained The same goes for our offshore logistics term natural gas purchase agreements. of the sea with the needs for deploying tion plan for achieving carbon neutrality status as Global Compact LEAD, as a where our vessels still predominantly run Also, we are working to reduce emissions renewable energy infrastructure and in 2025, this year, our sustainability team recognition of our commitment to and on fossil fuels. If we cannot find viable from our supply chain. Later in this report, manage impacts on natural habitats and has made a great effort to break down high engagement with the goals of the Mads Nipper solutions for these cases, we plan to in- you can read more about how we do so. local species; and thirdly, how to work exactly how we work on sustainability. UN Global Compact. Group President and CEO 10 Ørsted Sustainability report 2020 11

Our sustainability compass: Understanding the world around us

In this section, we lay out our systematic and programmatic approach for understanding sustainability challenges and opportunities and for adjusting our business strategy accordingly. We also present our perspective on the main sustainability challenges the energy industry needs to address to drive a rapid and sustainable green energy build-out.

We want to make our company car fleet 100 % electric by 2025, and, from the beginning of 2021, we will only acquire electric vehicles. 12 Ørsted Sustainability report 2020 13

A systematic and Our approach to working on sustainability

Mapping Prioritising Anchoring Developing Realising and programmatic approach reporting to sustainability

Understanding emerging sustainability themes and how they impact our business continue to be key factors in developing Ørsted as a global leader in Timing renewable energy. Over the years, we have developed a systematic approach Ongoing effort Once a year Once a year Ongoing effort Ongoing effort for identifying sustainability themes and underlying challenges and integrating sustainability into our business. Objective Map sustainability Understand how each Anchor prioritised Update our portfolio Report and commu- themes important theme affects us and sustainability themes of sustainability pro- nicate the progress of to our business and our stakeholders and in our management grammes to address our programmes and stakeholders. prioritise accordingly. and governance. priority themes. any challenges faced. A company’s stakeholders, ranging from a core part of our strategic thinking an updated overview of sustainability customers, employees, policymakers, and our value proposition to customers themes that could affect our stakehold- Key activities regulators, investors, and NGOs to local and the communities we work with. ers or our business. • Engage in investor • Workshops with • Sustainability • Update existing • Publish an annual communities, all expect companies to Over the years, we have honed a highly conversations. internal subject- Committee (SC) sustainability sustainability report take an active role in delivering sustaina- systematic and programmatic approach Prioritising sustainability themes matter experts to approves theme programmes as to communicate • Talk with local ble societies. Listening and engaging with to mapping, prioritising, and addressing Having mapped our sustainability assess impact of prioritisation. needed. annual performance communities. themes. and our strategic their concerns often provide a rich indica- the sustainability themes affecting us themes, we evaluate the importance • SC prepares • Build new • Hold dialogues with sustainability tion of what is to come, from customer and our stakeholders. Based on five of each theme from stakeholder and • Conversations recommendations for programmes by NGOs and political direction. with external an updated portfolio understanding the expectations and hard law to internation- core phases, it enables us to identify business perspectives. The ranking of stakeholders. stakeholders to test of programmes. strategic context of • Publish key ESG al frameworks defining best practice. sustainability themes that are important, importance is based on a variety of • Converse with our assessment. the relevant theme performance data • Executive Committee build programmes to address them, and factors and is more of a qualitative subject-matter and meticulously quarterly and • Discussions within (EC) approves At Ørsted, we firmly believe that our report on the progress we make in each exercise. For stakeholder importance, we experts and identifying and annually. our sustainability portfolio updates and universities. selecting options to resilience and long-term value creation programme. consider issues such as the intensity of team to decide final sets accountabilities • Provide ongoing address it. is shaped by our ability to systematically attention the theme receives from NGOs, assessment and for realisation. communication theme prioritisation. • Potentially retire on progress and identify and manage the sustainability Mapping sustainability themes civil society, or policymakers, the level of • Board of Directors existing programmes. challenges across our approves prioritised themes which are important to our stake- Engaging with our stakeholders starts investor interest, and whether any inter- programmes. holders and business. We benefit tremen- with developing an acute understanding national frameworks have been devel- themes, the portfolio, and accountabilities. dously from the exchange between our of the themes that are most important oped describing best practice. To gauge stakeholders and our internal expertise to them. For example, we clarify how reg- the potential impact on our business, we Output as it helps us identify and address the ulators and NGOs see the opportunities assess when the theme could impact our A list of sustainability A two-by-two matrix Anchoring a prioritised An updated portfolio Ongoing content on key sustainability challenges we need to and challenges for building renewable business, the degree and type of impact themes that impact ranking the importance set of sustainability of sustainability performance and our business and our of each theme leading themes in our business. programmes. challenges, quarterly work on. energy in balance with nature and how the theme could have if not addressed stakeholders. to a prioritised set of ESG performance local communities expect our renewable adequately or quickly enough, and our sustainability themes. reports, and annual Here, we set out our approach to our energy projects to contribute to local ability to influence the theme. sustainability report. work on sustainability and how we job creation. Likewise, we engage with integrate sustainability when defining researchers and business associations We repeat this analysis every year Examples of stakeholders involved our business strategy and operations. to ensure that the biomass we use for through workshops and interviews with Politicians, experts, Politicians, experts, Board of Directors, Politicians, experts, Mostly an internal As this is not an exact science and still a energy generation is sustainable. And stakeholders, subject-matter experts, regulators, customers, regulators, customers, Executive Committee, regulators, customers, process with audit of field in development, we hope that other we closely follow the scores in our ESG and internal staff. The output is a simple local communities, local communities, and Sustainability local communities, all data in our ESG investors, NGOs, aca- investors, NGOs, aca- Committee. investors, NGOs, aca- performance report. companies will do the same so that we ratings to understand what investors and matrix of sustainability themes which are demia, employees, etc. demia, employees, etc. demia, employees, etc. can continuously learn from each other ESG rating agencies are asking about ranked based on importance to stakehold- and together advance strong company and whether there are any new emerging ers and our business. Our sustainability sustainability practices. themes we should address. team then uses this matrix to prioritise the Case: Supply chain carbon emissions themes that we should actively address Stakeholders focus on Through our Based on a memo We develop a We report openly and Our approach has five phases Every year, we conduct a systematic and to assess if our current performance companies reducing assessment, the on key themes, our new sustainability transparently about emissions beyond supply chain emissions EC mandates a new programme to our progress in reducing Our transformation journey over the assessment to map the sustainability is adequate. You can find the matrix of their own operations become a top priority programme to work decarbonise our scope 3 emissions. past decade has shaped how we work themes encountered in these stakehold- prioritised sustainability themes for 2020 and across their entire for climate action. strategically to reduce supply chain. You can read more on on sustainability, making sustainability er dialogues. This work translates into on page 2. supply chain. supply chain emissions. pages 20-21. 14 Ørsted Sustainability report 2020 15

Anchoring our sustainability themes in targets. Finally, our Board of Directors will Realising and reporting on progress How we develop new sustainability programmes our business approve the key sustainability themes Reporting on the progress of each pro- Having defined a prioritised set of sus- identified and the programmes selected gramme and the challenges we face is tainability themes, we anchor them in to address them. key to ensuring transparency, giving our Anchor Understand Identify Select Realise our internal governance structure. This stakeholders an opportunity to hold us ac- project context options options options gives our senior management and Board Developing and updating countable and scrutinise our sustainability of Directors a systematic overview of the sustainability programmes performance. Reporting also serves as the most important sustainability themes We develop sustainability programmes basis for continued dialogue on the sus- Mindset and enables them to make decisions on for the sustainability themes that are tainability themes that are material to our Commitment Comprehensiveness Exploratory Long-term Persistence how to best address them through sus- most important to both our stakehold- business. We strive to make our reporting value creation tainability programmes. By anchoring our ers and our business strategy. Currently, as practical as possible in the hope that it sustainability programmes in executive we have a portfolio of 20 programmes. inspires action beyond our company. Objective accountabilities and responsibilities, we Based on the outcome of our sustaina- Building the Understand the Identify a broad set of Select the best options Implement the new ensure that our sustainability strategy is bility themes analysis, we either up- Reporting on our sustainability perfor- management challenges within options to address the for us to work on the programme in our embedded in our business strategy and date existing programmes or develop mance is of great interest and impor- processes to develop a the theme and best sustainability theme. sustainability theme. business operations. new programme. practice to address it. daily operations. new ones. Our programmatic work on tance to our stakeholders, not least sustainability themes allows us to firmly our investors. Each quarter, as part of In practice, our Sustainability Commit- integrate our response to them in our our quarterly financial reporting, we Key activities tee will prepare a recommendation for daily business processes. In practice, this publish a comprehensive ESG perfor- • Set up a small • Understand the • Explore a diverse set • Define the desired • Launch a minimum our Executive Committee detailing the means developing concrete targets and mance report with detailed updates on and dedicated strategic context of options to address change and its viable project to sustainability themes to prioritise, any po- understanding the actions necessary to our performance across programmes project team to within the theme, the theme. drivers. test and develop tential new sustainability programmes to reach them as well as assigning clear and other sustainability performance drive programme including: key programme • Understand current • Define programme development. components. add, and any potential changes to exist- responsibility for the execution of each indicators. Once a year, we publish our – stakeholder performance within targets to meet ing programmes. The Executive Commit- programme. Developing new sustaina- sustainability report where we address • Establish a common expectations the business in desired change. • Anchor the understanding of the relation to the theme. programme in tee will then assign executive account- bility programmes is a comprehensive the broader sustainability agenda we – regulations and • Define internal required time frame. the management ability for each programme, meaning process, and you can dive into the details work on and present the challenges and international • Map implications for stakeholders for structure. that each Executive Committee member of how we develop them in the following opportunities we see on the horizon. It • Empower the project frameworks short- and long-term driving change. team to explore business performance • Set milestones becomes accountable for the practical section. You can also find an overview also provides an overview of our sustain- – peer performance • Identify external a wide range of across options. and timelines for implementation of a specific programme, of our 20 sustainability programmes on ability performance for the year across stakeholders to opportunities to – corporate best implementing the engage for driving including delivering on programme page 16. our programmes. address the theme. practice programme. change. – relation to the • Work with staff SDGs. and stakeholders to execute the programme. Developing sustainability programmes Typical time frame Every year, we update our portfolio of sustainability programmes. We have honed a systematic process for developing new sustainability 3-6 months 6-12 months Up to 2 years programmes and updating existing ones.

