Here’s what you need to know about DONG Energy right now: It’s the largest energy provider in Denmark, and since 2008, has pivoted from being primarily an oil and natural gas provider to now offering more than 55 percent renewable energy to its customers.
The story of this change is impressive. As Filip Engel, DONG’s Director of Group Sustainability, Group Environment, Public Affairs & Corporate Branding, shared during a recent press excursion during SB’16 Copenhagen, to change, senior leadership first had to understand the threats to the business. DONG considered climate change its number one threat because, Engel explained, political leaders would see it as a risk, which would eventually change the markets from the current status to one that favored renewable power. Secondly, DONG leadership recognized that younger generations want to work for companies with a positive and purposeful objective.
Once they decided that mitigating climate change and employee retention and recruitment were top priorities for their core business, they shifted resources and set targets to pivot from “black” energy (fossil fuels) to “clean” energy. To do this meant investing heavily in offshore wind. The business unit of 2,000 staff members that once worked on coal-fired power plants essentially swapped with the wind division, which went from about 50 people to now over 2,500 people, while the coal division is being phased out. In setting strategic targets, DONG’s leaders had to steer the organization to align around a common goal to focus on clean energy, and they had to track their actions. By setting and tracking actions, DONG could remain nimble if the targets weren’t being hit. Importantly, the team knew to set targets ambitious enough to foster innovation, but realistic enough to actually be achievable:
- Target #1 was to reduce CO2 in energy production 60 percent by 2020 – the company achieved a 50 percent reduction in 2016, so it looks like the 2020 goal will be no problem.
- Target #2 was to reduce the cost of offshore wind production 40 percent by the year 2020. DONG already met this goal earlier this year, three years ahead of time. DONG has also halved its own CO2 emissions, it now produces more clean energy than black (55 percent of its power and heat comes from clean energy, which includes both offshore wind and sustainable biomass); and has reduced coal production by 74 percent. This amount accounts for more than half of Denmark’s CO2 reduction over the last decade.
These facts and figures really began to sink in as we took a seaplane to view the Anholt Offshore Wind Farm off the coast of Denmark. I thought about how remarkable it was that DONG leadership was able to have the foresight and vision to take a huge company and do what we often think is impossible: transform completely, in a positive direction. As we flew away from Copenhagen through dense cloud cover over the Kattegat sea area, I thought of the state of many energy companies in the world: stuck in their grind of fossil fuel energy production, reluctant to change to cleaner forms of energy. And eventually the clouds cleared and 111 offshore wind turbines came into sight. These turbines – each as big as Boeing 747 airplanes and all together powering 400,000 households with clean energy – are the future. Offshore wind itself is the future, all around the world.
All I could think and feel as my camera clicked away was immense gratitude - gratitude that DONG’s vision for clean energy is now a reality, and that DONG has the power to influence other companies to do the same. Our future can be clean, secure and stable, if we all take a page from DONG’s transformation. A simple quest to minimize risk can transform businesses and entire industries, and have a magnitude of positive impact for generations to come.