The materiality analysis is useful in determining the content of the Sustainability Report. This ensures that the report covers the topics that are of the greatest materiality as regards our business environment, the nature of our projects and operations, and their economic, environmental and social impacts. This exercise cannot be performed without the participation of both internal and external stakeholders. We conducted this materiality analysis—our third, after those conducted in 2011 and 2014—in three stages:

Identification

As with the previous analysis, the first stage involved updating the list of sustainability issues related to the company’s operations, and to their impacts. Various internal and external information sources were used for this, including:

  • Results of the last consultation exercise conducted in 2014 for the Sustainability Report 2014
  • Results of the survey of stakeholder satisfaction carried out following publication of the Sustainability Report 2016
  • Material topics in the Global Reporting Initiative guidelines and its Electric Utilities Sector Supplement
  • Analyses of energy industry aspects, such as those produced by the Electric Power Research Institute, International Hydropower Association and Canadian Electricity Association
  • A benchmarking analysis of topics raised by several other companies in the energy industry
  • The company’s strategic priorities

This stage led to the identification of 34 aspects related to sustainability and yielded a clear definition of each, so as to ensure a shared understanding and outline their Boundaries. Relative to the previous analysis, 33 of the 34 aspects remained the same, while one was removed (Measurement of consumption) and replaced by another aspect (Acquisitions and partnerships outside Québec). Some definitions of aspects were amended slightly to better define their scope.

We also updated the list of stakeholders consulted, based on the following major categories: Industry Associations, Customers, Indigenous Communities, Consultants, Media, Citizens Movements, NGOs, Economic Partners, Public Authorities, Academics.

Prioritization

We then prioritized our stakeholders, using this new list. The priority stakeholders were determined according to three criteria: influence, impact and partnership. Various consultation methods were employed, depending on the different categories: a survey for all stakeholders and discussion sessions for priority stakeholders.

In October 2017, an electronic survey was conducted of the stakeholders determined to assess the relative importance of each aspect, based on their information requirements. This exercise enabled the company to determine the aspects it should elaborate further in the Sustainability Report. Out of 187 invitations sent to external stakeholders, 73 organizations responded to the survey; in addition, 75 Hydro-Québec employees responded (out of 156 invitations sent). The response rates were therefore 39% and 48%, respectively. The survey results are shown in the Materiality Matrix, which illustrates the findings of the internal assessment and of the assessment made by external stakeholders.

Validation

Based on the stakeholder prioritization, two discussion sessions with external stakeholders were held in fall 2017; 23 organizations took part in one of these sessions. An additional session was held in November with nine representatives of Hydro-Québec business units. At these three sessions, the internal and external stakeholders expressed their views of the survey results. In their opinion, the results accurately reflected the positive and negative impacts of the company’s operations. The participants went on to specify the type of information they would like to receive for each of the main aspects. Special attention was paid to the 10 most material aspects, according to the survey results, in order to determine the nature of the information expected by stakeholders. Additional aspects proposed by the survey respondents were also discussed.

Review of stakeholder consultation exercise

In the fall of 2017, Ernst & Young assisted Hydro-Québec in conducting its stakeholder consultation exercise. Our team led the discussion sessions with external stakeholders and the session with Hydro-Québec managers in order to elaborate on the results obtained in the surveys and better define the expectations expressed. The foregoing description of the validation stage is consistent with the work performed.

Thibaut Millet, Partner, Ernst & Young

This diagram presents the main sustainability issues identified by Hydro-Québec and its stakeholders according to the importance of each issue, from low to high. The most important issues are:

  1. Social acceptability of projects
  2. Electricity supply
  3. Atmospheric emissions and impact of climate change
  4. Legal compliance
  5. Social acceptability of projects
  6. Electricity supply
  7. Atmospheric emissions and impact of climate change
  8. Biodiversity management
  9. Technological Innovation
  10. Contribution to transportation electrification
  11. Public and consumer health and safety
  12. Legal compliance
  13. Energy Portfolio
  14. Ethical management practices

