POWERING CHANGE SSE PLC SUSTAINABILITY REPORT 2021 THE YEAR IN NUMBERS SSE has the largest renewable electricity portfolio in the UK ABSOLUTE EMISSIONS RENEWABLES IN CONSTRUCTION and Ireland, providing energy needed today while building (SCOPE 1 AND 2) AND OPERATION Coronavirus statement a better world of energy for tomorrow. It develops, builds, The report covers the first full operates and invests in low-carbon infrastructure in 7.6MtCO e 5.8GW year of operations within the 2 constraints of the coronavirus support of the transition to net-zero, including onshore pandemic. Thanks to a highly and offshore wind, hydro power, electricity transmission RENEWABLES CONNECTED TO SSEN MEDIAN GENDER PAY GAP (UK) resilient business model and the and distribution networks, alongside providing energy TRANSMISSION’S NETWORK AND OPERATION commitment and flexibility of its employees, SSE maintained products and services to customers. the safe and reliable supply of 6.7GW 18.3% electricity throughout the year UK-listed and headquartered in Perth, SSE is a major and did not draw on furlough or rates relief in doing so. Further contributor to the economies in the UK and Ireland. It NUMBER OF SAFE DAYS RENEWABLES COMMUNITY FUNDS detail of SSE’s response to the employs more than 10,000 people and is real Living Wage AND OPERATION coronavirus outbreak can be and Fair Tax Mark accredited. found on sse.com/coronavirus 271 and throughout this report. £10.2m This Sustainability Report for the period 1 April 2020 to 31 March 2021 aims to provide enhanced disclosure of UK/IRELAND TAXES PAID SSE’s policies, practice and performance against its key economic, social and environmental impacts and goals. £379m/€20.4m On occasion the report refers to activities of joint ventures and in these instances it is made clear this is the case. UK/IRELAND ECONOMIC CONTRIBUTION £5.2bn/€439m Stories in action Throughout this report, SSE’s sustainability policies, practice and performance Contents SSE PLC ANNUAL REPORT 2021 ANNUAL REPORT 2021 SSE PLC are brought to life through stories in action identified with the following icons: POWERING CHANGE CHIEF EXECUTIVE’S STATEMENT 3 SSE PLC ANNUAL REPORT 2021 SSE’S BUSINESS MODEL 4 For a better energy world of STRUCTURED SUSTAINABILTY GOVERNANCE 9 IDENTIFYING MATERIAL ISSUES 10 Engagement Innovation Partnering Dilemma TAKING MEANINGFUL CLIMATE ACTION 18 in action in action in action CLIMATE-RELATED FINANCIAL DISCLOSURE 26 Alternative Performance Measures PROTECTING THE NATURAL ENVIRONMENT 36 SSE assesses the performance of the Group using a variety of performance PROVIDING AFFORDABLE AND CLEAN ENERGY 42 measures. These measures are not all defined under IFRS and are therefore INVESTING IN INDUSTRY, INNOVATION AND INFRASTRUCTURE 52 termed ‘non-GAAP’ measures. A reconciliation from these non-GAAP measures to the nearest prepared measure in accordance with IFRS is DELIVERING A JUST TRANSITION TO NET ZERO 66 presented and described on pages 172 to 177 of the Annual Report 2021. The SSE plc Sustainability Report 2021 is COMMITTED TO DECENT WORK AND ECONOMIC GROWTH 70 The alternative performance measures SSE uses might not be directly complemented by SSE’s Annual Report 2021 DATA AND PERFORMANCE 94 comparable with similarly titled measures used by other companies. which can be found online at sse.com. Our cover: Jasmine Allen emerges from the nacelle of one of the turbines at Greater Gabbard wind farm, 12 miles off the coast of Suffolk. Jasmine, 21, is an apprentice in SSE Renewables and featured in SSE’s 2021 brand campaign in the lead-up to COP26. SSE plc Sustainability Report 2021 1 SUSTAINABILITY REPORT CHIEF EXECUTIVE’S STATEMENT POWERING SUSTAINABLEprojects over and above the base case that “Our CHANGE vision is to be a leading energy company in a net zero will be key to delivering net zero. With all eyes on COP26 in Glasgowworld. later Our this core year, renewables SSE is and networks businesses, And we are engaging as well as our complementary businesses in thermal, focusedwith stakeholders on the practicalon ED2… and positive action required to buildIf we are a fully net to zerodecarbonise carbon our economy economy. distributed energy and customer solutions, all have by 2050, this will require both a significant important roles to play in delivering that vision.” increase in electricity demand and a fundamental shift in the way it is consumed Theas coronavirus millions more pandemic electric vehicles, netand zero storage world, infrastructure. our business Examples strategy of this salesustainability of our stake requires in SGN constantset to be our and next demonstratedhundreds of powerfullythousands ofthe heat nature pumps deliberatelycan be seen reflects in Aberdeenshire our objective and in the