RWE AG Report on the German Supply Chain Due Diligence Act 2023
Content | |
Monitoring of risk management & responsibility of the management board | |
Preventive measures in own business area | 11 |
Preventive measures for direct suppliers | 13 |
3. Measures | 15 |
Identification of violations and remedial measures in own business area | 15 |
Identification of violations and remedial measures for suppliers | 15 |
Establishment of or participation in a complaint procedure | 16 |
Implementation of the complaints procedure | 19 |
Review of risk management | 19 |
Contact | 21 |
This report was published in May 2024. It is available at https://www.rwe.com/en/responsi- bility-and-sustainability/sustainability-report/
1. Context and Governance
Information on the corporate and procurement structure
Which sectors are the companies in your own division active in?
RWE AG and its affiliated subsidiaries are involved in energy supply.
Naming of all affiliated companies over which a decisive influence is exercised in accordance with Section 2 (6) sentence 2 LkSG.
The entire list of companies over which RWE AG exercises a decisive influence can be found in the "Annual Report 2023", pp. 216 - 292. This can be found at https://www.rwe.com/- /media/RWE/documents/05-investor-relations/finanzkalendar-und-veroeffen-tlichungen/2023-Q4/2024-03-14-rwe-annual-report-2023.pdf
Are the affiliated companies directly affected by the scope of the law and therefore subject to reporting requirements due to exceeding their own number of employees in Germany from 2023 (3,000 employees) or from 2024 (1,000 employees)?
The following is a list of affiliated companies and their employee counts which will also fall under the scope of the LkSG from 2023 and 2024:
- RWE Clean Energy LLC (1.500 employees)
- RWE Generation SE (3.000 employees)
- RWE Offshore Wind GmbH (2.400 employees)
- RWE Power AG (8.800 employees)
- RWE Renewables Europe & Australia GmbH (1.400 employees)
- RWE Supply & Trading GmbH (2.000 employees)
Countries in which the affiliated companies have locations:
Germany, Netherlands, United Kingdom, Czech Republic, Portugal, Spain, Luxembourg, Australia, Japan, India, Canada, France, Poland, Mexico, Chile, United States of America, Ireland, South Korea, Taiwan, Belgium, Denmark, Sweden, Italy, China, Indonesia, Greece
Sector in which the affiliated companies operate:
The affiliated companies are active in the energy supply sector.
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Selection of all areas of value creation in which the affiliated companies are active in the specified sectors:
RWE is active in the value-adding areas of electricity generation and energy trading.
All production countries from which goods and/or services were procured from direct suppliers during the reporting period:
Procurement was mainly from the EU, the USA, Asia and the Middle East.
Total number of direct suppliers in the reporting period:
Approx. 15,000
Product groups that are relevant to the business model:
The main product groups are onshore and offshore wind turbines, solar power systems and storage modules, maintenance components for gas turbines such as boilers and scaffolding.
Raw materials that are relevant to the business model:
RWE purchases raw materials for electricity generation. These mainly include hard coal, natural gas and biomass.
Monitoring of risk management & responsibility of the management board
What responsibilities were defined for monitoring risk management in the reporting period?
Please state the name(s) and function(s) of the person(s) responsible for monitoring risk management.
Kunal Chandra is Chief Human Rights Officer (CHRO) at RWE AG. He holds the role of Director of Strategy and Sustainability within the company and is therefore responsible for the groupe-wide implementation of the Human Rights Risk Management System. Human Rights Officers (HRO) have been appointed within each of RWE subsidiaries. They support the CHRO within the respective companies. The HRO's appointed are
- RWE Clean Energy LLC: Steven Marshall
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- RWE Generation SE:* Ulrich Kramer
- RWE Offshore Wind GmbH: Zsuzsanna Sessel-Zsebik
- RWE Power AG:* Marie-Cecil Aufmkolk
- RWE Renewables Europe & Australia GmbH: Melanie Dreesen
- RWE Supply & Trading GmbH: Hendrik Voß
- Note: In addition to RWE AG, RWE Power AG and RWE Generation SE fall directly under the scope of the LkSG, as both subsidiaries had more than 3,000 employees in 2023. This re- port was prepared for the RWE Group and also applies to both subsidiaries concerned.
Describe the process that ensures reporting at least once a year or more regularly to the management board with regard to risk management.
The Chief Human Rights Officer (CHRO) informs the Executive Board of RWE AG at least once a year about the fulfilment of human rights due diligence obligations. The CHRO uses the results of the quarterly meetings with the Human Rights Officers (HRO) and the written reports from the subsidiaries, which the CHRO receives regularly.
There is also a quarterly reporting to the Executive Board of RWE AG on sustainability, during which human rights issues can also be discussed.
For their part, the Executive Boards of the subsidiaries are informed by the respective Human Rights Officers.
