Corporate Social Responsibility

at Vestas

Respecting human rights wherever we are in the world

CSR at Vestas - Leading a responsible and inclusive energy transition

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As the reach and scale of renewable energy increases, so does the urgency to ensure this scale is supported by sustainable practice. Integrating sustainability in everything we do is a part of this.

In support of this, Vestas has committed to respecting human rights within the development of wind energy projects that we contribute to. This is being firmed up with the launch of the CSR strategy “Leading a responsible and inclusive energy transition”.

Our Corporate Social Responsibility (CSR) blueprint is not a revolution, but an evolution. It’s a more focused approach on what was started years ago. It consists of three pillars, focusing on:

• Responsibility, strengthening human rights governance and management;

• Inclusiveness, creating long-term value and engagement where we are present;

• Leadership, ensuring the integration of Human Rights in the energy transition.

By having CSR integrated into our processes, we are in a better position to lead a responsible and inclusive energy transition.

Our Responsibility, strengthening human rights governance and management

Vestas is committed to respecting human rights wherever we are present, and we see it as our responsibility to operationalise this commitment.

We have developed our own social framework, informed by international industry practice and in line with international standards. Our social framework aims at earning the “Social License to Operate” (SLO), which is the ongoing social approval of our activities by the communities we work in. This approach builds a healthy foundation of community acceptance, approval, and trust of the wind farm throughout its lifetime.

We earn the SLO in a community by identifying, preventing, mitigating, and accounting for how Vestas addresses risks to human rights. This exercise is outlined in our Social Due Diligence (SDD) methodology.

Our methodology ensures that we clarify uncertainties linked to potential human rights impacts. Such uncertainties could be in relation to land acquisition, local employment, cultural customs and heritage, community health and safety, or access to remedy for impacted communities and workers. These steps allow us to reduce our negative impacts on local communities and enhance positive impacts, thereby making our projects more inclusive.

We are constantly working to ensure that all projects within scope undergo a social due diligence. This also means that we conduct SDDs on projects that do not reach Firm Order Intake (FOI) in the reporting year. In 2020, we started reporting publicly on the completion rate of SDDs in scope that reach FOI. For 2020 the completion rate was 77.8%. While we are encouraged by this high rate, we acknowledge that we still have work to do to meet our target of 100%.

Read about our Social Management System for more information on our human rights methodology in our market approach and how we support our customers in creating bankable projects.

A woman and her children watching a theatre play discussing social issues related to the Taïba wind farm project in Senegal

Vestas has committed to recognize our responsibility to respect human rights as set out in the UN Guiding Principles on Business and Human Rights. To fulfill this commitment, businesses are expected to conduct a corporate Human Rights Impact Assessment (HRIA).

In 2018, Vestas undertook its first corporate-wide HRIA. The HRIA conducted by sustainable business experts BSR mapped relevant human rights risks looking at how Vestas might impact rightsholders across our activities and value chain namely, Procurement and Manufacturing, Sales and Construction, and Service. The assessment consisted of desktop research, an analysis of internal management processes, and interviews with internal stakeholders, senior management, and subject matter experts.

The corporate HRIA identified a number of salient human rights across our operations and value chain. Each risk mapped was prioritized according to two sets of criteria: salience of risk (scale, scope, remediability, likelihood) and relevance for business action (attribution, leverage, risk history, current management). To the right is an example of the results and how we work with it. This will change as time goes on. Credit: Vestas corporate-wide HRIA by BSR, 2018.

Prioritized Human Rights Risks - Sales & Construction

In addition to identifying salient human rights risk, the assessment resulted in over 50 recommendations to be implemented across the value chain over the coming years. Priority was given to the recommendations related to our governance and management of human rights. This led to an updated Human Rights Policy in 2019 which integrated principles related to relevant community human rights impacts and CSR. In 2020, Vestas continued this work and updated our social due diligence process to its third iteration. Going forward, our aim is to improve how we disclose our human rights performance and develop human rights training material. Vestas recognizes that working with human rights is an ongoing journey and that we still have work ahead of us, primarily strengthening our human rights management across the value chain.

Vestas is committed to remedying actual adverse impacts on individuals, workers, and communities that we may have caused or contributed to. Where adverse impacts are committed by third parties with links to Vestas through our services, we seek to use our leverage to ensure that those impacted are remedied. For this purpose, Vestas has in place an Operational Grievance Mechanism (OGM) during the construction of our wind farm projects. The OGM is available without obstructing access to other remedies.

