Environmental, Social and Corporate Governance (ESG)

NES SUSTAINABILITY PLAN

Introduction

NES vision is to offer industry leading, high performing, cost effective and sustainable smart grid solutions with our three tier, proven, open, multi-application platform. 

For Networked Energy Services, this means using innovation to embed the concepts of eco-sustainability and digital inclusion in our technology and throughout our business to enable the most efficient, reliable and secure delivery of energy for utilities.

We are committed to sustainable value creation by aligning our business strategy to meet societal needs while reducing environmental impact and advancing social development. This commitment is embedded in our company at every level as an integral part of customer satisfaction, innovation, a core pillar of our way of efficient operations and a fundamental part of our values and transparency.

Focus Areas for the Sustainability Management Plan 

NES recognizes that the company-wide adherence to corporate responsibility and ethics are fundamental for business sustainability and ensures this is implemented throughout our sustainability management plan.

NES Sustainability Management Plan addresses economic, environmental, and social sustainability through key focus areas such as Environment (operational and product-related), Governance and Risk Management, People and Workplace, Integrity and Ethics, and Supply Chain.

1. Environmental, Health and Safety Management 

NES is greatly committed to following stringent environment, health and safety (EHS) regulations. Therefore, NES has adopted a clear EHS Policy and has established a comprehensive Environmental, health and safety Management System (EHSMS) compliant with legislation, regulations and standards (ISO9001, ISO14001, and OHSAS18001) and codes to manage environment, health and safety risks. 

NES strives to protect our environment by providing quality and valued Products & Services that minimize any potential impact on the environment and that maximize the sustainability of the company’s supply and service capability, while protecting the health and safety of our employees within the jurisdictions in which we operate. Moreover, NES is committed to continually monitor the company’s EHS performance and to subsequently review its EHS policy with respect to future legislation and business opportunities. 

Taking a holistic, end-to-end perspective, NES EHS & Sustainability considerations and principles are embedded throughout our business value chain from development of energy-efficient products, to the sourcing of materials, through to end-of-life recycling and waste disposal enabling our customers to operate at peak efficiency and performance, and creating value for our stockholders by improving quality of life, reducing the impact of our products and operations on the environment and providing a secure and safe work environment. 

To achieve this NES has adopted a set of strategy: 

  • Develop the most advanced energy efficient smart metering system to improve our lives while undertaking proactive measures to minimize the environmental impact of both production and distribution activities, and protect health and safety. This is achieved by realizing overall reductions in the amounts of materials and parts used and waste emitted during production activities. In order to accomplish this objective, NES is working to make product designs more compact, lightweight, and efficient while simultaneously reducing the amount of defective products created through manufacturing processes by implementing quality management initiatives within our product lifecycle such as Zero Defects principle. 
  • Manage environmental risks and health and safety hazards, in an effort to improve our operations and performance, and maintain the highest levels of commitment to the health and safety of our employees and the protection of our environment.
  • Commit to meet or exceed regulatory and policies emanating from the EHSMS. We work to create a sustaining workplace safety culture and focus our efforts to continuously enhance our health and safety performance. Adopting safety and health is instilled to all third parties performing activities at NES locations including suppliers, contingent workers, contractors and all other non-NES employees.
  • As part of our design efforts we strive to make use of recyclable materials wherever possible and to minimize internal power consumption. Some examples demonstrating NES’s use of recyclable materials in NES meters include the meter cover and terminal block. The meter cover is made of ABS/PC plastic and is recyclable. The terminal block is made of polycarbonate plastic (with brass inserts) and is also recyclable. In fact, based on the weight of NES meters, approximately 80% of the meter is recyclable. In addition, NES uses recycled, recyclable, and/or reusable materials where practical for our product packaging and shipping.
  • Identify areas of continuous improvement associated with our approach to product development: NES conducts Life Cycle Assessments (LCA) when designing its eco-efficient and recyclable products to quantify and measure the environmental impact associated with all stages of its product’s life cycle as well as constantly seek improvements in design, material selection and operating characteristics such as energy efficiency. 
  • Examine non-product specific aspects of the lifecycle including:

      - Proper planning, operation and safety practices such as eco efficient product packaging and transport economy are used throughout the shipping process.

      - Reducing the end-of-life environmental impact by providing product developers with design guidance and best practices for disassembly, reuse and recycling.

