About this report
Scope of this report
The scope of this report is TenneT B.V. and the subsidiaries in which it has a controlling interest (generally speaking a voting interest of over 50%). For example, our 50% stake in BritNed and BritNed’s activities are not included in our results. This integrated report covers the full year 2017, i.e. 1 January 2017 to 31 December 2017. TenneT’s integrated annual report 2017 was published on 23 February 2018 and is available online.
The 2016 Annual Report was published on 8 March 2017.
In 2017, there were no significant acquisitions or divestments impacting our non-financial reporting. A complete overview of all the entities consolidated in this Integrated Annual Report can be found in note 7.4 of the consolidated financial statements.
We based this integrated annual report on the Integrated Reporting (IR) framework, as defined by the International Integrating Reporting Council (IIRC). This allows us to be transparent about our impact as an organisation. The financial information in this report was prepared in accordance with IFRS, as adopted by the EU, and complies with Section 9 of Book 2 of the Dutch Civil Code.
Since 2017, our non-financial qualitative and quantitative information is prepared according to the Global Reporting Initiative (GRI) Standards, following the in-accordance option: ‘Core’. We also adhere to the sector guidelines for our industry (G4 sector disclosures - electric utilities).
The GRI Index table, as included on our corporate website, shows which GRI aspects are material to TenneT and refers to those sections in the report describing this aspect. In addition, and in accordance with the policy on state-owned companies (Nota Deelnemingenbeleid Rijksoverheid 2013), TenneT complies with the Dutch Corporate Governance Code, as laid down in the Corporate Governance section of this report.
Furthermore, our integrated annual report complies with the EU directive on the disclosure of non-financial and diversity information, which was translated to Dutch legislation and is mandatory for annual reports from 2017 onwards.
This report is also a Communication on Progress, i.e. an update on how we implement the 10 principles of the United Nations Global Compact (UNGC). We have endorsed these principles since 2015, not just to underline our own commitment, but also to drive CSR performance in the value chain. The UNGC principles are the basis of our TenneT supplier code of conduct and mandatory for all suppliers. New suppliers who do not meet our standards during factory audits, are disqualified from our tender procedures. Our Communication on Progress document can also be found on our website.
The UN recently launched new Sustainable Development Goals (SDGs). These goals are accepted worldwide as driving sustainability. The section in our annual report on strategy performance describes our impact and the contribution we make to the SDGs that are most relevant to our business.
Stakeholders and materiality
In accordance with the applied reporting principles, this integrated annual report only covers topics considered material to our organisation. TenneT uses the materiality principle to determine which subjects to include in the report and which activities in the supply chain to take into account. Our corporate website (www.tennet.eu) includes additional information which was not considered material for integrated-reporting purposes. We defined the material topics based on stakeholder interviews, combined with our own assessment of the economic, environmental and social impact. The results of this assessment can be found in the section on materiality, including a comparison with last year.
The fact that we report on selected topics does not mean we do not manage aspects that are not considered material to our business. Our activities and CSR policy are broader and are not limited to the outcome of the materiality analysis. For more detailed information, please visit the CSR section of our website.
Scope and boundaries
The table below provides a clear overview of the material topics, their impact, our contribution, the boundaries and KPIs.
