Corporate Social Responsibility Report Essent 2007

2 0 07 C S R R e p o r t E s s e n t N.V.

Being sustainable together.

Sharing dilemma’s.

2007 CSR Report

TA B L E O F CO N T E N T S

Business is something that involves us all 4 We are society

06 Essent as an employer Diversity in development 50 Interviews

Profile 6

Monic Bührs, Marie-Christine Osterop Anouk Rasenberg, Margo van Berkel

01 Retrospective and outlook Retrospective 10 Outlook 18

07 Essent as a corporate citizen Committed to the community 62 Interviews

02 Corporate governance of CSR 20

Marco Grob, René Savelsberg Annemarie Moons, Gijsje van Honk

03 Structure of the report and accountability 24 08 Measuring sustainability 74 04 Essent as a business operator Tomorrow’s energy 26

09 Assurance Report 78

Interviews Paymon Aliabadi, Gerard Hirs Johan van de Gronden, Richard Schmölzer 05 Essent as a market player Weighting sustainability 38 Interviews Johan Maris, Helma Kip Kornelis Blok, Nico Roozen

Essent N.V.

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Business is something that involves us all

We are society This was the guiding principle in 2007 that helped us to even deeper entrench Corporate Social Responsibility (CSR) in our corporate policies and our business practices. The Business Plan, which defines a number of explicit CSR targets, was an important tool in that regard. In 2008 we will continue to translate these targets into concrete measures for each business unit, including key performance indicators (KPIs) and target values.

Announcing new policies is not enough, not when it comes to CSR either. An enterprise also has a responsibility to report on the degree to which its policies have been executed.

For this reason, we published our first separate CSR Report (for 2006) in 2007. This explicit report on our CSR efforts allowed us to initiate highly concrete discussions with our internal and external stakeholders about our ambitions. In addition, the publication of the report resulted in a gratifying rise of Essent’s position in the annual Transparency Benchmark of the Dutch Ministry of Economic Affairs.

Our CSR policy is continually gaining momentum thanks to our dialogue with stakeholders. We try to align our policies to their expectations as much as we can by listening carefully to their recommendations and criticisms. In this report, sixteen internal and external stakeholders present their opinions on topics that matter to Essent, including energy technology, the use of bio fuels, staff diversity and our regional anchorage. We will take their comments to heart where possible when planning any future steps.

Staff commitment is an absolute prerequisite for the success of our CSR policy. After all, it is our collective staff who help us achieve our ambitions. In 2008 we will launch an internal campaign with a view to bolstering our staff’s inspiration and motivation. Spurred on by the campaign motto ‘How on Earth’, every staff member will be asked to join in on activities to literally improve the social climate both in and outside our company.

2008 is promising to be an earth-shakingly dynamic year!

Arnhem, the Netherlands, 27 February 2008 Michiel Boersma Chairman of the Executive Board

4 Essent N.V. 2007 CSR Report

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Profile

Essent is a Dutch energy company that supplies electricity, gas and heat to private and business customers. While regarding the Netherlands as our home market, we are also increasingly active in Germany and Belgium.

Essent’s operations cover the entire energy chain, from the generation of energy – excluding exploration and extraction – to supplying products and services to end-users: large and small businesses, and private consumers. We also supply a

Energy chain

generation

trade

infrastructure

sales

electricity

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variety of products and services, such as equipment

The 2007 figures show that in the Netherlands Essent is:

maintenance, energy advice, heat, operating sustainable

■

the market leader, with revenue of EUR 7.4 billion;

energy facilities and micro-cogenerators. We are also

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the leading producer and supplier of sustainable energy;

engaged in three waste management activities:

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owner of Energie:Direct, one of the country’s fastest

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leading with its waste management operation, processing

growing energy start-ups;

waste incineration, waste composting and landfill management. On 1 February 2007, Essent Kabelcom, a supplier

approximately 2.9 million tonnes of waste a year.

of cablecom and telecom products, ceased to be a part of the company.

Essent is a non-listed public company with limited liability.

It was incorporated in 1999 and has its head office in Arnhem.

Its shareholders are Dutch provincial and municipal authorities. The company comprises 10 business units, 7 of them forming the Energy Value Chain for the Netherlands, Germany and Belgium. The remaining operations in Germany are conducted by swb. The network operation is financially, organisationally and legally separate from the other activities of the company. At year-end 2007, the size of Essent’s workforce was over ten thousand.

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Revenue per segment - continuing operations Ă? LQ PLOOLRQV RI HXURV 2007

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(890.7) 2006

6,441.6 4,588.4 1,241.6 380.2 1,055.6 (824.2)

2005

5,889.6 3,543.8 1,276.2 362.4 993.0 (285.8)

Revenue per country - continuing operations LQ PLOOLRQV RI HXURV 2007

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8 Essent N.V. 2007 CSR Report

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People Number of employees1

2007

2006

10,223

9,832

% of women

27

27

% of women in management positions

14

14

% absenteeism rate due to illness DART-rate

Planet

Proét

4.2 1.09

2007

Number of suppliers who have signed Supplier Code of Conduct Donations (in euros)

4.3 0.97

2006 88

15

300,000

300,000

2007

2006

in millions of euros

Revenue

7,378

6,442

Profit attributable to equity holders of Essent

2,594

761

Total equity

5,175

3,414

724

1,620

8,204

6,559

Total interest-bearing liabilities Capital employed

Power

2007

2006

Total sustainable generating capacity (MW)

1,042

% of sustainable energy in total generation

10.0

15.2

927,000

936,000

Number of green for gas customers in the Netherlands

25,000

15,300

CO²-emissions (Ktonnes)2

14,625

14,496

48

33

Number of green electricity customers in the Netherlands

% of solid biomass bearing EGGS label 1

In FTes excluding Essent Kabelcom

2

Emission orginating from electricity and heat generation according to Essentownership share, excluding emissions from Essent Milieu and Essent Networks

9 Essent N.V. 2007 CSR Report › Profile

1,065

01 Retrospective w w w. e s se n t . e u

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Retrospective and outlook

the first results are in

international benchmark

After a thorough exploration in 2006, 2007 was our first

The road map towards achieving our CSR goals is based on

real policy year in terms of Corporate Social Responsibility.

the following seven strategic principles, which were defined

People, Planet, Profit and the fourth P for Power, which we

in 2006:

added ourselves, became serious business. CSR was firmly

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in the Boardroom. Our Business Plan for 2007 was the first

promoting sustainable development and limiting climate change

cascaded throughout the organisation, on the shop floor and ■

strengthening our competitiveness in the countries in which we operate

of its kind to include a chapter on CSR policy.

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ensuring that our suppliers observe internationally

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raising the rate of labour participation for groups that

our CSR Policy Plan 2007-2010. The Plan identifies three key

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raising the quality of work at Essent

policy areas: energy conservation, innovation and employ-

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raising the quality of life in our environment/surroundings

ability. It is encouraging to see that already good progress

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improving safety.

Two major steps were taken immediately at the beginning of

agreed human rights

the year: the introduction of the CSR Advisory Board and the appointment of CSR Ambassadors to the various business

are currently underrepresented within Essent

units. These steps set the stage for the implementation of

was made in all three areas in 2007. Examples included the Essent Energy Conservation Plan launched in cooperation

In June 2007 we conducted a review of these strategic princi-

with our shareholders, the approval of our innovation strat-

ples. We were interested to find out whether they sufficiently

egy, and the willingness on the part of Essent – traditionally

underpinned Essent’s ambition to be a leading sustainable

a male-dominated company – to introduce measures to ‘get

energy company. The conclusion was that, in order to allow

women to the top’.

for a useful comparison with peer businesses, we needed to

These are but a few remarkable milestones that we will dis-

model our CSR strategy on international standards. For this

cuss elsewhere in this report.

reason, we transformed our seven strategic principles into the following nine key policy areas, which now make up the core of our CSR policy:

10 Essent N.V. 2007 CSR Report

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pursuing the best options together: nationally and globally

We are keen to opt for sustainability, and our choice to do so is a conscious and deliberate one. This is not to say, however, that we intend to map out each and every route on our own.

Because the challenges are so substantial, we need to join forces. What is more, if we team up with others, we can send a strong signal to the market, influence developments, and show society what we stand for.

The Schokland Agreement was an important milestone in this regard. On 5 July 2007 Michiel Boersma, the Chairman of the Executive Board, signed this agreement with the Dutch government on behalf of a consortium of twenty companies, centres of excellence and non-governmental organisations in Schokland, a former island in the IJsselmeer. The parties to the agreement pledged to develop sustainability criteria for biomass imports, including a certification system. What is important is that we can offer the guarantee that the biomass we use at our plants is sustainably produced and traded in its country of origin. This allows us to make a contribution of our own towards eradicating extreme poverty and hunger.

And we are promoting a sustainable living environment and fair trade at the same time.

The Schokland Agreement is part of Project 2015, a project launched by the Dutch government to make up for the delays encountered in achieving the eight Millennium Development Goals. The parties to the agreement have pledged to put in place an adequate certification system within six years.

During that time, pilot projects will also be carried out in exporting countries to promote local knowledge of sustainable ■

emissions reduction

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share of renewable energy in the fuel mix

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energy conservation, including efficient use

regional base, regional responsibilities

of base materials and fuels

Essent has traditionally had regional roots and the provincial

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innovation and knowledge management

authorities and town councils in our original area of opera-

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customer satisfaction and quality labels

tion are still our shareholders. We owe it to this region to

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good employership

take responsibility, preferably in cooperation with our share-

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human rights

holders.

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corporate citizenship

Early in 2007, working with our shareholders, we developed

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occupational health and safety.

the Essent Shareholders Energy Conservation Plan. Its aim is

biomass production.

twofold: to curb carbon emissions by conserving energy and Late in 2007 Essent was benchmarked against other large

moving towards sustainability, and to reduce our customers’

energy companies in Europe based on the Dow Jones

monthly bill through energy conservation. The Plan focuses

Sustainability Index (DJSI), the leading global index tracking

on three target groups: households, our shareholders (with

the sustainability performance of listed companies. Essent

their buildings, facilities and related non-profit institutions),

is the first Dutch energy company to have its sustainability

and the corporate market.

performance benchmarked based on the DJSI criteria.

We work with each shareholder to draw up a personalised

The outcome, which will lay the groundwork for our policy in

Conservation Plan, but we also offer them the possibility of

2008, provided a mixed picture. The most important conclu-

shared implementation to achieve economies of scale.

sions were that Essent could stand the comparison with

We have earmarked a multi-year budget for the Plan:

other European energy companies where the economic and

EUR 5 million in 2007 and EUR 10 million in 2008. The budget

social dimensions are concerned, but that there is room for

for 2009 will be set after an evaluation is conducted in 2008

improvement in respect of the environmental dimension. Our

(for further details, see chapter 7).

climate strategy, in particular, is an area where fine-tuning is in order (for further details, see chapter 8).

11 Essent N.V. 2007 CSR Report › Retrospective and outlook › Retrospective

w w w. e s se n t . e u Poster sent to all staff

Poster announcing the

together with Al Gore’s ďŹ lm

introduction of fair trade coffee

‘An inconvenient truth’.

within Essent.

Een ongemakkelijke waarheid.

Maar ook een uitdagende.

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Maatschappelijk Verantwoord Ondernemen

staff commitment

car mileage, making our ďŹ&#x201A;eet of cars more environmentally

A CSR policy can only thrive in a company whose manage-

friendly, double-sided printing, and offering fair trade coffee.

ment leads the way and whose staff feel engaged with the

Another idea that was raised was for staff to volunteer as

policy objectives. CSR warrants debate, about the need for

energy conservation ambassadors and promote sustain-

sustainable operations and about the choices to be made in

ability in their respective communities.

the process. In March 2007, to stir up the debate, we sent all

The enthusiasm among our staff justiďŹ ed a number of

of our staff a DVD of Al Goreâ&#x20AC;&#x2122;s ďŹ lm â&#x20AC;&#x2DC;An inconvenient truthâ&#x20AC;&#x2122;.

follow-up actions. First of all, we analysed the results of the

The ďŹ lm triggered lively discussions within the company

meetings and broadly communicated our ďŹ ndings through-

and awareness grew that â&#x20AC;&#x201C; as an energy company â&#x20AC;&#x201C; we ďŹ nd

out the organisation. We also decided to develop two pro-

ourselves at the heart of an unprecedented change process.

grammes, more speciďŹ cally: â&#x20AC;&#x2DC;Sustainability insideâ&#x20AC;&#x2122;

And that is a process that we actively need to mould

(Binnengoed, covering CSR in our ofďŹ ces) and â&#x20AC;&#x2DC;Essent

and shape.

carbon-neutralâ&#x20AC;&#x2122; (Essent CO2-neutraal, aimed at our own energy consumption and mobility).

responsible food choices and in-depth debate about credibility

sustainability, inside and out

In order to further entrench CSR in the organisation and our

The Binnengoed programme, which is intended to get our

day-to-day operations, we organised ten lunch meetings

CSR house in order, proposes a two-step approach.

with staff at various Essent sites between 10 May and 25

The ďŹ rst step was to implement a quick-win programme

June 2007.

aimed at raising awareness and delivering relatively easy-

During these lunches â&#x20AC;&#x201C; where, obviously, responsible food

to-achieve results. September, October and November

choices were on offer â&#x20AC;&#x201C; staff were invited to express their

2007 were campaign months, each with their own individual

views on CSR. The most important conclusion drawn from

theme. September was the month of the hallmarks.

these meetings was that we have to put our words into action Essent introduced Max Havelaar fair trade coffee and FSC within the company as well, and ensure that we get our own

paper, among other things. October was recycling month,

CSR house in order. Examples put forward included reducing with special emphasis being placed on the reuse of com-

12 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u Tamme Wierenga (Essent Manager Information Management), Marga Edens (Essent Manager CSR) and Olivier Vanden Eynde (General Manager of Close the Gap) present the 50,000th computer to Desmond Tutu, the South African bishop.

puters, mobile telephones, office furniture and suchlike.

CO2 neutrality, a responsibility that comes

Vitality was the theme of the month in November. In a pilot

with our position

carried out at a large Essent facility in Den Bosch, we gained

If, at Essent, we want to be recognised as leading the way in

experience with healthy foods and a company workout plan.

making our communities more sustainable, we will have to

The second step is more strategically oriented and consists put our own affairs in order first. CO2 reductions and carbon of four stages. First of all, we will take stock of the current

offsetting are key issues in terms of the environment and

situation (which products and operations do we have), and

our reputation as a company. If we work hard to offset the

explore the savings potential (both with regard to environ-

carbon emissions caused by our car fleet and buildings, we

mental and cost aspects). Next, we will look at the possibili-

can bring home our message of sustainability to our custom-

ties of replacing existing products with sustainable ones and, ers and raise their awareness. Our staff also expect us to set finally, we will decide what items qualify for recycling. The

a good example. It is a matter of credibility.

entire programme runs from 2007 to 2009 and is designed to

That is why we have launched two action plans. The first one

deliver maximum environmental benefits in combination with is aimed at offsetting the carbon emissions caused by our car cost savings.

In 2007, aside from introducing fair trade coffee, we

fleet, and the second at reducing energy consumption in our buildings.

achieved several other notable results. We made a start with double-sided and black-and-white printing. Another high-

towards a CO2-neutral car fleet

light was our offer of used computers to Desmond Tutu, the

In 2007 the Essent car fleet (industrial vehicles, leased cars

South African bishop, in the autumn of 2007 as part of the

and charged business mileage clocked up in private cars)

Close the Gap project to tackle poverty by bridging the digital caused around 16,000 tonnes of CO2 emissions in total. Our divide with developing countries.

previously introduced - rather symbolic - policy of planting

Looking ahead to 2008 we will work to make our catering

a tree for each newly leased company car illustrates that we

and cleaning product groups more sustainable.

are keeping our attention focused on the need for sustainability. It is now underpinned by a massive carbon-offsetting scheme involving our entire fleet of cars. In 2007 the decision

13 Essent N.V. 2007 CSR Report › Retrospective and outlook › Retrospective

w w w. e s se n t . e u

was taken to offset our carbon emissions of 16,000 tonnes in full. This involved an amount of EUR 350,000 in renewable energy certificates.

We will, of course, make every effort to reduce car mileage.

We expect further incentives to use train services to reduce car mileage by 6.5%. Even greater savings would appear to be feasible by taking additional measures aimed at limiting business travel through behavioural changes and making facilities such as video-conferencing available on a larger scale. Plans are being developed to achieve this.

In 2008 the cost of offsetting carbon emissions caused by the car fleet will be regarded as ordinary business expenses.

With this, we have incorporated our CSR policy into our ordinary business activities. towards CO2-neutral business premises

In making our office buildings more sustainable, we are using the same method as the one applied to the Binnengoed project. First of all, we take stock of the current situation at each of our sites (energy consumption, contracts, nature of the buildings, etc.), and identify the opportunities for energy conservation and limiting carbon emissions. Next, we look at where we can use renewable energy instead of conventional energy. Finally, we offset what carbon emissions remain.

14 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

what others think of us

However hard we try to put in place a sound CSR policy, we cannot rule out the possibility of overlooking one or two things, or misinterpreting the expectations of others. That is why we regularly gauge the opinion of parties operating in the area of CSR to find out what they think of our policies.

We have placed the dialogue with our stakeholders at the heart of these feedback efforts. In 2007 we chose to focus on four issues, i.e. palm oil, emissions reduction, energy conservation and human rights.

The first step was to commission the Good Company research and consulting firm to send out questionnaires to five influential stakeholders: the World Wide Fund for Nature (WWF), the Dutch National Forest Service, two Dutch nature conservation and environmental protection groups (Natuurmonumenten and Natuur & Milieu), and Amnesty International. To ensure maximum objectivity, it was explained to the stakeholders that they were asked to give their opinion on the sustainability policies of power companies.

They did not know that the questions were being asked on Essent’s behalf.

The findings showed that the four environment-oriented stakeholders appreciated the greater openness on the part of the energy industry. They also saw encouraging sustainability initiatives in a number of companies.

Otherwise, the stakeholders were mostly critical. They commented that energy companies should invest more of their substantial profits in innovation, sustainability and energy conservation, and certainly not in coal-fired power stations.

Using palm oil as a biofuel was considered non-sustainable, In the fourth quarter of 2007, we began implementing the

and promoting green gas was referred to as window dress-

first and second stages of the plan by introducing an energy

ing. Moreover, they felt that energy companies should take

management system. The system enables us to analyse en-

responsibility for the entire energy chain and channel more

ergy consumption levels in our buildings and identify areas

efforts into small-scale power generation and energy con-

where savings can be achieved. We expect to be able to

servation tips. Also, energy companies should go to greater

reduce our energy consumption by 10% to 20% and curb car- lengths to fulfil their social role, for example with regard to bon emissions further through additional measures. Further details will probably be available in the first half of 2008.

It could be argued that stage four of the plan is unneces-

payment arrears.

Late in 2007, on the basis of these findings, we initiated a dialogue with a number of these stakeholders to share and

sary. After all, if we take stage three of the plan seriously and

explain our views, and to explore in what areas we might join

use renewable energy across the company, there will be no

forces in moving forward. More specifically, Essent and the

CO2 emissions left to be offset. However, the actual situation

Dutch National Forest Service will explore ways of expanding

is more complex. Biogas is available only to a very limited

their current alliance through small-scale initiatives de-

extent, green gas is in itself a form of offsetting and generat-

signed to bring sustainability closer to the public. As regards

ing capacity for green electricity in the Netherlands is not

palm oil, we will use the findings of the Blok Committee,

keeping pace with demand. Encouraging even more imports

which considers the phased-in certification of palm oil to be

is not one of our objectives. It seems likely, therefore, that we

a feasible option (see chapter 5).

will have to offset a residual level of CO2 emissions.

In the dialogue on human rights, Amnesty International

As with the Binnengoed programme, we aim to achieve maximum environmental benefits coupled with cost savings.

urged power companies to look at issues such as working conditions on palm oil plantations, planting CO2 offset for-

This is not only good for our wallet, but also provides appeal-

ests in areas where people are forced out of their homes,

ing examples for external campaigns. Clearly, customers will

and the production of biomass at the expense of food crops.

more readily invest in environmental care if the measures

We believe, however, that our Supplier Code of Conduct

taken yield returns.

(see chapter 5), which imposes requirements on all of our suppliers, provides sufficient safeguards. We have, therefore,

15 Essent N.V. 2007 CSR Report › Retrospective and outlook › Retrospective

w w w. e s se n t . e u

decided not to home in on the issue of human rights for the time being.

The dialogue with stakeholders about CSR is not, of course, limited to NGOs. Regular customer surveys (households and corporate customers) and customer forums keep us apprised of their opinions. We also liaise with our shareholders; not only during regular meetings, but certainly also in connection with the Shareholders Energy Conservation Plan.

It goes without saying that the views of our employees count heavily in our CSR policy. Our annual staff survey consistently features CSR aspects. And we are in constant dialogue with our staff, at the lunch meetings referred to earlier and during long-distance walks on the Pieterpad trail. walking our way to sustainability

The Pieterpad trail, a legendary walking trail from Pieterburen in the northern province of Groningen to Sint Pietersberg, a hill near Maastricht in the south, more or less covers the company’s original area of operation. Because walking clears the mind and loosens the tongue, we organise walking trips for groups of employees along the Pieterpad trail (day

Five members of Impulse!

walks) to encourage them to speak out on important issues.

an affiliate of

In 2007 the walks revolved around the theme of CSR.

Young Leaders for Nature

To many participants, CSR was initially a very broad and, hence, somewhat abstract notion. But as the walks went on, they gradually got to grips with it. It quickly turned out that there was great willingness to contribute to CSR, and that many staff underestimated their own potential where CSR was concerned. Frequently heard comments included: “I’d like to, but I’m sure my boss thinks it’s nonsense,” and,

group will fit out the Arboretum in Eenrum (in the northern

most often, “the company’ll have to foot some of the bill

Province of Groningen) with a solar power system. Another

then.” However, our staff proved during these walks that

group will try to set up a small-scale hydropower system

their influence was greater than they had initially expected.

at a restaurant in Denekamp (in the Province of Overijssel).

It has led to several great projects and suggestions for

The walks also produced many useful tips for our in-house

improvement. On one of the walks, we were joined by Profes- Binnengoed campaign. sor Arjo Klamer, Professor of Cultural Economics at Erasmus University Rotterdam, who put a philosophical angle on the

once learnt ...

relationship between CSR and behaviour. The upshot was

CSR will thrive only if it embraced by everyone at the compa-

that we perform best if we feel part of a group and are emo-

ny. Impulse!, the association of Essent Management Train-

tionally involved with issues.

ees, did so whole-heartedly. The young members of Impulse!

A visit, on one of the walks, to Ben & Jerry’s, a company

joined the Young Leaders for Nature, which was founded

known for its sustainability efforts, showed that Essent can

in response to an open letter from the crème de la crème of

be proud of the progress we are making.

the Dutch corporate sector to the newly to be formed Dutch

The overall conclusion drawn from the 18 walks in 2007

Cabinet (in December 2006). The open letter was an initiative

was that we must, first and foremost, have faith in our own

of Leaders for Nature and encouraged the Cabinet to pursue

capabilities.

an active government policy on corporate sustainability.

