From the CEO

From the CEO

Reykjavik Energy´s responsibilities in the services it provides have changed a great deal over recent years. At the turn of the century, before the individual utilities were merged, it was Reykjavik Energy that built power plants, laid fibre optic cables to households and handled general utility services for a substantial percentage of the Icelandic population. Over the past five years, however, Veitur Utilities, ON Power and Reykjavik Fibre Network, the subsidiaries of Reykjavik Energy, have been on the frontline of engaging with customers, successfully gaining a foothold in the public consciousness.

Despite the statutory obligation to unbundle Reykjavik Energy into a parent company and independent subsidiaries, the responsibility of ensuring that its services are always available to the municipalities which Reykjavik Energy serves remains unchanged. Reykjavik Energy fully owns its three subsidiaries and shapes their business strategies. It is therefore natural that Reykjavik Energy is the entity that is discussed both when things go well but also when we could have done things better. The participation of the parent company in the public debate is therefore natural and necessary.

Looking at some of the fundamental requirements placed on Reykjavik Energy, the Group performed exceedingly well in 2018. Customer satisfaction with our services continued to rank very high. And even with moderate pricing of services, the Group’s results were solid and operations yielded fair dividends to owners. The impact of our activities on climate and environment reduced further and a better equilibrium was attained in the utilisation of natural resources. Energy production in the Hengill area performed very well and the carbon footprint it leaves behind is rapidly decreasing. The sequestration of geothermal gases into rock was greater than ever and drilling was successful in maintaining the production capacity of the power plants. The management of sewerage systems was sound and there was a successful response when soil bacteria in previously unknown quantities were detected in potable water from the shallowest wells in Gvendarbrunnar.

As a workplace of just over 500 employees, Reykjavik Energy was confronted with a major challenge in 2018. Serious accusations of inappropriate behaviour, which emerged in connection with the dismissal of an employee, were accompanied by claims that the workplace culture in the Group was crumbling. Reykjavik Energy has been at the forefront in championing non-discrimination issues in recent years and therefore took these claims very much to heart. We commissioned a meticulous and credible assessment of our culture by an impartial third party was a necessary first step. This work was duly done.

The conclusions of the independent evaluation came as little surprise to management and personnel of Reykjavik Energy and subsidiaries. The workplace culture is strong. But there is also room for improvement. Work is therefore being systematically conducted on the recommendations that emerged from the assessment. Despite the setback, job satisfaction of the Group increased in 2018, confirming previous surveys of positive working morale and job satisfaction. Indeed, towards the end of the year, scores in job satisfaction and confidence in management compared very favourably with the general labour market – and are still rising. A very different result could easily have been imagined had complaints in the wake of dismissals not been tackled as seriously as they were.

One of the most successful undertakings in the management of Reykjavik Energy for a long time has been “The Plan”. This was the financial rescue plan effected between 2011-2016. It had one sole objective: to strengthen the financial position of the company and get it back on its feet again to enable it to fulfil its function. The results of the Plan exceeded that objective, and not just on the financial front. It also yielded several other benefits to Reykjavik Energy. Corporate governance was strengthened, transparency and disclosure increased, work procedures in several areas were improved, gender equality was emphasised strongly, the gender pay-gap was eliminated, job satisfaction rose and Reykjavik Energy’s image was enhanced as it became clearer that the Plan’s objective would be achieved.

Recently, the image of the parent company in the Reykjavik Energy Group has dwindled somewhat, according to surveys. This is something we must address. Public support for the company is of great value and needs to be protected. The task that lies ahead is not an emergency project on a par with the Plan, but rather a coordinated effort in which Reykjavik Energy and its subsidiaries, Veitur Utilities, ON Power and the Reykjavik Fibre Network, contribute to improve the community we share. Our climate change objectives play a prominent role in this, and the manner we support each other in reaching our climate change targets. Energy switching in transport is a key factor in this regard and the Group should continue to be at the forefront of this field. The health and safety of our staff are also of utmost importance: their welfare is the foundation of the Group´s positive engagement with the community. We have set ambitious goals to ensure the staff of the Group continues to be satisfied with Reykjavik Energy as a workplace. We are determined that Reykjavik Energy will perform well in all these areas and thereby function in harmony with the community it serves.