Establishing a new sustainability pro- phases 2, 3, and 4, before moving into ex- Updating existing programmes gramme requires dedicated and sus- ecution in phase 5. As we develop the full The sustainability landscape is dynamic, Output tained effort. To build a full programme, programme over time, we often launch a and themes constantly evolve as the we typically go through five phases. minimum viable project to test and refine importance of specific challenges increase A full sustainability programme consists of: essential programme components. You and knowledge around each theme If we identify the need for a new pro- can read an example of how this works improves. We continuously update our ex- gramme, we spend some time anchoring in practice in the section on our supply isting programmes to reflect such changes. Understanding of the Targets and Concrete actions a programme project internally in the chain decarbonisation programme on When doing so, we use a light version of key challenges within indicators towards targets business. In phase 1, we often set up pages 20-21. The key to success is to get the full programme development process. the theme a small project team to develop the sufficiently deep into the substance of If needed, we refresh our understanding of programme. This team typically works the issue and not jump to conclusions the strategic landscape, for instance in re- part-time on the project and takes on too early in the process. In practice, the lation to international frameworks, investor the programme development as part of phases often overlap, and we move back expectations, or best practice. Based on Governance structure Continued reporting Defined desired its responsibilities. We then dive into the and forth between them to adjust and this, we identify gaps in the current pro- and policies on progress impact on SDGs substance of the sustainability theme in test our findings. gramme design and ways to close them. 16 Ørsted Sustainability report 2020 17

Our 2020 portfolio of Key industry challenges to a sustainability programmes sustainable green energy build-out

At Ørsted, we are deeply committed to advancing the 17 UN Sustainable Development Goals (SDGs), Accelerating the global deployment of renewable energy is not without its challenges. which define the key sustainability challenges that the world faces towards 2030. The goals are This year, our sustainability themes analysis reflects how a number of fundamental sustainability interconnected and almost all of them are influenced by the climate challenge. We have developed challenges are emerging at the intersection of renewable energy, communities, and nature, and 20 sustainability programmes to systematically address the most important sustainability challenges these challenges will pick up speed over the coming decade. affecting our business and stakeholders. As a renewable energy company, we aspire to have a transformative impact on SDGs 7 and 13, while contributing to several others as well.

To catalyse the green energy transformation

Sustainability challenge Programme Our impact on the SDGs To ensure a sustainable transition to In addition, the energy industry must • Enabling inclusion of diversity. Inclusion green energy, it is decisive to manage the address several other sustainability of diversity is important in its own right. Climate action 1. Decarbonisation of energy generation As a world-leading renewable energy company, impacts that the green energy build-out challenges in the years ahead to ensure As we globalise our company, we want Energy efficiency and operations our main contributions are to SDGs 7 and 13 where potentially have on the environment a sustainable transition to renewable to build a workforce that reflects the we aspire to have a transformative impact. Climate action 2. Decarbonisation of our supply chain and or society. In our annual sustainability energy: societies in which we operate. We are wholesale buying and selling of natural gas themes analysis, we have identified three • Offsetting residual emissions. Our plan keen to refine how we approach this, key challenges that are especially impor- to achieve full carbon neutrality by creating a more diverse workforce and Climate action 3. Deployment of offshore wind tant to our stakeholders and business: 2025 will reduce our carbon emissions inclusive company culture that reflects 4. Deployment of onshore renewables As the re- by 98 %, but the remaining 2 % may a larger variety of perspectives and 5. Greener combined heat and power plants • Decarbonising supply chains. newable energy industry seeks to scale have to be offset. The market for credi- enables globalisation. Reliable energy systems 6. Green energy utilisation and integration up the green energy build-out, the ble offsetting solutions that guarantee Sustainable finance 7. Financing green absolute carbon emissions from renew- carbon removal on the scale we need • Increasing recyclability from renewable able energy supply chains will increase. is already under development. We now energy technologies. Wind turbines To address the sustainability impacts of the green energy transformation Decarbonising these supply chains is need to establish a mature strategy currently have a recyclability rate of 85- essential for realising a net-zero world. to find carbon-removal solutions that 90 %. Yet, wind turbine blades continue

Biomass sustainability 8. Sourcing certified sustainable biomass While contributing to a greener world, we advance are credible, trustworthy, and clearly to be difficult to recycle. While some the positive ripple effects of the green energy • Improving biodiversity protection. Con- contribute to carbon removal. technologies exist, scalable solutions are Biodiversity impacts and changes 9. Marine biodiversity transition and manage any negative effects on structing renewable energy at sea and not yet available at a competitive price. to ecosystems local communities and the environment. Use of the sea and land for green on land inevitably impacts local habi- • Sourcing sustainable biomass. Sustain- In the coming decade, the energy sector energy tats and ecosystems. As we accelerate able biomass remains the best option plays an important role to facilitate the

Local community impacts 10. Local communities the build-out of green energy, we will for phasing out coal from existing pow- development of the right solutions to re- work with a greater number of as well er plants and delivering significant car- cover or recycle turbine blade materials. Reuse and recycling of materials 11. Resource management as more diverse ecosystems, which bon reductions. To realise the positive is why we need a stronger and more climate impact of biomass for energy • Sourcing minerals and metals sustain- programmatic approach to manage generation and protect biodiversity, we ably. A green energy transformation our biodiversity impacts. must continue to ensure that the bio- requires significant amounts of mineral mass we use is sustainably produced and metals, including copper, rare earth, To ensure responsible business practices • Creating shared value with local com- and that the quality of documentation iron, cobalt, manganese, and nickel. A munities. While renewable energy pro- lives up to our expectations, in line with significant share of the global extrac- Safety, health, and well-being 12. Workplace safety We conduct our business with responsibility, jects offer local communities significant Danish and EU legislation. tion and production of these materials 13. Employee health and well-being accountability, and respect for our employees, business partners, and suppliers. economic opportunities, they also bring comes from countries with a higher risk Employee attraction and development 14. Employee development change that can cause concern among • Managing human rights issues in new of negative social, human rights, and 15. Employee satisfaction our local stakeholders. To expand green supply chains. As the green energy environmental impacts. We need to energy in a way that enhances shared build-out and supply chains accelerate work carefully with suppliers to ensure Diversity and equal opportunity 16. Inclusion of diversity local benefits, we need to work with an to parts of the world where human traceability, due diligence, and miti- Business ethics and transparency 17. Good business conduct increasingly large set of local stake- rights risks are more prominent, we gation of risks beyond our immediate

Business partner and human rights 18. Human rights & responsible business holders across more geographies as we need to strengthen our due diligence control throughout our supply chains. due diligence partners programme globalise as a company and stakeholder engagement to con- tinue to ensure that human rights are Head to our programme reporting on Information security and cyberattacks 19. Information and cyber security Head to pages 20-25 to read more about respected wherever we operate. pages 32-43 to read more about how we Responsible tax 20. Responsible tax practices how we address these challenges. approach these challenges. 18 Ørsted Sustainability report 2020 19

Our response to three decisive sustainability challenges

In this section, we highlight three challenges which are particularly important to a sustainable green energy build-out and how we will address them programmatically: Decarbonising our supply chain, managing impacts on marine biodiversity, and creating shared value with our local communities.

Marine mammals live in an underwater world full of noise – both natural and man-made. Installing wind turbine foundations in the seabed may cause loud noise in the water that can affect marine mammals. Various technologies exist to reduce this noise. One of them is the bubble curtain, a long circular tube releasing a dense curtain of bubbles surrounding the turbine foundation, helping to protect marine wildlife. 20 Ørsted Sustainability report 2020 21

Supply chain decarbonisation Key progress across our focus areas programme picks up speed

While green energy technologies generate power with zero emissions, emissions from the supply chain still remain. And to realise a world that Disclose emissions and Use 100 % green electricity Optimise vessel fleets and develop stays within the 1.5 °C limit, we need to reduce supply chain emissions. This set science-based targets in the manufacturing of roadmaps to power vessels with wind turbines, foundations, renewable energy will be our next strategic frontier in our decarbonisation journey, and we are Improve carbon accounting cables, and substations practices across the industry and Since the shipping sector cannot be easily already engaging with our suppliers to find sustainable solutions. establish a baseline for tracking Though not applicable to all electrified, reducing carbon emissions remains and reporting supply chain manufacturing processes, the a big challenge, but optimisation of transport emissions. use of green electricity is a routes and the use of sustainable biofuels are readily available solution for relevant first steps. • We have established dialogues reducing emissions. The emissions linked to renewable Today, most of our supply chain emissions the total lifecycle emissions of an Ørsted on decarbonisation with our top • In the short term, biofuels can help reduce strategic suppliers in the most • We have set a firm emissions. Since not all biofuels are sustainable energy technologies throughout their come from offshore wind. They are mostly offshore wind farm. This is primarily due to carbon-intensive parts of our expectation for our strategic alternatives to fossil fuels, we have developed lifetime are approximately 95 % lower derived from the manufacturing, trans- the carbon-intensive processes needed to supply chain. suppliers to manufacture their guidelines to help guarantee biofuel sustainabil- than those related to fossil-based ener- port, and installation of the wind turbines, manufacture materials for wind turbines ity. We have also implemented these guidelines • We have partnered with the Car- products using 100 % green gy generation. Most of the emissions are foundations, substations, cables, and other and foundations as well as the fossil fuels electricity by 2025, at the as criteria in our new framework agreement for bon Disclosure Project (CDP) and fuels in our supply chain. released during the early stages of the components we buy from our suppliers, used by vessels supporting the installation asked suppliers to disclose their latest. renewable energy supply chain, and we who, in turn, buy services and inputs from of our farms. emissions and climate strategy • In the medium and long term, new green fuels, need to reduce them if we are to reach their suppliers and so on. On average, to the CDP in a uniform way. such as ammonia produced from renewable net-zero emissions across our entire foot- material extraction, manufacturing, trans- Our 2020 progress hydrogen and battery-driven vessels, will be key • Of our 28 top strategic suppliers, technologies in driving the decarbonisation of print by 2040. port, and installation account for 90 % of In January 2020, we launched our supply 26 have successfully reported shipping. In 2020, we joined the Getting to Zero chain decarbonisation programme to ad- data to the CDP, and the remain- Coalition – an initiative that unites think tanks, ing two have committed to do so dress these carbon emissions and plot the IGOs, and over 100 stakeholders across and be- in 2021. Prior to our programme, course towards a carbon-neutral footprint. yond the shipping industry – where we contrib- only 12 reported to the CDP. ute to an ambition of launching commercially Average emissions across the lifecycle of an Ørsted wind farm viable net-zero emission vessels by 2030. (g CO2e/kWh) Our programme currently focuses on engaging our key strategic suppliers Ørsted Direct suppliers (tier 1) Indirect suppliers (beyond tier 1) who directly supply us with products and services and account for approx. half of our total procurement spend. We have strong relationships with all these sup- emissions are particularly hard to abate and services, contribute significantly to Offshore wind supply chain Ørsted offshore Offshore wind Scope expands to include (scope 3) wind operations supply chain pliers, and, together, we are focusing our as they are linked to heavy manufactur- the total emissions across our supply more suppliers (scopes 1 and 2) (scope 3) dialogue on three specific areas. ing and shipping. Reducing them requires chain. This is, in particular, the case for the As we continue to develop our supply significant technological innovations to production of steel used in the founda- chain decarbonisation programme, we In 2020, we have made good progress be available at a cost-competitive level. tions of our wind turbines, which accounts will gradually expand its scope to include across all three of these focus areas. This Finally, supplier roadmaps for powering for roughly 50 % of the total emissions our onshore wind and solar technolo- will be foundational in developing our vessels with green energy will need to in our offshore wind supply chain. Since gies. In parallel, we will work to reduce 6.62 programme even further in the coming be built incrementally since most of the these emissions originate among suppliers emissions from the last two lifecycle 0.66 years when we will look to establish technologies required are still immature. which are not among our direct suppliers, stages of our green energy structures: our roadmaps and metrics to track our pro- Roadmaps will also need to be tailored to we have met this challenge by forming own operations and decommissioning. gress towards carbon neutrality by 2040. each supplier category as they are all at wider initiatives with companies from We have already in place a strategy to different stages of their decarbonisation other sectors that use steel. In 2020, we decarbonise our logistics in operations 5.96 However, fully realising our ambitions in journey and face unique complexities and joined the Climate Group’s SteelZero initia- – particularly those offshore – and are all our focus areas is not going to be easy. challenges. tive as founding member. This is a new exploring solutions to recover or recycle 2.57 Firstly, accounting practices within the global initiative that seeks to drive market all parts of our wind turbines during 0.67 renewable energy industry are not yet No low-carbon steel, no carbon- demand for low-carbon and net-zero decommissioning. For more information established, and few suppliers disclose neutral supply chain emissions steel. With SteelZero, we want on both of these initiatives, head to our -2.82 their carbon footprint. This makes it diffi- While our programme, in the beginning, to make it clear to the steel industry that reporting on the ‘decarbonisation of cult to systematically identify, measure, focuses on direct suppliers (tier 1), we are we are ready to be part of an innovative energy generation and operations’ and Material extraction Transport and Operations and Decommissioning and and track carbon emissions across our aware that more removed suppliers, who and collaborative journey to realise our ‘resource management’ programmes at and manufacturing installation management material repurposing supply chain. Secondly, some supply chain do not directly provide us with equipment shared goal of making carbon-free steel. the end of this report. 22 Ørsted Sustainability report 2020 23

