Powering change together
SSE PLC SUSTAINABILITY REPORT 2022
SSE has the largest renewable electricity portfolio in the UK and Ireland, providing energy needed today while building a better world of energy for tomorrow. It develops, builds, operates and invests in low-carbon infrastructure in support of the transition to net-zero, including onshore and offshore wind, hydro power, electricity transmission and distribution networks, alongside providing energy products and services to customers. SSE's ambitions for the development of renewable energy now extend beyond the British Isles to carefully selected international markets, including East Asia, Europe and North America.
Data assurance and Sustainability Report The Directors of SSE plc are responsible for the preparation and presentation of this Sustainability Report. SSE takes an integrated approach to assurance, using internal audit and external assurance providers to ensure accurate and complete disclosures where appropriate. Where data has been
THE YEAR IN NUMBERS
Absolute scope 1 and 2 GHG | Renewable energy capacity in |
emissions: | construction*: |
6.2MtCO e 2.4GW | ||
(2020/21: 7.6MtCO2e) | 2 | (2020/20: 2.0GW) |
Measurement restatements
This report reflects a number of structural changes within SSE plc in the reporting year.
UK-listed and headquartered in Perth, SSE is a major contributor to the economies in the UK and Ireland. It employs around 11,000 people and is real Living Wage, Living Hours and Fair Tax Mark accredited.
This Sustainability Report for the period 1 April 2021 to 31 March 2022 aims to provide enhanced disclosure of SSE's policies, practice and performance against its key economic, social and environmental impacts and goals.
On occasion the report refers to activities of joint ventures and in these instances it is made clear this is the case.
externally and independently assured this has been noted in the relevant tables. SSE has objective reporting criteria for preparing and presenting the independently assured information disclosed in this report and the performance measures are in accordance with the reporting criteria. See sse.com/ sustainability/policies-and-assurances for more information.
Installed renewable capacity connected to SSEN Transmission's network:
7.8GW
(2020/21: 6.8GW)
Total Recordable Injury Rate per
100,000 hours worked:
0.17
(2020/21: 0.14)
Median UK gender pay gap:
18.0%
(2020/21: 18.3%)
Investment in communities:
£11.2m
(2020/21: £10.6m)
These include the disposal of its Contracting and Rail business; the formation NEOS Networks, a standalone joint venture Telecoms business; and the sale of SSE's stake in gas distribution operator SGN.
UK/Ireland taxes paid:
£335m/€46.4m
(2020/21: £379m/€20.4m)
UK/Ireland economic contribution:
£5.8bn/€438m
(2020/21: £5.2bn/€439m)
Stories in action
Throughout this report, SSE's sustainability policies, practice and performance are brought to life through strategy in action identified with the following icons:
Engagement | Innovation | Partnering | Dilemma |
in action | in action | in action |
Alternative Performance Measures
SSE assesses the performance of the Group using a variety of performance measures. These measures are not all defined under IFRS and are therefore termed 'non-GAAP' measures. A reconciliation from these non-GAAP measures to the nearest prepared measure in accordance with IFRS is presented and described on pages 204 to 212 of SSE's Annual Report 2022. The Alternative Performance Measures SSE uses might not be directly comparable with similarly titled measures used by other companies.
Powering change together
SSE PLC Annual Report 2022
The SSE plc Sustainability Report 2022 is complemented by SSE's Annual Report 2022 which can be found online at sse.com.
Contents
Chief Executive's Statement | 03 |
SSE's business model | 04 |
SSE's approach to sustainability | 08 |
Structured sustainability governance | 12 |
Identifying the issues that matter | 14 |
Emerging trends | 16 |
Working with and for stakeholders | 18 |
Partnerships that power change | 19 |
SSE's Group Principal Risks | 20 |
Climate-related opportunities and risks | 21 |
Accelerating climate action | 22 |
A strategy to support net zero | 25 |
Performance against the net zero plan | 26 |
Embedding climate action | 28 |
Targeted action to address GHG emissions | 30 |
Adapting to a climate changed world | 33 |
Providing affordable and clean energy | 34 |
Delivering net zero in a cost-effective way | 37 |
Serving electricity distribution customers | 38 |
Low carbon energy solutions for customers | 41 |
Investing in industry, innovation and infrastructure | 46 |
Creating value in the transition to net zero | 48 |
SSE's approach to innovation and technology | 49 |
Driving sustainability in the supply chain | 52 |
Ambitious renewables growth to support net zero | 56 |
Building a network for net zero | 60 |
Powering communities to net zero | 62 |
A changing role for thermal generation in a net zero world | 64 |
Committed to decent work and economic growth | 66 |
A fair and just transition | 69 |
Paying a fair share of tax | 70 |
Sharing economic value | 72 |
Guaranteeing fair work | 76 |
Creating an inclusive workplace | 79 |
Getting everyone home safe | 84 |
Protecting and enhancing the natural environment | 86 |
Embedding effective environmental management and governance | 89 |
Enhancing the natural environment | 90 |
Responsible production and consumption | 94 |
Data and performance | 98 |
ESG rating and indices performance | 99 |
Sustainability-linked Executive remuneration | 100 |
SASB Standards Disclosure | 102 |
Limited Assurance opinion on GHG and water data | 104 |
Cover image: SSE Renewables employees on the Sloy/Awe hydro scheme, pictured at Loch Sloy.
