with power comes responsibility - claremont...
TRANSCRIPT
RWE npower
For further information visit
www.rwenpower.com/cr
We welcome your feedback on
this report, please contact us at
or write to Anita Longley,
Head of Corporate Responsibility,
at the address shown.
Corporate Responsibility Report 2006 With power comes responsibility
0208/06/07
RWE npower
Corporate Communications
Windmill Hill Business Park
Whitehall Way
Swindon SN5 6PB
T +44 (0)1793 877777
F +44 (0)1793 892525
I www.rwenpower.com
Co
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Resp
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6
CEO’s Statement 2006
01 CEO’s Statement
02 Company Overview
08 Strategy and Integration
14 Working with Stakeholders
18 Meeting the Challenges:
Transition to a Low Carbon Economy
Customer Relations
Contribution to Society
26 Marketplace
36 Environment
48 Workplace
58 Community
65 Performance against 2006 Targets
74 GRI Indicators
77 Verifi cation Statement
80 Glossary
Meeting our customers’ need for clean, reliable and affordable energy in an increasingly uncertain world
The information and data contained in this report were correct at 31 May 2007.
COVER PICTURE: It is all too easy to forget that the demands we make for energy in our homes and workplaces have an impact on the environment
and the planet’s resources, which are both fi nite and fragile. By being aware of our responsibilities we can make better choices and decisions.
The cover picture and themed images in this report aim to remind us of the relationship between the way we live and the world we live in.
Corporate Responsibility Report 2006
01
Our Corporate Responsibility (CR) report offers us an important
opportunity each year to review how well we have performed
in addressing the major social and environmental challenges
we face in developing a sustainable and profi table business.
This is our fourth full CR report and describes our activities
and performance during 2006, a year when energy and the
environment were again at the heart of public policy debate.
The Government’s review of energy policy led to a renewed
focus on energy supply companies and their role in meeting
the nation’s strategic energy policy goals. In particular,
it highlighted the need to provide affordable energy to homes
and businesses and to make the substantial investments
required to meet the challenges of global climate change
and security of supply.
Moving to a low carbon economy whilst maintaining affordable
and secure sources of energy represents the biggest challenge
the energy industry has faced.
Communities and consumers have some diffi cult choices to
make in the years ahead about the future generation mix in the
UK and, in particular, the role coal, gas, nuclear or renewable
generation can and should have. We believe that we have
a role to facilitate debate, inform discussions and, ultimately,
to provide the products and services that our customers want.
As a signifi cant emitter of carbon dioxide (CO2), we are
committed to developing strategies and plans to ensure we
are able to play a leading role in minimising emissions in the
future. Our own evidence to the Government’s Energy Review
highlighted the fact that if policy objectives are to be met, the
UK needs both to build substantial amounts of new low carbon
generating capacity and to take advantage of every possible
initiative to save energy and to use it as effi ciently as possible.
For us this means investing in new clean coal stations (with the
option of carbon capture equipment), high effi ciency gas-fi red
stations, more wind power and emerging technologies. It also
means helping our residential and business customers to use
energy more effi ciently and save money, for example, through
the introduction of ‘smart metering,’ allowing them to monitor
and adjust their energy use. In our future vision (see the Strategy
and Integration section of this report) we have set ourselves
a number of targets to deliver an affordable low carbon energy
future for the company based on these investments and activities.
We recognise that through our activities we interact with
society in many diverse ways. These include the impacts
of energy prices, particularly on our vulnerable customers,
the contribution of our investment programme to job creation
and economic growth, and the effects of emissions from our
power stations, both globally and locally, on the environment.
Developing a robust understanding of the social and environmental
dimensions of our impacts and of our stakeholders’ perspectives
is fundamental to delivering a sustainable future for the company.
We need to be able to apply this understanding to all areas of our
business so that we can make informed decisions about how we
make progress. For example, analysis of our needs has helped us
to identify the enormous benefi ts that a diverse workforce offers
us and the need to invest in the young engineers who will be the
future lifeblood of our generation business.
A strong commitment to CR reinforces our company values,
helps to defi ne our corporate image both internally and
externally, and underpins our relationships with stakeholders.
I have no doubt that maintaining an open and active
dialogue with our stakeholders helps to ensure that we have
the information to take decisions and to manage the risks
of operating in a rapidly changing business environment.
This dialogue helps us to strike the right balance in
addressing concerns, which are often shared, albeit from
diverse perspectives, by different stakeholder groups.
This consultative process is one of the foundations upon which
we can base the transition to a more sustainable future.
In 2006, we again set ourselves challenging CR performance
targets and the report describes our performance against these
targets. I believe that we can be justifi ably proud that, through
the commitment and hard work of my colleagues, we continue
to meet and often exceed our CR objectives and performance
targets. However, we do recognise that we must continue
to strive to meet new and challenging targets in the future.
This report has been assured by an independent organisation,
csrnetwork. Further information and data are also available
on our corporate website at www.rwenpower.com/cr
I would welcome your feedback on this report, which can
be sent to us at [email protected] or in writing
to the address which appears on the back cover.
Andrew Duff, Chief Executive Offi cer
CEO’s Statement
RWE npower – Key fi gures 2006 2005 2004 2003
External revenue € million 8,485 6,382 5,605 5,552
Internal revenue € million 8 3 - 89
Total revenue € million 8,493 6,385 5,605 5,641
EBITDA € million 658 561 698 850
Operating result1 € million 512 437 604 714
Return on capital employed (ROCE)2 % 7.3 6.6 8.6 9.4
WACC3 before tax % 10 10 10 10
Value added € million -185 -227 -100 -42
Capital employed € million 6,969 6,645 7,045 7,559
Capital expenditure € million 407 542 166 215
Property, plant and equipment € million 396 315 150 215
Financial assets € million 11 227 16 -
31/12/2006 31/12/2005 31/12/2004 31/12/2003
Workforce4 FTE 11,624 10,125 9,555 9,357
Total payroll and benefi ts € million 488 452 - -
1 The product of the company’s industrial and commercial activities before its fi nancing operations are taken into account
2 2004 ROCE, value added and capital employed restated to be consistent with 2005 numbers calculated in accordance with new IFRS
accounting policies3 Weighted Average Cost of Capital
4 Converted to full time equivalents
Corporate Responsibility Report 2006
RWE npower is a division of RWE AG. We are one of
the UK’s largest energy supply companies with more
than 6.5 million customers from the domestic and
business sectors and a generating capacity of more
than 10,000MW.
In 2006, our operating result was €512 million,
an increase of 17% compared to 2005. This signifi cant
improvement was attributable to increased revenues
from our generation business.
The profitability of our energy supply business was
impacted by an increase in wholesale electricity and
gas prices. This resulted in higher customer prices;
nevertheless, our residential business gained some
600,000 new customers, while the number of business
customers served by the company by the end of 2006
was 394,000. A discussion of price increases during
the year can be found in the Marketplace section of
the report.
In 2006, our total workforce increased by some 1,500
people. This was mostly due to the expansion of our
retail business.
We continue to invest in cleaner and more effi cient
ways of generating electricity. We recently announced
our intention to invest £800 million in a new combined
cycle gas turbine (CCGT) power station and a further
£100 million in new wind farm developments.
Retail
Our retail division supplies electricity and gas to
residential and business consumers and provides
meter reading services through our MeterPlus business.
Our aim is to provide all our customers with excellent
standards of service. We have a particular responsibility
to protect vulnerable members of society, which we
do through programmes such as Spreading Warmth
and Health Through Warmth.
We provide specialist advice to all our customers
on energy efficiency. We are also committed to
developing innovative products which allow our
customers to make sustainable energy choices, such
as our domestic green energy product, npower Juice.
Business customers, too, benefit from our tailored
energy and risk management services.
Company Overview 2006
02 03
Company Overview
2 RWE npower owns 33.3% equity in Zephyr Investments Limited, owner of Beaufort Wind Limited, the company established to own the assets
operated under the Zephyr deal with the other two equity shareholders Englefi eld Capital and Arcapita (both of whom hold a 33.3% equity share).
We operate the entire Beaufort portfolio under a Management Services Agreement with Beaufort Wind Limited, and npower retail is the offtaker
for 100% of the energy.
RWE npower –
Electricity and Gas Sales volume / revenue
Capacity
(MW)
Bears Down 9.6
Beinn Ghlas 8.4
Bryn Titli 9.9
Carno 33.6
Causeymire 48.3
Farr 92.0
Ffynnon Oer 32.0
Kirkby Moor 4.8
Lambrigg 6.5
TOTAL
Capacity
(MW)
Llyn Alaw 20.4
Mynydd Gorddu 10.2
North Hoyle 60.0
Novar 17.0
Taff Ely 9.0
Tow Law 2.3
Trysglwyn 5.6
Windy Standard 21.6
391.2
Electricity Gas
2006 2005 2004 2003 2006 2005 2004 2003
External sales volume TWh 1 56.4 55.3 59.5 59.3 50.1 47.7 48.6 48.6
Private and commercial customers TWh 22.3 22.3 22.5 24.9 41.4 39.6 38.6 39.1
Industrial and corporate customers TWh 34.1 30.2 37.0 34.1 8.7 8.1 10.0 9.5
Other TWh – 2.8 – 0.3 – – – –
External Revenue € million 6,174 4,820 4,154 4,068 1,777 1,221 1,096 1,040
16 onshore and one offshore wind farm with a total
generating capacity of 391MW, equivalent to
approximately 20% of UK installed wind capacity.
We also operate hydroelectric power stations at
15 sites with a capacity of 59MW.
Our Technology Services division delivers proven
strategic and operational services to address the
technical, commercial and environmental issues faced
by our power generation business and by our customers.
Our external services are marketed jointly with RWE
Power, under the brand RWE Power International.
These include improvements to power station effi ciency,
theoretical and practical advice on burning sustainable
fuels and guidance on clean-up technologies such as
fl ue gas desulphurisation (FGD) and selective catalytic
reduction (SCR).
RWE npowerMain Sites
Corporate Responsibility Report 2006 Company Overview 2006
04 05
Generation and Renewables
We own and operate one of the largest and most
diverse portfolios of power generating plant in the UK,
including large gas, coal and oil-fi red power stations,
cogeneration plant and renewables facilities.
We are one of the leading developers of renewable
energy generation facilities in the UK. We are market
leaders in the development and operation of both
onshore and offshore wind farms and small-scale
hydroelectric schemes. At the end of 2006, we operated
Coal Power Station
Gas Power Station
Oil Power Station
Onshore Wind Farm
Offshore Wind Farm
Hydro Site
Cogen Plant
Office
Technology Services Site
npower Core Customer Area
Power Stations
CoalAberthaw, WalesDidcot A, EnglandTilbury, England
GasCowes, EnglandDidcot B, EnglandGreat Yarmouth, EnglandLittle Barford, England
OilFawley, EnglandLittlebrook, England
Onshore Wind FarmsBears Down, EnglandBeinn Ghlas, ScotlandBryn Titli, WalesCarno, WalesCauseymire, ScotlandFarr, Scotland
Ffynnon Oer, WalesKirkby Moor, EnglandLambrigg, England Llyn Alaw, WalesMynydd Gorddu, WalesNovar, ScotlandTaff Ely, WalesTow Law, EnglandTrysglwyn, WalesWindy Standard, Scotland
Offshore Wind FarmsNorth Hoyle, Wales
Hydro SitesAuchtertyre, ScotlandBlantyre, ScotlandBraevallich, ScotlandCwm Croesor, WalesCwm Dyli, WalesCynwyd, WalesDolgarrog, WalesDulyn, WalesGarnedd, WalesGarrogie, ScotlandGarry Gualach, ScotlandGlen Tarbert, ScotlandInverbain, ScotlandKielder, England (operated on behalf of Northumbrian Water)Stanley Mills, Scotland
Combined Heat and Power StationsAylesford Newsprint, EnglandBASF, EnglandBridgewater Paper, EnglandConocoPhillips, EnglandDow Corning, WalesEsso Oil Refi nery, EnglandGeorgia Pacifi c, WalesHuntsman Tioxide, EnglandLancaster University, EnglandMillennium Chemicals, EnglandRhodia Oldbury, EnglandRhodia Whitehaven, EnglandSCA Tawd Mill, England Whitegate Refi nery, Ireland RWE npower Offi ces RWE npower HQ, SwindonRWE npower, Kingsway, Londonnpower cogen, Solihullnpower Renewables HQ, Swindonnpower HQ, Oak House, Worcesternpower, Birminghamnpower, Hullnpower, Kingswinfordnpower, Leedsnpower, Newcastle upon Tynenpower, Oldburynpower, Peterlee, Co Durhamnpower, Solihullnpower, Stoke-on-Trentnpower, Team Valley, Gatesheadnpower, Thornabynpower, Worcester
Technology Services SitesDrax, EnglandTSG Ferrybridge, EnglandTSS, ScotlandSwindon
1 In 2006 we generated a total of 38.8TWh of electricity from our generating facilities.
1 This does not include renewable capacity in the Zephyr fund.
Renewables1
Oil
0
12,000
8,000
10,000
4,000
6,000
2,000
RWE npower power plant capacityby primary energy source
MW
At 31 December 2005 At 31 December 2006
Hard coal
Gas
Assets owned by Zephyr 2
RWE TRADING
FUEL STORAGE & SUPPLY
COOLING TOWERS
ASH RECYCLING
FOSSIL FUEL GENERATION
How we provide energy
The electricity we generate at our coal, gas and
oil-fired power stations and at our renewable energy
facilities is sold into the wholesale electricity market
through RWE Trading.
RWE Trading buys and sells in the electricity, gas,
coal and oil markets for the fuel we need for our
CUSTOMERS
HYDRO POWER
WIND POW
ER
Gas has a similar journey; it is produced offshore
by companies such as Shell or BP. As a gas shipper
we ship it through the gas transportation network,
which is owned by National Grid, to our power
stations, and via the gas distribution network to
our customers.
generating plant to supply
our customers with electricity and gas.
The electricity from our power stations is carried
around the UK on high voltage transmission lines.
As this electricity nears its fi nal destination the voltage
is reduced and distribution lines deliver it to customers.
Corporate Responsibility Report 2006 Company Overview 2006
06 07
As an integrated energy business we produce electricity at our generating facilities, our trading operation buys and sells electricity and gas, we ship gas on the gas network, and supply gas and electricity to our customers.
Our generating facilities have the potential to cause
environmental impacts. For example, cooling water
for our fossil-fired stations is abstracted from and
discharged to rivers or the sea. Cooling towers reduce
water usage significantly, but also reduce overall
plant effi ciency. Wherever possible we seek to reuse
and recycle by-products from our activities.
Pulverised fuel ash (PFA) removed from fl ue gases and
furnace bottom ash (FBA), for example, can be recycled
to be used in the construction industry. Biodiversity action
plans conserve and enhance the unusual biodiversity
at our station sites.
CONSERVATION
Introduction
CR issues, risks and challenges that are important to
RWE npower are assessed and incorporated into the CR
strategy following consideration by our CR Committee
(CRC), independently chaired by Yvonne Constance.
Membership of the CRC includes our CEO, other Board
members and representatives from across the business.
It provides leadership and commitment at the most
senior level and drives business performance.
Our CEO and business managing directors also sit
on the Health and Safety Review Committee (HSRC),
independently chaired by Sir Robin Mountfi eld, where
targets for the management of health and safety are
set and performance monitored.
Anita Longley
Yvonne Constance
Independent Chairman
Alan Robinson
Director, UK Markets, RWE Trading
Pensions and Interface with RWE Trading
Andrew Duff
Chief Executive Offi cer
Policy and Strategy
Saudagar Singh
Human Resources Director
Workplace
Dr Hans-Peter Meurer
Manager, Environmental Affairs, RWE AG
Interface with RWE AG
Julia Lynch-Williams
Head of Product Management
Marketplace
John Rainford
Site Manager, Didcot A and B Power Stations
Environment
Alison Cole
Director, Corporate Communications
Community and Communications
Kevin Akhurst
Managing Director, Generation and Renewables
Environment
John McElroy
Head of Environmental Strategy
Environment
Anita Longley
Head of Corporate Responsibility
Integration, Strategy and Community
Kevin Miles
Managing Director, npower Residential
Marketplace
Dave Titterton
Head of Marketing, npower Business
Marketplace
Volker Beckers
Group Chief Finance Director, RWE npower
Corporate and Supply Chain
Strategy and Integration 2006
08 09
John McElroy
Kevin Miles Dave Titterton
Volker Beckers
Yvonne Constance
Alan Robinson
Andrew Duff
Saudagar Singh
Dr Hans-Peter Meurer
Julia Lynch-Williams
John Rainford
Alison Cole
Kevin Akhurst
Corporate Responsibility Report 2006
Strategy and Integration
Strategy and Values
Corporate Responsibility:
Benefi ts to the Business
Responsible business practice offers real benefi ts to
our business and has become an indispensable part
of our decision-making processes. The commitment
demonstrated by all employees from our CEO and
executive management team down and from our
business units upwards has been a driving force in
bringing the different business units together under the
npower brand and promoting a ‘one company culture.’
The Benefi ts of Responsible Business Practice
• Capturing economic benefi ts from a more
forward-looking and innovative approach;
• More effective risk management supported by
stakeholder engagement;
• Protecting our corporate and brand reputation;
• Demonstrating our CR credentials to business
customers keen to demonstrate the sustainability
of their own supply chains;
• Developing innovative products and sustainable
energy solutions to meet customers’ needs;
• Attracting and recruiting candidates from diverse
backgrounds in a competitive recruitment market;
• Healthier, committed and motivated employees
through our occupational health and wellbeing
programmes;
• Building and maintaining positive relations with
communities, through employee volunteering and
support of local charities and community groups; and,
• Achieving better brand recognition through our
community involvement programme.
Our Vision
We recognise that the world is changing and the
future for energy companies like RWE npower is
going to be very different. Global issues such as
climate change and security of energy supplies
will continue to dominate the world stage and we
must be at the forefront when it comes to taking the
decisions that will shape the future of our business
and society as a whole.
The challenges were set out to delegates at our 2006
management conference where senior executives
and managers gathered from across the company.
In the UK over half of the current generating capacity
will have closed within the next ten years, including
some of our own power stations, and we believe that,
by 2020, 20% of the country’s electricity will need
to come from renewable sources. There is no doubt
that there are challenging times ahead but these
also present us with great opportunities.
Delegates discussed objectives and aspirations for
RWE npower in the coming years, which will shape
and drive all our activities to secure the company’s
future. Its key elements include:
• Communicating an inspiring and credible strategy
to our investors;
• Substantial investment in new generating projects
and improvements to existing plant;
• Ensuring we have the right people with the right
skills, our challenge is to engage them in delivering
our vision; and,
• Ensuring we anticipate what customers will want
into the future and create products and services
that add value.
Our CR strategy plays a central role in delivering the
benefi ts of responsible business practice, and thereby
contributes to realising our aim to become the leading
integrated generating and supply company in the UK
energy market. We will achieve this through operational
excellence, optimisation of existing assets and organic
growth supported by small-scale acquisitions. In the
medium term our CR strategy will also be integral to
the delivery of our vision of what our company will be
like in the year 2020.
Corporate Responsibility Report 2006
10
Company Values and Code of Conduct
The RWE Group shares a set of core company values and
a Code of Conduct. These encourage the standards and
behaviour we value in our colleagues, which support
the implementation of our corporate strategy.