by foundation installation on marine offshore wind farms can contribute to er and more programmatic approach to Biodiversity management mammals and fish. In some circumstanc- thriving marine life near our wind farms. management of our biodiversity impacts es, it is possible to reduce the noise that allowing us to: define specific biodiver- propagates into the marine environment A more programmatic approach to sity objectives for our company and through the use of technology such as biodiversity management identify actions required to meet those supports accelerated a bubble curtain, which can reduce the Our current project-based approach to objectives; track our progress towards sound waves spreading within the sea- biodiversity impact management has objectives and report transparently bed and water. allowed us to assess the local needs, reg- on them; and root our programme in a green build-out ulations, and stakeholder expectations clear cross-organisational governance Exploring opportunities to support at specific sites, and design solutions ac- structure anchored in our Executive marine biodiversity cordingly. As we accelerate the build-out Committee. This approach will help us A large-scale build-out of renewable energy will impact our natural Alongside our work to address negative of green energy, our work will take place to continuously improve our ability to environment. For deployment of renewable structures to continue at the environmental impacts, we are also in more diverse marine ecosystems in far manage potential adverse impacts and exploring the potential for offshore wind greater numbers. find solutions to realise opportunities fast pace required, it is imperative that we continue to find ways to build farms to support marine wildlife. within our work, such as the potential for in balance with local habitats and species within these ecosystems. Building on our success with local re- offshore wind farms to support marine Firstly, underwater structures can play sources, we are now developing a strong- biodiversity and conservation. a role in supporting marine biodiversity. Wind turbine foundations and the scour protection which may be installed to Global biodiversity – the variety of life At Ørsted, building and operating impacts in accordance with regulations protect foundations and cables can Underwater structures can create the artificial reef effect. found on land and at sea – is under offshore wind is presently our biggest ac- and best practice. To that end, we have create additional habitats for e.g., sea- pressure. Animal populations worldwide tivity, and we work diligently to manage built substantial in-house environmental weed, mussels, shellfish, and fish species have declined by nearly 70 % since 1970, positive and negative impacts across all expertise, and conduct detailed assess- to colonise. These can, in turn, attract and without decisive action, more than our offshore activities. Wind farms are ments of the environmental impact of additional species, increasing biodiversity half of the world’s terrestrial and marine large, complex infrastructure projects, our wind farms following the mitigation and productivity in the vicinity, an effect species will face extinction by 2100. A and building and operating them can hierarchy, international standards, and known as the artificial reef effect. decade ago, the majority of the world’s cause adverse impacts on the natural country-specific regulations. governments adopted 20 biodiversity environment. The noise from offshore Secondly, wind farms can play a role in targets through the Convention on Bio- piling during installation can, for example, Our highly skilled environmental special- supporting marine conservation alongside logical Diversity to halt the accelerating temporarily disturb marine mammals, ists engage with regulators, environmen- required future protection of the seas. Less loss of biodiversity on land and in water. and foundations and cables can alter the tal NGOs, and other important stakehold- than 10 % of the world’s seas are currently Yet, in 2020, the UN's Global Biodiversity seabed and existing underwater habitats. ers across all our projects to find the best designated as ‘marine protected areas’. Outlook report concluded that none solutions to manage our impact on biodi- According to the United Nations’ Conven- of these 20 targets had been fully met That is why we have started work to versity. We also undertake a wide range tion on Biological Diversity, this needs to at a global level, and only six had been systematically address our approach to of research on key environmental impacts increase to at least 30 % by 2030 to en- partially met. how we manage impacts on biodiver- and mitigation approaches. Among oth- sure that marine health is maintained and sity, focusing first and foremost on our ers, this research includes the Ecosystem restored for the future. The extensive body As climate change is posing a funda- offshore wind activities. In accordance and Passive Acoustic Monitoring (ECO- of data on physical and natural resources mental threat to biodiversity, scaling with our Biodiversity policy, we always PAM) project, which will help advance re- collected to support siting and develop- up renewable energy needs to play an carry out a full and detailed assessment search on the detection of North Atlantic ment of offshore wind farms can play important role in protecting the world’s when planning new projects and tailor right whales and characterisation of their an important role in the identification of ecosystems. However, installing and op- our impact mitigation to the unique habitat in offshore wind farm areas. The future marine protected areas, and there erating new renewable energy structures marine environment at each of our sites. ECO-PAM project is a partnership with the may be instances where co-location of at significantly increased scale will also We are dedicated to building renewable University of Rhode Island, Woods Hole such protected areas within or near wind impact our natural environment. These energy in balance with our seas and have Oceanographic Institution, and Rutgers, farms could have mutual benefits. impacts must be considered and man- already made a corporate commitment the State University of New Jersey. aged appropriately. to promoting the UN Global Compact’s We are currently piloting projects to Sustainable Ocean Principles. Across our wind farms, we have also explore this potential. At our wind farm More renewable energy means more piloted several cutting-edge initiatives to off the coast of the island of Anholt in focus on biodiversity Best practices to manage impacts avoid, reduce, or compensate for signif- Denmark, we stacked boulders within the As an energy industry, we seek to deliver A substantial evidence base has been icant negative environmental impacts. wind farm to create stone reefs across accelerated deployment of renewables developed on the impact that wind We develop and use engineering and the wind farm and restore a rocky reef while supporting biodiversity manage- farms have on the natural environment, technological solutions. For example, habitat that had been lost. And at our ment through protection, mitigation, or and this evidence base is ever growing during the construction phase, a range Borssele wind farms in the Netherlands, compensation. This starts with devel- as the industry develops. Many of the of measures tailored to the wind farm we are laying pipes to encourage a nurs- oping a comprehensive and strategic impacts are temporary, and we strive to site can be implemented to manage the ery ground for cod. With these projects, approach to biodiversity management. avoid, reduce, or mitigate any significant impacts of underwater noise caused we are building our knowledge of how 24 Ørsted Sustainability report 2020 25

This dialogue often translates into local solutions to the issues raised. If relevant, Systematic engagement Forging educational partnerships we stay engaged throughout the con- struction and operation of our renewable energy projects. Often our stakeholder A large-scale green energy build- • our offshore wind apprenticeship to build shared benefits engagement is important to winning out relies on people with advanced programme with Dayeh University project bids, securing permits and licences, technical skills, typically those with in Taiwan and earning local support. a background in science, technology, with local communities engineering, or maths (STEM). We are • our relationship with community Systematic approach to manage keen to source these skills locally. colleges that provide wind tech- diverse local expectations Local officials, business groups, and nician training, including Western When moving into new geographies, we encounter new and diverse local Today, most of our local community educational institutions are, in turn, Texas College, a community college community expectations. To manage these expectations effectively, we work is developed on a project-by-pro- interested in building the necessary near Snyder, Texas, the site of the ject basis. Yet, our expansion into US and skills in the local community to stim- Amazon Wind Farm must ensure that our approach to support and enable these communities Asian-Pacific markets has put us in touch ulate the local economy. is strongly anchored across our increasingly global company. with increasingly diverse local commu- • a national partnership with nities, a trend that will only continue as We currently support skills devel- KidWind, a US non-profit that we grow our project portfolio further. opment through initiatives such as provides curriculum and training To manage diverse local expectations apprenticeships and educational opportunities to teachers about As large, complex infrastructure, our re- increased footfall from those using local so that over time these communities effectively, we must ensure that the tools programmes, which today include: the wind and solar industry newable energy projects form a very tan- facilities. The British coastal towns of can become powerhouses in the green we use to identify and address local gible part of the communities in which Grimsby and Hull are examples of how energy industry. stakeholder concerns are grounded in • our partnership with the Grimsby • funding the Wind Energy Master they are built, raising hopes as well as local communities can be reinvigorated in a systematic approach which remains Institute and Furness College in the Class with the Technical University concerns among local stakeholders. As part due to the construction of our nearby Early engagement to address local consistent across our organisation. UK to deliver a three-year wind of Denmark to enable knowledge we seek to expand our installed renewa- offshore wind farms, which involved 8,000 community concerns turbine technician apprenticeship sharing between their wind energy ble energy capacity across Europe, North people. And in New Jersey, we partnered Green energy projects also bring change We are currently working to refine and scheme experts and universities close to America, and Asia Pacific, these expec- with state and local authorities and EEW to local communities. Change that can develop the mechanisms guiding our our offshore wind projects. tations will diversify. While we already to develop a new manufacturing facility be a cause for concern among our local local community work. For example, we have significant experience of working for turbine monopiles. This comes with a stakeholders, including concerns about: have developed a new approach that proactively with local communities to re- USD 250 million investment in the state’s • the noise impact of new energy struc- enables our local staff to systematically alise shared benefits, as we scale up our offshore wind industry, bringing more than tures, such as anticipated noise from examine project impact through a human activities, we must develop a consistent, 500 high-paying jobs to the area and construction or rotating turbine blades rights lens. This allows us to remediate systematic approach anchored in best opportunities for local suppliers. • access to the sea, particularly among and robustly report on any negative Working with local fisheries practice and in line with international local fisheries who seek to clarify how human rights impacts, in line with inter- to enable co-use of the sea human rights standards. For onshore projects, in many rural com- new offshore wind farms will affect national standards. Additionally, we work munities, a new wind or solar farm is often ongoing fisheries operations on an evolving catalogue of activities When building new offshore wind one another. As with other commu- Collaboration leads to long-term the single largest taxpaying entity, gener- • changes to the natural environment, that have helped create shared benefits farms, we often develop in waters nity groups, we tailor our approach growth for local communities ating stable, long-term revenue streams including how renewable energy will for local communities such as appren- that are also used for commercial to the local context and engage Green energy projects stimulate long- to support county and school services. affect local recreational areas. ticeship schemes. fishing purposes, and this can create fisheries as early as possible in new term economic growth for local commu- concern among the local fisheries projects. We involve commercial and nities. Local businesses such as suppliers To help local communities take full ad- Across all our projects, we address the As we expand our geographical presence, regarding both access to fishing recreational fisheries in our project of components or logistics services can vantage of the job opportunities generat- above-mentioned concerns to the great- we will work to embed these tools in grounds and effects on fish stocks. planning through a series of communi- benefit directly from the construction ed by green energy activities, we collabo- est extent possible. We work to include every project to guide our local engage- Addressing these concerns largely ty meetings and employ local fishing of wind and solar farms, while shops, rate with educational institutions to raise stakeholders early to understand their ment work in a strategic way. Once in depends on national legislation, industry representatives to ensure restaurants, and hotels can experience skill levels for local aspiring professionals, concerns and design projects accordingly. place, they will help us strengthen our which can differ significantly across effective collaboration throughout company-wide reporting on local commu- our markets. In some markets, fishing the development, construction, and nity engagement activities, which today vessels are allowed to operate within operational phases of our projects. Our local stakeholders and the topics we engage on is not comprehensive enough. Of course, our wind farms; in others, only certain many questions to which we do not yet types of fishing activities are permit- In many cases, our offshore wind Local stakeholder groups Examples of topics have answers remain – namely, how to ted, in others still, all forms of fishing farms coexist peacefully with thriving Our neighbours Noise levels, visual impacts, location of transmission cables set indicators and produce meaningful are prohibited. local fisheries. However, where issues Local elected officials Tax revenue, job creation, general skills development reporting for a theme as diverse as local relating to marine spatial planning community engagement – but by placing While these variations increase the and regional fisheries management Local industry and suppliers Supply chain opportunities, focused skills development local stakeholder insight and inspiration complexity of working with local fish- arise, solutions may need to be Local educational institutions Curriculum additions, apprenticeships, attracting talent at the centre of our work, we hope to find ing communities, it is often possible shaped politically by local or nation- Environmental NGOs Minimising negative environmental impacts, creating positive impacts the solutions. Also, our programme should for the two sectors to thrive alongside al governments. Fisheries and other users of the sea Coordinating ongoing use of the sea be broadened to also include our rapidly Indigenous populations Ancestral lands, cultural heritage growing onshore wind and solar activities. 26 Ørsted Sustainability report 2020 27

