Sustainability
and Governance

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Governance

Alexela's management culture is value-based

Alexela's business activities are guided by values, a Code of Conduct, focus, topics, strategic objectives, and national laws and regulations.

Alexela's governance principles:
  • Alexela does not tolerate any form of corruption or bribery. We will never ask for, offer, or accept bribes.
  • By bribery, we mean offering or accepting something of value in exchange for an action that may involve extortion and profiteering.
  • By corruption we mean dishonest or illegal behaviour such as embezzlement, abuse of power, fraud, nepotism, collusion.
  • We do not engage in or facilitate tax evasion, money laundering.
  • Decisions at Alexela must be made in the best interests of the company and avoid conflicts of interest.
  • Alexela complies with competition law and antitrust rules and does not enter into discussions or agreements that involve price fixing, market sharing, bid rigging, or other unfair trading practices.
  • Alexela ensures the security and privacy of the data of its customers, employees, and business partners.

At least once a year, we publish a public report on our ESG objectives, progress, and key findings.

Alexela's ESG strategy is the responsibility of the company's Board of Directors and the Head of Sustainability. Thus, the management plays an important role in integrating sustainability into the business processes, but all employees also play an important role, as they are responsible for quality, safety, and the environment in their area of responsibility.

Employee training starts at the very beginning with a New Employees Day, which introduces, among other things, the company's values, Code of Conduct and strategic focus topics, so that everyone can work well and safely. Staff training will continue throughout their employment, in addition to sector-specific training, with ongoing general training such as cyber security, data protection, mental health, etc. training.

In order to promote an open organisational culture and internal communication, information is shared on an ongoing basis via the intranet, and regular information sessions for all employees are held and monitored via Microsoft Teams. On the intranet, all employees can easily give feedback on ongoing processes, praise colleagues and, if necessary, criticise if something needs to be done better.

Applying governance principles

Alexela adheres to ethical, fair, and transparent governance principles in all its activities, as set out in our Code of Conduct. The Code of Conduct is a compass in our daily work and decisions, ensuring that these principles are followed by all employees and partners.

Our Code of Conduct reflects our values, which help to promote a respectful, sustainable, and responsible corporate culture. By adhering to it, we ensure ethical behaviour towards nature and people. We are also committed to complying with the law, by complying with all necessary regulations in order to ensure a safe and healthy working environment where human rights are always held in high regard. For example, we ensure a healthy and safe working environment for our employees and partners by complying with occupational health and safety laws.

Alexela does not tolerate corruption or unfair competition. We do not accept bribery or unfair business practices, such as abuse of official position or conflicts of interest arising from family or business ties. All major transactions are approved by the Management Board to avoid potential problems. For example, we make sure that we do not have situations where the dissemination of inside information is used to advance personal interests.

Management Board

In 2024, Alexela AS was managed by a three-member Management Board with the following composition:

Marti Hääl

Marti Hääl

Chairman of the Board

Aivo Adamson

Aivo Adamson

Member of the Board

Karmo Piikmann

Karmo Piikmann

Member of the Board

Advisory Board

The Advisory Board of AS Alexela in 2024 consisted of four members as follows:

Hans Pajoma

Hans Pajoma

Chairman of the Council

Mikhail Kazarin

Mikhail Kazarin

Member of the Board

Andreas Laane

Andreas Laane

Member of the Board

Priit Penjam

Priit Penjam

Member of the Board

ESG illustratsioon

Sustainability

Sustainability assessment

Alexela is the most diversified energy company in Estonia. We want to actively help every household and every business. The share of renewable energy in Alexela's energy portfolio is growing with the aim of offsetting the impact of fossil fuels in households (at home), transport (en-route) and business (at destination)

The development of the company is based on a consistent focus on environmental, social, and governance topics (ESG). Addressing climate change is important, but social and governance aspects are equally important to ensure sustainable development.

Alexela's ESG strategy is the responsibility of the company's Board of Directors and the Head of Sustainability. Each area manager is responsible for linking ESG issues in his/her area of responsibility to the achievement of the area's objectives.

In order to map and better manage key ESG issues, we have carried out a double materiality assessment, taking into account both, the materiality of the impacts of sustainabilityrelated issues and their economic materiality. We involved the company's key stakeholders in the assessment process. The table below highlights the major internal and external stakeholders whose expectations and involvement are important.

Double materiality process

The results of the double materiality assessment reflect our need to pursue a sustainability strategy that aims to increase the share of renewable energy by balancing the impact of fossil fuels in business, households, and transport. This strategy will help us to develop our corporate culture and innovation.