Values
The day-to-day role and importance of values in our
business are emphasised both through company-wide
initiatives and by encouraging more local, grass root
take-up and ownership of these initiatives by our
employees. Individual business units, for example, have
discussed the values and agreed what they mean and
how they can be demonstrated in their own business areas.
To reinforce and support these activities further, the
company values also form a key part of our performance
management across the company.
11
Strategy and Integration 2006
Our Company Values
• Customer focus
• Forward thinking
• Performance
• Trust
• Reliability
Business Conduct
Our Code of Conduct (‘the Code’) was developed
by an independent group of experts and circulated
to all employees, recognising that our reputation
for conducting business with integrity and respect
for those affected by our activities is critical to our
success. Compliance Officers provide support and
guidance on its implementation.
The Code encourages all employees to take responsibility
for their actions and provides guidance covering a wide
range of situations which employees may experience,
for example, potential confl icts of interest. It also outlines
the principles which guide the business activities
of the RWE Group and reinforces our commitment to
the principles of the United Nations Global Compact,
which RWE signed up to in 2003, and the Organisation
for Economic Cooperation and Development (OECD)
guidelines for multinational companies.
In the UK, we continued our work in 2006 with the
Institute of Business Ethics to develop training and
workshops covering business ethics and the Code.
These will be held throughout 2007.
Our speak-up policy includes provision of an external
helpline for employees who wish to raise concerns about
business issues confi dentially. To date, use of this helpline
has been low and we therefore aim to raise its profi le
through our business ethics training.
Integration and Performance
All papers submitted to the RWE npower Board for
fi nancial investment are required to include an assessment
of the social and environmental impacts of the proposal.
An authorised Committee of the Board meets every two
weeks and the Executive Directors recognise that they
are responsible for managing the company in accordance
with best practice corporate governance. In practice,
the Board is advised of relevant CR issues by the CEO
and other Board members represented on the CRC.
The HSRC provides a focus for the Company’s
commitment to the highest standards of workplace
health, safety and wellbeing. The Committee sets
and monitors quantitative targets and qualitative
objectives, reviews best practice and identifies
areas for improvement.
Our Risk Committee also has representatives from across
the business, including the CRC and HSRC Committees.
By systematically examining and quantifying the risks
facing the company and ensuring these are mitigated,
it ensures a consistent approach to risk management.
The CR team advises both the CRC and individual
business units, which have day-to-day responsibility
for implementing CR strategy and achieving targets set
by the Committee, on best practice. Our Ambassadors
Group provides working-level, cross-company input
to our CR strategy and its members champion CR
throughout the company.
CR targets are communicated to employees through
team briefi ngs and an employee CR report. Our CR
and health and safety performance, and performance
against company values, are taken into account during
the employee appraisal process and in deciding the
level of bonus awards.
Integration with Group Strategy
During 2006, we worked with our colleagues across
the RWE Group to review the RWE Group CR strategy.
The fi rst stage of this process, facilitated by Forum
for the Future, was to develop a number of scenarios
that highlighted the major drivers of change that
Corporate Responsibility Report 2006
12 13
Strategy and Integration 2006
could affect the future operating environment of the
company, for example, climate change, security of
supply or distributed generation. These scenarios were
developed through both desk research and discussions
with RWE employees and external experts, and helped
ensure that the Group strategy would be equally
applicable in a number of different possible futures.
The fi ndings from the scenario exercises, together
with further consultation with internal and external
stakeholders across the business, will be used to
inform ongoing strategy workshops and will culminate
in the revised RWE CR strategy during 2007.
Business Continuity
It is essential that we can continue to provide our
customers with a continuous and high quality supply
of our products, even in adverse circumstances.
Our Business Continuity Policy has been further
developed to ensure that the necessary measures are
in place to identify, assess and manage potential crises
in all of our business units.
Monitoring and Reporting Performance
The CR Committee sets CR performance targets,
which are over and above regulatory requirements,
on an annual basis and reviews progress against them
at its quarterly meetings. The Marketplace, Environment,
Workplace and Community sections of this report
describe our success in achieving our objectives in
2006. A summary of our performance in 2006 is set
out towards the end of the report. CR Reports and
performance data for previous years can be found at
our website at www.rwenpower.com/cr
This year, for the fi rst time, we have set some longer
term performance targets in addition to those for
delivery within the 2007 calendar year. We will continue
to monitor progress against these targets on a quarterly
and annual basis.
This report covers the calendar year 2006 and all
RWE npower operations in the UK. It does not include
activities under joint ventures such as the Zephyr Fund,
although RWE npower’s role as the operator of Zephyr
assets is included. Major changes to the organisation
since the 2005 report include the divestment by RWE
of Thames Water, with the consequent dissolution of
the joint RWE npower and RWE Thames Water Shared
Services business. This report considers all material CR
issues affecting the company, as determined through
the CR management process and supplemented by
independent research on stakeholder expectations.
We have used the Global Reporting Initiative’s (GRI)
guidelines1 to ensure that our report addresses the
indicators relevant to our business.
The Business in the Community (BitC) CR index provides
an opportunity to reinforce a company’s leadership in
managing, measuring and reporting on responsible
business practice. It provides a benchmark for companies
to evaluate their management practices in four key areas
of corporate responsibility, (Marketplace, Environment,
Workplace and Community) and performance in a range
of environmental and social impact areas material to
the business. RWE npower was awarded the highest
performance rating of Platinum in the 2007 BitC index,
which refl ects performance in 2006, placing it once again
amongst the top performing companies.
Useful website links
www.dowjones.com
www.forumforthefuture.org.uk
www.globalreporting.org
www.bitc.org.uk
www.unglobalcompact.org
1The GRI G3 guidelines published last year.
We integrate CR in our business through:
• A commitment to responsible business practice
at the highest level in the company, reinforced by
good communication with, and by demonstrating
expected behaviours to, our stakeholders;
• Robust processes to manage and monitor
responsible business practice;
• An effective, relevant and interesting
internal communications strategy;
• Setting targets to improve our performance
and monitor progress on a quarterly basis;
• Involving employees in the decision-making
process and programme development and
delivery; and,
• Considering the social and environmental
impacts of our business decisions.
Corporate Responsibility Report 2006
14
Business Decisions
Our approach to risk management and strategy is based
on the precautionary principle, which means that we
do not take strategic or operational decisions without
proper consideration of their potential environmental
or social impacts. The nature of our business operations
means that its impacts are highly diverse in terms of
their scope and magnitude. Our stakeholders – including
customers, employees, suppliers, Government, regulators
and the general public – have a wide range of perspectives
to offer. Ensuring that we maintain an open dialogue
with them is therefore a fundamental part of our
decision-making process.
Working in partnership wherever we can with organisations
that are able to bring a different perspective to the issues
we face offers us the opportunity to learn from others
and multiply the benefi ts of our efforts. For example,
through our social action programmes, such as Health
Through Warmth and Spreading Warmth, we work
with key external stakeholders to help us fulfil our
responsibility to protect vulnerable members of society.
Understanding the Challenges
An economically sustainable future for our company
depends on understanding the expectations of our
stakeholders, and in developing solutions that fi nd
the right balance between the needs of different
stakeholders. We must provide reliable and affordable
supplies of electricity and gas to our customers with
minimum impact on the environment, while providing
our shareholders with a sustainable, positive return
on their investments. This will require the investment
of billions of pounds over the next few decades.
Such a level of investment, however, is only possible if
we have confi dence in the public policy framework and
regulation governing our industry over the long term.
15
Working with Stakeholders 2006
Our main regulatory bodies
Regulatory organisation Area regulated
Offi ce of Gas and Electricity Ofgem is the independent regulator responsible to The Gas and Electricity Markets Markets (Ofgem). Authority. Ofgem’s fi rst priority is to protect consumers. It does this by promoting effective competition and regulating monopoly companies which run the gas pipes and electricity wires. Ofgem’s other duties include helping to secure Britain’s energy supplies, helping achieve environmental improvements as effi ciently as possible and taking account of the needs of vulnerable customers.
Environment Agency (EA). The Environment Agency is the public body responsible for protecting and improving the environment in England and Wales. It controls the emissions from processes through various permits, licences and authorisations. The equivalent organisation in Scotland is the Scottish Environment Protection Agency.Department of Trade The DTI’s Energy Group works to ensure competitive energy markets while achievingand Industry (DTI). safe, secure and sustainable energy supplies. Its role is to set out a fair and effective framework in which competition can fl ourish for the benefi t of customers, the industry and suppliers, and which will contribute to the achievement of the UK’s environmental and social objectives. These objectives include the alleviation of fuel poverty, and maintaining the security and diversity of the UK energy sources. Health and Safety Executive The Health and Safety Executive is an arm of the Health and Safety Commission (HSE).
(HSC), which is responsible for health and safety regulation.Local Authorities. Local authorities control emissions of pollutants to the atmosphere for some processes
(mostly smaller installations). They also have responsibilities for planning decisions.
A key factor in successful business performance is effective communication through an open dialogue with all our stakeholders. We must be responsive to their concerns and complaints and adopt high standards of reporting on our environmental and social performance.
Working with Stakeholders
In November 2006, RWE npower a
nnounced its decision not to
proceed with the conversion of
its oil-fired power station a
t
Littlebrook in Dartford to bur
n 100% biomass fuel in the for
m
of palm oil. The decision was
taken in accordance with the
strict technical, economic and
sustainability criteria we se
t
ourselves, which build on the
minimum standards established
by the Roundtable on Sustainab
le Palm Oil (RSPO). These
extremely high standards meant
that it was not possible, at
that
time, to purchase the large vo
lumes of sustainably sourced p
alm
oil required to make the conve
rsion economically viable.
The RWE npower sustainability cr
iteria were developed on the bas
is
of a detailed understanding of
the palm oil industry, and in
cluded
dialogue with and recommendati
ons from key international
Non-Governmental Organisations
(NGOs) involved in the indust
ry,
particularly World Wildlife Fu
nd (WWF) and Oxfam. To ensure
the
robustness of our criteria, we
consulted extensively with ot
her NGOs,
including Friends of the Earth
, Forum for the Future, Green
Alliance,
Greenpeace and the Forestry St
ewardship Council (FSC).
Kevin Akhurst, Managing Direct
or of Generation and Renewable
s at RWE npower said: “The use
of
biofuels in energy generation
has huge potential, but it has
to be appropriate. We are pro
ud
to have solved the technical i
ssues involved in such a large
-scale and ambitious project,
even
though in the final analysis t
he project was not feasible. G
iven the importance of moving
to
a low-carbon economy, it is vi
tal for energy companies to gi
ve a serious examination to al
l
projects with the potential fo
r significant carbon savings.”
CASE STUDY:
PALM OIL
Corporate Responsibility Report 2006
16
Communicating our Views
We therefore maintain an open dialogue with legislators,
regulators and opinion formers through meetings,
correspondence and responding to public consultations
in order to explain our positions on issues of signifi cance
to our business. In our submission to the UK Government’s
Energy Review consultation last year, for example,
we emphasised the importance of long-term, stable
policy and planning frameworks to stimulate investment
in new viable renewable energy generation and of
substantial support for Research and Development (R&D)
initiatives, including large-scale demonstration projects
into emerging renewable and carbon capture and storage
(CCS) technologies.
We make our views known to the outside world both
directly and through trade associations and peer groups
such as the UK Business Council for Sustainable Energy
(UKBCSE), the Association of Electricity Producers (AEP)
and the Energy Retail Association (ERA).
RWE npower Consultation Responses in 2006
During 2006, our principal consultation responses were
related to the Government’s Energy Review and the
further consultations launched by its Energy Review
report ‘The Energy Challenge.’ In general, we reiterated
our overall policy messages as set out in the CEO’s
statement at the beginning of this report and responded
to consultations of specifi c relevance to our business.
Leadership and Learning
We believe that change within an organisation requires
clarity of purpose and commitment from senior
management. It is by involving our senior executives
through the CR Committee that the strategic
importance of CR is reinforced. In addition, a component
of leadership is to engage and support other companies
and publicly promote responsible business practice
through, for example, workshops and presentations.
We are actively involved in a range of business
and sector-led forums such as the UKBCSE, the CBI’s
Climate Change Taskforce, and the Basic Services
Human Rights Network.
01
CASE STUDY:ASH DISPOSAL AT RADLEY LAKES
Following the consultation process we decided:• not to use the more ecologically mature of the two Lakes (Lake F) under consideration;• to undertake extensive ecological restoration following works, and to engage a partner to manage a nature reserve on the site in the future; and,• that works would be supervised by an independent ecologist, who would help set up the protective boundaries for wildlife, helping to preserve as much bank, shrubs, and trees as possible.We also committed:
• to keeping local residents informed about all activity;• to keeping the impact of work upon local residents to an absolute minimum; and,• to retaining as many trees as possible, and will plant over 1,200 trees throughout the construction period.
The development of Lake E received conditional planning permission from Oxfordshire County Council in January 20071.
Pulverised fuel ash (PFA) is produced as a result of burning coal. We have always looked to reuse or recycle the ash from our coal power stations for beneficial use in the civil engineering industry. In 2005, we invested £1.9 million in a jointly funded (with the equipment manufacturer) scheme to construct a new PFA reprocessing plant at Didcot A, capable of producing around 120,000 tonnes per year for use as a partial replacement for cement in the production of concrete products. Since the early 1970s, we have successfully reused and recycled around 70% of the ash produced at Didcot, sending only the remaining 30% to Radley. Eight gravel pits have been used in two phases of work and the areas that were filled earliest have now been restored to Oxfordshire countryside. The development and operations on the site have been monitored by the Environment Agency and through a Local Liaison Committee comprising the Parish Council and Power Station employees.
Last year, following consideration of all other viable options, we decided that continued disposal of PFA at Radley remained the best environmental option because it provides a constantly available route for the disposal of ash that cannot be recycled or reused. Transporting PFA by lorry, for example, would result in increased impacts on the local community, and would also not provide the constant PFA disposal route required to match the station’s generation capability. Extensive stakeholder consultation was undertaken to discuss our future ash disposal plans involving two of the Lakes (E and F). Even so there has been, and continues to be, opposition from some residents of Abingdon and Radley to our plans.
We have been working with other leading companies
through the BitC to develop new thinking on wellbeing
and we chair the BitC’s Leadership Network which aims
to develop ideas on future CR leadership practice.
We are Foundation Partners of Forum for the Future
and have worked with them specifi cally on sustainable
marketing and procurement strategies within the context
of sustainability.
Engaging with Stakeholders
Our engagement programme is tailored to suit our
wide range of stakeholders. It addresses stakeholder
concerns in different ways, and at different levels.
We have well established consultation programmes
with our customers and employees, and those
communities affected by our operational locations,
on issues of concern to them. Communication and
feedback mechanisms include regular customer and
employee surveys, Local Liaison Committees at each
of our conventional power stations and extensive
consultation with key stakeholders around proposed
new developments.
Useful website links
www.parliament.uk
www.aepuk.com
www.bcse.org.uk
www.nea.org.uk
www.dti.gov.uk
www.rwe.com
Working with Stakeholders 2006
17
Working with Stakeholders 2006
1At the time of publication of this report an application had been lodged by objectors to our ash disposal scheme to have Lake E registered as a ‘Village Green’.
A decision is expected in Autumn 2007.
Examples included submissions to:• the Government’s Energy Review;• consultation on the reform of the Renewables Obligation;
• consultation on the policy framework for new nuclear build;
• consultation on new measures for gas security of supply;
• consultation on distributed energy; and,• initial consultation on the Energy Effi ciency Commitment 2008–11.
Corporate Responsibility Report 2006
18
In 2006, we commissioned independent research
on stakeholder expectations and concerns in
order to support and refresh our regular process
of stakeholder consultation.
The analysis included undertaking a review of existing
information on stakeholder expectations, conducting
meetings with employees who maintain oversight
of key stakeholder relationships, and engaging with
selected stakeholder groups through interviews and
questionnaires. The research identifi ed a wide range
of issues, and highlighted those that are most material
to the business and our stakeholders, and where we
should focus and prioritise actions.
In this section, we look at three issues identifi ed as
having a high degree of materiality for the company,
for example, through their economic impact or
opportunity and risk to reputation. They are the
transition to the low carbon economy, our relationship
with customers and our contribution to society.
In each case, we identify the importance of the issues
to us and set out the actions we are undertaking to
address them. An additional benefi t of considering
these particular issues side by side is that the overlap
between them, from a stakeholder perspective,
becomes very apparent. Whereas customers benefi t
from measures to increase the effi ciency of the
way they use energy, for example, the environment
benefi ts too through lower emissions of carbon
dioxide and other gases.
19
Meeting the Challenges 2006
Meeting the Challenges
Corporate Responsibility Report 2006
20 21
Meeting the Challenges 2006
Transition to a Low Carbon Economy
In his foreword to the draft Climate Change Bill in March 2007,
then Prime Minister Tony Blair stated that:
“The threat from climate change is perhaps the greatest
challenge facing our world. Without decisive and urgent action,
it has the potential to be an economic disaster and an
environmental catastrophe.”
As a company, RWE npower generates the majority of our
electricity by burning fossil fuels with the consequent emissions
of the greenhouse gas carbon dioxide (CO2). Against the
background of the Government’s intention to set a mandatory
target reducing carbon emissions by 60% against 1990 levels
by 2050, we need to provide energy that is generated using
low carbon technologies, using secure fuel sources and being
affordable. We need a policy and planning framework that will
encourage signifi cant investment in new generating capacity
while promoting energy-effi cient technologies and energy
savings across all economic activities.
A diverse energy mix will make it possible to reconcile
the UK’s goals of security of supply, carbon reductions
and affordability. We have already invested signifi cantly
in new cleaner generating plant, reducing carbon
emissions and providing secure supplies of energy.
In 2006, we invested a further £115 million to reduce
power station emissions, making a total of £434 million
over the last two years. We’ve recently committed
a further £900 million to new cleaner generating
capacity and announced plans to build a £1 billion
clean coal station.
We will engage with other companies, with Government,
regulatory authorities and potential suppliers in order
to understand the issues of potential new nuclear
power stations and their market implications better.
However, there would need to be much discussion,
public debate and enabling legislation, before we
would make a decision on whether or not to be
involved in any future programmes in the UK.
Energy efficiency will be a vital component
of meeting energy policy goals.
“ The greenest energy you use is the energy
you don’t use.”
“The cheapest energy you use is the energy
you don’t use.”
npower business energy effi ciency campaign
Last year our energy savings initiatives led to the
installation of more than £1.5 million energy savings
measures, including 105,000 cavity wall and 84,000
loft insulations.
We need a fi rm commitment to a long-term
carbon pricing mechanism based on the EU ETS*
to encourage investment in low carbon technologies
in the energy sector. The electricity supply sector
has already made signifi cant contribution to
reducing UK carbon emissions. Other sectors such
as transport also have a signifi cant role to play.
*European Union Emissions Trading Scheme
Long-term partnerships with our business customers
enable us to develop new energy services and
products to meet their needs. Our business division
has struck sustainable energy deals with customers
including BT, Marks & Spencer, Sainsbury’s,
Wembley and Millennium stadia, Barclays, Woolwich
and AstraZeneca.
