EU Taxonomy
Hafslund’s Taxonomy report for the 2023 reporting period was prepared in accordance with the EU Taxonomy Regulation. The Taxonomy Regulation has been implemented into Norwegian law through the Act relating to the disclosure of sustainability information in the financial sector and a framework for sustainable investments. The Act entered into force on 1 January 2023. The Taxonomy report for 2023 is based on Hafslund’s interpretation of the EU Taxonomy in accordance with the system of rules and associated guidelines etc. as of the reporting date.
The EU Taxonomy sets six specifically defined environmental objectives. An economic activity must make a substantial contribution to the attainment of at least one of the six environmental objectives in the EU Taxonomy Regulation in order for it to be defined as sustainable. In addition, the economic activity must avoid significant harm to the other five environmental objectives and satisfy minimum requirements for social standards, as set out in the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.
According to the Taxonomy Regulation, for each environmental objective, the European Commission shall develop technical screening criteria for when the various economic activities are in fact deemed to satisfy each of the environmental objectives.
Hafslund’s assessment for 2023 was that the Group’s hydropower production, production and distribution of district heating and cooling, consultancy services and mobile charging solutions are eligible economic activities in accordance with the EU Taxonomy. Only assets in Hafslund’s subsidiaries have been considered for eligibility.
Of Hafslund’s turnover, 84 per cent of Hafslund’s hydropower production and 13 per cent of Hafslund’s production and distribution of district heating and cooling are defined as sustainable in accordance with the EU Taxonomy.
Below is a more detailed overview of Hafslund’s approach to the Taxonomy criteria and how Hafslund assesses these for its eligible activities.
Taxonomy tables
| Economic activities | Code | Proportion of turnover | Proportion of CapEx | Proportion of OpEx |
|---|---|---|---|---|
| A.TAXONOMY-ELIGIBLE ACTIVITIES | % | % | % | |
| A.1. ENVIRONMENTALLY SUSTAINABLE ACTIVITIES (TAXONOMY ALIGNED) | ||||
| 4.5 Electricity generation from hydropower | 35.11 | 84 % | 51 % | 74 % |
| 4.10 Storage of electricity | 0 % | 1 % | 0 % | |
| 4.15 District heating/cooling distribution | 35.30 | 13 % | 12 % | 12 % |
| 9.1 Close to market research, development and innovation | 0 % | 0 % | 0 % | |
| Total of environmentally sustainable activities (Taxonomy-aligned) (A.1) | 97 % | 64 % | 86 % | |
| A.2 TAXONOMY-ELIGIBLE BUT NOT ENVIRONMENTALLY SUSTAINABLE ACTIVITIES (NOT TAXONOMY-ALIGNED ACTIVITIES) | ||||
| 4.5 Electricity generation from hydropower | 35.11 | 0 % | 0 % | 1 % |
| 4.10 Storage of electricity | 0 % | 0 % | 0 % | |
| 4.15 District heating/cooling distribution | 35.30 | 0 % | 5 % | 0 % |
| 9.1 Close to market research, development and innovation | 0 % | 0 % | 0 % | |
| Total of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 0 % | 5 % | 1 % | |
| Total (A.1 + A.2) | 97 % | 69 % | 87 % | |
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | ||||
| Total of Taxonomy-non-eligible activities (B) | ||||
| Waste ineration | 38.21 | 2 % | 4 % | 13 % |
| Electricity generation using waste | 38.21 | 1 % | 0 % | 0 % |
| Other (incl. CCS) | 0 % | 23 % | 0 % | |
| Fiber (ICT) | 61.10 | 0 % | 3 % | 0 % |
| Hafslund Vekst | 0 % | 0 % | 13 % | |
| Hafslund AS (not assessed) | 0 % | 0 % | 0 % | |
| Total (A + B) | 100 % | 100 % | 100 % |
Download full EU taxonomy table as PDF.