Our walkers rolled up their sleeves and got down to some

The Young Leaders for Nature subsequently sent an open

physical work as well, pitching in and making themselves

letter of their own, saying that they themselves were willing

useful as a group. In the early autumn of 2007, for example,

to make a contribution to their companies’ CSR policy.

they built a trail in the Goudplevier nature reserve in the

The letter was presented to the CEOs of 23 large Dutch com-

Province of Drenthe, and in Maastricht the walkers success-

panies, including Essent, in November 2007. Early in January

fully arranged for high-efficiency boilers to be fitted at the

2008, as a follow-up, the Young Leaders for Nature staged

Toon Hermanshuis (a home for terminally ill cancer patients). a forum in Utrecht, where they engaged in a debate with Walkers also took on voluntary obligations. In 2008 one

16 Essent N.V. 2007 CSR Report

members of the Board of their respective companies. Fifteen

Essent members of Young Leaders for Nature took the

These actions have led to the firm anchoring of CSR in our

opportunity to make four solid agreements with the

formal organisational structure and its integration into our

Executive Board, represented by Rinse de Jong, and with

standard planning & control cycle. CSR is no longer a

CSR Manager Marga Edens.

maverick policy proposition. Instead, it has become part and

Under the first agreement, the Essent Young Leaders for

parcel of our day-to-day ideas, actions and reporting

Nature will help raise CSR awareness throughout the

practices.

company (People). The second agreement involves the introduction of a CSR funnel that will help to translate ideas suggested by Essent staff into concrete decisions and actions (Planet). Under the third agreement, Essent will review its investments against CSR criteria as well as against profitability goals (Profit). The fourth agreement will see the Essent Young Leaders for Nature work towards bringing Essent at the forefront by having the car of the future powered by green electricity (Power).

CSR is business as usual

2007 was our first true CSR policy year, which is also evidenced by the fact that CSR has now become a permanent feature in our business plans. In the overall Essent Business Plan 2008 we have, for the first time, included a chapter on CSR policy and our business units, for their part, were invited to include a CSR chapter in their respective business plans, showing what policy and practical input they plan to con– tribute to our joint CSR policy.

17 Essent N.V. 2007 CSR Report › Retrospective and outlook › Retrospective

01 Outlook w w w. e s se n t . e u

Retrospective and outlook

more challenges ahead

spearhead CSR efforts. In practical terms, this strategy

Although we are very pleased that CSR has become a fully

is reflected in the CSR Department’s plan of action:

fledged part of Essent policies and the day-to-day activities of our staff, we cannot afford to rest on our laurels. The chal-

energy market

lenges – at local, national and global level – are increasing.

■

what we have accomplished so far. There is still much to be

43% of customers will start to use green electricity (Groene Stroom)

Moreover, our ambitions in the area of CSR extend beyond ■

35,000 customers will start to use green for gas (Groen voor Gas)

achieved in 2008. strategy fine-tuning

sustainability

In 2008 the main aim of our CSR strategy will be to strength-

■

encourage torrefaction* and prepare Essent

■

set up new offset projects for green gas

en CSR as a guiding principle in our strategy, business policies and day-to-day operations, so as to ensure that

for the use of torrefied biomass

Essent becomes a sustainable energy company.

In all of this, we will continue to adhere to the nine strategic

awareness

principles defined at the beginning of this chapter. The CSR

■

launch a CSR campaign targeting our employees

Department’s role is to inspire, initiate and coordinate, and to cascade CSR throughout the organisation by: ■

raising awareness and actively involving our staff and;

■

encouraging the business units to develop commercial products and services in line with our CSR policy.

Key projects include improving the internal and external visibility of our CSR policy, gaining acceptance among different stakeholders, and launching internal and external projects to

18 Essent N.V. 2007 CSR Report

* see figure at page 36

placing the world centre-stage

After the summer of 2008 we will launch a major in-house campaign. Our aim will be to encourage greater awareness among staff in terms of sustainability, and promote Essent’s newly defined core values. We will need to attribute meaning to these core values – Pro Active, Accountable, Cooperative and Delivering – in order for them to be put into practice.

Our core values should guide us and set us on the right track in everything we do and what we believe in. If we are as committed to sustainability as we say we are, we must have the courage to ‘sustainabilise’ our core values as well. Only then can we expect to be able to fully appreciate the value of the sustainability pillars underpinning our strategy and will we be better equipped to act accordingly.

The campaign we have in mind will place the world centrestage. The overriding question is what we are going to do to stop climate change. That is why we have named the staff campaign ‘How on Earth.’ It revolves around two main themes: energy consumption and mobility.

We will start by sharing knowledge and then move on to changing people’s behaviour. Things are bound to get serious at times, but we have no doubt that the campaign will make for some enjoyable and festive activities as well. Let us move forward with fresh spirits and build a shared future.

19 Essent N.V. 2007 CSR Report › Retrospective and outlook › Outlook

‘How on earth’

02 w w w. e s se n t . e u

Corporate governance of CSR

A number of the about 70 CSR ambassadors

We regard CSR as business as usual, which is why we apply

Our approach:

the same corporate governance practices as we do to Essent

5 We operate with integrity

in general. Our corporate governance policies are enshrined

6 We ensure a healthy and safe working environment

in legislation and the Dutch Corporate Governance Code;

7 We ensure that the company adheres to well-defined

for details on our corporate governance, we refer to our

corporate governance practices

financial annual report.

8 We stand for free enterprise and fair competition

Sound corporate governance is rooted in good business

9 We set the same standards for our business partners

practices and good governance. At Essent, we take it one

that we set for ourselves

step further, claiming that good business practices are socially responsible business practices.

In our business dealings, we adhere to a set of CSR-related

And: good governance is socially responsible governance.

conditions of purchase, which we refer to as the Supplier

These are our principles.

Code of Conduct. With this Code, we seek to guarantee that our suppliers’ operations are socially responsible as well.

Code of Conduct

The Essent Code of Conduct, which gives guidelines for

whistleblowers’ arrangement

our daily actions, is based on our views of good governance

The whistleblowers’ arrangement offers employees who

and CSR.

suspect irregularities the opportunity to report their suspicions without this affecting their employment situation.

Our responsibilities:

Counsellors have been appointed to protect employees who

1 Our customers can always depend on us

have reported a suspected irregularity by not disclosing

2 We provide optimum value growth for our shareholders

their identity and overseeing that they do not experience any

3 Our employees can count on respect and trust

adverse consequences in their employment situation.

4 We live up to our social responsibility

No reports under the whistleblowers’ arrangement were filed in 2007.

20 Essent N.V. 2007 CSR Report

new positioning, new core values

The Advisory Board assists the Executive Board by offering

In the autumn of 2007, after the merger talks with Nuon had

recommendations about CSR policies and policy execution.

failed, we considered our positioning in the market. One of

Key topics addressed by the Advisory Board in 2007 were the

our key findings was that we need to raise our profile in the

CSR controls that are in place, the dialogue with our stake-

market as an enterprise that is truly concerned with sustain-

holders, the extent to which Essent wants to be involved in

ability and innovation. This has shifted the Essent core values projects in developing countries and Essent’s position on the more towards our corporate social responsibility and the practical aspects that go with it.

CO2 emissions market.

Secondly, we appointed CSR Ambassadors early in 2007.

In order to allow ourselves to tackle the new challenges,

The some 70 Ambassadors, volunteers from all echelons of

we have fine-tuned the Essent core values to Pro Active,

the organisation, are the vanguard of CSR within Essent.

Accountable, Cooperative and Delivering. These core values

They are the first point of contact for CSR in the organisation.

form a daily source of inspiration for our staff and all our

In addition, their job is to identify and inspire. All 70 Ambas-

partners. How do we operate? Well, this is how!

sadors meet four times per year to exchange information and make recommendations. They also serve as panel chairs for

anchoring CSR

the Pieterpad walks. In the spring of 2007 they were closely

As indicated, we want to position Essent as a leading and

involved in organising the CSR lunches.

sustainable energy company by using our CSR policy as

The result of these two actions is that CSR has already

a leverage. Obviously, it is the Executive Board that has a

been pretty firmly anchored in our operations. CSR is starting

policy-defining role, but their efforts would be wasted if their

to become our ‘green’ leitmotiv.

policies were not broadly anchored in our operations. That is why two actions were taken.

First of all, we formed a CSR Advisory Board early in 2007.

CSR in the Essent Business Plan

We have included a separate CSR chapter containing

This Board, on which business unit directors, heads of

company-wide targets in our Business Plan 2008 – which

corporate services departments and specialists are seated,

was drafted in the autumn of 2007 – in order to allow CSR to

is chaired by the Chairman of the Executive Board.

take further root in our organisation. In addition, all business

21 Essent N.V. 2007 CSR Report › Corporate governance of CSR

w w w. e s se n t . e u

units were asked to include CSR targets in their individual

much to be gained from well-defined targets and putting

business plans for 2008. These were based on a conversion

in place internal process controls.

of the nine CSR policy spearheads into the activities of the separate business units.

We will keep close track of the execution of the plan in 2008 and fine-tune it where necessary.

international alliance

Although it does not come under corporate governance, a step that ties Essent even closer to CSR is our membership

Thanks to its broad positioning within Essent, CSR is increas- of UN Global Compact, an international initiative that brings ingly becoming a regular aspect of our business, including

companies together with the United Nations, labour and civil

the planning & control cycle. It is becoming ‘business as

society to support ten universal principles in the areas of

usual’.

human rights, labour, the environment and anti-corruption.

Soon after it was established, we have entered in 2007 the

CSR in the Corporate State of the Risk

Dutch Chapter of Global Compact. So far, Essent is the only

Essent prepares the Corporate State of the Risk a number of

Dutch energy distribution company to become a member of

times per year. It is an aspect of our risk management policy

Global Compact.

that gives us an understanding of the key risks to which our

The CSR report for 2008 will be Essent’s first ‘Communica-

business is exposed and the options that we have to mitigate

tion on Progress’ report, a CSR report in accordance with the

them.

Global Compact methodology.

All business units and corporate services departments assess their risk potential and the related implications, if any.

This includes operational risks, occupational health and safety (HSE) risks, economic risks, risks due to changes in legislation and reputational risks.

In line with the idea that CSR is an integral part of our ordinary activities, we started to introduce CSR aspects to this risk assessment in 2007. In doing so, we made allowance for elements in our operations where CSR plays a role and where risk exposures might exist. One of the conclusions was that the embedding of CSR in our ordinary activities helps to identify, understand and reduce potential risks. There is

22 Essent N.V. 2007 CSR Report

03 w w w. e s se n t . e u

Structure of the report and accountability structure

accountability

The lay-out of this report reflects the progress Essent has

This CSR Report was prepared in accordance with the

made in anchoring CSR in the organisation. Whilst the report

principles of the Global Reporting Initiative (GRI). We have

for 2006 was principally a broad and in-depth overview

modelled our report on the G3 Guideline for the definition

of overall CSR aspects, this report for 2007 is much more

of the key GRI indicators. We refer to our website for a list

attuned to material issues and the resulting dilemmas.

of indicators used and details on the application of the GRI

In this report, we have maintained the approach based on

Application Level Criteria. In defining the scope of this report,

the four roles that characterise Essent’s position in society:

we relied on the GRI Boundary Protocol – a reference docu-

a business operator, a market player, an employer and a

ment for establishing the boundaries of a social responsibility

corporate citizen. We have foregrounded the most urgent

report. For the purposes of describing our performance and

dilemma that comes with each role.

disclosing the required information, we reviewed the relevance of our operations, the degree of control exercised by

the business operator

Essent and the materiality of the information.

tomorrow’s energy what do we do and what don’t we do?

scope

Our report addresses the CSR activities of Essent N.V. in the market player

2007. The fact that we are an energy company takes centre-

measuring sustainability

stage. For this reason, the activities of Essent Waste Man-

how sustainable is palm oil?

agement – a business unit specialising in waste processing – have only been included to a limited extent. We have not

the employer

included our minority interests (of 50% or less) in this report

diversity in development

either. Although we concentrate mainly on the Netherlands,

where are those women?

we do partially report on our German associate swb AG, a 51% participation. We have also included disclosures on our

the corporate citizen

wind-related activities in Germany.

regional involvement

The summarised financial information relates to the Essent

sugar daddy or partner?

organisation as a whole, including associates and activities in the countries where we operate. Obviously, there are excep-

In addition, this report addresses a number of remarkable

tions. Being an energy company, we report on energy. That

trends and looks ahead to 2008 where this is relevant.

is why we have taken account of the electricity production of

Where the format is concerned, we have basically opted

our associates, in proportion to our shareholdings. The same

to publish two reports, a print and an online version. After

goes for Essent Waste Management, which also generates

all, the Internet allows us to elaborate on developments in

energy from waste.

our performance throughout the year and leaves more room

We will also highlight our 50% interest in EPZ NV, operator

for background information. We post all information about

of the Borssele nuclear power station among other plants,

Essent, our power stations, wind farms and activities on our

because of its exceptional nature.

website, including the related figures. These figures ultimate- Energy production causes emissions. Therefore, our report ly demonstrate our ambitions, the progress we make

contains the most important – CO2 – emissions data of all our

and the level of our success. This print report is a summary

associates. Not included are the (limited) emissions caused

of key issues. For more detailed information, please log on to

by Essent Networks due to the transport of gas or the offset of

www.essent.eu.

resistor losses due to the transport of electricity. The emissions caused by waste incineration and waste storage by Essent Waste Management are not included either. Safety is

24 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

a concern for everyone at Essent. Our safety performance,

a range of consultative talks between all echelons of the

which is expressed in the DART rate, comprises all Essent

organisation and with various stakeholders; open interviews

business units and swb AG. It does not include the ďŹ nancial

give an impression of our stakeholdersâ&#x20AC;&#x2122; opinions on our ap-

minority interests where Essent has no control over the day-

proach to these dilemmas. And on policy-related matters, we

to-day operations.

consulted with our workforce, specialist corporate services

Our staff base is perhaps our most important source of

staff, business unit directors and the Executive Board. Our

energy. In addition to the number of people (in FTes) that

ďŹ ndings from these consultations make up the more qualita-

Essent employs, we also look speciďŹ cally at age composition, tive section of the report. absenteeism, the ratio of male to female employees and a

We have also included ďŹ gures and trends, as well as, in

range of other issues. Our analyses pertain to our own work-

many instances, comparative data. The more quantitative

force, but to temporary workers as well. Staff employed by

information originates from standard sources and reporting

swb AG in Germany, Essent Belgium en Energie:Direct (both

systems. The summary of the ďŹ nancial information is based

of which are divisions of the business unit Service & Sales),

on our ďŹ nancial annual report, which is published separately.

the newly acquired Westland Energie Services, our minority external validation

interests and interns are not included in these analyses.

It is of the essence that the information contained in this data collection

report is complete, accurate and transparent. That is why

Our report describes the efforts that we put forth in 2007.

we have asked Ernst & Young Accountants to issue an

Most of the information contained in this report deals with

Assurance Report on this report. It is currently being

the way in which we have embedded CSR in our business

reviewed whether (parts of) the online report could also

and the dilemmas that we faced in the process. We hosted

be certiďŹ ed.

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3 Staff employed by associates are not included unless equity interest exceeds 50%.

4 Socially relevant activities are attributable to a limited extent only to individual business units. Activities undertaken by swb AG are not included.

5 Relates to CO2 caused by energy-generating emissions by associates whose interests are represented for Essent by the Business Development business unit.

6 Relates to the wind energy activities in the Netherlands and Germany only.

7 Includes the operations of Essent Belgium and Energie:Direct. Relates to the green electricity, Business green electricity and green for gas products.

8 Included in total number of FTes employed by Essent. Not included in other staff data.

25 Essent N.V. 2007 CSR Report â&#x20AC;ş Structure of the report and accountability

04 w w w. e s se n t . e u

Essent as a business operator

TOMORROW’S energy in continuous operation

each power station is a one-off

Power stations and wind farms appeal to our imagination.

However impressive and complicated it may seem, electricity

They are impressive structures and masterly examples of

generation is basically a simple process. In fact, every power

engineering skills. But they are also the source of power for

station or wind turbine operates like a bicycle dynamo, only

society; the place where electricity originates, from where

it is bigger. A power station becomes special because of the

four-inch thick cables bring electricity to people’s homes.

fuels it uses and the environmental controls that are in place.

At Essent, we operate three types of large power plants:

the place of Power

conventional coal-fired and gas-fired stations, and highly

The power to switch on lights, ignite engines, run computers; efficient combined heat and power plants (CHPs). the power to keep things affordable, and the power to do so as sustainably as possible.

The Amer power station and Claus power station were designed as conventional plants, but we have since substan-

In the Netherlands, Essent is at the vanguard of renew-

tially improved their sustainability performance. The Amer

able energy generation. We intend to carefully build on this

power station near Geertruidenberg, for example, co-fires

position. After all, our overall objective is to be a leading and

a considerable quantity of solid biomass (wood) with coal.

sustainable energy company. This will involve hard work as

Moreover, a substantial part of the residual heat is used to

it imposes great demands on the way we operate. We need

heat homes and businesses. The plant is also being fitted

to make existing power stations more sustainable. We must

with a DeNOx system. This filters harmful nitrogen oxides

build new power stations using technology that places less

(NOx) from flue gasses. The Amer power station has a power

of a burden on the climate. And we will have to achieve maxi- generation capacity of 1,240 MW and heat generation mum yields from our wind farms, while, at the same time,

capacity of 600 MW. The Claus power station in Maasbracht

guaranteeing the energy supply and keeping it affordable

is a gas-fired plant made suitable to co-fire bio-oils. Its maxi-

for our customers.

mum output is 1,280 MW.

26 Essent N.V. 2007 CSR Report

the thoroughbred of power stations

Co-generation plants are important. They are, in fact, small

CHP plants are a special type of power station. We own a

combined heat and power stations. We are pleased to oper-

number of CHP plants, the largest of which is in Moerdijk.

ate a large number of them because, like their big cousins,

Generating heat as well as power, CHP plants are gentle on

they have a very low impact on the environment. That is why

the environment. They deliver high energy efficiency and CO2 we intend to considerably expand our presence in this maremissions are low. Given the current state of the art, CHP

ket. Early in 2007 we took a major step in this direction by

plants are by far the most effective option for large-scale

acquiring Westland Energie Services, which specialises in

electricity generation. However, in order for a CHP plant to be supplying energy to the glasshouse industry. Co-generation cost-effective, gas prices must compare favourably to other

plants are a very attractive proposition in this market be-

fuels. And that has not always been the case over the past

cause greenhouses not only need heating and power (light-

few years.

ing), but also require CO2 for their crops to grow. Between

Our current overall output from CHP plants is 1,560 MW.

them, our co-generation plants put out 160 MW overall.

When it comes to CHP plants, Essent occupies the number

Another development in this field is the micro-cogeneration

one position in North-West Europe. Our knowledge of, and

plant, a central heating boiler that generates electricity as

experience with, this technology will become crucial over the well as heat in homes. Micro-cogeneration plants are mostly next few years as we face the difficult transition to renewable still being piloted. energy and further measures will be implemented in the way of energy conservation.

Electricity is also generated at our waste incineration plant in Wijster and waste fermentation plant in Groningen.

The joint capacity is 60 MW. The waste incineration plant of

every little helps

Afvalverbranding Zuid-Nederland (AZN) delivers high pres-

Obviously, we also engage in small-scale power generation.

sure steam to the Moerdijk CHP plant. After all, we would

Our dedicated biomass plant in Cuijk has a capacity of

waste a valuable opportunity if we did not make the best

25 MW. The plant fires solid biomass in the shape of wood

possible use of the heat that is generated by incinerating

cuttings and wood pellets.

household refuse.

27 Essent N.V. 2007 CSR Report › Essent as a business operator › Tomorrow’s energy

w w w. e s se n t . e u

a little water and ...

built 3 MW turbines, nearly quadrupling our output there

Flat as it is, the Netherlands does not offer too many possibil- to 156 MW. ities for hydropower. Essent operates two small hydropower

In 2008 we expect to increase wind capacity by 70 MW,

plants: an 11.5 MW plant on the river Meuse near Linne and

around 44 MW of which will be for own usage. The remaining

a tiny one (100 kW) on the river Vecht near Gramsbergen.

part will be sold to others. That is how we can put our experi-

But our motto is: ‘take care of the pence…’. They also, of

ence to use.

course, allow us to gain experience in this field. wind power is not a fix-all ... a lot of wind

Wind power may be important and successful, but it also

In contrast, wind power is a major force in terms of our

has a downside. The more wind turbines are built, the more

overall electricity output. In order to concentrate as much

difficult they are to fit into the landscape. And, what is more,

knowledge and experience as possible in one place, we

offshore wind farms are rather costly. In addition, there is the

have combined our Dutch and German wind power opera-

general problem of having to maintain near-equivalent back-

tions into a single entity, Essent Wind.

up capacity for each megawatt of wind power. After all, the

In 2007 we successfully added 42 MW to our existing capac-

wind does not always blow, but people always need electric-

ity. At the same time, we sold existing wind farms in Germany

ity. Conversely, if during exceptionally stormy nights an elec-

with a total capacity of just under 65 MW. We also demol-

tricity surplus arises in off-peak hours, combined heat and

ished one of our two wind farms at Eemshaven to clear the

power stations might have to be shut down. And that comes

way for a new one. The 40 small wind turbines put out a total

at the expense of energy conservation and heat supply.

capacity of 10 MW and will be replaced by larger, state-ofthe-art turbines. In total, we now put out nearly 424 MW in

biomass under fire

wind power in the Netherlands and Germany, a respectable

It was for these reasons that we decided, quite a while ago,

amount, but slightly less than last year, so we need to ‘up the

that we should not rely solely on wind power if we were

ante’. Over the next few years, we plan to add 250 MW

serious in wanting to shift to renewable energy resources.

in onshore projects in the Netherlands, and are counting

We needed to develop at least one other form of sustainable

on as much as 1,150 MW in Germany.

energy generation. Something that had growth potential.

As for offshore projects, we expect to achieve a capacity

With a view to making our operations more sustainable, we

of 400 MW in Germany. One of the new projects involves

have therefore invested heavily in biomass as a fuel for our

replacing 134 wind turbines at Eemshaven by 52 newly

power stations.

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28 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

Solid biomass in the shape of wood chips and wood pellets

be organised first to look at whether or not the public believe

is used as a fuel by a dedicated power station near Cuijk,

nuclear power is an acceptable option. In the interim, we

and co-fired at the Amer power station near Geertruiden-

will continue to focus on technological and safety issues so

berg. Liquid biomass in the shape of bio-oils and fatty acids

as to prevent a knowledge lag.

is co-fired at the Claus power station near Maasbracht.

Unfortunately, after a number of highly successful years, in-house production of renewable energy dropped in 2007.

