Supply Chain

As an energy Group, we see responsibility for a sustainable supply chain as an integral part of our business. In the case of coal, EnBW is at the end of a global value chain that begins with mining operations in source countries. We are aware that all forms of mining have impacts on people and the environment. Resource extraction must always take place in accordance with national laws and internationally accepted standards. We take preventive measures to avoid or minimise negative impacts.

We have adopted a wide variety of measures in recent years to ensure responsible coal procurement and respect for human rights:

• Adoption of the EnBW Principles of Conduct referencing key national and international standards such as the UN Guiding Principles on Business and Human Rights
• Introduction of a clearly defined business partner screening process that, in addition to financial creditworthiness, also verifies compliance with minimum social and environmental criteria taking risk management aspects into account
• Introduction of an EnBW sustainability register covering all major coal producers worldwide from which EnBW sources coal
• Establishment of a Committee for the Responsible Procurement of Coal and Other Raw Materials, which meets regularly and makes recommendations on working with relevant business partners
• Regular dialogue with our coal producers and with other governmental and non-governmental stakeholders to ensure a responsible value chain in coal-fired power generation

Coal mining is a complex process that encroaches on the environment. Ensuring good working and living conditions in coal mining is consequently always a special challenge. EnBW has long maintained direct contact for this purpose with mining companies and also all other stakeholders who contribute to improving working and living conditions in line with internationally recognised standards, from trade union and civil society representatives to governmental and non-governmental organisations.

Stakeholder dialogue centres on respect for human rights, compliance with occupational health and safety standards, safeguarding freedom of association, environment and climate protection and, in particular, reducing negative health impacts on local populations.

In line with the requirements of responsible corporate governance, EnBW assumes responsibility for the entire supply chain. We take allegations of non-compliance with sustainability standards very seriously and implement targeted action involving all relevant stakeholders to secure improvements in coal mining countries and continuously improve standards for responsible coal procurement.

We believe that sanctions-only approaches have only limited effect and do not help improve local living and working conditions in the medium to long term. This makes it all the more important for us to collaborate and engage in dialogue with our suppliers and other local stakeholders (communities, employees, trade unions, NGOs, etc.) in order to identify structural problems at an early stage and work together on solutions.

In our procurement process, we assume responsibility for the entire supply chain, from extraction at source to the power plant. We therefore work to comply with key sustainability standards at all stages of our value chain. This is based on our Principles of Conduct for the Responsible Procurement of Coal and Other Raw Materials , which set out all key requirements relating to responsible business conduct, human rights, labour standards and environmental protection.

We formulated the Principles of Conduct with professional support and discussed them at the draft stage with representatives from civil society, the scientific community and business. They embody EnBW’s core values and represent a voluntary commitment with social policy impact. The Principles of Conduct are a binding part of all resource procurement contracts in all direct procurement relationships.

Our coal producer sustainability registry, which we established in 2012, is a central in-house knowledge base on sustainability aspects in coal procurement. All major coal mining companies are screened for sustainability criteria and scored in an assessment model with traffic light ratings. If the producer analysis flags up any discrepancies, the Committee for the Responsible Procurement of Coal and Other Raw Materials is convened and the company concerned is asked to respond – for example by conducting a self-audit. Our emphasis here is on working together with the supplier on any discrepancies or allegations in a continuous improvement process. If a coal producer does not cooperate, additional audits follow – including by outside parties – and it is also possible for the producer to be disqualified as a trading partner.