| Economic activities | Code | Proportion of turnover | Proportion of CapEx | Proportion of OpEx |
|---|---|---|---|---|
| A.TAXONOMY-ELIGIBLE ACTIVITIES | % | % | % | |
| A.1. ENVIRONMENTALLY SUSTAINABLE ACTIVITIES (TAXONOMY ALIGNED) | ||||
| 4.5 Electricity generation from hydropower | 35.11 | 93 % | 61 % | 48 % |
| 4.15 District heating/cooling distribution | 35.30 | 5 % | 19 % | 21 % |
| Total of environmentally sustainable activities (Taxonomy-aligned) (A.1) | 99 % | 80 % | 69 % | |
| A.2 TAXONOMY-ELIGIBLE BUT NOT ENVIRONMENTALLY SUSTAINABLE ACTIVITIES (NOT TAXONOMY-ALIGNED ACTIVITIES) | ||||
| 4.5 Electricity generation from hydropower | 35.11 | 0 % | 0 % | 0 % |
| 4.15 District heating/cooling distribution | 35.30 | 0 % | 2 % | 0 % |
| Total of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 0 % | 2 % | 0 % | |
| Total (A.1 + A.2) | 99 % | 82 % | 69 % | |
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | ||||
| Total of Taxonomy-non-eligible activities (B) | ||||
| Waste ineration | 38.21 | 1 % | 7 % | 18 % |
| Electricity generation using waste | 38.21 | 1 % | 1 % | 0 % |
| Other (incl. CCS) | 0 % | 8 % | 0 % | |
| Fiber (ICT) | 61.10 | 0 % | 2 % | 0 % |
| Hafslund Vekst and Hafslund AS (not assessed) | 0 % | 0 % | 13 % | |
| Totalt (A + B) | 100 % | 100 % | 100 % |
Download full EU taxonomy table as PDF.
The performance indicator for revenues consists of the lines “sales revenues” and “other operating revenues” in Hafslund’s total comprehensive income. In 2023, this totalled NOK 17,526 million, of which 97 per cent originated from activities covered by the Taxonomy.
The indicator of investments includes all outgoing payments related to the Group’s investments. In 2023, the Group’s total investments were NOK 1,217 million, of which 69 per cent were related to activities covered by the Taxonomy.
Hafslund’s approach to the Taxonomy criteria:
Hydropower production
Hafslund’s hydropower production in is covered by the EU Taxonomy through activity 4.5 “Electricity production from hydropower”. Relevant environmental objectives with associated technical screening criteria for hydropower production are environmental objective number one (climate change mitigation), number two (climate change adaptation), number three (sustainable use and protection of water and marine resources), and number six (protection and restoration of biodiversity and ecosystems).
Assessment of substantial contribution to satisfying environmental objective number one
Hafslund has used the approach in SINTEF’s memo “Assessment of greenhouse gas emissions from hydropower for the EU Taxonomy” to document a substantial contribution to environmental objective number one. In line with this memo, Hafslund has assessed the criterion for calculating power density (W/m2) for Hafslund’s power plants, unless the power plant is a run-of-river hydropower plant.
Based on the assumptions in SINTEF’s memo, reservoirs and power plants have been divided into four large watercourses in accordance with catchment areas and division into utility owners’ associations. For most reservoirs, gross area (total area) is used in the calculations. For those reservoirs that are measured by depth, net area is used as a basis. Hafslund has also used calculations based on LRV for some bodies of water. Data on installed capacity is obtained from the Norwegian Water Resources and Energy Directorate’s (NVE) hydropower database for all power plants.
These are the Glomma watercourse with Gudbrandsdalslågen, Hallingdal watercourse down to and including Nes power plant, Begna watercourse down to and including Eid power plant, and Aurland watercourse. The Group also has four smaller watercourses in Brødbøl, Trysil, Dokka and Sagefoss. All regulating reservoirs and power plants that fall within these system boundaries are taken into consideration when calculating power density, including power plants that are not owned and operated by Hafslund. Hafslund’s assessment is that the power plants in the four major waterways, including the Dokka watercourse, meet the criteria in environmental objective number one. There are a total of five power plants in the smaller waterways that do not meet the criteria in environmental objective number one, including the power plants in the Trysil and Brødbøl waterways and Sagefossen power plant.