“ Like thousands of others, I never thought energy
saving applied to me but we have a responsibility for
our children to start taking steps to save our planet.”
Paul Sergeant, Millennium Stadium Chief Executive
We operate 16 onshore, and the UK’s fi rst major offshore,
wind farms with a total generating capacity of 400MW,
equivalent to approximately 20% of UK installed wind
capacity. We continue to support the development of
new sources of renewable energy through the npower
Juice fund. Total committed investment from the fund
in 2006 was £626,000, and projects funded cover a wide
spectrum of research and activity. We plan to invest up
to £1 million, raised through our npower Juice fund,
in groundbreaking marine energy technologies.
We develop and operate CHP plants throughout the
UK. CHP is a highly effi cient way of generating energy,
reducing consumption of fossil fuels.
“ npower Cogen should be congratulated for
demonstrating how environmental issues need not
be compromised to meet energy requirements.”
John Smith MP, local to Dow Corning CHP plant
Corporate Responsibility Report 2006
22
npower’s A1-Boilers scheme is the most successful
initiative of its kind in the UK according to Heating
and Ventilation Magazine; 50,000 boilers have been
installed over the last three years and we are looking
to redouble the effort over the next three years.
We received the Power in Partnership award jointly
with National Grid Company for our involvement in the
Warm Wales project.
“ The award recognises the hard work and commitment
shown by all the partners involved in the scheme
and once again proves that partnership between
major organisations and local authorities can make
a signifi cant difference to the lives of thousands
of vulnerable households.”
Jeremy Nesbitt, Commercial Director at Warm Wales
Last year we became the fi rst major UK supplier to
offer automated meter reading (AMR) technology
to our larger business customers – the npower smart
meter. Access to more accurate understanding of
consumption will help to eliminate the uncertainty
generated by estimated billing and give companies
the means to analyse energy usage and bring down
their costs.
Residential customers are becoming more aware of the
environmental implications of their domestic energy
use too. We provide support through real-time energy
display unit trials, and through advice on consumption
levels and energy effi ciency on customer bills.
Our npower Juice product offers green electricity to
more than 50,000 residential customers. In 2006, 1,300
residential customers took advantage of three new
microgeneration products introduced (solar thermal,
ground source heat pumps and export reward schemes).
By 2010, we aim to have grown total (microgeneration)
renewable energy customers to a minimum of 10,000.
23
Meeting the Challenges 2006
Customer Relations
Customer focus is vital to our success. We aim to provide all our
customers with excellent service and are committed to selling
our products responsibly and protecting vulnerable members
of society. We believe that the best way to grow our customer
base is by providing customers with something that is distinctively
better and different to what they are offered elsewhere. Last year
we added 600,000 more residential customers. npower is the UK’s
leading electricity supplier, providing power to over six and a half
million domestic customers.
The 2006 independent study by J.D. Power and
Associates ranked npower highest in customer
satisfaction amongst electricity suppliers. The J.D.
Power survey not only ranked us fi rst for electricity but
second for gas in terms of customer satisfaction.
Our quality of service, as measured by energywatch,
has improved in each of the key categories, and for
the fi rst time in 2006 our performance was better than
the industry average in every category.
Following increases in energy prices over the past
year or so, we have recently decreased our retail prices
in response to falling wholesale prices. We continue
our commitment to provide support to vulnerable
customers through our Health Through Warmth
and Spreading Warmth programmes.
“ Customers want to know that we produce and supply
affordable energy and are supportive of the most
vulnerable members of society.”
David Threlfall, CEO, npower Retail
Corporate Responsibility Report 2006
24
To complement our sponsorship of domestic test cricket
we have agreed to support NS Fusion, a fi ve-year project
designed to engage young people in sport and physical
activity. We are donating 1,500 Urban Cricket kits to
the programme, which contain a plastic bat and tennis
ball with tape, to enable the ball to swing, in an
easy-to-carry case.
“ I think it’s fantastic that npower has contributed to
such a forward-thinking project as NS Fusion. Providing
activities and promoting participation in sport to those
who need it most is very important and helps to build
healthier communities.”
Ian Bell, England cricketer
25
Meeting the Challenges 2006
Contribution to Society
Our community involvement programme makes a
positive contribution to society by focusing on three
key areas where we believe our company is best able
to deliver real benefi ts to the communities where
we operate: health, education and the environment.
Benefi ts of the programme include increasing the
profi le of and trust in the npower brand; motivating
employees through volunteering programmes and
evidence of community involvement; supporting
recruitment of new employees through local high
visibility; and, building long-term relationships with
business customers by working in partnership on
community projects. In order for our programmes to have
the maximum benefi t for our local community stakeholders,
we work in partnership with others who can offer
different perspectives and expertise and leverage
maximum funding from a range of external sources.
“ npower is to be applauded for its innovative Urban
Cricket programme, run in partnership with the ECB,
as it has proved to be an excellent way to get children
out on the pitch learning the skills of the game.
The programme is a good example of how major
companies can have a positive impact in the
community by working with grass roots sport to fi nd,
develop and support the stars of tomorrow.”
Richard Caborn MP, Sports Minister
“ In terms of community activity, the information given
and the structure and clarity of the programme and
reporting are all up with the best of the pack…”
Peter Truesdale, London Benchmarking Group (LBG)
“ RWE npower has been instrumental in the piloting
and testing of the London Benchmarking Group (LBG)
model for community partners. This new programme
helps to educate community partners about effective
evaluation, programme measurement and data capture.
This enables community partners/charities to improve
the reporting of specifi c programmes and also enables
them to position themselves to engage more easily
to gain additional corporate support.”
Shannon Houde, Head of LBG & Community Consulting
To date our partnership with our corporate charity
Macmillan Cancer Support is valued at over £1.5 million.
“ npower’s support over the past three years has been
vital to the work we do at Macmillan, helping
people affected by cancer and their families and
friends. We are now working together to develop
the partnership even more.”
Judy Beard, Macmillan Cancer Support
Our Health Through Warmth (HTW) programme helps
vulnerable people in the community who are living in
cold, damp homes. Since HTW began in 2000, we have
spent £2.5 million from our npower HTW crisis fund.
In total, there have been almost 27,000 referrals
for assistance, while the scheme has leveraged
almost £18 million of additional funding.
We’re sponsoring the National Education
Business Partnership Network’s Business Volunteer
Commitment Award and encouraging our business
customers to get involved.
“ npower actively seeks to place education at the heart
of its activities, such that it underpins all aspects of
business success. Education is the key to inspiring
not only npower’s internal stakeholders, but also its
external stakeholders in the wider community.”
Declan Swan, National Education Business Partnership Network
More than 10% of the workforce took part in the
volunteering programme during their working week
comprising 75 team tasks with 47 community projects.
Volunteering employees contributed 9,775 hours,
the equivalent to 1,303 days or more than three
working years.
Our e-mentoring programme helps children take advantage
of the expertise available within our business at different
key stages and provides staff with an opportunity
to volunteer without leaving their desk.
We won an award for effective giving from the
Charities Aid Foundation.
“ npower was announced as joint winner for its strong,
integrated and focussed community investment
programme. As an energy supplier and generator,
transparent communication with the community
is paramount for business and this was clear in
npower’s application.”
Charities Aid Foundation
Our retail business is people-driven: both customers and our people want to know and trust that we produce and provide affordable energy responsibly and to see that we are addressing social and environmental issues.
Corporate Responsibility Report 2006
26
Last year we a
nnounced plans
to increase t
he “green” ele
ctricity
available to o
ur customers t
hrough our npo
wer Juice sche
me,
which supplies
non-premium p
riced environm
entally friend
ly
energy. Kevin
Miles, Residen
tial Managing
Director at np
ower,
said: “Despite
all the recen
t press covera
ge on global w
arming
and the increa
sed interest i
n all things g
reen, when it
comes
to taking gree
n energy consu
mers’ habits h
ave been relat
ively
slow to change
. At the same
time, the mark
et for switchi
ng
utility compan
ies has never
been busier: i
f you are thin
king
of switching,
it’s worth bea
ring in mind y
ou can go gree
n at
no extra cost.
” Thanks to th
e imminent com
pletion of new
projects by np
ower renewable
s, npower Juic
e will now
be available t
o some 100,000
customers.
CASE STUDY:
MORE JUICE
Providing Renewable and Effi cient Energy
Residential Customers
Increasing the number of renewable energy products
available to residential customers, particularly by
providing fi nancial support for the installation of low
and zero carbon technologies in domestic properties,
was a key goal for 2006.
In February, we signed a highly innovative partnership
agreement with ICE Energy to support the design,
supply and installation of heat pumps in the domestic
sector. This unique relationship has already enabled
consumers to benefi t from signifi cant fi nancial
support exceeding that currently provided by
Government programmes.
In April, we entered the second phase of our
microgeneration trial for domestic customers, which
involved aligning customer reward payments to electricity
exported from these schemes. The trial was originally
based on photovoltaic (PV) solar energy. It has now been
extended to include more innovative schemes such as
microwind turbines and microhydro installations.
We continued to support the development of new sources
of renewable energy through the npower Juice fund.
For every npower Juice customer, we make a contribution
of £10 every year to the fund. Total committed
investment from the fund in 2006 was £626,000,
and projects funded cover a wide spectrum of research
and activity ranging from data collection to developing
better health and safety practices for maintenance
of offshore devices. The projects come from a variety
of organisations across the UK and are all designed
to help develop the wave and tidal industry.
The Energy Effi ciency Commitment (EEC) is an obligation
placed upon energy suppliers to achieve energy savings
through a range of energy effi ciency improvements in
homes throughout the country. Last year we achieved
energy savings in households of 5.3TWh, slightly below
our target for 2006 of 5.8TWh. However, we are still
on track to achieve our three year target; by the end of
2006, 58% of the way through the programme, we had
delivered 71% of our commitment.
27
Marketplace 2006
Marketplace
The Big Switch Off, part of our e3 energy efficiency campaign directed at npower business customers, was aimed at encouraging companies to save thousands of pounds each year by switching off lights and equipment presently left on overnight, thus reducing their energy consumption. The campaign focussed in particular on the August Bank Holiday weekend. The Big Switch Off was not just about encouraging employers, but employees too, to be more environmentally responsible in the office or workplace.
Gordon Parsons, Managing Director of npower business, reminded customers: “It only takes a few minutes to walk around a building at the end of the working day and ensure that all non-essential equipment is turned off, yet so many people leave their desks without thinking about the consequences of leaving equipment running.”
CASE STUDY: THE BIG SWITCH OFF ENERGY EFFICIENCY CAMPAIGN
During 2006 we directly contributed towards reducing
emissions of CO2 by 2,230 tonnes, the equivalent
of nearly four million car miles1, through a number
of initiatives undertaken by private insulation and
retail partnerships, and working specifically with
communities and councils to deliver a range of energy
saving measures (see chart above).
In addition to the clear environmental benefi ts of
our initiatives to reduce carbon dioxide emissions,
they also deliver cost savings to those who need
them most. At least 50% of the savings delivered
are to people on certain income-related benefi ts and
tax credits. It is vital we help these customers as their
energy bills represent a signifi cant proportion of their
household income.
Residential customers are becoming more aware of the
environmental implications of their domestic energy
use too. We provide support through real-time energy
display unit trials, advice on consumption levels
and energy efficiency on customer bills. Access to
more accurate understanding of consumption will
help to eliminate the uncertainty generated by
estimated billing and afford customers the means
to analyse energy usage and potentially reduce
their bills.
Business Customers
Our aim for 2006 was to increase purchases of power
from renewable generation sources for large energy
customers by 25%, as compared with 2005. However,
external market factors (in particular a collapse in the
co-fi red ROC prices) resulted in reduced generation
by our contracted counter-parties, and at the end of
the year we had purchased 1.9TWh, compared to the
2.3TWh in 2005. We expect to achieve a similar level
of purchases in 2007 with more signifi cant growth
in 2008–9.
Our purchases of good quality combined heat and power
(GQCHP) during the year increased by 3.4TWh over 2005,
giving us a market share of 60%. Although lower
than our target of doubling GQCHP, this represents
a signifi cant achievement in a market where supplies
were much lower than anticipated.
Last year we became the fi rst major UK supplier to
offer automated meter reading (AMR) technology
28
purchases2, price increases for customers would have
been signifi cantly greater. In the latter part of the
year wholesale costs fell as new gas pipeline projects
were successfully completed and began to deliver
signifi cant volumes of gas from mainland Europe.
As a result of this, we were recently able to announce
a price cut for both electricity and gas customers
from April 2007.
In response to consumer concerns regarding the price
rises in 2006, Ofgem (the energy market regulator)
issued a press release in February 20073 stating
“It is a myth that companies were swift to increase
prices and slow to cut them in line with wholesale price
changes. Wholesale prices started increasing sharply
in June 2003 but it wasn’t until June 2004 that customers
saw the effects. Since then, energy companies have
continued to fi ght to hold onto or gain customers by
absorbing substantial amounts of the wholesale cost
increases they were incurring.”
We provided some shelter for vulnerable customers
from the January 2006 price rise to customers
registered on our Warm Response Service. A credit of
up to £35 was paid to offset the impact of the rise on
their 2006 winter quarter bills.
to our business customers – the npower smart meter.
The technology represents a breakthrough for energy
users. Access to more accurate understanding of
consumption will help to eliminate the uncertainty
generated by estimated billing and afford companies
the means to analyse energy usage and bring down
their costs.
npower business also specialises in risk management
solutions, including market-leading fl exible energy
purchasing, energy effi ciency and broader energy
management functions.
e3 is an integrated marketing campaign to promote
energy effi ciency and environmental responsibility to
npower business customers. It is based on our belief
that the only sustainable way to reduce carbon
emissions is for customers to use less energy.
The launch of our new energy effi ciency website
www.npower.com/e3, which was developed with
key external stakeholders, led up to our successful
Big Switch Off campaign over the August Bank
Holiday weekend when 496 business customers
pledged to reduce their energy consumption over
the Bank Holiday (see case study). In the ten months
since launching e3, a total of 2,891 new customers
have signed up to receive energy supplies and the
electrisave energy monitoring device.
Price Increases
In 2006, sharp and signifi cant rises in
fuel costs, notably in the early part of the
year (at one stage, gas prices were trading
at 250p a therm compared to the average
20p a therm between 2000 and 2003),
forced UK energy suppliers to introduce
price rises that were unprecedented both
in terms of number and magnitude. During
the course of the year all major suppliers
introduced at least two price increases
for both gas and electricity. Cumulatively
these raised gas bills by 40 – 50% and
electricity bills by 20 – 30%. If suppliers,
including npower, had not acted in advance
by ‘hedging’ their wholesale energy
29
Marketplace 2006
In 2002, Sainsbury’s set its
elf a
goal of reducing carbon emis
sions
emitted per square foot of f
loor
space by 10% by 2005, compar
ed to
1997 levels. To achieve the
target,
the company established a pr
oject
team with npower business an
d
developed a long-term partne
rship
both to supply electricity a
nd gas
and to identify and implemen
t energy
efficiency projects. Power a
nd gas
agreements were signed in 20
02 to
supply all Sainsbury’s UK st
ores with
a high percentage of energy
derived
from renewable sources.
The overall project achieved
a reduction
of more than the targeted 10
% in carbon
emissions. Sainsbury’s have
invested
over £14 million, and benefi
ted from
savings of over £10 million
a year.
Sainsbury’s and npower are n
ow working
together towards achieving f
urther
environmental and economic t
argets.
CASE STUDY:
SAINSBURY’S GREEN AMBITIONS
1 All carbon savings and equivalents taken from the Energy
Saving Trust energy calculator. To view this calculator go to
www.energysavingtrust.org.uk
2 i.e. by routinely making forward purchases of gas and
electricity over the months and years leading up to 2006.
3 www.ofgem.gov.uk
Insulation (79%)
Heating (6%)
Lighting (3%)
Appliances (12%)
Energy saving measures
delivered through EEC in 2006
Responsible Selling
A sound reputation for responsible selling to our
customers is of critical importance to us and we met
our targets of maintaining sales complaints below
2005 levels. Complaints to energywatch in 2006
averaged 16 per month, compared to our target of
less than 20 per month.
We also maintained our above average performance in the
Association of Energy Suppliers (AES) annual sales audit.
In the independent industry-wide audit conducted
by KPMG our performance was considered to be
extremely positive. We were rated as above average
and in the upper range for the industry as a whole.
In July 2006, npower committed to a new ombudsman
scheme for customer complaint management.
As a result we have now implemented a new complaint
management system across all sites enabling customer
complaints or expressions of dissatisfaction to be
tracked through to an agreed resolution or escalation
for review by the ombudsman.
Customer Service
The 2006 independent report by J.D. Power and
Associates on customer satisfaction with electricity
suppliers ranked npower first for electricity and
second for gas.
Corporate Responsibility Report 2006
30
During the past year market conditions have been
extremely challenging for the Customer Services team
with the impact of price increases in 2006 increasing
demand on our call centres, the continued migration
of customer accounts to a new billing system and higher
customer numbers. As a result of these issues, we have
not been able to meet the high service standards we
have set for ourselves (our actual service level was
53.5% of all calls answered within 20 seconds and
63.6% of all correspondence replied to within fi ve days
against a target of more than 75% of all calls answered
within 20 seconds and 75% of all correspondence
replied to within fi ve days). Measures to restore the
required service levels by mid-2007 include a recently
opened additional call centre building and an ongoing
recruitment campaign at all customer services sites.
During 2006, there was an increase in the actual
number of sales complaints of 4.5% compared with
2005. However, with the increase in the number of sales
of 24% over 2005 levels, the ratio of sales complaints
per 1,000 sales improved from 0.12 to 0.07,
as compared with the industry average of 0.08.
Similar patterns are evident in the data describing
transfer and billing complaints. For transfer complaints,
our performance in 2006, 0.52 complaints per 1,000
transfers, again improved from the 2005 level of 0.81,
and was signifi cantly below the industry average of 0.96.
For billing complaints, we improved our performance for
the fourth year in succession, reducing our overall billing
complaints (per 1,000 customers) by 35%, from 0.068
to 0.045, again signifi cantly below the industry average
of 0.074 billing complaints per 1,000 customers.
Customer Satisfaction
In 2006, we conducted customer satisfaction research
using new research methodology. Measures to address
the key fi ndings, including more realistic goal-setting,
are being integrated into business plans for 2007.
The 2007 survey will track progress against these aims.
Whilst we were unable to reduce the number of
complaints from the Press and Members of Parliament
last year, complaints have remained relatively steady
with less than a 1% increase in both categories which,
in the light of price increases in 2006, we believe
is satisfactory.
31
Marketplace 2006
0
0.2
0.4
0.6
0.8
Industry average Jan-Dec 2003 Jan-Dec 2004 Jan-Dec 2005 Jan-Dec 2006
0.7
5
0.1
6
0.1
5
0.1
2
0.1
1
0.0
7
0.0
8
Total Number of energywatch ComplaintsSales (per 1,000 transfers)
0.5
4
0
1.0
2.0
3.0
4.0 4.0
9
2.1
1
1.8
3
1.4
0.8
1
0.9
6
0.5
20.9
6
Industry average Jan-Dec 2003 Jan-Dec 2004 Jan-Dec 2005 Jan-Dec 2006
Total Number of energywatch ComplaintsTransfer (per 1,000 transfers)
0
0.05
0.1
0.15
0.2
0.1
39
0.0
74
0.1
15
0.0
59
0.0
68
0.0
52
0.0
450
.074
energywatch complaints statistics are provided by energywatch on a monthly basis and refer to all sales, transfer, account administration and billing complaints.