materialcreative disposal innovation. (see pageThe potential16 ). of of ourand interconnected embedded generation world andand storage toHumber create valuewhere, simultaneously with Equinor, we for have plans greater digitalisation in our industry the comeimportance onto the of system co-ordinated in the coming and years. shareholdersto jointly develop and pioneeringsociety. power stations Whatenables we us do to achievematters more, and for less. with CCS technology, and what could be we’re privileged to do it… collaborativeThat means action distribution across networks borders. have Innovation can also provide answers to a critical role to play and the next price the world’s first major 100% hydrogen- Above all, developments this year underline The greatest impact we make is to the emerging challenges of our time: control period between 2023 and 2028, fuelled plant. the importance of our work to provide As weRIIO-ED2, look forward is key to to unlocking the most the strategic, deliver the profitable solutions to energyfrom restoring needed today nature while to reusingbuilding materialsa importantanticipatory international investment conference required to deliver climateConstruction change. of Keadby From the2, meanwhile, development betterin a way world that of eradicates energy for tomorrow.the notion We of on climatethe resilience, change flexibility since theand Parisresponsiveness ofis awe-inspiring progressing well offshore and it will windbe the farms most are‘waste’. delighted These to arebe a issues Principal for Partner the future, of Agreement,we will need. the imperative to transform andefficient incredible gas plant subsea in Europe transmission providing thebut UK this Government year’s report as placesit prepares significance to host our businesses and economies has infrastructure,a much-needed to capacitythe complexity boost and of worldon the leaders importance at the pivotal of a culture COP26 of UN neverWe’ve felt consultedso urgent. extensively With average with allglobal repurposingdisplacing less thermal carbon generation efficient generation assets climateongoing summit innovation being heldfor the in Glasgow benefit of all temperaturesstakeholders reaching to build a1.2°C robust above and toon support the system; a renewables-led however, we are energy clear this inSSE’s November. stakeholders. pre-industrialcompelling levels, business the plan window and are of system,will be theSSE last is inunabated the business CCGT ofplant climate we build and we are already looking at options With the eyes of the world on the UK, it opportunityexcited about to prevent the role werises can above play in the action that transitions our energy system That culture of innovation is also transformation journey that lies ahead. for hydrogen blending there. is a reminder that the work we are doing 1.5°C is closing. It is therefore both a to a net zero world. And in doing so, todesigned decarbonise to ensure our economy we are and alive tackle to privilegeRefocusing and a responsibility thermal generation to be a weDisposals support green have economic sharpened activity, the climatethe constant change need is vitally to importantupdate our – and our Principalfor a Partnernet zero of theworld… UK Government’s creatingfocus onjobs, our prosperity net zero and vision… fair returns rolesustainability in this puts objectives us in a privileged and, in position. 2021/22, presidencyAs variable of renewableCOP26 in electricityGlasgow this toOur our vision shareholders. is to be a leading energy we look forward to a review of our November.increasingly SSE’s dominates role as athe sponsor electricity is to company in a net zero world. Our core We2030 are Goals working to hard ensure to showcase they remain the best be asystems positive in contributorthe UK and Ireland, before, SSE during Inrenewables this years’ andreport, networks we spell businesses, out the as thestretching UK has toright offer to and the engaging end of the with decade. a andThermal’s after the fleetconference played an through important the role rolewell of as each our complementary of SSE’s business businesses units in in wide range of stakeholders to share our practicallast year action securing that electricityremoves suppliescarbon for thethermal, mission distributed to establish energy net and zero. customer And experienceFinally, the on spirit the indecarbonisation which this report journey emissionshomes andfrom businesses the electricity when system.the wind becausesolutions, a netall have zero important economy roles is asto muchplay sois publishedfar. There is is a to long stimulate way to gofurther to deliver in delivering that vision. Our business mix net zero in the next three decades – but did not blow and the sun did not shine. about