The OGM applies globally and has been developed meeting expectations outlined in international standards and principles such as the UN Guiding Principles for Business and Human Rights and IFC’s Environmental and Social Performance Standards. The OGMs are available in English and in local languages.

A complainant, be it a group or an individual, can raise a concern, or a grievance related to human rights issues e.g.:

• Stakeholder engagement
• Land acquisition, land use or livelihoods
• Community health and safety
• Cultural heritage and customs
• Access to project benefits

Vestas reports the number of community grievances received in our Annual Report and Sustainability Report. In 2020, there were 20 community grievances. We are pleased to see that our operational level grievance mechanism is being used and we will continue to revise and improve it so that we can ensure local communities have the opportunity to raise issues with us as soon as they arise.

In addition, Vestas has a global whistleblower hotline “EthicsLine” which can be used to report observed or suspected malpractice. We also work with our business partners to remedy adverse impacts which are directly linked to our operations, services, or products through the latter’s own grievance mechanisms.

More information about the OGM process can be found in our Social Management System which describes our social framework.

Our Suggestion Box in Lake Turkana, Kenya gives local community members the ability to share grievances in writing, should they have any

"We do not have all the answers and we cannot do this alone. We need to engage with our partners to move the needle on human rights, especially in the more challenging emerging markets. This is the way we can lead a responsible and inclusive energy transition, hand in hand."

Kristian Heydenreich
Senior Director – CSR and Global Compliance

Inclusiveness, creating long-term value and engagement where we are present

At Vestas, we prioritize working with customers, local authorities, communities, and other actors in wind farm projects to develop good relationships and invest back in the local community. These relationships are essential for successful and sustainable projects, especially in emerging markets. By working this way, we can nurture a close collaboration with our customers, partners, investors, contractors and with local stakeholders, to focus more on human rights. And by doing this, we can avoid potential negative impacts such as on local livelihoods, community health and safety, straining local resources, etc. We also promote positive impacts such as education, enhanced employability, jobs, and a better understanding of renewable energy.

In 2020, Vestas started reporting on the number of direct community beneficiaries from our community engagement initiatives. Despite the challenges that COVID-19 presented, we managed to continue several of our community engagement initiatives and reach 14,770 direct beneficiaries in a safe manner. Our projects included skills training, installing solar panels on local health centres, repairing school toilets, and providing locals with cooking stoves. We always consider the results of the Social Due Diligence conducted for the project and our six primary SDGs when choosing which community engagement initiatives, in collaboration with the local community and our partners.

Senegal - Improved educational conditions for students and teachers

In September 2018, Vestas announced a contract to provide a customized solution for the first wind park ever built in Senegal. The location of the new 158.7 MW plant, owned by the renewable energy generation company Lekela, was in Taiba N’Diaye, a small town located 75 km northeast of Dakar.

Since Vestas will service the wind farm for the next 20 years, it was natural to build and maintain a sound relationship with the community. We have done this through regular community engagement and development initiatives. Education is one of the SDGs that Vestas focuses on. Vestas supported schools in the Taiba N'Diaye project area by:

i) repairing the sanitation and lavatory buildings and constructing a new classroom at the elementary school in Taiba Mbaye village, benefitting 565 students and 11 teachers, and

ii) repairing the public lavatories and replacing 16 windows and three doors at the elementary school and at the college in Miname and Keur Malle villages, benefiting 577 students and 24 teachers.

UN Sustainable Development Goals covered:

Before

After

Elementary school in the Taïba Mbaye village, Senegal

Dominican Republic - Transferring skills and knowledge through hands-on training

In 2011, Vestas installed the first wind turbine in the Dominican Republic. In order to increase awareness on renewable energy, in 2019 Vestas partnered with the NGO “500 RPM” and the National Institute of Professional Technical Training (INFOTEP) to build a simple 350W DIY turbine.

The turbine was installed next to a rural school as a backup solution to the constant power cuts. This initiative developed local knowledge through a theoretical and practical workshop so that the technical schools can replicate this type of turbine in the future.

UN Sustainable Development Goals covered:

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India - Community development programme

Vestas started a structure community programme close to its under-construction 250 MW wind farm in Gujarat. The initiative is based on the specific community needs in the 13 villages closest to the wind farm in the Bhuj and Mandvi Blocks of Kutch district, Gujarat, India. Through discussions with community members and other local stakeholders, several themes were identified as areas for positive impact. The areas prioritized were children’s education, skills development, water and sanitation, and healthcare of domestic animals. The community programme is ongoing, even during the service phase of the wind farm.