Our progress across sustainability programmes

In this section, we outline our progress across all of our 20 sustainability programmes. We present dashboards on our key performance indicators and lay out the components of each of our programmes.

This year, the COVID-19 pandemic affected how and where we work. Many of our colleagues had to work from home most of the year and our work environment was increasingly virtual. 28 Ørsted Sustainability report 2020 29

Catalysing the green Levers to decarbonise our company Programme 3 Programme 4 Deployment of offshore wind Deployment of onshore renewable energy transformation energy capacity We deploy offshore wind farms globally. We deploy onshore renewable energy technologies, Our climate targets are designed to align our company and entire including onshore wind and solar PV. carbon footprint with the 1.5 °C pathway. Here, you can see how Installed offshore wind capacity (GW) Installed onshore wind and solar capacity (GW) we progress on our main performance indicators in our seven programmes to align our business with science and catalyse the 6.8 7.6 15 1.0 1.7 5 green energy transformation. 2019 2020 Target (2025) 2019 2020 Target (2025)

Performing well By 2025, we will be By 2040, we want to Programme 5 Greener combined heat and power plants carbon-neutral in our own reach carbon neutrality Performing well, but with energy generation and in our total carbon challenges this year We phase out coal from our combined heat and power (CHP) plants by replacing coal with certified sustainable biomass and closing down coal-fired capacity. operations (scopes 1 & 2) footprint (scopes 1, 2 & 3) Significant challenges Coal consumption (million tonnes)

0.6 0.6 0 2019 2020 Target (2023)

Progress towards our carbon-neutral targets Levers to support wider green energy transition

Programme 1 Programme 6 Programme 7 Decarbonisation of energy generation and operations (scopes 1 and 2) Green energy integration Supporting green financing

We reduce the emissions across our energy generation and operations We support new technologies that can help balance Green financing proceeds to become carbon-neutral in scopes 1 and 2 by 2025. supply and demand of green energy and that use allocated to offshore wind green power to decarbonise industry. projects, total (DKK billion) Reduction in GHG intensity (% reduction in g CO2e/kWh, Green energy share (%) base year 2006) Strong commitment to engage in the development of green hydrogen technologies 17.9 24.1 86 87 98 86 90 99 2019 2020 2019 2020 Target (2025) 2019 2020 Target (2025) and pursue storage projects that allow us to Our target is optimise our generation assets. to exclusively Avoided emissions potential use green from allocated green bond financing proceeds annually¹ (million instruments Programme 2 tonnes CO2e) Decarbonisation of our supply chain and wholesale buying and selling of natural gas (scope 3)

To achieve carbon neutrality by 2040, we reduce emissions from our Third-party assurance of data supply chain and from wholesale buying and selling of natural gas. The programme indicators and targets shown on 2.1 2.7 pages 28-31 and in the bottom row on pages 32-43 2019 2020 Reduced carbon emissions in scope 3 (%, base year 2018) in this report are part of our ESG performance report 2020 and have been subject to third-party assurance by PwC. 1) Total avoided emissions includes both projects under 13 50 Read about the scope of the assurance in our ESG construction and projects in operation. Please refer to our 2020 Target (2032) performance report, page 38. ‘ESG performance report’ and 'Green bond impact report'. 30 Ørsted Sustainability report 2020 31

Programme 13 Programme 14 Programme 15 Addressing the sustainability impacts Employee health and well-being Employee development Employee satisfaction

We implement a holistic approach to We are building a culture of continuous Employee satisfaction and motivation is of the green energy transformation physical, social and mental health, and learning and development to retain important to us, and we aim to remain well-being to enable good employee existing talent and engage new talent. in the top 10 % in a benchmark of peer The green transformation is a driver for positive change beyond mitigating performance and engagement. companies. global warming. But it can also have potential negative impacts on, for Share of employees that have recorded Employee learning and development Employee satisfaction (index 0-100 instance, biodiversity or local communities. Here you can see how we incidents of stress – both light and heavy (index 0-100 where 100 is high learning where 100 is high satisfaction) progress on our programmes to ensure a sustainable green transformation. cases (%) opportunities)

9.4 77 80 77 Top 10 % Programme 8 Programme 9 11.0 77 78 among peers 2019 2020 2019 2020 Target (2020) 2019 2020 Target (2020) Sourcing certified sustainable biomass Protecting marine biodiversity

We use sustainable wooden biomass to phase out coal To protect biodiversity, we avoid and reduce impacts on marine at our CHP plants. ecosystems throughout the development, construction, and Programme 16 operation of all our offshore wind farms. Inclusion of diversity

Share of our biomass that is certified sustainable (%) Red-List species recorded in areas with Ørsted offshore We promote, encourage, and advocate for a culture where different perspectives operations (number) are valued and leveraged, and where it is safe to speak up.

96 100 100 1 0 6 8 The share of women in positions as senior directors The share of women in positions of directors, 2019 2020 Target (2020) Critically Endangered Vulnerable Near- or higher - Leadership Conference (%) senior managers, managers, and team leads (%) endangered threatened

13 20 22 25 26 30 2019 2020 Target (2023) 2019 2020 Target (2023) Programme 10 Programme 11 Local communities Resource management

We want to develop our renewable energy projects so that We work to reduce, reuse, and recycle waste materials where Programme 17 Programme 18 they create benefits for local communities and address com- possible to limit the impact on natural resources and lower Good business conduct Human rights and responsible business partners munity concerns and expectations. carbon emissions. . We prohibit all forms of bribery and corruption. We promote Through screenings and assessments, we identify performance Other waste from production and administration reused or compliance internally and with our business partners through gaps in our suppliers' adherence to our Code of Conduct (CoC) Based on frequent engagement with our local recycled (excluding wastewater from the oil pipeline) - (%) due diligence, training, and reporting of misconduct. for business partners. We take action to close any gaps. stakeholders, we strive to tailor our local initiatives to the needs of local communities, including community benefit Substantiated whistle-blower cases (number) Screenings on all sourcing contracts above DKK 3 million and funds, apprenticeships and scholarships, and local supplier assessments opened (number) development. 84 78 2019 2020 3 4 384 51 2019 2020 Risk Desktop & site screenings assessments

Programme 12 Ensuring responsible Workplace safety Programme 19 Programme 20 We strive to create a safe workplace for employees, business practices Information and cyber security Responsible tax practices contractors, and suppliers. We work to ensure the security of corporate information We are transparent in our tax reporting and voluntarily We conduct our business with responsibility TRIR (per million hours worked)* and critical infrastructure through a risk-based approach disclose country-specific information about our tax position in and in close collaboration with our business partners. our annual report. and accountability, ensuring respect for our employees, business partners, and suppliers. 4.9 3.6 2.9 2019 2020 Target (2025) Global corporate income tax paid in 2020 (billion DKK) Here you can see how we perform on the key We carry out ongoing global indicators of our nine programmes to ensure *TRIR is the total recordable incident rate, which is the number of campaigns for safe behaviour 1.1 responsible business practices. recorded incidents divided by the total number of hours worked. in the workplace. 2020 32 Catalysing the green energy transformation Ørsted Sustainability report 2020 33

Programme 1 Decarbonisation of energy generation 2 Decarbonisation of supply chain Programme 3 Deployment of offshore wind 4 Deployment of onshore renewables overview overview and operations and wholesale buying and selling of natural gas

Sustainability Climate action and energy efficiency: As 73 % of global Climate action: To realise a net-zero world, the energy Societal Green energy deployment: The deployment of renewable energy technologies must be accelerated to help phase out coal and challenge carbon emissions come from the use of fossil fuel-based industry must reduce emissions in the supply chain of challenge other fossil fuels from the global energy systems at the pace and scale required by climate science to limit global warming to energy, decarbonising energy generation and improving renewable energy technologies and phase out fossil fuel- 1.5 °C. energy efficiency are essentual to limit climate change. based activities.

Our approach We increase our total share of green energy and work to We reduce emissions from our supply chain and from Our approach We deploy offshore wind farms globally. We want to increase We deploy onshore renewable energy technologies, including reduce emissions to achieve carbon neutrality in our energy wholesale buying and selling of natural gas and fossil fuel- the deployment across our regions — the UK, Continental onshore wind and solar PV. Our focus is to expand our generation and operations by 2025. This covers the emissions based power (scope 3) in line with scientific requirements and Europe, North America, and Asia Pacific. Through scale and regional leadership position in the US. Our target is to have from the generation of heat and power and from our we work to achieve carbon neutrality by 2040 (scopes 1-3). technological development, we drive down the costs of built 5 GW of onshore wind capacity by 2025 and 30 GW operations and maintenance, including the vessels servicing We work with our suppliers to reduce emissions from offshore green electricity in the markets where we operate. Our target across all green energy technologies by 2030. our wind farms, our vehicles, and our sites (scopes 1 and 2). wind farm components and logistics. is to have built 15 GW of offshore wind capacity by 2025 and 30 GW across all green energy technologies by 2030.

