Focusing on due diligence and managing potential risks at Ørsted

Ørsted is a major Danish company that develops, constructs, and operates offshore and onshore wind farms, bioenergy, photovoltaic and energy storage facilities as well as facilities for the production of renewable hydrogen and green fuels. Ørsted works committed with due diligence within their own organization and in business relations. Ørsted has identified and work to prevent, mitigate or avoid a number of risks related to their business activities that may be causing negative impacts.

An area Ørsted has chosen to focus their efforts on is labor conditions for workers on vessels in their value chain. In the shipping industry, cases have been discovered where workers have been subjected to discrimination, bullying or harassment in the workplace. Hence, this is a particular risk in the industry. For this reason, Ørsted has initiated a campaign aimed at their suppliers. The campaign creates awareness of the challenges surrounding labor conditions on vessels amongst existing suppliers. It also targets suppliers to ensure that they take specific actions to prevent discrimination, bullying or harassment from occurring.

The campaign includes several initiatives. For example, Ørsted has forwarded a letter of expectations outlining their view on labor conditions for employees on the vessels. In connection, a document with guidance and examples of initiatives and best practices has been sent out. Suppliers may refer to this document to meet the expectations. In addition, Ørsted conducts interviews with selected suppliers to understand their work and the actions taken to manage the risk of discrimination, bullying or harassment on their vessels. Ørsted also trains employees, e.g. marine inspectors, who are already working on the vessels. This enables them to detect possible risks in the working environment and check if measures are in place to avoid and address incidents.

As part of Ørsted’s work to assess and manage negative impacts, the company has incorporated lessons learned from the campaign into their process for selecting and signing contracts with new suppliers. As a result, specific questions about labor conditions are now assessed during the evaluation of new suppliers. Besides providing insight into existing suppliers’ effort to avoid discrimination, bullying or harassment in the workplace, Ørsted’s supplier interviews also serve as an evaluation loop of the initiatives implemented. The current campaign is the second round focusing on labor conditions for workers on vessels in the value chain. The interviews are therefore also used to evaluate the effectiveness and progress of Ørsted’s efforts.

Consequently, Ørsted points out the importance of focusing on managing the risks identified in your due diligence process. A key take away is to ensure the continuous follow-up on the impact of the initiatives initiated – may it concerns your own processes, new or existing business relationships.