Governance, commitments and engagement

Corporate governance and management structure

The management and organisational structure of the EVN is described in the corporate governance report starting. An overview of EVN’s major investments can be found here.

Involvement of management and the highest governance body in sustainability issues

The Executive Board of EVN is responsible for the continuous develop ment of the corporate strategy and for the preparation and revision of corporate guidelines and policy statements. This work is carried out in close coordination with the Supervisory Board and is supported by steering committees and working groups that are established for specific topics. A CSR steering committee was installed to deal with questions regarding sustainability. It comprises the entire management team, including the Executive Board, and therefore reflects European best practice standards. This committee’s broad composition allows for the targeted management of CSR issues and continuous coordination with the corporate strategy and operating segments’ goals.

• GRI indicator: Role of the highest governance body in economic, ecological and social impacts, risks and opportunities (G4-42)

Assistance to the Executive Board and Supervisory Board on sustainability issues is also provided by the Advisory Committee for Environmental and Social Responsibility. This committee consists of independent internal and external experts as well as employee representatives. For guidance on issues related to social commitment, the Executive Board can also call on the external experts who serve on the advisory board of the EVN Social Fund (details on these advisory boards can be found below.). The stakeholder group “customers” has been represented by a committee since 2011, whose function is to intensify the customer dialogue. The Customer Committee has 24 members who are selected to represent the interests of consumers from Lower Austria. The committee’s members serve two-year terms, whereby the last appointments were made at the beginning of 2013. The direct exchange of ideas and opinions between various stakeholders and the members of the Executive Board also takes place in a roundtable discussion as part of the regular stakeholder surveys. The needs and concerns expressed by the stakeholders flow directly into EVN’s strategy in the form of the strategic areas of activity that are derived from the surveys.

• GRI indicator: Consultation processes between stakeholders and the highest governance body (G4-37)

The Supervisory Board is supplied with in-depth information on current economic, ecological and social issues that are relevant for EVN at an annual closed conference. Compliance was the main subject of this conference in 2013/14. The Chief Compliance Officer reports to the Supervisory Board twice each year on critical issues and concerns at meetings of the Audit Committee. Independent of these meetings, the Supervisory Board receives additional information on any initial suspicions of violations that may represent an economic risk to the company or damage to its reputation. The Audit Committee of the Supervisory Board is informed of any initial suspicions of violations that may have material economic effects or cause damage to the company’s reputation. The chairman of the Supervisory Board is notified directly if there are any suspicions of severe compliance violations involving the Executive Board members or if the Executive Board fails to take action. No critical issues were reported to the Supervisory Board during the reporting year.

• GRI indicators: Measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental and social topics (G4-43); Process for communicating critical concerns to the highest governance body (G4-49); Nature and total number of critical concerns communicated to the highest governance body (G4-50); Anti-corruption training (SO-4)

Stakeholders have the opportunity to express their views on management’s remuneration and the remuneration scheme at the Annual General Meeting.

The remuneration scheme for key EVN managers was adjusted as of 1 October 2010. Among others, the adjustment included the following points:

• Inclusion of value-oriented indicators
• Inclusion of sustainable development factors for the respective areas

• GRI indicator: Stakeholders’ views on management re muneration (G4-53)

Ethics and integrity

EVN‘s dynamic international expansion in recent years was also connected with new challenges in the areas of cultural diversity, values and business ethics. In order to support the development of a shared corporate culture across language barriers and national borders, EVN issued a Code of Conduct. It explains the most important principles and rules of conduct of EVN’s corporate culture to its employees and is available in German, English and the languages of the subsidiaries in Bulgaria, Macedonia and Russia. The EVN Code of Conduct is regularly adapted to reflect current developments, above all changes in legal requirements. It is based on internal management directives and the following international regulations:

• UN Global Compact
• Universal Declaration on Human Rights (U.N.) and the European Convention for the Protection of Human Rights and Fundamental Freedoms
• ILO (International Labour Organisation) Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy
• ILO Declaration on Fundamental Principles and Rights at Work
• OECD Guidelines for Multinational Enterprises
• OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
• Austrian Corporate Governance Code

• GRI indicator: Values, principles, and norms of behaviour (G4-56)

In 2011/12, EVN‘s compliance organisation was modified and fundamental decisions were taken concerning the implementation of a compliance management system (CMS). The Corporate Compliance Management Department (CCM), a staff department reporting directly to the Executive Board, was created to establish, operate and further develop the CMS.