Hafslund has a total of nine run-of-river power plants spread over the various waterways that are not included in the calculation of power density. They are not in the “system” and do not use, or use only very low quantities of, reservoir water. These run-of-river power plants satisfy the criteria in environmental objective number one.
In order for hydropower production to make a substantial contribution to achieving environmental objective number one (climate change mitigation), one of the following criteria has to be met:
- The power production comes from a run-of-river hydropower plant, which does not have an artificial reservoir.
- The power density of the power generation is above 5 W/m2.
- Greenhouse gas emissions from the power production’s life cycle are lower than 100g of CO2e/kWh.
Assessment of significant harm to environmental objective numbers two to six
In order to comply with the Taxonomy, the activity must “do no significant harm” (DNSH) to the five other environmental objectives. For hydropower production, this assessment is relevant to environmental objective number two (climate change adaptation), environmental objective number three (sustainable use and protection of water and marine resources), and environmental objective number six (protection and restoration of biodiversity and ecosystems). There are no DNSH criteria for hydropower linked to environmental objective number four (transition to a circular economy) or environmental objective number five (pollution prevention and control).
Adapting to climate change (DNSH 2)
Hafslund conducted a climate risk analysis for the entire Group in the autumn of 2023. In this project, physical climate risks were identified and assessed based on their relevance to Hafslund. Relevant climate risks were further analysed at power plant level using the climate scenarios RCP 4.5 and RCP 8.5 on different time horizons. For Hafslund’s hydropower business, damage to infrastructure as a result of an increase in extreme weather events has been identified as the most relevant physical climate risk, because hydropower plants are heavily exposed to drought, precipitation and flooding. The probability has been assessed as very high in a high-emission scenario and high in a low-emission scenario.
Risk and vulnerability analyses (ROS analyses) are regularly conducted for all of Hafslund’s hydropower plants/ Furthermore, all dams are subject to government supervision through the Norwegian Dam Safety Regulations. The risk of increased precipitation and major flooding has been assessed and taken into consideration when assessing the safety of the dam facilities.
In accordance with requirements stipulated in the Dam Safety Regulation, Hafslund’s dam facilities are dimensioned for 500 or 1,000-year floods. The flood calculations have conservative assumptions, including climate surcharges set by the NVE. The flood calculations are input data for dimensioning waterway facilities. Dimensioning is based on a safety mindset that there needs to be a safety factor of at least 50 per cent for technical strength.
Hafslund finds that the criteria for environmental objective number two have been met for all of the Group’s regulations and power plants.
Sustainable use of water and marine resources (DNSH 3)
The technical screening criteria for the environmental objective relating to sustainable use and protection of water and marine resources are closely linked to the EU Water Framework Directive, which has been implemented into Norwegian law through the Regulations relating to the framework for water management (the Water Regulations). A specific assessment has been made of how the individual power plants and regulations impact different bodies of water, including whether hydropower production prevents these bodies of water from meeting the environmental objectives stipulated in the Water Framework Directive.
Hafslund finds that the Group’s power plants that were established in accordance with licences that were granted or revised/converted in 2016 or later are in compliance with the Water Regulations, and satisfy environmental objective number three. The reason for this is that specific environmental objectives for the individual bodies of water and the first water management plans with associated action programmes first entered into force from 2016.
However, all hydropower activities, including those that do not require a licence and hydropower activities with licences granted prior to 2016, are still covered by the water management plans and associated environmental objectives and action programmes. Most bodies of water that are impacted by Hafslund’s hydropower activities have achieved environmental objectives in accordance with the Water Regulations.
Some bodies of water that are impacted by Hafslund’s hydropower activities are covered by ongoing audits, and will achieve the environmental objective when the audit is completed. For these bodies of water, Hafslund has implemented the measures that are possible to implement pending the result of the audits. When the result of the audits is available, Hafslund will prepare a plan for the implementation of relevant mitigating measures. Hafslund therefore finds that the power plants covered by the ongoing audits meet the criteria for environmental objective number three.