The double materiality assessment is also reflected in our Code of Conduct, which we expect our partners to follow, in addition to Alexela employees. The Code of Conduct reflects Alexela's values, which guide us towards ethical business conduct and respect for the environment and people. All employees are required to undergo Code of Conduct training in order to create a responsible and ethical internal culture.

Activities

We have a long-standing commitment to the community and to the green transition.

Our activities include:

  • Developing less polluting refuelling solutions, such as biomethane refuelling and e-mobility.
  • Biomethane production based on the local circular economy.
  • Developing solar and wind parks.
  • Developing renewable energy storage capacity, such as the Zero Terrain pumped-storage hydropower in Paldiski.
  • Green electricity package Green Spark.
  • Involving clients through community programmessuch astree planting.
  • Promoting biodiversity, such as the Insect Drive-In project, which was rolled out across the entire network of service station.
  • Rewarding reusability in retail, such as cheaper hot drinks with reusable cups and Alexela water packaged in recycled plastic bottles.

Summary

Our activities are aimed at developing more environmentally friendly solutions and ensuring sustainability by investing in nature and local communities.

Alexela Value Chain

Click on the numbers to learn about impacts, risks, and opportunities.

Alexela value chain
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1 Positive impact
Development and provision of distributed generation and energy storage solutions.
2 Positive impact
Development and provision of renewable energy and alternative fuels.
3 Positive impact
Use of alternative fuels and waste in bioenergy production. Efficient gas management.
4 Positive impact
Ensuring safe working conditions. Valuing employees.
5 Positive impact
Employee training and development.
6 Positive impact
Safety communication. Responsible marketing practices.
7 Positive impact
Safety communication and ensuring safety.
8 Positive impact
Responsible corporate culture and value-based behavior.
9 Positive impact
Contributing to the quality of legislation through membership organizations.
10 Positive impact
Reasonable payments. Setting environmental and social conditions.
11 Positive impact
Provision of vital services, contributing to security of supply and energy security. Contributing to communities.
12 Positive impact
Development and provision of alternative energy solutions.
1 Negative impact
GHG emissions from own activities and value chain.
2 Negative impact
Energy consumption in own activities and value chain.
3 Negative impact
Gasoline vapors, micro-pollution.
4 Negative impact
Use of plastic packaging.
5 Negative impact
Large-scale transfer of resources between value chain partners.
6 Negative impact
Generation of waste in own activities and value chain.
7 Negative impact
Large-scale management of personal data.
1 Risks
Legislation in GHG emissions trading and changes in excise duties.
2 Risks
Worse financing conditions in case of poor sustainability performance.
3 Risks
Investment risk in innovative technologies.
4 Risks
Decrease in competitiveness due to lagging behind in research and innovation development.
1 Opportunities
Growth in demand for renewable energy and alternative fuels.
2 Opportunities
Growth in demand for energy storage technologies.
3 Opportunities
Development opportunities in energy technology innovation.

Our Focus Topics

The implementation of the integrated management principle is based on the following principles:
Focus diamond

Alexela's sustainability strategy is in line with both national and European standards and regulations. We take into account stakeholders who may be affected by our activities. Our current sustainability efforts are supported by various management systems certified by third parties, which are among the most important tools in our daily work.

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Energia kui teenus

Sustainability Strategy

Stakeholders

For Alexela, reliable cooperation with its key stakeholders is important. These include employees and owners, customers and suppliers/partners, the community and local governments, as well as regulators and supervisory authorities. Alexela has the strongest mutual interaction with these stakeholders.

Huvigrupid

Sustainability at Alexela

Alexela's focus topics are the development of environmentally friendly refueling solutions, the advancement of the circular economy, contributing to energy security, empowering communities, and supporting culture, sports, and charity. The focus topics are defined based on the company's highest impact areas and the input of the most important stakeholders. Within these focus topics, we monitor our activities with the greatest care, and through them, we have the most influence on eight of the UN Sustainable Development Goals (SDGs). So far, we have gathered stakeholder input through annual surveys and direct communication.

Environment

Achieving environmental objectives through innovation

Alexela is constantly changing its business and development practices to reduce its impact on the environment and apply circular economy principles. Our goals are in line with the Paris Climate Agreement and the Green Deal. We focus on reducing our CO2 footprint and give preference to suppliers whose environmental policies are compatible with our own. All Alexela employees must respect these principles.

