Each month we highlight a company we have researched and features on our Ethical Screening Portal, this month we look at Ørsted and Renewable Energy - Environmental Products and Services sector.
Sector: Alternative Electricity
Sector Themes; Renewable Energy; Environmental Products & Services; Net Zero; Just Transition
Company: Ørsted
Originally established by the Danish state in 1972, the company formerly known as DONG (Danish Oil and Natural Gas) Energy changed its name to Ørsted A/S in 2017 following the divestment of its oil and gas business and the decision to phase out coal-fired power generation, moving to renewable energies. The company is currently one of the world’s largest developers of offshore wind power with operations in the UK, Europe and the Nordic region, and is a recognised leader in many areas of corporate responsibility. The Danish Government holds a 50.1% shareholding in Ørsted.
Energy Transition
Since setting an initial goal in 2009 to be 85% powered by renewables by 2040, the company has succeeded in making considerable progress in transitioning from thermal energy to greener alternatives. Ørsted is currently on course to be carbon neutral across all of its operations (Scope 1 and 2 emissions) by 2025 and carbon-neutral across its entire value chain (Scopes 1-3) by 2040. There is an interim target to make a 50% absolute reduction in Scope 3 emissions (against baseline year 2018) by 2032. These targets have been validated by the Science Based Targets initiative (SBTi) using the Net Zero Standard.
The company works with business partners to decarbonise its supply chain, recognising that over half its upstream emissions are associated with the manufacture of the steel used in its wind turbine towers and foundations. It has set goals aiming to decarbonise steel through making its production more efficient, and encouraging the use of electric arc furnaces which can recycle scrap steel. Ørsted is a member of SteelZero, a new initiative from non-profit organisation Climate Group, run in partnership with ResponsibleSteel. Organisations that join SteelZero commit to a transition to procuring, specifying, or stocking 100% net-zero steel by 2050.
In addition to its climate action plan, the company has set key objectives to strengthen its initiatives in other impact areas; these include enhancing biodiversity at its operating sites; and ensuring that the needs of all stakeholders are being fully considered and met.
Recent Developments
- Ørsted's last operating coal-fired power plant was due to be decommissioned on 31 March 2023 with two other units already decommissioned. In October 2022, due to concerns over energy security, the Danish authorities instructed Ørsted to keep three units using coal or oil in operation until 30 June 2024. The company maintains its goal of becoming carbon-neutral by 2025.
- July 2022 – The company became the first organisation to receive full accreditation through the Climate Transition Pathway (CTP) framework by demonstrating that its low carbon transition plan was aligned with objectives of the Paris climate agreement.
- August 2022 - Ørsted set a new requirement for all of its suppliers to transition to 100% renewable electricity use when providing products or services by 2025, becoming the first energy company globally to set such a target. The majority of the company’s suppliers have already met this objective.
- October 2022 - Ørsted and WWF announced a new partnership which will explore how to support a rapid transition to renewable energy while addressing the global biodiversity crisis. Ørsted, which aims to deliver a net-positive biodiversity impact by 2030 at the latest, and WWF will develop and test ways for offshore wind builds to support and enhance ocean biodiversity, starting with a habitat restoration project in the Danish North Sea.
- The company recognises that a just energy transition means ensuring robust human rights practices are in place across its entire business in order to support employees, suppliers and nearby communities. In 2023, Ørsted aims to track its most salient human rights risks and report externally on human rights.
Ørsted is a company that features on our Ethical Screening Portal. To find out more about this company, or our services please contact: info@ethicalscreening.com
Sources:
https://orsted.co.uk/about-us/our-company/our-green-energy-transformation
https://orsted.com/en/sustainability/climate/decarbonisation-of-energy-generation-and-operations
https://sciencebasedtargets.org/companies-taking-action/case-studies/net-zero-case-study-orsted
https://orsted.com/en/insights/expert-take/we-need-low-carbon-steel-heres-how-well-get-it
https://www.theclimategroup.org/our-work/press/new-steelzero-initiative-receives-backing-major-businesses-ramping-demand-clean
https://orsted.com/en/media/newsroom/news/2022/10/20221001568911
https://www.transitionpathwayinitiative.org/companies/orsted
https://www.esgtoday.com/orsted-requires-all-suppliers-to-use-100-renewable-energy-by-2025/
https://wwf.panda.org/act/partner_with_wwf/corporate_partnerships/who_we_work_with/orsted/
https://www.ilo.org/global/topics/green-jobs/WCMS_824102/lang--en/index.htm
https://orsted.com/en/sustainability/green-transformation-that-works-for-people