SSE : Sustainability Report

Creating value

for people and planet

SSE plc Sustainability Report 2024

About SSE

SSE is a leading generator of renewable electricity in the UK

and Ireland and one of the largest electricity network companies in the UK. It is driven by a purpose to provide energy needed today while building a better world of energy for tomorrow. It develops, builds, operates, and invests in low-carbon electricity infrastructure in support of the transition to net zero, including onshore and offshore wind, hydro power, flexible thermal generation, electricity transmission and distribution networks, alongside providing energy products and services to customers. SSE's ambitions for the development of renewable energy now extend beyond the British Isles to carefully selected international

markets, including Asia-Pacific, Europe, and North America.

UK-listed and headquartered in Perth, SSE is a major contributor to the economies in the UK and Ireland. It employs around 14,000 people and is real Living Wage and Fair Tax Mark accredited.

The Sustainability Report for the period 1 April 2023 to 31 March 2024 aims to provide enhanced disclosure of SSE policies, practice, and performance against is key economic, social, and environmental impacts and goals. On occasion the report refers to activities of joint ventures and in those instances, it is made clear this is the case.

	Contents
	Strategic introduction
	Chief Executive's foreword	03
	Our purpose	04
	Driving sustainability at SSE	06
	Understanding what matters	08
	Emerging trends	10
	Working together for sustainable outcomes	12
	Advancing climate action
	A strategy to support the net zero transition	17

Directors' Statement on SSE plc's Selected Sustainability Data		the selected sustainability data, including clear definition of the
As the Directors of SSE plc "SSE" we confirm that we are solely responsible		entity's organisational boundaries, and applied them consistently;
for the preparation of SSE's selected sustainability data including this	•	presented information, including the reporting criteria, in a manner
Directors' Statement and for reporting the selected sustainability		that provides relevant, complete, reliable, unbiased/neutral,
data in accordance with the reporting criteria set out on at		comparable and understandable information;
sse.com/sustainability/policies-and-assurances.	•	reported the selected sustainability data in accordance with the
			reporting criteria.
We confirm, to the best of our knowledge and belief, that we have:
•	designed, implemented and maintained internal controls and
	processes over information relevant to the measurement, evaluation	Rachel McEwen
	and preparation of selected sustainability data that is free from	Chief Sustainability Officer
	material misstatement, whether due to fraud or error;
•	established objective reporting criteria for preparing and presenting	For and on behalf of the Board of Directors of SSE plc. 14 June 2024.

How SSE is structured

Index-linked earnings from economically-regulated

networks offset inherent risk in market-facing businesses

RenewablesFlexibilityNetworks

SSE	SSE	SSEN	SSEN
Renewables	Thermal	Transmission	Distribution
Providing clean and	Balancing the market	Enabling net zero by	Bringing net zero
affordable home-grown	with flexible generation	connecting renewables	to the doorstep by
energy		to centres of demand	decarbonising streets
			and homes

MMRR

	Energy products and services
Energy Customer Solutions	SSE Enterprise

Alternative Performance Measures

SSE assesses the performance of the Group using a variety of performance measures. These measures are not all defined under IFRS and are therefore termed 'non-GAAP' measures.

A reconciliation from these non-GAAP measures to the nearest prepared measure in accordance with IFRS is presented and described from page 190 of SSE's Annual Report 2024. The Alternative Performance Measures SSE uses might not be directly comparable

	Performance against the Net Zero Transition Plan	18
	Decarbonising SSE's electricity generation and	20
	operational emissions (scope 1 and 2)
	Decarbonising SSE's value chain emissions (scope 3)	26
	Adapting to climate change and building resilience	28
	Advocating for Climate Action	30
	SSE's Net Zero Transition Report summary	32
	Providing affordable and clean energy
	Building a clean, secure and affordable energy system	37
	Serving electricity distribution customers	38
	Energy Customer Solutions	40
	SSE Enterprise	42
	Investing in industry, innovation and infrastructure
	Investing at scale and with discipline	47
	Innovation enabling net zero	48
	Powering sustainable success with responsible procurement	49
	Connecting power for future generations	52
	Delivering world-class renewable assets	54
	Smart, fair and sustainable	56
	Valuable flexibility for the net zero transition	58
	Committed to decent work and economic growth
	Powering the just transition	63
	Sharing the benefits of net zero	67
	Providing a safe and secure workplace	71
	Valuing employee voice	74
	Guaranteeing fair work	77
	Investing in a workforce for net zero	78
	Inclusion and diversity	83
	Protecting and restoring the natural environment
	A strategic approach to environmental protection	89
	Looking after the natural world	90
	Responsible consumption and production	94
	Governance review
	Structured sustainability governance	98
	Sustainability-linked Executive remuneration	100
	Managing sustainability-related risks	101

SSE Airtricity and SSE Business Energy provide a shopfront for the Group's renewable generation output

SSE Energy Markets

Trading commodities, securing value for SSE's assets and managing volatility

Bringing low-carbon solutions to business-to-business markets

MM

Corporate services

Providing cost-effective shared services

1. and strategic direction across the Group

with similarly titled measures used by other companies.