  • Meet our corporate social responsibility by enhancing environmental awareness, improving safety, and ensuring compliance with environmental legislation.
  • Raise awareness, and regularly refresh communications on key environmental and safety values and behaviors and provide appropriate training and education for all employees regarding EHS issues, programs and performance. 
  • Actively promote recycling both internally, amongst our customers and suppliers aiming to achieve zero emissions by improving recycling rates. 
  • Work with our suppliers to establish EHS performance goals in accordance with our ethical behavior and environmental principles and perform regular. 
  • Continuously improve EHS performance of our operations. 
  • Collaborate with customers, suppliers, external stakeholders to help NES implement effective programs that achieve highest level of environment and safety performance, and are better for business while sharing best practice and partnering on sustainability issues.
  • Integrate this EHS commitment into the company’s decision-making processes and strive to continuously improve our commitment to the above-stated principles through exercise of our EHSMS, improved technology and production changes. 
  • Keep up to date our EHS management system and policy. 
  • Regularly monitor the EHS aspects of NES’ products, services and/or activities, identify key EHS risks and impacts, develop operational controls, and prepare emergency response and contingency plans to ensure that the EHS objectives and targets for quality, health, safety and the environment are being met. NES facilities provide planning, equipment and training for on-site incidents and our employees work with local community safety units to prepare for combined response.


NES is fully aware of all relevant EHS issues and their potential impact and will strive for ever- improving EHS performance, stepping up efforts to innovate energy and environmental technologies contributing to the realization of a sustainable society that is safe and secure.

2. Governance and Risk Management

a) Corporate Governance

NES is managed by a Board of Directors that establishes guidelines for Board operations and ethical conduct, and supports all of the company’s initiatives that cover a scope beyond the limited part of what is meant by ‘sustainability’. 

The President and CEO, appointed by the Board of Directors, is responsible for handling the day-to-day management of NES in accordance with instructions from the Board. The President and CEO is supported by the Executive Team.

The Executive Committee is responsible for general management of the Company and Group governance, under the authority of the Chairman and Chief Executive Officer.

The Corporate Governance Committee includes representatives from all areas of the company. 

The Corporate Governance Committee periodically reviews the Company’s governance principles and practices, the company’s sustainability priorities, strategy and KPIs, track progress, solicit stakeholder feedback in collaboration with the CEO and Leadership team and provides oversight to the Board of Directors on global challenges, emerging and critical sustainability issues for the company and recommend changes when deemed necessary. 

b) Risk Management

Embedding corporate responsibility policy and sustainability to our business activities need a robust systematic approach to risk management to cover health and safety, social environmental and security impacts.

NES risk management is based on identifying, analyzing, managing and monitoring critical risks as well as taking action plans and sharing of best practices across our business operations and processes. Proactive management and effective control of risks is key to our success as it creates long term value and strengthens our business performance and resilience. 

To reinforce its risk management system, NES has adopted a structured approach where the Board is responsible to oversee public policy, EHS and sustainability critical risks as well as to prioritize risk management activities that need to be reviewed regularly. The corporate Governance Committee is responsible for oversight of the Company’s operational, financial, strategic and business reviews risks including conflict of interest policies, codes of ethics, and compliance with laws and regulations. Every business unit along with its employees is in charge of identifying, managing, monitoring, mitigating and controlling risks and depending on the probability and severity risk they escalate as appropriate. Risk owners within each business unit are responsible to report key risks to the relevant committee at least annually. 

NES supports its employees to implement a robust risk management system by ensuring they receive adequate trainings, follow rules and procedures and practical guidelines. 

Our risk management approach is handled within the Cycle of Risk Management, an on-going iterative process that is integral to the overall business continuity. Key components of this cycle are:

  • Initiate: Development of strong risk management policies and identification of existing and potential risks to the present effort.
  • Plan: Development of an effective risk management plan to identify, categorize, quantify, prioritize, and respond to risks and plan for contingency risks
  • Change Management: Identifies and controls changes that could affect certain requirements, regulations, or add risk. Process should evaluate change, require change initiator to conduct risk assessment and implement controls. Approval process to implement a change is necessary.
  • Execute: Execute the overall risk management plan and individual plans for specific risks that occur during the process
  • Monitor and Control: Determine whether the implemented Risk Response Strategies are achieving the desired objective and provide corrective action if necessary
  • Close: Close risks and issues as they are resolved and develop after action responses to further enhance risk mitigation in the future
  • Document and Record Control: Standardizing documents as a process for ensuring the latest documents are being used, documents are being reviewed periodically, and new documents are properly approved.  
  • Metrics: Create a set of metrics to drive improvements, focus people and resources on what is important and transfer of best practices