Impact:

Over 1400 children benefited from across 13 rural schools with education kit learning materials
80 rural young women were trained in local traditional arts and crafts for individual income generation and were connected to a local resource center for further collective action
950 children now have access to clean drinking water through the setting up of Reverse Osmosis units and 400 children have access to better sanitation facilities through repair and renovation in three schools
The repair and renovation of community water facilities benefited around 500 families in six villages
Around 450 villagers from seven villages benefited from various general preventive health checkup camps
Approximately five thousand domestic cattle were vaccinated through animal vaccination treatment camps in three villages

Read more about our other initiatives below

UN Sustainable Development Goals covered:

Argentina - Transferring skills and knowledge through hands-on training

In 2018, Vestas constructed the 100 MW turnkey Corti wind farm near Bahía Blanca in Argentina. In order to increase awareness on renewable energy and to actually develop renewable energy at educational institutions, Vestas and our customer partnered with a local NGO to build small 350W wind turbines based on a DIY concept.

Nine Vestas employees assisted hands-on in the project. The students were trained by the NGO on how to build the small turbines so that in the future they can build more turbines for the rural communities in the area.

Sustainable Development Goals covered:

Mexico (Tres Mesas I) - Developing the next generation of wind energy engineers

Vestas pioneered wind energy in Tamaulipas, Mexico in 2014 with the installation of the first wind turbine in the state. We recognize that our human talent is a critical factor to our success. To further this, Vestas has implemented educational partnerships with local universities to develop the next generation of wind energy engineers.

As part of the initiative, Vestas technical employees share their knowledge and experience with the third generation of students studying towards a Diploma in Maintenance of Wind Generators from the Victoria Polytechnic University. Some graduates from previous generations have gone on to join Vestas as Service Technicians. These technicians will be part of Tamaulipas’ ambitious energy plan to significantly contribute to the installed capacity in Mexico within the next few years.

Sustainable Development Goals covered:

Mexico (Tres Mesas III) - Raising cultural and historical awareness through archeological discoveries

As a leader in the energy transition, Vestas recognizes the importance of respecting the culture and traditions of the communities near its operations. One of Vestas’ priorities is to build wind farms without adversely impacting the environment around it and fully respecting human rights.

In April 2019, the first exhibition of archaeological remains found during the excavation of the foundations of the turbines took place in Tamaulipas. The exhibition, promoted by the Tres Mesas Wind Farm and National Institute of Archeology and History, was partially sponsored by Vestas. It featured artifacts found during the project as well as infographics showing the archaeological practices used during the preparation of the foundations. The exhibition raised awareness in the local community about the cultural and historical background of the Las Mesas area and how it can coexist with the installed wind energy projects.

Sustainable Development Goals covered:

The Vestas Human Rights Journey

Click to enlarge

Leadership, ensuring the integration of Human Rights in the energy transition

As the aspiring world leader in sustainable energy solutions, Vestas is working to accelerate the renewable industry’s human rights performance through fostering partnerships. If the energy transition is to be truly responsible and inclusive, we need to adopt a cross-stakeholder, collaborative approach respecting business-related human rights. Human rights are transitioning from soft law to hard law and financial institutions are firming up their demands. Vestas and its customers will have to approach these changes together. Therefore, Vestas endorses the introduction of mandatory human rights due diligence in upcoming legislation. In 2009, Vestas signed the UN Global Compact and began its human rights journey. A decade has since passed, and we are ready to take the next steps.

Downloads

Vestas Employee Code of Conduct
- A set of rules and principles that outline the behavioral expectations we have of our employees

Vestas Supplier Code of Conduct
- A set of rules and principles that outline the behavioral expectations we have of our suppliers

Human Rights Policy
- This policy outlines Vestas' commitment to respecting human rights and addressing adverse human rights impacts, when applicable

Modern Slavery Act Statement
- Our annual statement addressing the risks of slavery and human trafficking taking place in Vestas' business and supply chains

Social Management System
- An outline of our human rights methodology in our market approach, supporting customers in creating bankable projects

Lake Turkana Impact Study
- A socio-economic study of the key impacts from Lake Turkana Wind Power project in Kenya

Documenting Business Respect for Human Rights
- A new study from the Danish Institute for Human Rights that examined how the largest companies in Denmark document their work with human rights, where Vestas ranked first place

Supporting EU level mandatory human rights legislation
- Together with 11 other companies, Vestas released a statement supporting EU legislation that will make it mandatory for companies to prevent and mitigate negative human rights impacts to workers and communities