The underlying causes are explained in greater detail in chapter 5. and then there is nuclear power

Essent has a 50% interest in the nuclear power station at Borssele. The other shareholder is Delta Nutsbedrijven, a power company based in the Province of Zeeland. The station’s capacity is 485 MW. In 2006 Essent and Delta signed a covenant with the Dutch government. Under the covenant, the Dutch government allows the nuclear power plant, which technically still has quite a few years of useful life left in it, to continue to operate until 2033, thereby preventing capital losses. In exchange, Essent and Delta will each contribute EUR 125 million to enable the transition to a sustainable energy management in the Netherlands. The government will double this amount and donate EUR 250 million. Essent and Delta will put some of this amount towards a separate fund. For details, we refer to chapter 7.

We regard nuclear energy as one of many intermediate solutions on the road towards a fully sustainable energy supply.

We do feel, however, that a nation-wide public debate should

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29 Essent N.V. 2007 CSR Report › Essent as a business operator › Tomorrow’s energy

CO2

04 w w w. e s s e n t . e u

DILEMMA

[ 4:1 ]

But here is our dilemma as a business operator We need to weigh sustainability, affordability and availability as the priorities of our stakeholders differ. Can we nonetheless make a useful contribution to tomorrowâ&#x20AC;&#x2122;s energy?

Business operator/Power

[ 30/31 ]

how green are we as an investor?

Reasons enough, then, to think long and hard about the

Power stations do not have eternal life. Upgrading consid-

question of how we intend to resolve this capacity issue

erably extends their useful lives. The Claus power station

when it arises.

in Maasbracht and CHP plant in Moerdijk are examples in point. That said, power stations are like cars. However much

imports

you polish and tinker with them, there comes a time when

It does not seem feasible or advisable to us to substantially

their technology is definitely outdated and their fuel efficien-

increase our imports. All countries on the North-West Eu-

cy is no longer acceptable.

ropean energy market are effectively facing the same chal-

Before that time comes, you need to have thought about

lenge. They all have old power stations that are scheduled

replacement. And about adding capacity, because energy

for decommissioning shortly. Germany will be shutting down

consumption is likely to continue to rise in the future. Clearly, nuclear power plants as well. Norway has banned any further we will go all out to conserve energy. If it were up to us, we

hydropower plants. And long-term contracts to secure inter-

would meet the Cabinet’s ambitious target of conserving 2%

national transmission capacity are prohibited under EU law.

per year.

Imports are also a less attractive option because they create

Expectations are, however, that the demand for energy will

dependency, as well as hampering us in our efforts to con-

increase by at least 1% per year over the next ten years. Add

serve energy and improve sustainability. In order to ensure

to that the fact that the Dutch power supply scores poorly

security and sustainability of the energy supply, we will have

on targets such as reliability, affordability and sustainability

to expand production capacity in the Netherlands.

compared with other European countries, or so the Dutch Energy Council concluded in a recently published report on

renewable energy

achieving a balanced fuel mix. The main cause lies in the ex-

Solar power is too expensive and too uncertain for the time

cess number of gas-fired power stations (which is, of course, being to play a key role. A break-through in the development to do with the Dutch gas fields in Slochteren), with coal-fired

of affordable solar cells seems likely, but is not expected in

stations adding to the problem. And we have little access to

the short term.

hydropower and nuclear energy.

32 Essent N.V. 2007 CSR Report

And as for biomass, with which we already gained so much

experience? Sustainability along the supply chain becomes

one is that any further development of renewable energy

of ever increasing importance. The rising demand for bio-

would benefit greatly from an energy storage system. We

mass should not result in additional logging or impact the

will need to work hard to achieve this in the Netherlands.

production of local foodstuffs. Biomass will therefore con-

The second conclusion is that we will continue to need a mix

tinue to be used mainly as a co-firing fuel. We will certainly

of different types of energy production in the Netherlands

continue to use it, although in a supporting role, rather than

for the time being. Channelling all efforts into renewable

in a leading one.

energy will push energy conservation and energy efficiency

Wind power is an altogether different matter. We could

into the background. This might also come at the expense

conceivably use wind power to generate all of the capacity

of combined heat and power plants and smaller-scale co-

required. There is great potential in wind energy, especially

generation plants. But in the long run, conserving energy is

at sea. But wind energy comes with a few drawbacks that we

the most sustainable solution.

cannot resolve until we have the ability to store energy. One of the problems is the volatility of wind supplies. In times of

need for energy storage

high winds, we should be able to store electricity away for

At Essent, we devote many of our innovation efforts to de-

calm days. The other problem is wind energy output at night.

veloping an energy storage system. We are involved, for

Because we cannot store electricity at the moment, all of

instance, in exploring the idea of constructing an energy

it must be conveyed directly to the power grid, also during

storage island in the North Sea, a variation on civil engineer

windy nights. However, people use considerably less energy

Lievense’s old plans for the IJsselmeer lake. In the Province

at night. As a result, wind power could well eliminate the

of Limburg, in the south of the Netherlands, we are studying

demand for combined heat and power during such nights,

the possibility of storing energy in subterranean reservoirs

despite the fact that CHP plants require steady, round-the-

(pumping up water using cheap electricity at night and

clock operation to supply heat and as such conserve energy.

letting it run down again – passing through several turbines

This is also known as running on ‘base load’. Generating

– at the more expensive peak periods during the day). Still,

extra power for daytime uses is referred to as running on

it will be a while before we can put in place a reliable and af-

‘peak load’. This leaves us with two conclusions. The first

fordable energy storage system.

33 Essent N.V. 2007 CSR Report › Essent as a business operator › Tomorrow’s energy

need for base load in particular

At Essent, our gas-fired output is relatively high. That should not come as a surprise. As a Dutch company, we were sitting right on top of the Dutch gas fields at the time.

Gas-fired power stations are by far the best suited to meet peak demand during the day because they can be precisely calibrated to demand. They are like gas cookers. You turn up the heat a little as needed and bring it back to simmering point seconds later. However, research has shown that base load capacity, in particular, is what we need in the future, especially if we want to ensure a reliable and affordable power supply.

It goes without saying that we will continue to pursue our successful combined heat and power policy. This is necessary to help achieve much-needed energy efficiency. But it will not be enough. Combined heat and power requires the simultaneous release of heat, which is not always possible.

Moreover, gas prices substantially affect the feasibility of combined heat and power generation. hybrid power station

That is where our plans come in to build a hybrid power station that uses biomass and pulverised coal, which is an excellent way of combining our knowledge of biomass and state-of-the-art coal technology. A hybrid power plant is designed particularly to provide a continuous power supply

34 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

and, hence, is a perfect solution to meeting base load de-

follow-up action

mand. We are planning for an output of around 800 MW.

Although we will initially focus on meeting base load demand

Black coal is available in abundance and is extracted in

as a first priority, we will certainly address the challenge of

politically stable areas so prices are fairly stable as well.

peak load demand in the future. This could be achieved, for

Alternatively, we considered building a coal gasification

instance, by developing a new gas-fired power station in

plant, but this is now proving to be more expensive to build

Moerdijk. We will take all of these issues into consideration.

and less reliable than a pulverised coal-fired plant, while

The next step will be to see whether a new power station is

output and CO2 emissions are more or less the same.

a viable option. Because we are not the only company in the

The new plant will have an efficiency ratio of around 46%

energy market that is planning to expand its production ca-

– compared with up to about 40% for existing coal-fired

pacity, the situation has not become any easier. The number

plants – reducing CO2 emissions by around 20%. Because

of power plant construction companies is limited and prices

biomass will account for at least 30% of the fuel mix used by

are rising sharply, mainly driven by rapid developments in

the plant, carbon emissions will be further reduced by that

China. This may have a knock-on effect on the affordability

same percentage. Moreover, NOx, SO2 and fine particles will

of the energy supply. This is also an issue which we will factor

be removed from flue gases.

into our decision-making. Should we not then be thinking

We intend to create the technical conditions necessary for

about nuclear energy after all? Base load! Affordable, reli-

preparing the plant for future capture and storage of CO2

able and clean where emissions are concerned. Although the

emissions and conduct a study of available options. We will

debate about nuclear energy is slowly regaining momentum

also investigate ways for even further increasing the share of

in the Netherlands, it definitely still is a controversial issue.

biomass in the fuel mix.

Environmental pressure groups regard nuclear power as an

The new hybrid power plant will be located in Geertruiden-

unsustainable source of energy and are drawing attention to

berg, as part of the existing Amer-cluster. The site already

safety issues such as the storage of nuclear waste and non-

has the infrastructure in place to process black coal and

proliferation. At Essent, we do not outright dismiss nuclear

biomass. The transmission capacity needed to sell the elec-

energy. It might lead to a better balanced fuel mix. But it also

tricity generated is also available. In addition, there is a dis-

requires substantial investments. That is why we believe

trict heating network (connected to homes and businesses in political and public debates should be held first. the wide vicinity), which will be able to absorb residual heat

When looking at the energy supply of the future, the chal-

generated by the plant. This will further improve the plant’s

lenges that lie ahead are huge. Therefore we and society at

efficiency.

large should put in maximum effort to meet these challenges.

35 Essent N.V. 2007 CSR Report › Essent as a business operator › Tomorrow’s energy

>

Torrefaction and biomass Improvement potential for biomass deployment

air

fuel

drying

drying 単ue gas

biomass

Business operator/Power

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Torrefaction is a thermal process

value chain. The input of biomass

designed to increase the energy

as a substitute fuel for coal can

density of solid biomass, such as

thus be increased sharply,

wood, waste and residual flows

allowing hybrid power stations

from the timber-processing and

to fire even more biomass.

agricultural industries, and to

This results in further reductions

reduce its chemical pollution.

in carbon emissions from hybrid

In its processing – supply and

power stations. It should come

incineration – in a power station,

as no surprise, therefore,that

it compares best to coal. This

Essent is actively investigating

makes torrefaction an important

the practical feasibility

potential link in the biomass

of torrefaction.

Interviews Paymon

Aliabadi director Essent Trading

#VTJOFTT PQFSBUPS 1PXFS

Genève

Gerard

Hirs retired Professor of Energy Technology University of Twente

T H E C U R R E N T M A R K E T F O R C A R B O N E M I S S I O N S T R A D I N G H A S FA I L E D I N A N U M B E R O F A R E A S

since the introduction of the allocation system for emissions rights by the European Union.

Based on this system, industrial sectors have been allocated a number of carbon emissions rights. If they emit more carbon dioxide than they have been allocated, they need to purchase additional rights on the market. I would prefer a system of auctioning off these rights instead of allocating them, because an auction does not work to the advantage of the traditional emitters of large quantities of CO2. This would truly create a market price for carbon emissions. Even if such a system can’t be introduced overnight on a global scale – due, for instance, to extension of the mechanisms resulting from the Kyoto Protocol – the European Union should nonetheless seek to implement it!

I T G O E S W I T H O U T S AY I N G T H AT T H E C O S T S O F C A R B O N E M I S S I O N S W I L L I N C R E A S I N G LY B E

incorporated into consumer energy pricing. Until now, no international consensus has been reached, however, about the extent of these costs. The second problem here is that our sector doesn’t have a clear view of the market after the Kyoto Protocol expires in 2012. Given the investment required for a hybrid power plant, we need to know how the costs of carbon emissions will develop, not only in the coming years, but also in the next few decades.

S I N C E T H E U S E O F B I O F U E L S R E Q U I R E S T H E D E P LOY M E N T O F D E V E LO P I N G T E C H N O LO G I E S , start-up subsidies are vital. This also applies to other large renewable energy technologies, such as wind and solar power. All these applications offer economies of scale, thereby lowering costs, if only the technology is sufficiently broad-based. Until then, inconsistent subsidy policies of the different national governments form an impediment that is not easily overcome.

In the US and Europe, local political interests or pressures from lobby groups seem to have triumphed over common ecologic and economic sense. The result is a patchwork of different subsidy regimes and legislation that stands in the way of free market forces. And that’s what’s disheartening investors.

I W O U L D R E A L LY L I K E TO S E E N AT I O N A L G O V E R N M E N T S C O L L A B O R AT E I N D E V E LO P I N G A S U B S I DY

system that is applied consistently and has specific regard for the long term. Emerging biofuel technologies are like young plants; they need care and a certain protection against the discipline of the international energy market. The enormous volatility we see in the price of conventional, fossil fuels can change a project from a successful undertaking to a reckless, loss-making activity overnight. As a trader, you can sort of control this market volatility, but it can be disastrous for long-term investments in renewable value chains. Subsidies should make allowance for this market volatility and have longer effective periods. At present, the lack of consistency in subsidy systems for biofuels and renewable technology forms the largest threat to private-sector investments. And that uncertainty also affects us when we take decisions about long-term investments that are supposed to benefit our shareholders and the environment.

E S S E N T I S F I R M LY C O M M I T T E D TO S U S TA I N A B I L I T Y . B U T W E C A N ’ T O F F E R E C O N O M I C A L LY responsible solutions under our own steam. We need to forge alliances with governments and address inconsistent legislation and subsidy policies. That will allow us to do so much more in the way of renewable energy. To start, these alliances are needed to rally support for investments in a hybrid power station.”

#VTJOFTT PQFSBUPS 1PXFS

Paymon

Aliabadi

“ E S S E N T I S M A R K E T L E A D E R I N D E V E LO P I N G R E N E WA B L E F U E L S , A N D I N V E S T S I N T E C H N O LO GY utilising these fuels. Trends on the energy markets affect each investment decision that we take. Unfortunately, we are currently seeing an accumulation of market distortions at regional, national and global level. These developments have an adverse effect on the opportunities that we have to increase our renewable energy production. Let’s just mention a few issues we encounter in developing a hybrid coal- and biomass-fired power station. Emissions and biofuels are especially important in making such an investment.

Gerard

Hirs

“ W H E N A D E C I S I O N I S TA K E N TO B U I L D A N E W P O W E R S TAT I O N , T H E T Y P E O F F U E L A N D T H E method of power generation are two major considerations. Coal has come in for a lot of public criticism of late, despite the fact that there are enough stocks to last for around 1,000 years.

The fact is that coal is in plentiful supply, its price is stable and it requires only a small amount of energy to mine and transport. Coal has the added advantage of a fairly constant basis of comparison for energy-saving and reducing carbon emissions. In other words, you don’t have to work harder and harder at the business of mining coal. In that sense, coal is developing in the opposite direction to that taken by other fuels: coal-mining has gradually become easier, not harder, in the course of time.

LO C AT I N G N E W S O U R C E S O F OT H E R F U E L S , O N T H E OT H E R H A N D , I S S O M E T H I N G T H AT R E Q U I R E S more and more energy. The problem here is that new sources are proving more and more difficult to find. In the case of oil and natural gas, for example, the amount of energy absorbed by production and transport is on the rise. More and more energy is lost per unit of product during the journey from the source to the consumer. Dutch households, for example, will no longer get their gas from local gas fields in the future. Rather, supplies may well come in the form of liquefied gas transported from the Barents Sea or Qatar. Producing, compressing and transporting gas are all high-energy activities, resulting in up to 30% of output being lost before it gets here in the first place. Anyway, in the future, gas from the local gas fields will no longer come to the surface just like that; electricity consumption is rising. Even in the Schoonebeek oilfield in the Netherlands, 30% of the output is needed just to get the oil to the surface. The comparative figure for coal is less than 10%.

In other words, all the savings you make by using a high-efficiency gas-fired central heating system and setting your thermostat at a lower temperature are immediately undone by the energy you need simply to produce the gas. As a result, producing gas and oil from new sources will save much less energy and make much less of a difference to CO2 emissions than politicians and policy-makers are hoping. In fact, the difference between the environmental impact of oil and natural gas on the one hand and coal on the other, is only small. These are all factors that you’ve got to take into account when selecting a fuel for a new power station.

B I O M A S S I S A C O M P L E T E LY D I F F E R E N T S TO R Y . B I O M A S S A B S O R B S C O 2 BY A P R O C E S S O F P H OTO synthesis, thus keeping it out of the atmosphere. Provided it remains under the ground for long enough, it can turn into coal of its own accord. In other words, natural gas, oil and coal are all part of a CO2 cycle lasting many millions of years. When biomass degrades on the earth’s surface or is used as a fuel, the CO2 stored inside it is immediately released. So allowing wood in a forest to rot away is a dreadful waste. Deliberately composting rotting wood is in fact even worse. It would be better to keep the biomass and hence ensure that the CO2 stored in the biomass stays where it is.

U S I N G B I O M A S S A S A S U B S T I T U T E F O R F O S S I L F U E L S M E A N S , T H E R E F O R E , T H AT T H E C O 2 S TO R E D in the biomass is released back into the air. The use of biomass as a fuel is still very much in an embryonic stage. Gasification has not been successful to date, and power stations like the one in Cuijk that fire exclusively on biomass have only a very low energy efficiency, at around 20%.

In fact, all you’re doing is setting off a sort of controlled forest fire! In that case, it’s better to store the biomass and use coal as a fuel, as it’s more efficient. The only way in which biomass can be used efficiently is by co-firing it in a large, modern coal-fired power station. This is twice as efficient as the process used in the power station in Cuijk. Although CO2 is still released into the atmosphere, the good news is that the power station makes much better use of the energy value represented by the biomass. And this is why Amer 10 is such a good idea.

H O W E V E R , F U E L I S N OT T H E S O L E C O N S I D E R AT I O N . T H E G E N E R AT I O N T E C H N I Q U E U S E D I S A L S O a big factor. We have now gained a great deal of experience with coal gasification, a technique that was first used in the 1990s. Although there were certain teething troubles, the method is now working well. The staff of Essent have played a big part in this success. I can imagine that another option alongside coal gasification would be combustion in modern coal-fired power stations. Although both methods would have to comply with environmental laws and regulations, I would expect coal gasification to be more efficient and also to do better from a compliance aspect. These are both points one has to weigh up, of course, against the cost of construction. However, a higher energy efficiency would theoretically justify a larger investment.”

PAYMON ALIABADI

GERARD HIRS

JOHAN VAN DE GRONDEN

Johan

van de Gronden

“ T H E W O R L D W I D E F U N D F O R N AT U R E ( W W F ) S TA N D S F O R B I O D I V E R S I T Y A N D VA R I E T Y O F L I F E .

Biodiversity has come under tremendous pressure due to climate change. Although climate change is caused by human activity, the good news is that we can change our actions, for instance by reconsidering our behavioural patterns and using technology sensibly.

O U R A L L I A N C E W I T H E S S E N T I S R O OT E D I N A N U M B E R O F S T R AT E G I C TA R G E T S . W E A G R E E that the average temperature should not rise by more than 2 degrees this century. We also subscribe to the ambitious European and Dutch climate goals, i.e. a 20% reduction in CO2 emissions in 2020. But obviously, we would like to see more. Here’s where friction comes in.

Businesses should not let short-term gains prevail over what society needs to do to resolve the climate issue. WWF plays a role in that debate, trying to encourage authorities, citizens, businesses and shareholders to take balanced and sensible decisions together.

T H E E N E R GY I S S U E I S C LO S E LY I N T E R W O V E N W I T H T H E C L I M AT E I S S U E . A N D A LT H O U G H W W F doesn’t know about energy generation, we are experts in biodiversity. That’s why we need to find solutions together and develop an ambitious climate strategy. If we look at technology, we need a proper assessment framework. Unfortunately, we are still highly dependent on fossil fuels in the Netherlands. Just think: if we take emissions produced by an efficient gas-fired power station as the norm, it doesn’t really matter how you shape the energy supply of the future, as long as we stay below the norm and our carbon footprint becomes smaller.

It would have to be investigated whether a hybrid power station meets this norm. But we can’t imagine Essent building a conventional coal-fired power station. That would knock the wind right out of the government’s green policy. And I don’t think this meshes with the responsibilities of Essent and its shareholders.

B U I L D I N G C O N V E N T I O N A L C OA L - F I R E D P O W E R P L A N T S I S A B I T L I K E P L AY I N G F I N A N C I A L russian roulette. The price of coal might be low now, but we also have to make assumptions about the future cost of carbon emissions. That’s why WWF is in favour of emissions trading.

The real environmental damage can be assessed by attaching a price to CO2. This is perhaps more important than the price of coal. Looking at the cost of energy, you need to consider the big picture.

W E A L S O H AV E TO W I D E N O U R H O R I Z O N S B E YO N D T H E N E T H E R L A N D S W H E N I T C O M E S TO

RICHARD SCHMÖLZER

thinking about the energy supply of the future. There are much bigger environmental gains to be achieved outside the Netherlands! Over the next few years, hundreds of simple coalfired power stations will be built in emerging economies such as China and India, without facilities for the capture and storage of CO2. So we have a double motive for critically reviewing the technical options. Our innovations also need to be of value outside this country, so we have to be able to export our knowledge. We have that responsibility as a rich nation. At the climate change conference in Bali, the adage was: don’t lay down the law for other countries, but help them find solutions.

T H E S TO R A G E O F C A R B O N E M I S S I O N S I S O N E S U C H S O L U T I O N . O F C O U R S E T H E R E A R E M A N Y questions surrounding the capture and storage of CO2; we have to critically look at the availability of this technology, its degree of sustainability, safety issues and costs. I feel that the right know-how for the technical feasibility is available in the Netherlands. But a single enterprise can’t be expected to deal with this alone. It requires consultations between businesses, the government and societal organisations, such as WWF. It goes without saying that WWF does not set the rules or choose a technology, but we do need to engage in debate about how to achieve the climate goals.

U LT I M AT E LY , C O 2 S TO R A G E I S A T R A N S I T I O N T E C H N O LO GY O N T H E R OA D TO A T R U LY sustainable energy supply. Unfortunately, the one perfect solution has not presented itself yet, so that we need to continue to experiment with technologies. We should keep from being dogmatic and not outright dismiss any technical options. It doesn’t matter how we achieve a reduction in carbon emissions, whether through co-firing biomass in a hybrid power station, through heat regeneration or storage of CO2, as long as we achieve that goal.

In my opinion, wind, biomass and solar energy are ultimately the only truly sustainable energy sources.”

#VTJOFTT PQFSBUPS 1PXFS

Richard

Schmölzer

“ AT O U R F E L LO W S U B S I D I A R Y K O L LO S I L I C O N C A R B I D E I N D E L F Z I J L , W E M A N U FA C T U R E S I L I C O N carbide (SiC), a material with a high breakdown strength that is used in particulate filters, abradants and incinerators. Silicon carbide is formed by heating a mixture of sand and coke 8FSLHFWFS 1FPQMF to more than 1,700 degrees Celsius. This process is extremely energy-consuming; we’re in the Top 20 of bulk consumers. The increase in energy cost would have got us into trouble in 2006 if we hadn’t changed our working methods. Because we can’t survive using peak-price electricity during the day, we now start the reaction process during cheaper off-peak hours.

At the end of 2007 Kollo Energie signed a suitable bespoke contract with Essent for this purpose: up to and including 2018 we will be supplied with three million MWh worth of electricity.

At Kollo, we’re more than happy with this.

W E ’ R E TA L K I N G A B O U T C O N V E N T I O N A L E L E C T R I C I T Y . O F C O U R S E W E W O U L D P R E F E R G R E E N electricity, although we’re already the cleanest and most energy-efficient silicon carbide plant in the world. We’re aware that our large-scale use adds to greenhouse gas emissions, but green electricity is simply too costly for us at this time. It’s one to two euros per MWh, and our competitors are located in countries such as South Africa, Ukraine and China. I hope and expect that we’ll be able to start using green electricity after all within five years’ time.