Policy Statement on the human rights strategy
Is there a policy statement that has been prepared or updated on the basis of the risk analysis carried out during the reporting period?
RWE has published a policy statement on its human rights strategy. This applies to RWE AG and all its subsidiaries. The policy statement is not only available in German and English, but also in Dutch, Chinese, French, Italian, Polish, Spanish and Turkish. The declaration is available on our website .1
The policy statement was communicated to employees and external stakeholders. This explicitly includes suppliers.
The policy statement is available to all our employees and was also presented in an online article in the company's internal employee magazine. Furthermore, it was published and made available on the RWE corporate website. The policy statement was discussed in advance with employee representatives. Direct suppliers receive the policy statement as part
1 https://www.rwe.com/en/responsibility-and-sustainability/social-affairs-and-society/human-rights-due-diligence/policy-statement-on-rwes-human-rights-strategy/
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of the contract conclusion process, and reference is also made to the policy statement in the supplier training that RWE makes available to all suppliers.
What elements does the policy statement contain?
The policy statement describes how RWE respects human rights. It addresses the individual rights that are protected and also those rights that are of particular relevance to RWE's own activities and the supply chain. The policy statement also describes all the key processes that have been set up to respect human rights, as well as the corresponding competences and responsibilities.
Description of possible updates in the reporting period and the reasons for them.
The policy statement will be reviewed in the course of 2024 and updated if necessary.
Embedding the human rights strategy within the organisation
Which major departments/business processes was the human rights strategy embedded in during the reporting period?
The annual risk analysis has shown that significant risks are not associated with our own business area, but are mainly to be found in the supply chain.
In order to support the implementation of the human rights strategy and fulfil our due diligence obligations, we have introduced an effective risk management system for human rights, the implementation of which applies throughout the Group. Through this holistic ap- proach, RWE focused primarily on procurement processes and purchasing initiatives. The Group's procurement, legal and sustainability departments, among others, played a key role in this process.
Describe how responsibility for implementing the strategy is distributed within the various departments/business processes.
The Executive Board of RWE AG is responsible for the implementation of and compliance with the policy statement on RWE's human rights strategy. Within this framework, the Chief Human Rights Officer (CHRO) is responsible for monitoring human rights risk management as a whole. The respective Human Rights Officers (HROs) are responsible for compliance with human rights due diligence in the subsidiaries. The Human Rights Expert Team is based in the Group Sustainability department at RWE AG. This team is responsible for the further development, management and implementation of the human rights strategy. If necessary,
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it supports the specialist departments involved in the operational processes and the subsid- iaries.
Describe how the strategy is integrated into operational processes and procedures.
The complaints procedure includes three channels for reporting human rights or environmental risks or violations to RWE. External persons and interest groups can contact us directly via e-mail (humanrights@rwe.com) or contact an external law firm. If requested, anonymity can be maintained. RWE employees also have the option of submitting complaints via the internal "Business Keeper Monitoring System" tool. The human rights experts from the Human Rights Expert Team then process all complaints received.
The Human Rights Expert Team carries out annual and ad hoc risk analyses for the entire Group, including the subsidiaries. With the support of an external provider, a differentiated risk analysis is carried out for the company's own business division and for all direct suppliers in the supply chain.
As a further preventive measure, RWE has introduced a qualification process for potential suppliers in which they are subjected to a review; suppliers undergo a screening focused on ESG, environmental protection, human rights and labour rights and a responsible supply chain. Whether suppliers have to undergo this screening depends on a fixed turnover threshold of 50,000 euros or more.
In a first step, the respective procurement departments carry out the so-called basic checks. This involves a media screening of the relevant suppliers.
Based on the results of the basic checks, an extended check can be triggered. For this pur- pose, the potential suppliers receive predefined questionnaires for self-disclosure, which the employees of the procurement departments evaluate.
Finally, an advanced check can be carried out, which can be triggered by the results of the basic and extended checks, risk analyses or complaints received. An advanced check can also be triggered independently of the results of the extended checks if the supplier has a risk that is identified by the abstract risk analysis (country or sector).
The Advanced Check is the responsibility of RWE AG's Human Rights Expert Team. It is a detailed questionnaire that is specifically tailored to the situation and the supplier to be checked, which is designed to identify environmental and human rights risks. Any gaps identified are recorded in agreement with the supplier in a Human Rights Action Plan, which is intended to close these gaps. To this end, special measures and tasks are defined, the implementation of which is intended to minimise the risks. If the measures adopted do not lead to a satisfactory solution that meets both the legal and RWE's own internal require- ments, further formal reviews or a formal audit process may follow. RWE also reserves the right to reject suppliers or cancel existing contractual relationships..
To ensure that the human rights and environmental due diligence obligations are effective and complied with, RWE has introduced processes to monitor the due diligence obligations.
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Describe which resources & expertise are provided for the implementation.