For the remaining bodies of water that have not achieved the environmental objective and are not being audited, a specific assessment was made of the reason for why the environmental objective was not achieved. For all of these bodies of water, active efforts are being made to acquire knowledge, plan and implement all technologically feasible and ecologically relevant mitigation measures to achieve the environmental objectives by the deadline (2027 or 2033). Hafslund therefore finds that the Group also satisfies the criteria for environmental objective number three for these bodies of water. The Group also wishes to note that, for many of the bodies of water that have already achieved the environmental objective, more work is being done on measures to make further environmental improvements.
Protect and restore biodiversity and ecosystems (DNSH 6)
The technical screening criteria for the environmental objective relating to biodiversity and ecosystems are particularly linked to whether the measures satisfy the requirements for impact assessments stipulated in the EU Environmental Impact Assessment Directive (the EIA Directive).
The first EU Environmental Impact Assessment Directive entered into force in 1985 and formal requirements for impact assessment were implemented into Norwegian law through the Planning and Building Act in 1986. Hafslund’s power plants with licences granted after 1986 are therefore found to meet the criteria for environmental objective number six.
Hafslund finds that the Group’s power plants with licences granted prior to 1986 and power plants that do not require a licence meet the criteria for environmental objective number six. Among the reasons for this is that an impact assessment was also carried out for these power plants in accordance with watercourse legislation that was in force at that time. Furthermore, emphasis has been placed on the authorities continuously assessing the need for environmental improvement measures in all bodies of water, including the need to review licence conditions or summon operators without a licence for a licencing process, in order to achieve set environmental targets. Several of Hafslund’s power plants have undergone reviews of conditions in recent years and have therefore had their conditions updated. This has also resulted in the implementation of mitigation measures.
Hafslund also has some power plants without licences that were established before statutory requirements for licences entered into force. However, the Water Regulations also apply to these facilities, including requirements for monitoring and a duty to implement measures. If the environmental condition is found to be poor, the government authorities must assess whether there is a need to summon the owner to a licencing process. Hafslund has not received any such summons for any of the power plants without a licence.
Furthermore, Hafslund has ongoing dialogue and works closely with Norwegian sector authorities on impact assessments, and implements the mitigation measures that are deemed relevant for improving the environmental condition in affected waterways. Based on this, Hafslund finds that the criteria in environmental objective number six have been met for the Group’s hydropower activities. This also includes Hafslund’s power plants that do not have licences.
Hafslund’s approach to the Taxonomy criteria: Production and distribution of district heating and cooling
Hafslund finds that its production and distribution of district heating and cooling are covered by the economic activity 4.15 “District heating and cooling distribution” in the EU Taxonomy. The reason for this is that all turnover from district heating comes from the distribution of heating and cooling to commercial buildings and households, and is based on the guidance provided by the European Commission.
Assessment of the EU Taxonomy’s classification of excess heat from waste incineration
Waste incineration is not currently included in the EU Taxonomy (“not eligible”). Based on this, Hafslund has classified revenues, investments and operating expenses associated with waste incineration activities as “not eligible”. In this assessment, the Group distinguished between waste incineration as a necessary process for treating residual waste, and the utilisation of the excess heat produced from the incineration process in an associated district heating system. These are different industries with different industry codes. Hafslund has also had this view confirmed by the EU via FISMA, which wrote the following in an email to Cewep, Confederation of European Waste-to-Energy Plants, on 10 March: “Regarding your point on clarifying how downstream activities described in Taxonomy Delegated Acts, such as waste heat or material recovery from bottom ash, may be Taxonomy-eligible, we would refer you to the first part of this from last year (FAQs and notably to Questions 2 to 6). Activities are indeed eligible where they fall within a specific activity scope description, irrespective of other activities they may be linked to in their value chain. And as regards district heating, we would like to point out that the criteria for district heating and cooling distribution specified in Section 4.15 of the Climate Delegated Act do not contain any requirements/limitations relating to the source of the heating or cooling.”
