Local value creation

Management approach

Contributing to long-term local value creation is a key success criterion towards achieving the overall company goal of delivering competitive and sustainable renewable energy. We always strive to create long-term value, but we also acknowledge that there is risk of unintended consequences from developing, constructing and operating renewable power projects. In every project, we identify, mitigate and monitor risk and potential impact areas. Priority activities include community engagement, local recruitment, grievance handling, as well as planning and implementation of new and existing local development programmes.¹

While we aim to create value, there is a risk of unintended consequences from project construction. We are continuously conscious of this and strive to complete risk identification and mitigation. The truly global reach of the organisation means that, in some instances, legal and governance frameworks are not always present to govern the standards of impact control within project communities.

Scatec is committed to operate in line with the Equator Principles and IFC’s Environmental and Social (E&S) Performance Standards (PS) to ensure consistent practices across all projects. Our work is also guided by the OECD Guidelines for Multinational Enterprises. Scatec respects all internationally recognised human rights including the International Bill of Human Rights and the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work. Our human rights policy is aligned with the United Nations (UN) Guiding Principles on Business and Human Rights.

¹ Please note that in many countries there is a distinction between mainly voluntary community investments (e.g., local development programmes) and mandatory compliance initiatives (e.g., grievances, local labour).

Significant indirect economic impacts | Operations with local community engagement, impact assessments, and development programmes | Operations with significant actual and potential negative impacts on local communities

Significant potential impacts on local communities can include physical and economic displacement, changes in vegetation and infrastructure, and increased activity levels in the area. Impacts during construction such as traffic, noise, and dust are considered limited and effectively mitigated if and where nearby communities exist. For any significant actual or potential impacts, we follow strict requirements in line with the IFC PS and the Equator Principles.

Examples of positive and negative significant indirect economic impacts are disclosed in the context of external benchmarks and stakeholder priorities.

A stakeholder analysis and stakeholder engagement plan is carried out in accordance with the IFC’s Performance Standards and the Equator Principles for all projects. In line with our Sustainability Policy and Community Investment Procedure, a local needs assessment is always carried out prior to implementing any programmes. The community needs assessments are identified in close dialogue with local stakeholders and in consultation with local community members in order to address the prioritised needs and significant social challenges of the communities. The results of the assessments form the basis for our local development programmes.

Project Development

High-level engagement with project partners, local governments and community leaders

Development of stakeholder engagement plan

Implement grievance mechanism

Construction

Stakeholder engagement with local governments, community leaders, local businesses and NGOs

Grievance mechanism fully operational

Employment of local labour during the construction phase

Appointment of local contractors (where possible)

Development programmes and initiatives conceptualised

Scatec reports on metrics related to any significant actual and potential impacts on local communities, including local community engagement, impact assessments and development programmes. Key definitions used in our reporting:

Community investments: our voluntary initiatives that contribute to the long-term common good of local communities and come in addition to efforts made to mitigate or compensate for project-related impacts. We are committed to contributing to the communities in a way that allows them to develop by themselves without becoming dependent on us.
Number of grievances (number received in all projects): The total number of grievances received for all projects globally in operation and under site construction. This includes grievances received via the Company’s website, physical grievance boxes located on project sites, Community Liaison Officer (CLO) offices or in the local community.
Grievances resolved (% of grievances resolved): The total number of grievances addressed and resolved as a percentage of all grievances received in all projects in construction or operations phase. Grievances resolved are defined as assigned, addressed, and closed out by the Company. The final response must be shared to the filer(s) of the grievance with an explanation of action taken to resolve the grievance. Resolving grievances is an ongoing process and the percentage of resolved grievances will depend on the nature of the grievances, timing, and other factors.

Local: Given that the definition and scope of the concept can differ around the world, we define local as the closest possible community or village to our project site. In this context, local supply chain development, local employment and local development is aimed the nearest community or village to our project site.
Stakeholders: any person, group or organisation with a vested interest in the outcome of the power project
Key stakeholders: any stakeholder with significant influence on or significantly impacted by the power project