Ørsted

The Board of Directors oversees our risk management in general and have delegated the oversight of our enterprise risk management risks to the Board's Audit & Risk Committee. The Board of Directors has established an Asset Project Committee, which has regular updates on project execution and monitoring of risks as its key focus. Risk reviews are being carried out for selected projects and reported to the Group Executive Team and the Board of Directors. Overall ownership for all mitigating actions for individual risks identified as part of the annual risk assessment rests with a member of the Group Executive Team.

The Board of Directors has established an Asset Project Committee, which has regular updates on project execution and monitoring of risks as its key focus. Risk reviews are being carried out for selected projects and reported to the Group Executive Team and the Board of Directors. We regularly report the status on project execution progress and project risks to the newly established Asset Project Committee.

To strengthen a successful integration of sustainability into the business, we updated our sustainability governance with a clear accountability and leadership focus at the Group Executive Team level. We continued to push for the further integration of sustainability into our business – to support that sustainability impacts, risks, and opportunities are consistently considered in decisions, ranging from what we source to how we develop, construct, operate, and decommission our projects. As part of this, we began to further detail and develop roadmaps – to break down our ambitions into structured short- to medium-term actions and milestones. Going forward, this will support that all relevant business functions have a strong understanding of their roles in and responsibilities for executing on sustainability.

Our 'Enterprise risk framework' sets out the general principles, the roles and responsibilities, and the main processes by which all risks must be identified, assessed, managed, monitored, and communicated throughout the Group. This framework is being strengthened to support consistent processes for managing risks at Ørsted and to enable informed decisions on risk-taking to be made. Risk assessment is carried out on an ongoing basis in all business segments and regions as part of our daily business operations. In addition, we have performed an annual risk assessment with the overall objective of identifying and reporting on our most significant risks. This is carried out through an assessment of the main risks across all business segments, regions, and selected staff functions. An assessment is made of the potential financial impact of the main risks, which are then consolidated and evaluated at Group level.

We create value by developing, constructing, operating, and owning renewable assets and by providing sustainable energy products to our customers. Our portfolio includes offshore and onshore wind farms, solar farms, energy storage, and heat and power plants. We develop our pipeline of renewable assets, we construct them based on thorough supplier selection and local content adherence, and we operate our large portfolio. We enter into long-term power purchase agreements with strategic partners, and we manage and optimise our large portfolio of renewable assets and partnerships. We have made it a core commitment to develop, construct, and operate our renewable assets in an environmentally and socially sustainable way, which helps de-risk projects, enhance our license to operate, and drive lasting, positive change for society – through employment opportunities, community support, and enhancing nature. Ørsted's vision is to create a world that runs entirely on green energy. Our strategic aspiration is to be the world's leading green energy major. This aspiration builds on three strategic pillars: to be one of the world's leading developers, constructors, and generators of renewable assets; the leading talent platform in renewables; and globally recognised sustainability leader.

Local people and businesses have a vital role to play in the growth of the renewable energy industry. In the US, we developed a workforce development programme that has provided 335 union workers with the necessary credentials for working offshore. In connection with the construction of Hornsea 3 in the UK, we have launched a community benefit fund that will distribute up to GBP 7 million over ten years to invest in the region's future. In 2024, 21 social and environmental groups were selected by an advisory panel formed of local representatives as the first to receive grants. We consistently work to learn from and optimise the impact of our community engagements. We completed three different pilots to measure the effectiveness of the local social value we deliver. The results will help us target investments to the areas that drive the greatest local benefits.

We have identified seven of the ten ESRS topical standards under the CSRD to be material. These are 'Climate change' (ESRS E1), 'Biodiversity and ecosystems' (ESRS E4), 'Resource use and circular economy' (ESRS E5), 'Own workforce' (ESRS S1), 'Workers in the value chain' (ESRS S2), 'Affected communities' (ESRS S3), and 'Business conduct' (G1). Based on the DMA performed in 2024, the magnitude of the identified sustainability-related financial risks were below the magnitude of the enterprise risks. During 2025, we will further align the sustainability risk assessment between the DMA and enterprise risk framework.

The CSRD mandates reporting on environmental, social, and governance (ESG) practices and adherence to a double materiality assessment (DMA). These assessments are used to identify and disclose material sustainability impacts and financial risks and opportunities, inform areas for development, and track progress annually, ensuring sustainability-related financial risks are considered together with the broader risk portfolio. Managing and evaluating sustainability-related risks as part of ongoing risk management activities is essential for all companies, not least for those in the renewable energy sector. While we have worked with and reported on sustainability risks for many years, we support the added transparency and standardisation provided by the Corporate Sustainability Reporting Directive (CSRD) – and see it as a way of working in addition to being a reporting framework.