Therefore, Hafslund’s interpretation of the EU Taxonomy is that all revenues from district heating and cooling operations, which both produce and distribute energy, can be included in the EU Taxonomy’s economic activity 4.15 “District heating/cooling distribution”. On this basis, the revenues, investments and operating expenses associated with this activity are classified as “eligible”. At the present time, Hafslund has not classified revenues, investments and operating expenses as “eligible” under any “production” activities (for example, electricity produced by turbines in the waste incineration plant).
The criteria for a substantial contribution to environmental objective number one for economic activity 4.15 “District heating and cooling distribution” require that the system satisfies the definition of efficient district heating and cooling systems stipulated in Article 2, paragraph 41, of the Energy Efficiency Directive (Directive 2012/27/EU). Article 2 of the Energy Efficiency Directive refers to “waste heat”, but the EU Taxonomy Regulation and the Energy Efficiency Directive do not define “waste heat”. However, “waste heat” is defined in Article 2(9) of the Renewable Energy Directive (Directive (EU) 2018/2001), and this definition does not appear to exclude waste heat from waste incineration. In Annex IX of the Energy Efficiency Directive (EED), waste heat from waste incineration is explicitly referred to as an energy source that each country should utilise as much as possible to achieve efficient district heating systems. In light of this, Hafslund interprets this to mean that the utilisation of waste heat from waste incineration can be included in the assessment of whether the heating and cooling activities satisfy the definition of an efficient district heating system.
It is also worth noting that the Norwegian energy authorities recognise and encourage the use of waste heat from waste incineration. It is classified in the same manner as other sources of waste heat. Waste incineration is the only lawful option for the treatment of residual waste (volumes left over from sorting processes) in Norway, because disposal is prohibited.
The primary purpose of incineration is to treat residual waste, while energy utilisation is an important secondary service. If waste heat is not used, the amount of residual waste will remain unaffected, and the incineration process will thereby still be necessary and have the same CO2 emissions. The waste heat currently utilised in the district heating system would then have to be replaced by other sources of energy, which would have had either a direct or an indirect adverse effect on climate and nature.
Assessment of substantial contribution to environmental objective number one
The Group’s district heating and cooling activities make a substantial contribution to environmental objective number one by satisfying the requirements for efficient district heating and cooling systems stipulated in the Energy Efficiency Directive. To satisfy the requirement, the district heating and cooling system must use at least 50 per cent renewable energy, 50 per cent waste heat, 75 per cent cogenerated heat or 50 per cent of a combination of such energy and heat.
In 2023, the energy mix for district heating distributed in Hafslund Oslo Celsio’s system consisted of 50 per cent waste heat from waste incineration, 19.7 per cent from electric boilers, 10.8 per cent from heat pumps (of which 3.1 per cent was electricity, while the remainder was excess heat), 11.3 per cent from wood pellets, 6.6 per cent from bio-oil/biodiesel, and 1.7 per cent from LNG. Since Klemetsrud is a combined heat and power (CHP) plant, the proportion of heat from cogeneration, heat pumps, wood pellets and biofuels will total 61.5 per cent.
Assessment of significant harm to environmental objective numbers two to six
In order to comply with the Taxonomy, the activity must “do no significant harm” (DNSH) to the five other environmental objectives. For the distribution of district heating and cooling, this assessment is relevant to environmental objective number two (climate change adaptation), environmental objective number three (sustainable use and protection of water and marine resources), environmental objective number five (pollution) and environmental objective number six (protection and restoration of biodiversity and ecosystems). There are no DNSH criteria for distribution of district heating and cooling associated with environmental objective number four (circular economy).
Climate change adaptation (DNSH 2)
In 2022, Hafslund carried out a physical climate risk analysis for its heating and cooling activities in accordance with EU Taxonomy requirements. An important principal finding was a potential risk for parts of the district heating grid located closest to the sea. This is because, when viewed from a long-term perspective, the sea waters will rise and the infrastructure will be under water. Hafslund meets the criteria for environmental objective number two by the Group having identified this risk and having the opportunity to implement measures to mitigate this well in advance.
