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International energy generation group ScottishPower has begun assessing
the social and environmental performance of its coal and natural gas
suppliers.
The UK-based group has been reviewing its suppliers of goods and services such as turbines and transformers for some time. It has now decided to add fuel suppliers as dwindling reserves in the UK increasingly force it to seek new overseas sources of coal and gas.
The approach will be developed more fully over the next year, but the group has already brought some checks of fuel suppliers into existing credit and legal reviews. Health and welfare benefits for suppliers' staff and 'broad comparisons' of wages paid relative to national and industry averages are among topics covered. Although large amounts of coal and natural gas are still bought on international and national commodity markets, ScottishPower, along with other energy companies, is now buying more direct from suppliers whose performance can be monitored.
The group said the move was an acknowledgement that human rights and labour standards would increasingly impinge on its business as it sources fuel further afield. Three years ago it sourced about 20 per cent of its UK coal needs overseas but last year that figure rose to 65 per cent. Switches in supply are also being driven by the search for cleaner coal from Colombia, Indonesia, Russia and South Africa.
'Production for many of our major purchases will move to developing countries, making human rights issues more significant to our purchase and sourcing activities,' the company said. 'The move towards sourcing lower sulphur coal is a very tangible example of how you can take a decision on environmental grounds that then brings other challenges in the social sphere. It's something we are facing up to and is a matter of asking the right questions of our suppliers.'
The UK-based group has been reviewing its suppliers of goods and services such as turbines and transformers for some time. It has now decided to add fuel suppliers as dwindling reserves in the UK increasingly force it to seek new overseas sources of coal and gas.
The approach will be developed more fully over the next year, but the group has already brought some checks of fuel suppliers into existing credit and legal reviews. Health and welfare benefits for suppliers' staff and 'broad comparisons' of wages paid relative to national and industry averages are among topics covered. Although large amounts of coal and natural gas are still bought on international and national commodity markets, ScottishPower, along with other energy companies, is now buying more direct from suppliers whose performance can be monitored.
The group said the move was an acknowledgement that human rights and labour standards would increasingly impinge on its business as it sources fuel further afield. Three years ago it sourced about 20 per cent of its UK coal needs overseas but last year that figure rose to 65 per cent. Switches in supply are also being driven by the search for cleaner coal from Colombia, Indonesia, Russia and South Africa.
'Production for many of our major purchases will move to developing countries, making human rights issues more significant to our purchase and sourcing activities,' the company said. 'The move towards sourcing lower sulphur coal is a very tangible example of how you can take a decision on environmental grounds that then brings other challenges in the social sphere. It's something we are facing up to and is a matter of asking the right questions of our suppliers.'
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