Powering sustainable growth

SSE plc Annual Report 2024

The SSE plc Sustainability Report 2024 is complemented by SSE's Annual Report

2024 which can be found online at sse.com.

	ESG disclosures
	ESG ratings and indices performance	103
	SASB Standards Disclosure	104

Key:

M Market-focused businesses

R Economically-regulated businesses

SSE plc Sustainability Report 2024

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Chief Executive's foreword

2023/24 highlights

Strategic introduction Year in review

Governance review

ESG disclosures

The hard yards of delivery

Transition pathway transparency

With the focus of stakeholder attention - rightly - shifting from target setting to accountability, an important new disclosure has been developed identifying the actions and levers that will determine the achievement of SSE's climate targets. See more on pages 20 to 22.

Revised Just

Transition Strategy

With the publication of a revised Just Transition Strategy, this report outlines SSE's performance against a basket of ten KPIs identified to help stakeholders understand the impact SSE is making as it transitions from high carbon

to low carbon activity. See more on pages 63 to 66.

Nature

With SSE's core commitment to the restoration of nature captured in its commitment for biodiversity net gain on all its large onshore infrastructure developments, page 90 outlines the path taken so far and for the first time, discloses the number of developments where BNG has been designed into the development.

Building a sustainable company is a long- term endeavor. I would like to think that the progress made in 2023/24 takes us one step further towards that goal."

2023/24 could be thought of as a year where important climate targets - at home and abroad - met the practical reality of the hard yards of delivery. We've seen those key Paris-aligned targets come under pressure. SSE has long nailed our colours to the Paris Agreement and the 1.5oC carbon reduction pathway. That is something that is easy to say but, as we can see from the climate performance in countries around the world, there is a real risk of slippage against that 1.5oC pathway. While 2023/24 represented SSE's lowest level of greenhouse gas emissions yet and we are holding firm to that pathway, we are also working hard for those targets not to slip. In this report, and for the first time, we clearly set out (on page 20), the key levers that will determine the achievement of those key science-based targets.

SSE's role in the transition goes way beyond simply meeting our own net zero pathway. Our investments enable the decarbonisation of key sectors in the economy. That requires very significant new low-carbon infrastructure. And for the benefit of those who host that infrastructure we must leave a positive legacy.

It can be tough being a community that is about to host nationally significant infrastructure. There are concerns for us to respond to, which we are doing. These projects also create opportunities for communities and we will ensure that these communities see benefits from those investments. Building on the tradition of community investment from renewables projects, SSEN Transmission is developing a powerful package of local benefit (see page 52), including regional and local funding, alongside important strategies to support housing development in the north of Scotland, accommodating construction

workers in the short term, but leaving a long-term legacy for local people too.

With a refresh of our Just Transition Strategy, we have created a basket of KPIs (see page 64) that will support the ability of stakeholders to hold us to account and engage with us, on this complex journey to minimise any negative social consequences of the transition and maximise the positive ones. We know that this almighty industrial transition from high carbon to low carbon potentially creates upheaval and disruption for working people. Our job is to support that transition at an economy level and deliberately attract working people from the declining high carbon industries. The juxtaposition of North Sea oil and gas with our development is a very powerful point here and one third of our new recruits last year were former high-carbon workers.

Alongside progress on carbon and social impact, we recognise the importance of restoring nature in creating a climate-safe world. The way in which SSE measures and targets positive impact is through Biodiversity Net Gain. Our commitment is that every onshore development site will be left in a better condition of nature than when we found it. This year's report demonstrates the good progress being made on that front (see pages 90).

Finally, building a sustainable company is a long-term endeavor. I would like to think that the progress made in 2023/24 takes us one step further towards that goal.

Alistair Phillips-Davies

Chief Executive

14 June 2024

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Strategic introduction Year in review

Governance review

ESG disclosures

Our purpose

SSE is a leading generator of renewables and flexible thermal energy in the GB and Ireland markets, and one of the world's fastest-growing electricity networks companies.

Our purpose is to provide energy needed today while building a better world of energy for tomorrow.

Our vision is to be a leading energy company in a net zero world.

Our strategy is to create value for shareholders and society in a sustainable way by developing, building, operating and investing in electricity infrastructure and businesses needed in the transition to net zero.

Our strategy

Our strategy is to create value for shareholders	… in electricity infrastructure and	… and in doing so, we	... that underpin	… which contributes to a
and society in a sustainable way by developing,	businesses needed in the transition	are delivering on our	a purpose ...	decarbonised future.
building, operating and investing …	to net zero …	2030 Goals …

Develop		Transmission	Renewables	Cut carbon	To provide
				energy needed
				intensity by 80%
					today while
					building a better	Renewables
		£20.5bn*		Increase renewable	world of energy		Energy
			energy output fivefold	for tomorrow.
Invest	Build	net capex					that is:
							Sustainable
				Enable low-carbon		Flexibility	Affordable
					Secure
				generation and
				demand
			Thermal and
Operate		Distribution	other businesses	Champion a fair and		Networks
	Market-focused businesses		just energy transition
		~45%
		Economically regulated businesses	~55%
		* Investment over five years under the NZAP Plus.
Net Zero Acceleration		Our balanced portfolio gives us op-	… supporting climate solutions	… 2027 …	… and with its world-class
Programme Plus (NZAP Plus)		tionality and flexibility - so we	can	aligned to a 1.5°C pathway, and set-	~9GW	assets and development
	invest where we see most value …	ting clear medium-term targets for ...	pipeline, sector expertise
		renewables net capacity
					>15%	and delivery record,
The NZAP Plus is our strategy in action and					SSE will be central to
includes £20.5bn of planned capital expenditure,				networks gross RAV CAGR	a decarbonised energy
			13-16%
with around 90% for investment in renewables				system post-2030.
and electricity networks.					adjusted EPS CAGR
					5%-10%
					forecast annual dividend growth

