Iberdrola, leader in ESG
We have made environmental, social and governance (ESG) factors intrinsic to our socially responsible management
Iberdrola carries out its activities in order to create sustainable value for all Stakeholders: we call it our social dividend. That's why we include in our strategy the three internationally accepted areas for measuring impact and sustainability in investments: environmental, social and governance (ESG) factors, as a substantial contribution to sustainable development.
For the last two decades, ESG factors have been an integral part of the Iberdrola strategy, to the extent that it has now become an established leader in ESG + F, supporting environmental, social and governance aspects over financial strength.
Its pioneering commitment to renewable energies and grids has enabled it to anticipate the current energy transition and to be a pioneer in climate action. The group has set a target to achieve CO₂ equivalent emission neutrality for Scope 1 and 2 by 2030 and net zero CO₂ equivalent emissions by 2040 for all areas, including Scope 3. To achieve this, it has amended its By-Laws to make the Board of Directors responsible for approving, overseeing and regularly reporting on a climate action plan for achieving those targets.
In addition, Iberdrola has set a target of having a positive net impact on biodiversity by 2030. This goal is based on the application of the conservation hierarchy principle throughout the life cycle of its facilities and the implementation of mechanisms to identify, quantify, and monitor compliance therewith.
Also, in keeping with its commitment to be "people-positive", the company will make around 12,000 new hires by 2025 and has made a commitment to increase the presence of women in relevant positions to 35 % by 2030.
It also intends to exceed 55 hours of training per employee per year, four times the European average, focusing its efforts on key issues such as cybersecurity, where it expects to increase annual training hours sixfold by 2030. Also by 2030, its R&D investments will exceed €500 million per annum.
The company has also redesigned its corporate governance and sustainability system around ESG criteria, establishing its position at the forefront of best international corporate governance practices. The group also encourages sustainability in the supply chain, incentivising its suppliers to adopt the best policies and practices in matters of sustainable management.
How does Iberdrola apply ESG criteria?
The real and effective implementation of the sustainable development strategy is intended to be — combined with the Governance and Sustainability System — a key factor that enables Iberdrola to stand out from its competitors, sharing its achievements with its Stakeholders. This commitment to sustainable development materialises in its commitment to ESG factors, which are part of the company's daily operations and which are put into practice in the following areas:
This focuses on continuing to contribute to the creation of an energy system in harmony with nature and mankind, facing the triple environmental challenge of the fight against climate change, the conservation of biodiversity and resource circularity. The company has made some outstanding achievements in terms of reducing greenhouse gas emissions (GGE) — allowing it to lead the energy transition for more than 20 years — and in the conservation and promotion of biodiversity in ecosystems.
Iberdrola places people at the centre of its strategy. The company helps to improve quality of life, assists vulnerable people, creates jobs and invests in ensuring universal access to energy, which generates a sustainable social and inclusive dividend. Its commitment to diversity, employee training, assistance for vulnerable groups and respect for human rights strengthens its links with society, together with the promotion of socially responsible practices in the supply chain and cybersecurity.
The Governance and Sustainability System of Iberdrola, which has been one of the most advanced companies in this area for yearsmainly addresses shareholder rights, the structure of governance bodies, corporate policies, the Compliance System, and climate governance, among others.
ESG+F objectives: Iberdrola's sustainability roadmap
The current market context, in which ESG scrutiny of the company by investors is increasing and regulation is becoming more demanding, has made it necessary to review the objectives established in our Sustainable Development Plan 2020-2022 "Energy for Progress", in order to align them with the best market practices and ensure that they are ambitious enough to anticipate the demands of the different stakeholders, ensuring the maintenance of the shared leadership position we currently have.
That is why in November we updated this roadmap by defining a comprehensive, relevant and ambitious set of objectives around our environmental, social, governance and sustainable financing priorities that positively impact all our stakeholders. We reaffirm our determination to be an active player in creating a more sustainable and inclusive energy model for future generations.
ESG information 2022, a further step in Iberdrola's commitment to sustainability and governance
For the second consecutive year, the company brings together all relevant information on its environmental, social, governance and financial performance in a single digital space. The data, corresponding to the 2022 financial year, is framed in the context of the energy company's business model, the countries in which it operates and its strategy and outlook for the coming years.
This digital tool brings together all the company's non-financial information to respond to numerous recognised reporting standards in this area (IIRC, GRI, SASB, Global Compact, etc.). It includes both the information reported in the Integrated Report and the content published in the Statement of Non-Financial Information - Sustainability Report, as well as other relevant information for influential agents such as providers of ESG and sustainability indices and ratings.
We drive ESG criteria among our suppliers
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Iberdrola has decided to extend its commitment to ESG criteria to its more than 20,000 suppliers worldwide, from which it made purchases worth €17.8 billion in the last financial year, and has become the first company to obtain the Sustainable Procurement Strategy certificate awarded by AENOR. At the end of 2022, 91.5 % of purchases from the Group's suppliers were subject to ESG policies and standards.
To achieve this, Iberdrola has designed its own model to assess the positioning and performance of each supplier with respect to the three ESG pillars, and through its global supplier management platform, suppliers can perform their own self-assessment of their performance in sustainable development, based on parameters such as having a human rights policy, a code of conduct, health and safety standards (SDG 3), and a global environmental sustainability strategy that includes plans related to water (SDG 6), energy (SDG 7), and biodiversity (SDG 14 and SDG 15).
Those suppliers that obtain a low rating get support from Iberdrola to identify areas for improvement and the possibility of implementing an individualised action plan with specific commitments and actions. In the three-year period 2020-22, more than 1,000 proposals for improvement plans have been generated for the Group's suppliers, which have contributed to more than 77 % of the main suppliers having achieved the required level of Sustainability.