Definition and boundary of aspects

Definition and boundary of aspects
Rank Aspect Definition Boundary
1 Social acceptability of projects Relations with local communities, including project-related information, consultation and engagement with stakeholders, as well as consideration of the concerns expressed Mixed
2 Electricity supply Distribution, transmission and generation system development, reliability, demand-side management, electricity surplus Internal
3 Atmospheric emissions and impact of climate change Management of atmospheric emissions related to Hydro-Québec operations (e.g., SO2, NOx), greenhouse gas and the impact of climate change on the organization (operating risk) Mixed
4 Biodiversity management Protection and restoration of protected areas, natural habitats and wildlife, and the impacts of operations on biodiversity and land Mixed
5 Technological innovation R&D leading to introduction of new technologies (e.g., energy efficiency, long-term operability of facilities, renewable energies, university partnerships, etc.) Internal
6 Contribution to transportation electrification Support for rollout of transportation electrification infrastructure (public transit and electric cars), as well as development and marketing of related new technologies (e.g., batteries, materials, electric motor systems, etc.) Mixed
7 Public and consumer health and safety Protection of the public and consumers, including facility and system security, introduction of emergency plans, compliance with public health standards (e.g., electric and magnetic fields, mercury in reservoirs) External
8 Legal compliance Compliance with laws and regulations, and Hydro-Québec contribution to government sustainability strategies Mixed
9 Energy portfolio Choice of energy options (conventional, emerging, self-generation), diversity of generation options and electricity supply, as well as their impact on rates Mixed
10 Ethical management practices Internal policies and practices that prevent risks of collusion, corruption and conflicts of interest Internal
11 Water body management Use of water bodies to generate electricity, including management of instream flows and the impacts of reservoirs (e.g., impact on navigation, etc.) Mixed
12 Energy efficiency for customers Support offered to customers to promote energy efficiency in their facilities (e.g., buildings, industrial systems, equipment, etc.) External
13 Environmentally responsible management practices Initiatives to improve the organization’s performance, introduction of management systems (e.g., ISO 14001, OSHA 18001 and BOMA BESt certification, etc.) and management of waste and hazardous materials (reduction, reuse, recycling, recovery) Internal
14 Relations with Aboriginal communities Relations with Aboriginal communities affected by or with an interest in projects or operations External
15 Spinoffs of projects and operations Direct and indirect economic impacts on local communities, from infrastructure investments, job creation, industrial tourism (visits to Hydro-Québec facilities) External
16 Land use Management of generation, transmission and distribution impacts on land and landscape (undergrounding, access rights, obtaining servitudes, etc.) External
17 Management of contaminated land Management of leaks and spills into the environment, management of contaminated land Mixed
18 Procurement practices Local purchasing practices and responsible procurement, including selection of suppliers and materials, supplier evaluation and awareness, etc. External
19 System energy efficiency Measures implemented at Hydro-Québec to increase system efficiency and reduce system energy losses Internal
20 Electricity exports Electricity sales outside the province (e.g. to the United States), specifically the quantity exported and its profitability Internal
21 Universal access to service Practices and programs for low-income customers and those with payment difficulties, and service development programs for isolated communities External
22 Electricity prices Development of rate grids and changes in electricity prices for different customer categories (residential, small-, medium- and large-power customers) External
23 Community investments Philanthropic programs including donations and sponsorships, employee volunteering, fundraising campaigns and the Integrated Enhancement Program Mixed
24 Financial viability The organization’s financial performance, risk management and internal efficiency programs (e.g., optimization of administrative processes, etc.) Internal
25 Employee health and safety Programs to support the social, psychological and physical health of Hydro-Québec employees Internal
26 Relations with governments Organization’s positioning with government institutions and their representatives (e.g., Régie de l’énergie, Bureau d’audiences publiques sur l’environnement, NERC, FERC, etc.) Mixed
27 Vegetation control Vegetation management in facility rights-of-way (transmission lines, dikes, dams, distribution system, etc.) to maintain system security and reliability Internal
28 Customer service Assistance available to consumers by email or telephone (e.g., when outages occur, to answer questions, etc.) External
29 Heritage management Programs to protect and enhance built, technological, natural and archaeological heritage, and promote public awareness Mixed
30 Diversity and equal opportunity Internal practices and policies relating to equal opportunity for employees (compensation, recruitment, training, promotions), recognition and respect for diversity of individuals and opinions Internal
31 Measurement of consumption Rollout of an advanced metering infrastructure (next-generation meters) to improve billing service and outage detection Mixed
32 Information management Internal policies and practices on protection of personal information and access to information Mixed
33 Jobs and working conditions Information on the workforce and all benefits negotiated or granted to employees (compensation, benefits) Internal
34 Training and skills development Training offered to employees as well as skills development and succession management programs Internal