|Reference||Why material?||What is the impact?||What is our role?||What are the bounderies?||Key Performance Indicators (KPIs)||Targets/ambitions||Unit(s) responsible within organisation|
|Grid availability||Secure supply||Our main task is to ensure security of electricity supply to 41 million people across the Netherlands and Germany.||Electricity is the backbone of the economy of the countries we operate in.||We are responsible for maintaining a balance between supply and demand; we operate and manage the high-voltage grid.||We are responsible for transmission services. Production is the responsibility of producers, distribution lies with DSOs.||Security of supply: uptime in % Amount of interruptions (#) Energy not transported (MWh)||100% grid availability||Asset Owner|
|Investments||Financial performance||To facilitate the energy transition, we need to invest in our infrastructure.||To finance our investments, we need to spend approximately EUR 28 billion in the coming ten years.||We are responsible for realising the investment programme and living up to our stakeholders’ expectations.||We are responsible for realising our investment portfolio. The investment programme is based on the task we are given by the Dutch and German governments.||Capital expenditures (capex) on grid infrastructure / assets (in EUR million) Return on Investment (ROI): Benefits - Costs / Costs||Invest EUR 28 billion in the period 2017-2027||Strategic Investment Committee Supervisory Board|
|NWE Electricity Market||Lead NWE Integration||Electricity does not respect borders and a NWE market is necessary to ensure a reliable and sustainable grid.||An integrated market drives price convergence and security of supply.||TenneT is taking a lead role in integrating the electricity market in NWE to encourage cross-border connections and closer collaboration for the benefit of society, both now and in the future.||Our responsibility is to our own grid and interconnections with neighbouring grids. Other European TSOs are responsible for their grid.||Interconnection capacity (imported and exported volumes + number of cross-border interconnections) Price convergence (number of price areas + number of hours of price equality)||A seamless cross-border energy market Realizing the North Sea Wind Power Hub||Customer & Markets|
|Community engagement||Engage stakeholders||It is crucial we connect with local communities, NGOs and politicians at the earliest stage of a project to address their concerns and gain their understanding and acceptance.||There is increasing public opposition to grid expansion, especially where new assets are concerned.||To be honest, open and fair to all stakeholders involved.||The decision to expand the grid is taken by the Dutch and German governments. Executing our work and explaining the necessity of it is our responsibility.||Number of stakeholder meetings and public events (#) Customer satisfaction score Corporate reputation Stakeholder approach score||Live up to our values (i.e. being responsible, engaged and connected) when addressing our stakeholders’ concerns||Corporate Public Affairs (PAC) Corporate Communications (CMC)|
|Societal financial impact||Financial performance||TenneT’s activities have a financial impact on society.||Costs of managing and balancing the electricity grids which do not directly impact company performance but which are fully reimbursed through regulatory tariffs.||It is our role to minimise costs as much as we can.||We are responsible for keeping costs as low as possible. Reducing redispatch costs is an issue for national governments to solve.||Grid expenses (EUR)||Enable low and stable energy prices||Financial departments|
|Safety||Engage stakeholders||The safety of everyone involved in our activities – our employees and our contractors – is a top and continuous priority.||Wherever people are at work, safety-related incidents may occur. This can harm the well-being of our people or our contractors.||Our Safety Vision 2018 aligns our views on safety with TenneT’s strategic goals while retaining our licence to operate. We continually strive for zero work-related incidents and accidents.||We are responsible for our own people and responsible for setting high expectations with our suppliers and contractors. It is their job to take care of their people.||Lost Time Injury Frequency (LTIF)||For 2018: LTIF ≤ 1.8 For 2020: LTIF ≤ 1||Corporate Safety & Security (SSC)|
For most of our figures, our reporting focus is on our own operations, although we do take some aspects of the value chain into account in our carbon footprint and LTIF. We recognise that reporting outside our gate (so-called ‘value chain reporting’) provides a better overview of our impact. As such, we have decided to include the impact of the transport activities of our offshore operations into our carbon footprint reporting.
EU directive on non-financial and diversity information
Our annual report complies with the EU directive on non-financial reporting. The table below provides a clear overview of where the different aspects of this directive are reported.