*Based on equity share at 31 March in each financial year | SSE plc Sustainability Report 2021 | 1 |
SUSTAINABILITY REPORT
Chief Executive's statement
2021/22 highlights
Powering change together
Refreshed 2030 Goals
In February 2022, SSE refreshed its 2030 Goals, making them more ambitious and ensuring they remain stretching to the end of the decade. See more on page 10.
The purpose of SSE's annual sustainability report is to disclose the impact of its business activities on people and the environment. Designed to complement the statutory disclosures in the Annual Report, SSE's social and environmental impacts are comprehensively monitored and disclosed. Led from a strategic objective to 'create value for shareholders and society', SSE recognises that it has a far wider impact on the world than simply its annual financial results.
to access the benefits a low-carbon economy can bring. These principles of a just energy transition to net zero have parity within SSE's plans to achieve net zero.
Integrity
Any plan to meet net zero, indeed, any strategy to create value for SSE's wider stakeholders, requires comprehensive transparency. Its why SSE continues
Net Zero
Transition Report
SSE published its Net Zero Transition Plan in March 2022 and has produced a report on progress against this Plan, which will be subject to shareholder vote at the upcoming AGM in July. See more on page 26.
Action for a just transition
SSE's work over 2021/22 has reinforced the importance of a just transition to net zero, which has included a worker insights report and partnership collaboration to share learnings. See more on page 69.
Increasing climate ambition
SSE announced more stretching net zero ambitions, alongside aligning its Science Based Targets Initiative- approved interim carbon targets to a more stretching 1.50C pathway. See more on page 25.
2021/22 was an exceptional year for business delivery, with a capital investment plan between 2021 and 2026 pursuing clean growth opportunities that are critical to removing greenhouse gases from our energy systems and tackling climate change. It was also a year where SSE spelled out, with greater clarity than ever before, the greenhouse emissions targets it must meet to become a net zero business.
Targets
The publication of a Net Zero Transition Plan in March was the culmination of a series of actions taken earlier in the year. New science-based greenhouse gas targets were set in November, accelerating the speed in which emissions reduction plans are delivered. This means, amongst other things, that rather than targeting to cut our absolute scope 1 and 2 greenhouse gas emissions to 6 million tonnes of carbon dioxide equivalent in 2030, we will be cutting them to 3 million tonnes. With COP26 focused on accelerated climate action, I like to think SSE's plan is net zero acceleration in practice.
Action
Setting robust, independently verified targets is one thing. But, as our
Net Zero Transition Plan outlines, the targets are only as good as the actions designed to meet them. The same argument is true for nation states and the Nationally Determined Contributions set in advance of COP26. In SSE's case, we are clear on what we must do: we must bring about a responsible phased reduction of carbon emissions associated with unabated gas generation, and establish new carbon capture power stations, as quickly as possible. At the same time, we must increase renewable energy output - and we are developing wind, hydro and solar projects to increase it fivefold by the end of the decade.
Because SSE understands that tackling climate change is not simply a technical challenge to meet through investment in large-scale assets, SSE seeks to support the human challenge too. Working people need to become reskilled, communities must benefit from the economic activity that results and all energy consumers must be able
to quantify, annually, its overall socioeconomic impact. It's also why we publish, in significant detail, our journey in improving inclusion and diversity within the company. It also means we must be honest about the challenges we face. While excellent progress is being made - SSE's carbon emissions are down again this year - I have no doubt there will be bumps in the path ahead. Our commitment to stakeholders is to let them know when those challenges arise.
Finally, the spirit in which this report is published, is to stimulate further engagement and feedback from the many people and organisations that have an interest in SSE and its business activities. As always, I would encourage you to get in touch with us directly, using the email address sustainability@sse.com.
Alistair Phillips-Davies
Chief Executive
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SUSTAINABILITY REPORT
SSE's purpose, vision and strategy
SSE's business model
OUR PURPOSE
To provide energy needed today while building a better world of energy for tomorrow.
OUR STRATEGY
To create value for shareholders and society in a sustainable way by developing, building, operating and investing in the electricity infrastructure and businesses needed in the transition to net zero.