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SUSTAINABILITY

Driving sustainability at SSE

SSE's business strategy has sustainability at its core, with a commitment to create and share value with shareholders and society, to ensure that the transition to net zero benefits all stakeholders.

Strategic introduction Year in review

Governance review

ESG disclosures

Progressing towards 2030 Goals

Cut carbon intensity by 80%

Reduce scope 1 carbon intensity by 80% by 2030, compared to 2017/18 levels, to 61gCO2e/kWh.

A framework for a sustainable business

Due to the essential nature of SSE's activities, sustainability has naturally been a long-standing feature of its business model, embedded at the heart of its strategy. It provides a framework that guides decisions as it transitions to net zero, ensuring it is done in a way that creates and shares value with stakeholders.

Sustainability is articulated at the highest level, with SSE's business strategy aligned to the UN's Sustainable Development Goals (SDGs). To embed this approach throughout the organisation, SSE has

identified four SDGs which are highly material to the business, and to which it has linked its four core business goals for 2030. These 2030 Goals are focused on addressing the challenge of climate change in a way that

is fair to working people, consumers and communities. SSE has identified a further three material SDGs, which are focused on the environment and guide the pillars of SSE's Environment Strategy.

This framework allows SSE to navigate the complexities of economic, social and environmental impacts and address them in a balanced way to ensure the best outcomes for stakeholders.

Ensuring accountability for sustainability

Reinforcing SSE's commitment to sustainability, sustainability-linked metrics and targets form part of executive performance-related pay. Progress against SSE's 2030 Goals is linked to the longer- term Performance Share Plan, and the Annual Incentive Plan is linked to average performance across three independent external ESG ratings. These measures mean that accountability for sustainability is held at the most senior levels in the Company.

A summary of progress against these performance measures can be found in the Remuneration Committee's Report from page 168 of SSE's Annual report 2024.

SSE's scope 1 GHG intensity
2017/18	2030
307gCO2e/kWh	61gCO2e/kWh
						Read more
	2023/24
					on page 15
	205gCO₂e/kWh

Increase renewable energy output fivefold

Build a renewable energy portfolio that generates at least 50TWh of renewable electricity a year by 2030.

Total renewable generation output*
			2030
			50TWh
							Read more
	2023/24
						on page 35
	11.2TWh

SSE's sustainability hierarchy

Strategy		To create value for shareholders and society in a sustainable way by
driver		developing, building, operating and investing in electricity infrastructure and
		businesses needed in the transition to net zero.
SSE's 2030		Four core business goals linked to highly material SDGs
Goals
			Cut carbon intensity by 80%
			Increase renewable energy output fivefold
			Enable low-carbon generation and demand
			Champion a fair and just energy transition
SSE's		Linked to three further material SDGs
Environment
Strategy			Resource use					Environmental management

Framework to share value: aligned to UN's Sustainable Development Goals (SDGs)

Enable low-carbon generation and demand

Enable at least 20GW of renewable generation and facilitate around 2 million

EVs and 1 million heat pumps on SSEN's electricity networks by 2030.

2030

20GW

2023/24		c. 284,000	c. 45,300**		Read more
9.3GW
		on page 45
		pure electric or plug-in	heat pumps connected
		hybrid vehicles registered

Champion a fair and just energy transition

Be a global leader for the just transition to net zero, with a guarantee of fair work and commitment to paying fair tax and sharing economic value.

£6.86bn	10	Read more
contribution to	consecutive years as an accredited	on page 61
UK and Irish GDP	Living Wage employer

• Includes pumped storage, biomass and constrained off wind in GB.

• SSEN Distribution now uses source data from the UK Government's Microgeneration Certification Scheme (MCS) to measure progress against this goal. 2021/22 and 2022/23 data has been restated, see page 46.

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STRATEGIC INTRODUCTION

Understanding what matters

A success business strategy is one that is focused on the most salient social, environmental, and economic matters, building a deep understanding of impacts and allowing them to be effectively managed.

Strategic introduction Year in review

Governance review

ESG disclosures

Materiality informing SSEN Transmission's sustainability strategy

SSE's approach to double materiality

A credible approach to sustainability is one that is focused on the most significant issues. SSE has consistently sought to understand its sustainability impacts and in 2022/23, with support from an independent third-party, adopted the 'double materiality' approach. This approach not only takes into account sustainability matters that have a material impact on SSE's business value, but also considers the impact SSE has on the environment and society. Figure 1 shows the results of the materiality exercise, represented on a matrix where ESG topics are plotted by SSE's impact on the topic, against the topic's impact on SSE. The issues in the top right hand corner represent the topics with both the highest impact on SSE and on which SSE has the highest impact.

