Statkraft

A. The main facts about the activities of the company.

Statkraft is Norway’s largest and the Nordic region’s third largest power producer, mainly producing renewable energy such as hydropower, wind power, gas-fired power and district heating.
It is wholly owned by the Norwegian state. 69% of its capacity is in Norway, while the rest is installed abroad. The company employs 3800 persons and is active in more than 20 countries.

Statkraft is actually Europe’s biggest producer of renewable energy. 96% of the power production in 2016 (66 TWh) came from renewable energy sources. They are also a leading international player in hydropower as well as engaging in the development of wind power.

Furthermore, Statkraft develops hydropower in emerging markets. This is sometimes done through BOOT- projects, meaning that they build, own and operate a plant in a foreign country as well as extracting profit from it. Then after a period the plant is transferred to the public-sector partner they were collaborating with in that country. This is a way of helping to build infrastructure in developing countries.

B. The Ethical challenges this company is addressing.

Statkraft operates in many different countries, among them Brazil, Perú, Albania, and India. The multinational aspect makes it more demanding to always act ethically, either because the company may face new situations that they do not know how to handle, or because of issues related to cultural differences.
The main problems they are facing are:

Corruption
Corruption is a substantial challenge facing the company since they have operations in developing countries and countries where corruption is a normal way of doing business.
In their annual report from 2016, Statkraft informed of the suspicion that there may have been incidents of corruption related to Desenvix Energias Renováveis, a Brazilian company in which Statkraft owns 81 percent of the stocks. The suspicion was reported to both Brazilian and Norwegian authorities.

Ensuring secure working conditions at projects abroad
Some of the countries in which Statkraft operates may have poor infrastructure and low security standards. Therefore, it is important that they make sure to provide adequate security for their employees. There was for instance a problem at the Devoll-project in Albania in 2014 where three workers died in a rockslide.

Building and running plants without harming local communities and environment
Another problem facing energy producers is acquiring land in a location that suits their needs, especially if there is a local community with people living on or near the location. In that case, there are several aspects that need to be considered, for example that the land is acquired in a legal and ethical manner, not forcing people off their land. Another problem is making sure that the plants and production processes do not harm the environment, for instance by draining or contaminating the local water supply.
Statkraft had a challenge building the Banja installation in Albania, because they had to acquire already inhabited land. To solve the problem, they set up a team to work on a program of «Livelihood, Support and Development», meaning to work with the local people to help them move to a new area and build new houses. Instead of simply paying the people for their land, the Statkraft team must actually cooperate with them and for example help them set up new businesses.

C. What makes you believe this company is really ethical and why you trust it?

They engage in various CSR activities, and include these results in their annual report
Statkraft plans and evaluates their CSR activities as a part of their annual report. Here they describe their activities, evaluate them, and set goals for future achievements.
The measures they take are founded on international standards such as the UN Global Compact, the IFC Performance Standards on Environmental & Social Sustainability and the UN Guiding Principles on Business and Human Rights. Being member of the United Nations Global Compact, they are committed to following the 10 principles on human rights, labour rights, environment and anti-corruption. Statkraft also takes inspiration from the principles contained in the OECD’s Guidelines for Multinational Enterprises, which cover major areas of business integrity, including human rights, environment, information disclosure, combating bribery, competition and taxation.

Furthermore, Statkraft has designed their own management system called “The Statkraft Way”, which provides guidelines on how to manage the CSR activities.
Most importantly, they use third party verification to assure that they have actually done what they claim. Statkraft has engaged Deloitte AS to conduct a review and provide a limited level of assurance on their CSR report. The review and assurance is carried out in accordance with the assurance standard ISAE 3000.

The CEO arranges a conference with international scientists, politicians, business leaders, etc to discuss climate issues
Christian Rynning-Tønnesen, the CEO of Statkraft, is personally enganged in issues relating to the climate and how to produce energy in a green way. For this reason the company has been arranging a conference “The climate roundtable”. Here they have invited international scientists, politicians and business leaders to discuss international strategies on climate following the Paris climate accord, responsible leadership, etc. The third and most recent round of the conference was arranged in March 2016.

They have a code of conduct giving the employees instructions of how to conduct ethical business, as well as a "whistleblowing" arrangement to discourage employees from breaking the code of conduct
Statkraft has a Code of Conduct containing detailed internal rules and guidelines for business ethics and anti-corruption, giving the employees guidelines on how to act ethically in different situations. The company has zero tolerance for corruption, both direct and indirect. That means that they have strict rules applying to the gifting or receival of business courtesies, especially when involving public officials.
The company also assesses every market they enter. Some of the markets where Statkraft operates rank high on Transparency International’s Corruption Perception Index, therefore particular care is taken when doing business in these markets.
Furthermore, they give necessary training in anti-corruption to all employees. The training is done so that it suits each market according to its risk profile, as well as the position the employee holds in the company. A further step in preventing corruption is the whistleblowing channel set up by Statkraft so that employees and external parties may anonymously report suspicions of or violations of the Code of Conduct. This does not only count for actions of corruption, but also violations of environmental or human rights regulations.

D.The possible challenges facing the company in the future and how you think this company may improve.

Firstly, if Statkraft keeps expanding and getting bigger it may become harder to control the business conduct abroad. Especially if they expand to less developed areas, such as Africa. Until now they have operated in moderately developed countries.

Secondly, Statkraft is currently wholly owned by the Norwegian state. However, the current government is considering partly privatizing the company. This could potentially change the company’s perspective towards being more concerned with pleasing the shareholders and less interested in the ethical aspects of their business.