Our business explained
OUR VISION
To be a leading energy company in a net zero world.
Develop BuildOperate
CO2 | The Net Zero Acceleration Programme | |
Invest | ||
OUR GOALS
With an eye to net zero, in 2022 SSE revised its interim goals aligned to the UN's SDGs for 2030.
Cut carbon intensity by 80%
Reduce Scope 1 carbon intensity by 80% by 2030, compared to 2017/18 levels, to 61gCO2e/kWh.
Increase Renewable | Enable low-carbon | Champion a fair and |
energy output fivefold | generation and demand | just energy transition |
Build a renewable energy portfolio | Enable at least 20GW of renewable | Be a global leader for the just transition |
that generates at least 50TWh of | generation and facilitate around 2 | to net zero, with a guarantee of fair work |
renewable electricity a year by 2030. | million EVs and 1 million heat pumps | and commitment to paying fair tax and |
on SSEN's electricity networks by 2030. | sharing economic value. | |
OUR VALUES
All of this is underpinned by a set of core values designed to guide decisions and actions in SSE.
Safety | Service |
If it's not safe | We are a company that |
we don't do it. | customers can rely on. |
Efficiency | Sustainability | Excellence | Teamwork |
We focus on | We do things | We continually | We work together, |
what matters. | to add | improve the way | respect each other |
long-term value. | we do things. | and make a difference. |
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SUSTAINABILITY REPORT
SSE's purpose, vision and strategy
SSE's business model
SSE's strategy is to create value for shareholders and society in a sustainable way by developing, building, operating and investing in the electricity infrastructure and businesses needed in the transition to net zero. SSE's businesses are well positioned to capture the growth opportunities generated by driving and accelerating the net zero agenda through electricity infrastructure.
A strategically coherent business mix focused on net zero
Decarbonising generation | Enabling electrification | Providing energy solutions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SSE Renewables
What it does
Develops, builds, operates and invests in assets that generate electricity from renewable sources.
How it supports net zero Develops and generates zero-carbonelectricity at large scale from onshore and offshore wind farms and provides clean flexible power from hydro-electricityschemes.
2.4GW
Renewable generation capacity in construction*
SSEN Thermal
What it does
Generates electricity from thermal sources in a flexible and reliable way, and its Gas Storage business holds around 40% of the UK's underground capacity, supporting security of supplies in the UK.
How it supports net zero Produces progressively lower- carbon electricity and electricity system support to enable net zero transition. Facilitates increasing levels of renewable electricity
by offering flexibility to balance renewables' natural variability. SSE's Thermal's Gas Storage assets have potential to be repurposed to hold lower carbon gases in future, including hydrogen.
5.3GW
Energy Portfolio
Management
What it does
Secures value for SSE's asset portfolios in wholesale energy markets and manages volatility through risk- managed trading of energy- related commodities.
How it supports net zero Provides efficient route- to-marketfor low-carbonelectricity, supports system balancing and provides energy solutions for business energy customers.
SSEN Transmission
What it does Owns, operates and develops the electricity transmission network in the north of Scotland.
How it supports net zero Connecting sources of renewable electricity generation to the national grid and transporting that clean electricity to areas of demand.
7.8GW
Renewable generation capacity connected to SSEN Transmission's network
SSEN Distribution
What it does Owns, operates and maintains the electricity distribution networks in the North of Scotland and central southern England.
How it supports net zero Through the timely connection of local renewables and the coordinated delivery of network investment and flexible solutions to alleviate network constraints and allow for further electrification.
3.8 million
Homes and businesses supplied by SSEN Distribution
Customers
What it does
SSE Business Energy and SSE Airtricity provide energy and related services to households, businesses and public sector organisations across Great Britain and the island of Ireland.
How it supports net zero Increases the accessibility of green energy solutions through the provision of customer-drivenpropositions and acts as a partner to customers and stakeholders as they seek ways to respond to the climate crisis.
c.1.2 million
Domestic and business customer accounts
Distributed Energy**
What it does
Focused on investing in, building and connecting localised flexible energy infrastructure, as well as developing solar and battery projects, operating heat networks, and offering integration, aggregation and trading capability.
How it supports net zero
Through offering services that bring low- carbon, on-site generation, storage and delivery flexibility close to the point of use. Diverse capabilities across a range of low- carbon technologies offer a local 'whole system' approach.
380MW
solar and battery pipeline secured with >1GW more sites under assessment
Installed thermal generation capacity
- Based on equity share at 31 March 2022
- Following the sale of its Contracting arm, SSE Enterprise is now referred to as Distributed Energy
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SSE plc published this content on 17 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 June 2022 13:12:01 UTC.