I N M Y O P I N I O N , E S S E N T C O U L D B E E V E N M O R E A C T I V E I N P I O N E E R I N G S U S TA I N A B I L I T Y initiatives. True, Essent already offers consumers green electricity for the price of conventional power and that’s a good thing, but what a true statement it would be if they were to switch all their customers to green electricity as a standard – although I don’t know whether enough sustainably produced electricity is available to do that.

I F E E L T H AT T H E P L A N S F O R A N E W C OA L - F I R E D P O W E R P L A N T D O N ’ T M E S H W I T H S U S TA I N ability ambitions. Opting for coal is opting for money. I understand the dilemma facing energy companies, but they have to ask themselves what’s more important: sustainability or affordability? Personally, I prefer to see a wind farm on the horizon rather than smog from carbon emissions. What’s more, affordability is a relative notion: instead of complaining, as a business, that energy costs have gone up, you could try to reduce your energy consumption or change your production process. And that’s exactly what the Kollo Group has done.

I D O N ’ T T H I N K T H AT A F F O R DA B I L I T Y S H O U L D P R E VA I L O V E R S U S TA I N A B I L I T Y . W E C A N ’ T S E L L that to future generations. We will have to find a mix where we utilise natural sources of energy such as the sun, water, wind and biomass to their full potential, even though renewable energy is currently more expensive per MWh than coal-generated electricity. Nuclear energy is also a cheap and carbon-neutral alternative, but it has negative connotations in this country. Be that as it may, I would prefer a nuclear power plant in this country, under Dutch control, to one in a country with some sort of dubious regime.

U LT I M AT E LY , W E C A N ’ T E S C A P E H AV I N G TO E M B R A C E S U S TA I N A B I L I T Y . I S E E G R E AT P OT E N T I A L in the cradle-to-cradle principle where all material outputs and inputs are seen as technical or biological nutrients (waste = food). We should take the same approach to energy. Customer and supplier should both accept responsibility. This is quite a challenge for the energy sector: do they have to wait for the demand or create it themselves? No one wants to pay more – nor do we. I believe that Essent – as the largest producer of green electricity in the Netherlands – should take the country by the hand. And we will follow where they lead us.”

Johan

van de Gronden general director of WNF, the Dutch chapter of WWF Zeist

Richard

Schmรถlzer managing director Kollo Energie B.V. Appingedam

w w w. e s se n t . e u

Essent as a market player

8&*()5*/( TVTUBJOBCJMJUZ profits: do they make you rich or green?

take their custom elsewhere, or from unmotivated staff with

Energy companies have a duty to offer consumers a reliable

a rulebook mentality. In other words, two basic conditions

and affordable supply of energy. At the same time, they must

for making a healthy profit are the presence of satisfied

also operate in a sustainable manner. Not doing so means

customers and staff who are committed to your cause.

not taking your social responsibility seriously enough.

The problem is that no two people are the same: different

These objectives are all valid enough, but are they also

people have different desires, and this applies just as much

compatible with each other? The answer is: yes, they most

to our own customers and staff as it does to people in gener-

definitely are! The fact is that a good energy company is a

al. Some people set great store by reliability, whereas others

profitable energy company. Making a profit allows it to offer

regard affordability as the most important consideration. Yet

its customers a reliable, affordable and sustainable sup-

others cite sustainability as the main factor in the equation.

ply of energy. Profits are good news for everyone, including

And there is an ever-expanding group of people who reckon

our (public-sector) shareholders, who receive half of these

we should do equally well on all three aspects.

profits in the form of dividend each year. In short, a business

Which brings us back to where we started. In order to earn

needs to make a profit in order to achieve its aims.

enough income to provide our customers with a reliable,

But does this mean scrutinising every step you take in terms

affordable and sustainable supply of energy, we need to do

of its effect on corporate profits? Yes, actually, it does. The

our very best in all these various areas. That is how it works

point is that a company should not take action that does

when you are a market player. In fact, it is pretty simple when

not help it to make a profit. Thatâ&#x20AC;&#x2122;s why itâ&#x20AC;&#x2122;s so important for a

you think about it.

business to develop a good nose for activities that are intrin-

So do reliable, affordable and sustainable automatically go

sically profitable. Here at Essent, this is an aspect to which

hand in hand with each other?

we devote a great deal of attention. Indeed, we have already

No, not necessarily. It is something you need to work on.

made a number of vital discoveries in this connection. One of In some cases, you need a bit of help to get you there. these is that satisfied customers are good for profits. Another is that dedicated staff are also good for profits. Clearly, you do not make much money from dissatisfied customers who

38 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

HOW GREEN ARE WE?

from forests and municipal green spaces, untreated wood residues from the timber processing industry, and palm oil.

green electricity

In other words, green electricity does not include power

We are the people who invented green electricity (Groene

generated from relatively dirty products, such as kitchen and

Stroom) over ten years ago. This we did in collaboration with

garden waste and sewage sludge. As a further consideration,

the World Wide Fund for Nature (WWF). Green electricity is

we do not sell more green electricity than we can produce

the name given to electricity generated from natural sources

ourselves or purchase from other sources. This is an aspect

such as wind, water, the sun and clean biomass. Green elec-

that we watch very closely: after all, we want to be sure that

tricity is CO2-neutral, which means that it does not contribute we can obtain the necessary Guarantees of Origin in relation to climate change. Consumers do not pay any extra for our

to the green electricity we sell to our customers.

green electricity.

In November 2007, the Roundtable on Sustainable Palm Oil

At the end of 2007, we had 872,000 consumers of green

(RSPO) adopted a set of criteria for the sustainable produc-

electricity on our books, representing an impressive 43% of

tion of palm oil. These criteria are now being used as the

all our electricity consumers. The number of green electricity

basis for a system of certification. At the end of 2007, we de-

users remained stable in 2007 compared with 2006.

cided to use only 100% certified palm oil residues as biomass

Our Groen Zakelijk electricity is green electricity for busi-

for the production of renewable energy.

nesses that are serious about their social responsibility. We had registered 55,000 business green electricity users by the

green for gas

end of 2007.

Green for gas (Groen voor Gas) is the name of the environ-

Right from the outset, our guiding principle has been that

mentally friendly alternative to natural gas that we devised in

we should produce as much green electricity as possible in

collaboration with the World Wide Fund for Nature (WWF).

our home country. The problem is that imports do very little

Using their own gas consumption figures, we can compute

to reduce CO2 emissions, given that they rarely lead to any

for each of our customers exactly how many kilos of CO2 they

extra production of sustainable electricity in the countries

emit into the atmosphere through their chimney. For a small

of origin. We can help to build a sustainable future only by

fee, we can help the customer in question to fully offset his

effectively reducing our consumption of fossil fuels.

or her CO2 emissions. This they can do by planting trees, for

We guarantee that green electricity is produced from fully

example, as trees convert carbon dioxide into oxygen. The

renewable energy sources, i.e. wind, water, landfill gas and

trees are planted in plantations with the Forest Stewardship

clean biomass. The latter is taken to mean wood cuttings

Council (FSC) stamp of approval.

Green electricity contracts 31-12-2007

872,004

31-12-2006

881,253

Business green electricity contracts 31-12-2007

55,100

31-12-2006

53,292

39 Essent N.V. 2007 CSR Report › Essent as a market player › Weighting sustainability

w w w. e s se n t . e u

Another way of offsetting CO2 emissions is by investing in

energy conservation

more efficient and renewable power-generation technology,

Energy conservation is another priority, alongside sustain-

such as a new wind farm in New Zealand.

able energy production. After all, the less energy you use

All these projects comply with UN guidelines and the

in the first place, the less you need to replace by energy

WWF’s Gold Standard. Every year, an independent auditor

produced from renewable sources. After all, let’s get real:

checks whether consumers’ aggregate CO2 emissions have

it is not exactly going to be easy to meet the government’s

been fully offset.

target of ensuring that 20% of all the energy consumed in

Green for gas is proving a popular product, and the number the Netherlands is produced from renewable sources within of users rose by 9,600 in 2007 to 25,000. Early in 2007, we

the next 12 years, especially if the general trend is for people

launched business green for gas especially for the business

to use more and more power. A recent report published by

market.

the Energy Council (on the fuel mix) again also stresses the urgent need for energy conservation.

Double Green

In order to encourage our customers to save energy, we

Double Green (DubbelGroen) is the logical result of teaming

have devised a special Energy Conservation Plan for private

up green electricity with green for gas. It is a way of offering

consumers and an Energy Conservation Service for corpo-

our customers an opportunity to keep all their energy con-

rate clients. The idea behind the Energy Conservation Plan is

sumption CO2-neutral.

that it should act as a big incentive for customers to reduce their energy consumption. It is not just about saving the en-

feed-in tariffs for consumers

vironment; it is also about saving money. Remember: afford-

Some of our customers are themselves pioneers – those

ability is one of our objectives.

who use solar panels to produce their own renewable power

We help our customers find ways of being economical with

providing a case in point. It is with these people in mind that

energy. The first step involves finding out exactly how much

we devised a special feed-in tariff, in the knowledge that

energy they use. Once the figures are available, we then

there are times when they produce more electricity than they

make a series of suggestions for conserving energy. Where

actually need. The surplus is returned to the power grid, and

necessary, we remove certain obstacles preventing con-

we pay them a fee for this. This is a good way of encouraging

sumers from investing in energy-saving techniques, and we

small-scale use of sustainable power generation.

supply handy tools that they can use to monitor their energy

Green for gas contracts 31-12-2007

24,944

31-12-2006

15,345

40 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

consumption once they have implemented our recommenda- and what is the government up to in the meantime? tions. In other words, the Essent Energy Conservation Plan is

The government announced at the end of 2005 that it was

good news both for the environment and for our customers’

planning to review the MEP grant scheme (set up under the

wallets.

Electricity Production Environmental Quality Act). It was

The Energy Conservation Service works in a similar way, but

clear from the announcement that grants awarded for bio-

is targeted at corporate customers.

mass projects would be subjected to particularly close scru-

In 2007, we mounted a number of campaigns in the consum-

tiny. In the summer of 2006, the government subsequently

er and small-firms markets highlighting the importance of

decided to reduce the value of certain grants. There were big

conserving energy. One resounding success was the ‘socket

cuts in the government grants formerly paid for the co-firing

module’, which shows just how much energy various house-

of vegetable oil and non-wood agricultural residues. As a

hold appliances use when they are left on stand-by.

result, new projects using this type of biofuel are no longer viable (as we have already reported elsewhere in this report).

together with partners

This is a shame, as the decision has put the lid on a promis-

Like the WWF, the Dutch National Forest Service is a key

ing new development that was still in an embryonic stage

partner of ours. They are also very useful people to work

and on which a great deal of further research still needed to

with: after all, it is all very well talking about biomass, but it

be performed. Moreover, we have been trying for some time

has to be available in the first place. In partnership with the

to draw public attention to the value of agricultural residues

Dutch National Forest Service, we are pioneering the use of

as a fuel. We believe that the government should in fact be

wood cuttings and residues as a sustainable fuel. The Dutch

stimulating their use as a biofuel, particularly as they come

National Forest Service wishes to promote the use of Dutch

with very few drawbacks worth mentioning. After all, we are

wood as a renewable fuel. We worked together in designing

talking about genuine waste products that are not grown for

an itinerant exhibition called ‘Fascinating Forests’, which

their own sake and which do not therefore displace other,

shows the whole production chain from tree to green elec-

more important crops. This is a completely different situation

tricity, highlighting the environmental benefits.

from that applying to the production of corn for use as biodiesel, as this takes up large tracts of land previously given over to potatoes, wheat or rice, and may even pose a threat to supplies of animal feed.

The fact is that agricultural residues complement rather than compete with food production. Coffee husks are a good example: if they are not used as a biofuel, they’re simply thrown away. This is a tremendous shame.

Obviously, we were able to continue work on other projects that remained eligible for MEP grants. However, with no sign of the plans for a new grant scheme for encouraging investment in renewable energy production materialising in the near future, research into new sustainable biomass flows came to a halt. We are now expecting the Minister of Economic Affairs to present new plans during the first few months of 2008. In the meantime, the energy companies and other parties involved in the use of biomass have continued to press hard for the adoption of sustainability criteria (such as the criteria for the production of sustainable palm oil, which were ratified by the Roundtable on Sustainable Palm Oil in November 2007). decline in output of green electricity

We were hit hard by the decision to end the MEP grant scheme. Grants are needed in order to identify and test new forms of biomass, to enable researchers to discover cleaner or alternative technologies, and also to support sustainable electricity production. The ending of the grant scheme accounted for half the decline in the production of green electricity in 2007. In fact, the decline was so marked that we were actually compelled to import green electricity in order to meet our customers’ needs. And as we have already

41 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

explained, imported green electricity does little to further the tireless search cause of sustainable power generation.

We are constantly on the lookout for ways and means of

The other half of the decline stemmed from our decision

boosting the efficiency of the biomass we use. For example,

(pending the results of the study performed by the Blok

technological research has shown that we can raise the

Committee) not to co-fire palm oil in the Claus power station. calorific value of biomass by subjecting it to thermal preThis is a point on which we will be elaborating later on in this

processing (a process known as torrefaction). This means

chapter. Against this background, it is clear that the develop- greater efficiency and hence more green electricity. ment of sustainable energy production requires consistency

Another aspect of the use of biomass is the doubts that have

in government policy, i.e. government policies on sustainable been expressed in recent times about the security of future energy production need to remain stable for a number of

supplies. We are likely to see a surge in demand from around

years.

the world, whereas supplies are likely to remain broadly

Businesses will be reluctant to invest if policies and grant

stable. In other words, there are limits to the future growth

schemes change every few years.

in biomass use. It is against this background that we are continuing our tireless search for new renewable fuels. The

sustainable energy production: what and how much?

need to place our energy production and consumption on

We produce sustainable energy from a variety of sources.

a sustainable footing represents a huge challenge. At the

The bulk of the output (alongside wind farm production)

same time, the amount of time and resources available to us

comes from our power stations, which are fired by various

for quickly locating large sources of sustainable energy are

forms of biomass.

relatively limited. We clearly need to investigate every possi-

The Amer power station, for example, co-fired no less than

ble avenue and to be resourceful and innovative. We need to

half a million tonnes of biomass in 2007, producing around

try out every available option, and retain only those that are

935 GWh of green electricity in the process. This is enough

genuinely viable. One of the possible sources of energy we

to meet the energy needs of over 265,000 households. The

are currently looking at, for example, is algae. It is all still very

greater part of the biomass used by the Amer power station

much in the exploratory stage, but looks as though it could

consisted of wood pellets (made from compressed cuttings)

be an attractive option.

and sawdust.

Of the solid biomass, i.e. all the mentioned forms of biomass

coffee, anyone?

apart from bio-oil, 48% is Green Gold Standard Label-certi-

Another option, and one that is now in a more advanced

fied (see figure on page 48).

stage, is the use of coffee husks as a fuel. Husks are the

in GWh

2007

2006

2005

Sustainable energy generation by the Essent Group Wind energy

753

696

672

Hydropower

34

33

29

0.01

0.05

0.05

48

50

65

Solar power Landfill gas and biogas Stand-alone clean biomass Fossil replaced by clean biomass

158

162

174

1,135

2,476

2,525

Of which Solid biomass Liquid biomass Other biomass (e.g. waste incineration) Total Please note: Associates included proportionate to Essent share

42 Essent N.V. 2007 CSR Report

1,069

946

1,236

66

1,530

1,290

386

341

285

2,514

3,757

3,750

w w w. e s se n t . e u

Essent biomass portfolio Ă? LQ 0:K 2007

7RWDO

1,432,132

%LR RLO

68,440

&RFRD EHDQ VKHOOV

37,051 260,404

:RRG RWKHU

1,065,180

:RRG SHOOHWV

1,057

2WKHU

2006

2,601,491 1,496,040 60,227 172,144 750,680 112,400

outer shells of coffee beans, and are a waste product of

to our customers, our staff, our shareholders, as well as to

coffee production. They offer great potential as a means of

interest groups and government organisations, at any time.

replacing fossil fuels in power stations. There is no downside

We must be ready to report on origins, environmental impact,

to this particular biomass ďŹ&#x201A;ow: no trees need to be felled to

affordability, reliability, safety and the potential side-effects

produce them, the husks are produced in a responsible

of our products and services.

manner and do not form part of the food chain. In other

Because we are serious about our responsibility, we expect

words, they are biological waste pure and simple, but with

our suppliers to meet high standards in turn. It is with good

a high caloriďŹ c value. Working in partnership with a develop- reason that one of the provisions of our Code of Conduct ment organisation called Solidaridad, we have now started

states that we expect our business partners to meet the same

trials with the use of coffee husks as biomass. We buy the

standards we set for ourselves. The criteria our suppliers are

husks from Brazilian farmers, who are paid a fair price for

expected to meet are set out in detail in our Supplier Code

them, based on the Fair Trade principles. Following an inten-

of Conduct. The main ingredients of this code are compli-

sive period of preparations in 2007, the ďŹ rst shipload of cof-

ance with laws, regulations and human rights, environmental

fee husks arrived in the Netherlands early in 2008. The husks

protection, integrity and transparency. This responsibility

will be used in the Amer power station as a co-ďŹ ring fuel in

for the entire supply chain applies across the board to all our

the production of sustainable energy. Exactly how great a

activities in relation to sustainability.

proportion of the fuel intake they will be able to account for

Our Supplier Code of Conduct (SCoC) has now become a

should become clear during the course of 2008.

standard feature of all contracts with suppliers. We are planning to publish a revised version of the code in 2008, which

responsibility for the entire supply chain

will be aligned even more closely with our corporate policies.

CSR is all about accountability, about reporting on every-

The new version will include additional provisions on the

thing we do and do not do, on all our products and services,

reduction of CO2 emissions and energy conservation meas-

from the ďŹ rst to the last step. In other words, CSR covers

ures. It will also include a compliance provision, under which

the entire supply chain. We cannot afford to bury our head

we will be entitled to check whether suppliers are indeed

in the sand. By implication, we must be ready to account

operating in accordance with the code.

43 Essent N.V. 2007 CSR Report â&#x20AC;ş Essent as a market player â&#x20AC;ş Weighting sustainability

05 w w w. e s se n t . e u

DILEMMA

[ 5:1 ]

CSR means resolving dilemmas Given our responsibility for the entire supply chain, what is our view, as a market player, about the use of palm oil as biomass?

In essence, it’s all about striking a balance between financial and environmental considerations.

Market player/Proðt

[ 44/45 ]

w w w. e s se n t . e u

palm oil: a special case

forests, the appropriation of vast tracts of land for palm-tree

When we first started using biomass – mainly wood residues

plantations, the planting of trees in peat bogs, child labour

at first – for producing green electricity at the end of the

and the low wages paid to labourers.

previous century, we immediately designed a track-and-

We felt that these were valid arguments. Clearly, the bio-

trace system, not just to provide guarantees about the origins mass imported by Western countries must be produced in of the biomass, but also to enable us to set specific sustain-

a sustainable manner. Whether it is used for the production

ability requirements. It was this system that formed the basis

of drugs, shampoo, food, animal feed, chemicals or fuel, its

for our Green Gold Standard Label.

production may on no account be at the expense of people,

The public response was enthusiastic. The new technol-

flora and fauna, and the environment in its country of origin.

ogy appealed to the popular imagination, and the dedicated

Unilever already understood the problem. For many years

biomass power station in Cuijk was hailed as a model of good now, it has been importing large quantities of oils and fats future practice.

from a variety of countries. Together with the WWF, Unilever

The mood swung, however, when we started using palm oil

therefore launched a forum known as the Roundtable on

in the Claus power station to generate green electricity.

Sustainable Palm Oil (RSPO) a few years ago. We joined the

Palm oil was an excellent biofuel that was sold relatively

Roundtable when we started using large quantities of palm

cheaply on the world market. We believed it would help us in

oil as biomass. We should point out that, in all cases, we still

our mission to deliver green electricity for the price of con-

prefer using waste products such as husks, shells, pulp resi-

ventional power. In some quarters, however, concern was

dues, skins, sawdust, wood cuttings and so on. These are all

expressed at the use of vegetable oil as a biofuel for cars and

waste products from existing agricultural production chains.

power stations. Some commentators were against the use of

Apart from being cheaper, they do not compete with higher-

edible biomass, such as peanut, soybean and palm oil, in en-

value chains such as the food production chain.

ergy production. In their view, such oils were part of the food

At the end of 2006, we stopped buying palm oil products

chain and should be used exclusively for eradicating famine

for co-firing in the Claus power station. There were two im-

among the world’s poor. Other observers felt that the critical

mediate reasons for taking this decision: first, it was difficult

question was where palm oil would cause the most lasting

to find evidence to bear out the claim that palm-oil produc-

damage: to society, nature or the environment? Among the

tion was indeed sustainable. Second, the chances of the

topics debated in this connection were the felling of primeval Roundtable on Sustainable Palm Oil reaching a successful

46 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

conclusion were beginning to look increasingly remote.

able to produce as much green electricity in 2007 as we were

At the same time, we were loath to abandon palm oil en-

in the previous year. We decided to import green electricity

tirely. After all, the opportunities for moving further down the

to make up for the deficit and hence meet market demand.

road towards a sustainable energy supply are pretty few and

However, this is not an option we like using, as imports do

far between, so there is every reason for closely investigat-

very little to ‘green’ electricity production. A huge amount

ing any opportunities that present themselves. We therefore

still needs to be done if we are to produce 20% of our power

asked an external committee chaired by Professor Blok of

from sustainable sources in 12 years’ time. We will need to

Utrecht University to resolve the deadlock by advising us on

investigate and test a large number of new technologies,

the best course of action to take.

assessing not just their energy efficiency, but also their tech-

Professor Blok’s Committee presented its findings in June 2007. The Committee advised us not to abandon palm oil as a fuel, as we were one of those who were in an ideal posi-

nical feasibility, their sustainability and their affordability.

But energy production has also got to be financially viable.

We need to earn a profit so that we can operate on a sustain-

tion to press for the adoption of certification procedures for

able footing. After all, if part of your body is moving towards sustainable palm oil. The Committee believed that a full certi- sustainability, the rest of your body has to move in the same fication system could be put in place within five years. During direction, too. the intervening period, Essent could gradually start buying larger and larger quantities of sustainable palm oil and palmoil derivatives. The Committee suggested that we should buy certified palm oil in increasingly large supplies, starting with a minimum percentage of 20% in 2008 and gradually raising this by 20% each year, enabling us to reach 100% in 2012.

We recently resolved to go one step further, however. We have decided that, during the transition to 100% certification, we will not be making use of uncertified palm oil. We will only buy fully certified palm-oil products.

The findings of the Blok Committee pushed the debate on palm oil in a new direction. Suddenly, things started moving quickly, and the RSPO adopted a set of certification criteria in November 2007. Various bodies are now working on a worldwide certification and inspection system, and we expect that the first RSPO-based certificates will be issued during the course of 2008.