NES risk management system address and mitigate the wide range of risk potential across our business and operations including the four main categories below: 

Strategic Risks

Risks that affect or are created by an organization’s business strategy and strategic objectives and are associated with Corporate governance, Mergers and acquisitions, Intellectual property, Innovation and Technology, Competitors, Marketing & Sakes, Program and Project, Sustainability and other Strategic risks. By effectively managing strategic risks, NES can support the development and execution of business strategy and help creating value by maximizing gains and improving competitive position

Financial Risks

NES addresses a variety of financial risks including risks in areas such as liquidity, assets, investments, markets, volatility in foreign currency exchange rates and interest rates and commodity price, credit and others, establishing a sustainable infrastructure to meet its financial  and contractual obligations and manage the ever-changing regulatory and business environment while driving best performance and results year over year

Legal & Compliance Risks

Legal and compliance risks relate to legal and regulatory compliance and are enacted to ensure that organizations operate fairly and ethically, meeting its sustainability targets and compliance with environment health and safety laws and regulations. NES proactive regulatory risk management is implemented through specific policies, procedures and protocols to ensure that NES is in compliance well in advance of regulatory changes. The various types of legal risks that can impact our business includes Corporate, contract, disputes and regulatory. Dedicated procedures and business continuity plans are put in place to manage the appropriate response to identified key risks.

Compliance risks, also known as integrity risks include those associated with:

  • Environmental, Workplace Health and Safety Risks. NES has an integrated EHSM system that addresses process, compliance, and culture and is assessed periodically. We focus on managing risks associated with evolving regulatory environment related to carbon reduction, renewable energy standards and the need for increased sustainability by providing our energy efficient solutions and best management practices to reduce risks.
  • Social responsibility and Corruption Practices: NES CR and Sustainability program is in compliance with UN Global Code of Compact and ensures its employees are adhering to it.  
  • Quality: NES manages products and services risks to ensure we are in compliance with laws and regulations and meet or exceed the industry expected standards.
  • Process risks: NES actively monitor and manage the processes risks in order to prevent failure to meet our responsibilities to our customer and partners. 

Operational Risks

Operational risk can result from a breakdown of processes, inadequate activities by people, inadequate systems or from external events that affect the operation of our businesses. It includes information management and data protection and security, including cybersecurity, supply chain, product life cycle and execution, product safety and performance and other risks. 

To minimize the risks arising from operational challenges, NES has put in place operational processes to ensure that our product design, manufacture and services that we provide, meet the most rigorous quality standards. NES produces highly reliable, future proof, secure products and specialized services that uses leading edge technology. Our competitive position in the market is dependent on our ability to deliver innovative products and services, to customize them when needed and to anticipate and respond to market, regulations, eco environmental requirements as well as technological changes driven by emerging risks and to deliver products, services in line with our projected performance and cost estimates.

To protect customer services and consumer information, NES security follows a risk-based approach that tackles the real exposures and risks arising from a fast-moving threat-landscape. NES goes beyond merely achieving compliance to standards, because standards are slow-moving compared to the innovation of cyber-criminals and cyber-terrorists. Protection of our customers’ information and service reliability remains a key focus for our security initiatives. NES Intrusion detection and response provides another mechanism to identify unauthorized access, limiting exposure to attacks and quickly locking out the attacker. Expert guidance is an important theme for NES as we continue to proactively conduct risk and vulnerability assessments based on our extensive experience of the changing threat landscape. Finally, with cyber-security regulations (such as GDPR) coming into effect in Q2 of 2018, NES offers its customers help in understanding how these regulations relate to their own obligations to comply.

Our reliance on third-party suppliers, manufacturers and service providers exposes us to volatility in the prices and availability of these systems and services. To manage these risks, NES deploys a structured supply chain continuity program that develops guidelines, processes, tools and technology to support supplier continuity planning and tackles their financial, operational, environmental, and safety requirements. We also engage with our suppliers to identify, assess, manage and mitigate risks associated with EHS, quality, capability and sourcing issues and evaluate potential back up plans.

