EDF / 2019 Universal registration document

3. Non-financial performance EDF, a responsible company

The Sustainable Development Department 3.1.2.3.3 It reports to the Innovation, Corporate Social Responsibility and Strategy Director, a member of the Executive Committee. It contributes to the Group’s strategic transformation by accompanying business lines and projects in specifically taking into account environmental and social issues (opportunities and risks) in their business decisions and conduct, the integration of the six Corporate Social Responsibility Goals into the strategic screening of operating entities and process of screening new projects from the point of view of sustainable development  (1) . It is particularly responsible for monitoring the Group’s target for reducing direct “scope 1”  (2) GHG emissions. Its aim is to make the Group’s performance as a responsible company a USP that creates value for all stakeholders (employees, shareholders, customers). It coordinates sustainable development in the Group: corporate coordination of the business lines and subsidiaries through the SDC (Sustainable Development Committee)  (3) , coordination of the dedicated internal networks such as the EMS and the predictive watch networks, coordination of relations and dialogue with external partners. It brings together and coordinates the expertise necessary for taking into account sustainable development issues, particularly the implementation of the CSRGs. Transformation drivers 3.1.2.4 Integration of the Corporate Social 3.1.2.4.1 Responsibility Goals into the Group’s strategic process and project screening The six CSRGs reflect long-term commitments (2030). The requirements for their implementation are set out in guidelines specifying the contribution of each of the Group’s entities and subsidiaries to the achievement of the common objective. The system for monitoring these commitments is integrated into the Group’s strategic planning loop. Annual performance reviews allow entities and subsidiaries to monitor and control their actual performance. Similarly, projects and investments subject to the approval of the Group’s various Commitments Committees, and particularly those of the Group Executive Committee  (4) (CECEG) and the International Business Development Committee (CBDI) that are the subject of a specific opinion of the Sustainable Development Department based on a screening grid that translates the issues of the six CSRGs into operational terms. Where necessary, the Sustainable Development Department organises due diligence specific to these issues. The environmental management system (EMS) 3.1.2.4.2 In order to implement the goals and actions based on its sustainable development commitments and policy, the EDF group has set up a Group-wide environmental management mechanism using an environmental management system (EMS). This system is ISO 14001: 2015 certified by the Afnor certification external expert, for a scope representing almost all the consolidated revenue of EDF and its subsidiaries (excluding Enedis) and shareholdings. All (100%) of industrial sites are covered by an EMS and, for all thermal, nuclear and hydropower generation sites in Europe, this system is certified. The environmental actions adopted are deployed at all entities and subsidiaries via implementation of the Group’s Sustainable Development policy goals.

Predictive watch 3.1.2.4.3 EDF anticipates changes to environmental and energy policies in order to take appropriate measures to guarantee regulatory compliance and manage business integration or reputational risk issues. To this end, the Sustainable Development Division coordinates a predictive watch system that mobilises and coordinates the Group’s experts. This process is based on the work of thematic groups known as “watch networks”: water, waste and soil, air, biodiversity, industrial risks, energy efficiency, energy poverty, health and climate change, sustainable finance. Each of these network comprises fifteen members from different Group businesses that meet every quarter to share an overall vision. Each network works closely with the Legal, Public Affairs and European Affairs Divisions. The managers of each network meet every month as a Sustainable Development Agency which monitors the transversality of approaches and ensures that the Group’s challenges are optimally taken into consideration with an overall, long-term view. In 2019, EDF was considered by the InfluenceMap think tank to be one of the 17 businesses most actively supporting regulation in accordance with the Paris Agreements  (5) . Management of environmental risks 3.1.2.4.4 Environmental risks, including those associated with climate change, are fully integrated into the Group’s EMS and internal control system in coordination with the Group risk management function. They are subject to action plans resulting from strategic priorities in the Group’s sustainable development policy. Identifying the environmental risks The 2019 risk mapping  (6) update reconfirmed the risk analysis and did not highlight new environmental risks. At the end of 2019, the Group has eight high-threshold SEVESO sites and 32 low-threshold sites  (7) . In 2019, as in previous years, the most significant factors in terms of the economic and financial challenges related to environmental risks pertain to the following subjects: climate change and GHG emissions; the roll-out of energy efficiency initiatives; the impacts of EDF’s activities on the air, water and soil and the production of waste; protection of biodiversity and services provided by ecosystems and the management of water resources. The main change concerns the observation of the effects of climate change with higher temperatures and droughts increasing the pressure on both environments and some of the Group’s business lines. Managing the environmental risks In order to control risks of industrial incidents or accidents that could harm the natural environment or public health, EDF has implemented a Group environmental management system; an active investment policy and an industrial asset decommissioning programme for assets no longer in operation, which includes decontamination operations where necessary; an employee training and awareness-raising programme for all stakeholders, including feedback from crises experienced and drills; inspections and audits at the generation sites; a crisis management policy which requires the regular testing of crisis systems through an annual programme of crisis response drills (see section 2.1.2.5 “Crisis management and business continuity”). Specific internal feedback from the industrial incident at LUBRIZOL’s SEVESO site in France (non-EDF) will be provided, allowing identification of any potential areas for improvement.

(1) See section 3.1.2.2 “Integration of the Corporate Social Responsibility Goals into the Group’s strategic process and project screening”.

(2) See. section 3.4.2 “Methodology”. (3) In 2018, the SDC met five times. It reviewed the carbon trajectory, the biodiversity agenda, the organisation of non-financial reporting and the Group’s Environmental Management System. (4) This undertaking concerns new projects involving investments of more than €50 million, entailing a significant impact on regions and the environment. The Group plans to lower this investment threshold to €30 million by 2030.

(5) How companies really impact progress on climate, 2019, influencemap.org/climate-lobbying. (6) See section “2.1.2.1 Risk mapping and the report on the control of activities and risks”.

(7) Upper and lower threshold: industrial establishments are “Seveso” classified according to their technological risk depending on the quantities and types of hazardous products they handle. There are two different thresholds which classify establishments as “Seveso low-threshold” or “Seveso high-threshold”. The requirements vary significantly between these two types; they are very restrictive for the high-threshold, particularly with regard to the safety management system, informing the public and the prevention plan, etc.

133

EDF | Universal registration document 2019