Opinion of the Alliander stakeholder panel
For the fifth successive occasion, Alliander has organised a stakeholder panel to review its Annual Report. We are pleased with Alliander’s invitation to its stakeholders to provide feedback on the annual report. In the following statement, we will summarise our feedback, which we believe will enable Alliander to gear the report more closely to the wishes and needs of the stakeholders.
Alliander is an organisation that faces a considerable challenge in the energy transition, and one with a unique social responsibility ensuing from its position as a regulated regional network monopoly company. These two facts combined make it extra important that Alliander engage in open and transparent dialogue with society. With this annual report, Alliander has chosen to clearly place the information presented in a context of value creation, which we welcome as a significant and exciting step. As a result, the information in the report provides a relevant and fascinating insight into Alliander’s activities and challenges. That said, the panel feels that the value creation angle could be more prominent in some areas. Alliander is a crucial link in the value chain, which carries with it a unique social responsibility. We feel that Alliander could position itself more clearly in this respect, especially on the fundamental choices that we believe will have to be made in the medium term for the sustainability of the energy system. If Alliander fails to clearly define its position, nothing will change. Followers always lag behind. The section about the systematic approach, for example, is good, but overly descriptive. Highlight Alliander’s contributions.
Greater emphasis on and insight into role and vision
Following on from the foregoing, the panel would like to read more about how Alliander defines its position and its vision. In our view, Alliander is not only an asset manager and an enabler, but should aspire to a more leading role. Identify the inconvenient truths and impediments slowing down the energy transition: the battle for the public space, the huge leap in scale required for electric vehicle charging, the rapid growth of data centres, the shortage of technicians, and how legislation and regulations are struggling to keep up. Explain where these issues are restricting network operators, especially given the choice for the value creation approach. Make the link to the greater good. Aside from that, it may be an idea to plot developments on a broader timeline and throw light on the required changes to the energy system, such as the specifics of the switch to local energy generation or the impact of electrification or the growing number of data centres. These are things that are currently generally only implied between the lines.
Selection of themes of material importance
In preparing the annual report, Alliander proceeds on the basis of the materiality analysis, which was made more restrictive last year. What stood out to us was that this more restrictive approach to the materiality analysis led to some of the themes selected being articulated differently, and that the focus is primarily an internal one. The theme of ‘Responsible communication and information’ just failed to make it into the top 15, while this is, in fact, a hugely important subject for customers if we consider it in light of the impact of the energy transition. Perhaps this can be covered in the report after all.
While Alliander is clearly committed to transparency, the stakeholder panel feels there is room for improvement here and there. With respect to certain activities, it is, for example, not always clear what role Alliander plays and whether or not partners play any kind of role, such as in the building of the prefab substation. It should, in our view, be possible to provide greater transparency on the safety risks to which contractors are exposed; Lost Time Injury Frequency (LTIF) data for contracted work and third parties are currently lacking. We would like to see that kind of data added. Furthermore, we feel that the activities are often described in a way that is overly focused on the process, without reporting on obstacles, solutions, or the desired perspective. Share the dilemmas and choices the organisation faces, such as by publishing projections on facts and myths surrounding the energy transition from the company’s perspective.
If there is one group of stakeholders who will actually read the annual report, it is the shareholders. What is missing from the report, according to the panel, is information about climate risks and the impact (direct and indirect) of this on Alliander. The annual report should include reporting on these risks in the spirit of the Task Force on Climate-related Financial Disclosure (TCFD). Although the report does cover the SDGs, it generally only goes into the positives, disregarding that some of Alliander’s activities may have a negative impact and undermine the SDGs. The report goes into where Alliander is doing well in pursuing SDGs, but it would actually be more valuable – also in terms of transparency – to show where things are not yet going so well. There seems to be quite some room for improvement on this front.
Topics missing from the report
As Alliander’s stakeholders, we are aware of several topics that are currently not or insufficiently covered in the report. Given the increase in localised energy generation, Alliander could be clearer on how the company gets customers involved in accelerating the energy transition. As far as the workforce is concerned, we understand that staffing is a challenge and that it has prompted Alliander to mount a major recruitment drive, but what is Alliander doing to retain staff? And what role does getting youngsters interested play in this context? Stepping up the focus on cybersecurity and privacy is also essential, as this is a rapidly emerging topic for governments. On a more detailed level, we would like to see more extensive notes on the impact on social capital. Legitimacy and social justice are important issues in the public debate around the energy transition: the current approach to the energy transition (and current legislation and regulations) and future gas-free heating supply will potentially lead to major price differences between cities and even between districts within cities, thus increasing social inequality.
A final word
Alliander strives for high quality in its reporting. Their reporting has improved significantly over the past years. We hope that our contribution will help to drive this improvement forward. Finally, we would like to thank Alliander for its attitude towards stakeholders, for giving us the opportunity to give meaningful feedback on the draft version of the annual report and for the substantive dialogue with the Management Board.
On behalf of the stakeholder panel,
Maarten Biermans – Sustainable Capital Markets Director at Rabobank, Lecturer at Webster University
Fries Heinis – General Manager of Bouwend Nederland
Yvonne Kemmerling – Chair of the FutureCity foundation, director and coach in the public domain, project consultant
Herman Mulder – Chair of the Impact Economy Foundation, Chair of SDG Charter, Chair of True Price Foundation, Ambassador of IIRC
Margot Weijnen – Scientific Director of Next Generation Infrastructures, Chair of Process and Energy Systems Engineering at Delft University of Technology
The stakeholder panel
The stakeholder panel that assists us with the annual report forms part of our ongoing stakeholder dialogue. We shared a draft version of the 2019 annual report with the panel members. The panel members responded in writing. Their input was discussed at greater length on 19 December 2019, in a meeting that was also attended by our CFO Walter Bien. The feedback was used to improve this report, and will also serve to further enhance the quality of our reporting. The stakeholder panel is independent.
Perhaps you, too, would like to talk to us about the annual report or the issues confronting Alliander. We are open to dialogue and also regularly organise roundtable sessions with our stakeholders. Please contact us on email@example.com.