RWE has appointed a Chief Human Rights Officer (CHRO), Kunal Chandra, Director of Strategy and Sustainability, who is responsible for the Group-wide implementation of the Human Rights Risk Management System. Human Rights Officers have also been appointed in each subsidiary.
The Human Rights Expert Team reports to the CHRO and is entrusted full-time with the task of observing, protecting and promoting the implementation of human rights due diligence obligations. The members of the Human Rights Expert Team are appropriately trained for this task. They have contractual assurances freeing them to investigate complaints inde- pendently. There are also other employees who fulfil similar tasks in the sustainability departments of the subsidiaries. In addition, employees in the purchasing and legal departments are entrusted with human rights tasks. They too have undergone appropriate training or further training.
The established processes are supported by IT tools. This applies to the annual and ad hoc risk analyses. The review of individual suppliers is also carried out with the support of a corresponding IT platform. The complaints procedure is also supported by IT. An external law firm provides additional support here.
2. Prevention
Execution, procedure and results of the risk analysis
Has a regular (annual) risk analysis been carried out during the reporting period to identify, prioritise and assess human rights and environmental risks?
A regular (annual) risk analysis was carried out during the reporting period in order to iden- tify, prioritise and weigh up human rights and environmental risks.
Describe the period in which the annual risk analysis was carried out.
In preparation for the start of the LkSG in January 2023, the risk analysis was carried out in September 2022. All other annual risk analyses are carried out in the first quarter of the respective reporting periods and updated as required over the course of the year.
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Describe the risk analysis process.
The risk analysis was carried out with the support of an external provider. The risk analysis focused on two main areas: country risk and sector risk.
Country risk: Based on the following sources, the countries in which suppliers operate were evaluated and weighted in order to assess the risk situation:
- World Bank Governance Indicators
- Global Slavery Index
- Childrens Rights in the Workplace Index
Sector risk: Based on the following sources, the sectors in which suppliers operate were evaluated and weighted in order to assess the risk situation:
- CSR Risk Check
- ILO: Encyclopedia of Occupational Health & Safety
- ILO: Workplace discrimination, a picture of hope and concern
- ILO: Occupational Hazard Datasheets
Note: As a result of the evaluation process, the external provider supporting the implementation of the risk analysis was changed from the 2024 reporting period onwards.
Were ad hoc risk analyses also carried out during the reporting period? If no: Please explain your answer.
In 2023, no findings could be derived from information/complaints.
Which risks were identified as part of the risk analysis(s) in our own business area?
Based on the abstract risk analysis, which was carried out on a sector and country-specific basis, ten potential risks were identified for RWE's own business area. These were:
- Use of unqualified security forces
- Restriction and/or violation of the freedom to travel
- Disregard of occupational health and safety
- Disregard of freedom of association
- Negative impact on communities
- Negative impact on landscapes, ecosystems and biodiversity
- Environmental pollution
- Unequal treatment in employment
- Withholding of an appropriate living wage
- Forced labour and all forms of slavery
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Which risks were identified as part of the risk analysis at your direct suppliers?
Based on the abstract risk analysis, which was carried out on a sector and country-specific basis, twelve potential risks were identified for RWE's direct supply chain. These were:
- Use of unqualified security forces
- Restriction and/or violation of the freedom to travel
- Child labour
- Disregard of occupational health and safety
- Disregard of freedom of association
- Negative impact on communities
- Unlawful expropriation of land, forest and water
- Poor working conditions
- Environmental pollution
- Unequal treatment in employment
- Withholding of an appropriate living wage
- Forced labour and all forms of slavery
If the risks identified were assessed in the reporting period, what criteria were used for their assessment and prioritisation?
The risks were assessed and prioritised on the basis of various parameters. These include: the nature and scope of the business activities and RWE's ability to influence the direct perpetrator of a human rights or environmental risk or violation; the severity of the typically expected violation; the reversibility of the violation and the probability of a violation of human rights or environmental obligations occurring; as well as the nature of the company's causal contribution to the risk to human rights or environmental risks or else to the violation of a human rights or environmental obligation. All were also included in the assessment and pri- oritisation process.
The assessment and prioritisation was carried out by a multi-professional team with the support of the external provider who implemented the risk analysis. Indicators were defined on the basis of external databases and internal evaluation processes. The external databases include the Worldwide Governance Indicators of the World Bank, the Global Slavery Index of the Walk Free Foundation and UNICEF's Childrens' Rights in the Workplace Index. The following evaluation criteria were defined:
- The probability of occurrence is determined by the location and the industry, both in equal measure. Location risk includes an overall categorisation of country risk as an assessment of the regulatory environment and governance of the country insofar as they affect human rights conditions. Industry risk is determined based on the general
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RWE AG published this content on 17 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 May 2024 09:58:02 UTC.