Information on SSE's performance relating to each issue is integrated throughout this report and in SSE's Annual Report 2024.

Figure 1: SSE's double materiality matrix

	Environment	Social	Governance
						Carbon
						emissions
			Supply chain	Sustainable energy
			management
			generation
					Skilled
topic		Energy transition		workforce
		policy			reliable energy
			Community
the			relations		Transparent and
	Nature and			ethical business
				practices
		biodiversity
on
Circularity & waste	Stakeholder		Health, safety
impact	management		& wellbeing
management		management
	Water				Physical
	management			Labour	climate	Risk and crisis
		Environmental		risks
		management		practices

SSE	Air quality
	Societal

impact

Human rights and

modern slavery

Privacy and data security

Topic impact on SSE

In 2023/24 SSEN Transmission undertook a double materiality assessment to inform a revised Sustainability Strategy expected to be published in summer 2024. The process followed global best practice, and included a detailed impact assessment of over 60 environmental, social, economic, and governance- related topics, engagement with both internal and external stakeholders, and a desktop review.

The findings of the materiality assessment emphasised that SSEN Transmission's focus on delivering a reliable, and affordable network for net zero, and on doing so safely, aligns with the business's most material impacts, risks, and opportunities.

Community impacts, engagement and benefit were shown to be highly material for the business, alongside climate impacts, both in how SSEN Transmission manages and reduces GHG emissions, and in how the business adapts to the

Sustainable businesses don't just 'do no harm'. They find

An evolving materiality landscape

As methodologies and guidelines for conducting double materiality assessments (DMA) evolve, SSE applied the most recent draft European Financial Reporting Advisory Group materiality assessment implementation guidance, published

in December 2023 to undertake a 'pulse check' on the issues of greatest materiality. The objective of the exercise was to ensure that the results of the 2022/23 comprehensive assessment remain relevant in the current year. SSE

were some insights gained, for example, the position of 'Supply chain management' as a top five topic was reinforced by the inclusion of a new Group Principal Risk on supply chain. Safety, SSE's number one company value,

is positioned as a top 10 topic on the matrix and performance this year reconfirms the imperative to maintain focus. Interestingly the sharp rise in the position of 'Misinformation and disinformation' in the WEF two year global risk horizon has been noted for future assessments.

SSE's most material sustainability topics

impacts of climate change. Nature- related topics including biodiversity, land and forestry, and increasingly the business's impacts in the marine environment are also highly material. Areas of high impact on the business include securing and managing the supply chain, and attracting and retaining a skilled workforce.

More information will be available in SSEN Transmission's Sustainability Report, which will be published later in 2024.

the win-wins and purposely create shared value for both shareholders and society.

But none of that is relevant unless there is a clear understanding of the most important issues at stake."

Rachel McEwen

Chief Sustainability Officer

conducted an internal review considering developments such as material financial transactions, supply chain spend and practices, and group risk over 2023/24, alongside external sources like the World Economic Forum (WEF) Global Risks Report 2024, amongst others.

SSE confirms that the DM, Figure [x], as published in last year's report, remains highly relevant to SSE for this year's reporting cycle.

While the review validated the matrix, there

1. Carbon emissions
2. Sustainable energy generation
3. Affordable and reliable energy
4. Supply chain management
5. Skilled workforce

Opportunities for enhanced Impact

1. Just transition
2. Circularity
3. Nature and biodiversity

2024/25 and beyond

While SSE is not yet subject to recent mandated sustainability-related disclosure standards in Europe, it is seeking to adopt the most relevant aspects of the International Sustainability Standards Board (ISSB) Standards and the EU Corporate Sustainability

Reporting Directive (CSRD). In preparation for upcoming reporting requirements, SSE will utilise emerging best practice guidance, build on

its DMA, pulse check and leverage SSEN Transmissions approach while conducting future assessments.

SSE is mindful that emerging ESG

disclosure standards from the ISSB and CSRD require evidence of a company's most material ESG issues - from both the company and stakeholder perspective. Being able to provide evidence of the status of those issues will support stakeholder confidence in SSE's non-financial disclosures.

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Strategic introduction Year in review

Governance review

ESG disclosures

Emerging trends

An important feature of long-term sustainable businesses is the ability to adapt and respond to key social, environmental, and economic trends. While some of those trends are long term in their nature, for example the climate imperative, from year-to-year new elements emerge. 2023/24 was no different, with global and national circumstances affecting the external environment SSE operates within.

The role of the energy transition in stimulating industrial renewal

Successive industrial plans and growth strategies from the UK government since 2017 have focused of key sectors of the UK economy, with each set of plans highlighting the critical role that 'green industries' will play in improved growth and prosperity across the UK. The five sectors in the green energy industries are defined as: carbon capture and storage, electricity networks, hydrogen, nuclear and offshore wind. However, the 2022 Inflation Reduction Act in the USA and Europe's 2023 Green Deal Industrial Plan have brought into sharp focus, the case for a long-term green industrial strategy in the UK.

plans for growth. The confirmation in the March budget of 'full expensing' becoming permanent, is particularly welcome. That means 100% of capital invested is deducted from taxable profits and is a powerful incentive to invest. A faster and more responsive planning system will also make a material impact on the ability to build on energy infrastructure, which directly impacts on the speed that goods and services are purchased from supply chains.