Our progress • We have reduced the carbon intensity of our energy • We have set an interim target towards 2040 of reducing Our progress • We have installed our 1,500th wind turbine, and are well on • We have increased our installed onshore energy generation generation and operations by 87 % since 2006, to 58 g emissions from our supply chain and gas sales (scope 3) track to meet our target of 15GW installed offshore wind capacity to 1.7 GW, and are on track to meet our 2025

CO2e/kWh in 2020. We are on track to deliver a 98 % by 50 % by 2032. We updated our 2018 base year as we capacity by 2025, with a current capacity of 7.6 GW. target of 5 GW. reduction by 2025. divested our LNG business that accounted for 20 % of the • We have commissioned the 752 MW Borssele 1 & 2 • We have expanded our portfolio of onshore wind farms in • The build-out of green energy is a key driver, and we have total 2018 base year scope 3 emissions. We are currently Offshore Wind Farm in the Netherlands, the biggest the US by purchasing the Haystack project in Nebraska and reached a 90 % share of green energy generation. on track with a 13 % reduction of emissions since 2018. offshore wind farm in the country. by completing the Willow Creek project in South Dakota • We continue to push for optimised vessel designs and • We have established dialogue on decarbonisation with • As the EPC provider, we have been part of the Coastal and the Sage Draw project in Texas. the use of biofuels in our vessel portfolio, including hybrid our key strategic suppliers in the most carbon-intensive Virginia demonstration project, the first-ever offshore • We have also completed the Plum Creek project in and battery technology, fuel cells, and offshore charging categories in offshore wind. wind turbine to be installed in US federal waters. With only Nebraska, a 230 MW onshore wind farm consisting of 82 possibilities. • We have partnered with the Carbon Disclosure Project two wind turbines, the project is intended to show the wind turbines. • As of 2021, we will no longer buy or lease fossil-fuelled (CDP) to promote a transparent and uniform way of possibilities of offshore wind in the US. • We have expanded our solar energy portfolio in the US by cars, and, by 2025, our entire fleet of vehicles, including site measuring and disclosing emissions in our supply chain. • Our portfolio of long-term CPPAs (corporate power acquiring the 227 MW Muscle Shoals project in Alabama. and operational vehicles, will be fully electric. Currently, • Of our 28 key strategic suppliers, 26 have successfully purchase agreements) is constantly expanding, with large • We have taken final investment decisions on both the we have a 38 % share of electric vehicles (including plug-in disclosed to the CDP, and the remaining two have companies wanting to secure their power from renewable 367 MW Western Trail project, our largest onshore wind hybrids) in our fleet. committed to do so next year. sources. Most recently: project to date, and the Old 300 Solar Center, a new • We cover 100 % of our own power consumption with green • We have decided that our strategic suppliers shall produce – We have signed the world’s largest renewables CPPA 430 MWac Houston solar PV project in Texas. certificates, mainly from our offshore wind farms. and deliver their products and services to us using 100 % with TSMC in Taiwan, securing an offtake of the full • We have initiated a project to identify options for offsetting green electricity by 2025, at the latest. production from our 920 MW Greater Changhua 2b & 4 any residual emissions we may still have by 2025 (scopes • We have co-founded the Climate Group’s SteelZero Offshore Wind Farm. 1 and 2). These solutions must be certified and able to initiative, with the aim to drive the cross-sectoral innovation – We have signed the largest offshore wind CPPA in Europe document carbon removal. journey needed to decarbonise steel. with the technology company Amazon, which will buy • We continue to integrate green requirements in tenders for the output of 250 MW from the Borkum Riffgrund 3 office supplies and administrative services. Offshore Wind Farm.

Actions to Achieve carbon neutrality in our energy generation and Achieve carbon neutrality across our total carbon footprint Actions to Work with governments, companies, and international organisations to accelerate the global green energy build-out. become future-fit operations (scopes 1 and 2) by 2025. (scopes 1-3) by 2040, a decade earlier than science demands. become future-fit

Our governance Accountability lies with the Executive Committee. Accountability lies with the Executive Committee. Our governance Accountability lies with the Executive Vice President (EVP) of Accountability lies with the EVP of our Onshore business unit. our Offshore business unit.

Policy and link to • Ørsted Sustainability commitment • ESG performance report: Section 2.8 Policy and link to • ESG performance report: Section 2.1 • ESG performance report: Section 2.1 more information • ESG performance report: Section 2.7 more information • Annual report, pages 23-25 • Annual report, page 26

International • Paris Agreement • Paris Agreement International • Paris Agreement frameworks • Greenhouse Gas Protocol & Science Based Targets initiative • Greenhouse Gas Protocol & Science Based Targets initiative frameworks • IPCC Special Report: Global Warming of 1.5 ºC of reference • IPCC Special Report: Global Warming of 1.5 ºC • IPCC Special Report: Global Warming of 1.5 ºC of reference

Examples of • EV100, the Climate Group • The Climate Group’s SteelZero Initiative Examples of • Ocean Renewable Energy Action Coalition, spearheaded • N/A partnerships and • World Wildlife Foundation DK • Getting to Zero Coalition partnerships and by Ørsted and Equinor collaborations • Energy Transitions Commission • Natural Capital Partners collaborations • North America’s Building Trades Unions (NABTU)

SDG contribution 13: We will become carbon-neutral to help limit climate 13: We are reducing our indirect carbon emissions across our SDG contribution 7.2: We are increasing the share of renewable energy in the global energy mix. change. entire carbon footprint to help limit climate change.

Targets and GHG intensity Green energy share Carbon emissions (scope 3) (Mt CO2e) Targets and Installed offshore wind capacity (GW) Installed onshore wind and solar capacity (GW) indicators (g CO2e/kWh) (%) indicators -50 % -98 % -13 % 15 -87 % 462 36.2 34.6 99 29.2 86 90 25.3 7.6 6.8 14.6 5

17 1.7 65 58 1.0 10

2006 2019 2020 2025 2006 2019 2020 2025 Adjusted 2018 2019 2020 2032 2019 2020 2025 target 2019 2020 2025 target target target base year target 2018 34 Catalysing the green energy transformation Ørsted Sustainability report 2020 35

Programme 5 Greener combined heat and power 6 Green energy utilisation and Programme 7 Financing green overview overview plants integration

Sustainability Green energy deployment: Coal continues to be the most Green and reliable energy system: To help balance supply Societal Sustainable finance: The IPCC estimates a USD 2.4 trillion Green share of revenue challenge widely used fuel for power generation globally even though and demand of green energy, store energy, and use green challenge annual shortfall in clean energy investment through 2035 it is the most carbon-intensive fossil fuel. To limit climate power to decarbonise industries where emissions are to meet the goals of the Paris Agreement. Mobilisation of change, coal must be phased out. particularly hard to abate, new technologies must be tested, institutional and private capital will be necessary to meet this In the space of a decade, we have become a global piloted, and scaled to fully decarbonise the world’s energy challenge. green energy company. Today, our business strategy consumption. is focused on a large renewable energy build-out. We Our approach We phase out coal from our combined heat and power We explore and develop solutions to produce renewable Our approach We exclusively use green financing instruments, including invest all of our capital in green energy projects, and (CHP) plants by replacing coal with certified sustainable hydrogen to displace fossil fuels in sectors that are difficult green bonds and green loans, to progress our green our earnings (EBITDA) are predominantly green. Yet, biomass and closing down coal-fired capacity. Our target is to to electrify, such as heavy industry and transport. We also transformation and build-out of green energy. in our product portfolio, we still have legacy business completely phase out our use of coal in 2023. deploy battery storage solutions with some of our green energy projects. that is not green.

Our progress • This year, we saw an increase in coal consumption at • We have taken important steps towards growing our Our progress • This year, we have been exploring how to best align with Firstly, we have one last remaining fossil-based three of our combined heat and power plants due to our current pipeline of projects within Power-to-X solutions: the upcoming EU taxonomy, which will help investors provision of ancillary services in Denmark, contributing to – We have entered into a landmark partnership in determine the sustainability of the economic activities combined heat and power (CHP) plant in Esbjerg, stable grid operations. Denmark with A.P. Moller - Maersk, DSV Panalpina, DFDS, they invest in. We expect to align with all aspects of the Denmark. In 2023, we will close this CHP plant and • We are still on track to complete our coal-to-biomass SAS, and Copenhagen Airport for the development of a taxonomy when the final version is launched in 2021. fully retire the use of coal in our business. conversion programme, with the last remaining coal-fired large-scale power-to-hydrogen facility in Copenhagen • We have continued our green debt financing by allocating CHP plant, located in Esbjerg, Denmark, closing by 1 April aimed at decarbonising sectors in industry, heavy proceeds of DKK 24.1 billion to eligible green bond projects. 2023, at the latest. Therefore, we will completely stop using transport, and shipping. • In the annual report, we have built further on our TCFD Additionally, due to long-term legacy gas contracts, coal from 1 April 2023. Until then, fluctuations in our coal – Together with ten partner organisations, we have implementation by introducing a TCFD reference table in we still buy wholesale natural gas in the energy consumption are expected. secured funding for the Westküste 100 project, the first our ESG performance report, section 5.3. • We have inaugurated our new wood chip-fired unit at offshore wind power-to-hydrogen conversion project in markets which we sell in the European gas markets Asnæs Power Station. Today, the power plant can supply Germany. to industrial customers who depend on it. These gas green district heating, as well as green process heat to – We have partnered with the world’s leading fertiliser contracts were signed many years ago. Some were Novo Nordisk and Novozymes – thus lowering the city and company, Yara, to replace fossil hydrogen with renewable district’s carbon emissions. hydrogen in the production of green ammonia in the signed in the 1980s with the Danish Underground Netherlands. Consortium (DUC). Under these agreements, we are committed to buy the natural gas produced by Actions to Phase out coal in 2023 and substitute the remaining use of Take an active role in testing and scaling new energy Actions to Continue to use only green financing instruments for all our DUC. We also have a long-term supply contract with become future-fit natural gas and fossil oil with sustainable alternatives. technologies that can enable an acceleration of the green become future-fit future financing and align business activities and reporting energy build-out. with EU taxonomy. Gazprom.

Our governance The EVP of our Markets & Bioenergy business unit is Accountability for hydrogen projects lies with the EVP of our Our governance Accountability for green financing lies with our CFO. Our In 2020, our wholesale of natural gas operated accountable for the conversion and operations of our heat Offshore business unit. For storage projects, it lies with the Sustainability Committee approves allocation of green bond on low margins, as reflected in our earnings, but it and power plants. EVP of our Onshore business unit. proceeds. accounted for approximately one third of our total Policy and link to • ESG performance report: Section 2.10 • Annual report, pages 21-25, 30-31 Policy and link to • TCFD table in ESG performance report: Section 5.3 revenue. Gas sales also account for 87 % of our more information more information • Annual report, page 21 (EU taxonomy) scope 3 emissions, due to the emissions linked to the • Green bond impact report 2020 end-use of the natural gas we buy and sell. International • Paris Agreement • Paris Agreement International • Green Bond Principles (ICMA) frameworks • IPCC Special Report: Global Warming of 1.5ºC • IPCC Special Report: Global Warming of 1.5ºC frameworks • Green Loan Principles (ICMA) With our target to have net-zero emissions across • EU Sustainable Finance Taxonomy of reference of reference our carbon footprint by 2040, we have decided to • TCFD recommendations phase out our activities to buy and sell natural gas. Examples of • Powering Past Coal Alliance • IRENA Coalition for Action Examples of • Corporate Forum on Sustainable Finance As an interim target, we want to halve our emissions partnerships and • Green Hydrogen Catapult partnerships and • Nasdaq ESG Data Portal by 2032 compared to 2018. This means that we will collaborations • WEF - Accelerating Clean Hydrogen initiative collaborations • Green Bond Principles not renew or enter into new long-term gas purchase

