As we look forward, we are continuously refining our due diligence practices. This includes enhancing pre-contractual screenings to identify potential risks early, especially for complex and large-scale projects, such as offshore wind farms. We are also developing corrective actions and tailored improvement plans together with our suppliers, where necessary. This is an ongoing effort that includes audits, supplier training, and regular follow-ups to address any gaps identified.

We are in the process of establishing a Human Rights Task Force specifically focused on strengthening our due diligence systems and governance. Additionally, we are developing corrective actions and tailored improvement plans together with our suppliers, where necessary. This is an ongoing effort that includes audits, supplier training, and regular follow-ups to address any gaps identified.

We ensure that the views and interests of affected stakeholders regarding our sustainability-related impacts, risks, and opportunities are regularly communicated to the relevant accountable person in the Group Executive Team through periodic meetings.

In our DMA, we have identified and assessed our impacts on the environment and society as well as the sustainability-related financial risks that we are exposed to and the opportunities we leverage. In total, 40 impacts, risks, and opportunities (IROs) have been assessed as material, comprising of 7 positive impacts, 23 negative impacts, 8 risks, and 2 opportunities. A high-level outcome of our DMA is shown in the matrix, aggregated per ESRS topic. Seven ESRS topics are material to Ørsted, with six of these topics having 'double materiality', i.e. they have both material impacts and financial risks or opportunities. Climate change (E1), biodiversity and ecosystems (E4), resource use and circular economy (E5), and affected communities (S3) are our most material sustainability matters, and the IROs within these topics are closely linked to our strategic aspiration to be the world’s leading green energy major.

Our material sustainability-related impacts, risks, and opportunities (IROs) across our full value chain include:

Positive impacts:

1. Renewable energy deployment (E1)
2. Local jobs and educational opportunities (S3)

Negative impacts:

1. Natural resources exploitation and land-use and freshwater-use change (E4)
2. Habitat loss from land degradation (E4)
3. Species population size decrease, and extinction risk increase (E4)
4. Use and depletion of virgin materials (E5)
5. Pollution from mining may affect communities’ health (S3)
6. Indigenous Peoples’ rights and livelihoods possibly disrespected or disrupted by suppliers (S3)

Sustainability-related risks:

1. Climate-related transition risks due to changes in political support (E1)
2. Climate-related physical risks (E1)
3. Dependence on scarce critical raw materials (E5)
4. Increased voluntary turnover (S1)
5. Possible supplier misconduct concerning forced labour (S2)
6. Local communities’ resistance and concerns (S3)
7. Increasing local content and social impact requirements in tender processes (S3)
8. Consent of Indigenous communities (S3)

Sustainability-related opportunities:

1. Renewable energy deployment (E1)
2. Biodiversity restoration, research, and innovation initiatives (E4)

Our material impacts, risks, and opportunities (IROs) are closely tied to our strategic decision over 15 years ago to transform our business model from fossil-based to renewable energy and to expand our portfolio to include offshore and onshore wind, solar, and storage solutions. The impacts are highly connected to our strategy and business model and occur through our construction and operation activities as well as through business relationships with suppliers. The resilience of our business to potential negative impacts and risks is shaped by the broader political framework for renewable energy deployment as well as effective collaboration across the value chain to achieve our commercial and sustainability ambition. While we continue to monitor developments and adapt as needed, our strategy and business model have been assessed as capable of addressing these challenges and leveraging climate-related opportunities.

While deploying renewable energy is essential for the transition to a sustainable energy system, we recognise that it has associated GHG emissions from resource extraction, manufacturing, and service operations. Therefore, we also focus our efforts on decarbonising our supply chain to mitigate these impacts. The resilience of our business to potential negative impacts and risks is shaped by the broader political framework for renewable energy deployment as well as effective collaboration across the value chain to achieve our commercial and sustainability ambition.

The impacts primarily originate from our renewable energy business activities but also partly from our legacy business relating to coal and gas. These impacts occur both through our business relationships with suppliers and through our own activities of constructing our renewable assets.

Potential impacts, risks, and opportunities were assessed across three time horizons: short term (covering the current reporting year and the next year), medium term (from the end of the short-term period to five years), and long term (more than five years).

The impacts are directly linked to our business model, as constructing and operating renewable energy assets and products require materials, and waste is generated during the construction, operation, and decommissioning phases. These impacts occur through our business relationships with suppliers and contractors, who are involved in manufacturing and extraction activities, and also through our own waste-generating activities.