Corporate social responsibility (CSR) is about eco efficiency; maximising the positive impact of business on society and the environment and diminishing the negative. It is about creating a business environment where transparency facilitates stakeholder engagement, giving them the opportunity to monitor and influence how businesses forge their relationship with society.
Long-term prosperity can only be achieved by setting high standards. Every year, Landsvirkjun outlines its key objectives, in six areas, in order to purposefully fulfil its policy on CSR. Please feel free to follow our progress in fulfilling our obligations on CSR.
Clicking on the tab below will enable you to familiarise yourselves with those key areas we have set out as our objectives each time. The circles show our progress. An empty circle shows that we are at the starting point of a project, a half full circle shows that we are progressing well and a full circle symbolises the completion of a project.
Landsvirkjun observes the ten principles of the UN Global Compact, the United Nations' global consensus on ethics and responsibility in business. In 2016 Landsvirkjun will submit a progress report to the organisation for the second time since the Company became a participant in the Compact in November 2013.
The Compact entails a commitment to observe and implement ten principles that concern human rights, labour rights, the environment and anti-corruption and to report annually on the progress made on the Company's key actions relating to these issues.
The progress report will be published concurrently with other annual Landsvirkjun publications in 2016, i.e. its annual report and environmental report, and this arrangement will be maintained in the future. The objective is, among other things, to harmonise the Company's principal processes and the establishment of its goals.
The reassessment of Landsvirkjun’s main processes gives more definition and transparency to our work processes. We ensure continuous responsibility, increased flexibility and we simplify the corporate governance system that we adhere to. The process improves our ability to analyse all operations within our company based on objectives, value, risk and various other improvements and measurements.
The government has recently introduced an ownership policy for public limited companies and general partnerships in its ownership. In 2014, Landsvirkjun will make any improvements necessary in areas of its operations not already in compliance with the new ownership policy.
Landsvirkjun signed the UN Global Compact in November, 2013 and is therefore committed to aligning its operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. The Company must also produce an annual Communication on Progress report (COP) to account for its progress on matters of social responsibility. See: https://www.unglobalcompact.org/ In 2014, Landsvirkjun was consistent in its efforts to improve operations in accordance with the ten principles of the Global Compact and published its first COP in November of this year. The report can be seen here: UN Global Compact - Communication on Progress
Landsvirkjun’s Code of Conduct was published and implemented in December, 2013. There are nine categories, including the health and safety of employees, the importance of integrity and respect in communication and the handling of confidential information and conflicts of interest. The first three months of 2014 will give employees the opportunity to provide feedback on our Code of Conduct which will then be made public.
Landsvirkjun participates in the Green Steps project organised by the Icelandic Environment Agency, which entails various actions designed to reduce waste of resources and render office work more environmentally friendly. There are four green steps, and the goal for 2016 is to complete the first green step, which is well under way, with the second step already in progress. See Landsvirkjun - fyrsta græna skrefið.pdf.
Landsvirkjun chooses to work with business partners and suppliers who show a commitment to responsible corporate governance. In 2015, we hope to take our first deliberate step in implementing green procurement measures in accordance with our commitment to environmental and social responsibility.
Landsvirkjun became a founding member of the Green Public Procurement program (VINN) in December, 2014. VINN is a forum for collaboration on green procurement led by the Ministry for the Environment and Natural Resources. Amendments will be made to Landsvirkjun’s procurement processes in 2015 with the aim of increasing the percentage of environmentally friendly goods purchased by the company. A status report will be completed in 2016 to describe the effects of these changes and will be based on the outcome for 2014.
An important component in increasing social responsibility is actively encouraging ethical business practices in all business partnerships. In 2014, we set the objective of developing and implementing a policy on ethical business practices.
The Policy has now been fully developed and will be implemented in working procedures connected to all Landsvirkjun’s business partnerships.