• GRI indicator: Internal and external mechanisms for compliance and integrity (G4-57)

• Additional information on the compliance organisation can be found in the corporate governance report

Extensive training for employees

Following the implementation of the modified compliance organisation in 2012/13, activities in the reporting year focused on training sessions for employees as well as the introduction of internal procedures for advising and reporting concerns related to ethical and legal behaviour. The participation of managers is vital for the establishment of a sustainable compliance culture due to their functions as role models and contact partners for compliance-relevant concerns. Five-hour, interactive and dialogue-oriented workshops were therefore held in October 2013 for roughly 100 managers to create a greater awareness for this issue. Similar workshops were held for the managers in EVN’s South Eastern European subsidiaries from February to April 2014.

In order to spread and anchor CMS as strongly as possible throughout the Group, the training for employees built directly on the managers’ courses. The compliance officers responsible for the respective departments explained EVN‘s CMS and the related structures and processes to employees. The minimum standard for these courses, which were held in small groups, was 2.5 hours. The content was based on the ten subject areas defined in EVN‘s Code of Conduct. A previous risk analysis led to the focus on the following issues, which were discussed by means of specific examples:

• Customers
• Capital market and investors
• Integrity and avoidance of corruption
• Data protection and confidentiality

• GRI indicator: Total hours of employee training on human rights policies or procedures (HR2)

The compliance box “Compliance. It´s good energy.“ was developed for these training courses. It can be used as a collection of resources or reference work and was distributed to all participants at the start of the training course. The box is available in German, English, Bulgarian, Macedonian and Russian. This compliance training placed a special focus on the confidential, anonymous whistle-blowing system installed by EVN to facilitate the reporting of concerns related to unethical or illegal actions. The whistle-blowing system is also an important element of the compliance box. Both compliance training and the compliance box provide detailed information on reporting procedures that are available to employees in the EVN Intranet and to business partners via email under compliance@evn.at/mk/bg. The entry form for reporting in the EVN Intranet is also available in the languages mentioned above. A Group directive defines the procedure for dealing with the reported concerns and protecting the whistle-blower against reprisals.

Compliance training courses were held for roughly 6,000 employees and over 200 managers in ten different languages at more than 100 different locations in 2013/14. Plans call for the completion of these courses by the end of the 2014 calendar year.

New compliance-relevant content and issues are reviewed on a regular basis. In accordance with the risk assessment, they are processed and included in the compliance box as required. Training courses on special subjects provide additional information for areas exposed to increased risk. The EVN Intranet and e-learning tools are also available to all employees as a means of strengthening the awareness for compliance and reinforcing the course content. A specific plan sets the main points for communications on current compliance issues.

• GRI indicators: Anti-corruption measures trainings (SO4); Reporting concerns related to integrity (G4-58)

• The EVN Code of Conduct is available under http://www.evn.at/Code-of-conduct.aspx.

• For information on EVN’s capital market communications, see Investor Relations

CSR organisation

The sustainable orientation of management and the related goals represent central elements of EVN’s corporate strategy. The actual integration of sustainability issues is the responsibility of the CSR steering committee which includes also members of the Executive Board. Organisational and content-related support is provided by the CSR advisory team, which serves as an interface and link between strategic decisions and operational implementation. This team supports the departments in developing goals, measures and standards, which are then approved by the CSR steering committee. It also identifies current trends and developments in the area of sustainability. The Corporate Social Responsibility Management is represented by the spokesman of the Executive Board.

The involvement of all corporate units and the identification of the CSR development opportunities in these units are ensured by the nomination of CSR network officers in all departments. These network officers ensure that previous CSR activities are regularly reviewed and current activities and opportunities for improvement are discussed and realised. The handling of CSR issues at EVN’s subsidiaries in Bulgaria, Macedonia, Croatia and Germany is supported by the implementation of individual CSR organisations that are based on the Austrian model.

A stakeholder survey was carried out in 2013/14 to review the strategic areas of activity and their prioritisation. The results led to the modification and further development of EVN’s materiality matrix. Within the framework of the regularly scheduled CSR target discussions, the survey results were also discussed internally with the specialist departments. The related goals and measures were adjusted where necessary and should help to further strengthen and anchor the CSR strategy in the core business and support the implementation of an annual structured process to include stakeholders. The CSR measures in the individual corporate units are also monitored annually. In addition, in the reporting period a workshop was held with the CSR network officers to define further measures to increase CSR awareness and to describe CSR examples. One result of this workshop was a project to integrate the subject of CSR in existing training programmes. A working group was also established to improve the understanding of human rights demands on EVN.

• GRI indicators: Sustainability management process – responsibilities and process for delegation by the highest governance body (G4-35); Report of environmental, ecological and social topics to the highest governance body (G4-36)

• Additional information on the CSR organisation can be found under www.responsibility.evn.at.

