Sustainability governance
In the year 2021, ACWA Power revised its governance and management processes to better support the Company in delivering on its ambitious ESG strategy with the Board of Directors directly overseeing ESG. In line with the Company’s governance, the Board of Directors are responsible for approving the Company’s ESG strategy and targets, and monitoring and overseeing progress.
The Company’s governance framework, provided below, outlines ESG and sustainability within the overall decision‑making processes.
ACWA Power’s dedicated Sustainability and CSR function continued to drive both overall ESG strategy and the Company’s reporting to internal and external stakeholders in the year 2023.
The sustainability and CSR function will continue to enable the implementation of ESG and sustainability initiatives by:
- Developing frameworks and procedures relating to GHG inventory and ESG monitoring.
- Developing the CSR framework and monitoring its implementation at corporate and local level.
- Organising a company‑wide ‘sustainability network’ to foster commitment to sustainability and cascading it to asset level to enhance the impact of our sustainability efforts.
The role of the Board of Directors
The Board is the highest governing authority in the Company and is responsible for reviewing and approving its overall direction. This includes the review and approval of strategies and plans including, but not limited to, vision and corporate strategy, operations, ESG, funding, investments, and divestments.
The governance structure includes four respective Board Committees, established to assist the Board in fulfilling its fiduciary responsibilities by providing independent advice, guidance, and oversight with respect to their respective areas of expertise.
Underpinning our commitment to environmental stewardship, the Board has established ambitious climate objectives, aiming for carbon net zero by 2050 and a 50% reduction in Specific Emissions Intensity (t CO2e/MWh) by 2030, relative to 2020 levels, the baseline year. For each project, ACWA Power conducts an analysis of its emissions and includes the project’s impact on overall portfolio emissions in an Investment Memo, based on which the Board Executive Committee makes investment decisions. We therefore ensure that ESG factors are integrated into our capital allocation process. The Board receives regular updates, at least once per year (sometimes more frequently) with the forecast emissions for the Company up to 2050, inclusive of planned growth.
The Board conducts annual reviews of performance relative to long‑term targets and regularly evaluates ESG strategy, performance and targets. Members of the Board are proficient in sustainability practices and have the necessary skills to address risks related to sustainability issues.
Recognising that sustainability is dynamic, the Board is considering setting up a dedicated Committee to steer our ESG strategy, with provisions for quarterly reporting. Furthermore, a series of focused sessions on ‘Sustainability’ are scheduled for 2024, demonstrating our ongoing commitment to this critical agenda.