Workers in the value chain (S2)

Employment conditions, equal treatment and equal opportunities for all, and other work-related rights

Together with all our partners in the value chain, we work every day to develop and construct a reliable, affordable and sustainable energy system. The expansion and maintenance of our networks and the assets for supporting those activities result in a substantial demand for materials.

The increased workload due to the energy transition has led to more purchases of goods and services from our direct and indirect supply chain partners. That has a big impact on them. On the one hand, this impact is positive, because increased demand creates work and economic capital, and because agreements on employment conditions, such as working hours and safety, can be reached in our direct relationships with suppliers and contracts.

On the other, the impact is also negative, especially further up the chain. Higher demand means more mining of raw materials and increased production of specific materials and components. This can negatively impact the environment and working conditions. Lengthy product chains are associated with risks in terms of human rights compliance. Through them, we indirectly contribute to the impact on circumstances elsewhere.

Outsourcing, investments and production sometimes lead to an increased risk regarding the recognition and observance of norms in such areas as fundamental human rights, safety and the environment. Findings from external research also show that there are risks to workers’ rights in our supply chains. We will investigate these risks further in 2025.

Impacts, risks and opportunities

  • Negative impact – Poor working conditions in the value chain lead to a decline in the welfare of workers in the value chain.

  • Risk – Insufficient compliance with employment conditions in the value chain may lead to reputational harm and higher costs.

  • Risk – Breaches of labour rights and human rights in the value chain could lead to Alliander being held liable or fined.

Policy and approach

Wherever they are in the world, workers deserve to work in humane, decent and safe conditions. At Alliander, ethical and honest business practices are paramount. By setting criteria for circularity, carbon emissions, working conditions and the social performance of suppliers, both suppliers and Alliander will contribute to sustainability and increase the social impact of their spending. These criteria are laid down in Alliander’s Supplier Code of Conduct. This code is based on OECD guidelines and also respects the international treaties on employment conditions and working environments drawn up by the International Labour Organization (ILO).  

This code of conduct sets requirements for suppliers on matters such as the ban on child labour, human trafficking, forced labour, discrimination, safety, the environment and employment conditions. Alliander expects suppliers and contractors to comply with this code of conduct in their own business operations and in their dealings with their own suppliers upstream. Alliander is not aware of any cases of non-compliance. We also endorse the Safe Energy Networks Governance Code. 

Compliance with the code of conduct in the chain

In interviews with some large suppliers it was noted that, like us, they try to ask questions of their suppliers about compliance with the code of conduct.  We have audits performed to monitor compliance with agreements on labour rights. These are snapshots which are planned in advance. Alliander aims to promote reporting and the visibility of abuses. This requires us to form a reliable and equal partnership with our direct suppliers. 

Objectives and results in 2024

Alliander has not yet set specific objectives regarding workers in the value chain and current actions are being defined more precisely in connection with the ESRS. Each year, we review whether our direct suppliers of components we regard as critical recognise and comply with correct working and environmental conditions, in accordance with the Supplier Code of Conduct.  

  • In 2024, we began expanding the code of conduct to state what we expect from suppliers more explicitly. Specifying procurement criteria and vetting suppliers in the product chain is instrumental in taking our corporate social responsibility.

  • In 2024, based on an externally led review and advice, we began an improvement approach to some of our high-risk core activities, affecting the supply chains for contract work, cables and transformers.

  • Safety incidents are evaluated and discussed on the contractors platform. The purpose is to learn so that we can improve our work processes and continuously increase safety at work.

Our plans

  • Improving audit processes and increasing transparency in the whole of the value chain (where our raw materials ultimately come from) is one of the most important supply chain responsibility activities that Alliander will undertake in the next few years. Our objective is to work over the long term towards a fully transparent supply chain in which all environmental and social impacts are visible. This is the only way we can meet the OECD guidelines and eliminate misconduct from our supply chain as much as possible.

  • Alliander will draw up an inventory in the coming years of the types of workers in the whole of the value chain, including downstream workers and employees in partnerships such as joint ventures. This will also be charted geographically and we will examine on a product-by-product basis whether there is a structurally increased risk of human rights abuses, such as child labour or forced labour. Structural consultation with workers throughout the value chain is important, including on the information channels to be maintained and regular reporting.

  • By extension, we will work on policies and processes to contribute to rectification where we have caused or contributed to a material negative impact on workers in the value chain. Regular evaluations will be performed, including of the effectiveness of the measures taken.

  • In the coming years, Alliander aims to contribute to transparent procedures, instruments, culture and awareness in order to increase the likelihood that misconduct will be resolved. We also want to put safeguarding measures in place to enable workers to report abuses anonymously or obtain legal assistance and to eliminate potential abuses. 

  • Based on best practices from the sector and input from internal and external stakeholders, Alliander aims to develop KPIs with percentage targets for strategic suppliers and external contractors that have safety certification and a transparent and safe reporting procedure for abuses.  

  • From 2025 onwards, Alliander intends to improve audit processes at suppliers in the chain and bring them into line with the stricter code of conduct. This will allow a clear picture to be formed of reports of abuse and enable us to take action if required. It is important that suppliers and employees in the chain have confidence in the system, to minimise the barriers for making abuses transparent and addressing them.

Working safely is not limited to our own organisation; it also affects our supply chain partners, contractors, suppliers, customers and local residents. We are responsible for implementing measures to prevent accidents involving employees, including those of our direct and indirect supply chain partners, and members of the public. Alliander’s incident reporting system provides the technical means for incidents and near-misses involving supply chain partners and members of the public to be systematically logged. In this regard, Alliander wants work to be performed in line with specific safety protocols and standards for working with gas and electricity infrastructure, such as VIAG and BEI. Contractor and subcontractor employees must comply with these protocols and standards as well.