Sustainable use and protection of water and marine resources (DNSH 3)
All of Hafslund’s facilities were subject to regulatory approval processes before and during construction. Environmental impact assessments have been carried out when required by the Norwegian authorities. Necessary mitigating measures have also been implemented for all facilities.
Statutory supervision of the facilities is carried out during the operational phase. This includes inspections and annual reporting on sustainability performance. A risk register has been established based on specific risk analyses for each facility, which includes relevant risks relating to the potential for incidents that may lead to impact on water.
The district heating and cooling business is also ISO 14001-certified, and life cycle assessments of the district heating business have been carried out.
Based on the above and the fact that the activity is carried out in accordance with all relevant legislation, it is Hafslund’s assessment that all district heating and cooling activities satisfy the criterion for environmental objective number three.
Pollution prevention and control (DNSH 5)
Hafslund does not consider the Group’s district heating and cooling distribution to cause significant harm to the environmental objective of pollution prevention and control and that it therefore satisfies the criterion for environmental objective number five.
Among the reasons for this is that the independent technical report “EU Taxonomy review” from Sweco for the district heating industry concluded that this criterion is not relevant for assessing whether district heating (distribution and production) does significant harm to the objective of “pollution prevention and control”. Components and equipment Sweco included in the study (pumps, fans and electric motors) do not noticeably impact the pollution levels from the production of district heating.
The aforementioned report also documents that the distribution of district heating does not generally result in a significant increase in emissions of environmental pollutants into the air, water or land when compared to the situation prior to when the activity started. Finally, the report notes that replacing specified equipment for the purpose of achieving a better energy label will lead to increased emissions from a life cycle perspective, because existing equipment does not impact pollution levels, while the production of new equipment will result in the use of resources and energy for production. The conclusions in Sweco’s report are supported by Hafslund.
Sweco’s report is in accordance with the EU report “Taxonomy: Final report of the Technical Expert Group on Sustainable Finance” from 2020, which states that: “When concerning the operation of the district heating grids, the potential significant impact is considered low”.
Hafslund would also make general mention of the fact that all production facilities have strict emissions requirements set by the authorities, and that the use of district heating by customers has in many instances replaced local heating plants with significantly less stringent emissions requirements. The extensive use of excess heat in district heating also enables the release of electricity that would otherwise have been used for heating purposes, and which can then be used in, for example, electrification of the transport sector – with reduced emissions and pollution as a result.
Protection and restoration of biodiversity and ecosystems (DNSH 6)
All of Hafslund’s facilities were subject to regulatory approval processes during construction, and environmental impact assessments have been carried out when required by the Norwegian authorities. Necessary mitigating measures have also been implemented for all facilities.
Statutory supervision of the facilities is carried out during the operational phase. This includes inspections and annual reporting on sustainability performance. The district heating and cooling business is ISO 14001-certified, and life cycle assessments of the district heating business have been carried out.
The main facilities are located in urban or industrial areas that are not close to vulnerable nature. For smaller facilities that pass through areas that are of significant importance to biodiversity, several measures are implemented in order to protect the surrounding areas. For example, the district heating network has an electronic leak alarm system. Some district heating systems are located near rivers and streams. All of these are equipped with protection systems that prevent oil and chemicals from leaking out in the event of an accident.
Based on the above and the fact that the activity is carried out in accordance with all relevant legislation, it is Hafslund’s assessment that the Group’s heating and cooling activities satisfy the criterion for environmental objective number six.
Hafslund’s approach to the Taxonomy criteria: Consulting
Hafslund Rådgivning assists customers with the green transformation, and this business is covered by the EU Taxonomy through economic activity 9.1 “Research, innovation and development”. The reason for this is that the consulting service has the objective of assisting public and private stakeholders with issues that relate to the transition to emission-free solutions.
Assessment of substantial contribution to environmental objective number one
The criteria for substantial contribution to environmental objective number one are met by the service contributing towards reducing life cycle emissions of greenhouse gases. Hafslund’s consulting services result in solutions where customers have reduced their expected emissions, without this having a negative impact on the external environment. Among other things, the consulting ensures that customers reduce emissions through proposed measures related to electrification, the use of charging solutions, or energy analyses that optimise energy consumption. The fact that implementing proposed solutions will result in lower GHG emissions for the customer’s financial activity without being to the detriment of the remaining environmental objectives means that the requirements for substantial contribution are met.