Industry average Jan-Dec 2003 Jan-Dec 2004 Jan-Dec 2005 Jan-Dec 2006
Total Number of energywatch ComplaintsAccount and Billing (per 1,000 customers)
0
5,000
10,000
15,000
20,000
15
,17
3
12
,68
8
8,2
69
5,6
42
1
Total Number of energywatch Complaints – npower
2003(Jan-Dec)
2004(Jan-Dec)
2005(Jan-Dec)
2006(Jan-Dec)
Together with our
partner National G
rid, last year
we were awarded Th
e Power in Partner
ship award
for our involvemen
t in the Warm Wale
s initiative,
which is managed a
nd delivered by Wa
rm Wales.
The partnership, w
hich is also suppo
rted by Neath
Port Talbot Boroug
h Council and Wrex
ham County
Borough Council, a
ims to reduce the
number of homes
in fuel poverty an
d improve the ener
gy efficiency
of all properties
in these local aut
hority areas.
CASE STUDY:
WARM WALES
Corporate Responsibility Report 2006
32
Services for Vulnerable Customers
We continued to develop our Spreading Warmth
programme during 2006. The programme is designed
to make sure we deliver relevant products and
services to our vulnerable and fuel poor customers,
to enable them to manage their energy usage more
effectively and by doing so, meet our regulatory
obligations. We are constantly reviewing our products
and services to ensure that not only do we meet our
obligations, but we also give real help to our vulnerable
and fuel poor customers.
The Warm Response Line is a unique contact point for
customers who would normally avoid calling contact
centres directly. Experienced, named employees, who
have the skills to assist customers, provide a personal
response to customers, identifying their issues and
providing the appropriate responses.
The Warm Response Service is a scheme to fulfi l our
regulatory obligations to maintain a Priority Service
Register. It provides extra services for customers with
additional needs such as large print and Braille bills,
free gas safety checks and special adapters to make
appliances easier to use. During 2006 those customers
registered on the service received up to £35 to help
against rising prices. Registrations on the Warm Response
Service (WRS) database have exceeded the 25% target
and had increased by 56% by the end of 2006.
First Step is a package for customers who are genuinely
struggling to pay for their energy use and who may
have debts. First Step advisors work on an individual
basis with customers to agree a package of measures
to help them manage their account independently.
In some cases, customers may be eligible to have all or
part of their debt cleared, and customers most in need
will be offered the First Step tariff, which is npower’s
cheapest tariff irrespective of payment type. Full roll-out
of the programme will take place in June 2007.
Last year we undertook to provide 8,000 benefit
entitlement checks to customers in the Energy
Effi ciency Commitment (EEC) programme and to fuel
poor customers. These checks identify if customers
are potentially eligible for new or additional benefi ts
that may increase their income. To date, in total, we
have received almost 6,000 requests for a benefit
entitlement check. Through the Warm Wales project,
we offered 5,251 benefit health checks of which we
completed 1,157, with the result that 714 customers are
potentially entitled to further benefits. In addition,
through our First Step programme, we have referred
645 customers for benefi t health checks.
To ensure we identify vulnerable customers and
provide them with the appropriate assistance, products
and services, we have also taken the fi rst steps to
incorporate vulnerable customer awareness into front
line call centre staff training. Our training material has
now been completed and a pilot testing of the training
programme has been conducted. We are currently
incorporating feedback from the pilot programme into
the training course.
Supply Chain
We have continued to work with key stakeholders
to raise awareness and understanding of sustainable
procurement and to develop an agreed company
strategy. During the year we contacted six of our
suppliers, selected to represent our full range of
procurement activity, to test their awareness of how
we apply our CR standards and the Code of Conduct
in our procurement activities. The feedback received
from these suppliers will assist in the development
of our communication strategy with the supply
market, including the implementation of an ongoing
programme of surveys that will test the effectiveness
and visibility of our sustainable procurement policy.
Separately, we undertook to map three strategically
critical supply chains in depth and agree action plans
with suppliers to mitigate the identifi ed risks.
33
Marketplace 2006
A review of commodities and services specifi c to our
company will be completed early in 2007.
To inform current and potential suppliers, we also
prepared and agreed our key principles for sustainable
procurement and have published these on our website.
Further enhancements to our internet content will be
made during 2007.
In 2006, we also conducted an initial review of how
environmental factors are taken into account during
procurement activities. This identified those areas
and contractors where we need to concentrate our
efforts to reduce our impact on the environment.
Specifi c outcomes from the review will be implemented
in 2007, including: reviewing packaging and reducing
the number of deliveries; analysing the life-cycles
of five of the most ordered products; considering
applying ordering restrictions on stand-alone printers;
and, restricting the engine size/fuel types of hire cars.
Useful website links
www.est.org.uk
www.energywatch.org.uk
www.energy-retail.org.uk
www.npower.com/e3
www.npower.com/spreading_warmth
www.nea.org.uk
www.rwenpower.com/cr
A supply chain mapping questionnaire has been
developed and the mapping process has commenced
for meters, sales agents, valves, bulk gases, work
clothing, personal protective equipment, turbine
spares and boiler components. This will be completed
early in 2007.
Last year we successfully developed a supply chain
risk assessment tool. The tool allows us to identify
products and services with the highest potential risk
and/or impact on our business. The tool has already
been applied to a utility sector-specifi c set of product
groups and the results (including identifi ed high risk/
high impact areas) presented to the CR Committee.
Corporate Responsibility Report 2006
34
Marketplace Performance Targets 2007
Meeting the demands of our customers for renewable energy.
In 2006, 1,300 residential customers took advantage
of the three new products introduced (solar thermal,
ground source heat pumps and export reward
schemes) for which we provided over £300,000
of funding over and above Government grants.
By 2010, we aim to have increased the number
of residential customers who have installed
microgeneration to a minimum of 10,000.
In 2007, we will:
• develop a website to provide up-to-date
information on microgeneration technologies
for domestic customers;
• introduce two more renewable energy products
(PV and heat pump tariff) designed to reduce a
customer’s carbon footprint; and,
• grow total customer numbers in renewable energy
products to 3,000.
In 2006, we funded a number of R&D projects
(total value £626,000) designed to advance the
long-term development of wave and tidal power.
By 2010, we aim to have increased the number
of customers who source their renewable energy
through the npower Juice and other green tariffs
by 400% (to 200,000).
In 2007, we will:
• continue this programme and will have
70,000 Juice customers; and,
• contribute £10/customer per annum
into the Juice fund.
By the end of 2006, we had developed a comprehensive
portfolio of energy management tools to educate and
empower our business customers to manage their
energy more effi ciently.
We are committed to growing our range of energy
services products and services, and in 2007 we will
pilot and launch three new energy management
products.
We will grow the gross margin from energy services
by 10% in 2007 compared to 2006.
Consumer research indicates that our residential
customers are starting to consider the environmental
implications of their domestic energy use. We will
continue to provide assistance to our customers
through developing new products and services that
enable more effi cient energy use.
In 2007, we will:
• develop and launch trials to assess the impact
of smart metering to reduce energy consumption
and help infl uence the market to support the
introduction of universal smart metering;
• develop trials of real-time energy display units
amongst npower customers – a device that helps
customers to better understand their electricity
bills and reduces electricity wastage and reduce
consumption; and,
• incorporate advice on consumption levels and
energy effi ciency on customer bills.
Maintain the current low level of residential sales
complaints to less than 20 per month.
The expansion and improvement of self-service
facilities will enable residential customers to choose
the means by which they interact with us.
This will reduce the number of routine contacts with
our call centres, allowing more resources to be
devoted to those customers who require individual
attention and improve the service for those wishing
to self serve.
To improve accessibility for customers in 2007,
we will:
• increase the number of customers signing up to
view their bills on line from current level (zero)
to 100,000; and,
• increase IVR (Interactive Voice Response) and web
forms from current level (6% of contact volume) to
10% of contact volume.
Reduce energywatch recorded complaints for
residential customers (customer transfer and
account/billing) by a further 10%.
We will continue building our understanding of
residential customers’ expectations through research
and feedback and will build approaches that meet and
exceed these expectations into both new and existing
Product Defi nitions and Journeys.
In 2007 we will:
• repeat our detailed quantitative research study of
customer product satisfaction drivers;
• match or improve our benchmarked 2005/6 scores
relating to customer product satisfaction; and,
• launch a range of product enhancements based on
insights from the previous study.
Datamonitor’s customer satisfaction programme
identifi es the key competencies that make up
service, and aims to give major energy suppliers
an indication of its performance across these
competencies.
In 2006, npower improved its Datamonitor customer
satisfaction fi gures for business customers by 3.9%
whilst overall the industry improved by 1.5%, an
increase relative to our competitors of 2.4%.
In 2007, we aim to deliver a 1% improvement,
relative to our competitors, in Datamonitor customer
satisfaction scores (using a weighted average indicator).
Reduce carbon dioxide emissions through improvement of customer energy effi ciency.
Responsible selling.
Improve service to our customers.
Meet and exceed customers’ expectations.
35
To support our vulnerable customers, we will
continue to develop our Spreading Warmth initiative,
including the Warm Response Service and the First
Step scheme.
In 2007, we will:
• increase the number of customers registered for
Warm Response Services by a further 25%;
• continue to offer our cheapest tariff (irrespective of
payment type) to vulnerable customers as part of
our First Step scheme;
• continue to offer energy effi ciency advice to all of
our customers. This service will be supplemented
by 5,000 home visits per year; and,
• identify the most effective process for ensuring
that our vulnerable customers receive their full
benefi t entitlements.
In 2007, our aim is that 75% of front line service
staff have received vulnerable customer awareness
training.
In 2007, we will further extend First Step and Home
Advisor schemes to link with our corporate charity.
100% of First Step and Home Advisor teams to have
received Macmillan Cancer Support awareness training.
In 2007, we will design and implement an ongoing
programme of supplier surveys to ascertain the
effectiveness of our sustainable procurement policy.
In 2007, we aim to have received responses from
50% of suppliers surveyed.
In 2007, we will complete the 2006 activity of
mapping three critical supply chains, and agree action
plans with suppliers to mitigate the identifi ed risks.
In 2007, we will refresh the HR/HI (High Risk/High
Impact) commodities/service matrix to refl ect our
current supply chain, and consider requirement for
further supply chain mapping.
In 2007, we will design and implement an assurance
framework that ensures the RWE npower standards
are met by the supply chains of RWE Group
companies providing services internally (e.g. RWE
Systems for IT and Procurement Services).
In 2007, we will incorporate the assurance framework
in contract / Service Level Agreements for RWE
Systems UK.
In 2007, we will develop and agree in conjunction
with RWE Trading an approach to evaluate the
feasibility of a similar approach for the supply of
fuel.
In 2007, we will assess the quality and effectiveness
of internet content of our direct competitors with
respect to sustainable procurement.
In 2007, we will develop and implement proposal for
an internet offering appropriate to RWE npower.
In 2007, we will identify and develop a set of
approaches and products which can be offered to
strategic vendors at preferential rates to encourage
the adoption of our CR principles, e.g. carbon
neutrality reviews.
In 2007, we will design and implement a means of
communicating with strategic vendors to roll-out the
approaches and products on offer.
In 2007, we will review existing procurement
procedure for reference to environmental
considerations, and implement recommendations.
Provide services for vulnerable customers.
Implement our sustainable procurement strategy to ensure that our approach to supply chain management is aligned with our CR policy.
Identify high risk/high impact (HR/HI) issues across our supply chain and monitor performance of suppliers.
Develop an offering to strategic vendors which promotes the corporate responsibility framework of RWE npower.
Improve internal processes for taking account of environmental issues when making procurement decisions.
Marketplace 2006
Last year we conducted a feasibility study for a ‘clean
coal’
power station at our Tilbury site on the Thames Estuar
y.
The study looked into ‘supercritical’ plant technology
that
improves the efficiency of the combustion process toge
ther
with carbon capture and storage (CCS) systems, which of
fer
the potential to isolate and store CO2 produced during
the
combustion of fossil fuels and prevent it from reachin
g
the atmosphere. We are continuing to investigate elemen
ts
of CCS at our combustion test facility at Didcot.
Following the study, we have recently announced
our plans to build a 1,600MW state-of-the-art
cleaner coal power station at Tilbury. The new
power station would cost over £1 billion to build
and would be operational by 2013. It will be
designed to accommodate CCS technology.
This announcement follows proposals outlined
earlier last year by our parent company RWE
to investigate the building of a €1 billion CO2
free plant in Germany, subject to the necessary
political framework conditions and authorisations.
CASE STUDY:
CLEAN COAL
The potential impacts of our operations on the environment are carefully controlled by regulations, but our strong track record in environmental performance refl ects a culture that goes beyond mere compliance.
36
Reducing Carbon Dioxide Emissions
As some 30% of the carbon dioxide (CO2) emissions in
the UK come from electricity generation, many of the
principal measures introduced by the Government to
reduce emissions of greenhouse gases have focussed
on reducing emissions from the sector. The primary
mechanism for reducing the UK’s emissions of CO2 is
the European Union Emissions Trading Scheme (EU ETS).
This was introduced at the start of 2005 and the fi rst
period of the scheme will run until the end of 2007.
Under the EU ETS, every installation (such as a power
station) covered by the scheme is allocated a set number
of CO2 allowances for each year. If emissions exceed the
number of allowances allocated, installations are required
to purchase allowances from other operators who have
reduced emissions below their allocation. Allowances can
be traded with other operators covered by the scheme in
the UK or Europe.
Member States have submitted National Allocation Plans
for the second period of the trading scheme from 2008
to 2012 for approval. The UK’s Plan has been approved
and will see further signifi cant reductions in emissions of
CO2 from the electricity sector. Reduction Plans proposed
by a number of other Member States have been rejected
37
Environment 2006
on the grounds that they allocated too many allowances.
We therefore expect to see a signifi cant reduction in the
overall allocation when these Plans are fi nalised and the
second period of the trading scheme is likely to require
cuts in emissions across Europe. RWE npower’s allocation
will reduce from an average of 16.02 million tonnes of
CO2 (MtCO2) per year in phase 1 to 12.36 MtCO2 per year
from 2008 onwards.
In 2006, our emissions of CO2 from power generation
were 24.06 MtCO2 (total emissions were 26.27 MtCO2,
which included emissions from our CHP plant not all of
which are currently covered by the EU ETS). The increase
in emissions in 2006 was primarily due to an increase in
generation from our coal-fi red power stations compared
with 2005 as a result of higher gas prices during 2006.
As a result of investments made in effi ciency
improvements and the signifi cant increase in generation
from renewable sources, the overall carbon intensity of our
generation increased only marginally from 2005 levels.
Last year thermal performance improvements were
achieved at a number of stations across our portfolio
through investing in a range of plant, including high
effi ciency steam turbines at Didcot and a new mill
system (leading to improved combustion performance)
at Tilbury. At Fawley Power Station modifi cations were
Corporate Responsibility Report 2006
Environment
Biomass is a general term for organic fuels like sawdust and wood chips. They are described as ‘carbon neutral’ because burning them only releases back into the atmosphere the carbon dioxide they have absorbed while growing. The new storage and blending facility at Didcot Power Station is within the existing power station site. It will allow an increase in possible biomass use from around 1% of the current fuel used in the station to 10%. John Rainford, Station Manager at Didcot said: "The new investment could replace more than 300,000 tonnes of coal with biomass annually and avoid up to 700,000 tonnes
of carbon emissions being released into theatmosphere every year."
CASE STUDY: DIDCOT BIOMASS
Corporate Responsibility Report 2006
38 39
Environment 2006
made to the low pressure steam turbines, resulting in
reduced start-up times that equate to a fuel saving, per
run, of around 25 tonnes of heavy fuel oil (HFO) and
approximately 80 tonnes of CO2.
Renewable Energy Generation
In 2006, we met our aim of generating more than
1,500GWh of our electricity from renewable sources,
generating 1,662GWh of electricity. There was a
significant increase in the amount of electricity
generated using biomass while output from our wind
farms and hydroelectric stations also increased. In total,
over the last fi ve years we have increased renewables
generation from 1.8% of our total generation to current
levels of 4.3% of total generation. This compares with
3.2% in 2005. The largest increase in 2006 was from
increased biomass generation, which included trials
of palm oil at Littlebrook Power Station.
We also made signifi cant additions to our operating
portfolio through the construction and commissioning
of 126MW of new renewable energy projects by the
end of 2006, including the Farr and Ffynnon Oer Wind
Farms. Construction also began on another 15.5MW
of new projects due for completion in 2007.
However, we believe that if national targets for renewable
generation are to be met, then urgent action is required by
Government and industry to address planning and network
access issues which are causing signifi cant delays to
proposed new developments. We achieved 9.5MW of
consents for new renewable projects in 2006, signifi cantly
lower than our target of 80MW, although planning
applications were submitted for a total of some 259MW
of new hydro and wind capacity. At the end of 2006
we had approximately 1,225MW of projects in the
planning system, including the proposed 750MW
Gwynt y Môr offshore wind farm.
The Renewables Obligation (RO) requires electricity
suppliers to supply an increasing proportion of
electricity from renewable sources or to pay a
‘buy-out‘ price. The money raised from the buy-out
fund is recycled to suppliers and further supports the
development of renewables projects. The RO is a
market mechanism and at any time the value of the
Renewables Obligation Certificates (ROCs) may be
above or below the buy-out price that has been put
in place to limit the cost to customers. In order to
minimise the cost to our customers we only buy ROCs
50
0
200
300
350
250
150
100
2005 2006
Environmental and
Efficiency Improvements
Renewable Energy Schemes
Cleaner Generating Plant
Environmental Investment (£m)
0
10
20
30
40
23
.5 27.
5
23
.1
23
.9 26
.3
2002
2003
2004
2005
2006
CO2 Emissions(Mtonnes)
0
200
400
600
800
67
9
70
8
67
8
67
5
67
8
CO2 Emissions(g/kWh)
biomass
hydro
wind
Renewable Electricity Generated (GWh)
0
800
1,400
1,800
1,000
1,600
1,200
600
200
400
20032002 2004 2005 2006
2002
2003
2004
2005
2006
Corporate Responsibility Report 2006
41
Environment 2006
40
During the conservation day held at the
nature reserve at Aberthaw Power Station,
drainage channels were cleared, bird-watch
ing
boxes erected and paths and grassland
restored. This will improve the community’
s
access to this important nature reserve,
which includes a lagoon and salt marsh – o
ne
of only four of these habitats in Wales.
The conservation day has helped to protect
some 20,000 species, which live on the res
erve,
including endangered bloody-nosed beetles,
cockles,
and rare types of grass. Adders and Tree S
parrows
have been provided with a new long-term ho
me and
notice boards have been installed offering
information
to walkers and tourists. Aberthaw Power St
ation Manager,
Clive Smith said: “It was an excellent day
for
everyone involved with the East Aberthaw N
ature Reserve.
The turn-out really was fantastic; it was
great to
see local residents, school pupils, and co
mpanies
working together to help the environment.”