|A description of the policies pursued, including due dilligence.||The outcome of those policies.||Principle risks in own operations and within value chain.||How risks are managed.||Non-financial key performance indicators.|
|Relevant social and personnel maters (e.g. HR, safety etc.)||Strategic performance, engage stakeholder Operational performance, non-financial, our people Summary stakeholder activities||Strategic performance, engage stakeholder Operational performance, non-financial, our people||Strategic performance, deliver stakeholder value, engage stakeholder Operational performance, non-financial, our people||Strategic performance, deliver stakeholder value, engage stakeholder Operational performance, non-financial, our people||Strategic performance, engage stakeholder Operational performance, non-financial, our people|
|Relevant Environmental maters (e.g. climate-related impacts)||Operational performance, non-financial, Our impact on the planet||Operational performance, non-financial, Our impact on the planet||Operational performance, non-financial, Our impact on the planet||Operational performance, non-financial, Our impact on the planet||Operational performance, non-financial, Our impact on the planet|
|Relevant matters with respect for human rights (e.g. labour protection)||Operational performance, non-financial, Our impact on our supply chain||Operational performance, non-financial, Our impact on our supply chain||Operational performance, non-financial, Our impact on our supply chain||Operational performance, non-financial, Our impact on our supply chain||Operational performance, non-financial, Our impact on our supply chain|
|Relevant matters with respect to anti-corruption and bribery||Governance and risk management, Risk management and internal control, compliance and integrity||Governance and risk management, Risk management and internal control, compliance and integrity||Governance and risk management, Risk management and internal control, compliance and integrity||Governance and risk management, Risk management and internal control, compliance and integrity||Governance and risk management, Risk management and internal control, compliance and integrity|
|A description of the policies pursued.||Diversity targets||Description of how the policy is implemented||Results of the diversity policy|
|Insight into the diversity (executive board and the supervisory board)||Operational performance, non-financial, our people Supervisory Board report, Diversity and culture||Operational performance, non-financial, our people Supervisory Board report, Diversity and culture||Operational performance, non-financial, our people Supervisory Board report, Diversity and culture||Operational performance, non-financial, our people Supervisory Board report, Diversity and culture|
Data collection process
The reported data is obtained from financial and non-financial data management systems in our own operations, such as IFS and SAP for financial and HR data, Mecoms for our electricity transport data, and iTask for our safety data. The key non-financial qualitative and quantitative data is included in the regular planning and control cycles and reported internally at least once a quarter by the Business Control department which performs a check on the quality and reliability of the data. TenneT’s Executive Board and senior management contribute to the context of the report and the quantitative data.
The definitions and calculations used are disclosed in the abbreviations and definitions section of this integrated report and in the CSR section of our corporate website. The definitions and calculations used were re-assessed based on such things as process improvements, further alignment within the group and the materiality analysis. As a result, certain originally reported comparative figures were re-classified to conform to the current year’s presentation. In case any significant assumptions or restatements were made, this is specifically addressed where the data is disclosed.
The data for this report was measured, and where no data was available, it was estimated. An example of this is the energy use at some of our smaller offices. No uncertainties or inherent limitations to the data were identified due to the measurement, estimation or calculation of data.
The financial statements included in this report are subject to an independent external audit and TenneT’s non-financial reporting is subject to a limited assurance review. These were both conducted by our external auditor, EY Accountants LLP. Reliable data is essential in our dialogue with stakeholders, so we decided to have our non-financial data reviewed by an external accountant.
Results of the external assurance are discussed with the Executive Board, Supervisory Board and CSR board. The findings are followed by our internal audit management system to keep track on their progress.
Governance of CSR
For TenneT, CSR covers a broad range of subjects, all aimed at creating a sustainable future for our internal and external stakeholders. Our CSR strategy is from 2015 to 2017 as such our strategy has not changed compared to last year. In 2017, we decided to work towards a CSR mid-term plan for 2018-2020, focusing on three main areas with clear ambitions for 2020-2025.
The CSR mid-term plan 2015-2017, discussed and agreed by the Executive Board and Supervisory Board, describes our ambitions for each material topic based on the CSR maturity ladder (defensive, responsible, strategic and transformative). To ensure progress, each project defined in the 2017 CSR action plan is the responsibility of a senior manager with support from CSR policy advisor, who reports to the senior financial control manager. We have established a CSR board to monitor progress on the CSR mid-term plan and advise the Executive Board on the integration of CSR into the business. The CSR board, which meets quarterly, is chaired by the CFO and includes senior managers from Asset Management, Large Projects, Communication, Public Affairs and Finance.
It is TenneT's ambition to be one of the best-performing TSOs in CSR in Western Europe and as such we continuously look for innovations and opportunities to improve our CSR performance. We benchmark ourselves against our peers using external assessment processes, such as the Netherlands Transparency Benchmark, Oekom, Sustainalytics and Vigeo. Our ambition is to be in the top 25 of the Transparency Benchmark and within the top 25% for the other ratings. This supports our defined ambitions in CSR reporting and CSR substantive issues, respectively. In 2017 we attained our goals: we were at no. 7 on the Transparency Benchmark and were in the top 25% of the other sustainability ratings.