As a result, although we will not be co-firing any palm oil in the Claus power plant for the time being, it is possible that we may be able gradually to start buying RSPO-certified palm-oil products in the autumn of 2008.

Palm oil is only the first form of liquid biomass flow for which a certification system is now being designed. Similar systems of sustainability certification have yet to be devised for other oils, such as soybean oil, rapeseed oil, sunflower oil, as well as other energy sources such as sugar cane and corn.

We are working hard in partnership with various other companies to change this situation, and intend to open up our Green Gold Standard Label to other suppliers in the future.

In addition, we have joined forces with other energy companies and oil companies to devise a system of certification of various other biomass flows. This is no easy task: whilst we would much prefer to see the adoption of an international standard, for the present there are not even any European standards, let alone globally accepted guidelines. Recognising the value of sustainable biomass, the Dutch government is supporting us in this process.

As a result of the controversy surrounding the use of palm oil (and also the ending of palm-oil grants, as we have already mentioned elsewhere in this report), we were not

47 Essent N.V. 2007 CSR Report › Essent as a market player › Weighting sustainability

>

Green Gold Standard Label Monitoring sustainability in the value chain of agricultural/forestry products

transport Source

Biomass producer

Agriculture/forestry

Processing

transport

Certiรฐcates Sustainable source and production checklist(s)

transport

For overall shipment/lot: all checklists for sustainable source and production approved

Storage

Port of loading

Cargo vessel

Storage in country of origin

Loading onto cargo vessel

Seacrossing

as Green Gold Standard Label. [yes]

Tracking & tracing Sustainable transport checklist Was the contracted cargo shipped and received in good and clean order? [yes] Are the samples of corresponding chemical composition? [yes]

Market player/Proรฐt

In 2002 Essent designed the

tion of forests or damaging the

Green Gold Standard Label,

living environment. 48% of the

a method to guarantee the

biomass used by Essent in 2007

sustainable origins of solid

was certified. The Green Gold

biomass – such as wood, waste

Standard Label is comparable to

and residual flows from the tim-

other sustainability certificates

ber-processing and agricultural such as the Forest Stewardship industries. With this, Essent

Council (FSC) quality mark.

wants to prevent the biomass

In order to raise the label’s

that is required for the genera-

profile among other users of

tion of green electricity from

biomass, even more enterprises

contributing to the destruc-

will be invited to use it.

2VBMJUZ TZTUFN $BSHP WFTTFM

1PSU PG MBOEJOH

Green Gold Standard Label-certificate awarded?

Unloading in the Netherlands

Transfer to power station

[yes]

1PXFS TUBUJPO

$VTUPNFS

Generation of green electricity

Use of green electricity

Interviews Johan

Maris managing director of Control Union Certifications

.BSLFU QMBZFS 1SPGJU

Zwolle

Helma

Kip Sustainable Energy Manager at Essent Arnhem

.BSLFU QMBZFS 1SPGJU

Johan

Maris

“ C O N T R O L U N I O N I S A D U TC H C E R T I F I C AT I O N F I R M , W H I C H H A S R I S E N TO P R O M I N E N C E W I T H certification of organic farming. We are currently more focused on product certification, including that of palm oil, which is why we are involved in the Roundtable on Sustainable Palm Oil (RSPO). This is a set of principles and criteria for sustainable palm oil production adopted by producers, distributors and users of palm oil. We are one of the certifying agencies assessing whether the members of the Round Table comply with the principles and criteria. Now that the first assessments are underway, we can expect the first sustainable palm oil shortly.

O B V I O U S LY , C E R T I F I C AT I O N I S A N I M P O R TA N T TO O L TO F I N D O U T W H E T H E R A P R O D U C T I S T R U LY sustainably produced. And the energy sector plays a distinct role in this respect. The carbon balance is a key factor in corroborating the sustainability claim of biofuels. Do the use of the land and the production method, for instance, not create more carbon emissions than are saved by firing biomass instead of coal? An example: the use of peat land for palm oil plantations did not initially play a role. But it is precisely the use of this land that produces more carbon emissions than are saved. Now, the type of soil has become a criterion in sustainability certification. Such questions are entirely irrelevant to other users of palm oil, such as the food industry. We have the energy sector to thank for contributing to the scope of the sustainability criteria.

M A N Y C E R T I F I C AT I O N P R O G R A M M E S A R E P R O D U C T - O R I E N T E D A N D D O N OT F O C U S S P E C I F I C A L LY on sustainability throughout the chain. Local farmers look at their fields and not at the application of their product; how can I earn the best living using my land? Sustainability is less of an issue for them. There are a lot of middlemen and many potential applications before a product reaches the end user. Their product can be used as a biofuel, but is just as easily applied in cosmetics or in the food industry. That’s why you can’t just say that demand for biofuel pushes out food production. By certifying the entire chain you gain an understanding of where products come from, who produces them and which middlemen do what.

I T WA S I N E V I TA B L E T H AT Q U E S T I O N S W O U L D A R I S E A B O U T T H E S U S TA I N A B I L I T Y O F PA L M O I L .

The world is a global village, so we know all about working methods in countries such as Indonesia or Malaysia. If you cause damage to the environment by what you buy, you need to change your buying habits. And you will be held accountable for what you do. This is a responsibility that businesses will have to accept; they can manipulate producers by laying down criteria for suppliers, thereby influencing sustainability throughout the chain. Businesses are often better placed than governments to do that, so they have to accept this responsibility. The same question involving sustainability also came into play with respect to solid biomass such as wood. Thanks to the Green Gold label, we now know what’s sustainable and what’s not. Essent pioneered this quality label. Without Essent, certification procedures for biofuels in the Netherlands would have been far less developed than they are now.

I ’ M P L E A S E D T H AT E S S E N T I S W I L L I N G TO F U R T H E R E X P LO R E T H E I S S U E O F S U S TA I N A B I L I T Y .

The report published by the Blok Committee also lists a number of actions that go beyond the RSPO criteria. In my opinion, Essent gives off an excellent signal by having decided of its own accord to source 100% sustainably produced palm oil only from now on. But we have to remember that no producer can satisfy this requirement at the present time. And there is great demand for palm oil. In other words, you have to ask yourself whether you can rally the support of the producers by demanding that palm oil should be 100% sustainable. Sustainable production methods are not implemented overnight and require collaboration. It might be more effective to gradually move towards sustainable production than to demand that all palm oil be 100% sustainably produced from now on. This excludes parties that are still in the startup phase. After all, producers need to be given the opportunity to comply with the new requirements!”

Helma

Kip

“ E S S E N T WA S O N E O F T H E F I R S T E N E R GY C O M PA N I E S TO S TA R T U S I N G B I O M A S S O N A L A R G E R scale. We began to use it in the nineties. And we were quick to evaluate whether its origins also satisfied our sustainability requirements. In doing so, we not only assessed the quality of the biofuel, but we also, and more particularly, addressed the question of whether its cultivation, extraction and transport were deserving of the label ‘sustainable’. With this in mind, we launched the Essent Green Gold Standard Label in 2002. This label is highly suitable for traceable solid biomass such as wood residues. The system allows us to trace this biomass throughout the value chain: from its source to the power station. An independent inspectorate monitors this process; this is how we know, on an ongoing basis, that our biomass is truly sustainable and from ethical origins.

O U R B I O M A S S C O N S I S T S P R I M A R I LY O F R E S I D UA L M AT T E R , S U C H A S W O O D C U T T I N G S , S A W D U S T and residual matter from agricultural production. A telling example is a recently started pilot with coffee husks, a residual product from coffee cultivation. We will supply our first green electricity from coffee husks in 2008. The use of residual matter reduces the burden on other applications, but whether you use biomass to produce electricity, food, medicines or cosmetics, you always need to ask yourself whether the biomass you import and use does not have an adverse impact on the sustainability situation elsewhere. And in this context, sustainability not only involves ecological assurances such as protecting primeval forests, but also respecting human rights, preventing child labour and creating favourable social circumstances.

I N 2006, T H E S E I S S U E S C A M E R U S H I N G TO T H E S U R FA C E W H E R E PA L M O I L WA S C O N C E R N E D .

And now we see that biofuels are increasingly being scrutinised. We ceased our electricity production from palm oil products when we were called to account for this sustainability issue and felt we couldn’t come up with a satisfactory answer, despite the fact that we mostly used residual products of the oil palm (fatty acids). Obviously, we’re not the only company using palm oil and we already contacted other users at an early stage in hopes of finding a quick answer to the question of how sustainable the use of palm oil products actually is.

The Roundtable on Sustainable Palm Oil (RSPO) is a forum where large users of vegetable fats, such as Unilever, come together to discuss this issue. Essent is a member of the RSPO as well. Unfortunately, the sustainability of palm oil proved not as easy to demonstrate as we had hoped. As an energy company, we have to be able to guarantee, however, that the carbon reductions we claim to achieve are not being cancelled out elsewhere in the chain, e.g. due to logging or cultivation of peatlands.

TO E X P E D I T E A S O L U T I O N , W E D E C I D E D TO H AV E A S U R V E Y O F O U R O W N C O N D U C T E D I N 2007, reviewing the question of whether palm oil could be certified. Although this proved to be possible, it will be some time before certification is realistically feasible.

At the end of 2007, we decided to use only 100% sustainable palm oil products for generating electricity. Since such certified palm oil is not available at present as producers have yet to adjust to the different sustainability criteria, we’re currently no longer sourcing any palm oil products for our sustainable electricity production. I expect the first sustainable palm oil to become available at the end of 2008.

I N T H E I N T E R I M , W E ’ R E W O R K I N G H A R D , I N TA N D E M W I T H OT H E R E N E R GY A N D T R A D I N G companies, to allow the application of sustainability criteria to other biomass flows as well.”

JOHAN MARIS

HELMA KIP

Kornelis

Blok

KORNELIS BLOK

“ A N Y C O M PA N Y T H AT U S E S B I O M A S S H A S A S O C I A L R E S P O N S I B I L I T Y . T H I S A P P L I E S particularly to those companies that are interested in making the transition to a sustainable energy supply. They’ve got to make sure, after all, that the change is permanent.

Biofuels like palm oil have vital roles to play in this process. The main reason for using biofuels is their ability to reduce greenhouse gas emissions. However, this does not of course justify any damage they cause to the environment or the appropriation of land that would otherwise be used for food production. These are factors that any company using palm oil for energy production purposes needs to take into account. The same applies, incidentally, to other users of palm oil, even though these may not immediately spring to mind – such as manufacturers of shampoo, cosmetics or food fats. They, too, have a responsibility to ensure that their raw materials have been produced in a sustainable manner.

W H I L S T C O M PA N I E S T H E M S E LV E S A R E P R I M A R I LY R E S P O N S I B L E F O R T H E M AT E R I A L S T H E Y

use, the government does of course have a role to play, too. The government, after all, can do things that firms can’t. For example, the damage caused to food supplies, the felling of forests and poor working conditions are all important issues in relation to palm oil. This is not a matter of checking whether individual suppliers are good employers or whether a new plantation of young trees is planted after a forest has been felled. No, these are issues that need to be addressed at a regional – or even global – level. A regional or global system for monitoring biofuels, for example, could track the impact of palm oil production on the environment and food supplies. Clearly, this is beyond the reach of an individual company.

The government has a role to play here, both as a coordinator and in reining in those companies that do not wish to submit themselves to voluntary monitoring.

T H E D U TC H G O V E R N M E N T H A S T R A D I T I O N A L LY P L AY E D A P R O - A C T I V E R O L E I N S E T T I N G U P certification systems for sustainability. The Cramer Committee, for example, has done a tremendous amount of good work in this connection. However, it’s important to harmonise systems with other countries, and not to make things too complicated. We need to prevent a situation from arising in which ten different certification systems are in operation in Europe.

Europe already has a whole raft of grant schemes, but sustainability criteria for biomass do not play a part in these. They have been incorporated, however, in the new grant scheme recently adopted in the Netherlands. Grant schemes should not be designed in such a way as to preclude the use of biofuels. Assuming that there is a broad set of sustainability criteria and a good certification system, and that biofuels can offer a high energy efficiency per hectare, there’s every reason for taking a long, hard look at them. Palm oil is just such a fuel. Apart from coming with a good environmental record, it can also satisfy sustainability criteria applying to the entire production chain.

W H I L S T W E R E C O G N I S E T H E T R E M E N D O U S VA L U E O F T H E R O U N DTA B L E O N S U S TA I N A B L E

NICO ROOZEN

Palm Oil (RSPO) as a system for guaranteeing the sustainability of palm oil, our own report goes a step further in its recommendations. The fact is that you need to take account of the CO2 balance and the impact of palm oil on food production. You’ve also got to guarantee that any rise in the demand for palm oil will not lead to a further loss of tropical rainforest for the purpose of planting new plantations. Clearly, it is not easy to keep track of this aspect. It’s important to build up close contacts with trading partners. Producers can also raise their output by making use of land that’s lying fallow or by boosting the output of existing plantations. These two options still have a huge amount of mileage in them, which is why we have advised Essent to look closely at them.

E S S E N T ’ S D E C I S I O N TO S W I TC H I M M E D I AT E LY TO S U S TA I N A B LY P R O D U C E D PA L M O I L I S entirely understandable, in the light both of the company’s social responsibility and of the controversy that has surrounded the use of palm oil. Having said that, it would have been entirely reasonable for Essent to switch gradually to sustainably produced palm oil. After all, for the present only a very small amount of palm oil has actually been certified as having been sustainably produced. With hindsight, Essent should perhaps have acted more quickly, learning from past experience with the certification of solid biomass such as wood.

There’s only one option if there are doubts about the sustainability of biofuel in the value chain, and that’s certification. Although Essent is now pioneering the certification of palm oil and leading the way in terms of the demands it requires suppliers to meet, it must remain on the alert whenever new fuels appear on the market.”

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Nico

Roozen

“ I F A F I R M C L A I M S TO B E A C T I N G I N A S O C I A L LY R E S P O N S I B L E WAY I N R E L AT I O N TO T H E sustainability of a particular product, for example, it must be able to substantiate this claim to the satisfaction of society at large. In other words, there has got to be a set of impartial standards, resulting in a clearly defined code of conduct. The next step is transparency throughout the production chain, so that an independent third party can assess sustainability at all points of the chain.

A code of conduct may be described as impartial if it is the result of a process of dialogue with all the stakeholders, i.e. producers, customers, lobby groups and, where appropriate, government bodies.

S O M E F I R M S M AY N E E D TO A C T A S P I O N E E R S , A S E S S E N T D I D W H E N I T I N T R O D U C E D T H E Essent Green Gold Standard (EGGS) for solid biomass. The problem was that no system of certification was in operation when Essent decided to start using solid biomass. The company then took a calculated risk by formulating a standard of its own. That’s what pioneering is all about. Whilst we welcome this move, Essent must be willing to open up its standard to others and also to contemplate the possibility of the standard being subsumed in a new national or international code. It’s gratifying to see that this is indeed the attitude taken by Essent. It would be great to see the EGGS being incorporated into a generally accepted set of standards in a few years’ time.

T H E R O U N DTA B L E O N S U S TA I N A B L E PA L M O I L ( R S P O ) I S A G O O D E X A M P L E O F T H E WAY in which a certification system could come about. Essent is an active member of the RSPO, together with other palm oil users and products, as well as NGOs. I T ’ S A B S O L U T E LY V I TA L T H AT T H E VA R I O U S S TA K E H O L D E R S TA K E E A C H OT H E R S E R I O U S LY and show understanding for each other’s views. Companies should not regard sustainability simply as a form of window-dressing, whilst lobby groups must in turn recognise that compliance with a code of conduct has got to be commercially viable. After all, any company’s primary aim is to make a profit and hence safeguard its own future. Although this is something we respect, we do believe at the same time that the word ‘profit’ has more than just a financial meaning. We prefer to use the term ‘social profit’, as it allows us to take account of the actual social and ecological cost. In other words, the aim of certification should be to match the maximum social profit with the minimum system cost.

T H E PA R T N E R S H I P B E T W E E N O U R T W O O R G A N I S AT I O N S , E S S E N T A N D S O L I DA R I DA D , H A S B E E N highly constructive. This applies, for example, to Essent’s decision to use coffee husks imported from Brazil: we worked together in formulating the relevant standards and Solidaridad paved the way for Essent to purchase the husks it needs in a way that will also give local producers a fair price for their produce.”

Kornelis

Blok chairman of the Blok Committee and Professor of Science, Technology and Society Utrecht University

Nico

Roozen director of Solidaridad Utrecht

w w w. e s se n t . e u

Essent as an employer

%*7&34*5: JO EFWFMPQNFOU a dedicated workforce

Judging by the findings of the Essent employee survey held

Firms that mean business about their corporate social re-

at the end of 2007, we are now scoring above the Dutch

sponsibility also mean business about the health, safety and

national average. Having said this, given that we aspire to

welfare of their staff. There are simply no two ways about it.

become one of the leading players on the market, there is no

And it is not just because staff are entitled to good working

time to sit around and rest on our laurels.

conditions, a pleasant working atmosphere and plentiful career opportunities. Nor is it because companies that have

more diversity needed

a reputation for taking good care of their staff make a better

In order to wield influence in the world around us, we our-

impression on their customers. It is also because the People

selves need to reflect the composition of the society in which

who bear the brunt of a companyâ&#x20AC;&#x2122;s social responsibility are of we operate. Unfortunately, this is not something we have course its staff.

achieved yet. We are keen to employ more young people,

Our workforce of over 10,000 people in the Netherlands,

more people from ethnic backgrounds and more women. In

Belgium and Germany represent an equal number of poten-

other words, we would like our workforce to be more diverse.

tial ambassadors. If we include their friends and relatives in

Having said that, things are steadily changing. Step by step,

the equation, the sum total is an army of supporters and well- we are moving towards a better balance in the composition wishers that would not even fit in the three largest football

of our workforce. Women are our first target. Recognis-

stadiums in the country. This is an opportunity we would

ing that change does not happen of its own accord, we are

very much like to seize. But we can do so only if we have a

now taking action to recruit more women and increase the

dedicated workforce that backs us up everywhere they go:

number of women in managerial positions. This also means

at work, in the street, in pubs, at parties, at sports clubs and

getting more women into senior management.

wherever else they may find themselves.

At the same time, we continue of course to do all we can

Dedication hinges on the quality of work, development

to recruit and retain highly qualified technical and IT staff.

opportunities, leadership styles, the way in which people

Similarly, our skills development and training programmes

are remunerated and good, safe working conditions. Every

continue unabated, as do our attempts to promote a healthy,

year, we improve our performance in each of these respects.

safe working environment. However, we can only make rapid

50 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

Main Essent business locations

Groningen 620

in the Netherlands, including number of employees

Wijster 288

Provincial Essent shareholders

Zwolle 724 Hengelo OV 236 Arnhem 294 ’s-Hertogenbosch 2,577 Geertruidenberg 380 Weert 362 Roermond 365 Landgraaf 207

progress by setting certain priorities. And diversity is one of

at the time of the merger talks with Nuon. The outflow rate

them. This chapter examines the opportunities and threats

of ‘own staff’ was 6.3% in 2007, compared with 5.4% in 2006.

facing us in this connection, both internal and external.

The slight rise was caused primarily by staff leaving of their own accord. Some were unwilling to await the outcome of

workforce at a glance

the merger talks with Nuon (fearing a reorganisation and a

At Essent 10,223 people are employed (FTes, excluding

redeployment of company staff) and decided to pursue their

Essent Kabelcom) Essent was formed by the amalgamation

careers with another employer.

of a large number of local and provincial utility companies in the northern, eastern and southern parts of the Netherlands.

average age

These origins are still reflected by the towns in which our

There was a slight rise in the average age of Essent staff,

offices are located and the places where the bulk of our

which went from 40 in 2006 to 41 in 2007. By way of compari-

staff live. During the period since our inception, however,

son, the average age of the working population in the

our market has extended to cover the whole of the country,

Netherlands is 39 (CPB, 2002).

as well as Germany, Belgium and even Switzerland (since

Incidentally, there are wide differences in average ages

2007). Our five largest places of business are in the towns

between the various business units. For example, the

of Den Bosch (2,577 FTes), Zwolle (724 FTes), Groningen

average age of staff employed in Production is 47, whereas

(620 FTes), Geertruidenberg (380 FTes) and Roermond

the average age at Service & Sales and also at Essent

(365 FTes). We have 294 people working in our head office

Trading is 35.

in Arnhem. Essent staff live all over the country. Some 68% of our staff do not live in the town where they work.

loyalty

Staff tend to remain with us for a long time, the length of staff inflow and outflow

service averaging 14.5 years. In fact, 25% of our staff have

In 2007 the inflow rate of our own staff was 11.3%, compared

been with us for more than 25 years. These figures place us

with 13.0% in 2006. This slight decrease is due in part to the

well above the national average of 9 years (CBS, 2001).

recruitment freeze affecting certain jobs that was announced

51 Essent N.V. 2007 CSR Report › Essent as an employer › Diversity in development

w w w. e s se n t . e u

diversity

identify a single cause. The absenteeism rate at Essent

Although, on average, 27% of our workforce are women,

remains lower than the average for the energy industry as

the figures vary considerably from one business unit to

a whole (4.9% - CBS, 2004).

another. The more technically oriented business units have traditionally been male-dominated domains, with the

complaints and problems

proportion of female staff being well below the average

A total of 15 formal complaints were made to our confidential

(i.e. 4% at Production and 17% at Essent Networks). The

staff counsellors in 2007. Four of these were referred to the

work performed by Service & Sales is of a more clerical and

Grievance Committee, which subsequently declared one

commercial nature, and the percentage of female staff em-

of them inadmissible. The Grievance Committee reached a

ployed there is higher than average, at 52%. The percentage

decision on all the cases submitted to it, including a case

of managerial posts held by women is 14%.

instigated in 2006, which meant that rulings were given on a

Women are represented most prominently in the under-30

total of five cases in 2007.

age bracket at Essent, and are actually in the majority in the 20-25 age bracket. The proportion of women gradually

employer of choice

declines as from the age of 30, with only a handful of women

Everyone likes getting a word of praise from time to time.

in the 55-plus age bracket. Only 12% of our male staff work

We do our best to be perceived as an attractive employer and

part-time, compared to 46% of our female staff.

thankfully our efforts are rewarded with praise. For example, our management traineeship programme, which has

permanent and temporary contracts

proved very popular among job-seekers, was ranked second

Ninety percent of our own staff are employed on a permanent in the contest for the Best Traineeship Programme in 2007. basis, i.e. under contracts of indefinite duration. In 2007,

An annual survey performed by a weekly magazine called

42 people were employed under work-experience contracts

Intermediair ranked us among the country’s top-20 leading

and 131 trainees spent their internships with us.

employers, citing our pay and fringe benefits as being the 16th best in the country. A leading Dutch daily named us as

absenteeism due to illness

the Best Employer of 2007, whilst our ICT Department was

The absenteeism rate at Essent was 4.3% in 2007. As the

proclaimed Top ICT Employer of 2007 by the CRF market

comparable figure for the previous year was 4.2%, this means research agency. Naturally, we are extremely proud of all that there was a limited rise in the absenteeism rate in 2007.

these titles. Moreover, with a ‘war for talent’ raging on the

The difference is too modest, however, for us to be able to

job market, they are also extremely useful marketing tools.

