C ORPORATE S USTAINABILITY

Vestas invests with a high emphasis on environmental, social and governance areas. Vestas signed the UN Global Compact in 2009 and has remained their commitment to the principles of the UN Global Compact. Vestas’s Sustainability Strategy department develops and implements the sustainability strategy in the organization. The department reports to the sustainability Committee, Executive Management, Board of Directors, and the CEO. The Vestas’ management supports sustainability initiatives and ensures a solid governance structure to manage and control its business (Vestas, 2020b). For Sustainability reporting, in accordance with their Signatory status to the UN Global Compact, Vestas applies the option stipulated in section 99a of the Danish Financial Statements Act, which concerns the statutory duty of large enterprises to report non-financial information (Vestas, 2020b).

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In 2020, Vestas launched a new sustainability strategy of “Sustainability in Everything We Do”

to ensure the increase of their sustainability performance as they expand and look beyond their own value chain. Vestas adopts a cross-stakeholder approach to maintain the support of local communities, forms industry partnerships to build a green supply chain. Vestas believes the world turned a corner in 2020, the pandemic pushes for green energy and paves the way for a more sustainable planet. Renewable energy showed it is ready to become the dominant energy source. Demand for renewable energy demand is expected to grow from 28% in 2019 to 69%

in 2050 (Vestas, 2020a). This drives Vestas to integrate sustainability in their business operation which details in Table 2 showing Vestas’ sustainable goals and initiatives in environmental, social dimensions. At the end of 2020, the installed wind turbines save the world 186 million tonnes of CO₂ annually. Vestas also reduced carbon emissions by 33 percent during the year 2020 (Vestas, 2020a). Vestas scores 16 in its ESG risk rating which presents to the general public with a low level of risk in ESG dimensions (Yahoo Finance, 2021b).

Vestas’s sustainability development provides the foundations for more resilient societies, offering clean, stable, and cost-competitive energy, as well as sustaining and creating jobs. Its sustainability commitment plays a key role in its future revenue and cash flows.

Goals Indicator Objectives Initiatives

Becoming carbon neutral by 2030 without using carbon offsets

 Reduce 55 percent by 2025

 Reduce the carbon emissions in our supply chain by 45 percent per MWh generated by 2030.

o Percentage reduce carbon emissions from the business operation

 Support our main suppliers in developing strategies to reduce their emissions

 Have a direct impact on these emissions by focusing on

how we design our products

 Investing in environmental projects reduce future carbon emissions. Examples include financing the transition from coal to natural gas, or planting trees as a form of carbon storage.

Producing zero-waste wind turbines by 2040

 Increase from 42 percent to 50 percent by 2025, and to 55 percent by 2030.

o Increasing the recyclability rate of the components

 Create a value chain that generates no waste materials by developing and implementing a circular economy strategy.

 Initiatives to increase the recyclability of the wind turbine rotors such as Launched the project DecomBlades and support the SusWIND project.

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Table 2: Vestas’ sustainable goals and initiatives – the authors’ own creation based on data from Vestas, 2020b

Goals Indicator Objectives Initiatives

Becoming the safest, most inclusive and most socially responsible company in the energy industry in 3 dimensions

 Safety: reduce to 1.5 by 2025 and to 0.6 by 2030 (a 15 percent year-on-year TRIR reduction)

o Total Recordable Injury Rate (TRIR)

 Increase the focus on improving safety conditions and due diligence for all our contractors, including supervised and unsupervised labor

 Developing predictive capabilities for all health and safety risks

 Diversity and inclusion:

Gender equity to 25 percent by 2025, and to 30 percent by 2030.

o To increase the number of women in leadership positions at Vestas

 A diverse workforce: gender identity, age, culture, ethnicity, physical abilities, political and religious beliefs, and sexual orientation.

 Reviewed our recruitment processes, trained all our recruiters in unconscious bias, and invested in software that is capable of identifying biased language in jobs ads

 Social responsibility o The share of Engineering, Procurement and Construction (EPC) and Supply-and-installation (S&I) projects having undergone the SDD process

o · The number of community beneficiaries reached o · The number of community

grievances received

 Integrate human rights into everything Vestas does and respects business-related human rights.

 Support our customers in respecting and implementing globally recognized

international standards, such as the IFC

 Performance Standards on Environmental and Social Sustainability

 Achieve trust by investing in local communities, creating jobs and funding education, health and access to energy in line with the UN

SDGs.

 Adopt a unique approach

"Leading a Responsible and Inclusive Energy Transition"

to respecting human rights, informed by the UN Guiding Principles

 Signed the UN Global Compact in 2009

 Proactively consulting with stakeholders to identify, prevent and mitigate project related social risks.

 To develop bankable projects and build trust with local communities, helping to secure our Social License to Operate (SLO). Updating and optimizing our Social Due Diligence (SDD) process.

 We also worked with community development projects in India, Sri Lanka, Senegal and Jordan.

 Improve disclosure around our human rights performance and develop human rights training materials.

Leading the transition to a world powered by sustainable energy - Green supply chain

 27 strategic suppliers in 2021

o Suppliers’ sustainability scorecards to track the sustainability performance to cover the strategic suppliers o Percentage increase in the

suppliers’ sustainability

scorecards

 To drive decarbonization and electrification beyond the power sector, form partnerships with other sustainability leaders to drive change, and support our partners on their journey to become more sustainable.

 Partnership encompass a range of stakeholders, including suppliers, customers, other wind turbine OEMs and recycling companies, as well as universities and knowledge partners

 Partnership with the Danish energy company OK.

 A pilot project has deployed a High-Power Charging Station by the highway outside of Odense, Denmark

 Actively working with partners such as DSV Panalpina and Hempel to Decrease the carbon footprint of our value chain

 Closely track the

sustainability performance of ten key suppliers on a monthly basis

 Held webinars with a

sustainability focus

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