Alexela's target is to achieve CO2 neutrality by 2030 (Impact Areas 1 and 2). We measure our CO2 footprint from 2020 and have corrected the results from last years. In 2022, we verified our baseline year, which helped to refine later measurements. Under the GHG Protocol Standard, calculations for Impact Areas 1 and 2 are mandatory for organisations, while Impact Area 3 is optional. Companies can therefore start by mapping the most immediate impacts. For Impact Area 3, a tiered approach is used, including different relevant impact categories according to data availability and capabilities. Work and activities are ongoing in this area.

Greenhouse gas footprint of AS Alexela and AS Alexela Motors

Impact Area 1: direct emissions from sources owned or controlled by the company.
Impact Area 2: indirect emissions from purchased energy.

Impact Area Source of GHG emissions GHG emissions (t CO2 eq.)
Impact Area 2020 2021 2022 2023 2024
Impact Area 1 986 1 186 1 505 2 044 1 428
Transport of fuels 845 1 001 1 285 1 663 1 220
Business trips in a company vehicle 44 63 148 375 202
Thermal energy (gas) 97 122 72 6 5
Impact Area 2 4 037 680 0 0 0
Electricity 4 037 680 0 0 0
Total Impact Areas 1-2 5 023 1 866 1 505 2 044 1 428
Impact Area 3 522 1 251 846 822 825
Business trips in an employee vehicle 36 53 112 118 95
Biodegradable waste 0 0 0 1 1
Waste 135 840 220 180 184
Black metal 0 0 0 0 0
Paper/cardboard 0 0 0 0 0
Recycled material (packaging) 0 0 1 1 2
Water consumed 6 7 7 9
Commuting 352 352 504 516 535
Total Impact Area 3 522 1 251 846 822 825
Total Impact Areas 1-3 5 546 3 116 2 351 2 867 2 253

The CO2 footprint of AS Alexela and AS Alexela Motors (Impact Areas 1-2) was in 2024 1428 tonnes of CO2 equivalent (2 044.3 tonnes in 2023), representing a 30% reduction in emissions compared to 2023 and a 72% reduction in emissions compared to the base year. The reduction in emissions in 2024 was due to the replacement of vehicles in the fleet by less-polluting. Passenger cars were replaced by CNG and electric powered vehicles, lorries were replaced by CNG and LNG powered vehicles.

The volume of emissions from upstream and downstream activities in the company's value chain did not change significantly in 2024, remaining at 825 tonnes of CO2 equivalent (822 tonnes in 2023). In 2024, we continued to improve waste sorting at Alexela, which, despite the company's expansion, helped to keep emissions from waste under control.

In 2024, the carbon footprint of AS Alexela and AS Alexela Motors decreased, which we achieved by making the company's vehicle fleet less polluting and by continuously improving waste sorting. The long-term trend shows that Alexela's carbon intensity per unit of energy sold is decreasing, as illustrated by the graph below.

CO2 footprint and CO2 intensity

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CO2 footprint (t CO2 eq.) Impact Areas 1–3
Per unit of energy sold (t CO2 eq. per GWh) right axis

AS Alexela and AS Alexela Motors CO2 footprint and mitigation plan, Impact Areas 1-2

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Graph: Alexela has set itself a target to be CO2 neutral by 2030 in Impact Areas 1 and 2. The main CO2 footprint-reducing activitiesso far have been the transition to 100 percent renewable electricity and the gradual transition of its vehicle fleet to less polluting solutions.

Transition plan for climate change mitigation

Alexela's main environmental impact comes from our energy portfolio. Environmental policies are part of our strategy to mitigate climate change. We monitor and measure the achievement of our environmental targets and publish the results in our annual report.

Our action is focused on reducing emissions, with a target to achieve CO2-neutrality 2030 (Impact Areas 1-2).

To do this we:

  • We produce and buy green energy, providing it to our customers, to reduce the use of fossil fuels.
  • We are building renewable energy production units, such as solar parks and, in the future, wind parks, and energy storage.
  • We will develop car charging points to make the transport sector less polluting.
  • We are bringing biomethane and hydrogen to the market, offering them in our own service stations and as automotive fuel.

Impact of the Regulatory Environment

Overview of the regulatory environment

Alexela has continuously invested, knowing that only by following the basic principles of democracy and fair competition can we make people's lives better. The year 2024 has shown that regulatory risks have increased. The regulatory environment is characterised by uncertainty, the impact of which on long-term investments will be felt for years to come. Investing wisely will help us to meet the regulatory challenges and to support the Estonian society. While the implementation of regulatory changes has temporarily eased revenue expectations, we will continue to contribute to Estonia's development.

