HUMAN CAPITAL

Employees are PGE's most valuable asset. It is thanks to their experience and involvement that we are able to build a value-based organisation that combines social responsibility with business objectives. PGE Group is a place for people with passion and motivation. Our ambition is to be the most effective energy group in Poland. This also entails the introduction of best practices in corporate governance as regards human capital management, support for business decisions and management of productivity as well as standardisation of support processes.

INPUT

*concerns the Group's 9 key companies, employing 82% of employees of the Group

OUTPUT

*concerns the Group's 9 key companies, employing 82% of employees of the Group

OUR ACTIVITIES SUPPORTING THE USE OF HUMAN CAPITAL

• Promoting a safe work culture amongst employees through preventive activities and the exchange of knowledge and experiences.
• Provision of our employees with opportunities to raise their qualifications by participating in specialist training, workshops in soft, management and IT competences, post-graduate studies and foreign language courses.
• Update of the Human Capital Management Strategy
  • establishment of Workplace Architecture for the entire Group, which is the starting point for additional HR solutions and tools,
  • focus on improving the flexibility of costs and maintenance. Optimisation of the use of competences within PGE Group,
  • implementation of the model HR – Business Partner,
  • system of periodic employee assessments based on a Competence Model.

TRANSFORMATION OF CAPITALS

Thanks to skilful and effective use of human capital, we are able to property use our manufactured capital and increase our financial capital, which in turn is used to increase the productivity of human capital. Employee training and adapting their competences to the tasks allows us to increase human capital potential, although we are facing a challenge in the form of filling a generational gap. Appropriate use of human capital naturally contributes to growing and building up intellectual capital.

INTELLECTUAL CAPITAL

PGE's business experience and brand are values that enable us to maintain our market position and adapt to a changing world. The systems and procedures used by us allow the organisation to function efficiently and conduct business effectively in the area of electricity generation and distribution. Along with the changes happening in our surroundings, the role of research and development and innovation activities is becoming relatively greater than material values.

INPUT

• PGE employees' knowledge and skills.
• Concessions for activities related to lignite mining and the production, distribution and trade in electricity and heat.
• IT systems for infrastructure operations, customer service and support of management and communication.
• Effective procedures in place.

OUTPUT

• Thanks to the effective use of concessions and efficient procedures, we maintain a low level of generation asset failures, which results in greater availability and thus higher energy generation and sales capacity and improves national energy security.
• We have introduced a model for developing and implementing new solutions for the management of high-risk undertakings: the first portfolio companies are PiMerge S.A. - a company that is working on innovative technology to combat smog, and Scanway sp. z o.o., a company dealing with innovative ways of monitoring industrial infrastructure from the air and ground.
• We are promoting the development of electric transport in Poland and are gaining experience and competences as infrastructure operator and provider of electric car charging services - we initiated a project to launch a network of fast chargers within our distribution area in December 2017.
• Our search for innovations is aligned with the idea of transformation towards circular economy and the Polish legislative requirements concerning used car batteries. We are actively joining projects in the area of battery waste recycling. At the end of 2017, as part of a consortium with a company involved in environmental and biotechnology research, we received approval for funding for a project from the National Centre for Research and Development and we joined this project.

See how we are implementing our strategy in the innovations area

OUR ACTIVITIES SUPPORTING THE USE OF INTELLECTUAL CAPITAL

• Harmonisation and integration of the Group's IT systems, including creation, using internal resources of the Group, of the billing system that will be a groundwork for providing flexible customer-oriented offers.
• We carry over artificial intelligence projects aimed at use it in our wind farms.
• Work on an updated version of the Development and Innovation Strategy.
• Formation of special purpose vehicles:
  • PGE Nowa Energia – development of technologies and products that are crucial for the value chain, acceleration and commercialisation, PGE Group's competence centre, cooperation with start-ups, accelerators and other investors, government agencies,
  • PGE Ventures - corporate investment fund focused on the further development of businesses in their post-acceleration phase, acquiring new solutions from the market.
• Involvement in cooperation on the development and commercialisation of new technologies.
• Identification of Strategic Research and Development and New Business Areas.
• Cooperation with universities (technical universities: Silesia University of Technology, Kielce University of Technology, Lublin University of Technology, Wrocław University of Technology, Warsaw University of Technology, Rzeszów University of Technology, Łódź University of Technology, University of Łódź, AGH University of Science and Technology).