With government policy supporting both renewable and networks deployment, there is an increasing expectation from stakeholders that the industrial and manufacturing base across the UK develops to support that growth. It is for that reason that SSE was particularly pleased to award the first order for electricity network cable underpinning the investment by Sumitomo in cable

Shifting the UK economy back onto a growth trajectory is the only way to sustainably deliver brilliant public services and relaunch the UK's global standing…That means big choices and bold moves on increasing business investment, future- proofing our labour market, recommitting to our climate ambitions and improving our

The risk of climate targets slipping

Since 2018, and the publication of the Intergovernmental Panel on Climate Change's seminal report that outlined the global risks associated with a world warmed to 1.5oC above pre-industrial levels, the countries SSE operates within have established strong net zero

With SSE developing material plans in four of those five green energy industries, it has a vested interest in the industrial policy that will support them thrive. While there are many aspects of a comprehensive and holistic industrial strategy, there are components that are particularly impactful in relation to SSE's

manufacturing in the Moray Firth. The case, however, for increased focus from governments and industries on further such investments is clear. It will underpin the public consent for low carbon infrastructure at the same time as securing a diverse and competitive supply chain in the long run.

global reputation for infrastructure delivery."

CBI February 2024

legislation. Supported by an environment at successive COPs, the focus for many countries and companies has been the establishment of ambitious targets to cut greenhouse gas emissions. The overriding narrative has been one of accelerated climate action.

In 2023, there were some signals that those accelerated targets are coming under pressure. In September 2023, the UK's Prime Minister, announced a delayed ban on new petrol and diesel cars and weakened targets on phasing out gas boilers. In April 2023, following advice from the Climate Change Committee that 2030 climate targets in Scotland were 'beyond what is credible', the Scottish Government, announced its intention to remove the framework of interim targets from law, whilst continuing to target net zero by 2045. And in Ireland, the Environment Protection Agency has issued a report stating that the country is on track to miss two key 2030 climate targets by a 'wide margin'.

As a long-standing proponent for accelerated climate action, SSE has long

understood the business imperative to avoid the worst effects of a changed climate. With opportunities to create value for both shareholders and society, its business strategy is built upon the imperative to deliver a decarbonised power system by the mid-2030s at the latest. It will continue to advocate for the practical steps required to deliver an orderly transition in electricity. It also recognises that there are many social goods that arise from the widespread deployment

of renewable energy, supported by low-carbon flexible generation; not least energy security and, in the long run, more affordable energy.

It is therefore clear that the case for the

action that decarbonise the economy is not simply based on the climate imperative: there are further social and economic benefits to be had. While strong targets are important, they are not as important as the actions required to meet them. It therefore remains as critical as ever to remain focused on the actions at both company and country levels that will put the targets back on track.

It's the plans and actions that matter in the end."

Chris Stark, the then Chief Executive, Climate Change Committee, April 2023.

Towards an age of consenting

The past decade has been characterised by increasing levels of political ambition to deliver rapid climate mitigation, with much of the focus centring on the clean energy transition as a key catalyst for decarbonisation. Governments and businesses, including SSE, have put in place a series of important, and progressively more ambitious, targets for emissions reduction and clean energy. While there is debate whether these pledges are sufficient to prevent global warming exceeding the Paris Agreement goals, the targets provide the framework to deliver the transition, helping to bolster investor confidence and reduce the cost

of capital. Particularly where commitments are enshrined in legislation and where targets are underpinned by clear transition plans, they are vital catalysts for action.

However, the scale and pace of the construction work that will be required to deliver these pledges on the ground is unprecedented. It is clear that we are now entering a period more likely to be characterised by the need to secure consent for this change - both in practical permitting terms, but also in terms of maintaining a public mandate by ensuring the costs and benefits are equitably distributed, the case for the transition is well understood and depoliticised, and that communities are effectively consulted to ensure that infrastructure is delivered in a way that appropriately balances the needs and interests of all stakeholders.

The need to accelerate planning and consenting processes is well understood but nonetheless presents challenges. The UK's Electricity Networks Commissioner, Nick Winser, made 18 recommendations to government in summer 2023.

Taken together the report presents a comprehensive plan to significantly reduce the length of time to develop, consent and construct new transmission circuits.

Very few new transmission circuits have been built in the last 30 years and a dramatic increase will be required through to 2050… the challenge is to reduce the timescale for building strategic transmission...

and reduce the overall timescale to seven years. I am confident that this is achievable."

Nick Winser, UK Electricity Networks Commissioner, August 2023

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STRATEGIC INTRODUCTION

Working together

for sustainable outcomes

SSE's business success relies on constructive relationships with its stakeholders. Through meaningful engagement SSE seeks to ensure stakeholder perspectives are considered and that it drives positive change through its partnerships.

Strategic introduction Year in review

Governance review

ESG disclosures

Building a lasting partnership in Ireland

SSE partnered with Business in the Community Ireland	best practice and support for businesses, and creating a
(BITCI) for over eight years. BITCI supports businesses	forum for industry collaboration. SSE has been involved
to bring about a sustainable, low-carbon economy and	in several strands of work through its relationship with
a more inclusive society through providing access to	BITCI, some of which are detailed below.