In 2014, a project team was appointed within Landsvirkjun with the objective of developing a code of conduct for suppliers built on the Code of Conduct for Landsvirkjun employees and the guidelines outlined by the UN Global Compact with regard to human rights, labour, the environment and anti-corruption. These measures provide suppliers and service providers with clear guidelines on Landsvirkjun’s expectations with regard to responsible working procedures and Corporate Governance. These regulations are now ready and will be implemented in working procedures in connection with suppliers and service providers in the next few weeks and months.
Work on the re-evaluation of the policy could not be fully completed this year. However, the group did begin work on the re-assessment of the policy with regard to service providers, suppliers, customers and other stakeholders. The group also discussed the scope of the policy, the methods utilised by other companies in implementing such a policy, performance criteria and the relevant standards and guidelines. This work will be ongoing in 2014.
Landsvirkjun places great emphasis on utilising the energy resources entrusted to it in a sustainable manner, guided by the principle of engaging in energy production in harmony with the environment and community. Through its clear environmental policy, detailed research and close monitoring of the environment the Company is determined to minimise the negative impact of its activities.
At the United Nations Climate Change Conference in Paris in December 2015 Landsvirkjun signed the declaration on "Caring for Climate". With its participation in the project Landsvirkjun undertook to report on its progress regarding the goals set by the Company in the campaign against climate change.
Subsequently, Landsvirkjun registered its intention to reduce its carbon footprint with NAZCA (Non-State Actor Zone for Climate Action), an international forum where companies, cities, sub-national regions, NGOs and investors are given an opportunity to register their goals in combating climate change.
Landsvirkjun's NAZCA goals are:
• To become a carbon neutral company no later than 2030
• To invest in renewable energy production, geothermal energy, hydro energy and wind energy
• To take steps so that a quarter of the Company's fleet of vehicles is powered by electricity in 2020
• To take various actions to reduce the impact of climate change by initiating a nation-wide energy efficiency programme
In 2016 Landsvirkjun will for the first time submit its report on carbon emissions to the Carbon Disclosure Project (CDP). CDP is an independent international organisation. The objective of the Project is to contribute to sustainability in business operations by collecting information from companies regarding the release of carbon into the atmosphere. The Project was started in 2000 and today CDP collects information from over 3,000 companies around the world.
In 2014 we assessed the possibility of increasing efficiency from geothermal energy. The assessment revealed a number of exciting opportunities in utilising excess energy and carbon dioxide emissions to produce alternative fuels. However, many questions remain unanswered and this year we are going to explore business and technical issues related to this type of production.
Landsvirkjun is committed to reducing environmental impacts of all stages of new power projects, namely preparation, construction and finalizing of projects. This will be a key objective in the construction of the Þeistareykir Geothermal Power Station which is situated in an unbuilt area in North Iceland.
Throughout the entire power project planning process, from the design phase to the construction phase, Land- shaping and recycling of materials are pursued. An emphasis is also placed on cleaning up the area as soon as possible, after construction has been completed, to ensure that visual impacts are as short lived as possible and that the area retains as many of its original features as possible.
Every effort is also made to reclaim grazing land lost as a result of power station projects. A cooperative effort was set up with landowners on land reclamation projects in 2014 as part of the drive to achieve this objective. Approximately 40 hectares of land was sown in the Þingeyjarsveit area and over thirty thousand plants were planted in Norðurþing.
A project report on the action taken in 2014 and the action plan for 2015 can be accessed via the Þeistareykir website. Plans include the planting of forty thousand plants and the re-vegetation of 187 hectares of land.
An important step was taken in 2014 with regard to more environmentally friendly transportation. We set a transportation policy where an emphasis is placed on less fossil fuel consumption and active participation in developing an energy exchange plan for Iceland.
The option of switching to electric vehicles is always considered when renewing any part of the vehicle fleet at Landsvirkjun. In early 2015 there are four electric vehicles in Landsvirkjun’s fleet as well as two hybrids.
In 2015, we will continue to encourage projects that decrease emissions of carbon dioxide in employee transportation. We will also assess ways to encourage other companies and individuals to take an active part in energy exchange.
