Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Zero-Waste Wind Turbines
• Safety
• Diversity and Inclusion
• Social Responsibility
• Sustainable Energy Transition

Environmental Achievements

• Avoided 186 million tonnes of carbon emissions through installed fleet.
• Reduced carbon emissions in own operations by 33 percent.
• Introduced 127 sustainably fueled service vehicles.
• Sourcing 100 percent of electricity from renewable sources.

Social Achievements

• Minimized risks to keep employees safe during COVID-19 pandemic.
• Found no structural pay inequality in external audit of seven major countries.
• Improved employee satisfaction and motivation score to 73 (highest ever).
• Launched a three-pillared approach for business-related human rights.
• Ranked #1 for human rights approach among 20 large Danish companies.

Governance Achievements

• Updated Group Tax Policy.
• Upgraded EthicsLine platform.
• Strengthened regional knowledge sharing through Vestas Global Compliance Network.
• Implemented a comprehensive Social Due Diligence process.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and stakeholder engagement.
• Difficulty in recycling wind turbine blades due to composite materials.
• Need to reduce carbon emissions from supply chain (Scope 3).
• Maintaining high safety standards for contractors.

Mitigation Strategies

• Implemented online solutions for stakeholder engagement and safety training.
• Launched DecomBlades project for blade recycling.
• Engaged 10 strategic suppliers in carbon footprint and circularity initiatives.
• Delivered virtual safety workshops for contractors.

Supply Chain Management

Supplier Audits: 39 onsite assessments and 44 compliance audits in 2020.

Responsible Procurement

• Vestas Business Partner Code of Conduct
• Supplier sustainability requirements (carbon footprint, circularity).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting manufacturing footprint.

Transition Risks

• Regulatory changes, market shifts.

Opportunities

• Increased revenue due to policy support schemes and growing demand for low-carbon technology.

Reporting Standards

Frameworks Used: GRI, TCFD, UNGC

Certifications: ISO 9001, ISO 14001, OHSAS 18001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 4
• SDG 7
• SDG 8
• SDG 12
• SDG 13
• SDG 17

Initiatives contributing to these goals described on pages 46-47.

Sustainable Products & Innovation

• Wind turbines with high energy efficiency and low carbon footprint.

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular Economy
• Social Responsibility
• Safety
• Diversity & Inclusion
• Human Rights
• Sustainable Tax
• Sustainable Finance
• Governance

Environmental Achievements

• Reduced supply chain CO2e emission intensity by 3% from the 2019 baseline.
• Recycled 285 end-of-life blades.
• Launched the CETEC project to design a fully recyclable wind turbine blade.
• Improved material efficiency by 20% to 2.0 tonnes of non-recycled waste per MW produced and shipped.

Social Achievements

• Reached 8,236 community beneficiaries through CSR work.
• Reduced Total Recordable Injury Rate (TRIR) by 6% to 3.1.
• Increased the percentage of women in leadership positions from 19% to 21%.

Governance Achievements

• Updated Code of Conduct to reflect current and upcoming legal industry standards.
• Updated Vestas Supplier Code of Conduct.
• Signed a EUR 2,000m sustainability-linked loan.

Climate Goals & Targets

Environmental Challenges

• Steel and shipping sectors remain hard-to-abate and contribute to a large portion of the world’s CO2 emissions.
• Absolute CO2 emissions increased in own operations due to integration of the offshore business.
• Need to accelerate the decarbonisation of steel production.

Mitigation Strategies

• Working with suppliers and customers to accelerate the deployment of sustainable fuels in offshore service vessels.
• Incentivising the production of CO2-reduced steel in partnership with steel suppliers.
• Partnering with suppliers in the creation and utilisation of green hydrogen and renewable electricity to help decarbonise steel production.
• Investing in the development of alternative materials, such as wooden towers.

Supply Chain Management

Supplier Audits: 3,438 supplier screenings and 1,748 customer screenings in 2021.

Responsible Procurement

• Vestas Supplier Code of Conduct
• Sustainability criteria integrated into supplier selection
• Engagement of 50 strategic suppliers in carbon and waste reduction targets.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Decarbonisation of steel production using green hydrogen from wind power.

Reporting Standards

Frameworks Used: GRI, SASB, UNGC

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 4 (Quality education)
• Goal 17 (Partnerships for the goals)

Vestas' initiatives contribute to these goals through renewable energy solutions, job creation, circular economy practices, climate action, community development programs, and partnerships.

Sustainable Products & Innovation

• Circular turbine blade (CETEC project)
• LVL towers (Modvion™ investment)

Awards & Recognition

• #1 in Corporate Knights Global 100 most sustainable companies

Environmental Metrics

ESG Focus Areas

• Climate change mitigation
• Zero-waste turbines
• Social responsibility (safety, diversity, community)
• Leading the transition to renewable energy

Environmental Achievements

• Reduced Scope 1 and 2 GHG emissions by 12 percent from a 2019 baseline.
• Reduced supply chain CO2e emission intensity by 5 percent from the 2019 baseline and 3 percent from 2021 to 6.46 kg/MWh.
• Recycled 475 end-of-life legacy blades.
• Improved material efficiency by 20 percent.
• Achieved 100 percent renewable electricity across operations globally.
• Launched a pilot program for a hydrogen-powered offshore service vessel, generating a CO2e saving of 9.3 tonnes compared to a traditional vessel.
• Developed a breakthrough in blade recycling technology.

