Naturgy Energy Group, S.A.

Climate Impact & Sustainability Data (2018, 2023)

Reporting Period: 2018

Environmental Metrics

Total Carbon Emissions:18.3 MtCO2e

Scope 1 Emissions:18.3 MtCO2e

Renewable Energy Share:27.5% (installed capacity), 24.9% (net production)

Water Consumption:26.5 Hm3

Carbon Intensity:342 tCO2/GWh (electricity generation)

ESG Focus Areas

Climate change
Diversity
Governance
Social responsibility
Health and safety
Supply chain management
Energy vulnerability

Environmental Achievements

Ranked first in the world in the Gas Utilities sector of the DJSI index for the second consecutive year.
Ranked world leader in the Multi-utilities sector of FTSE4Good index.
Included in CDP's Climate Change A List.
Achieved the highest scores for mitigation of climate change and incorporation of sustainability according to MSCI.
Reduced GHG emissions (Scope 1) from 20.5 MtCO2eq in 2017 to 18.3 MtCO2eq in 2018.
Increased emissions-free installed capacity from 26.4% in 2017 to 27.5% in 2018.
Increased net production free of emissions from 19.6% in 2017 to 24.9% in 2018.

Social Achievements

Launched the Solidarity Fund for Energy Rehabilitation to improve energy efficiency of vulnerable families' homes.
Launched the Job Circle project to train long-term unemployed people in energy rehabilitation.
Improved management of vulnerable customers.
Increased employee training hours from 38.4 in 2017 to 49.9 in 2018.
Maintained high scores on various sustainability indices.
Improved customer service, reducing claim processing time to one week on average.

Governance Achievements

Reduced the number of board members from 17 to 12.
Increased the weighting of independent directors on the Board.
Implemented a new organisational structure to ensure simpler and more transparent management.
Approved the Strategic Plan 2018-2022.
Implemented a long-term incentive plan linked to total shareholder return.

Climate Goals & Targets

Medium-term Goals:

Triple renewable installed capacity by 2022.
Achieve Ebitda of Euros 5,000 million by 2022.
Achieve net income of Euros 1,800 million by 2022.
Achieve annual average free cash flow of Euros 1,800 million by 2022.
Maintain net debt at Euros 16.4 billion by 2022.

Short-term Goals:

Reduce annual operating expenses by Euros 500 million by 2022.

Environmental Challenges

Unfavorable exchange rates, particularly in Latin America.
Asset write-down of Euros 4.9 billion mainly affecting conventional power generation in Spain.
Regulatory review of criteria and returns for regulated activities.
Volatility in commodity prices, exchange rates, and interest rates.
Mismatch between gas supply and demand.
Uncertainty about growth prospects in Latin America.
Aggregate demand pressure in Spain in a context of energy efficiency.
Growing tension in the insurance market in the face of natural catastrophes.

Mitigation Strategies

Geographic diversification.
Hedging via local currency funding and derivatives.
Optimisation of contracts and assets worldwide.
Optimisation of the balance between supply and generation.
Heightened intensity of communication with regulatory bodies.
Adjusting efficiencies and investments to recognised rates.
Physical and financial hedges.
Diversification of funding sources.
Continuous improvement plans.
Optimisation of total cost of risk and of hedges.
Transparency in communication.
Emergency plans at facilities with risk of environmental accident.
Specific insurance policies.
End-to-end environmental management.
Corporate positioning vis-à-vis climate change.

Supply Chain Management

Supplier Audits: 6,906 suppliers assessed in 2018

Responsible Procurement

Supplier Code of Ethics
ESG audits
Achilles tool for supplier classification
Prioritization of local suppliers

Climate-Related Risks & Opportunities

Physical Risks

Natural catastrophes

Transition Risks

Decarbonisation trend of the sector

Opportunities

Growth in renewable energies
Development of energy-efficient products

Reporting Standards

Frameworks Used: IIRC, GRI

Certifications: ISO 9001:2015, ISO 14001:2015, OHSAS 18001, Bequal Plus

Third-party Assurance: Independent external revision process, details in annex.

Sustainable Products & Innovation

Renewable gas
Smart meters
Energy storage solutions
Energy-efficient products and services

Awards & Recognition

Global leader in Gas Utilities (DJSI)
World leader in Multi-utilities (FTSE4Good)
CDP Climate Change A List
AAA rating from MSCI

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:112.9 MtCO2 eq

Scope 1 Emissions:12.5 million tCO2eq

Scope 2 Emissions:0.4 million tCO2eq

Scope 3 Emissions:101.7 million tCO2eq

Renewable Energy Share:41.0% (installed capacity), 38.6% (net production)

Water Consumption:777 hm3 (abstracted), 17 hm3 (consumed), 760 hm3 (discharged)

Waste Generated:Increased by 22% in 2023

Carbon Intensity:247 tCO2/GWh (power generation emission factor)