The sustainable utilisation of natural resources is a crucial factor in Landsvirkjun’s operations and the Company is required to utilise the resources it has been entrusted with in the most efficient manner achievable. We are continuously assessing and developing the technical resources available to us and exploring possible actions to utilise these resources in a more efficient manner.
In 2014, a specific analysis was conducted to determine the potential of utilising the geothermal resource for other purposes than that of electricity generation. The diverse utilisation of geothermal energy involves the utilisation of water, steam and gases from power stations for various purposes, within areas such as the industrial sector, greenhouse cultivation and tourism. We also assessed the possibility of further utilising the electricity we are able to generate for the electricity system during good water years.
The analysis revealed a variety of exciting opportunities in the diverse utilisation of the geothermal resource within Landsvirkjun’s operational areas in the north-east, particularly in the fields of cultivation, further processing in the food industry and fuel production from carbon dioxide and excess energy.
Landsvirkjun will continue to work towards ‘diverse utilisation’ and has subsequently appointed a project manager who has been given the task of creating a foundation for the diverse utilisation of geothermal energy, in Landsvirkjun’s operations, in the north-east of Iceland.
Landsvirkjun has long-since monitored greenhouse gas emissions (GHG) and carbon sequestration from its operations. Landsvirkjun has kept carbon accounts since 2007 which can be accessed in Landsvirkjun’s Annual Report. However, the Company has not yet developed a long-term comprehensive plan of action. The formulation of such a plan is an essential component in accepting environmental and social responsibility. It is our objective to develop such a plan in 2014.
Landsvirkjun has for years utilised and implemented a variety of measures to reduce the environmental impact of the Company’s operations.
In 2014, a specific emphasis was placed on energy exchange in transportation and subsequently the Company developed a transportation strategy:
Landsvirkjun is committed to reducing the impact of transportation on the environment and the atmosphere by:
In early 2014, two diesel cars (in use at the Fljotsdalur and Sogid power stations) were replaced with electric cars. The cars, which are of the type Nissan Leaf, are performing well and the Company will continue to replace older fossil fuel cars with electric vehicles wherever possible.
In September 2014, Landsvirkjun took part in organising a conference in Reykjavik on energy exchange in transportation.
In 2013, the International Hydropower Association conducted an assessment of the Bland Hydropower Station utilising the HSAP (Hydropower Sustainability Assessment Protocol). The Protocol places particular emphasis on environmental and social aspects. The report showed that Landsvirkjun fulfils the highest standards of practice in 14 of the 17 topics. Landsvirkjun was awarded the second highest rating for the three other topics. Topics evaluated during the assessment included responsible governance, environmental and social issues management, public safety and labour and working conditions. The report is available here.
Monitoring and environmental surveillance was increased on hydrogen sulphide levels, the climate and on air quality. Measurements on the concentration of hydrogen sulphide in the air are now accessible in ‘real time’ on the Landsvirkjun website and can be seen here:
Last year, Landsvirkjun took part in a number of research projects in order to further their expertise on the environmental impact of geothermal utilisation. Amongst these projects were the following:
Statistics on carbon emissions for 2013 are not yet available and we can therefore not assume that the target has been achieved in full. However, an update will be available as soon as the data becomes available. Important steps were taken to reduce or neutralise GHG emissions, including soil conservation and reforestation. An agreement was reached with the Iceland Forest Service and Soil Conservation Agency on two new areas of carbon sequestration. It is estimated that carbon binding will reach 2.5 T carbon / ha per year within a decade.
An agreement was reached with Kolvið on the neutralisation of all carbon emissions as a result of Landsvirkjun’s use of petroleum and diesel for transportation purposes, the international and national air travel of employees and finally the disposal of approx. one thousand tonnes of waste.
Research has also been conducted on the extent of natural emissions from geothermal areas.
The Company is engaged in a diverse range of activities which call for open dialogue with its owner, customers and stakeholders around the country. Landsvirkjun endeavours to work in accordance with the ideology of sustainable development, e.g. through active dialogue and participation in joint projects with stakeholders.