SSE's approach to stakeholder engagement

SSE promotes an open and transparent approach to stakeholder engagement which is supported by governance and accountability at both Group and Business Unit level. Through the course of its daily interactions with a broad range of stakeholders, SSE seeks to ensure that their perspectives are built into its business plans and objectives at every stage.

Stories in action

Throughout this report, SSE's sustainability policies, practice and performance are brought to life through stories in action, which include examples of strategic stakeholder engagement. They are identified with the following icons:

Engagement	Innovation	Partnering	Dilemma
in action	in action	in action

Marking a hat trick

In January 2024, SSE was recertified	rigorously interrogated during an
with the Business Working Responsibly	audit, independently verified by the
Mark for the third time. The Mark was	National Standards Authority of Ireland,
established in 2010 by BITCI and is a	across a wide range of sustainability-
standard for sustainability that goes	related topics. Achieving the Mark
beyond legal compliance by fostering a	was a culmination of collaborative
culture of responsible business through	engagement across the business
continuous improvement, ongoing	and ensures that for a further three
accountability, and leadership.	years SSE has an externally validated
	assurance of its sustainability
Focus areas across the business are	credentials.
	SSE celebrates achieving the Business
	Working Responsibly Mark for the third time.

SSE defines six key stakeholder groups which represent the people, communities and organisations who have an interest

Enduring partnerships

Enduring partnerships, like those with the Living Wage Foundation and the Fair Tax Foundation embody the heart of SSE's

partner of the Carbon Trust's Offshore Wind Sustainability Joint Industry Partnership (SusJIP) aimed at establishing a framework for addressing lifecycle

BITCI's Elevate Pledge 2024 Annual Report - Bridging The Inclusion published

in its activities and may be affected by them - Employees; Shareholders and debt providers; Energy customers; Government and regulators; NGOs, communities and civil society; and, Suppliers, contractors and partners. Detail on how SSE engages with these stakeholders, alongside the issues identified as material to them, can be found on pages 14 to 15 and 132 to 134 of SSE's Annual Report 2024.

Powering change through partnerships

approach to partnering for sustainability

• addressing key societal issues which represent key ways in which SSE can of share value with society. A decade on and SSE's commitment to these partnerships continues to strengthen as SSE announced it became a Living Pensions employer in November 2023 (see page [XX]). SSE has also been working in partnership with Business in the Community Ireland for over eight years, which is a organisation driving sustainable change in business in Ireland (see page 13).

Collaborating with industry

carbon emissions of offshore wind farms (see page 27).

Shared frameworks to impact change SSE is signed-upto voluntary international frameworks, which ensures that it operates to highest standards aimed

at ensuring the common good. This includes being a signatory of the UN Global Compact since 2018, aligning to its ten principles for corporate sustainability, and being a subscriber to the Institute of Business Ethics since 2014, through which it shares best practice on embedding ethical business cultures.

The Elevate Pledge was established by the BITCI's Leaders' Sub-Group on Social Inclusion, which SSE has been involved in since formation in 2018. Signatories to the Pledge commit to building inclusive workplaces that support everyone to thrive equally, with a focus on gathering workforce data to identify areas of success as well as gaps.

In February 2024, SSE provided data for the third Elevate Pledge report Bridging the Inclusion Gap, along with around

60 other signatory companies that represent over 150,000 employees, across 18 sectors. This data includes numbers on ethnicity, gender, disability,

socio-economic background and sexual orientation.

Some key findings included that compared to Irish society, the Elevate workforce has an over-representation of Black, Asian and other ethnicities, but an under-representation of workers with a disability and workers identifying as Irish Travelers. In addition, only 25% of signatories provided data on sexual orientation within their workforce. The full report and its findings can be found at bitc.ie.

Achieving more together

SSE has several well-established strategic partnerships that support collaboration on key sustainability-related issues, and form part of its sustainable culture and the way it operates. The nature of sustainability issues is that they often have external impacts and are linked to wider societal and environmental issues. By working in partnership, SSE can contribute positively to addressing these issues, enabling it

to achieve more than it could if working alone.

The scale and complexity of net zero is something that can only be solved through collaborative action, by a range of actors. SSE is involved in several industry collaborations which focus on key challenges facing the energy sector, and how these can be addressed through collective action. Examples include:

the Powering Net Zero Pact, a supply chain initiative working to address key challenges to bringing about a fair and just transition to net zero (see page 51); and, SSE Renewables being a founding

All-Ireland, Low Carbon

SSE Airtricity is currently taking part in the All-Ireland	and develop carbon reduction plans.
Climate Action Pilot Programme for small and
medium-sized enterprises (SMEs) with Bank of Ireland	SSE Airtricity will have the opportunity with the other
and Musgraves. This programme is being supported by	partner companies within to upskill, share and innovate
BITCI and BITC Northern Ireland. The pilot programme	together so that jointly companies across the supply
has the objective of 'learning by doing' to understand	chain can lower their emissions. This work is part of
better the challenges and opportunities of upskilling	SSE's wider involvement as a signatory of the BITCI
SMEs to address Climate Action in Ireland and improve	Low Carbon Pledge, through which it annually discloses
scope 3 data emissions reporting. It will support SMEs	carbon performance along with 68 other member
to improve climate literacy, measure carbon performance	companies.

