Opinion of the Alliander stakeholder panel
For the sixth successive occasion, Alliander has organised a stakeholder panel to review its annual report. We are pleased with Alliander’s invitation to provide feedback on the annual report. In the following statement, we will summarise our feedback, which we believe will enable Alliander to gear the report more closely to the wishes and needs of the stakeholders and society in general. It should be noted that the panel has based its discussion on a draft version of the annual report in which annual figures and several sections of text were left out by necessity.
Alliander is an organisation that faces a considerable challenge in the energy transition. Looking at the value creation model, the company has a very clear purpose in the social and financial domains. These two facts combined make it extra important that Alliander engage in open and transparent dialogue with society. We see in general that reporting is continuing to move forward and that there is an increasing focus on providing the transparency stakeholders want to see. Transparency is the very air needed for the proper functioning of markets and stakeholders, and it is a fundamental right, especially where this concerns information from an organisation in the public sector. The information in the draft report provides a relevant and fascinating insight into Alliander’s activities, results and challenges. The reports on TCFDs and carbon pricing are strong points in the reporting. Some points could stand to be illustrated more clearly though, such as making clear connections between the report and Alliander’s mission, vision and strategy. This also applies to topics arising directly from the energy transition, such as going natural gas-free in the construction of new homes and buildings, the use of the natural gas network as a transitional solution, hydrogen and collaboration within the industry and with other infrastructure operators. Other areas where reporting could be improved concern nitrogen, human rights issues in the Netherlands, and issues relating to capacity.
What is also striking is that the report is mostly quite narrative in nature, which is nice enough in itself, this gives colour and feeling; however, on some points there is an imbalance between the quantitative and qualitative dimensions in the sections and data, with concrete results sometimes missing or not being shown in the context of targets or developments. This can all be pulled together better, as can internal consistency, by bringing related sections closer together or improving the internal referencing.
In the view of the panel, the stakeholder distribution as identified in the report raises some questions. With a stated ambition to serve society and create value, it is striking that the stakeholder distribution is slanted towards customers/shareholders. In the materiality matrix, we would like to see a reference to satisfied customers and employees (especially with the current pandemic). Furthermore, in the annual report there is no explicit reference to builders, citizens, SMEs and suppliers, and this at a time when these people increasingly function as a small customer or supplier and are running up against the limitations of the energy system. Reading the report, it is not sufficiently clear how the stakeholder groups were chosen nor how they are consulted; to raise the level of transparency this should be explained. Given that the report states that it is based on the GRI Standards, in line with these standards it is important to explain the stakeholder approach.
We would also like to draw attention to the matter of ‘stakeholder inclusion’. An annual stakeholder panel for the annual report is a fantastic concept, but we would suggest rather that Alliander strive for more permanent, ongoing involvement. That would be a huge step forward.
For the company, some risks are particularly high, i.e. capacity for change, completion of the work package, long-term legal and regulatory focus, ensuring a future-proof IT landscape, and financeability. We would like to see more up-to-date insight in these areas in the light of the events of the past year. In addition, we read in the report that, in addition to transition risks, there are transition opportunities. We find that an extremely interesting observation, and one which we would like to see clarified further, given that this is exactly the message that should be passed on to the stakeholders.
Alliander has currently selected six SDGs. We suggest that at least three SDGs be added to these: SDG 4 because of the training courses that Alliander offers in collaboration with the industry, SDG 5 because of the company’s desire to narrow the income gap between men and women, and SDG 17 as a signal to the market that Alliander is open to working together with industry peers and the government. We also recommend ensuring that a better connection is made between the SDGs and the other information in the report.
Greater emphasis on and insight into role and vision
In the view of the panel, Alliander, like other network operators, plays a crucial role in bringing about the energy transition. The stakeholder panel has noticed that Alliander often takes a reactive position rather than setting the agenda and influencing this. The panel encouraged the company to make a change in this respect last year too. We understand the restrictive effect of laws and regulations in this regard, but still believe that the company is doing itself short. You need to jump into the discussions that are important to your own future.
For the first time, the stakeholder panel explicitly considered a number of Alliander’s dilemmas. One of them is that the choices that network operators would make from the technical and economic perspective of system integration and optimisation do not always line up with the choices citizens or municipalities would and are free to make. This is an area of tension between the parties. In our view, it could be of great help if Alliander were to get involved in the social debate and exert influence on a number of urgent topics, specifically urbanisation, location, and digitalisation. Currently, the company reviews plans, providing its views on the plans under the RES programme for example, but this is usually after the fact, at which point it is particularly difficult to maintain the carefully built support base. If Alliander were to make itself more visible and present at an earlier stage, this would result in better informed choices being made. This dilemma is not just down to Alliander though, which means the position regarding the solution to the dilemma needs to be clearly defined. Looking ahead in part by using scenarios and anticipating developments helps.
A second dilemma follows on the heels of the first: how do companies with operations in the regulated domain deal with the restrictive effect of laws and regulations? Whereas the energy transition is accelerating, legislation is slow to respond. This applies to the entire infrastructure sector. We recommend joining forces with industry peers: together, you can present a stronger front and arrange that you can work differently in the not too distant future. It is important to prepare now for a future that will be very different, and to explain this effectively, through joint lobbying activities for example. It is to be hoped that the new coalition government will also offer better prospects in this regard.
A final word
Alliander strives for high quality in its reporting. Their reporting has improved over the years, becoming more in keeping with the times. We hope that our contribution will help to drive this improvement forward. Finally, we would like to thank Alliander for its attitude towards stakeholders, for giving us the opportunity to give meaningful feedback on the draft version of the annual report and for the substantive dialogue with the Management Board.
On behalf of the stakeholder panel,
Aernout van der Bend – managing director at Next Generation Infrastructures
Maarten Biermans – head of Sustainable Capital Markets at Rabobank; adjunct lecturer, Webster University
Teresa Fogelberg – sustainability leader; former deputy chief executive at GRI
Harold Lever – chair of the Ondergrondse Netwerken en Grondwaterbeheer (underground networks and ground-water management) section at Bouwend Nederland
Heleen Keur – local council member for the municipality of Den Helder
Herman Mulder – chair of Impact Economy Foundation; chair of SDG Nederland; chair of True Price Foundation, IIRC ambassador
Dick de Waard – professor of Accountancy, University of Groningen
The stakeholder panel
The stakeholder panel that assists us with the annual report forms part of our ongoing stakeholder dialogue. We shared a draft version of the 2020 annual report with the panel members. The panel members responded in writing. Their input was discussed at greater length during an online meeting held on 18 December 2020, in a meeting that was also attended by our CFO Walter Bien. The feedback was used to improve this report, and will also serve to further enhance the quality of our reporting. The stakeholder panel is independent.
Perhaps you, too, would like to talk to us about the annual report or the issues confronting Alliander. We are open to dialogue and also regularly organise roundtable sessions with our stakeholders. Please contact us on email@example.com.