Dialogue is important to achieve a mutual understanding of the emphases and tasks of the Company and the expectations of stakeholders regarding its business activities. The opinions of stakeholders, as revealed in the course of reviews, can help the Company to identify new opportunities and changes in expectations. In 2016 Landsvirkjun intends to put in place a communications plan for targeted use regarding all power stations in operation and development options which are in progress or in preparation.
Landsvirkjun has always emphasised revegetation and reforestation in Iceland. Soon after the Company's first power plant, the Búrfell Power Plant, began producing electricity in 1969 young people were recruited for summer work on planting and seeding.
"Many hands lighten the load" has been an ongoing project of Landsvirkjun for decades. The project invites young people aged 16 to 20 to apply for summer work, and non-governmental organisations can request their work contribution in the interests of the environment.
This has been an important contribution to employment opportunities for students, who at the same time are given an opportunity to get acquainted with Landsvirkjun's work. Landsvirkjun also hires a number of university students for summer work on projects of various kinds.
Preparations will begin in 2016 for recruitment of summer staff in 2017 with a view to making the jobs on offer more attractive to a wider group of young people. The Company will endeavour to reflect the diverse composition of our society.
The role of Landsvirkjun is to maximise revenues from the energy resources entrusted to the Company, guided by sustainable use, value creation and efficiency. One of the ways to perform this role is to pay dividends on the Company's financial results. Landsvirkjun annually pays dividends to its owner, the State of Iceland. The amount of the dividend payments varies from year to year.
In 2015, we celebrate the 50th anniversary of Landsvirkjun. As a state owned company we need to engage in effective stakeholder dialogue, to supports transparency in our operations and increase a discussion on matters related to Landsvirkjun’s operations.
In 2014, our target was to hold at least five open meetings with stakeholders. We held six successful meetings and engaged in effective communication with stakeholders. This year we hope to do even better by holding even more meetings. The objective of these meetings will be to provide more information on our operations to the public, listen to public opinion, to discuss the future and to engage in communication with our owners: the Icelandic nation.
At Landsvirkjun we strive to ensure successful cooperation with society, place an emphasis on the sustainable utilisation of natural resources and on minimising the environmental impact of our operations. This year we will develop sustainability indicators in cooperation with municipalities and other stakeholders in North Iceland in relation to the new power project at Þeistareykir.
The objective of the development of sustainability indicators is to monitor the development in the area in relation to the new power project. Cooperation will be initiated in the area to address hopes and concerns pertaining to the planned construction and energy utilisation and to monitor the development of societal, environmental and economic aspects in the coming years.
At Landsvirkjun, our role is to consistently endeavour to maximise the potential yield and value of the natural resources we have been entrusted with, in a sustainable, responsible and efficient manner. One of the ways to fulfil this role is by paying dividends. Landsvirkjun pays annual dividends to its owner, the Icelandic state. The amount differs between years:
We have created a policy that promotes open communication with stakeholders and are therefore active in sharing information on the Company’s operations, via various resources. These resources include press releases and publishing our Annual Report and Environmental Report online. Open meetings with stakeholders are a key factor in implementing our policy on communication and provide an opportunity for stakeholders to familiarise themselves with Landvirkjun’s operations. We hope that these meetings will contribute to increasing our awareness of the concerns held by stakeholders and their expectations of the Company and its operations.
In 2014, we exceeded our initial objective of holding at least five open meetings during the year. Six open meetings were held by Landsvirkjun including two meetings in Reykjavík and four meetings in rural areas; both at existing power stations and at potential power project sites.
At Landsvirkjun, our role is to consistently endeavour to maximise the potential yield and value of the natural resources we have been entrusted with, in a sustainable, responsible and efficient manner. One of the ways to fulfil this role is by paying dividends. Landsvirkjun pays annual dividends to its owner, the Icelandic state. The amount differs between years.