SDG contribution 7.2: We are increasing the share of renewable energy in the 7.1: We explore new technologies to decarbonise the world's SDG contribution 7.1: We promote investment in energy infrastructure and agreements. From 2019 to 2020, we divested our global energy mix. energy consumption - especially in sectors where emissions clean energy technology. liquefied natural gas (LNG) business and have seen a are hard to abate 28 % decline in our volume of gas sales. Towards 9.4: We are developing and adopting a greater range of clean and environmentally sound technologies. 2032, we expect to see similar step-by-step reduc- tions in our wholesale volume as our gas contracts Targets and Coal consumption (million tonnes) Strong commitment to engage in the development of Targets and Green financing proceeds Avoided emissions potential expire. indicators green hydrogen technologies and to deploy energy storage indicators allocated to offshore wind from allocated green bond

solutions where meaningful. projects (DKK billion) proceeds (million tonnes CO2e)

6.2 24.1 0.6 2.7 0.6 0.6 10.2 1.1

6.1 0.8

1.6 0.2 0 2019 2020 2023 target 2017 2018 2019 2020 Tota l 2017 2018 2019 2020 Tota l 36 Addressing the sustainability impacts Ørsted Sustainability report 2020 37 of the green energy transformation

Programme 8 Sourcing certified sustainable biomass Programme 9 Marine biodiversity 10 Local communities overview overview

Sustainability Biomass sustainability: To ensure significant carbon savings New biomass regulations set common Societal Impact on natural ecosystems and biodiversity: With the Creating shared value with local communities: Wind and challenge compared to coal, the biomass used for energy generation challenge accelerated deployment of offshore wind, we must find solar PV farms are large, complex infrastructure projects. must meet strict sustainability criteria. industry standards solutions to build in balance with marine ecosystems. Healthy As we continue to grow, we will impact more local seas are important for keeping global warming within 1.5 °C communities. The green build-out must happen in balance and right now, due to a rapid decline in biodiversity, marine with the expectations of local communities and live up to In Denmark, the majority of homes are heated via health is under intense pressure. international human rights standards. district heating, which is a piping system that brings Our approach We only source sustainable biomass certified by independent, heated water to home heating systems. District Our approach We avoid and reduce impacts on ecosystems throughout the We want to develop our renewable energy projects so that third-party certification bodies, in line with the Danish heating systems require energy to heat the water, development, construction, and operation of all our offshore they create benefits for local communities and address industry agreement on sustainable wooden biomass. Our wind farms. We conduct detailed environmental assessments, community concerns and expectations. Our projects must biomass is from sustainably managed production forests with some of which is delivered by combined heat and we engage in dialogue with relevant stakeholders, and be built in line with international human rights standards. We ongoing reforestation. The wood pellets and chips are made power plants (CHPs). Today, sustainable biomass is collaborate to identify best practice to mange the continue to develop and refine tools to guide our approach from residues and low-grade wood in low demand, often from needed to retire the fossil fuels traditionally used in biodiversity impacts of the future build-out of offshore wind. across our projects. sawmills and from sawdust, regular thinning of forests, or diseased or crooked trees. these CHPs and to keep the Danish heating system running. As new technologies like large-scale heat Our progress • This year, we have reached our target to procure 100 % pumps develop and become cost-competitive, we Our progress • We have established a cross-functional project to take • This year, we have engaged with local elected officials, third party-certified sustainable biomass. We will maintain a stronger programmatic approach to our biodiversity suppliers, educational institutions, NGOs, and commercial can gradually phase in these new technologies as this level going forward. management. We want to define specific biodiversity fisheries. For example: • We report annually on the biomass feedstock types we new sources of heat production. objectives, track our progress, and report transparently. – We have established the Pro-NJ Grantor Trust to bolster use, countries of harvest, and the carbon emissions from • We have committed to work with the Science Based economic opportunities and support small, women- production and transport to ensure transparency in our Targets Network to contribute to the development of owned and minority-owned businesses in New Jersey. Ørsted owns seven Danish CHPs. They all used to approach. The report is available online. methods and guidance for science-based targets. – We joined forces with the network Onside and set up a • With the inauguration of our new sustainable biomass-fired run on coal and gas, but we have converted six of • We are founding members of the Offshore Coalition for new partnership that will invest GBP 1 million in a Youth unit at Asnæs Power Station, we marked the completion of seven CHPs to run on certified sustainable biomass Energy and Nature, a multi-stakeholder group working Zone in the UK. our coal-to-biomass conversion programme, moving one to further the coexistence of offshore wind with marine – We have signed crew transfer vessels (CTV) contracts to to deliver significant carbon reductions in a Danish step closer in the decarbonisation of our CHP operations in industries and healthy marine ecosystems. charter five ships and form a Taiwan-flagged CTV fleet, in Denmark. energy system centred around CHPs. The last of our • In the US, we operate in areas where the endangered North collaboration with local companies, for the construction CHPs running on coal will be closed in 2023, marking Atlantic right whale and the vulnerable fin whale are found. of the Greater Changhua 1 & 2a Offshore Wind Farm. Accordingly, we sail and operate in compliance with the US – We allocated more than USD 420,000 in economic our complete retirement of coal. Marine Mammal Protection Act, employ marine biologists and medical supply-relief donations to non-profit to support our environmental permitting teams, and invest organisations to support rural project host communities However, some environmental NGOs question the in marine mammal tracking software. in Texas, San Diego, and Nebraska, US. sustainability of our use of biomass. It is a complex Actions to Strengthen the tools used to ensure short carbon-payback Actions to Explore potential positive impacts of offshore wind farms, Enhance shared benefits with local communities by become future-fit time of the wooden biomass we use. topic, and we understand and recognise some of become future-fit and expand our biodiversity programme to cover all business strengthening tools to identify stakeholders early and share their general concerns. Among others, these NGOs units. knowledge across projects. Full implementation of the UN point out that only biomass derived from sustaina- Guiding Principles on Business and Human Rights focusing on processes for due diligence, remediation, and reporting. ble forestry that is not in demand for long-lifetime

Our governance The EVP of our Markets & Bioenergy business unit is products should be used in CHPs. This is supported Our governance The heads of our four Offshore market regions are The heads of our four Offshore market regions and our accountable for our policy and programme. Implementation by several scientific reports, including a recent study accountable for our policy on biodiversity. Environmental Onshore EVP are accountable for progress regarding lies with our Fuels & Logistics department with assistance of from the University of Copenhagen. These reports specialists support implementation through the lifetime of stakeholder and local community engagement. Public and the Bioenergy Sustainability department. our offshore wind farms. regulatory affairs in the respective markets are responsible. highlight that the right biomass will deliver signifi- Policy and link to • Ørsted Sustainable biomass policy cant carbon reductions in the short term. Yet, if that Policy and link to • Ørsted Offshore wind biodiversity policy • Ørsted Stakeholder engagement policy more information • ESG performance report: Section 2.2 biomass could have been used for construction or more information • ESG performance report: Sections 2.14 and 2.15 • Ørsted Local community engagement policy • Status report for sustainable biomass (only in Danish) furniture, which would store carbon and replace

International • EU Renewable Energy Directive carbon-intensive materials like steel or concrete, the International • The EU Birds and Habitats Directive • UN Guiding Principles on Business and Human Rights frameworks • Convention on Biological Diversity climate benefit would be significantly less. frameworks • UN 2020 Aichi Biodiversity Targets of reference • Danish industry agreement on sustainable wooden biomass of reference • UNGC Sustainable Ocean Principles Therefore, the energy industry must have strict and Examples of • Sustainable Biomass Programme (SBP) Examples of • World Wildlife Foundation DK Pro-NJ Grantor Trust, US • Onside - Horizon Youth Zone, UK • partnerships and • Forest Stewardship Council® (FSC®) well-defined standards for the biomass they use to partnerships and • UNGC Action Platform for Sustainable Ocean Business Dayeh University, Taiwan collaborations ensure real carbon reductions. We strongly support collaborations • Offshore Energy and Nature Coalition this, and, as such, only source biomass which is SDG contribution 15.2: We minimise our potential negative impacts on forests SDG contribution 14.2 and 15.5: We work to mitigate our impacts on marine 8.3, 8.5 and 11.A: We support decent job creation and and promote sustainable forest management. 100 % certified, made from forests with an ongoing and coastal ecosystems and take action to halt the loss of positive economic, social, and environmental development of reforestation or from residues that are not in demand biodiversity and natural habitats. local communities in the markets where we operate. from the building or furniture industry. Consequently, Targets and Certified sustainable biomass sourced (%) we are very pleased that the Danish government Targets and Red-List species recorded in areas with Local communities engagement indicators indicators Ørsted offshore operations has now decided to implement sustainability criteria 100 100 Local 96 that, by law, require companies importing or using suppliers Education NGOs biomass for energy to clearly document its sustain- ability, type, carbon savings, and impact on biodi- versity. This sets a necessary common standard for 1 0 6 8 Critically Endangered Vulnerable Near- biomass for energy generation that is stricter than endangered threatened Fishers Local community and minority groups the European Union’s current requirements.

2019 2020 2020 target 38 Addressing the sustainability impacts Ensuring responsible business practice Ørsted Sustainability report 2020 39 of the green energy transformation

Programme 11 Resource management 12 Workplace safety Programme 13 Employee health and well-being overview overview