Workforce diversity, male/female, at Essent in 2007 )HPDOH

Total Essent

0DOH

Head office

10,010 1,412

Corporate support departments/ Essent Support Group

404

Business Development

43

Projects

65

Generation

612

Essent Trading

209

Service & Sales

2,348

Value Added Services Deutsche Essent Networks Waste Management

52 Essent N.V. 2007 CSR Report

331 25 3,951 610

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The DART rate explained DART rate = (number of DART-cases : total number of worked hours) x 200,000

Our safety record is expressed in the form of a DART rate. The word DART is short for Days Away, Restricted or Transferred, i.e. it reďŹ&#x201A;ects the number of accidents or incidents that cause staff to take time off from work or which result in changes in their jobs for every 200,000 hours worked.

The ďŹ gures cover our own staff as well as staff employed by contractors. The deďŹ nition originates form the US Occupational Safety and Health Administration (OSHA). We have chosen to adopt the internationally accepted OSHA 18001 standard as the basis for our system of accident registration and safety management. By taking this approach, we can compare our own safety record with that of other companies. The DART rate also forms the basis for the targets that our directors and operational managers are required to meet. Alongside the DART rate, we also keep record of other data giving information on other types of incidents and accidents (such as minor incidents in which ďŹ rst aid is given), as well as reports of unsafe behaviour and situations.

In fact, things are moving so fast on the job market that the

be effective only if we all comply with the rules and regula-

shortage of certain categories of staff, particularly people

tions and remain constantly alert â&#x20AC;&#x201C; not just at work, but also

with technical qualiďŹ cations, is becoming increasingly acute. on our way to and from work. The mission statement formuAgainst this background, we are keen to do our very utmost

lated for our HSE policy (Health, Safety and the Environment)

to match supply and demand, without making any conces-

represents a full endorsement of this principle: â&#x20AC;&#x153;Every mem-

sions to quality. We need to attract and retain highly qualiďŹ ed ber of staff should return home safe and healthy at the end of staff, entice young people to come and work for us and boost

the day.â&#x20AC;? Although there is a great deal the company can do

the number of women in our service. In other words, there is

in this respect by pursuing effective policies, at the end

no time for us to sit back and rest on our laurels as we enjoy

of the day it is individual members of staff who get caught up

the ďŹ&#x201A;ush of success. We need to work, day in, day out, on our

in trafďŹ c congestion on their way home or who make a dash

image in the job market. We need to raise our brand aware-

for a train in a crowded railway station. The same thing

ness, make sure we stand out from the competition and

applies to safety helmets: they only work if people actually

project self-assurance and conďŹ dence.

put them on. In other words, an effective HSE policy is the joint responsibility of management and all individual mem-

H E A LT H A N D S A F E T Y AT W O R K

bers of staff, irrespective of their organisational roles. The overriding aim is, in fact, very simple: we want to prevent all

safety takes precedence

industrial accidents. This we wish to achieve by becoming

Our Code of Conduct makes no bones about it: â&#x20AC;&#x153;We guaran-

one of the leading energy companies in terms of staff safety.

tee healthy and safe working conditions for our staff.â&#x20AC;? There

An added beneďŹ t of an effective HSE policy is that it helps

are no riders, qualiďŹ cations or promises to try as hard as

staff to work better and more effectively. It boosts staff

we can: It is a guarantee pure and simple. Health and safety

efďŹ ciency, and thatâ&#x20AC;&#x2122;s good news, for both us and our staff.

is a corporate responsibility resting on all our shoulders.

Obviously, the Executive Board is responsible for formulating

the figures speak for themselves

policy, and equally obviously, the management has to make

Our aim is to become one of the best-performing energy

sure that this policy is put into effect. However, the policy can companies in northwest Europe by the end of 2008, with

53 Essent N.V. 2007 CSR Report â&#x20AC;ş Essent as an employer â&#x20AC;ş Diversity in development

w w w. e s se n t . e u

a DART rate of 0.80. The results of a European safety baseline ‘pump up those tyres’ survey performed by a firm of outside auditors (Det Norske

The aim of this pilot project is to sensitise staff to the con-

Veritas) in 2007 show that we are well on the way to achiev-

sequences of low tyre pressure: the car uses 2 to 5 percent

ing our aim.

more fuel, there is a greater risk of accidents and the tyres

Our DART rate for 2007 (based on approximately 31 mil-

themselves suffer more wear and tear.

lion hours worked) was 0.97. This includes hours worked by outside contractors. We have devoted considerable attention winter tyres to the latter aspect, given that our contractors’ safety record

All staff were invited to order special winter tyres for their

in 2006 was not as good as ours. The target we had set our-

cars at a discount. The scheme does not cover company cars

selves for 2007 was a DART rate of 1.0. As in the year before,

(including leased cars), as these have already been fitted

we scored better than the target and, again as in 2006, we are with winter tyres. pleased to report that no fatal accidents took place in 2007.

Den Bosch Section of A2 Motorway Project

HIGHLIGHTS OF 2007

The 15 largest companies in the Den Bosch region, including Essent, joined forces with the local Chamber of Commerce,

HSE Award

the Ministry of Public Works, local and regional authorities

We founded the HSE Award in 2006 as a means of raising

and employers’ associations to find a solution to the problem

safety-awareness among our staff. The award comes with a

of rampant congestion on the local stretch of the A2 motor-

cheque for 5,000 euros, which the winner is required

way. The aim is to improve road access to the local region.

to spend on a good cause. In 2007, the HSE Award was presented to the Production business unit, for a new type of

safety kits

risk analysis performed prior to starting up power stations.

With effect from 2007, all staff driving leased cars are issued with safety kits.

HSE and Mobility Campaign

The aim of this ongoing campaign is to reduce the amount of time spent on meetings and travel, and to encourage staff

Michiel Boersma, Chairman of the Executive Board,

to make greater use of public transport and to drive safely.

presents the HSE Award 2007 to the winning team of the Generation business unit. The 5,000 euros were spent on the restoration of St. Bavo’s Church in Raamsdonk.

54 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

policy on alcohol and drugs

The main topic of debate in 2007 was of course the plans an-

A new code of conduct on alcohol and drugs came into force

nounced by the Minister of Economic Affairs to separate the

on 1 May 2007. Our policy consists not just of strictly regulat- networks from the energy companies. Frequent and lengthy ing the use of alcohol and drugs, but also emphasises the

meetings were held with the Central Works Council on this

individual responsibility of staff in this respect. It is not just a

threat, and on the impact it would have both on the energy

matter of each person controlling his or her own behaviour,

supply industry in general, and on Essent in particular.

but also of their being willing to call colleagues to account

The Central Works Council decided to take action of its own,

for their actions.

joining a campaign mounted by the National Platform of Energy Company Works Councils to oppose the Minister’s

W H AT D O O U R STA F F T H I N K ABOUT US?

plans. In the end, sadly, we were unable to persuade the Minister to shelve her plans. The question of the separation of the networks from the energy companies will be a topic of

annual survey

further debate in 2008, as this is when preparations will need

We have been conducting annual Essent employee surveys

to be made for what is set to be a massive operation.

since 2003, with the assistance of a firm called TowersPerrinISR. Staff are asked to complete a questionnaire contain-

lots of meetings last year

ing around 100 questions about the company’s long-term

At the beginning of the year, we presented the Central Works

strategy and management style, their sense of loyalty to the

Council with our plans for the takeover of Westland Energie

company, communications, their future expectations, pay

Services BV. The Council advised us to go ahead with the

and fringe benefits, team spirit, etc. From the outset, the re-

acquisition. During the same period, plans were also an-

sponse to the survey has been enthusiastic, with the take-up

nounced for a merger with Nuon and the Council was asked

rate consistently higher than 70%. In 2007, 77% of the work-

for its opinion on the merger. Frequent, intensive consulta-

force completed the survey.

tions were held with all the various staff consultative bodies

The survey findings show that, year-on-year since 2003, staff

here at Essent, and these continued until the talks with Nuon

perceptions of Essent have steadily become more positive.

were broken off.

For the first time this year, the scores awarded for all aspects

Other topics of debate with the Central Works Council in-

surveyed were either equal to or higher than the Dutch

cluded the company’s HSE policy, the corporate strategy,

national average. With the exception of the BU Value Added

the relocation of certain parts of Essent Trading to Geneva,

Services and Essent Trading, all business units returned

the reorganisation of the BU Service & Sales, and the sale of

significantly improved scores on the previous year. Deutsche

Essent Domestiq Services BV.

Essent and Essent Belgium both performed very well, too.

For this reason, we are planning to set our sights even higher next year. In the light of our aspiration to become a leading company, our benchmark will no longer be the Dutch national average, but the average score for ‘leading Dutch companies’. The 2007 survey findings make crystal-clear where improvements are needed in order to score on a par with leading Dutch companies. This is in areas such as staff loyalty, identification with the company’s long-term strategy and management style, reputation, trust and integrity. Each year, the survey findings are used to set the following year’s targets. The target set for 2007 was to enhance staff development opportunities (in terms of training) throughout the entire company.

S TA F F PA R T I C I PAT I O N IN DECISION-MAKING constructive dialogue

Staff participation at Essent is all about having a say in decisions and representing staff interests in decisions affecting the organisation as a whole. It is all about ensuring that our staff are closely involved in all major developments affecting the company, and feel free to say what they think in an atmosphere of constructive dialogue.

55 Essent N.V. 2007 CSR Report › Essent as an employer › Diversity in development

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w w w. e s se n t . e u

it is hard to change a centuries-old tradition

For more than 150 years now, the Dutch energy industry has been a white male bastion. Not that this is particularly surprising. When the energy companies were founded in the mid-19th century, working women were a virtually unknown phenomenon (with the exception of cleaning ladies).

Because of the dominance of engineering and technology (which continued until the contours of a free energy market began to emerge), it was ‘jobs for boys only’ throughout this period. The fact is that there were no women engineers to employ.

Invariably, energy companies were controlled and run by engineers, who occupied all the posts, even those that did not require any specialist technical expertise. The company managers were engineers: that was the rule. And those engineers were men, men who wanted their subordinates also to be engineers, preferably ones who had attended a college of technical education. Again, they would have been men.

The lowest echelon in the company consisted of young men from junior technical schools. There may have been one or two exceptions from the rule, but this, basically, was the general picture in the industry. It also applied to Essent’s predecessor companies. Not surprisingly, 150 years of male domination have left their mark on the company.

Women account for 27% of Essent’s workforce. The percentage falls to 14% in the case of managerial positions, and to 12.5% in the case of senior executive posts (both managerial and non-managerial). These are low figures compared with other Dutch companies. Vedior, for example, boasts a 58% female participation rate, with Wolters Kluwer following in its wake on 44%, Fortis on 30% and KPN on 20%. With

future. On average, women perform better than men in high-

a national average of 7%, the Netherlands is not one of the

er education. In other words, greater diversity also means

leading lights in the international arena in terms of the ratio

bringing more talented staff into the workforce. Finally, a

of senior managerial posts occupied by women. Norway

range of studies and investment analyses have also shown

(32%), Sweden (24%), Bulgaria (21%) and Latvia (21%) all

that companies managed by women earn substantially

perform better.

higher profits than companies with all-male boards.

In short, the stats are not good. But how urgent is the need

For Essent in particular, there are two further reasons for

for change at Essent?

increasing the proportion of women in the workforce. Firstly, in the majority of households, it is the woman who chooses

greater diversity urgently required

the energy supplier. As the proportion of women working for

Research shows that diversity fosters a spirit of enterprise,

us grows, so we will acquire a more female outlook, encour-

raises the quality of decision-making and generates higher

aging female consumers to identify more closely with our

profits. More diversity also means a better response to

product offering.

customer demand and a greater chance of attracting and

Secondly, raising the proportion of women in our workforce

retaining talented staff. But why?

will help us form a better reflection of the society around us.

This should boost public support for our activities in pursuit

better performance and a better atmosphere at work

of sustainability and place us in a better position to strike the

The presence of women in the workforce means decisions

right balance between People, Planet, Profit and Power.

are given more careful consideration, and it also means a

As a final consideration, more women means more fun and

more pleasant atmosphere. Female qualities such as an abil-

more excitement. So what are we waiting for?

ity to listen well, motivate other people and hedge one’s bets are needed to counterbalance typically male characteristics

a formidable challenge

such as a desire to dominate, rivalry and pragmatism. As a

Unfortunately, raising the diversity of our staff is not simply

further argument, over half of all university graduates these

a question of a rubber stamp from the Board. Whilst it is true

days are women, and this figure is only likely to rise in the

that a Board decision is needed to set the whole process in

58 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

motion, the fact is that senior managers must themselves

tive Board, will be to formulate a diversity policy and define

be in favour of greater diversity and must be ready to actively

a number of measurable objectives. Two possible objectives

spread the message throughout the company.

might be: the outflow rate for female managers should not

The next step is a culture change: diversity has got to be-

be higher than the comparable figure for male managers,

come an issue that exercises the minds of staff throughout

and women should account for 20% of the top-100 senior

the company. Managers must be prepared to change work-

managers at Essent within a period of three to five years.

ing methods in their departments to accommodate the differences between the sexes. This is not just about differences

a long haul

in style and attitude, but also about different views on the

We are keen to learn from successful action already taken by

work-life balance. It also means accepting the fact that many other companies with a view to bringing about the requisite female staff are mothers (or want to become mothers) and,

culture change. Women’s Energy, the network of female staff

as a consequence, being prepared to alter ingrained habits

launched in 2006, will play a key role in raising the propor-

and company regulations. Clearly, this is something that

tion of women in our workforce. Other tools we are planning

takes both time and goodwill.

to use include behavioural training for managers and new tools for communicating with job-seekers. Creating a sense

a special task force

of urgency by deploying ambassadors and organising ‘theme

In order to set the process of change in motion and retain its

days’ is another important part of the mix.

momentum, the Executive Board acted on a proposal from

There are no two ways about it: Essent will be employing

Women’s Energy (WE), the company’s internal women’s

more women in the future. The change will not come

network, and set up a special task force. The task force was

overnight. Instead, it will be a matter of plugging away over a

given the job of mustering staff support for diversity, defining long period of time. Aware as we are of our male-dominated clear, objective targets and formulating a series of perma-

history, we realise that it’s going to be a long and difficult

nent measures.

process. At the same time, it will also be a lot of fun – an

The first job of the task force, whose membership broadly

interesting, surprising, exciting and colourful ride.

reflects the company’s management, including the Execu-

59 Essent N.V. 2007 CSR Report › Essent as an employer › Diversity in development

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IRS-Dutch National Benchmark Essent has conducted the

taken in previous years, Essent

Essent Employee Survey annu-

beat the National Benchmark

ally since 2003. This instrument

for the first time since 2003,

is used to keep the finger on the

virtually across the board.

pulse of organisational im-

Now Essent is ready to measure

provement. In addition to com-

itself against the Benchmark

paring its own scores through-

for Leading Dutch Companies.

out the years, Essent also uses

Essent outperforms the national

the National Benchmark, the

average in all areas addressed

average performance of 50

in the Employee Survey, gradu-

Dutch enterprises, to see how it

ally climbing towards the status

measures up. Thanks to a range

of top performer.

of improvement measures

-PXFS TDPSF than last year

Interviews Monic

BĂźhrs author of Stratego for Women

&NQMPZFS 1FPQMF

director of In Touch Women Resource Management B.V. Limmen

Marie-Christine

Osterop programme manager at Essent Service & Sales member of the Womenâ&#x20AC;&#x2122;s Energy Essent N.V. Arnhem

&NQMPZFS 1FPQMF

Monic

Bührs

“SO WHY AR E TH E R E SO FE W WOM E N I N MANAG E M E NT JOBS I N TH E N ETH E R LAN DS? WE LL, to a certain extent, it has to do with Dutch culture: ambitious women attract criticism from other women, particularly when they combine work with a family. This often leaves them with a sense of guilt. To a certain extent, too, it’s a consequence of the country’s prosperity: many women simply have no financial need to go out and earn money for themselves.

Another important reason is that women don’t make enough choices. You can’t have everything. If you consciously decide to give priority to a professional career, you’ve got to realise that this decision has all sorts of consequences, such as for your private life.

Moreover, because women place a higher value on enjoying their work than men, they tend to concentrate more on the content-side of their jobs and make more sideways moves than men.

Successful men, on the other hand, tend to follow a more logical, vertical line in their careers.

And because men are often the ones in positions of power, CVs showing a lot of sideways moves don’t always make a great impression in job interviews.

The fact that many women find it difficult to talk about pay during job interviews is another disadvantage. Male interviewers may conclude that their interviewee is probably a poor business negotiator.

A N OT H E R FA C TO R I S T H AT , A LT H O U G H O R G A N I S AT I O N S C L A I M TO VA L U E ‘ T Y P I C A L LY F E M A L E ’ competences such as good communication skills, empathy and interpersonal skills, when a woman displays these competences, they are seen as intrinsically female characteristics rather than as qualities in themselves. For example, a male manager who sends a get-well card to a member of his staff who is off sick from work is regarded as being considerate.

However, a female manager who does the same thing is simply regarded as displaying ‘normal’ behaviour.

F I N A L LY , W O M E N A R E G E N E R A L LY L E S S G O O D AT R E C O G N I S I N G A N D O B S E R V I N G T H E M A N Y rules, both written and unwritten, within organisations. Whether it’s a matter of networking or putting yourself in the picture, learning how to ‘play the game’ is a genuine competence that women with ambition need to acquire.

There are, of course, no hard-and-fast rules, but I believe that women will need to occupy at least 25% of all management posts before they gain sufficient critical mass to be able to alter the rules of the game in a meaningful way.

I N OT H E R W O R D S , T H E R E A R E LOT S O F ‘ S O F T ’ FA C TO R S T H AT P L AY A R O L E I N R E L AT I O N TO T H I S issue and these all require a great deal of thought. This is also why the problem has proved so hard to resolve.

I W E LC O M E T H E FA C T T H AT A W O M E N ’ S N E T W O R K WA S S E T U P I N E S S E N T I N 2006 – W I T H T H E full support of senior management – and that one of the network’s aims is to foster diversity in the company. I also applaud Essent’s decision to adopt a strategic policy on diversity as from 2008. At the same time, it is clear from experience in other organisations that have already done a lot to make life easier for female staff that, in the end, it is up to the women themselves to make a difference.

W H I C H I S W H Y I O F T E N S AY : L A D I E S , L E T ’ S S TO P M OA N I N G A N D S TA R T M A K I N G C H O I C E S .

Let’s learn the rules and play the game. We may even enjoy it!”

Marie-Christine

Osterop

“ TO M E , I T ’ S I M P O R TA N T T H AT A T E A M ’ S C O M P O S I T I O N I S A S D I V E R S E A S P O S S I B L E . I ’ M N OT O N LY interested in the male/female ratio, but also in aspects such as age and personality profiles.

After all, people tend to want to surround themselves with clones of themselves. Larger diversity brings out more perspectives, which is good for the decision-making process.

I R E G I S T E R E D F O R W O M E N ’ S E N E R GY B E C A U S E I F E E L T H E R E ’ S S O M E W O R K TO D O AT E S S E N T with regard to diversity. Women’s Energy has been active since 2006 as a women’s network within Essent and is intended for women who’ve already taken a number of career steps.

The network currently has about 25 members. Although we’re still toying with the form, my first experiences with the network are positive. It isn’t a bunch of moaning women, but a club of colleagues who inspire each other and can learn from each other.

What’s also positive in my opinion is that Essent’s top management offers Women’s Energy the room to develop as a network and takes us seriously. Early in 2008, for instance, we managed to convince the Executive Board to place diversity on the executive agenda. One of the resulting initiatives was the formation of a broadly based task force that will make proposals to increase diversity within Essent. Essent also decided to become a member of Opportunity in Bedrijf, an organisation for the promotion of diversity in business. Finally, the Executive Board promised to focus more on hiring women in managerial positions.

I M U S T S AY T H AT , B E I N G A W O M A N , I N E V E R F E LT T R E AT E D D I F F E R E N T LY T H A N M E N AT E S S E N T , but I do think that women in general operate differently than men. You often see – and I recognise myself here – that women are mostly concerned with the content of their job and want to achieve concrete results, and are less agile when it comes to networking and corporate politics, aspects that do matter at Essent. I, for one, sometimes forget to communicate a good result that I’ve achieved, not only to my principal, but also in a more organisationwide context.

Perhaps Essent will become less politically driven in the future, but for the time being our corporate culture is something that we just have to deal with. If women find this hard to handle, they should probably take up the glove and do something about it. This applies to a lot of issues in my opinion: stop complaining, and take constructive action.

T H AT ’ S W H E R E T H E I N I T I AT I V E S O F W O M E N ’ S E N E R GY C O M E I N : W E H AV E FA I T H T H AT E S S E N T is serious about increasing the diversity of its staff base, and we are only too happy to help facilitate and, where possible, accelerate this process.

E S P E C I A L LY AT E S S E N T , W H E R E W E H AV E S E E N M A N Y A R E O R G A N I S AT I O N , T H E R E A R E P L E N T Y of ‘right’ moments to change the make-up of teams so that they become more diverse. What it comes down to now is that we seize these opportunities when they present themselves!”

MONIC BÜHRS

MARIE-CHRISTINE OSTEROP

Anouk

Rasenberg

ANOUK RASENBERG

MARGO VAN BERKEL

“ U P U N T I L 2007 E S S E N T WA S N OT R E A L LY C O N C E R N E D W I T H T H E S P E C I F I C P O S I T I O N O F I T S female staff, although there were some ad hoc initiatives, for instance within the framework of the War for Talent campaign, when some attention was given, for instance, to providing more job flexibility, a topic that is relevant to many women because of the work/life balance.

The initiatives included facilitating working from home and introducing flexible work hours.

I W O U L D S AY T H AT T H E L A C K O F F O C U S O N W O M E N WA S N OT B E C A U S E E S S E N T WA S U N W I L L I N G ; it was rather a question of priorities. Essent has undergone so many developments in recent years (reorganisations, far-reaching merger plans) that diversity never made it to the list of priorities.

A L L T H I S W I L L C H A N G E F R O M 2008 O N WA R D S : D I V E R S I T Y W I L L B E C O M E O N E O F O U R strategic spearheads. Early in 2008 the Executive Board decided to set up a diversity task force whose objective it is to create awareness and support, and to formulate targets and actions relating to diversity. Essent has also become a member of Opportunity in Bedrijf, an organisation that helps to promote diversity in businesses. Finally, we are studying the possibility of teaming up more with recruitment agencies that target specific groups, such as women.

I D O N ’ T H AV E A N Y I L L U S I O N S A B O U T E S S E N T E V E R R E A C H I N G T H E 50/50 M A R K A S FA R A S men and women in managerial positions are concerned. Much of the business is simply too technically oriented for that. You can see already that the share of women managers is considerably higher in our sales and corporate services departments than in the Production and Networks business units. We have to be realistic in that regard and set ourselves differentiated targets.

