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.’
