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CSRD readiness

The Corporate Sustainability Reporting Directive (CSRD) requires all large companies to disclose information on the impact of their activities on people and the environment, as well as risk and opportunities arising from social and environmental issues.

Summary of the key actions taken during 2023:

  1. CSRD project planning: Identified project scope, key roles and responsibilities, timeline and actions.
  2. Double materiality assessment: Reviewed and updated Scatec’s materiality assessment according to CSRD requirements including comprehensive stakeholder engagement on impact and financial risk and opportunities.
  3. ESRS gap analysis: Mapped and identified gaps against the ESRS reporting requirements and developed a plan to close all gaps.
  4. Targets and KPIs: Reviewed our target setting process and current key for all material topics to ensure alignment to CSRD target requirements.
  5. ESG data management and internal controls: Reviewed internal control process and assessed ESG data quality and completeness for all material ESG topics.
  6. Due diligence and governing documents: Further formalised due diligence within the human rights topic area aligned to the Transparency Act. Continued monitoring of the CSDDD and implications for all ESG topics.
  7. Reporting and external assurance: Formalised ESG reporting platform for ESRS and continued with independent external review and assurance of our annual sustainability reporting.

Double materiality assessment

Scatec assesses material sustainability related impacts, risks and opportunities according to the concept of double materiality in the ESRS. The double materiality assessment has a dual focus by investigating both an organisation’s impact on environment, people and society and how different ESG topics financially impact the company.

Since 2019, Scatec have conducted materiality assessments every second year, building the foundation for ESG strategy and reporting according to best practices. In 2023, we developed our materiality approach to align with the double materiality principle in the upcoming CSRD. The assessment is validated by the Executive Management (EMT), approved by the Board of Directors, and will be reviewed annually.

Stakeholder engagement

Regular engagement with internal and external stakeholders to understand what types of topics and issues concern them is key to determining our sustainability priorities. Scatec’s key stakeholder groups include co-investors and partners, financing partners, shareholders, employees, suppliers, contractors, governments and regulators, and local communities. Stakeholder have been involved in the double materiality process through interviews, roundtables and workshops, and their perspectives are integrated in the assessment. Interactions with external sustainability experts, partners and networks also informs our understanding of impacts, risks and opportunities along the value chain.

The double materiality assessment has been organised and performed in close collaboration between Finance and the Sustainability Reporting & Strategy team. A working group with subject matter experts and line managers contributed with inputs and cross-functional discussions: Environmental and Social, Heath and Safety, Community Engagement, Human Resources, Supply Chain, Financial Controlling, Enterprise Risk Management, Investor Relations and Communications. The EMT and representatives from the Audit Committee were involved one-to-one conversations as part of the insights phase, in addition to the validation of the results. The difference between internal and external stakeholder views were also reviewed and discussed as part of the assessment.

 

Methodology

The double materiality assessment was conducted during third and fourth quarter 2023 and is based on the guidelines described in ESRS 1, and the relevant themes and sub-themes.

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In the impact assessment, we evaluated Scatec’s impact on people and the environment over short, medium and long term, in own operations and along the value chain. The impacts include both negative and positive impacts that Scatec can have on the society and the environment. The most relevant and significant impacts were summarised and scored. Significance is a factor of severity (scale, scope and irremediability) and likelihood (each scored from 1-5). For the financial assessment, the financial effects are dependent on the type of risks and opportunities. The risks and opportunities have financial effects on short and medium term for projects under construction and in operation (current) and on medium and long term for growth possibilities (future). The financial effect is calculated as severity multiplied with likelihood.

As part of the insights phase of the assessment, we performed a nature risk assessment inspired by the Task Force on Nature related Financial Disclosure (TNFD) to gain a better understanding of financial risk and opportunities related to biodiversity.

The double materiality assessment is conducted through a mix of quantitative and qualitative methods, including interviews, desktop analysis and scoring, and was built on a solid foundation of previous analyses and resources such as the TCFD report, Transparency Act Statement, ESG Performance Report and the Annual Strategic Report. Broad stakeholder involvement both externally and internally across the organisation informs the assessment, including also geographical reach with involvement of regional executives and Environmental and Social managers from all geographic areas.

Reports