Denmark’s Ørsted is 2020’s most sustainable energy corporation.
The energy sector is one of the biggest industries currently in the global market. It is inclusive of both renewable and non-renewable energy. But the non-renewable energy industry is single-handedly one of the biggest polluters of the world. Energy is an everyday use and still, we have not been able to make much progress in the renewable energy sector. Drilling of oil and natural gas, burning of fossil fuels, etc. these activities cause tremendous pollution. This sector harms the environment in every possible way. The burning of these fuels causes air pollution while also emitting large quantities of greenhouse gases. The mining of oil and natural gas also disrupts the environment majorly.
Based in Fredericia, Denmark, Ørsted, is an energy generation company that has changed the game for itself. The company is the world’s largest developer of offshore wind power(29%globally) and also produces 88% of its energy from renewable sources.
Ørsted is said to have its origin in a Danish gas and oil resource company Dansk Olie og Naturgas A/S (DONG), meaning Danish Oil and Natural Gas. DONG Energy originated under the Danish state-owned company Dansk Naturgas A/S. In November 2017, the company changed its name to Ørsted.
Ørsted’s changing course:
Ørsted was one of the leading producers of energy through oil and gas. It was also one of the best developers of coal-fired power plants. The company owned gas and oil pipelines throughout the North Sea. by 2016, it was able to produce almost 1,00,000 barrels per day of oil equivalent.
In 2017, the company decided to discontinue the practice of using coal for power generation and also sold off its oil and gas business. With these moves, in 2017, the company announced its transition to renewable energy.
Soon they started expanding their offshore wind project. Instead of getting involved in all sorts of renewable energy sources, their focus was only on offshore wind.
Our green transformation journey has shaped how we work on sustainability, making it a core part of our strategic thinking.
— Mads Nipper, CEO.
The company has taken a systematic and programmatic approach towards sustainable energy. While indulging with the stakeholders, each year they identify key sustainable themes.
Ørsted’s three key sustainability themes include;
1. Decarbonizing the supply chain:
Even while using renewable energy technologies that have zero carbon emissions, the energy supply chain is still a carbon emitter. This does not make the energy 100% carbon-free. Even the installations, wind turbines manufacturing and the installation process are carbon-intensive. The company wants to work to reduce this by building more sustainable supply chains with their suppliers.
The program launched in Jan 2020 addresses concerns like,
- Disclosing emissions and setting science-based targets.
- Use 100 % green electricity in the manufacture of wind turbines, foundations, cables and substations.
- Optimize vessel fleets and develop roadmaps to power vessels with renewable energy.
However, the company believes it to be a difficult task to get correct estimates on carbon footprint. The company aims at reaching net-zero emissions across the entire footprint by 2040.
2. Improved biodiversity management:
As their project is mainly focused on offshore wind energy, it can impact life at sea. The company continues to research ways to build green energy in balance with the local environment. They have also committed to promoting the UN Global Compact’s Sustainable Ocean Principles. Their biodiversity policy is highly flexible which makes it possible to mitigate their impact depending on the marine environment of the place. They also look at opportunities to support marine biodiversity.
3. Sharing values with local communities:
Unsustainable practices by one can affect the entire region, so the company aims at developing the energy projects while creating shared value and also addressing the concerns of the local communities. As their installations are across Europe, North America and Asia-Pacific they engage local stakeholders to ensure sustainable practices. As for their offshore wind farms, working with local fisheries to enable co-use of the sea is a great option.
“Running the company just for profit doesn’t make sense, but running it just for a bigger purpose is also not sustainable in the long term. Doing good and doing well must go together,” says CEO Henrik Poulsen.
Further, their 20 sustainability programs would help them overcome challenges. Out of 20, 11 are based on environmental impact and 9 on social and economic impact.:
Catalyzing the green energy transformation:
- Decarbonization of energy generation and operations
- Decarbonization of supply chain and wholesale buying and selling of natural gas
- Deployment of offshore wind
- Deployment of onshore renewables
- Greener combined heat and power plants
- Green energy utilization and integration
- Financing green
Addressing the sustainability impacts of the green energy transformation:
- Sourcing certified sustainable biomass
- Marine biodiversity
- Local communities
- Resource management
Ensuring responsible business practice:
- Workplace safety
- Employee health and well-being
- An employee’s development
- Employee satisfaction
- Inclusion of diversity
- Good business conduct
- Human rights & responsible business partners program
- Information and cyber security
- Responsible tax practices
With the above mentioned programs, they can achieve about 11 suggested SDGs. Their sustainable strategies also make their sustainable commitments operational and tangible.
Henrik Poulsen says, “We thought 35 to 40% was an ambitious target, but costs fell much faster than we expected. When we set out to change a decade ago, we thought the transformation to green energy would be complete by 2040. But we will reach that 2040 target 20 years earlier than we originally envisioned.”
Ørsted’s vision and values:
Let’s create a world that runs entirely on green energy.
The company believes in keeping down the global temperature rise, switching to renewables, driving the potential of wind power and cutting down on coal and CO2.
This company has become a guiding light for any energy company that wants to change course and switch to fundamentally sustainable energy.
Poulsen embraces, “I hope we can be an inspiration to others, yes. Both in terms of the radical nature of our transition and the speed.”
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