Landsvirkjun signed the UN Global Compact in November, 2013 and is therefore committed to aligning its operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. The Company must also produce an annual Communication on Progress report (COP) to account for its progress on matters of social responsibility. See:  https://www.unglobalcompact.org/ In 2014, Landsvirkjun was consistent in its efforts to improve operations in accordance with the ten principles of the Global Compact and published its first COP in November of this year. The report can be seen here: UN Global Compact - Communication on Progress.

The government has recently introduced an ownership policy for public limited companies and general partnerships in its ownership. In 2014, Landsvirkjun will make any improvements necessary in areas of its operations not already in compliance with the new ownership policy.

An important component in increasing social responsibility is actively encouraging ethical business practices in all business partnerships. In 2014, we set the objective of developing and implementing a policy on ethical business practices.

The Policy has now been fully developed and will be implemented in working procedures connected to all Landsvirkjun’s business partnerships.

In 2014, a project team was appointed within Landsvirkjun with the objective of developing a code of conduct for suppliers built on the Code of Conduct for Landsvirkjun employees and the guidelines outlined by the UN Global Compact with regard to human rights, labour, the environment and anti-corruption. These measures provide suppliers and service providers with clear guidelines on Landsvirkjun’s expectations with regard to responsible working procedures and Corporate Governance. These regulations are now ready and will be implemented in working procedures in connection with suppliers and service providers in the next few weeks and months.

The sustainable utilisation of natural resources is a crucial factor in Landsvirkjun’s operations and the Company is required to utilise the resources it has been entrusted with in the most efficient manner achievable. We are continuously assessing and developing the technical resources available to us and exploring possible actions to utilise these resources in a more efficient manner.

In 2014, a specific analysis was conducted to determine the potential of utilising the geothermal resource for other purposes than that of electricity generation. The diverse utilisation of geothermal energy involves the utilisation of water, steam and gases from power stations for various purposes, within areas such as the industrial sector, greenhouse cultivation and tourism. We also assessed the possibility of further utilising the electricity we are able to generate for the electricity system during good water years.

The analysis revealed a variety of exciting opportunities in the diverse utilisation of the geothermal resource within Landsvirkjun’s operational areas in the north-east, particularly in the fields of cultivation, further processing in the food industry and fuel production from carbon dioxide and excess energy.

Landsvirkjun will continue to work towards ‘diverse utilisation’ and has subsequently appointed a project manager who has been given the task of creating a foundation for the diverse utilisation of geothermal energy, in Landsvirkjun’s operations, in the north-east of Iceland.

Landsvirkjun has long-since monitored greenhouse gas emissions (GHG) and carbon sequestration from its operations. Landsvirkjun has kept carbon accounts since 2007 which can be accessed in Landsvirkjun’s Annual Report. However, the Company has not yet developed a long-term comprehensive plan of action. The formulation of such a plan is an essential component in accepting environmental and social responsibility. It is our objective to develop such a plan in 2014.

Landsvirkjun has for years utilised and implemented a variety of measures to reduce the environmental impact of the Company’s operations.

In 2014, a specific emphasis was placed on energy exchange in transportation and subsequently the Company developed a transportation strategy:

Landsvirkjun is committed to reducing the impact of transportation on the environment and the atmosphere by:

• Reducing the use of fossil fuels in Company owned vehicles
• Compensating for the inevitable release of carbon via re-vegetation
• Actively participating in the Energy Exchange Plan for  Iceland

In early 2014, two diesel cars (in use at the Fljotsdalur and Sogid power stations) were replaced with electric cars. The cars, which are of the type Nissan Leaf, are performing well and the Company will continue to replace older fossil fuel cars with electric vehicles wherever possible.

In September 2014, Landsvirkjun took part in organising a conference in Reykjavik on energy exchange in transportation. 

We have created a policy that promotes open communication with stakeholders and are therefore active in sharing information on the Company’s operations, via various resources. These resources include press releases and publishing our Annual Report and Environmental Report online. Open meetings with stakeholders are a key factor in implementing our policy on communication and provide an opportunity for stakeholders to familiarise themselves with Landvirkjun’s operations. We hope that these meetings will contribute to increasing our awareness of the concerns held by stakeholders and their expectations of the Company and its operations.

In 2014, we exceeded our initial objective of holding at least five open meetings during the year. Six open meetings were held by Landsvirkjun including two meetings in Reykjavík and four meetings in rural areas; both at existing power stations and at potential power project sites.

At Landsvirkjun, our role is to consistently endeavour to maximise the potential yield and value of the natural resources we have been entrusted with, in a sustainable, responsible and efficient manner. One of the ways to fulfil this role is by paying dividends. Landsvirkjun pays annual dividends to its owner, the Icelandic state. The amount differs between years.

In 2011, Landsvirkjun signed the UN Global Compact and UN Women. The objective of the compact is to promote equality and the advancement of both sexes in the workplace, labour market and in society. It is Landsvirkjun’s policy to ensure the equal treatment of male and female employees and that equal opportunities are enjoyed by all members of Landsvirkjun’s team, regardless of gender. In doing so, Landsvirkjun is following the letter of the law but also ensures that it utilises its human resources in the most effective manner. To this end, important action has been taken to reduce the gender pay gap which has been reduced from 12.0% to 1.6% over the past ten years. This effort was recognised in 2013 when Landsvirkjun was awarded the PWC Gold Standard. The Company also endeavours to address the issue of gender distribution within the various operational areas of the business. In 2014, it is our objective to increase the proportion of female managers at Landsvirkjun to 20%.

At Landsvirkjun, employee safety is of the utmost importance to us. Our working methods are designed to prevent accidents and we work according to a zero tolerance accident policy. We closely follow the accident rate and publish figures of accidents on a regular basis.

H200 shows the number of absences due to accidents per 200,000 hours worked.

Every year Landsvirkjun’s employees, consultants and researchers execute a number of audits and reports for the Company. In 2013, an essential step was taken to share this information with the public when the Company connected with the electronic search engine gegni.is. In 2013, approx. 300 reports were made ​​available via this source. Landsvirkjun will continue to support public access to research in 2014 via this route. An update on the increased number of available reports will be released at year end.

Landsvirkjun is aware that a key area in contributing effectively to CSR is knowledge dissemination; sharing expertise effectively in order to facilitate new knowledge or value for society. In 2014, Landsvirkjun will support the business centre Startup Reykjavik Energy (SER), whose sole aim is to support innovative ventures in energy-related industries by providing selected business ideas in this area with investment opportunities and support. For more information see: https://www.startupenergyreykjavik.com/

Performance indicators assessed by Landsvirkjun on completion of the project include:

• The number of businesses (in SER) still in operation one year after the completion of the project
• Further financial funding for SER businesses one year after the close of the business centre

The Landsvirkjun Energy Research fund has since 2008 sponsored students, university research projects, institutions, companies and individuals researching the fields of environmental and energy affairs. It is Landsvirkjun’s objective to ensure that the fund continues to support the foundation for new expertise in 2014. Landsvirkjun will allocate 52 million ISK to the fund in 2014.