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Strategic introduction Year in review

Governance review

ESG disclosures

Advancing climate action

Meeting the expectations of its stakeholders means taking a credible, realistic, and trusted path to net zero. SSE's strategy is therefore aligned to the ambitions set out in the Paris Agreement and to the power sector's 1.5°C global warming pathway.

Cut carbon intensity by 80%

Reduce scope 1 carbon intensity by 80% by 2030, compared to 2017/18 levels, to 61gCO2e/kWh

SSE's scope 1 GHG intensity

2017/18	2030
307gCO2e/kWh	61gCO2e/kWh

2023/24

205gCO₂e/kWh

The scope 1 carbon intensity of electricity generated has reduced by 33% compared to 2017/18 levels, to 205gCO2e/kWh. This is the lowest recorded by SSE, falling by 19% between 2022/23 and 2023/24.

The reduction in the carbon intensity of electricity generated during 2023/24 is the result of a slight increase in renewable generation and a decrease in thermal generation. Output from SSE's renewable generation portfolio (including pumped storage and biomass, and excluding constrained off wind in GB) increased slightly to 10.0TWh in 2023/24, from 9.7TWh the previous year; due to capacity additions such as Seagreen offshore wind farm which were partially offset by lower year-on-year wind speeds. Output from SSE's thermal generation decreased by 22% from the previous year, principally reflecting a normalisation of the market environment over the course of the year, and Tarbert oil-fired power station ceased generation.

	A strategy to support the net zero transition	page 17
	Performance against the Net Zero Transition Plan	page 18
	Decarbonising SSE's electricity generation and	page 20
	operational emissions (scope 1 and 2)
	Decarbonising SSE's value chain emissions (scope 3)	page 26
	Adapting to climate change and building resilience	page 28
	Advocating for Climate Action	page 30
	SSE's Net Zero Transition Report summary	page 32

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ENHANCED CLIMATE ACTION

Performance summary

Absolute scope 1 and 2 GHG emissions (MtCO2e) SBT commitments of SSE's suppliers by spend

6.24		6.52			2023/24	42%		9%	51% by spend
		4.81
		2022/23	34%	17%	51% by spend
		Set	Committed

Strategic introduction Year in review

Governance review

ESG disclosures

A strategy to support the net zero transition

SSE is at the forefront of the net zero transition, providing practical solutions to deliver a decarbonised energy system, reducing its carbon emissions whilst increasing focus on climate adaptation and resilience. SSE's enhanced capital investment programme 'NZAP Plus' accelerates delivery of its net zero ambitions with a practical plan of action in the short and medium term.

2021/22	2022/23	2023/24
	Category		Description	Unit	2023/24	2022/23	2021/22
	Greenhouse	Scope 1 GHG emissions	MtCO e	4.34(A)	6.08(B)	5.75(C)
	gas inventory			2
	Scope 2 GHG emissions1	MtCO e	0.47(A)	0.44(B)	0.49(C)
						2
				Scope 3 GHG emissions2	MtCO e	4.46(A)	4.81(B)	3.69(C)
				(Categories 3, 4, 6, 9, 11 and 15 only)	2
				Total reported GHG emissions	MtCO e	9.27	11.33(B)	9.93(C)
						2

Targeting net zero

SSE aims to achieve net zero across scope 1 and 2 GHG emissions by 2040 at the latest (subject to security of supply requirements) and for remaining scope 3 GHG emissions by 2050 at the latest. On the pathway to these long-term net zero ambitions, SSE has a series of interim carbon targets, verified by the Science

What does it mean to be net zero?

SSE will, first and foremost, take action to reduce emissions as low as possible and its Net Zero Transition Plan sets out the key actions it is taking to achieve its targets to drive progress towards its net zero ambitions.

It is well known that to reach net zero, companies must deeply reduce emissions and neutralise the impact of its remaining emissions. Only when abatement is maximised will SSE deploy technologies or nature-based solutions that will neutralise residual emissions. SSE notes stakeholder concern regarding the use of 'offsets' in net zero

Science- based carbon targets

Scope 1 and 2 emissions	MtCO e	4.81	6.52(B)	6.24(C)
	2
Scope 1 GHG emissions intensity of electricity	gCO e / kWh	205(A)	254(B)	259(C)
generated	2

Based Targets Initiative (SBTi) and aligned to a 1.5°C pathway.

strategies and, while trusted carbon markets must provide part of the answer in the long term, SSE remains cautious about their validity. It therefore is ruling out the use of offsets as part of its own net zero plan in both the short and medium term.

GHG emissions from gas sold (scope 3 carbon	MtCO e	2.01(A)	2.16(B)	2.29
emissions)	2
Proportion of SSE's suppliers by spend that have set	%	51	51	48
or committed to set science-based targets through		(42/9)	(34/17)	(n/a)
the SBTi3 (target set/ committed to set target)

Transition planning for the medium to long term

SSE is an early adopter of transition planning and published its first Net Zero Transition

by its final Sector Deep Dive Guidance in April 2024. SSE remains committed to best practice planning and disclosure and over the coming year will review

annually. SSE's Net Zero Transition Report is published each year in June, alongside SSE's full-year corporate reporting suite.