A LT H O U G H T H E R E W I L L B E N O D R A S T I C C H A N G E S O V E R T H E C O U R S E O F O N E Y E A R , I ’ M confident that our planned focus on diversity will pay dividends. This will not only work to the benefit of women at Essent, but it will also be good for Essent as a business. After all, research shows that diversity fosters a spirit of enterprise, as well as raising the quality of decisionmaking and generating higher profits, promoting a better response to customer demand, and increasing the chance of attracting and retaining talented staff.”

T H E N E X T T H I N G I S TO F O R M A S B R OA D A R E C R U I T M E N T C O M M I T T E E A S P O S S I B L E A N D B E

honest about preferences, rejections and assessments. Beware of preconceptions: not every woman wants a part-time job! And if they do, ask yourself whether that’s the end of the world.

A lot of male managers seem to be doing other things one day a week, for instance teach at a university or college. What’s the difference?

O N C E YO U ’ V E M A N A G E D TO H I R E W E L L - E D U C AT E D W O M E N , H E L P T H E M TO M O N I TO R T H E I R career path. We know from practical experience that diversity does not take care of itself once you’ve hired enough ambitious women. The organisation needs to make conscious efforts to nurture diversity. It’s very important, for instance, to invite women to ‘ambition interviews’. Try to find out why a woman refuses a promotion: what would it take to make the most of the qualities and talents of this woman – within the restraints of a healthy business policy? Perhaps her interests would be served by more flexibility in working hours and work stations?

T H AT B R I N G S M E TO T H E I M P O R TA N C E O F T H E I N F O R M A L S I D E TO T H E B U S I N E S S C U LT U R E .

Things to consider: how do you build a career in this organisation? What behaviour is encouraged and what is not done? And how does that affect specific groups? A culture where it’s ‘cool’ to say that you work 60-hour weeks as a minimum is no longer appealing to young high potentials – women and men! Management by example also counts: people might remember that Hans Wijers, when he was the Minister of Economic Affairs, cancelled an important meeting because it was his daughter’s birthday. The leading motto is: ‘practice what you preach’. Make sure that there are enough role models in the organisation and show that differences are there to be celebrated. Feature an article in the staff magazine on men in part-time jobs or show that there are more ways than one to build a career, such as easing up on your career when there are small children involved, only to go at it full swing when they grow older.

A F I R M T H AT D E A L S W I T H D I V E R S I T Y I N S U C H A TA R G E T E D WAY W I L L D I S C O V E R T H AT

improvements will follow suit. And that they won’t be the worse for it. Because ‘business is too important to just leave up to men’, as Mr Van der Waaij, CEO of Unilever Netherlands, so aptly put it.”

&NQMPZFS 1FPQMF

Margo

van Berkel

“ W H AT C A N E S S E N T D O TO I N C R E A S E T H E R E P R E S E N TAT I O N O F W O M E N I N S E N I O R M A N A G E M E N T positions? At Opportunity in Bedrijf, we have been mounting initiatives since 1996 to promote diversity in businesses through our network organisation and centre of excellence. Experience tells us that a firm that’s serious about diversity needs to focus on four main issues: demonstrating the business case, scrutinising recruitment and assessment procedures, monitoring internal transfers and promotions, and having a keen eye for corporate culture.

S TA R T I N G W I T H I S S U E O N E : M A K E S U R E T H E R E ’ S A C L E A R B U S I N E S S C A S E F O R M O R E D I V E R S I T Y .

Why do we need to address diversity? Diversity is not a ‘woman’s thing’ or a goal in itself, but has social relevance as well as being a corporate strategy. After all, diversity demonstrably leads to better business operations. In addition, a firm can’t afford – in these times of a candidate-tight market – not to utilise 50% of the available human capital to its full potential.

A S A B U S I N E S S , YO U A L S O N E E D TO S C R E E N YO U R R E C R U I T M E N T P R O C E S S E S . AV O I D emphasising merely the hierarchical or technical aspects of a business or a position in job ads; it is also important to communicate, for instance, that the firm also offers opportunities for coaching and personal development. These are aspects that are more appealing to women.

Anouk

Rasenberg People Development manager at Essent N.V. Arnhem

Margo

van Berkel senior advisor at Opportunity in Bedrijf Amstelveen

w w w. e s se n t . e u

Essent as a corporate citizen

$0..*55&% UP UIF DPNNVOJUZ participating in society

and make it better where we can. As members of society,

As a business, we are at the heart of society. What is more,

people role up their sleeves for the community, whether it

we are tied to it hand and foot. Just think about it: our cus-

means manning the bar at the local football club, handing

tomers are a cross-section of society. After all, we visit all our out flyers for a political party or mowing a neighbour’s lawn. customers at home, if only just to read the meter. Our cus-

It just means making a contribution to the community other

tomers cannot do without our products, not even for a day.

than through work.

At times, we cause them some inconvenience, because our

Being a corporate citizen – as Essent is –, Essent does ex-

energy supply is not always without failure. People see our

actly the same. In addition to our ordinary responsibilities,

vans at busy intersections. They see us dig holes and repair

we want to contribute what we can and help build a better

pipes or cables.

society. Sometimes our efforts are practically oriented, for

Our (public-sector) shareholders are elected by society.

instance when we encourage our employees to start volun-

Farm lands are teaming with our underground pipes and ca-

teering. Other times, we focus more on contributing input,

bles. And many town’s folk and country people look out onto

knowledge and ideas to projects where our expertise is valu-

our transformer stations. Others live near our power stations

able. And that does not mean that we only get involved

or close to wind turbines. And when you are stopped at a

in projects that serve our business interests. In many cases,

railway crossing waiting for a train to pass, the next thing you we offer monetary support. We donate generous sums to know, you see a row of Essent freight cars carrying refuse

social causes.

rolling by. We could go on, but we have made our point:

Sceptics might say: that is all fine and dandy, but Essent is

we matter to society and society matters to us. This raises the not a sugar daddy. It is a commercial business. And donatusual mutual obligations, for instance that we duly supply

ing money to a cause is not necessarily a measure of ‘social

our products and that society duly pays for them.

engagement’. That would be called sponsoring, meaning that ulterior motives are involved. One might argue about

duty calls

whether support always qualifies as sponsoring, but we do

But we also have special obligations to each other. Together,

not deny that we have ulterior motives.

we have to try to keep our community a place worth living

Why would we? Perhaps society even floats on ulterior

62 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

motives. The person manning the bar at the football club might not have any talent for football, but his volunteering still lets him share in the club’s championship. And maybe

national player and committed enough to cherish our roots.

Of course, this is easier said than done. Is our focus on local communities not diametrically opposed to our interests

the woman handing out flyers for a political party is hoping to in the rapidly developing international energy market? become a local councillor one day, which would make her a shareholder in an energy company. Who knows?

However that may be, people want to be appreciated for their efforts, as does a business. We, for one, mean to take up our part of the responsibility for the communities that we operate in. And our ulterior motives are that people know who we are when choosing their preferred energy supplier. our home turf

Essent has operations across the Netherlands and in parts of Germany and Belgium. We regard these areas as our home market, the target of our socially oriented activities. And then there is our native district, the place were Essent originated: the northern, eastern and southern parts of the Netherlands.

This is our parental home, so to speak, because our shareholders, i.e. provincial and municipal authorities, are located here. And it is where most of our staff live.

We feel especially connected with local communities in those areas. Essent’s motto is: with one foot in North-West Europe and the other in the community. And that is right in line with our strategy. We are strong enough to be an inter-

63 Essent N.V. 2007 CSR Report › Essent as a corporate citizen › Committed to the community

07 w w w. e s se n t . e u

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Corporate citizen/Planet

[ 64/65 ]

w w w. e s se n t . e u

Sponsoring comes in many shapes and sizes, from the Museum of Modern Art in Arnhem (part of the Dealing with reality exhibition) to speed skating.

sponsoring and support of social causes

There are different ways of showing that you care about society, one of which is being prepared to invest in activities or developments that are important to society, and earmarking sums of money for sponsoring or support to social causes, no matter what name this is given. What one company calls sponsoring, another might call a donation, and what one person would describe as support to social causes, another would simply refer to as sponsoring.

In any event, the deal nearly always involves money that is offered to enable another organisation to achieve its goal, whilst agreeing with that organisation that they will render a service in return that will help you achieve your goal. This is the objective of sponsoring, but less so of support to social causes. The difference lies mainly in the service in return, which is measurable in either monetary or commercial terms; this is not our main objective when we make donations.

In 2007 Essent donated approximately EUR 300,000 without demanding services in return.

As a speed skating sponsor, we demand, for instance, that our name be printed on the boarding lining the skating oval, so that it features prominently on television. As a supporter of a commemorative book about a community, we are pleased â&#x20AC;&#x201C; although we do not demand â&#x20AC;&#x201C; that our name is mentioned on the cover and that the Mayor refers to us in his

66 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

speech when presenting the book. And in exchange for the

Smaller projects are often more aimed at specific target

money that we contribute to important research projects,

groups. Yet, these target groups tend to be diverse, espe-

we demand the right to apply the findings of such projects

cially in our communities. As such we sponsor the children’s

to our operations.

theatre programme of the Odeon/de Spiegel theatre in

What is clear is that sponsoring, donations and support are

Zwolle. We find it important that children are introduced to

all branches of the same tree. Let us not complicate matters

various forms of art at an early age. The Essent-kidreporters

and speak of sponsoring from now on.

write reviews that are shared through the theatre’s website.

Our sponsoring of the Drents Museum in Assen, the Muse-

sponsoring portfolio: a mirror of society

um of Modern Art in Arnhem and the Bonnefanten Museum

Just like Essent itself, our sponsoring should mirror the

in Maastricht is intended for anyone who is interested in art,

breadth of society. That is why we focus on the areas of sport, arts and crafts, and history, or for anyone who might want culture, nature and social causes. The same adage applies

to take an interest. Together with the three museums, we

to each area: the higher the amount we invest, the more the

try to lower the threshold as much as we can. Because this

cause should be reflective of society as a whole. And when

requires our joint efforts, we recently decided to extend the

we say society, we refer first and foremost to a cross-section

contracts another three years.

of our local communities, because they are our grassroots.

We have also focused intently on young people over the

For this reason, we have deliberately opted to sponsor speed

past years, for instance by organising the Essent Awards,

skating. In the Netherlands, speed skating is a widely loved

incentive prizes for talented pop musicians, that have devel-

national sport, as well as being a top-class sport. Our mara-

oped into prestigious Dutch music awards. We introduced

thon skaters are diehards, the all-round skaters are our

the Essent Awards winners at large pop music festivals,

national treasures, and our sprinters are cool. Speed skating

including Noorderslag and Lowlands. And we saw many

is a tremendously popular spectator sport and when our na-

of ‘our musicians’ make it big after they had won an Essent

tional anthem plays to honour the champion, we collectively

Award. We also footed the bill for their performances at many

feel immense pride in being Dutch. Speed skating belongs

regional festivals.

to all of us.

With the Essent Chess Tournament in Hoogeveen, which has

67 Essent N.V. 2007 CSR Report › Essent as a corporate citizen › Committed to the community

w w w. e s se n t . e u

developed into the second-largest tournament in the Neth-

‘sponsor of the year’

erlands and the fourth-largest in Europe, we focus our atten- On this basis, we have defined and executed a sponsor politions, mainly through the Internet, at the throngs of tactical

cy. We are not doing all that badly, judging from the Sponsor

sport lovers who learned to play chess at the kitchen table.

Ring that was awarded to us in November 2007. The Sponsor

And we make the people of Hoogeveen proud by putting

Ring is an award honouring the ‘sponsor of the year’. The

their town on the map (except for the bridal couples who

judges’ report praised us for our consistent sponsor policy, in

cannot be married at city hall for a week because the venue

which we showed ourselves to be a reliable, long-term part-

is reserved for top-class chess players).

ner for our sponsored causes and succeeded in positively

Our involvement in summer festivals such as the Boulevard influencing consumer brand preferences.

Theatre Festival in Den Bosch, Noorderzon in Groningen and Cultura Nova in Heerlen lets us reach people of all ages

teaching on the weekend

who like to go out at night, visit the theatre and enjoy lazy

One of the projects that lies close to our heart is our involve-

summer nights.

ment in the IMC Weekend School project. This project, which

And our support of the World Wide Fund for Nature (WWF)

is undertaken in the cities of Tilburg and Groningen, targets

draws the attention of anyone who cares about nature, the

youngsters between the ages of 10 and 14 from underprivi-

environment and sustainability. Together with WWF, we

leged backgrounds. By offering them additional courses

are engaged in many projects and campaigns to promote

on the weekend we help them improve their career perspec-

sustainability in the Netherlands. And WWF scrutinises our

tives and boost their self-confidence. Our support is both

energy policy by looking over our shoulder. The discussions

monetary and practical. Essent staff regularly teach weekend

that we have with them in this regard keep us on our toes.

classes also, either as volunteers or specialists.

Of course we are involved in many more projects, including A large enterprise such as Essent has specialists in all many small-scale events and activities in our local communities. We take special care that we undertake colourful and exciting projects, so that our efforts reflect a mirror image of society.

68 Essent N.V. 2007 CSR Report

shapes and sizes.

w w w. e s se n t . e u < Show from the children’s theatre programme performed at the Odeon/De Spiegel Theatre in Zwolle.

Rinse de Jong (member of the Executive Board) and Marga Edens (CSR Manager) meet with the Essent members of Young Leaders for Nature to work on sustainable solutions for issues affecting society.

encouraging volunteering

in the future. And we need to invest in innovation. The only

At Essent, we encourage our staff to take up volunteering.

certainty that we have is that stagnation will not get us any-

What follows are just a number of examples. In April 2007

where. Moving forward is what we want.

Essent employees helped prepare a bandstand in the city of

Together with Delta, a fellow energy company located in

Zwolle for the festivities of Queen’s Day, the Dutch national

the Province of Zeeland, Essent has established an invest-

holiday. They also improved the connection to the electricity

ment fund for financing innovative enterprises and projects

grid. And a considerable number of people who walked the

in the area of renewable energy. Investment specialists

Pieterpad trail – we organise these walks to discuss CSR –

Chrysalix Energy and Robeco helped us to set up this Fund.

got down to work as well. They cleaned up undergrowth in

The Fund goes by the name of Sustainable Energy Technol-

nature areas, built trails and suchlike.

ogy Fund, or SET Fund. Essent and Delta have each contributed EUR 25 million. The Fund plans to double that amount

starry, starry night

by involving other investors as well. The Fund will support

If the community wants us to focus on social issues, we are

young innovative enterprises in particular that are involved in

only too happy to take up our responsibility. On 27 October

developing new technologies for renewable energy, alter-

2007 the provincial environmental federations and

native fuels, carbon reductions and energy conservation.

Stichting Natuur en Milieu organised a so-called Dark Night. Although Essent and Delta will contribute their expertise and This initiative is designed to darken the nights in the Netherlands, which is one of the most lit-up countries in the

experience, the Fund is independent of its financiers.

We also work in collaboration with institutes of learning.

world. And using less electricity is better for our climate.

We sponsor research conducted at the universities of Gro-

We switched off the neon Essent logo signs at all our sites.

ningen, Twente, Tilburg, Delft, Maastricht and Eindhoven.

These are studies relating to energy supply and sustain-

investing in research and renewable energy

ability. In addition, we have forged investment alliances with

You will not discover uncharted territory if you never stray

many colleges of higher education in our home communities.

from the beaten track. We need to be willing to venture into

We have done this also with a view to rejuvenating our em-

new areas in order to secure a sustainable energy supply

ployee base.

69 Essent N.V. 2007 CSR Report › Essent as a corporate citizen › Committed to the community

w w w. e s se n t . e u

have exciting installations such as power stations and waste incineration plants to show them. We also concentrated more on local communities with our small-scale sponsor activities.

In addition, we took stock of all our stakeholders and started to visit them or invited them to visit us.

The results for 2007 are so encouraging that we will start to use this method in other areas as well in 2008. Essent will gain a greater presence in communities and become more accessible locally. We hope that this will help us to become a more close-knit member of local communities in the future. conserving energy together locally

Our regional roots are also reflected in our collaboration with our shareholders. As our shareholders are local authorities, it is not surprising that we mean more to each other than is usual in a relationship between an enterprise and its shareholders. That is why we have developed the Essent Shareholders Energy Conservation Plan as part of the overall Essent Conservation Plan, which focuses on households and business customers as well.

The Essent Conservation Plan has also resulted in the ‘Save Your Energy’ curriculum for primary schools. On 23 November 2007 the curriculum was presented first to a school by the name of Epemaskoalle in Ysbrechtum, in the northern Province of Friesland. The curriculum is looking to become a resounding success, having been ordered by more than 500 Dutch primary schools already. shareholders conserving energy

Our shareholders asked us in December 2006 to present deeply rooted in the community

proposals for how we could encourage energy conservation

You need to be tied up with a community in order to be able

together. They wanted to give more practical expression to

to make a difference there. We will only be regarded as an at- their position as Essent shareholders, if possible in combitractive partner if our actions demonstrate that we value the

nation with their public duties as provincial and municipal

community. This means that we need to be visible and acces- authorities. Accordingly, they started to focus on sustainsible, to our customers, obviously, but also to authorities and

ability and energy-saving, but also on poverty policy and the

other decision-makers, to our stakeholders and to influential

cost of utilities.

organisations. In order to ingrain this in our minds, we have

This is how the Shareholders Energy Conservation Plan came

established the Regional Stakeholders Management. In 2007 about. It was presented to the shareholders in July 2007. The we gained experience with the concept in two areas, in the

Plan’s goal is twofold: cutting costs by conserving energy

Provinces of Drenthe and Limburg.

and reducing CO2 emissions.

We focused on three core themes: raising our profile in the

We provide the shareholders with our people and our exper-

community, building a network with our stakeholders and

tise to create a bespoke energy conservation plan for each

actively supporting our ambassadors in their respective

municipal authority or province, and to help them implement

communities. We already had regional ambassadors (higher

it, geared to the specific target groups in the area. Share-

managers at Essent), but they had mainly applied themselves holders can also opt for a joint plan, for instance together to their task on an individual and occasional basis before.

with other municipalities, or a provincial plan that covers

They have now been given a pivotal role in the Regional

every municipality.

Stakeholders Management and are supported by a special

Essent has committed itself to this Energy Conservation Plan

team for each area.

for three years, and has also pledged money, i.e. EUR 5 mil-

To raise our profile, we started to direct our attention more

lion in 2007 and EUR 10 million in 2008; the budget for 2009

at the regional media, asking them to report news and back-

will be set after the Plan has been evaluated.

ground information on Essent’s operations in the community. The budget is spread over the shareholders proportionate to We also encouraged local people to visit our sites; why not

their shareholdings. An amount of EUR 15 million is available

invite your neighbours every now and then? After all, we

for two years. If, for instance, a shareholder holds 10% of

70 Essent N.V. 2007 CSR Report

w w w. e s se n t . e u

our shares, it will be allotted EUR 1.5 million from the

Judging from the number of registrations, our shareholders

Energy Conservation Plan. We would note that provincial

are enthusiastic about our initiative. All provincial authorities

authorities can also spend the money on projects under-

and 56 of the 128 municipal authorities have already

taken in municipalities that do not hold shares in Essent.

registered for the Energy Conservation Plan. Plans for the

An energy conservation plan is made up of a plurality of

Provinces of Limburg and Noord-Brabant have already been

component parts. A shareholder can choose from the

worked out and are ready to go. The other Provinces will

following menu to combine options:

follow early in 2008. The Province of Flevoland will prepare

■

■

energy advice within the scope of the Energy

a plan in collaboration with the municipalities of Urk and

Performance Building Directive (EU label

Noordoostpolder. Venray and De Wolden will be the first

for the energy performance of residential and

municipalities where the plan will be put into effect.

non-residential buildings)

The municipal authorities that have not yet registered will be

energy advice within the scope of the

approached early in 2008.

Dutch Environmental Protection Act

The Plan for the Province of Noord-Brabant demonstrates

(consumption, opportunities for energy

clearly what an Energy Conservation Plan can do. It centres

conservation and measures)

around an energy conservation desk: an information point

■

lighting scan of office buildings

for home owners about everything to do with energy, energy

■

lighting scan of street lights

conservation and energy-saving subsidies. The same con-

■

sustainable energy scans

servation desk is also being prepared to field questions from

■

energy utilisation (performance contract)

occupants of rented houses. In addition, the Plan involves

■

energy management/monitoring (insight into

a study of the feasibility of energy generation from kitchen

energy consumption)

and garden waste, and renewable options for street lighting.

■

benchmark of municipal buildings

Streamlining opportunities for the district heating systems in

■

implementation of energy-efficient measures

cities such as Tilburg and Breda, and the viability of micro-

(Essent can supervise the implementation process)

cogeneration plants are also being investigated. The Plan

introduction of energy management system

will ultimately result in an energy saving of 178 TJ, i.e. 25%

(monitoring that savings are structural)

of the annual conservation target for urbanised areas in the

■

■

safety certification for electricity and gas

Province of Noord-Brabant. CO2 emissions will be reduced

■

micro-cogeneration plants (in pilot setting only

by 10 Mton per year. A start will be made with the execution

for the time being).

of the Plan early in 2008.

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71 Essent N.V. 2007 CSR Report › Essent as a corporate citizen › Committed to the community

Committed to society

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Conserving energy in the area where you live and work

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Making joint efforts; volunteering and IMC Weekend School

provincial authorities achieve CO2 reductions and cost savings locally

Essent Consumer

Essent Business

The energy

Energy Conservation Plan

Energy Conservation

future

you don’t use

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is your best saving

taking action and monitoring

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energy consumption

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sustainable energy, climate

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Culture

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Museums

Essent Music Awards Summer festivals Theatre

Interviews Marco

Grob interim director of the Museum of Modern Art Arnhem

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Arnhem

RenĂŠ

Savelsberg managing director and CEO of SET Venture Partners B.V. Amsterdam

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Marco

Grob

“ T H E R E L AT I O N S H I P B E T W E E N O U R M U S E U M A N D E S S E N T I S I N D I C AT I V E O F A C E R TA I N solidarity. After all, Essent does not traditionally have any customers in Arnhem. Their support to our museum can be seen as a calling card to the city. I believe that it has truly contributed to Essent’s image in Arnhem as a locally and culturally oriented enterprise. And it allows us to partner up with Essent where its cultural policy is concerned, together with the two other large museums that Essent supports. We effectively act as partners. We offer our advice on art exhibitions at Essent and regularly organise art shows together. It allows both of us to raise our profile and demonstrate to the community that locality matters. I feel that it has helped Essent to develop a positive and modern-day image, as well as a connection with the city where it’s headquartered.

A N I N V O LV E M E N T I N A R T M AY N OT B E S O M E T H I N G YO U E X P E C T F R O M A N E N E R GY C O M PA N Y .

Creativity is, though. To me, Essent is a creative company that doesn’t shy away from unorthodox methods. Just think of its solutions for renewable energy. Artists are the kings of unorthodox methods. That, and sustainability, is what connects us. Our art collection is part of our cultural heritage, something that we treasure. The same goes for nature: together, we need to conserve it for future generations.