Sustainability Consumption and recycling of resources: Natural resources Safety, health, and well-being: Valuing and protecting Societal Health and well-being: Companies have a responsibility Mental health during the pandemic challenge are currently being used faster than their reproduction rate. the physical safety of our employees and contractors challenge to provide the physical, social, and psychological working This impacts natural ecosystems, e.g. through water scarcity can positively influence the welfare of individuals and the conditions that allow people to lead whole and healthy lives. and waste pollution. To reduce consumption and ensure communities where we operate. COVID-19 has left its mark on our business, as with availability, it is crucial to use resources sustainably. countless others. Thanks to our hard-working and robust staff, we have not experienced any decrease Our approach We strive to minimise our consumption of resources, including We strive to create a safe workplace for employees and Our approach We implement a holistic approach to physical, social and water in our operations and supply chain through action contractors working for Ørsted, and we incorporate safety psychological health and mental well-being through our in business performance or productivity so far. plans and targets. We collaborate with our peers, suppliers, into all our decisions and actions. In our work, we actively Ørsted Life framework. We train and support managers in However, the physical, social, and mental health of and contractors to improve recycling rates and reduce landfill pursue a best practice, seeking high efficiency in the way we science-based stress prevention, and use data and research to our employees has been affected – as expressed disposal. work. develop health and well-being initiatives. We offer employees access to services, also while they are working from home. through signs of anxiety and a general sense of decreased well-being. Our progress • We continuously work to increase the reuse and recycling • We have achieved our best-ever safety performance, Our progress • We have developed guidelines and material on best rates of all our waste fractions. The majority of our waste expressed by a TRIR (total reportable injury rate) of 3.6. This practice in remote working during the COVID-19 pandemic, is oil-containing wastewater and bioashes from CHPs, and, corresponds to a 27 % decrease of recordable injuries since including physical exercises, psychosocial health guidelines, COVID-19 has impacted our employees working in 2020, the vast majority of these types of waste were 2019. and safety briefings when working from home. from home in different ways and to varying degrees. reused or recycled. The remainder of our waste primarily • We have successfully implemented a new, shared QHSE • During the COVID-19 pandemic, our People & Development A lack of proper office equipment, exercise, and comes from CHP plants, Renescience, offshore wind management system called ‘way we work’. It contains the team has provided managers with additional support on operations, and administration, and reuse or recycling of it is processes, policies, and instructions that describe employee how to be aware of mental pressure in their teams, and movement has affected their physical condition. In more challenging. tasks and specify job requirements. how they can address and alleviate such pressure. the absence of physical collaboration and meetings • We commissioned Renescience, a waste-to-energy plant in • We are in the process of getting our new QHSE • For World Mental Health Day, we focused on the COVID-19 with colleagues, our employees’ social working Northwich, UK. The plant has the potential to decarbonise management system certified according to ISO 14001 and situation and encouraged employees to reach out to each power and heat generation and sort waste into source ISO 45001. other to connect and offer mutual support. environment has been dominated by many virtual materials, such as plastic and metal, for recycling. • We are implementing an Enterprise Risk Management • We are piloting the Howdy app in our Offshore business to meetings. Some have experienced increased levels • We have created new waste and water management concept to further ensure the prioritisation of safety issues mitigate stress and provide early stress interventions. of disengagement, exhaustion, and fatigue, while policies, and improved reporting frameworks complying and allocation of our resources and attention. • We are revising our harassment and bullying policy to with GRI standards. • All our fully operational sites operate in accordance with provide easier and more accessible guidance on how to others have encountered more serious complications • All our fully operational sites work in accordance with ISO the ISO 45001 standard for occupational health and safety. handle cases of bullying and harassment. requiring psychiatric or psychological treatment. 14001. • The Danish harassment policy has been updated according to new legislative requirements in Denmark. • All employees have been offered flu vaccines as preventive We have kept these impacts front of mind through- measures for physical health. out the year, establishing a suite of initiatives to address them. For physical health issues, for example, Actions to Collaborate with peer companies and governments to Continue to embed QHSE in our working culture through joint Actions to Continue to develop services to improve the health and well- we have developed guidance for tending to physical become future-fit improve blade recycling and establish circular-focused efforts with our contractors and suppliers. become future-fit being of our employees, gather health data across locations, decommissioning plans for our offshore wind farms. Partner and strengthen our digital service offerings. conditions, accessing fresh air, and maintaining with our suppliers to minimise our resource consumption. healthy living, and shared it with all employees. Simi- larly, for social well-being, we have actively changed Our governance The QHSE Committee oversees progress, while The Vice President of QHSE is accountable for safety, Our governance Accountability lies with the Chief Human Resources Officer. our ways of working to include more interactive ac- implementation is carried out by the individual business units while the QHSE Committee oversees progress. The with support from the QHSE department. QHSE management team is responsible for the overall tivities and informal virtual get-togethers which sup- implementation of our safety management systems. port team spirit and create spaces to talk through the ups and downs of the working day. For mental Policy and link to • Ørsted QHSE policy, management policy, and water • Ørsted QHSE policy Policy and link to • Anti-bullying and harassment policy more information management policy • ESG performance report: Section 3.4 more information • Whistle-blower Hotline well-being, we have shared resources to ensure all • ESG performance report: Sections 2.11 and 2.12 • Annual report, pages 14, 33, and 39 • ESG performance report: Section 3.1 our employees can access support and emergency contacts whenever they need it. Such support is also • N/A • ISO 45001 • WHO Healthy Workplaces: A model for action International International freely available through our health insurance. frameworks frameworks • The NIOSH Total Worker Health Programme of reference of reference We take our responsibility for employee mental Examples of • Kalundborg Symbiosis – the world’s first industrial • N/A Examples of • In Denmark, PFA for health insurance, and health and well- health very seriously. Throughout 2020, our lead- partnerships and symbiosis. Equinor receives our excess flue gas condensate. partnerships and being activities. Globally, health and well-being service collaborations • DecomBlades, partly funded by Innovation Fund Denmark collaborations providers, and fitness facilities. ership has continually emphasised the importance of not simply focusing on achieving our business SDG contribution 12.4 and 12.5: We work to minimise our resource 8.8: We contribute to safe working environments through our SDG contribution 3: We promote the health and well-being of our employees targets, but, even more importantly, of celebrating consumption, including hazardous waste. safety approach and targets. by actively creating the space for all to live healthy lives. efforts which will secure employee health well into 6.4 and 6.5 We improve water quality by reducing pollution and increasing water-use efficiency. 2021. We have also held a series of virtual roundta- bles to help our managers support and talk about Targets and Other waste from production and administration reused or Total recordable injuries per million hours worked (TRIR) Targets and Share of employees that have recorded incidents of stress — mental health within their teams. In 2021, we will indicators recycled (excluding wastewater from the oil pipeline) - (%) (per million hours worked) indicators both light and heavy cases (%) continue our efforts to care for the physical, social, and mental well-being of all our employees. 84 78 11 4.9 9.7 9.4 3.6 2.9

2019 2020 2019 2020 2025 target 2018 2019 2020 40 Ensuring responsible business practice Ørsted Sustainability report 2020 41

Programme 14 Employee development 15 Employee satisfaction Programme 16 Inclusion of diversity overview overview

Sustainability Employee development and retention: As global competition Employee satisfaction and retention: Creating a work Societal Inclusion of diversity: Respecting diversity and promoting an Diversity of perspectives challenge for the best talent intensifies, businesses must improve the environment where all employees thrive and are motivated challenge inclusive workplace culture and diversity in management is development and retention of existing staff and engage new to help create a sustainable business is essential for sustaining key to encouraging and valuing individual characteristics. talent from different backgrounds. long-term value creation. Diversity of personality, lifestyle, work experience, educational background, ethnicity, age, culture, We are building a culture of continuous learning and We measure employee satisfaction and motivation through As we grow as a company, we are refining how we create Our approach Our approach disability, gender, and sexual orientation increases development with individual development as a starting point. an annual employee engagement survey to monitor whether a diverse workplace and diversity in management. Our We provide development opportunities through on-the-job employees are thriving in their work environment. We approach is made up of targeted actions which embed the diversity of perspectives in companies. Diverse experience, networks, and formal learning. We provide digital measure the perception of Ørsted as a workplace, including inclusion of diversity in our People & Development processes, perspectives are crucial for fostering more nuanced and in-person learning opportunities for all employees. And, daily tasks, workload, and relationships with managers. comprehensive management training on inclusion-of-diversity debates and more creative, dynamic, and empa- we have tailored programmes for selected early-career We use responses to identify areas of improvement at practices, and activities shaping inclusive organisational talents, senior specialists, managers, and executives. managerial, departmental, and company levels. behaviour in management and in general. thetic workplace environments, which in turn lead to better business decisions and results. Our progress • We have established a leadership role in our Global Talent • We have improved our overall employee satisfaction and Our progress • We have appointed a new Head of Global Inclusion & Well- function (a Head of Talent Identification & Deployment). motivation score from the annual employee engagement being to build a team to further strengthen our inclusion • We have increased investment in our learning platform, survey by one point, bringing it to 78. and well-being efforts. At Ørsted, we strongly believe in the value of a diverse Ørsted Academy (in-person, virtual, and digital training). • We have maintained our position in the top 10 % • We launched a company-wide ‘Inclusion of diversity insights organisation. We aspire to create an environment • We have launched several new virtual initiatives for among our peer benchmarking companies for employee survey’, which provided actionable insights from 4,000 where everyone can thrive, perform, and grow. In a year employee development, including webinar sessions on satisfaction. employees on opportunities and challenges to improving career development, a new learning management system, • 95 % of our employees responded to the annual employee inclusion of diversity at Ørsted. marked by global social movements across the world, and a global learning week for employees to learn about engagement survey – an increase from previous years – • For the third year in a row, Ørsted was a sponsor of displaying gender and racial injustices within our socie- Ørsted’s business from internal and external speakers. which provided a strong foundation for the results. Copenhagen Pride, which is one of a series of global events ties, 2020 has only sharpened our commitment. We all • We have missed our 2020 target despite significant to celebrate LGBT+ pride. investments in 2019 and 2020 in employee learning • In September, we supported the UK-based LGTB+ rights have the responsibility to take an active role to shape resources and programmes and in enabling managers to organisation Stonewall by signing a letter to the British a more open, diverse, and inclusive society. develop their talent. In 2020, employees’ perception of their government declaring our support for the legislative rights opportunities to develop improved. We appreciate that of transgender individuals. cultural change takes time, and our efforts are reflected in • We launched a series of inclusion awareness activities and As we increase our global presence, we want to our overall employee development score, which primarily panel events across the company. attract, develop, and retain a workforce that reflects focuses on the embedding of learning and development in • Our inclusion networks were merged, supported by the diversity of the communities we operate in. As the organisational culture. management, and, now, we have a global platform for all • In 2021, we will continue our determined efforts on inclusion networks at Ørsted. part of our inclusion of diversity programme, in 2020, developing our learning culture and resources, on building • We hosted a virtual ‘Girls’ day in Science’, introduced the we launched a company-wide ‘inclusion of diversity manager capability, and ensuring employees understand Ørsted STEM Troops, and collaborated with the ‘Above and insights survey’ to gain insights from our employees how they can be accountable for their development. Beyond’ role models to promote gender balance in STEM. on opportunities and challenges within Ørsted. It

Actions to Continue the capability building of managers and support Our Executive Committee will continue to engage directly Actions to Include more inclusive leadership training, embed inclusion showed that employees take much pride in working become future-fit employees to take ownership of their own development. with our organisation, so all employees understand how their become future-fit of diversity in our People & Development processes, develop at Ørsted, feel a high degree of psychological safety, work contributes to our company vision. flexible working conditions and build inclusive teams. and that most of them would recommend Ørsted as a great place to work. In addition, the survey Our governance Accountability for our talent strategy lies with the Executive Accountability lies with the Chief Human Resources Officer. Our governance Accountability lies with the Chief Human Resources Committee, while the People & Development team The Group Cooperation Committee, comprised of employee Officer and the Executive Committee. In the UK, a Steering provided clear direction on how and where we are to spearhead implementation. representatives, and the Executive Committee oversee the Committee oversees and approves activities and a People strengthen our approach: results of the engagement survey. Our P&D function conducts Leadership Team endorses activities driven globally. • Maintain our strong commitment to equal the survey and oversees improvement actions. opportunities in the workplace and further Policy and link to • ESG performance report: Section 3.1 • ESG performance report: Section 3.1 Policy and link to • Ørsted Global inclusion & diversity policy increase the transparency on equal pay and more information more information • ESG performance report: Section 3.2 equal opportunities to employees. • Create an even more inclusive workplace where International • N/A • N/A International • UN Convention on Discrimination Against Women frameworks frameworks • UN LGBTI Standards of Conduct for Business all employees feel they can bring their whole of reference of reference • UN Women Working Group selves to work. • Build on the learnings from working during Examples of • N/A • N/A Examples of • World Pride for 2021 partnerships and partnerships and • EMEA D&I network COVID-19, including that working virtually is a collaborations collaborations • The Association New Dane positive driver of inclusion across geographies and providing more flexible work conditions can SDG contribution N/A 3: We contribute to the good health and well-being target SDG contribution 5: We conduct business with accountability and responsibility, increase motivation, efficiency, and well-being. through our focus on engaging employees in their work life. ensuring respect for employees, partners, and suppliers.

