Social Responsibility Verdo’s business model

Resources

• People

• Capital

• Knowledge Innovation

• Wood

• Solar Water

• Coal

Activities

Development and installation:

• Biomass

• Energy systems

• Street lighting

• Waterworks

Fibre-optic networks

• Electrical installation

Operation and maintenance:

Regulated:

• District heating

• Water

• Energy systems Street lighting

Fibre-optic networks

• Electricity grids

Value

Trading: Biomass

• District heating

• Technical carbon

• District heating

• Electricity

• Drinking water

Contributes to CO 2 emissions

• Contributes to CO 2 reductions

• Danish and international jobs

Tax contribution in Denmark

• Cultural and sports sponsorships in local communities

• Electricity sales

Our business model is based on the transformation of resources into value created. We approach CSR in recognition of the mutual impact that Verdo and the outside world have on each other – how we affect and are affected by the environment and climate, as well as by our relationship with customers, business partners and employees. This means that CSR has both a direct and indirect impact on our business model.

Consequently, we strive to not only reduce our own CO 2 emissions from energy production, but also to reduce our customers’ emissions, among other things. The energy optimisation we offer our customers allows them to reduce CO 2 emissions from their energy systems, street lighting business and electricity consumption.

Among other things, Verdo trades in certified fuels, which are produced by sustainable forestry operations under safe conditions. The recognised certifications ensure that strict requirements are imposed on manufacturers and business partners which, in turn, allow Verdo to sustainably and responsibly source and resell certified fuels.

Operational and contingency plans

Unintended interruptions of the supply of electricity, water and heating constitute a significant risk to the health, educational and emergency organisations and public institutions we supply. To avoid interruptions, we continuously update our operational and contingency plans on heat, water and electricity supply in line with government requirements. In 2019, there were no significant unintended interruptions of supply.

Resources

Our value creation is dependent on a number of resources: people, capital, knowledge and innovation as well as wood, solar, water and coal. These resources play a vital role for our long-term value creation and competitiveness as well as for the development of a sustainable business, and we therefore want to look after them and develop them. One example is our electricity and heat production at the certified biomass-fired CHP plant in Randers. This significantly reduces CO 2 emissions and contributes to a lower environmental impact.

Activities

We operate across our four main value chains: heating, water, technical infrastructure and trading in fuels. Our expertise is therefore centred on the development and installation of energy-efficient energy systems, street lighting and intelligent infrastructure, operation and maintenance of water and heat supply as well as trading in green electricity and fuels such as certified biomass and technical carbon.

Value creation and competitive advantages

Investments in innovation and development are key to our business model and set us apart from our competitors. Synergies between the regulated and commercial business create value for our electricity, water and heating customers, as they help to keep prices competitive. Trading in certified fuel has given us a unique market position based on quality and competitive prices. At the same time, we are working to push the entire industry in a more eco-friendly direction. In the development, construction and operation of energy systems, we focus on our customers’ demand for flexible energy systems to optimise operations and save energy.

Macro trends

As an energy company, we are affected by macro trends such as Danish and international energy legislation, consumer demands and the UN’s 17 Sustainable Development Goals. This calls for responsible and CO 2-reducing solutions due to the climate impact of energy production. These general drivers and trends both support and challenge growth and value creation.

Approach to CSR

Our approach to CSR is defined in the following guidelines:

• We create and sell green energy and sustainable solutions for the benefit of people and the environment.

• We take initiatives that benefit our employees and increase their commitment, job satisfaction and safety.

• We actively work with diversity in recruitment.

We actively work to train the workforce of the future. We promote sports, culture and social activities.

• Our business operations are based on sound and ethical principles, and we conduct ourselves with decency.

• We launch initiatives to reduce CO 2 emissions. We actively work with the UN’s 17 Sustainable Development Goals.