Supply Chain Due Diligence

In addition to the identified material topics, Alpiq recognises the importance of responsible supply chain management and adheres to the DDTrO in relation to Minerals and Metals from Conflict-Affected Areas and Child Labour.

To ensure compliance with these Swiss requirements and the European directive, as well as to foster transparency, accountability, and adherence to ethical standards, Alpiq executed a project in 2024 to develop a new supply chain due diligence process for fully consolidated Alpiq entities, including a new Code of Conduct for Suppliers. The newly implemented supply chain due diligence process encompasses compliance assessments of both new and existing suppliers. Where indications of irregular or non-compliant conduct are identified, further investigative measures are initiated. Such conduct includes, but is not limited to, involvement in child labour or the use of conflict materials.

The supply chain due diligence process involves assessments from two key perspectives: business partner risk and country/geographical risk. These include the following:

• Business Partner Risk Assessment: This assessment evaluates factors such as the nature of the partner’s business activities and any potential links to sectors associated with higher risks of corruption, money laundering, terrorist financing, or sanctions. It also considers exposure to politically exposed persons (PEPs) and reputational risks identified through adverse media screening. Business partners appearing on sanctions lists are fully excluded from any engagement with Alpiq.
• Country and Geographical Risk Assessment: This assessment relies on publicly available indices, including sanctions lists, the FATF list of High-Risk and Non-Cooperative Jurisdictions, and the Transparency International Corruption Perceptions Index. Countries lacking effective systems to combat money laundering or terrorist financing, exhibiting significant levels of corruption or criminal activity, or subject to sanctions, embargoes, or identified as supporting terrorism are classified as high-risk jurisdictions. All transactions – including imports, exports, and financial operations – with sanctioned or embargoed countries are strictly prohibited at Alpiq.

Alpiq’s due diligence solution enables the collection and analysis of comprehensive global data sources on business partners to create a risk profile. This solution is tailored to Alpiq’s needs and risk tolerance, and detects potential alerts or issues related to the risk factors mentioned above. All the business partners in the portfolio are automatically screened on an ongoing basis for any changes in their risk profile.

Child labour

DDTrO (CO Art. 964j et seq.)

Alpiq recognises that child labour poses a significant ethical and human rights concern in global supply chains. While there is no direct risk of child labour in Alpiq’s operations, which primarily entail the production of electricity at geographically specific power plants, residual risks may arise in its supply chain where goods or services originate from regions identified as higher risk under the Children’s Rights in the Workplace Index.

To mitigate such risks, Alpiq adheres to the principles of the International Labour Organization (ILO) and has implemented a Code of Conduct for Suppliers, which establishes binding standards for suppliers and, among other requirements, expressly prohibits the use of child labour. Alpiq endeavours to enforce the principles stipulated in the Code of Conduct for Suppliers in its supply chain and reviewed its Code of Conduct for Suppliers and the associated risk assessment process throughout 2024. The Code of Conduct for Suppliers is incorporated into supplier contracts and communicated to suppliers as part of the supply chain due diligence process, requiring their formal acknowledgment and acceptance. Alpiq also regularly reviews its supply chain processes to improve traceability and risk management.

Alpiq intends to further strengthen its supply chain risk management. It reviewed its process (including traceability) during 2024 and will continue to adjust its approach in line with market practice. The company also continues to strengthen and develop its ESG framework, including its approach to child labour regulation.

In addition, Alpiq operates a whistle-blowing tool, accessible via the company website, which allows concerns to be raised with the Compliance function, including any perceived and actual shortcomings pertaining to child labour. In line with its procedures, any perceived shortcoming can be raised by employees and/or any member of the public and will be investigated independently.

Conflict minerals

DDTrO (CO Art. 964)

Alpiq complies with DDTrO regulations concerning conflict minerals. As Alpiq does not import or refine minerals or metals that fall within the scope of these regulations, it is exempt from related disclosure requirements. Nonetheless, Alpiq maintains responsible sourcing practices in line with the new supply chain due diligence process and the new Code of Conduct for suppliers, and monitors its supply chain to align with applicable standards.