Targets and Employee learning and development (index 0-100) Employee satisfaction (index 0-100) Targets and Share of women in Share of women in middle In 2021, to deepen our inclusion of diversity pro- indicators indicators Leadership Conference (%) management (%) We aim to remain in the top 10 % gramme, we will introduce an ‘Inclusion Index’ which in a benchmark of peer companies. leaders and teams across the organisation can use 30 26 to better understand potential challenges, drive 80 25 77 77 77 78 22 initiatives, and track progress. We aspire to make the Target 20 top 10 % Inclusion Index an integral part of the continuous 13 dialogue in our teams on employee satisfaction and motivation, enabling everyone to contribute to cre- ating a still more diverse and inclusive culture.

2019 2020 2020 target 2019 2020 2019 2020 2023 2019 2020 2023 target target 42 Ensuring responsible business practice Ørsted Sustainability report 2020 43

Programme 17 Good business conduct 18 Human rights & responsible business Programme 19 Information and cyber security 20 Responsible tax practices overview overview partners

Sustainability Business ethics and transparency: Corruption, bribery, and Business partner conduct: Risks in supply chains to labour Societal Information security and cyberattacks: As information and Responsible tax: By paying tax and supporting international challenge other fraudulent practices can impact society by destabilising and human rights, corruption, and environment must be challenge cyber security threats increase, companies must understand tax reform, companies contribute to the development of the institutions and undermining fair business competition. managed to mitigate impacts on workers, communities, and the associated risks and continue to improve security to societies they operate in and the creation of well-functioning the natural environment. protect critical infrastructure and information assets. tax systems and institutions conducive to business.

Our approach We have zero tolerance of all forms of bribery, corruption, and We have a due diligence process in place to assess our Our approach We work to ensure the security of corporate information Our tax reporting is transparent, and we voluntarily disclose kickbacks, given or received, direct or indirect. Good business business partners’ and suppliers’ adherence to our Code of and critical infrastructure through a risk-based approach country-specific information about our tax position. We aim conduct is promoted internally and with our business partners Conduct for business partners (CoC). We identify performance in close collaboration with our stakeholders. We provide to comply with the letter of the law and the underlying intent through policies, procedures, and reporting mechanisms, gaps through screenings and assessments, and we act on our them with tailored compliance support as well as training to ensure we pay the right amount of tax on time in the including our whistle-blower hotline. findings through supplier-driven corrective and preventive and awareness so they can incorporate and apply security countries we operate in. We engage with stakeholders and improvement plans. measures in their daily operations. cooperate with authorities to support effective tax systems.

Our progress • We continue to make efforts to strengthen our ‘Know your • We have developed a project to strengthen our Our progress • We have established a Global Information Security • We have enhanced our reporting of tax practices in the counterparty’ screening programme, including updating implementation of the UN Guiding Principles on Business Management function that governs and manages global Annual report, inspired by the new GRI indicator, GRI207. sanction risk procedures to mitigation, US and EU sanctions and Human Rights. This includes strengthening our human policies and processes, quantifies security risks, and provides • We have participated in dialogue with the Danish exposure, and performance of risk-based due diligence of rights policy commitment in our own operations and our support for the entire organisation. Parliament on the implementation of new CFC rules, with business partners. local community engagement programme. • We have established a Global Defence Function that OECD on CBC Reporting, with BIAC on Pillar II, and with • In selected dominions, we have introduced country-specific • We have continued to implement our anti-sexual detects and responds to information and cyber security various NGOs in the Tax Dialogue Framework. compliance procedures to supplement our policy on good harassment campaign for vessel suppliers and have held incidents. • We have operationalised our tax policy in a tax strategy. business conduct. meetings with relevant suppliers to understand their • We are managing an information security programme that • We have a dispute with the Danish Tax Agency relating • We have adopted a new global policy to mitigate the risk approach. drives various security enhancements and risk mitigation to the taxation of two offshore wind farms in the UK. of conflict of interests among our employees. • We have developed our ESG reporting set-up to better initiatives for information and operational technologies. Ørsted has taken steps to ensure that the two involved tax • The number of substantiated whistle-blower cases reflect all supplier-faced due diligence activities. • Via ongoing phishing simulations and communications authorities will initiate negotiations and, if needed, defer increased this year, and we are following up on this • We have identified and prioritised minerals and metals and customised awareness events for certain employee the case to arbitration to avoid double taxation of Ørsted. development. in our supply chain where salient human rights and groups, we have carried out global awareness campaigns See the Annual report, page 12, for more details. environmental risks are greatest. to promote safe behaviour in the workplace. • We were ranked the best company in Denmark on tax • We have identified workers in dormitories during COVID-19 transparency and governance by the Danish financial as a key risk and have initiated dialogue with selected magazine Økonomisk Ugebrev. suppliers in Singapore on how they manage this. • Our in-house tax department was ranked the best in-house tax team in Europe by International Tax Review.

Actions to We will continuously strive to improve our compliance set-up To improve our adherence to the UN Guiding Principles, Actions to To be equipped for an ever-changing cyber landscape, we To meet increasing compliance and reporting requirements, become future-fit to meet regulatory obligations and align with best practice in we will implement our human rights project as well as our become future-fit are driving four strategic themes to improve current security we will maintain focus on transparency and accountability in the countries where we operate. minerals and metals project developing actions to mitigate levels: (i) Anchor scalable security governance (ii) embed a tax payments and reporting. the negative impacts of sourcing minerals and metals. security mind-set, (iii) advance security operations, detection and response, and (iv) enhance global business resiliency.

Our governance The Board of Directors has approved our Good Business Accountability lies with the Head of Group Stakeholder Our governance Accountability lies with the Chief Information Security Officer Our Board of Directors has approved the Responsible tax Conduct Policy. A Compliance Committee, comprised of Relations, who also chairs the Responsible Business as per the risk appetite of the Executive Committee. The policy. Accountability lies with the CFO. Our global tax team our Executive Board and compliance officers, oversees the Partners Programme (RPP) Steering Committee. The Audit & Risk Committee monitors and performs supervision of manages the daily implementation of the policy. implementation compliance programme and activities. Committee has approved our Code of Conduct for business key security indicators and the risk exposure. The Information Accountability for the policy lies with our Chief Executive partners. Implementation is carried out by our RPP team in Security Board endorses the security strategy and is an Officer, as risk owner and risk responsible. collaboration with procurement professionals. important liaison across the organisation.

Policy and link to • Good business conduct policy • Ørsted Code of Conduct for business partners Policy and link to • N/A • Ørsted Global tax policy more information • Code of Conduct • UK Modern Slavery Act statement 2019 more information • ESG performance report: Section 4.4 • Stakeholder engagement policy • ESG performance report: Section 4.5 • Annual report, pages 37, 38, and 70

International • Anti-corruption regulations in the countries where we • UN Guiding Principle on Business and Human Rights, OECD International • International standards, NIST 800-53 & 800-82, ISO 27001 • OECD BEPS frameworks operate, including the UK Bribery Act and the US Foreign Guidelines for Multinational Enterprises, IFC Performance frameworks & 27002, and IEC 62443. • EU Directives, e.g. ATAD, DAC6 of reference Corrupt Practices Act. Standards, and ILO Core Conventions of reference • Regulatory requirements in the countries where we operate, • Applicable local and international tax legislation • OECD Guidelines for Multinational Enterprises • UK Modern Slavery Act and UK Bribery Act including EU NIS, UK NIS, and NERC CIP. • Wind Europe Industry Principles

Examples of • Confederation of Danish Industry’s Anti-Corruption Working • Wind Europe Sustainability Working Group Examples of • World Economic Forum • The Danish Confederation of Enterprises’ Tax Panel partnerships and Group • Danish Initiative for Ethical Trade partnerships and • UK Cyber Security Task Group (E3CC) • The Tax Dialogue collaborations • Better Coal collaborations • Danish Energy

SDG contribution 16.5: We strive to tackle corruption and bribery through due 8.7, 8.8, and 16.5: We seek to minimise potential negative SDG contribution N/A 16.6: We seek to contribute to effective, accountable, and diligence, training, compliance, and misconduct reporting. impacts on labour rights, modern slavery, safety, corruption, transparent tax institutions at all levels. and bribery in our supply chains.

Targets and Substantiated whistle-blower cases (number) Screenings on all sourcing contracts above DKK 3 million Targets and We carry out ongoing global campaigns Global corporate income tax paid in 2020 (DKK billion) indicators and assessments opened (number) indicators for safe behaviour in the workplace.

3 4 384 Substantiated cases transferred to the police (number) 0 1 51 1.1 2019 2020 Risk screenings Desktop and site assessments 44 Ørsted Sustainability report 2020 45

Sustainability governance Sustainability ratings and memberships

UN Global Compact LEAD participant Board of Directors

Sets the strategic direction for sustainability at Ørsted. Member of the action platform 'Business Ambition for Climate and Health'. Through this platform, we aim to Approves the sustainability targets in our corporate strategy and monitors that they are achieved. serve as a catalyst for enhancing action to meet the ambitions of the Paris Agreement and the UN SDGs. Approves our top sustainability themes and our annual sustainability report. Member of the action platform 'Sustainable Ocean Chair Business'. Through this platform, we aim to contribute Thomas Thune Andersen, Chairman of the Board to ensuring that an accelerated use of ocean-based solutions takes place sustainably to meet the ambitions of the Paris Agreement and the UN SDGs.

Audit & Risk Committee Memberships and alliances

A board committee appointed by the Board of Directors. Internal Audit

Supervises the integrity of the sustainability reporting, its presentation hereof in the annual Verifies the effectiveness of our report, and the internal control system for ESG data. sustainability programmes with particular Approves the ESG performance report. focus on compliance and validity of data.

Chair Dieter Wemmer, member of the Board

Executive Committee

Accountable for the implementation of our sustainability programmes.

Approves portfolio of sustainability programmes. Assigns accountability for programmes at executive level. Proposes the sustainability programme targets that are part of our corporate strategy to the Board and monitors that they are achieved. Ratings and rankings Elaboration and benchmark Score

Chair Mads Nipper, CEO Ørsted ranked the 2nd most sustainable company in 2nd place the world in Corporate Knights’ 2021 Global 100 index.

Compliance Committee Sustainability Committee QHSE Committee Ørsted awarded the highest possible CDP rating for two A Appointed by the Executive Committee. Appointed by the Executive Committee. Appointed by the Executive Committee. consecutive years and recognised as a global leader on climate action. Monitors our compliance with laws, rules, Oversees our Sustainability Commitment, Oversees that we live up to our strategic standards, and internal codes of conduct approves our sustainability themes analysis, priorities in terms of quality, health, safety, that apply to our business areas, including reviews our sustainability strategy, provides and environment (QHSE), reviews our QHSE Ørsted awarded the highest possible rating by MSCI for AAA the field of sustainability. recommendations for programme portfolio, strategy, and monitors performance of four consecutive years. monitors performance of programmes, and QHSE programmes. approves our ESG data set.

Chair Chair Chair Ørsted placed as no. 1 among all utilities and B+ Mads Nipper, CEO Marianne Wiinholt, CFO Anders Lindberg, EVP awarded Prime status by ISS ESG.

Business units and global functions Ørsted awarded a Platinum Medal for being among the 80 of 100 Conduct annual sustainability themes analysis and establish our sustainability programmes. top 1 % of companies assessed by EcoVadis.

Ensure progress by developing policies and procedures for each programme, setting targets, defining and measuring performance indicators, and managing and reporting on performance. Ørsted ranked the most influential electric utility 1st place Programme specific steering committees oversee the strategy, targets, and performance of Ørsted’s most strategic sustainability programmes. company in the world by World Benchmarking Alliance for contributing to a low-carbon economy.