CASE STUDY:
ABERTHAW CONSERVATION DAY
when they represent better value than paying the
buy-out. The relative proportions of ROC redemption
and buy-out we use for compliance in any one year will
depend on the price at which ROCs can be obtained
and the buy-out price in that year.
Between April 2005 and March 2006 our RO and
Scottish RO were a total of 2.94 TWh of which we
redeemed 45.7% by submitting ROCs and made
buy-out payments against the remainder.
Combined Heat and Power
CHP is a highly effi cient way of generating energy, as
the heat produced during electricity generation is used
to produce steam for a customer, and also to generate
more power. Increased energy efficiency reduces
consumption of fossil fuels. We support good quality
CHP (GQCHP) schemes – industrial schemes can achieve
efficiencies up to 90% – and believe it should be
encouraged where there are new large heat loads.
We are continuing to pursue a number of potential
opportunities for investment in high efficiency CHP
plant. However, where it is not possible to match the
heat demand of potential business customers closely
to the heat load of the power station, it is much harder
to realise the environmental benefi ts of CHP.
Reducing the Environmental Impactof Power Station Operations
Burning fossil fuels in power stations also results in
emissions of pollutants such as sulphur dioxide (SO2),
nitrogen oxides (NOx) and particulates. Whilst we have
to meet limits set by the Environment Agency (EA) for
emissions of these pollutants both from individual
stations and from our overall portfolio of coal and
oil-fi red plant, the improvements in effi ciency and
investments in renewables have also contributed to an
improvement in overall emissions of these pollutants.
Emissions of SO2 fell from 1.84 g/kWh in 2005 to
1.80 g/kWh in 2006. This reduction is partly due to use
of lower sulphur content coals and will reduce further
following commissioning of the FGD plant at Aberthaw,
which will enable the station to meet the SO2 emissions
limits set by the Large Combustion Plant Directive
(LCPD) from 2008 onwards.
In order to comply with emission limits set by the LCPD,
we will limit the operational hours of our oil and coal
stations, except Aberthaw, to 20,000 hours between
2008 and 2015.
SO2, NOx and Dust Emissions(ktonnes)
2002
2003
2004
2005
2006
0
25
50
75
10091
.8 96
.4
75
.2
65
.4
69
.9
63
.5 73
.7
59
.2
62
.1 70
.1
2.6
1
3.4
1
2.6
3.1
5
SO2 NOx Dust
2.4
1
SO2, NOx and Dust Emissions(g/kWh)
2002
2003
2004
2005
2006
0
1.0
2.0
3.0
4.0
2.6
5
2.4
8
2.2
1
1.8
4
1.8
0
1.8
3
1.9
0
1.7
4
1.7
5
1.8
1
0.0
8
0.0
9
0.0
7
0.0
7
0.0
8
SO2 NOx Dust
0
1,000
2,000
3,000
4,000
2,9
37
2,5
81
4,4
64
3,2
32
4,1
41
Recycled Waste (Power Stations)(tonnes)
2002
2003
2004
2005
2006
Sales of Ash(ktonnes)
0
100
200
300
400
374 4
04
33
0
29
8
60
6
500
600
2002
2003
2004
2005
2006
43
Environment 2006
We are planning to
invest up to £1 m
illion raised thro
ugh
our npower Juice f
und, in a groundbr
eaking scheme help
ing
to harness the pre
viously untapped p
ower of the sea.
The sea is one of
the world’s larges
t natural energy
resources and with
the right level o
f investment, mari
ne
technologies could
provide up to 20%
of energy for
Britain’s homes in
the future. Anyon
e with a credible
marine renewable e
nergy project requ
iring financial
support can apply
to the Juice fund,
which is external
ly
managed by Imperia
l College London,
for investment.
A scale model of o
ne invention, the
Pulse Stream 100,
has already receiv
ed funding from th
e npower Juice fun
d
and was unveiled b
y TV scientist Joh
nny Ball at last
year’s Ideal Home
Show.
CASE STUDY:
£1 MILLION MARINE
ENERGY FUND
Corporate Responsibility Report 2006 Environment 2006
42
Emissions of NOx have increased slightly from 1.75 g/kWh
in 2005 to 1.81g/kWh in 2006. This was mostly due
to an increase in generation at Aberthaw Power Station
which has higher NOx emissions than the other coal-fi red
power stations in our portfolio as it is designed to
burn Welsh low volatile coals (which are still used
at the station). Work is currently ongoing at all our
coal-fi red plants to meet lower emissions limits that
will apply from 2008 through improved combustion
control and other technologies.
All our power stations have operated within Air Quality
Strategy limits for 2006. Aberthaw is continuing to
operate an air quality management plan which involves
switching to low sulphur coals if weather forecasts
indicate a high or medium risk of exceeding the air
quality standard. The EA has endorsed Aberthaw’s
procedures for managing air quality as Best Available
Technique (BAT).
During 2006, we were required to submit applications
to the EA for Integrated Pollution Prevention and Control
(IPPC) permits for our power stations. These new permits
replace the system of environmental regulation of the
electricity generation sector that has been in place since
the early 1990s. The EA has raised very few issues with our
applications. By the end of 2006, we had received permits
for our Little Barford, Didcot B and Cowes power stations.
Environmental Management Systems (EMS) are in place
across our businesses, including all power stations,
and underpin our good environmental performance.
We review and improve our environmental management
processes continually. In 2006, all certified RWE
npower EMS were updated to comply with the
requirements of ISO14001:2004, maintaining their
certification following audits from the appropriate
certification bodies. Surveillance visits have shown
that all company EMS are maintaining a high level
of compliance with the new standard.
An information system (‘Madison’) is now being used
as part of the monthly reporting on environmental
compliance to senior managers. The most effective
ways of using Madison will be given further
consideration during 2007.
Use of resources in offi ces
4,026
3,654
4,352Gas
MWh
Electricity
MWh
Water
m3
3,837
2,718
Total Use of Resources
15,0000 30,000 45,000 60,000
44,799
32,553
28,788
29,966
32,979
51,858
52,179
57,406
57,640
66,108
Moredon
Oak
Quayside
Radcliffe
Rodley
Scarcroft
Stockton
Stoke-on-Trent
Team Valley
Thornaby
Trigonos
Tyne
Washington
Wear
2006 Annual Electricity ConsumptionkWh per m2
2000 400 600 800 1000 1200
160
582
101
617
582
504
507
449
91
230
Mistral 106
Limewood 1,091
Kingswinford Larch House 485
Hull 415
Holbrook 78
Electron 37
Cogen Court 146
Carliol 788
Birstall 310
Birchfield 434
Birch 366
Acorn 317
282
335
213
448
2002
2003
2004
2005
2006
Corporate Responsibility Report 2006
44 45
Environment 2006
During 2006, external consultants carried out ‘Contour,’
an Environmental, Health and Safety (EHS) assessment,
benchmarking and business improvement process.
The results were used to benchmark RWE npower’s
performance against other generating companies,
benchmark against other users of the approach and
to compare individual units within RWE npower.
RWE npower’s average score fell into the ‘World Class’
sector of the model. This is nine points above the utility
sector practice average and 15 points above the utility
sector performance average.
There were a number of environmental incidents in 2006
where we reported a breach of the conditions in our
authorisations. Five exceedences of authorisation
conditions occurred at our power stations and CHP plant
and in addition, we exceeded a sewage discharge consent
at one of our closed sites. These incidents were due to
discharges to atmosphere and water at levels slightly
higher than those set in authorisations and had only
very minor impacts on the environment.
There were an additional 181 justifi ed complaints relating
to noise, soot and dust at power stations. The majority
of these (173) were associated with one incident at
Didcot Power Station (this is discussed further in the
Community section of the report). We always aim to
respond to complaints at our power stations and follow
up issues with local residents as quickly as possible.
Reducing the Environmental Impact of our Business Operations
Although our environmental impacts are dominated
by power station operations, as a major UK business,
with a national presence and a workforce of over
11,500 staff, we are also responsible for the impacts of
our offi ces, travel and our supply chain. Supply chain
issues are discussed in the section on Marketplace.
Last year we conducted energy audits at six of our
sites, which have provided benchmark information
for implementing energy saving initiatives for these
offi ce sites, including replacement of printers, fl at
screen monitors and an energy awareness campaign.
Consideration will be made of the value and impact
of such recommendations at all offi ces following
implementation at the audited sites. Installation of
new IT equipment is currently in progress across the
company under our Infrastructure Refresh Programme.
We have begun to collect data about current levels of
business travel in order to identify measures to reduce
it (including international fl ights). Although we set
ourselves a target of reducing mileage in our business
retail division by 15%, this actually increased by 2.2%.
Disappointingly, available data suggests that the total
levels of business mileage by all RWE npower
employees also increased from 12.5 million in 2005
to 16 million in 2006 (not including the MeterPlus
business, which accounted for a further 14 million
business miles in 2006). However, in the absence of
specifi c business drivers to account for such an increase
in business mileage, it is believed that much of the
apparent increase in total business mileage is attributed
to improvements in data acquisition. Nevertheless, we
hope to see signifi cant improvements in reducing
business mileage, for example, through the increased
use of video and teleconferencing and home working,
facilitated by the installation of improved equipment,
and by using coach travel for big corporate events.
Following a review last year, we have decided to
implement an EMS across new power plant project
activities, although we will not seek formal certifi cation
of the scheme at present. The new projects EMS has
been completed and its implementation has commenced.
This EMS will cover activities associated with the
design, construction and commissioning of the new
plants and projects that we are currently progressing.
Additional information on our environmental
performance and power station operations can be
found at www.rwenpower.com/cr
Useful website links
www.npowerrenewables.com
www.iso14001.com
www.defra.gov.uk
www.environment-agency.gov.uk
Acorn
Birch
Birchfield
Cogen Court
Electron
Holbrook
Mistral
Oak
Quayside
Stockton
Thornaby
Trigonos
Tyne
Wear
2006 Annual Gas ConsumptionkWh per m2
200 40 60 80 100 120 140 160
105.9
17.3
96.4
8.9
10.7
8.4
12.6
144.6
11.6
11.8
12.2
10.6
10.6
8.5
Limewood
Moredon
Oak
Quayside
Rodley
Scarcroft
Stockton
Team Valley
Thornaby
Trent
Trigonos
Tyne
Washington
Wear
2006 Annual Water Consumptioncm3 per m2
10 2 3 4 5
0.48
0.67
0.60
1.46
2.51
1.95
0.31
1.82
0.12
1.33
Kingswinford Larch House 0.67
Hull 1.34
Holbrook 0.39
Electron 0.45
Cogen Court 0.28
Carliol 1.23
Birstall 0.63
Birchfield 1.19
Birch 0.79
Acorn 1.09
0.06
1.29
1.03
1.65
Corporate Responsibility Report 2006
46
Environment Performance Targets 2007
Reduce carbon intensity of electricity generated.
As at the end of 2006, RWE npower were the
leaders (by market share) in wind generation;
our aim is to maintain a leadership position over
the next fi ve years.
Typically, the timescales involved from placing
contracts to commercial operation for major
wind farms is in the order of two years.
Therefore, the measures we have chosen span a
three-year period (2007 to 2009 inclusive) to give a
representative view of project activity.
By 2009, we aim to:
• submit an additional 750MW to planning;
• achieve consent for a further 280MW; and,
• increase commercial capacity by over 200MW.
Climate change is one of the key issues that face
RWE npower. As a signifi cant emitter of CO2,
we are committed to developing strategies and
plans to ensure we are able to minimise our impact
going forward and to play our part in the overall
RWE Group approach.
Our carbon capture and storage (CCS) strategy
comprises a wide-ranging programme of research
using the combustion test facility at Didcot to
examine the technical, operational and commercial
issues associated with CO2 removal from coal-
fi red power station emissions. The necessary
confi guration works is expected to be completed
by the end of 2007 with the test programme due
to commence in 2008.
To complement this research, by 2010 we will
develop a 1MW pilot plant to test the feasibility of
CO2 capture from power station emissions gases.
In 2007, we will undertake a baseline study of our
offi ces’ carbon footprint and develop options to
become carbon neutral at our offi ce sites and will
benchmark the current carbon impact associated
with offi ce sites and improve mechanisms for
monitoring and reporting:
• use of energy in offi ces;
• road/rail/air transport; and,
• billing and other operations.
In 2007, we will develop and implement a
programme of action to reduce consumption of
electricity and gas across the offi ce portfolio by
10%, assuming no increase in occupancy rates.
In 2007, we will develop a programme of action to
manage carbon emissions through business mileage
across company (road/rail/air travel).
In 2006, we invested in technology to reduce the
need for attendance at meetings and to improve
home working in order to reduce road mileage in our
business sales division.
In 2007, we will reduce business road mileage in our
business sales division by 5%.
In 2007, we will improve resource effi ciency at
operational sites particularly water use and waste
reduction/recycling (ongoing but particular emphasis
on water management and contractor awareness
training).
Our internal indicator of the thermal performance of
coal-fi red stations is TEMP factor, which is used as a
key performance indicator and indicates the actual
thermal effi ciency of the station.
In 2007, we will continue to invest in effi ciency
improvements at our coal-fi red stations to deliver an
overall reduction in fuel consumption, on a like-for-
like generation basis, of 0.42%.
We will continue to develop our ash strategy for the
management of ash from coal stations, including:
• maximising utilisation opportunities for
power station ash;
• construct an ash processing plant at Aberthaw
Power Station during 2007 with start of operation
in 2008; and,
• minimise environmental impacts of surplus
ash disposal.
In 2007, we will identify baseline water consumption
data across all offi ce sites and implement reduction
schemes at pilot sites.
In 2007, we will calculate baseline measurement
data across all offi ce sites and identifi cation of waste
reduction schemes at pilot sites.
Improve the energy effi ciency of our offi ce based operations.
Reduce the environmental impact of our power station operations through improved waste management and effi cient use of resources.
Reduce the environmental impact of our offi ce facilities through improved waste management and effi cient use of resources.
47
In 2007, we will review and develop environmental
training on the intranet site, including a programme
for delivery to key employees, for example technical
offi cers, new starters and environmental champions.
In 2007, we will roll out Project Management
Department EMS to cover all new project activities.
Commission fi rst unit of Aberthaw Flue Gas
Desulphurisation plant in 2007.
In 2007, we will review processes for managing
and responding to complaints caused by abnormal
operations at power stations.
Provide appropriate training to all staff on environmental awareness.
Continuously improve our methods and approaches to environmental management.
Comply with all applicable environmental regulations and related authorisations.
Environment 2006
Together with special training for senior managers, addressing age awareness is a key element in our new ‘Valuing Difference’ video, poster and e-learning package. The package forms an important part of our programmes to create an inclusive organisation with employees who reflect our customer base, which contains people of all ages. Our message is that everyone’s contribution to the company is important, regardless of their background, including their age.
Barbara Hogg, who features in the poster campaign, is a Customer Service Advisor in the npower Juice team at Peterlee in the North-East. Barbara said: “I work in a brilliant team. We’ve got a range of ages, from 19-58 (that’s me!). The younger ones take in the job very quickly while the older ones can sometimes empathise more with customers because of their life experience. I’ve got a grown-up family and I’ve worked in two or three different jobs. It all helps me talk to people. I think a mix of ages is good for the workforce and good for the customer.”
CASE STUDY:
DIVERSITY GOES ONLINE
Workplace
Corporate Responsibility Report 2006
Diversity and Inclusion
Pursuing an active diversity and inclusion programme
offers the business many potential benefi ts. It helps us
attract and retain the talented people that we need in
the business; it helps us understand all our customers
and their requirements, and therefore deliver a higher
quality service; and, by encouraging people to come
forward with fresh ideas, it fosters a creative spirit in
the business.
Last summer we appointed our fi rst Head of Diversity
& Inclusion, who chairs the corporate Diversity Action
Group (DAG) and is responsible for building and
maintaining awareness and for helping to build our
reputation externally. As a result, we have developed
links with several other major organisations and are
a founder member of a new cross-industry Diversity
Forum aimed at exchanging and developing best
practice. The Head of Diversity and Inclusion also
represents RWE npower on the RWE Group Diversity
Forum and has regular contact with the Group Diversity
Offi cer, helping to set the Group-wide agenda.
We have been raising awareness of diversity through
training for senior management teams and training
line managers through half-day diversity workshops.
We have also created an online e-learning tool Valuing
Difference and made a diversity video with help from
people across the company. Both are being widely
used. The e-learning tool, for example, had 2,670 hits
since it was launched in September 2006 up to the end
of December 2006.
These activities have raised diversity awareness and
helped our people to understand that to be a truly
diverse organisation we need to be inclusive of all our
colleagues. And, while trying to do that, our external
face to the customers is enhanced and improved. For
example, at Peterlee contact centre we have recruited
people from a wider age range so that we can relate to
customers of all ages.
Diversity action plans are now in place for all areas of
the company. In addition to our corporate-level DAG,
our Residential, Operations and Business divisions now
have their own local DAGs, while the Generation and
Renewables (G&R) business has nominated ‘diversity
champions’ throughout the function.
48 49
Workplace 2006
Our objective is to treat our current and prospective employees from all sections of the community equitably and ensure that they work in a healthy and safe environment
The technology that is sha
ping our future – whether
it’s
developing innovative prod
ucts or helping to solve g
lobal
problems such as climate c
hange – means that the dem
and
for engineers has never be
en so high. Yet in the UK
there
is a critical shortage of
engineers in the marketpla
ce.
Attracting and recruiting
skilled people to RWE npow
er
is therefore one of the mo
st important challenges th
e
company faces over the nex
t few years and we are wor
king
on a variety of strategies
to enhance the profile of
engineering and science ca
reers in the company.
Government funding togethe
r with our people and faci
lities
at our Ferrybridge site me
an that an apprenticeship
is a
viable option for 16-year-
olds. ‘Earning while learn
ing’ is
attracting a new generatio
n to engineering, as the p
opularity
of the scheme shows. The n
umber of applications to j
oin the
scheme has almost tripled
in the last two years and
we currently
have 90 apprenticeships at
various stages. The progr
amme
has been so successful tha
t we are in the process of
talks to
increase the number of new
apprentices to 20 or 30 e
ach year.
Other initiatives to impro
ve engineering recruitment
include
direct contacts with educa
tional establishments, sig
nificant
improvements to our extern
al advertising and website
, improving
our offer to employees, en
hancing diversity and cons
idering
pan-European recruitment.
These new approaches are a
lready
proving successful.
CASE STUDY–ENGINEERING:
THE CAREER OF THE FUTURE
During 2006, we undertook a review of how well our
training and development programmes comply with
our diversity policies. Discussions with local training
managers and providers confi rmed that diversity and
inclusion elements are now appropriately integrated
in our programmes. The training teams embedded in
each business unit will ensure that ongoing training is
an important part of any future programme, including
induction for new starters.
Diversity Indicators As we reported in previous years we had not been
able to monitor the diversity mix of our employees
with complete confi dence due to difficulties in
collecting and maintaining accurate information
about gender, ethnicity and disability. During 2006,
we undertook a major project to request details from
employees, which resulted in diversity information
being provided by around 87% of our people.
This now has given us a much more accurate picture
of the overall make-up of our workforce [as set out
in the charts opposite].