A communication plan for stakeholders of the proposed power plants in the Northeast was formulated. Communication strategies for the area include two proposed project sites: Bjarnarflag and Þeistareykir. The Communication Plan is a development project that outlines purpose, guiding principles, communication networks and objectives for 2014. The purpose of the communication plan is to prevent any breakdown in communication between Landsvirkjun and its stakeholders.
Landsvirkjun has an Equal Rights Committee Jafnréttisstefna Landsvirkjunar which is responsible for the Equal Rights Action Plan and monitoring the achievement of its goals. The Plan includes actions which are designed to promote a more equal footing for all groups within the Company.
Landsvirkjun's management is working on targeted actions to increase the representation of women in management positions in the Company and balancing the gender ratio. In 2016 the objective is to improve the gender ratio in positions of management and authority in the Company by increasing the proportion of women from 24% to 30% This effort is based on an analysis of managerial positions in the Company.
Men and women who work for Landsvirkjun in the same jobs are paid equal wages and enjoy the same employment terms. To this end special care is taken to ensure that women and men are paid the same salaries for comparable work of equal value. The goal in 2016 is to bring the gender pay gap for similar work or work of similar value to within 1%. The results are verified by means of an Equal Pay Audit performed by the international company PwC , which provides a precise analysis of the wage structure by gender.
Landsvirkjun seeks to be at the forefront in security, health and occupational safety. The Company's policy in this area calls for accident-free operations and well-being in the workplace.
The goal is for operations in 2016 to be accident-free.
In 2015, we intend to reassess our policy on equal opportunities with the goal of increasing gender equality within the Company. The goal is to complete a new equal rights policy and an action plan on equal rights to ensure a successful implementation of the policy.
Employee safety is of key importance to Landsvirkjun. Our working methods and risk assessments are aimed at preventing accidents and we operate according to a zero-accident policy. We closely follow the performance of safety systems and register all incidents and accidents.
H200 shows the number of absences due to accidents per 200,000 hours worked.
In 2011, Landsvirkjun signed the UN Global Compact and UN Women. The objective of the compact is to promote equality and the advancement of both sexes in the workplace, labour market and in society. It is Landsvirkjun’s policy to ensure the equal treatment of male and female employees and that equal opportunities are enjoyed by all members of Landsvirkjun’s team, regardless of gender. In doing so, Landsvirkjun is following the letter of the law but also ensures that it utilises its human resources in the most effective manner. To this end, important action has been taken to reduce the gender pay gap which has been reduced from 12.0% to 1.6% over the past ten years. This effort was recognised in 2013 when Landsvirkjun was awarded the PWC Gold Standard. The Company also endeavours to address the issue of gender distribution within the various operational areas of the business. In 2014, it is our objective to increase the proportion of female managers at Landsvirkjun to 20%.
The graph shows gender ratio in Landsvirkjun’s operational areas in 2013.
At Landsvirkjun, employee safety is of the utmost importance to us. Our working methods are designed to prevent accidents and we work according to a zero tolerance accident policy. We closely follow the accident rate and publish figures of accidents on a regular basis.
H200 shows the number of absences due to accidents per 200,000 hours worked.
Major changes have been made to Landsvirkjun’s policy in recent years. The changing role and values of Landsvirkjun affect how human resources issues are executed. We set the objective of reviewing our staff policy with respect to these changes. This goal has been partially achieved and a draft of the policy has been completed. The policy has not been reviewed nor implemented but the project will be completed in early 2014.
Landsvirkjun supports innovation in a number of ways. One of the projects that the Company participates in is the accelerator network Startup Energy Reykjavík (SER), which was launched in 2014. Through the accelerator network Landsvirkjun supports startup companies in the energy sector through direct investment, and also by other means, such as advice and guidance.
Landsvirkjun's Energy Research Fund annually supports students, research projects, organisations, business enterprises and individuals who are engaged in promoting environmental and energy research.
In order to make Landsvirkjun's contribution to research and innovation more visible an indicator will be devised in 2016 to show the Fund's range of activities and progress.