The Report summarises SSE's progress

Operational	Sulphur hexafluoride (SF6 ) - thermal generation and	kg	265	424	305
impact	electricity transmission and distribution activities
	Purchased heat from non-renewable sources	GWh	4.86	3.36	3.38
	Purchased electricity from renewable sources	GWh	97.0	104.8	74.3
	Purchased electricity from non-renewable sources	GWh	105.3	97.9	118.6
CDP	SSE's CDP Climate Change Programme	Rating	A	A	A
Climate	Overhead line replacement and refurbishment4	£m	25.0	30.2	22.8
adaptation
Tree cutting4	£m	35.0	21.8	23.7
	Flood protection4	£m	5.3	0.2	1.5

Detailed disclosure on the breakdown of SSE's scope 1, 2, and 3 emissions is available in SSE's sustainability data tables which can be accessed at sse.com/sustainability.

1. This data has been extracted from the SSE plc Annual Report 2024 where it was subject to external independent limited assurance by PricewaterhouseCoopers LLP ('PwC'). For the results of that assurance, see PwC's assurance report and SSE's GHG and Environmental Reporting Criteria 2024 on sse.com/sustainability
2. This data was previously reported in the SSE plc Sustainability Report 2023 where it was subject to external independent limited assurance by PricewaterhouseCoopers LLP ('PwC'). For the results of that assurance, see PwC's assurance report and SSE's GHG and Water Reporting Criteria 2023 on sse.com/sustainability
3. This data was subject to external independent limited assurance by PricewaterhouseCoopers LLP ('PwC'). For the results of that assurance, see PwC's assurance report in SSE's Sustainability Report 2022 and SSE's GHG and Water Reporting Criteria 2022, both available on sse.com/sustainability

1. SSE scope 2 emissions are calculated using the location-based method described in the Greenhouse Gas Protocol.
2. SSE scope 3 GHG emissions reported consist of category 11 - use of sold products (gas sold) of 2.01MtCO2e(A); category 15 - investments (joint venture investments); category 3 - fuel- and energy-related activities; category 9 - downstream transportation and distribution; category 4 - upstream transportation and distribution;
   and category 6 - business travel. Category 1 - purchased goods and services and category 2 - capital goods are excluded as SSE continues to develop and refine its accounting approach to calculate these figures to an acceptable level of accuracy.
3. SSE's supplier target is calculated from a 2019/20 baseline.
4. 2023/24 data may be subject to minor adjustment before final inclusion in the regulatory reporting pack published to Ofgem in July 2024. Some 2022/23 data has been slightly revised after finalisation of data for the July 2023 Ofgem regulatory reporting pack.

Plan in March 2022. This was updated in October 2022 in response to shareholder and wider stakeholder feedback.

SSE's Net Zero Transition Plan is focused on actions to deliver the steep cuts needed in the medium term, on the pathway to net zero, and provides clarity for stakeholders around the elements within SSE's control. The updated plan outlines SSE's net zero aligned targets and describes 17 actions to reduce material GHG emissions across scopes 1, 2 and 3. Each of the SSE businesses contribute to the plan with their supporting climate targets and transition plans.

Throughout 2023/24 SSE actively supported the Delivery Group of the UK HM Treasury-led Transition Plan Taskforce (TPT) because of its experience as an early adopter of climate transition planning; SSE was invited to join three Working Groups: Electric Utility and Power Generators; Adaptation; and Just Transition. SSE supported these Working Groups with developing topic and sector-specific guidance on transition plans.

The TPT published its Disclosure Framework in October 2023, followed

this latest guidance as part of the TPT's recommendation to update standalone transition plans on a three-yearly cycle.

More information on SSE's action plan can be found in the Net Zero Transition Report summary table on pages 32 and 33.

SSE Renewables Net Zero

Transition Plan

At COP28 in December 2023, SSE Renewables unveiled its comprehensive Net Zero Transition Plan, detailing the business's strategy to reduce its carbon footprint in alignment with climate science between now and 2050. This Plan serves as a roadmap to net zero, identifying carbon- intensive 'hotspots' in the development and production of renewable energy which SSE Renewables will seek to address across the business. SSE Renewables' Plan compliments the SSE Group Net Zero Transition Plan, outlining its pathway to net zero in its own business context.

Reporting on progress

Both SSE and its investors benefit from high-quality engagement on climate-related issues. SSE has committed through its shareholder resolution for shareholders

to receive its Net Zero Transition Report

against the targets and actions set out in its Net Zero Transition Plan and provides a navigation tool for shareholders. SSE's Net Zero Transition Report 2023 was received by shareholders at the Annual General Meeting in July 2023, with 97.63% of votes cast in favour. While this annual exercise is of mutual benefit, SSE will consult during 2024/25 as to whether a three-yearly cycle of shareholder votes might be more proportionate and appropriate, particularly as this would align to the recent TPT Disclosure Framework's recommendations.

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