Assessment of significant harm to environmental objectives number two and six
Climate change adaptation (DNSH 2):
In 2023, Hafslund conducted a physical climate risk analysis for the Group’s geographical locations nu using climate scenarios. Hafslund Rådgivning’s services are not linked to geographical locations, but will be linked to the same geographical locations as the rest of the Group. The analysis that has been conducted at Group level is therefore considered to be adequate for the consultancy services provided.
Sustainable use and protection of water and marine resources (DNSH 3)
Technical screening criteria for environmental objective number three concern addressing the risk of whether the services cause harm to water and marine resources and/or their environmental status. Hafslund Rådgivning conducts initial assessments of customers and projects to avoid a negative impact on environmental objective number three from their project work or proposed solutions.
Circular economy (DNSH 4)
Technical screening criteria for environmental objective number four require that an assessment of whether the service being developed is a hindrance to goals set for the circular economy, for example, ineffective use of materials or an increase in the production, combustion or disposal of waste. Hafslund Rådgivning conducts assessments related to potential harm to the external environment both when selecting customers and projects. Among other things, this process ensures that the projects will not stimulate a weakened circular value chain for the customer.
Pollution prevention and control (DNSH 5)
Technical screening criteria for environmental objective number five involve assessing and addressing the risk of the service resulting in increased pollution into the air, water or land. Hafslund Rådgivning’s services are largely focussed on the transition from fossil energy sources to electrical solutions, and will thus lead to a reduction in polluting gases. For projects that do not involve electrification, Hafslund Rådgivning will not propose alternatives that could lead to increased pollution, because this would not align with the vision of contributing to the green transition.
Protection and restoration of biodiversity and ecosystems (DNSH 6)
Technical screening criteria for environmental objective number six require that the risk of causing harm to biodiversity and ecosystems is addressed and taken into account. Hafslund Rådgivning’s projects will have little impact on biodiversity and any potential impact will be positive.
Based on the above explanations, Hafslund therefore considers that the criteria for not causing significant harm to environmental objective numbers two to six have been met for Hafslund Rådgivning.
Hafslund’s approach to the Taxonomy criteria: Mobile charging solutions
Hafslund Boost provides a service which establishes charging solutions for all types of construction projects. Securing energy needs through battery containers with fast chargers and normal chargers forms part of these services and is considered to be covered by the EU Taxonomy through economic activity 4.10 “Storage of electricity”.
Assessment of substantial contribution to environmental objective number one
Hafslund Boost meets the criteria for significant contribution to environmental objective number one by virtue of the nature of the service/ The criterion dictates that the activity must be the construction or operation of electrical storage, which Hafslund Boost satisfies through its battery services that are used on construction sites.
Minimum requirements for social standards
The minimum requirements for social standards are stipulated in the United Nations Guiding Principles on Business and Human Rights (“UNGP”) and the OECD Guidelines for Multinational Enterprises (“OECD Guidelines”), as well as the ILO’s eight core conventions and the International Declaration of Human Rights. The minimum requirements are twofold, and set requirements for (1) processes and (2) that there is no significant harm. Based on Hafslund’s interpretation, the Group satisfies the minimum requirements for social standards.
In accordance with the guide to the minimum requirements for social standards from “Platform on Sustainable Finance”, Hafslund has considered the following topics:
- Human rights, including decent working conditions and consumer rights
- Corruption
- Tax
- Fair competition
Basic human rights and decent working conditions
Corruption
Requirements for anti-corruption processes
Hafslund has several processes and procedures that are suitable for preventing, detecting and managing corruption.