Advisory Committee for Environmental and Social Responsibility

EVN’s Environmental Advisory Board was already established in 1992 to advise the Executive Board on environmental and sustainability issues. In 2006, the scope of its activities was expanded to include social responsibility and its name was changed to the current designation of Advisory Committee for Environmental and Social Responsibility. The 28 members meet twice each year to discuss current issues.

The meetings in 2013/14 focused on the following topics:

• The electricity market in transition – surplus and competitio versus shortage and government intervention
• The energy transition and the EU’s energy and climate goals
• Power to Gas – the technology of the future?
• Innovation in the energy industry – the role of EVN

• The members of this committee are listed here

• Also available under www.evn.at/Advisory-committeefor-environmental-and-social-responsibility

EVN Social Fund

The EVN Social Fund was created at the end of September 2008 to bundle and increase the transparency of sponsoring activities in social areas. It provides sustainable support for youth institutions in Lower Austria and has an annual endowment of EUR 100,000. Decisions on the projects to be sponsored are made by an expert committee that meets twice each year. The committee members are Gabriela Peterschofsky-Orange, Head of the Children’s and Young Persons‘ Advocacy for Lower Austria, Helga Preitschopf, Federal Province of Lower Austria – Department of Social Affairs, Harald Wieser, Youth Welfare Social Worker, Elisabeth Baum-Breuer, Head of the Pottenstein Youth Centre and Michael Landau, Caritas President as the chairman. Their recommendations for the use of funds are made unanimously to the Executive Board of EVN. Twenty projects were supported during the reporting year.

• A list of the supported projects is provided in the chapter “Society“.

Control and assessment of sustainability performance

In addition to compliance with the provisions of the Austrian Corporate Governance Code, EVN’s most effective instrument for controlling its sustainability performance – and therefore also the Executive Board – is the annual process of collecting, analysing, evaluating, summarising and publishing facts and figures for sustainability reporting according to GRI, application level “comprehensive”.

EVN also commissioned TÜV SÜD, an independent testing institute, to verify its sustainability performance and the 2013/14 full report, in particular the content reported under GRI G4 and the GRI index, for the 2013/14 financial year. This verification included an interview with the members of the Executive Board on sustainability issues. TÜV SÜD issued its external evaluation of the company’s sustainability performance in the form of a management letter.

Numerous sustainability indices have added the EVN share to their listings in recent years. The companies included in these indices are audited on a regular basis. EVN has been included in the FTSE4Good Index since 2002 and in the Ethibel Sustainability Index Group (ESI), which covers ESI Global and ESI Europe, since 2005. In 2005 the EVN share was included in the Austrian sustainability index VÖNIX, which represents Austria‘s leading listed companies for social and ecological performance. Since December 2010, the EVN share has also been part of the ECPI Index and the ECPI Ethical Index EMU.

A further method for the external evaluation of EVN’s sustainability performance is the continuous extension of EMAS certification to additional power plants and heating plants. EVN took a further step in this direction during the reporting year with the auditing of the Korneuburg thermal power plant according to EMAS/ISO 14001 in March 2014.

EVN’s internal audit department reports directly to the Executive Board and to the Audit Committee of the Supervisory Board. Its responsibilities include the audit of EVN’s procedures and business units in Austria, while comparable functions for the subsidiaries in Bulgaria and Macedonia are carried out by separate internal audit departments. The activities of the internal audit department are based on International Standards for the Professional Practice of Internal Auditing (IIA). The problem areas identified by the internal audits in 2013/14 were reported to the responsible managers together with suggestions for improvement. The implementation of the measures defined by management will be verified in a follow-up review. No serious deficiencies were identified that could endanger the strategy or goals of the EVN Group.

• GRI indicators: Evaluation of the highest governance body’s performance with respect to sustainable development (G4-44); Highest committee or position that formally reviews the sustainability report (G4-48)

• The report on internal audit and risk management activities as well as information on EVN’s remuneration scheme can be found in the corporate governance report starting.

Support for external initiatives

EVN is part of the steering committee of the Austrian Global Compact Network since 2012. Established in 2009, the steering committee evaluates the past activities and plans the future activities of the Austrian UNGC Network.

• GRI indicator: Support for external initiatives (G4-15)

Membership in associations and interest groups

EVN is a member of numerous industry-relevant organisations and associations.

• GRI indicator: Memberships in associations and interest groups (G4-16)

• A detailed list of EVN’s memberships can be found under www.evn.at/EVN-Group/responsibility/CSR-strategy/Content.aspx.