Social Achievements

• Achieved a total recordable injury rate (TRIR) of 3.3.
• Increased the share of women in leadership positions to 23 percent.
• Reached 7,572 community beneficiaries through community engagement efforts.
• Launched initiatives to increase diversity in ethnicity and nationality of workforce.

Governance Achievements

• Became the first Danish company to issue sustainability-linked bonds.
• Joined the World Economic Forum’s First Movers Coalition, committing to procure at least 10 percent near-zero emissions steel by 2030.
• Updated Human Rights Policy, Employee Code of Conduct, and Supplier Code of Conduct.

Climate Goals & Targets

Environmental Challenges

• All western OEMs producing wind turbines are doing so at a financial loss.
• Systemic challenges facing the energy transition (permitting, value capture, energy system redesign).
• Decarbonising steel production (accounts for 50 percent of Scope 3 emissions).
• Maintaining progress on safety targets (TRIR plateaued over the last three years).

Mitigation Strategies

• Strategic partnerships with customers, suppliers, and competitors.
• Incentivising the production of CO2-reduced steel and partnering with suppliers in the creation and utilisation of green hydrogen and renewable electricity.
• Investing in the development of alternative materials (LVL towers).
• Implementing a new, simpler, clearer, and more systematic HSE management system.
• Focusing on HSE leadership and awareness, including personal safety action plans, global campaigns, and enhanced training products.

Supply Chain Management

Supplier Audits: Over 3,200 due diligence assessments, 28 sustainability audits (19 onsite, 9 online), 55 onsite supplier assessments.

Responsible Procurement

• Vestas Supplier Code of Conduct
• Conflict Minerals Policy
• Sustainability Scorecards
• Safety & Sustainability Survey
• Supplier Blocking Process

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products
• Decarbonisation of hard-to-abate sectors using green hydrogen

Reporting Standards

Frameworks Used: SASB, EU Sustainable Finance Taxonomy, TCFD (referenced in Annual Report)

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Detailed explanations of how initiatives contribute to these goals are provided in the UN SDGs section (pages 92-94).

Sustainable Products & Innovation

• EnVentus™ turbine (reduced rare earth materials)
• LVL towers (Modvion™)

Awards & Recognition

• Highest prize from Danish industry association for Circularity Roadmap
• Added to Dow Jones Sustainability World Index
• A score in climate by CDP
• Ranked #2 in Corporate Knights' Global 100

Environmental Metrics

ESG Focus Areas

• Climate change mitigation
• Circularity
• Social sustainability
• Responsible business conduct
• Human rights

Environmental Achievements

• Reduced supply chain CO2e emissions intensity by 8% from the 2019 baseline and 2% from 2022 to 6.30 kgCO2e/MWh
• Launched a new blade recycling technology in February 2023, aiming for 100% recyclable blades by 2040
• Improved material efficiency by 25% to 1.2 tonnes of non-recycled waste per MW produced and shipped
• Secured commitments from 77 key suppliers to track and report CO2e emissions and set reduction targets
• Secured first multi-year contract to procure low-emission steel, reducing emissions from heavy steel plates by 66% compared to conventional steel

Social Achievements

• Decreased Total Recordable Injury Rate (TRIR) by 9% to 3.0
• Increased percentage of women in leadership positions to 24%
• Reached 9,769 community beneficiaries linked to wind farm operations
• Improved Employee Engagement Score (eSat) to 73 and increased Employee Net Promoter Score (eNPS)

Governance Achievements

• Established a sustainability data platform using digital twin technology to monitor and forecast climate footprints
• Strengthened human rights governance by establishing a steering committee to implement recommendations from the Corporate-Wide Human Rights Assessment
• Issued three EUR 500m sustainability-linked bonds in 2023

Climate Goals & Targets

Environmental Challenges

• Increased scope 1 and 2 GHG emissions due to growing offshore construction and service businesses reliant on marine vessel fuels
• More than 98% of total carbon footprint stems from suppliers
• Slow progress in decarbonising steel production
• Need to source lower-emission materials, increasing prices and potentially reducing margins

Mitigation Strategies

• Partnering with Volkswagen and Ford to introduce 465 sustainably fuelled vehicles to the service fleet
• Pioneering the use of hydrogen-powered and biomethanol-fuelled service vessels
• Transitioning industrial heating systems to biomass
• Introducing hybrid generators at construction sites
• Collaborating with key suppliers to reduce scope 3 emissions
• Investing in low-emission steel and alternative materials like wooden towers
• Investing in a sustainability data platform for supplier engagement
• Implementing a new risk-based Health, Safety and Environmental (HSE) Management system

Supply Chain Management

Supplier Audits: 109 sustainability audits in 2023

Responsible Procurement

• Vestas Supplier Code of Conduct
• Vestas Conflict Minerals Policy
• Vestas Prohibited and Restricted Substances document
• Sustainability data platform for supplier engagement

Climate-Related Risks & Opportunities

Physical Risks

• Low impact in short and medium term, according to annual climate scenario analysis

Transition Risks

• Political, legal, and market transition risks related to carbon taxes and raw material prices

Opportunities

• Growth of wind energy and related renewable energy sources; innovative solutions as key differentiator in winning tenders.

Reporting Standards

Frameworks Used: SASB, TCFD, UNGC, EU Sustainable Finance Taxonomy

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 17 (Partnerships for the goals)

Initiatives contributing to these goals are described on pages 72-73.

Sustainable Products & Innovation

• Low-emission steel offering; new blade recycling technology; wooden towers (partnership with Modvion™)

Awards & Recognition

• Most sustainable company in the energy industry (Corporate Knights Global 100 ranking for three consecutive years)