Hafslund sets requirements through ethical guidelines for employees (including intermediaries) and suppliers. Information on corruption and corruption risk is collected in procurement processes and also included in Achilles audits. Comprehensive procurement processes in connection with framework agreements and procurements exceeding NOK 5 million, the principle of 4-eyes and known knowledge of normal market prices aid in preventing and detecting any corruption. All expenses must be documented with receipts and explanation in Visma Expense, which are reviewed and approved before payment. The whistleblowing system includes whistleblowing about corruption, both in own activities and among Hafslund’s third parties. Integrity due diligence processes are also carried out in connection with transactions and joint ventures/cooperative processes that involve corruption.
Although anti-corruption measures are implemented in several areas of the Group, an internal assessment uncovered the need for a more systematised approach to and the implementation of anti-corruption measures, including a systematic assessment of corruption risk and the development of a toolbox for measures in addition to ethical guidelines and terms in supplier contracts. There were no clear roles and responsibilities for anti-corruption work, nor a systematic approach to training.
Significant Harm
Hafslund did not cause significant harm due to corruption in 2023.
In the first quarter of 2024, Hafslund has implemented the following measures that strengthen the Group’s compliance with the OECD’s Guidelines on anti-corruption.
- Established coordinator responsibility, and assigned responsibilities to the line for anti-corruption work
- Completed training initiatives
- Identified risk of corruption in the Group
- Integrated risk of corruption into the guide on due diligence processes for basic human rights and decent working conditions
Consumer rights
Requirements for adequate due diligence processes
As part of the Taxonomy reporting, an assessment was carried out of the Group’s compliance with the OECD Guidelines regarding consumer rights. The only Group company that had private customers when the assessment was carried out was Hafslund Oslo Celsio AS.
Our assessment found that Hafslund Oslo Celsio has the necessary processes and measures in place to detect, prevent and manage potential and actual violations of consumer rights.
Significant harm
Hafslund Oslo Celsio did not cause significant harm to consumer rights in 2023.
Requirements for follow-up of tax obligations as part of corporate governance
Taxation and compliance with tax obligations are key elements of Hafslund’s corporate governance. Decisions that have tax implications of significant importance will be adopted by, or discussed with the Board of Directors or other senior executives in the Group. Hafslund also strives to be transparent with the tax authorities, and provide full and correct information in submitted tax returns as well as in other correspondence with relevant authorities.
Hafslund if of the view that the Group has the necessary procedures to ensure timely and correct payment of tax. Hafslund will also continuously improve the Group’s procedures and processes to ensure controls and management of tax risk.
Significant harm
Concering tax, “significant harm” is defined as “finally [been] found violating of tax laws”.
In Hafslund’s view, the Group has not “finally [been] found violating of tax laws”.
However, it should still be noted that, in the amendment decision dated 18 December 2023, which applied to the 2021 and 2022 financial years, Hafslund AS and jointly registered companies were denied a deduction for input value added tax of NOK 2.2 million and were imposed a surcharge of 20 per cent on this amount.
Hafslund has not made a final decision on whether the amendment decision dated 18 December 2023 constitutes “significant harm”. There is little guidance on how this condition should be understood, for example, what significance it may have that the amount is low when viewed in the context of Hafslund’s business activities. In any event, Hafslund has initiated measures to reduce the risk of equivalent errors occurring again in future financial years. The measures entail that Hafslund does not consider the amendment decision to be a “violation of tax law”, irrespective of whether or not the decision is considered, in isolation, to constitute “significant harm”. This is in line with the guide from Platform on Sustainable Finance. The guide notes that the status of “non-compliant” only applies to a company that “has proved that its processes have been improved in a way that a repetition of breaches is unlikely”.
Fair competition
Requirements to raise awareness of the importance of compliance with competition laws
Our internal assessment found that Hafslund complies with competition laws, and that compliance with competition laws is also emphasised in Hafslund’s “Ethical guidelines and requirements for suppliers”. Awareness is promoted through internal and external courses, as well as ongoing attitude work.
Hafslund’s assessment is that the Group complies with the OECD’s guidelines for fair competition. At the same time, the Group wants to strengthen this work through further development of the Group’s internal framework for compliance with competition regulations and contact with competition authorities.
Significant harm
Hafslund has not caused significant harm within competition law.