At NES, we believe that sustainability at its core is about analyzing, managing and mitigating risks and thus we ensure that quality assurance process is incorporated as a control mechanism over the risk management process. Quality assurance attributes that are followed during the risk management process are:

  • Strive to highlight all risks and their subsequent decisions through documentation and tracking on a centralized log. Develop a complete audit trail of the risks.
  • Standards and procedures involved with the risk management process are being followed.
  • Risk status report is current.
  • Actions from the risk management process provide better quality control.
  • Corporate governance committee and each business unit is aware of all the risks and their potential impact on the business and operation.

3. Supply Chain

NES is fully committed to promoting sustainability throughout its supply chains and proactively works with its suppliers to support their adherence to sustainable business practices and share its best practices to forge balanced, mutually beneficial long-term relationships with them. We focus on purchasing components, products, software and services from the right suppliers who share our values and principles in all of the areas of social equity, ethics and environmental protection while ensuring they are operating according to accepted industry standards aligned with our policies and internal processes. 

NES holds its suppliers to highest standards and expects them to provide a significant and sustainable value contribution for the success of its business and to align with a set of requirements as below:

  • Comply with the UN global compacts principles and Commit to the Electronics Industry Citizenship Coalition (EICC) Code of conduct.
  • Meet certified international standards such as ISO 14001 for environment and OHSAS 18001 for health and safety.
  • Adhere to Sustainability performance. 
  • Highest Capabilities in terms of On-time delivery, Service, Flexibility, Costs, Technical innovation, Quality, Overall business strength and productivity. 

NES tracks compliance with these standards as part of our risk analysis and supplier assessment processes and strongly encourage suppliers to implement or enhance their sustainability practices based on them. To effectively promote sustainable practices and behaviors throughout our supply chain and drive improved performance, NES has adopted a comprehensive approach to responsible purchasing that stands on 3 pillars: 

  • Regularly maintaining an open dialogue with suppliers, communicating clear sustainability requirements and managing their ongoing performance across a broad set of criteria.
  • Evaluate suppliers’ sustainability performance through ratings, onsite audits and a self-assessment questionnaire concerning their engagement in the main areas of corporate responsibilities and environmental maturity.
  • Support Suppliers improvement efforts whose performance is not at the expected level.

At NES, we strive for a best-in-class supply chain that enable us to move at the speed of our customers’ needs and help us deliver the right solutions in the right way, while always maintaining the highest levels of quality and meeting our stances on social responsibility and ethics. 

4. Workplace, Inclusion and Diversity

At NES, the success of our company is driven by diverse and highly skilled workforce, customers and communities that supports the development of innovative approaches to a wide range of business and technological challenges. We believe innovation is strongly linked to diversity. Therefore, we are committed to creating a global workplace that encourages gender, cultural and generational diversity and embraces inclusion. 

We believe that our employees’ knowledge, skills and integrity are one of our most valuable assets and are key to ensuring NES’s future success. For that we focus on: 

  • Bringing diversity to our leadership positions as well as our overall workforce.
  • Bringing together the best talented and enthusiastic people from a variety of backgrounds and cultures.
  • Building a gender intelligent organization by attracting, developing and retaining more women as part of our overall workforce and at all levels of our management team.
  • Supporting competence development by creating a stimulating environment of continuous learning and enabling a work culture that supports our people so they can reach their greatest potential.   
  • Encourage more open collaboration throughout the organization by using internal social networking platform to enable employees throughout the company to share, collaborate and exchange best practices on each other’s expertise and talents.

5. Integrity and Ethics

NES is committed to conduct business with integrity and with the highest ethical practices and standards of behavior. To achieve this NES has a comprehensive Ethics & Compliance program that sets our fundamental policies, directives and practices for every NES employee in interactions with each other, customers, communities, and other stakeholders. 

Key elements of this program includes:

  • NES Code of Conduct that describes how employees fulfill the requirements for ethical conduct and compliance with company policies as well as all applicable laws and regulations. It also reflects our commitment to the UN Global Compact’s principles and the United Nations’ Guiding Principles on Business and Human Rights (UNGPs) and guides employees’ relationships among each other and with external stakeholders.
  • Regularly communicating and reinforcing our commitment to ethics and compliance with applicable laws, rules and regulations, proper handling of proprietary data and information, and accurate financial reporting.
  • Annual all-employee training to ensure that every employee is aware of and following the program.
  • Risks audit, assessment and mitigation plans to further optimize and streamline our compliance processes while preventing and detecting violations of law, regulation and company policy, and cultivating an ethical business culture throughout the company.
  • Policies, Procedures and controls including zero tolerance policy requiring 100% integrity in all business practices including adherence to the law and to our own internal regulations.