How Alpiq understands sustainability

Karin, Alpiq is undergoing a transformation to a sustainable business. What does this mean and where do we currently stand?

For Alpiq, being sustainable is about focusing not only on maximising profits and shareholder value, but also on the crucial impact of the company’s activities on the environment and society. This mindset is already embedded in our corporate purpose “Together for a better climate and an improved security of supply”. Specifically, this means Alpiq always considers the three criteria of profit, security of supply and sustainability when making strategic decisions. A good example of this is Alpiq’s renewed contribution to the hydropower reserve for winter 2023/24. Instead of trying to maximise the profit Alpiq again submitted fair, price- and risk-based offers - showing that contributing to the security of supply is not just part of our purpose, but also reflected in our daily actions. By doing this, Alpiq is taking responsibility for the security of the electricity supply.

How does Alpiq plan to embed its sustainability objectives into the company in the long term?

“Sustainability” is one of guiding principles stemming from our purpose and we discuss the implementation of targeted decarbonisation strategies and investments in innovative projects and technologies. We also plan to expand our internal sustainability organisation and better connect the many experts we already have in our company. Our aim is to ensure that sustainability isn’t just a strategic consideration but is integrated into all our management and operational processes by using sustainability criteria.

What kind of role does our sustainability reporting play?

We can say that sustainability reporting involves a great deal of effort for a company. However, it’s an excellent instrument to create transparency both internally and externally – for example, towards investors and banks – about our sustainability activities. At Alpiq, we see it as essential to communicate openly and provide details about incidents, initiatives and activities that take place in a reporting year and to identify potential for further development. Taking a critical look at what we have achieved so far gives us a basis to continue developing our approach towards a sustainable business. It’s also extremely important for Alpiq to create trust with our stakeholders by providing comprehensive transparency and comparability with other companies.

The European Union has recently introduced a directive on corporate sustainability reporting (CSRD). What does that mean for Alpiq?

The new law means that Alpiq, with its sizeable subsidiaries in the EU, will have to fulfil the CSRD reporting requirements for the first time in 2025 and publish the corresponding report in early 2026. We plan to publish a report at Group level that covers all the reporting obligations of our subsidiaries in the EU. Because the complexity and scope of CSRD reporting goes far beyond previous requirements, we launched a project last year to develop our CSRD reporting. We’ll also fulfil the requirements both of the “Task Force on Climate-Related Financial Disclosures”, which examines the impact of climate change on a company’s financials, and of the EU Taxonomy Regulation.

CSRD compliance also requires that suppliers or internal processes comply with European sustainability standards. What challenges does this bring for an energy company like Alpiq?

Extending the reporting obligation to a company’s entire value chain is a huge challenge, not only for Alpiq. We rely on the global supply chains when it comes to the components used in our energy production plants. At the moment, it’s simply not possible to prove where and how all the raw materials were mined or the components of a turbine were produced. The increasing importance of the directives on due diligence in the supply chain are certainly helpful. The more detail companies are required to report about their supply chain, the easier it is to provide information about a direct supplier. In this way, international directives and standardised reporting frameworks are crucial for sustainability reporting.

Thank you very much for these insights on the development of reporting about sustainability, Karin.