CAPITAL TRANSFORMATION

Intellectual capital is developed using financial capital. Skilful use of funds creates the Group's competitive position in the future, allowing for further growth of financial capital or increase in the value of manufactured capital due to it being used more effectively. Growing the potential of intellectual capital also contributes to the development of the Group's human capital.

SOCIAL CAPITAL

For us, social capital means good relations with the communities within the range of our impacts. Caring for good relations with local communities is a rule inscribed in PGE Group's Code of Ethics. Our Group's companies and branches are often the largest employers in their regions. Thanks to the resources at our disposal, we can noticeably get involved in local life, supporting educational, sporting and cultural initiatives. The industry in which we operate is characterised by long-term planning. Social acceptance for our activities constitutes an important element of our economic activities. We believe that in the long term only sustainable development based on partner relations is possible. 

INPUT

• Organisational culture based on dialogue with employees and the surroundings.
• Adoption of PGE Group's Code of Ethics and the resulting provisions in the Code of Conduct for PGE Group's Business Partners and the Anti-corruption Policy.
• Since 2011, we have been supporting the development of local communities, providing grants and implementing our own programmes within PGE Foundation. We help in four areas: philanthropy, employee volunteering, support projects for first-graders at primary schools - "Energy Backpack" and the "Energy of Innovation" competition for young scientists.
• PGE Energia Ciepła Foundation mostly focuses on supporting the development of culture.
• PGE S.A.'s marketing activities, understood as sports and culture sponsoring and advertising activities, including image and sales ad campaigns and other forms of brand promotion. In 2017, the Company spent PLN 49.8 million on marketing.

OUTPUT

• Employee volunteering: since the first edition of the employee volunteering programme in 2014, we completed 160 projects within 12 voivodships. These included building new playgrounds, renovating school classrooms and delivering complete equipment for kids and youth day centres. 329 employees participated in the fourth edition of the programme in 2017. Our volunteers and members of their families took 12,500 hours from their free time to do this.
• Energy Backpack: this is a continuation of a campaign started over a dozen years ago by Łódź-based electricians and consisting of gifting school supplies to first-graders. In 2017, the campaign was implemented in 10 voivodships and encompassed 3,000 first-graders. In total since the beginning of the first campaign, 15,000 kids received school supplies.
• White stork protection: our energy professionals have for many years been participating in activities intended to protect the white stork, mainly by setting up platforms on LV line pillars. So far, we have installed over 23,000 platforms within our distribution area to ensure bird safety.
• Forests full of energy: this is an in-house ecological initiative created by energy professionals from PGE Dystrybucja 15 years ago and developed by employees from other PGE Group companies within our distribution area. In 2017, as part of the "Forest full of energy" campaign, at key PGE Group companies, employees together with schools and local communities across the country planted 80,000 trees. In the past four years, our Group's employees planted nearly 300,000 young trees.

OUR ACTIVITIES SUPPORTING THE USE OF SOCIAL CAPITAL

• Promoting respect for human rights in line with the UN Global Compact initiative.
• Development and consistent implementation of PGE Group's Code of Ethics.
• Adoption of a harmonised Code of Conduct for PGE Group Companies' Business Partners.
• Adoption and application of an Anti-Corruption Policy.
• Conduct of on-going dialogue with trade unions.
• Dialogue with public institutions.
• PGE Foundation's objective is to support the development of local communities and performance of in-house social programmes. Key operating areas: social aid, science and education, medicine and healthcare, support for culture and national heritage, as well as ecological activities and environmental protection.
• PGE Energia Ciepła Foundation's activities - supporting the development of culture (National Arts Song Festival, National Theatre Arts Festival, Rybnik Photography Festival), stimulating senior citizen communities, providing social support to those in need, promoting local initiatives related to ecology and environmental protection.
• Sports and culture sponsoring - PGE is the main sponsor of numerous sports clubs and cyclical events and competitions as well as cultural events and institutions, such as the Warsaw Philharmonic.
• Employee volunteering programme - employees taking action for local communities.
• Implementing a transparent information policy for PGE's shareholders and bondholders, ensuring equal access to information.
• Transparent communication - as one of the largest companies in the country, we have a significant impact on the economy, market, surroundings and infrastructure at both local and national level. This necessitates communication with our surroundings through the media, which is conducted by dedicated units. Communication with employees is conducted by internal communication departments. Information is also passed on via workshops, seminars and training, where we share our knowledge.
• Annual energy forums - meetings with local authorities to discuss cooperation, including investments in power infrastructure that determines the region's development.
• PGE EJ 1's Programme for Supporting the Development of Site Municipalities - activities intended to disseminate knowledge about nuclear power and to build social acceptance for this source of energy.
• Agreements on the formation of two energy clusters - agreements between Group companies and local governments and local businesses aimed at improving air quality, raise the level of local energy security and support development at regional level.