S O C I A L I N V O LV E M E N T I S A L S O A L I N K T H AT C O N N E C T S U S . A S A M U S E U M O F M O D E R N A R T , we’re constantly exploring reality and forms of realism. This stirs up questions. Art is critical and we do not only broach issues, but also want to convey a message. What I really enjoy is the creation of a vision for the future of the company: Essent 2030. The organisation invited artists to help plot this road. In turn, this creativity in dealing with your place in society and your own organisation leads to cross-pollination. We support each other in our quest; we help Essent in Arnhem and Essent helps us with our museum. And that reflects on both of us.

B E C A U S E O U R R E L AT I O N S H I P S PA N S A N U M B E R O F Y E A R S , E S S E N T L E T S U S L I F T T H E M U S E U M to a higher level, allowing us to organise better exhibitions for our visitors from all over the country. This is how Essent gives back to people who might also be its customers. Essent truly gives art a chance. And art stimulates reflection, it encourages people to think and feel. This affects the lives of people, as does a business through its products, services and workplace.

If businesses take their social role seriously, they should be giving back to society. That’s why we applaud investments in cultural institutions; they fulfil a valuable role in a city’s living environment. They cannot exist on municipal or national grants alone. Businesses need to get involved. That’s simply something you’re willing to do for each other.

O U R LO N G - T E R M A S S O C I AT I O N O F F E R S U S M A N Y O P P O R T U N I T I E S TO D E E P E N O U R R E L AT I O N ship, including more mutual profiling and promoting our partnership. We would also like to utilise Essent’s knowledge in the areas of sustainability and energy management. How can we capitalise on each other’s added value in forging relationships with the city and its surroundings, that continues to be the key question. Art builds bridges between people, businesses and perhaps even between countries.”

René

Savelsberg

“ C O R P O R AT E V E N T U R I N G I S E S S E N T I A L F O R L A R G E E N T E R P R I S E S I N O R D E R TO K E E P I N TO U C H with the market for new developments where they are not or not yet active themselves. Essent has chosen to do that in the best way possible, by participating in an independent fund with clear objectives. And especially the financial targets of such a fund also justify investments by the other fund partners. After all, that’s how economically viable innovations that are set to contribute to the sustainable energy supply of the future originate. But the EUR 25 million each that Essent and its partner, Delta, have made available for the fund for the next nine years are not enough. Although these are obviously large sums of money, more is needed to drive successful innovations. That’s why we also plan to attract other parties, and the chosen fund structure allows us to do just that.

V E N T U R I N G TO I N V E S T I N I N N O VAT I O N I S A B S O L U T E LY N E C E S S A R Y . I N G E N E R A L , L A R G E enterprises should take a much more active role in innovations, especially energy companies.

The demand for energy is enormous and will keep on growing. Sustainability issues will also gain in importance as a result. Corporate venturing is the perfect facilitator for Essent to contribute its share to the sustainable energy supply of the future. Although I do ask myself sometimes whether Essent would have made the same fund investments if it hadn’t been obliged to do so under the Borssele Covenant. At present, most innovations are not allowed to blossom because they don’t have enough scale or there’s no connection with the consumer; Essent has both. Scale is a prerequisite for successful innovations. And investing in tomorrow should be part and parcel of Essent’s place in society. Now’s the time to invest and make your mark.

O F C O U R S E T H E R E A R E A LT E R N AT I V E S TO C O R P O R AT E V E N T U R I N G , S U C H A S F U N D I N G R E S E A R C H by a centre of excellence. But the question is whether that’s actually as effective. You should never underestimate the power of the market in innovations. Making the most of opportunities in a business setting and undertaking purely technical research are two different things altogether. Investments also need to be aimed at making a profit in the future. That’s the only way to develop truly useful technology. Research is not automatically profitable and tends to be out of touch with the market. What’s more, by investing in early-stage businesses now, Essent is involved in those technological developments. This allows Essent to prepare for the application of these new technologies and become an early adopter. You don’t achieve this through research or donations alone.

T H E S E T F U N D D O E S N OT F O C U S O N LO C A L C O M M U N I T I E S O R J U S T T H E N E T H E R L A N D S .

After all, technology is without boundaries and we need to invest where we see opportunities, whether they lie in the Netherlands or abroad. We have chosen to focus on Europe. Of course I understand that the Essent shareholders hope that we will invest in their respective areas, but I’m sure they’ll understand that we have to go after investments with the most potential.

That’s how they best give expression to their own social responsibility as well. By investing in sustainable technology, through Essent and SET, the shareholders contribute directly to sustainability and the technology of tomorrow.”

MARCO GROB

RENÉ SAVELSBERG

Annemarie

Moons

ANNEMARIE MOONS

GIJSJE VAN HONK

“ T H E S H A R E H O L D E R S E N E R GY C O N S E R VAT I O N P L A N I S A G O O D E X A M P L E O F E F F E C T I V E A N D essential teamwork between Essent and its shareholders. There are regular meetings between us, the shareholders, and Essent’s management. During one of these meetings, Essent told us about their plans for promoting energy-saving as a means of helping customers to reduce their energy bills. We quickly agreed that this was something we could do in unison with Essent and asked the management to produce a more detailed plan. Energy conservation starts with awareness-raising among the general public, and this is where the provincial council has a role to play. Our common aim is to encourage people to save energy and hence reduce emissions.

T H E N E X T S T E P WA S F O R U S , A S T H E M E M B E R S O F T H E P R O V I N C I A L C O U N C I L O F N O O R D Brabant, to see what we could do to implement the Energy Conservation Plan in our own province. We tried to identify areas in which the Plan meshed in with our own policy plans, and then sought to formulate a series of realistic targets. The question we asked ourselves was: what can we actually achieve in concrete terms in the next two years? Or, as the Ministry of Housing, Spatial Planning and the Environment puts it, ‘how can we get things done?’ This is an important success factor. The Energy Conservation Plan is targeted at both new-build housing and existing homes.

The energy conservation desk – which was set up by the Provincial Council and is already working well – encourages home-owners to take energy-saving measures. The desk supplies both local residents and housing corporations with information on energy-saving measures in and around the home. Subject to certain conditions, residents and corporations can also apply through the desk for financial support for certain measures, such as high-efficiency double glazing, solar panels, and roof and wall insulation.

I N T H E C A S E O F N E W - B U I L D H O M E S , W E A R E U S I N G T H E E N E R GY C O N S E R VAT I O N P L A N TO support a project involving what are known as ‘energy-zero first-buy homes’. This will allow us to gain experience with all sorts of new techniques and products. We have also selected a further seven projects on which we will be conducting joint feasibility studies together with Essent during the coming two years. Teamwork is another critical success factor – the ability to work together and combine our mutual pools of expertise.

TH I S T YPE OF JOI NT ACTION MAKE S GOOD S E N S E. AFTE R ALL, TH E PR OVI NCIAL COU NCI L HAS local knowledge to offer, and Essent has the necessary technical expertise. We’re perfect complements to each other. And I believe it’s good for Essent to raise its local profile. After all, the company itself came into being as an amalgamation of local and provincial energy companies.

I B E L I E V E T H AT E S S E N T ’ S D E C I S I O N TO C O M E U P W I T H A N E N E R GY C O N S E R VAT I O N P L A N I S quite logical when you consider that it does more than just sell energy. An energy company also has a social responsibility, especially those that claim, as Essent does, to be ‘green’ companies. Green companies need to do more than simply invest in new, sustainable production capacity and supply green electricity. They also need to promote energy-saving and investments in energy-saving measures. Essent’s sharp focus on energy conservation is testimony to its confidence in itself.

S O I S T H E R E A N Y T H I N G E L S E T H AT E S S E N T S H O U L D B E D O I N G ? I T H I N K T H E R E I S . T H E Y ’ R E already leading the way in the use of biomass as a fuel, and made great strides last year in relation to energy conservation. But there’s every reason to broaden their horizon. Why not show even more guts, and try and make progress on several new fronts at the same time?

How about an energy-neutral business park, or local energy generation in glasshouses and solar collectors? These would not just be innovative, but also have a high regional profile.”

F I R M S S P O N S O R I N G A T H E AT R E O R M U S E U M S E T A N E X A M P L E F O R B U S I N E S S E S T H AT A R E N E W

in town: by social involvement in areas that are not their core business, the corporate sector helps to make the local community an exciting and colourful place to live.

I W O U L D T H I N K T H AT E S S E N T A L S O B E N E F I T S F R O M I T S T I E S W I T H O D E O N / D E S P I E G E L . T H E Y help Essent to raise its profile in a sympathetic way in an area where it has a large customer base, as well as enabling it to organise functions in our theatre every now and then, and welcome business relations here. A case in point is a symposium entitled “Tomorrow’s Energy”, which Essent has scheduled for 18 March 2008 in Odeon/De Spiegel and where a host of prominent speakers will express their views on the energy supply of the future.

E S S E N T N OT O N LY S P O N S O R S O U R T H E AT R E , F O R T H AT M AT T E R , B U T A L S O S U P P O R T S S T I C H T I N G Cortegaerdt, an organisation promoting the hustle and bustle at the theatre, and offering a meeting place for businesses located in the greater Zwolle area.

I N M Y O P I N I O N , E S S E N T P L AY S A P O S I T I V E S O C I A L R O L E I N O U R LO C A L C O M M U N I T Y : I T H E L P S to support the community and create a connection between parties that would otherwise not have been likely to meet.”

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Gijsje

van Honk

“ F O R A T H E AT R E S U C H A S O U R S – T H E L E A D I N G T H E AT R E I N S T I T U T E I N T H E C I T Y O F Z W O L L E and surrounding areas – corporate sponsors are lifesavers. That’s why we’re pleased that Essent has decided to become the principal sponsor of our children’s theatre programme for three years, starting from the theatre season 2007/2008. This allows us to present a larger and more diverse offering of theatre shows than would otherwise have been possible. Now we don’t have to limit ourselves to the ‘hits’, but we can also stage productions that may be lesser known, but are certainly worth watching. Just to illustrate: in the theatre season 2007/2008 we will put on over 70 children’s shows, from plays and musicals to concerts, dance and puppet theatre. Essent leaves the choice of what performances to stage entirely up to us, and that’s the way it should be.

O U R C O L L A B O R AT I O N W I T H E S S E N T I S N OT L I M I T E D TO T H E AT R E S H O W S A LO N E : W E H AV E introduced the ‘Essent-kidreporters’, enthusiastic eleven and twelve-year olds who visit one or more performances and write up a review, which we then post on our website. These are all concrete things that help us to achieve an important goal, i.e. to raise the level of cultural awareness in the greater Zwolle area, and to offer our youngest of audiences a nourishing cultural environment.

Annemarie

Moons member of the Provincial Executive of Noord-Brabant with special responsibility for Economic Affairs and Sustainability

Gijsje

van Honk director of the Odeon/De Spiegel theatres Zwolle

08 w w w. e s se n t . e u

Measuring sustainability

Essent aims to be a leading sustainable energy company.

Essent not being a listed company did not prove to be an

We already expressed this ambition in 2006. Sustainability

impediment whatsoever. Our performance could be bench-

is not something that is confined to regional markets. We

marked against that of listed energy companies in every

source our biomass on the world market, we have people

respect and weighed against the same criteria. Although we

working as far away as in Geneva and the climate situation is

are, and will remain, the odd one out where the DJSI indexes

a global issue. In this report, we have emphatically reiterated

are concerned, the outcome is extremely reliable.

our sustainability ambitions.

The benchmark was performed by Swiss-based firm SAM

Ambitions are a good start, but what is our actual status?

(Sustainable Asset Management), which is a division of

How sustainable are our operations compared with those

Robeco. The assessment is made based on questionnaires

of other energy companies? Are we in the break-away group, that need to be completed by the benchmarked entity itself, are we giving chase, or are we stuck in the back of

corporate documentation (including the Annual Report and

the bunch? We could just follow our instincts, but there is

the CSR Report), third-party documents, public information

nothing like objective measuring. And that is exactly what

and personal contacts between analysts and the corporation.

we decided to do.

Essent is the first Dutch energy company to have its sustainability performance benchmarked against that of its

the proof is in the numbers

listed peers in the rest of the world based on this index.

We had a benchmark performed based on the Dow Jones Sustainability Index (DJSI). Dow Jones is a reputable agency

We have opted for the following three benchmark levels:

and leading provider of global business news and informa-

■

other publications. Their DJSI is the most important global

■

as TNT, Unilever, Philips and Akzo Nobel are benchmarked against the DJSI.

74 Essent N.V. 2007 CSR Report

European benchmarked against 15 listed energy companies

index tracking the performance of leading listed sustainability-driven companies worldwide. Dutch companies such

Global benchmarked against 39 listed energy companies

tion services. It publishes The Wall Street Journal, among

■

North-West Europe benchmarked against 7 listed energy companies

w w w. e s se n t . e u

We made this choice in order to end up with a useful out-

agement aspects, and customer satisfaction.

come. A benchmark of our performance against our global

The environmental dimension addressed our energy-gener-

peers only might have produced a biased view with too com-

ating methods, emissions, power stations output, sourcing

fortable a score. For this reason, we added Europe

policies for products and services, landscape management,

and North-West Europe to the equation. After all, we want

preservation of biodiversity and suchlike. The social dimen-

to know as accurately as possible where we stand and

sion comprised an assessment of social aspects, including

how our sustainability performance compares against that

focus on internal affairs such as employee development,

of our peers.

training and satisfaction, and our occupational health and safety policy. External involvement in the form of sponsor-

assessment along three dimensions

ing and relations with stakeholders are assessed along the

Our sustainability performance was assessed along three

social dimension as well.

dimensions, i.e. an economic dimension, a social dimension and an environmental dimension. The economic dimension

our score

involved an assessment of our policies concerning corporate

At global level, Essent achieved an overall score of 68%,

governance, our Code of Conduct, human rights, discrimina- which is amply higher than the average score of 57%. tion, women in management positions, risk and crisis man-

The highest score among the 39 benchmarked energy

39 companies globally in 2007 Í DV D (VVHQW VFRUH

Overall scores

68 57

$YHUDJH VFRUH

81

7RS VFRUH

Individual scores Economic dimension

74 61 86

Environmental dimension

58 52 81

Social dimension

74 58 86

7 companies in North-West Europe in 2007 Í DV D (VVHQW VFRUH

Overall scores

68

$YHUDJH VFRUH

72

7RS VFRUH

78 Individual scores Economic dimension

74 75 84

Environmental dimension

58 67 80

Social dimension

74 73 86

75 Essent N.V. 2007 CSR Report › Measuring sustainability

w w w. e s se n t . e u

companies was 81%. As indicated above, one might question We are also trailing behind our peers where monitoring of, a benchmark against energy companies from other parts of

and reporting on, performance delivery are concerned.

the world. That is why we are more interested in comparing our sustainability performance against that of our European

follow-up actions

counterparts. Since the outcome of both European bench-

The information on which this benchmark is based relates

marks is more or less the same, we have decided to concen-

to 2006. In 2007 we already proceeded to deďŹ ne a host of

trate mainly on our score benchmarked against the seven

additional sustainability objectives, for both internal and

North-West European energy companies.

external purposes. We plan to translate those sustainability

Our overall score of 68% is slightly below the North-West

ambitions into more quantitative targets and their monitor-

European average of 72%. The highest score among the

ing. The dilemmas that are formulated in this report will help

seven benchmarked energy companies was 78%.

us to do so.

We scored 74% along both the economic and social dimen-

Naturally, we will investigate in 2008 where and how we

sions, which is more or less in keeping with the European

can further ďŹ ne-tune our climate objectives and step up our

average of 75% and 73%, respectively. The detailed report

sustainability efforts. The outcome of the benchmark has

shows that we are doing well as regards corporate govern-

steered us in the right direction. In our CSR Report on 2008

ance (although we do not employ enough women), risk

we will report on the progress we made.

management, occupational health and safety policies, and our commitment to society.

Our human resources policy, recruitment and retention practices, and performance reporting were rated slightly below average. In addition, our role as a corporate citizen (understanding of the effects of sponsoring) is not really up to scratch. We scored 44% at an average of 66%.

Unfortunately, our performance along the environmental dimension is lagging somewhat behind. We scored 58% at an average of 67%. What is most striking in this regard is that Essent has so far failed to adequately deďŹ ne concrete targets in the area of climate strategy (45% at an average of 60%) and emissions reduction (35% at an average of 70%).

76 Essent N.V. 2007 CSR Report

09 w w w. e s se n t . e u

Assurance Report TO : T H E STA K E H O L D E R S O F E S S E N T N.V.

Engagement

report, are explained in chapter 3 ‘Structure of the report and

We have performed an assurance engagement in accord-

accountability’.

ance with the Standard 3410 ‘Assurance Standard relating to Social Responsibility Reports’. Our assurance engagement

Auditor’s responsibility

concerns the 2007 Corporate Social Responsibility Report

It is our responsibility to formulate a conclusion with regard

(CSR) of Essent N.V (Essent) and is aimed to obtain:

to the 2007 CSR report of Essent on the basis of the engage-

■

Reasonable assurance that chapter 1 ‘Retrospective and

ment outlined above.

outlook’, chapter 6 ‘Essent as an employer’, chapter 8

■

‘Measuring sustainability’ are, in all material respects,

Procedures

an accurate and adequate representation of the policy

We performed our procedures in accordance with Dutch law

and business operations regarding Corporate Social

and the requirements set out therein with the independence

Responsibility during 2007.

of assurance team members. The test criteria that we used

Limited assurance that the other information in the

are the Sustainability Reporting Guidelines (G3) published

2007 CSR report of Essent is, in all material respects,

by the Global Reporting Initiative, the social reporting guide

an accurate and adequate representation of the events

of the Dutch Accounting Standards Board (Raad voor de

during 2007.

jaarverslaggeving) and Essent’s own reporting policies.

We believe that these criteria are sufficient in view of the

Procedures performed to obtain a limited level of assurance

purpose of our assurance engagement.

are aimed at determining the plausibility of information and

Our principal procedures relating to the information used

are less extensive than those performed in an assurance

to obtain limited assurance were as follows:

assignment to obtain a reasonable level of assurance.

■

Obtaining an understanding of the sector, organisation

■

Assessing the acceptability of the reporting policies

and it’s most relevant social responsibility issues;

The information published concerning the environmental and human resources information about swb AG, Deutsche Essent and minority interests (of less than, or equal to, 50%,

used and their consistent application, as well reviewing

where Essent does not have control of operations) are not

significant estimates and calculations made in preparing

included in our assurance engagement.

the 2007 Corporate Social Responsibility Report; ■

Reviewing the plausibility of the information contained

Management’s responsibility

in Essent’s Corporate Social Responsibility Report by

The management of Essent is responsible for the informa-

performing analytical procedures at group level and

tion contained in the 2007 CSR Report and the preparation

at site level in the Netherlands, conducting interviews

of the Report in such a way that it provides an accurate and

with responsible company officers, and checking the

adequate view of the policy, measures, and performance

substantiations of this information on a test basis, as

of Essent concerning CSR. That responsibility comprises,

well as retrieving the relevant corporate documents and

among other things, the design, implementation and main-

consulting external sources;

tenance of an internal control system that helps that the CSR

■

Assessing the overall view of the 2007 Corporate Social Responsibility Report based on the above criteria.

report does not contain any material inaccuracies, as well as the selection and use of acceptable principles for measuring and presenting sustainability performance results, and

Procedures added to obtain reasonable assurance regarding

the maintenance of estimates that, under the given circum-

the information in chapters 1, 6 and 8, were the following:

stances, can be deemed to be reasonable. The choices made

■

risks are covered by internal controls;

ing principles, including the inherent specific limitations that might affect the reliability of the information contained in the

78 Essent N.V. 2007 CSR Report

Identifying inherent risks relating to the reliability of the information and investigating the extent to which these

by the management, the scope of the report and the report■

Performing tests of control to review the existence and

w w w. e s se n t . e u

effectiveness of the internal controls aimed at reviewing the reliability and adequacy of the information; ■

Following the audit trail on a test basis, from the source data through to the information contained in the 2007 Corporate Social responsibility report;

■

Performing tests of detail on a test basis aimed at reviewing the reliability of the primary information.

Conclusion

On the basis of our procedures aimed at obtaining reasonable assurance we conclude that chapter 1 ‘Retrospective and outlook’, chapter 6 ‘Essent as an employer’, chapter 8 ‘Measuring sustainability’ are, in all material respects, an accurate and adequate representation of the policy and business operations regarding Corporate Social Responsibility.

On the basis of our procedures aimed at obtaining limited assurance we have no reason to conclude that the information in the 2007 CSR report of Essent is not, in all material respects, an accurate and adequate representation of the events that took place in 2007, in accordance with the Global Reporting Initiative guidelines, the social reporting guide issued by the Dutch Accounting Standard Board and the documented reporting policy of Essent.

Rotterdam, 27 February 2008 For Ernst & Young Accountants Signed D.A. de Waard

79 Essent N.V. 2007 CSR Report › Assurance Report

w w w. e s se n t . e u

Colophon

Abbreviations V J A VA W Wh k M G FTE

volt, unit of electric potential joule, unit of electric work ampere, unit of electric current volt-ampere, unit of apparent power watt, unit of actual power watt-hour, unit of number of watts supplied per hour kilo = 1,000 (e.g. kV = kilovolt, kWh = kilowatt-hour, kW = kilowatt) mega = 1,000 kilo giga = 1,000 mega fulltime equivalent; unit for expressing total number of staff based on a full working week

This CSR Report is published in Dutch and English. In the event of any discrepancies, the Dutch printed version takes precedence.

This CSR Report was printed on PEFC-certified, chlorine-free Lessebo paper. The Programme for Endorsement of Forest Certification Schemes (PEFC) is a global set of standards for sustainable forest management and supply chain certification. The European Commission stated in 2005 that it considered PEFC and the Forest Stewardship Council (FSC) as equal standards for sustainable forest management (EU A6-0015/2006).

The standards provide an assurance mechanism to purchasers of wood and paper products that they are promoting the sustainable management of forests by means of independent assessments.

w w w. e s se n t . e u

Essent N.V.

Editing & coordination

Nieuwe Stationsstraat 20

Eduard Wijnoldij Daniëls

6811 KS Arnhem

Chris Arthers

P.O. Box 268

Marga Edens

6800 AG Arnhem

Joke ten Hove

The Netherlands

Marjolijne van Huissteden

Tel.: +31 (0)26 851 1000

Marieke Mooij

Fax: +31 (0)26 851 1389 www.essent.eu

Production

Copy Jan Veenstra, Hoogeveen Theme location photos and portrait of M.A.M. Boersma Taco Anema, Amsterdam Portraits interviews Paulien de Gaaij Fotografie, Utrecht Images openingpage dilemmas ESA p. 31 Thermographic images Courtesy NASA/JPL-Caltech p. 45 FLIR Systems Benelux p. 57, 65 Translation Ernst & Young Language & Translation Services, The Hague Design, art direction and photography Design Studio Hans Kentie BNO, Leusden Lithography and printing Drukkerij Rosbeek B.V., Nuth Binding Binderij Hexspoor B.V., Boxtel Date of publication: 31 March 2008

Energy demands energy. And energy demands Essent.

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