Case study: How Latvenergo Group creates economic value for its stakeholders
Latvenergo Group is one of the largest power suppliers in the Baltics, operating in electricity and thermal energy generation and trade, natural gas trade, and electricity distribution. Taxes paid by Latvenergo Group to the state budget, dividends, jobs created and large investments strengthen the Latvian economy, and create value for all its stakeholders. Tweet This!
This case study is based on the 2020 Sustainability and Annual Report by Latvenergo Group, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
In 2020, the economic value generated by Latvenergo Group corresponded to 3% of Latvia’s GDP. Distributed economic value reached 85% of the economic value generated, and it was distributed among Latvenergo Group’s stakeholders. In order to create economic value for its stakeholders Latvenergo Group took action to:
- create economic value for employees
- create economic value for state authorities
- create economic value for providers of debt capital
- support local communities
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With this case study you will see:
- Which are the most important impacts (material issues) Latvenergo Group has identified;
- How Latvenergo Group proceeded with stakeholder engagement, and
- What actions were taken by Latvenergo Group to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2020 Sustainability and Annual Report Latvenergo Group identified a range of material issues, such as customer satisfaction, efficiency of generation plants, general compliance and fair business, emergency planning. Among these, creating economic value for its stakeholders stands out as a key material issue for Latvenergo Group.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Latvenergo Group engages with:
| Stakeholder Group |
| Shareholder – Ministry of Economics |
| Business partners |
| Employees, trade union |
| Funders and investors |
| Educational and scientific institutions |
| Customers |
| Media, non-governmental organisations (NGOs) |
| Professional associations and sector specialists |
| Public institutions |
| Local community |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Latvenergo Group organised stakeholder workshops attended by the management of the Group and representatives of priority stakeholders.
What actions were taken by Latvenergo Group to create economic value for its stakeholders?
In its 2020 Sustainability and Annual Report Latvenergo Group reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- Latvenergo Group is one of the biggest employers in Latvia, with a total of 3,295 employees at the end of 2020. Latvenergo Group provides its employees with competitive wages and contributions to their pension fund, along with training for improving their professional skills. In 2020, Latvenergo Group paid EUR 106.0 million for employee remuneration (direct and indirect remuneration for work).
- Creating economic value for state authorities
- Latvenergo Group is one of the biggest taxpayers in Latvia. In 2020, the Group paid EUR 138.7 million to the state budget of Latvia and, in addition to that, EUR 127.1 million were paid as dividends for the use of state capital. The amount of taxes paid in Lithuania and Estonia was EUR 12.6 and EUR 7.4 million, respectively.
- Creating economic value for providers of debt capital
- In 2020, Latvenergo Group paid EUR 10.8 million to providers of debt capital and investors (remuneration for the use of borrowed capital).
- Supporting local communities
- In 2020, Latvenergo Group spent EUR 0.7 million in charity and sponsorships.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Latvenergo Group, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://latvenergo.lv/storage/app/media/parskati/2020/IGP_2020_ENG.pdf
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