Landsvirkjun is currently engaged in building the Theistareykir Power Plant in north-east Iceland. The development in the area has been in preparation for years, and in the course of preparation Landsvirkjun launched a project known as the Sustainability Initiative in north-east Iceland.
The Sustainability Initiative is a communal project with the objective of monitoring trends in the community, the environment and the economy in the area from Vaðlaheiði in the West to the river Jökulsá á Fjöllum in the East. This is the area that will probably be most impacted by the development of the Þeistareykir Power Plant, the industrial complex at Bakki and the increased tourism in the county of Þingeyjarsýsla.
Work has been in progress on analysing the community's expectations and concerns. An attempt has been made to identify the factors that stakeholders feel a need to monitor concurrently with the developments and the changes that they may entail. These factors will form the basis of sustainability indicators to be monitored in order to observe trends and create a knowledge base of the social, environmental and economic conditions in the region. The indicators will be ready by 1 January 2017.
Landsvirkjun celebrates its 50 year anniversary in 2015 and will open a new anniversary exhibition at the Ljósafoss Hydropower Station called ‘Powering the Future’. The objective of the exhibition is to provide an educational experience for people of all ages about electricity, its characteristics and development opportunities in the future.
One of Landsvirkjun’s key responsibilities with regard to social responsibility is knowledge dissemination and supporting innovation and new expertise within society. In 2014, Landsvirkjun supported the investment program Startup Energy Reykjavík which is a mentorship-driven seed stage investment program which strives to increase value creation for energy related companies. The venture was a success with six out of seven companies still operating approximately one year after the closure of the program and with an accumulated 120 million ISK in share capital.
Landsvirkjun will continue its support for the initiative in 2015 and will utilise the same key performance indicators to evaluate success. These include the number of SER companies still operating at the end of the SER program and the likelihood of further investments in SER seed stage companies one year after the program closes.
Almost four hundred research reports, completed for Landsvirkjun by various experts, have been published online through the search engine gegnir.is. The objective for 2015 is to ensure that all reports published on the Company website will also be made available via the search engine as soon as they are released.
Landsvirkjun is aware that a key area in contributing effectively to CSR is knowledge dissemination; sharing expertise effectively in order to facilitate new knowledge or value for society. In 2014, Landsvirkjun will support the business centre Startup Reykjavik Energy (SER), whose sole aim is to support innovative ventures in energy-related industries by providing selected business ideas in this area with investment opportunities and support. For more information see: http://www.startupenergyreykjavik.com/
Performance indicators assessed by Landsvirkjun on completion of the project include:
The Landsvirkjun Energy Research fund has since 2008 sponsored students, university research projects, institutions, companies and individuals researching the fields of environmental and energy affairs. It is Landsvirkjun’s objective to ensure that the fund continues to support the foundation for new expertise in 2014. Landsvirkjun will allocate 52 million ISK to the fund in 2014.
Every year Landsvirkjun’s employees, consultants and researchers execute a number of audits and reports for the Company. In 2013, an essential step was taken to share this information with the public when the Company connected with the electronic search engine gegni.is. In 2013, approx. 300 reports were made available via this source. Landsvirkjun will continue to support public access to research in 2014 via this route. An update on the increased number of available reports will be released at year end.
Landsvirkjun signed three cooperation agreements with various academic institutions with this objective in mind.
In July, 2013 Landsvirkjun joined forces with, Reykjavik University and the University of Iceland to support and encourage the development of expertise within the field of renewable energy. Landsvirkjun has pledged 80 million to university education, over a five year period, to promote university education and research in geochemistry, electric power engineering and other academic disciplines within the universities.
In October, 2013 Landsvirkjun and the Institute of Economic Studies joined forces in an effort to support and encourage research within the field of business and economics, pertaining to energy generation, subsequently increasing public knowledge and awareness on the significance of these factors with regard to the economy. Landsvirkjun will contribute an overall total of 24 million ISK to the Institute of Economic Studies over a three year period.