Social conditions and working environment

Statutory statement on corporate social responsibility pursuant to section 99 a of the Danish Financial Statements Act We see it as part of our corporate social responsibility to contribute to growth, knowledge sharing and development, create new local jobs, support sports, culture and associations through sponsorships and support the local community as a whole – both in the Municipality of Randers, where Verdo is one of the largest employers, and in the Municipality of Herning.

Policy for social activities Verdo wants to retain and develop our existing workforce while at the same time attracting new employees and thus giving back to the local community we are part of by creating new jobs. That is why we are working actively to be an attractive workplace by promoting sports, cultural and social activities among our employees.

Social activities In most areas, 2020 was a year in the shadow of COVID-19. Bans on large assemblies and lockdowns significantly impaired our ability to organise social initiatives and activities for our employees.

Verdo’s dedicated employees usually participate in local running and cycling events. We call the initiatives ‘Den Gode Energi’ or Good Energy. This has been extremely difficult in 2020, and most of the events we normally participate in have either been cancelled or postponed due to COVID-19. In 2020, we continued our internal dialogue meetings, where all employees can put questions to the CEO. However, the meetings were primarily held online as most employees were working from home for much of the year. The purpose of the dialogue meetings is to contribute to a more open and transparent organisation, and the initiative gained strong internal support.

Verdo participated in the ‘Knæk Cancer’ campaign to run, walk or cycle to raise awareness of cancer. To stay in touch, we also held virtual coffee meetings and walkand-talk meetings. In 2020, our hunting club was able to go hunting despite the COVID-19 restrictions. Verdo’s cycling club managed to arrange a cycling race starting at our head office in Randers, and after the race we got together over beers and sausages.

Furthermore, we moved the Good Energy initiative to Instagram, where employees could share pictures of their home office with their colleagues. During the pandemic, we also increased the news communication to our employees with daily and weekly Corona News, which helped to navigate the events of the crisis and illustrate its impact on the employees’ everyday lives. We have many other staff benefits that continue regardless of lockdowns and restrictions, including training opportunities, health insurance, attractive pension schemes and personal pension talks for white-collar and hourly paid workers. Verdo has always made a point of working with educational institutions to set up traineeships, apprenticeships and internships. In addition, we are working with the Municipality of Randers to meet the need for testing the ability to work of unemployed citizens and citizens on long-term sick leave.

Health and safety Half of our approx. 550 employees work on construction sites, in warehouses and in production on a daily basis. Therefore, we have health and safety standards and are committed to reducing the number of workplace accidents. We also give high priority to the psychological working

environment and to well-being. Verdo conducts workplace assessments to determine the extent of any work-related sickness absence. If we identify cases of work-related sickness absence, we draw up a clear action plan to reduce sick leave and increase well-being among our employees.

In 2020, our Næstved location was awarded a green smiley by the Danish Working Environment Authority. It is a relatively new location, where there has not previously been a special focus on a good and safe working environment. There is now, and the employees have welcomed the change.

In 2020, we also introduced a variety of measures to prevent COVID-19 infection among our office workers and technicians. Several instructions were prepared on safe practices and conduct among ourselves and when dealing with people outside the company to prevent infection in the workplace.

In 2020, we also completed a new workplace assessment survey in Verdo A/S, Verdo Varme Herning A/S, Verdo Tele A/S and Verdo Teknik A/S.

Increased number of apprentices and trainees Verdo has always been a supporter of training and education and has set up attractive internships and apprenticeships for the talents of the future.

In recent years, we have welcomed a growing number of apprentices into our business, much to our delight. In 2020, the target for Teknik was for apprentices to account for 15% of the total number of technicians. This target was achieved for the third year in a row. In Energy, apprentices accounted for 14% in both Verdo Energy Systems A/S and Verdo Energiteknik A/S. Verdo Energy Systems A/S and Verdo Energiteknik A/S had 12% apprentices, which is equivalent to 7 out of 58 hourly paid workers. The two companies were merged on 1 January 2021.

