Foreword CEO & Chairman

The realities of climate change require a joined-up response

2023 was a year of stalled progress and turning points as the world struggled with a series of geopolitical conflicts that destroyed lives and further divided an already polarised planet. Wars in Europe and the Middle East, supply chain disruptions, inflationary pressures, and fluctuations in the global economy threatened energy security and affordability. Many European countries, including Alpiqʼs home base Switzerland, are net importers of oil and gas and thus particularly exposed to energy reliability and market volatility risks.

The prominence of these topics over the past year diverted attention and resources away from climate change and slowed the momentum of sustainable development. This resulted in a declaration at the COP28 UN climate summit that encouraged countries to move away from fossil fuels, but which many observers felt did not go far enough in terms of a concrete plan. Similarly, in December 2023, the Council and the European Parliament reached a provisional political agreement on the reform of the electricity market. One of the aims of the reform is to reduce the dependency of electricity prices on the volatile prices of fossil fuels and therefore to avoid price shocks in the future. Likewise, the energy transition stuttered due to the trilemma of ensuring economic efficiency, security of supply and sustainability. It is a fact that the energy transition and decarbonisation do not come for free. It is also a fact that, in our western society, we struggle to acknowledge the harsh reality that we are living beyond our sustainable means.

Never before have we had better fact- and science-based knowledge about the problems of our time. But as these problems become more imminent, short-term thinking and inertia set in and oppose change. What is our role as an energy company and as company leaders when it comes to sustainable business? We inform and discuss and get involved with others on the many platforms. We seek to inspire and mobilise employees, customers and partners, conduct dialogues with shareholders, banks and investors and raise public awareness. We seek to lead the way and encourage others. The recurrent challenge is to make three things clear: firstly, there is no silver bullet but many compromises, and all come with pros and cons; secondly, the longer we hesitate to act sustainably towards ourselves and our environment, the more it will cost each of us; and thirdly, short-term thinking and action is the opposite of a strategic approach to achieving major goals.

Anchoring sustainability in our company

Inspired and enriched by many interactions, insights and data, Alpiqʼs Board of Directors approved our corporate strategy in December 2023. The strategy confirms our focused development into a sustainable business that contributes to a better climate and an increased security of supply. We are committed to reaching net-zero carbon emissions by 2040, a pledge we aim to fulfil by implementing decarbonisation strategies through business changes and innovations, including efficiency improvements and emission elimination technologies and by measuring and reporting our greenhouse gas emissions on a regular basis. The comprehensive carbon footprint, including Scope 3 emissions, that we compiled in the reporting year serves as the basis for reducing our CO₂ emissions. We also launched a major project to develop our sustainability reporting in line with the requirements in Switzerland (Swiss Responsible Business Initiative) including the “Task Force on Climate-related Financial Disclosures (TCFD)” and the EU Corporate Sustainability Reporting Directive (CSRD) including “EU Taxonomy”. In the years ahead we will continue defining additional sustainability matters from concepts to related actions.

To ensure that we continue doing the right things right, we need the commitment and leadership of our people. We issued a comprehensive Code of Conduct and related trainings in 2023 to allow us all to navigate our corporate governance, values, business models and markets easily. This Code has already had a strong impact and we have had amazing feedback from all sides. We conducted a company-wide Secure Base Leadership programme for management, which included topics such as diversity and inclusion. Moreover, we introduced a new value-chain-based steering and operating model to optimise our value as a whole, enable us to react even more quickly, efficiently and sustainably to developments, as well as increase our transparency, drive our collaboration and increase our individual impact.

We encourage you to find out more about the other measures we have introduced across environment, social and governance topics in the pages that follow. In last yearʼs report, we said that we were still taking early steps on our journey towards creating a more sustainable Alpiq. We are pleased to say that we have made encouraging progress in the past 12 months. Our journey towards sustainability is a gradual progression, but it is also a bold one. We know that the actions and decisions we take today and the measures we embrace to monitor and evaluate our efforts are powerful steps towards a sustainable future.

27 February 2024