Corporate Responsibility Report 2006
50 51
Workplace 2006
Diversity in Senior Management Team(December 2006)
Male (85%)
Female (15%)
White British (95%)
BME groups (5%)1
Diversity in Key Talent Group(December 2006)
Male (79%)
Female (21%)
White British (93%)
BME groups (7%)1
Diversity in Emerging Talent Group(December 2006)
Male (80%)
Female (20%)
White British (91%)
BME groups (9%)1
RWE npower Staff Male/Female Ratio(December 2006)
Male (60%)
Female (40%)
RWE npower Staff by Ethnicity(December 2006)
White British (84.7%)
BME groups (8.6%)1
Not disclosed (6.7%)
1 Black, minority and ethnic groups.
RWE npower Staff by Age(December 2006)
16–25 (24.3%)
26–35 (29.7%)
36–45 (21.9%)
46–55 (17.8%)
56–65 (6.3%)
“ We want to attract and retain talented people
within the organisation, and diversity allows our
people to be creative and innovative and helps
us understand our customers better“
Nick Smith, Head of Diversity, RWE npower
Career Development
The long-term success of our business depends on
supporting the training and development needs
of employees at all levels. We set ourselves a number
of targets in this area for 2006.
Open Learning
We undertook to provide additional ‘open learning’
resource centres at customer services locations with
a target of 300 employees participating in ‘open
learning’ courses. An additional Learning Resource
Centre was opened at Phoenix House in Thornaby
in May 2006 and already more than 134 learners
have enrolled. Together with learners at the learning
resource centre at our Peterlee contact centre, which
opened in August 2005, a total of 357 learners were
participating in 657 courses by the end of 2006.
Management Training
By the end of the year, a further 29 senior managers
had attended an International Training Programme
while 170 managers had signed up to certifi cated
programmes such as the Diploma or Certifi cate in
Management Studies. 180 individuals have followed
internal, non-accredited programmes such as our team
leader and leadership development programmes.
Succession Planning
We also undertook to identify more female candidates
for high criticality1 succession posts. Our business
divisions have now identifi ed these roles, with G&R
identifying at least one female succession candidate
for four out of 16 (25%) high criticality roles, while for
the rest of the business there is at least one female
for 19 out of 40 posts (48%). Although we recognise
progress has been made in this area, we are not
complacent as the mix of our senior management teams
still does not refl ect that of our overall workforce. To that
end, the importance of having talented people from all
backgrounds under development remains a priority.
To support our efforts in this area further, last year
a full review of our recruitment and selection policy
was undertaken in which the importance of diversity
was reinforced. Our intention is always to appoint
on merit and we will continue to look carefully at our
various policies and procedures to ensure this.
At the same time, we will be working hard to offer
appropriate development to all of our people and to
prepare fully those with the potential to take on
key positions.
Communications with Employees
During the year we implemented actions arising from
our 2005 employee survey through action plans. Each
business area now has an action plan, supported by
focus groups to progress further issues arising from
survey feedback, such as the reduction of workplace
bureaucracy. We continue to monitor employees’
perceptions of the company via mini surveys or other
appropriate methods.
Our Business Review Forums enable senior executives
to share information about corporate strategy and
developments with employee and Trade Union
representatives. Separate fora have been established
for our Retail, Corporate and G&R divisions. We met
our target of holding at least three meetings per year
for each forum.
Employment Legislation
We have a legal duty to ensure the company is
appropriately prepared for the implementation of new
employment legislation. A full plan with guidance notes
for managers was implemented before the introduction
of age legislation on 1 October 2006. Letters were sent
to individuals approaching retirement age, indicating
how they might be affected. Policies and guidelines
have been changed where necessary and a diversity
video and e-learning tools highlighting age in the
context of overall diversity were also rolled out.
Company Values and Business Ethics
We have reviewed the effectiveness of internal
employee communications in support of our RWE
company values and have concluded that these have
been successfully integrated into our internal
communications strategy. Last year’s discussions with
the Institute of Business Ethics to develop a business
ethics training programme for all employees have
continued. Detailed design and implementation of
the programme will commence in early 2007.
Awareness and Understanding of CR
To increase awareness and understanding of CR
within the company we have included CR and
sustainability issues in the induction programme for
new employees in our business retail division.
A management training programme is currently
under development which will include CR training
for all managers.
We have been working with the University of Cambridge
Programme for Industry to consider ways of amending the
Chronos online learning tool, whose aim is to allow users
to improve their understanding of sustainability issues.
Health, Safety and Wellbeing
Health and Safety
We pursue continuous improvement in the areas of
health and safety and occupational health. Achieving
and maintaining the high standards we set ourselves
requires strong leadership. Equally importantly, it also
requires a supportive culture based on employee-led
safety (ELS) at all levels, and a structure of clearly
understood rules and practices.
The nature of our business as an energy supply
company means that we must ensure that appropriate
measures to protect employees, contractors,
visitors and the general public are always in place.
We recognise the importance of revisiting and
reconfi rming these requirements on a regular basis.
As a result of actions over the last year not only did
we meet our safety targets for the period, we were very
pleased to be able to announce that we also achieved
a dramatic improvement in the performance of our
meter reading business, MeterPlus. This area of the
company signifi cantly outperformed its targets as
a whole, having underperformed in previous years.
Occupational Health
The safety agenda is important for many reasons,
including commercial considerations such as the
avoidance of prosecution or regulatory action and
employees’ motivation but, perhaps above all, our
moral responsibility towards our employees. For
many years we have also placed great emphasis
on maintaining and promoting the health of our
employees through a comprehensive occupational
health programme. Recently we have extended this
into the slightly broader concept of ’wellbeing.’
Corporate Responsibility Report 2006
52 53
Workplace 2006
1 High criticality is defined as high impact on customers, revenue, or key business processes.
Appointment to any post is made in accordance with the company’s recruitment policy.
Accident frequency rate
(AFR) 1-3 days lost time per
100,000 hours worked
Target 2006 Actual
Staff n/a 0.16
Contractors n/a 0.45
Combined1 Less than 0.27 0.2
Serious Injury Rate (SIR)2 Target 2006 Actual
Staff n/a 0.11
Contractors n/a 0.39
Combined1 Less than 0.15 0.14
Target 2006 Actual
Number of Dangerous
Occurrences
Less than 5 2
1 The combined (staff + contractors) AFR and SIR
are based on the addition of staff plus contractor
accidents and the same for hours worked. Due to
approximately 90% of the hours being worked by
staff, the weighted addition may be equal or closer
to the staff figure to 2 decimal places.
2 All accidents as defined under RIDDOR, including
lost time accidents (over 3 days) per 100,000
hours worked.
Our wellbeing programme is about a cultural change for all employees. Its success will always be partly a subjective measure and so difficult to quantify, but we are committed to embedding it further into the business agenda. Healthy eating plans, running and walking clubs, and home working are just a few examples of how we encouraged staff wellbeing last year.We believe the most productive strategy is to focus on the majority of employees who attend work and our wellbeing programme is designed to encourage them to think about individual health management as part of their own daily routines. This is achieved by supporting sensible working hours and habits with on site health education and advice covering topics such as exercise, diet, alcohol, smoking and stress. Our occupational health department has been offering individual voluntary health screening for many years with tailored health advice being provided depending on results. Although at a national level the population is becoming more obese and taking less exercise, the anonymous collation of our screening data suggests these trends are not as marked within the company. We believe this to be a clear indicator that such health promotion initiatives have sparked improvements in lifestyle. Not surprisingly, international research into health promotion in the workplace suggests that every pound spent on wellbeing achieves greater savings not only for the employer but for every employee as well.
CASE STUDY:PROMOTING WELLBEING
Corporate Responsibility Report 2006
54 55
Workplace 2006
Stress
Progress continues to be made in addressing the
important issue of work-related stress. Over 1,000
managers have attended our stress workshops so
they are in a position to perform team-based risk
assessments and to assist staff who may have a
stress problem.
The target for the number of staff being invited to
use the Stress Risk Assessment (SRA) tool in their
teams was met in 2006. However, the additional target
that at least 50% of managers who use the tool should
complete the risk assessment process was not met.
Overall only 19% of projects begun during the year
were completed by year end although we expect the
targets to be achieved in 2007.
Sickness Absence and Rehabilitation
It is disappointing to report that the rolling year
percentage lost time rate for sickness ended the year
at 3.95%, compared with our target of 3.77%.
Although this does not represent a clear upward trend,
and our own benchmarking shows it is near the average
for the electricity sector, it is slightly above the CBI
rate for the utilities sector (3.8%). We are therefore
implementing actions to ensure that managers have
improved systems and support to tackle excessive
sickness absence.
An important related target is the saving in lost time
through the rehabilitation of employees who have
been off sick in the medium to long term. This is a
novel KPI in the management of health area and we
are pleased that the number of person days saved
exceeded the target (1,100). In 2007, we are aiming
for an even higher target (2,200 person days).
Voluntary Health Screening
In 2006, we expanded our ‘Get Healthy Stay Healthy’
programme so that most staff had access to screening.
Each check-up lasts about one hour and provides
the employee with an assessment of their health and
lifestyle together with specifi c health education advice.
Wellbeing
Our wellbeing programme aims to draw together
initiatives across the company in facilities, human
resources, and corporate responsibility as well as
occupational health and the various businesses
(see case study opposite). While it is difficult to
demonstrate a clear cost benefi t in hard fi nancial terms,
we believe that a healthy, happy workforce assists us
in the creation of a sustainable business and in the
delivery of our corporate objectives. We have continued
to work with BitC in promoting its ‘Action on Health’
leadership scheme.
Pension Scheme
Long-term pension provision remains one of the most
signifi cant challenges facing businesses today and
there is no question that pensions form an important
part of the remuneration package that we offer our
employees. The company provides defi ned benefi ts
pension arrangements for existing and new employees.
We monitor developments very closely and also
conduct regular valuations of our scheme to ensure
that we can meet our future liabilities. From 1 April
2005, the company agreed to make additional
employer contributions over an anticipated 12-year
period to repair a 4% ongoing funding defi cit.
Currently, RWE npower’s pension scheme has around
trustees do not impose specifi c ethical investment
restrictions on the fund managers, they do require
them to monitor and report on the governance
arrangements and behaviour of the companies in
which the pension scheme invests.
In the light of the pension reform and tax simplifi cation
measures introduced through the Pensions Act 2004 and
the 2004/5 Finance Acts, the company has embraced
the additional fl exibility that was permitted. A special
newsletter in March last year advised members about
how they can receive their benefi ts and build up more
pension whilst they are working.
Useful website links
www.remploy.co.uk
www.opportunitynow.org.uk
www.jobcentreplus.gov.uk
www.efa.org.uk
www.rospa.com
www.sheiiba.com
www.chaspi.info-exchange.com
38,000 members, including around 25,000 who are
pensioner members. The scheme has nine trustees,
six of whom are directly elected by the members.
Their prime responsibility is to manage the scheme’s
assets and administer the benefits in the best
long-term interests of the members. While the
Sir Robin Mountfi eld, the independent Chairman
of our Health and Safety Review Committee,
highlighted in his annual report to our Board
three indispensable elements of our safety culture
and confi rmed that these are in place in the
company, namely:
• a clearly articulated policy, championed by top
management and understood throughout the
business divisions, that safety must always have
priority over all other considerations, including
cost-saving or profi t improvement;
• clear rules, procedures and practices for
maintenance and inspection of plant, taking
special account of the age of plant and also
of incidents reported elsewhere with similar
plant; and,
• an infl exible company policy that expenditure
necessary for safety is never rejected or
postponed on grounds of cost or operational
performance, and that written evidence is
routinely recorded when expenditure decisions
are taken that safety has been fully taken into
account in reaching a decision.
Corporate Responsibility Report 2006
56 57
In 2007, we will:
• develop the RWE npower Property Charter, which
will set down and monitor the working conditions
and business requirements of our offi ces;
• measure the percentage of building area allocated
to support activity in our offi ces, and benchmark
for application as part of Property Charter; and,
• apply the Building Research Establishment
Environmental Assessment Method (BREEAM)
pre-assessment checklist to review the working
environment of all key offi ces in our portfolio.
In 2007, we will:
• reduce one day+ accidents (combined accident
frequency rate less than 0.19);
• decrease the number of serious injuries
(combined serious injury rate less than 0.13);
• devise a safety culture survey tool, and use tool to
survey UK facilities; and,
• roll out process safety measures, once fi nalised,
in our Engineering and Safety functions.
In 2007, we will:
• ensure that 50% of work-related ill health cases
(as confi rmed by Occupational Health) are
investigated fully by Line Managers;
• ensure that a further 1,600 employees use the
Stress Risk Assessment (SRA) questionnaire;
• ensure that 50% of Stress Risk Assessment (SRA)
projects begun in 2007 are completed;
• aim to register an additional 930 staff in the
‘Get Healthy Stay Healthy’ database;
• save 2,200 person days through the rehabilitation
of employees who are off sick; and,
• maintain the sickness absence rate at no more than
3.7% lost time.
Improve working environment at offi ces to increase staff morale and improve recruitment /retention.
Occupational Safety.
Health.
Workplace Performance Targets 2007
Promote diversity and inclusion in the workplace.
In 2007, our aim is that Diversity and Inclusion form
a key part in every induction and over 90% of new
starters receive awareness training.
In 2007, we will create a mechanism for capturing
diversity information about job applicants, by
site and business area, enabling an analysis of
appointments made within the ‘Personal Contract’
population.
In 2007, we will ensure recruitment suppliers
are fully aware of our diversity requirements and
where used are sourcing high quality talent from all
backgrounds, including females and those from BME
groups to shortlist for senior level opportunities.
In 2007, our aim is that for at least 50% (25% in
G&R) of high criticality posts that become vacant
a suitable internal or external female candidate is
shortlisted for consideration (high criticality
means high impact on customers, revenue, or key
business processes).
For 2008, we aim to attract a pool of applicants,
from whom we select our graduates, made up of at
least 50% females and 10% from BME groups.
In 2007, we will build our reputation at locations
within multi-cultural communities (e.g. Oldbury/
Quayside) by engaging with local BME groups to
promote understanding of the company and
potential employment opportunities.
In 2007, we will achieve a greater employee
awareness and understanding about the importance
of diversity and inclusion to the business than two
years ago (as measured by the 2007 staff survey).
In 2007, we will undertake analysis at all signifi cant
RWE npower sites (i.e. all sites with more than 100
employees) to determine the opportunities where we
can infl uence employees’ wellbeing on a site-by-site
basis. Prioritise these sites’ opportunities and
develop site specifi c strategies to address the three
most signifi cant.
In 2007, we will hold a company-wide ‘npower
Games’ event, with signifi cant representation (i.e.
more than 500 employees participating) from most
sites (i.e. with at least one representative from each
site with more than 100 employees).
In 2007, we will extend the RWE npower
programme throughout the business and ensure
that there is a 25% increase in the number of
learners commencing and progressing through NVQ
qualifi cations compared to 2006.
In 2007, we will increase the number of employees
who are satisfi ed with their opportunities for
advancement within the company above that
measured two years ago (as measured by the
planned 2007 staff survey).
In 2007, we will benchmark and review our
reputation as a graduate employer, including
our ability to attract graduates from diverse
backgrounds, by obtaining feedback from careers
departments and students and measuring progress
against this at the end of the year.
In 2007, our aim is that a diversity and inclusion
component will become part of our wider
education package to schools and other schemes
aimed to encourage women and under-represented
groups into engineering.
Demonstrate our commitment to wellbeing throughout npower.
Succession planning and career management.
Attracting talent/building for the future.
In 2007, we will create a policy and/or set of
guidelines that support career breaks and fl exible
working across the businesses.
In 2007, we will develop and implement a method
to communicate value of total benefi ts package to
employees.
In 2007, we will increase the number of employees
whose job allows them to utilise their skills and
abilities above that measured two years ago
(as measured through the 2007 staff survey).
Promoting employee satisfaction and commitment.
In 2007, we will complete development and
implement a business ethics training programme
and internal communications plan.
Company values and business ethics.
In 2007, we will ensure 50% of all B2B staff receive
sustainability awareness training.
Improve knowledge within the workplace (to support our external marketplace positioning).
Workplace 2006
Urban Cricket is an exciting venture between npower
and the England & Wales Cricket Board (ECB).
Fronted by England cricketer Kevin Pietersen, the project
delivered over 45,000 urban cricket kits to youngsters
across the UK. The idea behind Urban Cricket is simple –
play the game anytime, anywhere – once you have the kit
you can play, just you and your friends. The free kits
include a durable cricket bat, tennis ball with tape
(taping one side of the ball makes it swing) and an
over-the-shoulder bag. We want to build on the growing
interest in the sport by giving young fans the chance to
try the game without having to join a club or go through
their school. So far we have given out kits to 7–12 year old
sports fans through our community initiatives, including
our educational npower Power Days at schools, and at
www.urbancricket.com. An Urban Cricket stadium will open
in Lambeth, South London, with others to follow in the
Midlands and the North West.
CASE STUDY:
URBAN CRICKET
Earning the trust and confi dence of the communities where we operate can bring substantial benefi ts for the npower brand and provides signifi cant motivation to our employees
Involvement in the Community
Our community involvement programme makes a
positive contribution to society by focusing on three
key areas where we believe our company is best
able to deliver real benefi ts to the communities where
we operate: health, education and the environment.
An important feature of the way the programme
developed last year was the increased investment and
ownership by individual business units of specifi c
community initiatives. This represents explicit recognition
of the business benefits to be gained from such
initiatives and is leading to a genuine company-wide
programme, which provides effective relationships
with the local communities in which we operate.
npower business, for example, established two
sustainable community initiatives in areas where it
has a signifi cant presence. Partnerships were created
with Penn Hall School, Wolverhampton, and the Centre
of the Earth Project, Birmingham. Our generation
business has developed a range of initiatives to
encourage individuals to study science, technology,
engineering and maths (STEM) in order to enable them
to pursue a career in engineering. npower residential
has also been active, for example, developing the
Urban Cricket scheme. The value of many of these
partnerships is in creating an opportunity for
employees to become involved by giving time and
expertise to specifi c projects that develop sustainable
community relationships. Our employees can be proud
of their contribution to their local communities, which
in turn receive substantial benefi ts from their efforts.
Our overarching community programme aims to
maximise benefi ts to the communities in which we
operate and focuses on a number of key schemes:
• Health Through Warmth – provides support for
vulnerable people living in cold, damp homes.
• Employee volunteering – helps to build sustainable
relationships with local charities and community
groups, whilst motivating staff and increasing
job satisfaction.
• Fundraising and charitable giving – encourages
staff to engage with their local communities
through a number of means, such as our long-term
partnership with Macmillan Cancer Support and our
payroll giving scheme, GIVE.
• Education – we work with teachers and pupils to help
them understand how energy fi ts into their lives and
encourage the use of learning through sport.
Health Through Warmth
The npower Health Through Warmth scheme was
launched in 2000 and operates through locally based
partnerships that seek to identify vulnerable people
of any age, whose health is adversely affected by
the cold and damp conditions in their home. This is
achieved by facilitating the installation of appropriate
Corporate Responsibility Report 2006
58 59
Community 2006
Community
During 2006, we began developi
ng a more tailored approach to
our
support and involvement in hel
ping students learn about engi
neering
and science in an exciting and
real way that relates to our
Generation
and Renewables business. Our t
ailored involvement addresses
the
challenges we face as an indus
try in inspiring young people
to enter
a Science, Technology, Enginee
ring or Maths related career a
nd
recruiting engineers and scien
tists now and in the future.