TRANSFORMATION OF CAPITAL

Social relations are a source of enterprise value creation. Thanks to social relations, production, intellectual, human and financial capital is built in the long-term. However, social capital also encompasses commitments, which we diligently satisfy through short-term deployment of financial capital. By promoting the right attitudes towards the natural environment in relations with our stakeholders, we contribute to a reduction in the use of natural capital.

NATURAL CAPITAL

Lignite and hard coal are key fuels used to generate electricity and heat at our conventional and CHP plants. Natural gas and biomass are also included in our fuel mix. We are investing in technologies that directly use the forces of nature - wind, water and sun energy, which are converted into electricity at our renewables installations. We strive to effectively use natural resources. Our priority is to limit negative environmental footprint and protect the natural ecosystem.

INPUT

* Taking into account annual emissions at PGE EC in 2017

OUTPUT

* Taking into account annual emissions at PGE EC in 2017
** PGE GiEK, PGE Energia Odnawialna, PGE Dystrybucja and PGE EC for full year 2017
*** PGE GiEK
**** PGE GiEK, PGE Energia Odnawialna

OUR ACTIVITIES SUPPORTING THE USE OF NATURAL CAPITAL

• We strive to respect energy, aiming to effectively transform natural energy resources.
• We are modernising our generation assets to improve their efficiency.
• We are investing in modern desulphurisation, denitration and dust extraction installations, thus reducing harmful emissions.
• We are increasing the share of renewable sources in our generation mix, aiming at a 25% share of the renewables market in Poland by 2030.
• We are consistently reducing the average CO₂ emissions of the Group's assets.
• We are increasing the use of combustion by-products - in cement, construction and road building industries and we use them to rehabilitate land that has been adversely transformed during operations.
• We rehabilitate post-mining areas, creating new forest and water complexes with plenty of animal and plant species.

TRANSFORMATION OF CAPITALS

Natural resources are consumed in producing electricity and heat at our conventional and CHP plants. Through reliable electricity and heat supplies, we work for industries and people, strengthening social capital. Using natural capital in an effective manner, we are increasing our financial capital that is used for development and the strengthening of our other capitals. In effect, combustion by-products are created, which we try to maximally utilise, driven by the circular economy concept.

MANUFACTURED CAPITAL

We own the largest generation asset base in Poland in the area of electricity and heat production. This is the key foundation of our business. At the same time, we are the second largest distributor of electricity in Poland, owning a substantial asset base for the transmission of electricity.

INPUT

* without pumped storage plants with natural in-flow

OUTPUT

OUR ACTIVITIES SUPPORTING THE USE OF MANUFACTURED CAPITAL

• We are building modern generation capacities: 1,800 MW at Elektrownia Opole and 490 MW at Elektrownia Turów
• We are constructing a Thermal Processing Installation with Energy Recovery at CHP plant Rzeszów
• We adopted our District Heating Strategy, showing district heating as an important direction for the Group's development and investment expenditures
• We acquired EDF's assets to consolidate district heating assets within the Group
• We are continuing work on ensuring the opportunity to use growth options in the future (offshore wind energy, nuclear power, modern coal energy)
• We are modernising our generation assets, increasing their efficiency and reducing their environmental footprint
• We are developing our distribution network, increasing its reliability and the quality of services for clients

TRANSFORMATION OF CAPITALS

Implementing growth projects and carrying out acquisitions increase the Group's manufactured capital. This development takes up financial capital but in the long term these investments should contribute to increasing financial capital. Focusing on effectiveness and using the best available technologies, we constantly contribute to reducing the use of natural capital. By increasing the use of new technologies and improving the existing ones, we are building up competences within our human capital.