In 2020, we set up two new flexi jobs to retain staff, but job training opportunities were hampered by COVID-19. The benefits of internships are assessed to be insignificant due to the large number of employees working from home, and so we only had six interns in 2020.

Focus on health and safety Overall, Verdo has seen a small increase in workplace accidents and near-misses of 11%. Given our goal of reducing the number of workplace accidents, this is an unsatisfactory development. In 2019, we recorded a total of nine workplace accidents, resulting in a total of 103 days of absence. Days of absence fell to 93 days in 2020, but the number of workplace accidents rose to 10. Moreover, we recorded 98 near-misses in 2020. To reduce the number of workplace accidents among our technicians, they have all received safety training via instruction videos, followed by a test.

Climate-friendly canteen food Verdo’s green sustainability agenda also extends to our canteen at the Agerskellet location in Randers, which not only provides meals to our employees there but also to the CHP plant at the Port of Randers. In addition to being climate-friendly, healthy organic food is also good for the physical and mental well-being of our employees.

We strive to use Danish organic produce wherever possible. We are aware that meat production has a considerable climate impact. To minimise this impact, we use meat sparingly in our canteen and focus on animal welfare when sourcing meat.

Moreover, we are always looking for new ways to reduce and reuse surplus food. Our food waste is sent to a processing plant in Hedensted, where it is used in the production of biogas. This work continued in early 2020, but when the pandemic hit in March 2020, the canteen was closed completely for a while, later operating on a reduced and more flexible schedule. As a result, comparisons with previous years are not possible.

Women and men in management Statutory statement on the gender composition of management bodies pursuant to section 99 a of the Danish Financial Statements Act Workplace diversity remains an important issue in Denmark, and at Verdo we believe that diversity creates value and is a strength for our employees and the business that we can convert into results. A highly diverse management team improves the scope for managing and assessing the various aspects that enable the company to live up to its values and the expectations of the outside world. However, we still have some work to do in this area. 80% of Verdo’s employees are men, and the share of women gets smaller, the higher up the management hierarchy you get.

We are not the only company in the energy sector to face such challenges, but we are determined to do what we can to overcome them. That is why, in 2020, we stepped up our efforts to redefine our diversity targets towards 2030, and we are currently looking into defining subtargets for 2023 and 2027. The targets must apply at all management levels in the organisation.

In 2020, the number of female middle managers at management level 1 grew from 9.5% to 12.5%. This means that we still have some way to go to reach our target of 25% female managers at management level 1. Female managers at management level 2 are typically found in staff functions, where the diversity of the recruitment base is usually broader. Here we saw an increase from 17.5% in 2019 to 20% in 2020, thus achieving our target of 20% for 2020. At management level 3, one in seven directors is a woman. This is equivalent to 14% and therefore above our target of 10%. In connection with the recruitment of Verdo’s new CEO, we had a specific requirement that the final pool of candidates should include female candidates. This is a new approach designed to help eliminate gender bias in the recruitment process.

Women on the Supervisory Board Verdo also wants to increase the number of women on the Supervisory Board. This represents a particular challenge because Verdo is a consumer-led company and thus has no say in who is elected to the Supervisory Board. Nevertheless, we encourage our female talents to run for the employee-elected positions on the Supervisory Board. The Board of Representatives has a total of 45 members from Herning and Randers, nine of whom are women. This corresponds to 20%. Only one of the 12 members of Verdo’s Supervisory Board is a woman, corresponding to 8%. For several years, Verdo has been calling on the Board of Representatives to focus on the underrepresented gender when appointing the Supervisory Board. We will step up these efforts until the next election to the Board of Representatives in 2022.

The situation is different for the employee-elected members of the Supervisory Board, where two out of the four members are women, i.e. 50%. Some of our subsidiaries have their own supervisory boards. The members are recruited from among the members of the Group Management, which means that they are subject to the same gender diversity target. Women are represented in 13 of our 18 subsidiaries, which usually have one woman and two men. The share is unchanged from 2019.

Our focus on improving the gender balance on our supervisory boards continues in 2021.