Ian Noble, Martin Williams and
James Luxford, three of our e
ngineers
who have completed their two-y
ear engineering graduate progr
amme,
have developed an interactive
educational programme that wil
l make
a positive impact by raising a
wareness and inspiring 13–14 y
ear olds
to “delve” into the world of s
cience and engineering in scho
ols
close to our operating sites.
The aim of this programme, “np
ower enthuse”
is to excite, enthuse and insp
ire students in a way that wil
l appeal to both them
and their teachers. The progra
mme will enable employees, inc
luding our
apprentices and graduates, to
volunteer on the day, develop
their personal and
professional skills and share
their interest in engineering
with students.
Pat Langford, Programmes Direc
tor at SETNET said: “SETNET fi
nds the support and
involvement of RWE npower in t
he Science and Engineering Amb
assadors (SEAs) Programme
to be absolutely excellent. Le
tting their staff know that vo
lunteering as a SEA has the
complete endorsement of manag
ement is the very best way to
support the programme.”
CASE STUDY: NPOWER ENTHUSE
ENGINEERING THE FUTURE
energy effi ciency and heating measures. It is now
operational in 12 areas across the UK and embraces
27 Primary Care Trusts and 22 local authorities
across England and Wales.
The npower Health Through Warmth scheme is
operational in the following areas:
• Birmingham
• Dudley
• East Riding of Yorkshire
• Leeds
• Leicester
• Merseyside
• Newcastle upon Tyne
• Staffordshire
• Vale of Glamorgan
• Walsall
• Wrexham & Flintshire
• Wolverhampton
The scheme has trained almost 14,000 community
workers, such as nurses, midwives, occupational
therapists, the police and fi re service, so they can
identify individuals in need of help and refer them to
their area HTW Coordinator, who is able to facilitate
access to statutory national grant schemes and other
locally available funds. Where clients are ineligible for
these, funding is sought from charitable organisations
on their behalf. The scheme is not restricted to just
npower customers.
Financial support may also be offered from the npower
HTW Crisis Fund, depending on circumstances. To date
there have been over 27,000 referrals, with more than
£17.9 million grants and funds initiated. The HTW Crisis
Fund alone has fi nanced over £2.5 million worth of
measures. Last year the scheme received 9,382 referrals
(against a target 5,000) and, as a result, over £7 million
of grant-aided measures (against a target £5 million)
were initiated.
We continue to adapt appropriately and creatively
to the differing operational needs in each area.
In recognition of HTW’s achievements a regional BitC
Big Tick award was received in 2006 and the scheme
was shortlisted for the national BitC award in the
Community Initiative
category and for the Utility
Awards 2006 Community
Initiative of the Year.
Volunteering
Volunteering helps to build sustainable relationships
with local charities and community groups in the
vicinity of our operational sites. By concentrating efforts
on our key partners we are able to deliver real benefi ts
to those receiving help and build a positive image of
npower within the community.
Volunteering also offers an environment where
employees can develop skills and knowledge, whilst
passing on a positive message about npower to the
communities and other stakeholders, and has been
shown to be an important factor for the recruitment
and retention of employees. In 2006, over 10% of
employees were actively involved in our volunteering
programme and 47% of initiatives took place with our
key community partners. Volunteering employees
contributed 9,775 hours last year, the equivalent of
more than three working years.
We also undertook a joint volunteering opportunity
with RWE Group in Germany providing volunteers
for the Football World Cup for People with Learning
Disabilities. Eleven volunteers travelled from the UK to
take part in the event, helping steward the games and
assisting people with disabilities to their seats.
Our e-mentoring programme has continued to grow and
develop. The scheme aims to help children achieve their
true potential by taking advantage of the expertise
available within our business and provides employees with
an opportunity to volunteer without leaving their desk.
We set up fi ve new partnerships with schools around
our sites in 2006.
Employees who volunteer outside of work time are
encouraged to apply for a community volunteer award,
a fi nancial reward to assist with a community project
in recognition of their commitment. In 2006, we
supported 170 employees through this initiative which
meant that 170 charities and community groups
benefi ted from over £80,935 of fi nancial investment.
Fundraising and Charitable Giving
Last year we received an award from CAF (Charities Aid
Foundation) for ‘Effective Giving’ in recognition of our
overall community programme.
Partnership with others allows us to bring in additional
resources to our projects above and beyond our direct
contributions. By the end of the year, contributions
from external sources stood at over £7 million
(the majority of which is associated with the Health
Through Warmth scheme). We also submitted an
application to be involved in the Government ‘V’
campaign (a charity funded by the Russell Commission
which aims to engage 16–25 year olds in volunteering).
2006 saw the biggest and most successful Coffee
Morning in aid of Macmillan Cancer Support, since our
partnership began over three years ago. A total of
£80,000 was raised, after £4£ matched funding, and
the day gave employees at all sites the opportunity to
participate in Macmillan’s fl agship event. Events like
this help to raise the profi le of Macmillan’s work and
provide an opportunity to engage the whole company
in a single all-encompassing initiative.
With the relaunch of our payroll giving programme,
GIVE, last autumn we aimed to increase the
percentage of employees using the scheme to 5%.
The number of people using GIVE at year end
was around 6%.
Education
We already work in partnership with hundreds of schools,
colleges, universities, education professionals and
organisations close to our operating sites, sharing our
employees’ interest, enthusiasm and knowledge with
thousands of students.
In 2006, an Education Steering Group was formed,
with representatives from each business unit, to look at
ways we can share best practice through extending our
education commitment activities across the company.
The group will investigate how, as a company, we
can help meet our future recruitment needs by
working more closely with students and education
professionals, schools, colleges and universities.
We are supporting the development of the new
diploma qualifi cations for 14–19 year olds. We have
two representatives providing their knowledge and
expertise in the development of the Engineering and
Business, Administration and Finance Diplomas.
Our partnership with the Science, Engineering,
Technology and Mathematics Network (SETNET),
funded by DTI and DfES, provides an opportunity
for our engineering staff, especially our graduates
and apprentices, to become Science and Engineering
Ambassadors and volunteer in local schools.
Corporate Responsibility Report 2006
60 61
Community 2006EMPLOYEE VOLUNTEER FEEDBACKLast year:
• 98% of respondents found the task enjoyable (48% extremely);
• 92% saw an improvement in team building, 74% in teamwork and 64% in communications; • 87% felt more positive about the company as a result of taking part in the activities;
• 97% felt they made a difference; and, • 81% felt more motivated at work.
A real test of our r
elations with local
communities is how
well we manage the r
are occasions when p
roblems occur.
At the beginning of
February last year,
for example, we bega
n
to receive complaint
s from the public ab
out black dust near
to
our Didcot A coal-fi
red power station. F
urther investigation
s
revealed that some f
oreign debris had en
tered with the coal,
preventing the coal
screening machinery
from functioning
correctly. As a resu
lt some coarse coal
particles were not
removed, and emitted
from the boilers as
dust.
As soon as we realis
ed that the station
was the source of
the dust, we release
d a press statement
and appeared on loca
l
radio and television
to explain the reas
on why the dust inci
dent
had occurred, to rea
ssure the public tha
t the dust was harml
ess
and to apologise for
any inconvenience c
aused. Local people
affected
by the dust were enc
ouraged to contact t
he station so that w
e could
arrange to clean pro
perty affected – suc
h as cars, conservat
ories
or window ledges – a
s quickly as possibl
e. In total we recei
ved
173 enquiries, all o
f which were dealt w
ith to the satisfact
ion of
the complainants.
CASE STUDY:
DUST COMPLAINT AT DI
DCOT
Useful website links
www.corporatecitizenship.co.uk
www.wildlifetrusts.org
www.csv.org.uk
www.macmillan.org.uk
www.nebpn.org
www.npower.com/education
www.urbancricket.com
Increasing Stakeholder Awareness
We are using a range of tools to communicate the
business and community impacts of our programme
to employees. These include our internal team
briefi ng process; regular news updates to employees
via our ‘nformer’ newsletters and ‘Team’ magazine;
printed community ‘credit card’ information
cards; and, participation in volunteering days and
employee induction. Awareness of the community
programme was also raised through presentations at
our Wellbeing, Management, Sales and Residential
Conferences. Following a recent employee survey, the
number of employees who believe RWE npower makes
a positive contribution to the community is now 69%,
compared to 58% in 2005.
Last year we took part in a number of activities,
sharing our knowledge and experience, of the London
Benchmarking Group (LBG) model in order to engage
other companies in community and charitable activity.
The model, which we piloted and tested for use by all
community partners, provides a clear framework for
assessing and evaluating the business and community
benefi ts of community involvement programmes.
We led presentations about volunteering to, amongst
others, HM Treasury, the Cabinet Offi ce and Nike.
We also produced a video about our partnership with
our corporate charity, Macmillan, which we used to
help lever support for Macmillan from other companies.
Corporate Responsibility Report 2006
62 63
Community 2006
10
0
60
90
100
70
80
40
30
50
20
Focus by Percentage Contribution
%
2005 2006
Education & Young People
Environment
Health
Emergency Relief
Other
2002
2003
2004
2005
2006
0
3
5
6
4
2
1
Community Investments
£m
2003 2004 20051 2006
Charitable
Community Investment
Commercial Activity
1 Includes donations to the South East Asia Tsunami disaster relief effort.
1,2
21
,70
8
3,0
09
,77
3
4,8
22
,25
2
3,3
43
,52
1
RWE npower –
Time spent by employees to support work–related learning 2006
Number of benefi ciaries
(e.g. work placements) 54
Employee time spent
(days) 357
25
0
50
0
814
1,0
21
1,1
82
0
200
400
600
800
1,000
1,200
Number of Staff Volunteers
Performance against 2006 Targets
65
Performance against Targets 2006Corporate Responsibility Report 2006
64
Community Performance Targets 2007
Maintain a company-wide community involvement programme which provides effective relationships with the local communitieswhere we operate.
In 2007, we will review current business risks,
and ensure that community programme is aligned
to address issues and support business aims.
In 2007, we will develop and embed two external
stakeholder community partnerships.
In 2006, we launched the fi rst phase of our Urban
Cricket initiative, which involved the distribution
of over 45,000 Urban Cricket kits to children
throughout the UK. The next stage of the initiative
will involve the construction of Urban Cricket stadia
(proposed in London, the West Midlands and the
North West), and the creation of urban cricket ‘zones’
in existing school playgrounds.
In 2007, we aim to have completed the London
Stadium and fi ve surrounding zones, and have
commenced work on the West Midlands Stadium.
In 2007, we will increase the value of our partnership
with Macmillan Cancer Support to £2 million.
In 2007, we will bring in additional resources to
our projects from external partners in excess of our
direct contributions (including £5 million grant-
aided measures through our Health Through Warmth
scheme).
In 2007, we will refer 5,000 vulnerable, low income
households where occupants have a cold and damp
related illness, and facilitate the installation of
insulation and heating measures based on individual
assessment and need, through our Health Through
Warmth scheme.
In 2007, we will increase the number of employees
volunteering in the community to 10% of total
employees (based on total employee numbers of
12,359, as at January 2007).
In 2007, we will increase the number of employees
using their specifi c skills and expertise in
volunteering to 50.
In 2007, we will review, develop and communicate
the range of schemes available to employees (£4£,
Awards, Payroll Giving, Volunteering, e-mentoring).
We will benchmark our schemes against LBG members
to ensure initiatives are best practice.
Increase staff involvement in the community.
In 2007, we will implement a plan to communicate
the benefi ts and impacts of our community
involvement programme to key internal and
external stakeholders.
In 2007, we will maintain the number of employees
who believe RWE npower makes a positive
contribution to the community at 70%.
In 2007, we will establish an employee recognition
scheme for community involvement.
Increase awareness of our community programme amongst internal and external stakeholders.
Corporate Responsibility Report 2006
66 67
Performance against Targets 2006
Marketplace Objective Progress
Introduce three renewable energy
products by providing fi nancial support
for the installation of low and zero carbon
technologies in domestic properties.
Support the development of new sources
of renewable energy through the npower
Juice fund, currently valued at £500,000
per annum.
Increase our purchases of power from
renewable generation by 25%.
Double our purchases of good quality CHP.
Develop with key stakeholders an energy
effi ciency website, and a communications
plan to improve the effi cient use of energy
supported by a range of new products.
Maintain the current low level of sales
complaints (at less than 20 per month).
Achieve an above industry average AES
audit for sales.
Maintain service levels for telephone
contact and correspondence with customers
(more than 75% of all calls answered within
20 seconds and correspondence replies
within fi ve days).
Reduce energywatch recorded complaints
(customer transfer and account/billing)
by a further 10%.
Meeting the demands
of our customers for
renewable energy.
Responsible selling.
Improve service
to our customers.
Purchases of renewable power approximately
17% less than in 2005, due to market
pressures (collapse in price resulted
in reduced generation by contracted
counter-parties) and internal processes.
Work ongoing to improve internal processes.
GQCHP purchases increased by 60%, but
target not achieved due to unexpected
outages at counter-party, and we were
unable to purchase additional capacity.
In total, we purchased an estimated 60%
of the available GQCHP market.
We were unable to maintain our Service Level
to customers, due to the impact of price
increases, migration of IT systems
and growth in our customer numbers.
Introduce a new research method to measure
and monitor the performance of our products
and npower customers’ experience.
Reduce MP and Press Complaints by
10% respectively (compared to 2005).
Increase the number of customers registered
for Warm Response services by a further 25%.
Provide 8,000 Benefi t Entitlement checks to
customers in the EEC programme and to fuel
poor customers.
Incorporate vulnerable customer awareness
training into front line service staff training.
Refer 5,000 ‘at risk’ homes and initiate
£5 million grant-aided measures through
our Health Through Warmth scheme.
Work with key stakeholders to raise
awareness and understanding of
sustainable procurement and to
develop an agreed strategy.
Develop a supply chain risk assessment tool.
Complete the risk assessment of
our supply chain and identify HR/HI
commodities/services.
Map three critical supply chains in depth
and agree an action plan with suppliers to
mitigate the identifi ed risks.
Meet and exceed
customers’ expectations.
Provide services for
vulnerable customers.
Integrate corporate
responsibility into our
procurement activities
within the supply chain.
Identify high risk/high
impact (HR/HI) issues
across our supply chain
and monitor performance
of suppliers.
MP and Press complaints increased by less
than 1% respectively (compared to 2005).
In light of the price increases in 2006,
performance is regarded as satisfactory.
We received 5,868 referrals for Benefi t
Entitlement checks, of which we completed
1,157. This resulted in 714 customers
potentially entitled to further benefi ts.
The supply chain risk assessment tool has
been applied to a utility sector specifi c set of
product groups. A review of commodities and
services specifi c to RWE npower had not been
completed by year end.
A supply chain mapping questionnaire has
been developed and the mapping process
has commenced for one critical supply chain.
This activity along with the remaining
two supply chains targeted had not been
completed by year end.
Objective Progress
Corporate Responsibility Report 2006
68 69
Performance against Targets 2006
Environment Objective Progress
Generate more than 1,500GWh
of renewable electricity.
Achieve consent for 80MW of new
renewables generation.
Continue to identify opportunities for further
good quality CHP portfolio development.
Deliver 5.8TWh of energy savings
(fuel standardised, lifetime-discounted)
in domestic consumer households.
Continue to implement action plans
to improve resource effi ciency at
operational sites particularly water
use and waste recycling.
Invest in effi ciency improvements at the
coal-fi red stations to deliver an overall
increase in TEMP factor (our internal measure
of effi ciency), on a like-for-like generation
basis, of 0.4%. Equivalent to a reduction
in fuel consumption, on a like-for-like
generation basis, of 0.42%.
Improve energy effi ciency in our fi ve least
effi cient offi ce buildings by 2%.
Work with suppliers to reduce the amount
of waste (including recycling of packaging
waste) arising at our offi ce sites.
Identify additional effi ciency improvements
for all buildings to be implemented in 2007.
Assess the current level of business travel and
identify measures to reduce business mileage
(including international fl ights).
Contribute to UK and EU
reductions in emissions
of carbon dioxide through
participation in the EU ETS,
development of renewable
energy, increased use of good
quality CHP and delivery of
customer energy effi ciency
commitments.
Reduce the environmental
impact of our operations
through optimised energy
effi ciency, waste management
and effi cient use of resources.
Consents achieved in 2006 (9.5MW) were
signifi cantly lower than the target. However,
total applications for consent for new projects
were 259MW in 2006.
We delivered 5.3TWh of energy savings
in 2006. This is in line with the EEC2 plan
and puts us well on track to deliver our
EEC2 obligation.
Energy audit carried out at major sites.
Energy saving initiatives for these sites
included replacement of printers, fl at screen
monitors and energy awareness campaign.
Installation of new IT equipment in progress.
B2B participation in ‘The Big Switch Off’
campaign.
Pilot a scheme to reduce business mileage in
B2B by 15%.
Develop integrated environmental
training material that allows ‘core’ training
to be supplemented by power station
specifi c packages.
20% of RWE npower offi ce-based
employees to undertake environmental
awareness training.
Review need for accredited EMS to cover
new projects activities.
Update all accredited Environmental
Management Systems to meet revised
ISO14001 standard.
Incorporate Madison information into
corporate compliance reporting system.
Commission fi rst unit of Aberthaw Flue Gas
Desulphurisation by September 2007.
Meet National Air Quality Strategy targets
through best practice management.
Submit applications for IPPC permits at all
power stations by March 2006.
Provide appropriate
training to all employees on
environmental awareness.
Continuously improve our
methods and approaches
to environmental
management.
Comply with all applicable
environmental regulations
and related authorisations.
Data on business travel has been collected,
revealing a 2.2% increase in total mileage
in 2006.
Employees are encouraged to use
videoconference and teleconference facilities
rather than travelling to meetings.
For large corporate events buses have
been arranged. Much of the older
videoconferencing kit is being replaced.
Environmental awareness training
promoted through internal communications,
intranet, managers briefi ngs and
audit checklist process.
Objective Progress
Corporate Responsibility Report 2006
70 71
Performance against Targets 2006
Workplace Objective Progress
Develop a policy to address diversity issues
in training and a protocol to assess training
and development for diversity compliance.
Review the diversity profi le of employees
leaving or made redundant to evaluate if
there is any bias.
Cascade and implement business unit
diversity action plans and monitor progress.
Ensure that all employees with people
management responsibilities have
participated in the diversity and inclusion
training programme.
Implement a diversity awareness on-line
training tool for all employees.
Identify at least one female candidate for
33% (10% in G&R) of business defi ned high
criticality* succession posts (*high criticality is
defi ned as high impact on customers, revenue,
or key business processes. Appointment to any
post is made in accordance with the company’s
recruitment policy).
Additional 30 senior managers to attend
International Training Programmes
(32% of eligible population).
Additional 260 managers to undertake a
junior/middle management programme
– e.g. Diploma in Management, Certifi cate in
Management or non-accredited equivalent.
Implement actions arising from employees’
survey though directorate action plans.
Monitor employees’ perceptions of
the company via mini surveys or other
appropriate devices.
Promote diversity and
inclusion in the workplace.
Succession planning and
career management.
Communicate and consult
with employees and
Trade Unions.