The main source of uncertainty is Russia's war of aggression in Ukraine, as a result of which the European Union has made a major change to its energy policy. The fact that the EU has been slow to grasp the new geopolitical realities has added to the complexity, especially to the implementation of the 2019 Green Deal. Certain changes have not yet entered into force in Estonia.

In 2024, 15 sets of sanctions came into force, restricting access to the EU market for energy supplies from Russia and its allies. Alexela supports all sanctions that block market access for Russian energy products and has adapted its operations to democratic alternatives. We also accept our responsibility to ensure energy security independent of aggressor countries. However, there are practices in Estonia that avoid sanctions and create unfair competition. Such practices are harmful to us.

We have identified that certain market players used Russian origin LNG to avoid sanctions, creating unfair competition. We have also detected a situation where methane excise duty exemptions have been claimed twice, leading to illegal benefits. Such problems need to be addressed to ensure fair competition in the market.

Deferral of frequency reserve fees

In 2024, Alexela, together with partners and public authorities, managed to defer the implementation of the frequency reserve fee into 2025. We believe that such a fee obligation should only be implemented after harmonisation of the network charges in the Baltic States. Regulatory risks are still relevant and require cooperation between public authorities and the private sector. Our aim is to further cooperation to ensure long-term stability and to support the wellbeing of the Estonian people and energy consumers.

Regulatory risk management

Moving forward on regulatory risk management will be a collaborative process, where we will also address the following key issues: the Climate Resilient Economy Act, bringing biomethane to the market, CO₂ excise issues and the damaging of Estlink 2. We will continue to work on these issues, as mutual understanding and leadership are only possible through trusted collaboration between the public and private sectors.

Our People

Our people – our strength

Alexela employs more than 500 professionals who contribute to making the world a better place every day. Our employees interact with Estonians, both in service station café-shops, offering breaks and a choice of food, and in electronic channels, where we provide round-the-clock customer service. Whether it is advice on finding the best electricity package or quick help with a variety of problems, we're always there.

We value our people in every job position. Our value lies in our long-term employees, who share valuable experience and contribute to the continuity of the company, as well as in our newcomers, who bring new ideas and knowledge. Recruitment and management are based on the values developed in 2019, which support value-based management.

Value-based management and culture

Each and every one of our employees shares and carries forward our core values: 'I am a strength - and my work is valuable', 'We have power - and we support each other', 'We change the world - by making life in Estonia better'. These values are not just words - they are integral to our daily work. We believe that creating a value-based culture requires the engagement of all employees at every level, which is why our employees were involved in the process of developing the values from the start. It is only by working together that we can create a company where values truly live and thrive.

Employees of AS Alexela and its subsidiaries

Year 31.12.2023 31.12.2024
Number of employees 524 538
Board members 10 10
Executives and specialists 189 210
Customer service and staff 325 318
Council and Governing Board 28 28
Women 0 0
Men 14 14
30-49 y/o 11 10
Over 50 y/o 3 4
New staff*
Women 118 136
Men 47 45
Under 30 y/o 62 84
30-49 y/o 72 67
Over 50 y/o 31 30
Employee turnover*
Women 237 212
Men 96 91
Under 30 y/o 217 175
30-49 y/o 63 86
Over 50 y/o 53 42
* Includes seasonal workers

Employee well-being and development

At Alexela, we measure employee satisfaction regularly through surveys and use feedback to improve the working environment. Each year, we select three key development opportunities to create an even more supportive and motivating environment.

Our employees' daily work is based on values and the Code of Conduct. The Code defines the basic ideas of health, safety, equal treatment and respect for human rights. We believe that the safety and wellbeing of our employees is paramount. We therefore comply with all legal requirements and expect our partners to do the same to ensure a safe and healthy working environment.

The well-being and development of our employees is our priority, as we believe that the success of the company is determined by how well our people feel there. Alexela does not tolerate bullying, violence or harassment. We recruit on the basis of equality; we judge people on their professional merits.

Our values guide our everyday work. All employees are involved in defining our values, which are constantly evolving. We provide annual development opportunities through interviews and training, including 360 degree assessments for executives to focus on development needs. We also value self-development and provide opportunities for our staff to undertake vocational and professional training.

The health and well-being of our employees are important to us. So we offer sports support, medical insurance and benefits, and activities such as tennis tournaments that bring together team spirit and sporting values. We also offer competitive salaries, which are regularly benchmarked against the labour market and are always above average.

Valuing our employees is important because they are the ones who create the company's reputation and culture. In addition to everyday cooperation, we organise joint events such as Alexela Energy Day and Power Day to strengthen teamwork and a unified work culture.