We have been raising awareness of diversity
through training for senior management teams
and putting line managers through half-day
diversity workshops. We have also created an
online e-learning tool ‘Valuing Difference’ and
made a diversity video with help from people
across the company.
29 senior managers attended
international training programmes.
Continue Business Review Forum meetings
– at least three per year for each Forum.
Ensure that businesses are appropriately
prepared for implementation of new
employment legislation.
Develop and provide training on business
ethics to all employees.
Review effectiveness of internal employee
communications to support the integration
of company values.
Develop a programme of CR training for
B2B managers and employees (50% of B2B
employees participating in the training
programme by end of 2007).
Open additional learning resource centres
at customer services locations.
300 employees to participate in
‘open learning’ courses.
Reduce one day+ accidents (combined
accident frequency rate less than 0.27).
Decrease the number of serious injuries
(combined serious injury rate less than 0.15)
particularly in MeterPlus.
Devise and implement a measure of
potential severity for both injurious and
non-injurious events.
Establish a network of business-based
champions to pioneer wellbeing.
Improve access to company and external
exercise and sports facilities.
Communicate our wellbeing strategy to
internal and external stakeholders.
Impacts of changes in
employment legislation.
Company values and
business ethics.
Increase employees
awareness and
understanding of CR.
Provide educational and
recreational courses for
contact centre employees.
Occupational safety.
Wellbeing.
Business ethics training programme developed.
Detailed design and implementation of the
programme will commence early 2007.
Following successful pilot, safety and
engineering specialists are developing process
safety measures for roll out to all businesses.
Objective Progress
Corporate Responsibility Report 2006
72 73
Performance against Targets 2006
Workplace Objective Progress
Overall sickness absence rate less than
3.77% lost time.
A further 15% of staff to complete stress risk
assessment questionnaire.
50% of Stress Risk Assessment (SRA) projects
begun in 2006 to be completed.
Increase by 5% the number of staff
participating in our voluntary health
screening programme.
Save 900 person days through the
rehabilitation of employees who are off sick.
Health. Rolling year lost time rate for sickness 3.95%.
In 2007 we will establish support mechanisms
for managers to tackle excessive sickness
absence.
19% of SRA projects were completed by
end 2006. In 2007 Business MDs will be
sent improved progress reports so they can
encourage managers to complete SRA projects.
Implement two sustainable community
initiatives where npower business has a
signifi cant presence.
Develop one new, innovative community
programme to support the npower brand.
Bring in additional resources to our projects
from external partners in excess of our
direct contributions.
Maintain the number of employees
volunteering in the community at 10%.
Re-launch the payroll giving programme and
increase the percentage of employees using
the payroll giving scheme to 5%.
Improve our understanding of the
education agenda and develop activities
to support work-related learning and
employee volunteering.
Communicate the business and community
impacts of our programme to employees.
Increase the number of employees
who believe RWE npower makes a positive
contribution to the community from
58% to 65%.
Act as ambassadors to engage other
companies in community and charitable
activity; sharing knowledge and expertise.
Maintain a company-wide
community involvement
programme which provides
effective relationships
with the local communities
where we operate.
Increase employees
involvement in the
community.
Increase awareness of our
community programme
amongst internal and
external stakeholders.
Community Objective Progress
Corporate Responsibility Report 2006
74 75
GRI Indicators 2006
GRI Content IndexThe indicators for this CSR report are selected on the basis of the third version of the Sustainability Reporting
Guidelines (G3) by the Global Reporting Initiative (GRI) as released in September 2006. This Content Index
indicates which G3 indicators we can report, where they are found in the printed report, and to what extent
they are reported. Decisions regarding which indicators to report were also guided by the process we undertook
to identify key CSR issues and evaluate these according to their materiality.
GRI Report Content (key indicators) Reference Status
Strategy and Analysis
1.1 CEO Statement CEO’s Statement (p.01) ■1.2 Key impacts, risks and opportunities CEO’s Statement (p.01) ■Organisational Profi le
2.1 Name of the reporting organisation Company Overview (p.03) ■2.2 Products and/or services Company Overview (p.03) ■2.3 Operational structure Company Overview (p.03) ■2.4 Headquarter location www.rwe.com ■2.5 Countries in operation Strategy & Integration (p.13) ■2.6 Nature of ownership Company Overview (p.03) ■2.7 Markets served Company Overview (p.03) ■2.8 Scale of the organisation Company Overview (p.03) ■2.9 Signifi cant organisational changes Strategy & Integration (p.13) ■Report Parameters
3.1 Reporting period Strategy & Integration (p.13) ■3.2 Previous report CEO’s Statement (p.01) ■3.3 Reporting cycle CEO’s Statement (p.01) ■3.4 Contact point for questions CEO’s Statement ([email protected]) ■3.5 Content defi nition
CEO’s Statement (p.01), Meeting the Challenges (p.19) ■
3.6 Boundary of the report Strategy & Integration (p.13) ■3.7 Limitations on the report’s scope Strategy & Integration (p.13) ■3.8 JVs, subsidiaries, and outsourcing Company Overview (p.03,04) ■3.10 Effects of information re-statement Strategy & Integration (p.13) ■3.11 Changes from previous reports Strategy & Integration (p.13) ■3.12 Standard disclosures GRI Indicators (p.74–76) ■3.13 External assurance Independent Assurance Statement (p.77) ■Governance, Commitments, and Engagement
4.1 Governance structure Strategy & Integration (p.09) ■4.2 Indication whether chairperson is also executive offi cer Strategy & Integration (p.09) ■4.4 Mechanisms for Shareholder / employee participation Workplace (p.49,52,53) □4.6 Processes to avoid confl ict of interest at the board Strategy & Integration (p.11) ■4.8 Mission and value statements Strategy & Integration (p.10,11) ■
GRI Report Content (key indicators) Reference Status
4.9 Procedures for board governance on management of economic, environmental, and social performance
Strategy & Integration (p.12) ■4.11 Precautionary approach principle Working with Stakeholders (p.15) ■4.12 External charters / principles Working with Stakeholders (p.11) □4.13 Association memberships Working with Stakeholders (p.16,17) ■4.14 List of stakeholders Working with Stakeholders (p.15) ■4.15 Stakeholder identifi cation Working with Stakeholders (p.15) ■4.16 Approaches to stakeholder engagement Working with Stakeholders (p.17) ■4.17 Topics raised by stakeholders Meeting the Challenges (p.19) ■Economic Performance Indicators
Disclosure on management approach Marketplace (p.27) ■EC1 Direct economic value Company Overview (p.03) ■EC2 Financial implications due to climate change
Meeting the Challenges – Low Carbon Economy (p.20,21) □
EC3 Benefi t plan Workplace (p.55) ■EC8 Infrastructure investment and services for public benefi t
Meeting the Challenges – Low Carbon Economy (p.21) ■
Environmental Performance Indicators
Disclosure on management approach Environment (p.37) ■EN1 Volume of materials used www.rwenpower.com/cr ■EN3 Direct primary energy consumption www.rwenpower.com/cr ■EN4 Indirect primary energy consumption Environment (p.44) ■EN5 Energy conservation Environment (p.68) ■EN6 Initiatives for energy effi ciency and renewable energy Marketplace (p.28) ■EN7 Initiatives for reducing indirect energy Environment (p.44,45) ■EN8 Water withdrawal Environment (p.44) □EN11 Land assets in sensitive areas Environment (p.41) □EN13 Habitats protected or restored
Working with Stakeholders (p.16,17), Environment (p.41) □
EN14 Strategies for biodiversityWorking with Stakeholders (p.16,17), Environment (p.41) □
EN16 Greenhouse gas emissions Environment (p.40) ■EN18 Initiatives to reduce greenhouse gases Environment, Case Studies (p.37,38) ■EN20 NOx, SOx and other air emissions Environment (p.39) ■EN22 Waste by disposal method www.rwenpower.com/cr ■EN23 Signifi cant spills Environment (p.45) ■EN26 Environmental impact mitigation
Meeting the Challenges – Low Carbon Economy (p.21), Marketplace (p.28) ■
EN28 Non-compliance sanctions Environment (p.45) □EN29 Environmental impact of transport Environment (p.45) ■
GRI Indicators
Corporate Responsibility Report 2006
76 77
Performance against Targets 2006
Scope and objectives
RWE npower commissioned csrnetwork to undertake
an independent assurance engagement over the
information and data within the RWE npower 2006
Corporate Responsibility Report (‘the Report’). The
objectives of the assurance process were to check
claims and the systems for collection of data, and to
review the arrangements for the management and
reporting of corporate responsibility issues. The
assurance process was conducted in accordance
with the AA1000 Assurance Standard, and we have
commented on the Report against the principles of
materiality, completeness and responsiveness. Any
fi nancial information contained within the Report is
excluded from the scope of this assurance process.
Responsibilities of the directors of RWE npower and
the assurance providers
The directors of RWE npower have sole responsibility
for the preparation of the Report. In performing
our assurance activities, our responsibility is to
the management of RWE npower. However, our
statement represents our independent opinion and
is intended to inform all RWE npower’s stakeholders
including the management of RWE npower. We were
not responsible for the preparation of the Report.
During the reporting year we undertook an analysis
of RWE npower’s stakeholders’ expectations and
concerns, which has informed and strengthened
the opinion we are able to provide in this assurance
statement. We have no other contract with RWE
npower. This is the fi rst year that we have acted as
independent assurance providers for RWE npower.
We adopt a balanced approach towards all RWE
npower stakeholders and a Statement of Impartiality
relating to our contract with RWE npower will be
made available on request. The opinion expressed
in this assurance statement should not be relied
upon as the basis for any fi nancial or investment
decisions. The independent assurance team for this
contract with RWE npower comprised Jon Woodhead,
Andy Riley and Louise Hawson. Further information,
including a statement of competencies relating to the
team can be found at: www.csrnetwork.com
Basis of our opinion
Our work was designed to gather evidence on
which to base our conclusions. We undertook the
following activities:
• We conducted interviews with a selection of directors
and senior managers responsible for areas of
management and stakeholder relationships covered
by the Report. The objective of these discussions
was to understand RWE npower’s governance
arrangements and management priorities;
• We discussed RWE npower’s approach to
stakeholder engagement with relevant managers,
and we used the analysis of our direct engagement
with stakeholders conducted during the reporting
year to inform these discussions;
• We conducted a top level review of issues raised
by external parties that could be relevant to
RWE npower’s policies to provide a check on the
appropriateness of statements made in the Report;
• Subject to the exclusions set out under
‘Observations,’ we reviewed data collated at the
corporate level, and claims made in the Report.
We met with managers responsible for this process,
reviewed their processes and undertook a limited
number of sample checks;
• The scope of our work included a visit to an
operational site in the Generation Division, at
Aberthaw, Wales. Selected performance data at
site level were reviewed during this visit;
• We undertook an assessment of the company’s
reporting and management processes against
the principles of materiality, completeness and
responsiveness as described in the AA1000
Assurance Standard; and,
• We reviewed the work undertaken by RWE npower
to compare the Report against the Global Reporting
Initiative (GRI) G3 Sustainability Reporting Guideline.
Independent Assurance StatementGRI Report Content (key indicators) Reference Status
Social Performance: Labour Practices and Decent Work
Disclosure on management approach Workplace (p.49) ■LA1 Breakdown of workforce Workplace (p.51) ■LA7 Occupational injuries and absenteeism Workplace (p.53,54) ■LA8 Training on serious diseases Workplace (p.54) ■LA10 Training per employee Workplace (p.52) □LA11 Programs for lifelong learning Workplace (p.52) ■LA12 Career development Workplace (p.52) ■LA13 Composition of governance bodies Workplace (p.51) □Social Performance: Human Rights
Disclosure on management approach Strategy & Integration (p.11), Workplace (p.49)
Social Performance: Society
Disclosure on management approach Community (p.59) ■SO1 Impact on communities
Working with Stakeholders (p.24,25), Environment (p.45), Community (p.59) ■
SO3 Anti-corruption training Strategy & Integration (p.11) □SO5 Lobbying Working with Stakeholders (p.15,16,17) ■Social Performance: Product Responsibility
Disclosure on management approach Marketplace (p.27) ■PR5 Customer satisfaction Marketplace (p.30) ■PR6 Communication programmes Marketplace (p.30) ■Status
■ fully reported □ partially reported
Observations:
Materiality – has RWE npower provided information
on material issues to enable stakeholders to make
informed judgements?
• With the exception of the issues noted below
the Report includes information on RWE npower’s
main corporate responsibility performance issues
and should enable stakeholders to make informed
judgements. The Report not only demonstrates
how CR issues are integrated into day-to-day
management, but also how the company’s vision
and strategic planning are based around responsible
business practice.
• We recommend that future reports should explain
the carbon footprint of the company in the context
of UK national emissions and (existing and proposed)
national targets. Emerging best practice and
stakeholder expectations would suggest that
future reports should include targets for carbon
intensity, and further information on the company’s
future generation strategy, once the framework for
investment is made clear by Government.
• Energy prices remain of high concern to many
stakeholders. Whilst the Report includes some
information on this issue, the ability of stakeholders
to make judgements in this area would be improved
by inclusion of:
• A more detailed comparison of headline
prices during the reporting period and
further explanation of the interaction
between wholesale and retail prices for
RWE npower customers; and,
• Information on the rationale behind
assistance offered to vulnerable customers
during the year. Future reports should
also include more information on the
First Step programme. Although this
programme currently covers only a small
number of customers, it is due to be
launched nationally and is an important
element of RWE npower’s support to its
vulnerable customers.
Completeness – does RWE npower have systems
in place to understand changes to stakeholder
expectations and to provide complete and accurate
information against the issues identifi ed as material
for inclusion in the Report?
The RWE npower Corporate Responsibility Committee
(CRC) is a key component of the company’s governance
structure, and is the focal point for discussion of
current stakeholder issues that have been identifi ed
at corporate level and within the business divisions.
We recommend that the CRC should consider how
to keep appraised of new and emerging stakeholder
concerns, for example, through periodic external
stakeholder representation to the Committee, to enable
regular and systematic review of the company’s position.
On the basis of the method and scope of work
undertaken and the information provided to us by
RWE npower:
• For environmental performance data, nothing
came to our attention to suggest that these data
have not been properly collated. We are not aware
of any errors that would materially affect the
consolidated company level data. Additional work
is now needed to further develop systems to report
on the company’s carbon footprint, to include more
complete data on ‘other indirect sources’ such as
business travel.
• For health and safety performance data, nothing
came to our attention to suggest that these data
have not been properly collated. We are not aware
of any errors that would materially affect the
consolidated company level data.
• For other social performance data, nothing came
to our attention to suggest that these data have
not been properly collated. We are not aware of any
errors that would materially affect the consolidated
company level data. We recommend that future
reports should include data and information on
customer complaints tracked using the new customer
complaints management system that was introduced
during the year.
Responsiveness – how does RWE npower demonstrate
that it has responded to stakeholder concerns?
The Report provides examples of RWE npower’s
extensive stakeholder dialogue activities, and also
includes a synthesis of the analysis undertaken during
the reporting year of stakeholder expectations and
concerns. The range of issues are clearly set out, and
three issues that are seen by the company as being of
high materiality are discussed in detail. This section of
the Report could be improved through provision of a
greater range and balance of stakeholder viewpoints.
As noted under ‘Materiality,’ future reports should
seek to explain in more detail how the company is
responding to stakeholder concerns around energy
prices and global warming.
We recommend that RWE npower should consider
moving to a new reporting structure, to improve
accessibility of information. Reporting primarily using
the internet could be part of the solution, if backed up
with more concise hard copy reporting on the company’s
approach, performance and understanding of stakeholder
concerns on the highest materiality issues.
csr network ltd
UK June 2007
Jon Woodhead
Director
Andy Riley
Associate
Louise Hawson
Senior Consultant
78 79
Design
McCann Erickson Birmingham
Location Photography
oneninetythree
Art Direction
Paul Baker
Copywriting
Rob Gill
Printed on
containing a minimum 75% de-inked
post-consumer waste, from the Robert Horne Group.
This product has been awarded the National
Association of Paper Merchants (NAPM) Recycled
Mark. Produced at a mill that is certifi ed to ISO14001
environmental management standard.
AEP Association of Electricity Producers
AES Association of Energy Suppliers
AFR Accident Frequency Rate
AMR Automated Meter Reading
BAT Best Available Technique
BitC Business in the Community
BME Black Minority Ethnic
CAF Charities Aid Foundation
CBI Confederation of British Industry
CCGT Combined Cycle Gas Turbine
CCS Carbon Capture and Storage
CEO Chief Executive Offi cer
CHaSPI Corporate Health and Safety
Performance Indicators
CHP Combined Heat and Power
CO2 Carbon dioxide
CR Corporate Responsibility
CRC Corporate Responsibility Committee
CRI Corporate Responsibility Index
DAG Diversity Action Group
DEFRA Department for the Environment, Food and
Rural Affairs
DfES Department for Education and Skills
DTI Department of Trade and Industry
EA Environment Agency
EBITDA Earnings before Interest, Taxes,
Depreciation and Amortisation
ECB England and Wales Cricket Board
EEC Energy Effi ciency Commitment
ELS Employee-led Safety
EMS Environmental Management Systems
ERA Energy Retail Association
EST Energy Saving Trust
EU European Union
EU ETS European Union Emissions Trading Scheme
FBA Furnace Bottom Ash
FGD Flue Gas Desulphurisation
FTE Full Time Equivalent
GQCHP Good Quality Combined Heat and Power
GRI Global Reporting Initiative
GW Gigawatt
GWh Gigawatt hour
HFO Heavy Fuel Oil
HR Human Resources
HSRC Health and Safety Review Committee
H&S Health and Safety
HSC Health and Safety Commission
HSE Health and Safety Executive
HTW Health Through Warmth
IFRS International Finance Reporting Standards
IPPC Integrated Pollution Prevention and Control
ISO International Organisation for
Standardisation
KPI Key Performance Indicator
kW kilowatt
kWh kilowatt hour
LBG London Benchmarking Group
LCPD Large Combustion Plant Directive
MW Megawatt
MWh Megawatt hour
NAP National Allocation Plan
NEA National Energy Action
NGO Non-Governmental Organisation
NHS National Health Service
NOx Nitrogen oxides
OECD Organisation for Economic Cooperation
and Development
Ofgem Offi ce of Gas and Electricity Markets
PFA Pulverised Fuel Ash
PSR Priority Service Register
PV Photovoltaic
RIDDOR Reporting of Injuries, Diseases and
Dangerous Occurrences Regulations
RO Renewables Obligation
ROC Renewables Obligation Certifi cate
ROCE Return on Capital Employed
ROSPA Royal Society for the Prevention
of Accidents
RSPO Roundtable on Sustainable Palm Oil
SCR Selective Catalytic Reduction
SETNET Science, Engineering, Technology and
Mathematics Network
SHEiiBA Safety, Health and Environment Intra
Industry Benchmarking Association
SIR Serious Injury Rate
SME Small and Medium Enterprise(s)
SO2 Sulphur dioxide
SOx Sulphur oxides
TWh Terrawatt hour
UKBCSE UK Business Council for Sustainable
Energy
WACC Weighted Average Cost of Capital
WRS Warm Response Service
WWF World Wildlife Fund
Glossary of abbreviations used in this report.
Please see our website for a full glossary of terms and defi nitions.
80
Cert no. SGS-COC-0620
Glossary