EDF / 2020 Universal Registration Document

2 RISK FACTORS AND CONTROL FRAMEWORK Risks to which the Group is exposed the more important as energy transition introduces new or reinforced requirements in relation to protection of biodiversity. The Group is committed to biodiversity through its corporate social responsibility concerns relating to the preservation of the planet’s resources (see section 3.2.). Measures taken for industrial safety and the control of these risks may not be fully effective, which could have consequences for people, property and immediate surroundings. The Group may be held liable. In case of a major accident, insurance policies for civil liability and damages taken out by the Group could prove to be significantly inadequate, and the Group cannot guarantee that it will be able in the long run to maintain a level of cover at least equal to current cover levels. Risks specific to nuclear facilities are further developed in section 2.2.5 “Specific risks related to nuclear activities”. Risks specific to hydraulic facilities are set out in 4B above. The impact of an industrial safety failure may have a negative impact on the Group’s operational activity, its financial or legal position, on the environmental assets, or its reputation, and may affect the Group’s ability to achieve Corporate Responsibility Objective with respect to biodiversity. The Group owns 40 facilities classified as Seveso under the European Directive for the prevention and management of major industrial risks. These are essentially storage or warehousing facilities for oil, gas or chemicals. The regulatory requirements applicable to this type of facility are implemented at all relevant Group sites. In addition, the Group’s French Seveso sites have all responded to requests from prefects following the fire that occurred in 2019 at the Lubrizol plant, a Seveso classified site in Rouen. activities The EDF group is the world’s leading nuclear operator in terms of the number of reactors in operation (71 reactors for which the EDF group is the nuclear operator, out of 444 power reactors in operation in the world on 14 January 2021) (1) . The Group has basic nuclear fuel cycle facilities and carries out activities in research, equipment manufacture and the supply of services to other nuclear operators, since the integration of the Framatome subsidiary, within the scope of the Group in 2018. In addition, the Group holds minority stakes in nuclear power plants in operation in China, the United States and in Belgium, which it does not operate. The Group is investing in new reactor projects in France, the United Kingdom and China and carries out its nuclear industrial activity in other countries, notably India and the United Arab Emirates, countries in which nuclear operators signed agreements with the Group. The share of nuclear energy, as a low-carbon form of energy and a part of the Group’s electricity mix, thus represents a significant industrial asset for the competitiveness and development of the Group. Given the low impact of fossil carbon dioxide emissions from the nuclear industry over the entire industrial lifecycle, the performance and control of nuclear activities contribute directly to the achievement of Corporate Responsibility Objectives (see chapter 3). The control and performance of nuclear activities are at the heart of EDF’s sustainable development policy. The nuclear activities of EDF are associated with the following issues: as with any nuclear operator, the latter’s obligations mean giving ongoing priority to nuclear safety, based on technical and organisational provisions in order to guard against a nuclear accident and, in the hypothetical event of an accident occurring, to limit the consequences of such an accident. These principles are reaffirmed in the revision of the Group’s nuclear safety policy in 2021. The nuclear business is carried out under the control of nuclear safety authorities in countries where the Group exercises nuclear operator responsibility. Failure to take nuclear safety into account as the number one priority could have a significant, even vital impact on the Group; Specific risks related to nuclear 2.2.5

The Contract Management function aims to improve the management of risks and create opportunities in the management of contracts. This function calls upon Contract Managers in the departments throughout the contractual process. It is an additional line of defence in the management of contracts, in relation to Group top managers and the departments. The Contract Management Department, attached to the Secretary General, is responsible for structuring this function, coordinating the Contract Management sector, determining the performance measurement reference system, professionalising the players and providing business knowledge and a digital Contract Management tool. 4F – Risk of blackout or supply/demand imbalance. Repeated customer power supply interruptions, or a black out, or a widespread power grid incident, in a territory served by the Group could have consequences for the Group’s activities, financial position and reputation, particularly if they were partly attributable to the Group. Criticality in view of the control actions undertaken: Moderate. The Group may be faced with repeated power outages or even a black-out, a widespread network incident of considerable scale, or be involved in it, even if the triggering incident occurred on a network not operated by EDF or was attributable to another player. The causes of power outages can be diverse: local or regional imbalance between electricity generation and consumption, accidental power supply or transmission failure, cascade failures, interconnection problems, delays in investment and the necessary network conversions to meet the needs of energy and ecological transition, difficulty in coordinating players, particularly in a market with insufficient or evolving regulation. An external crisis, such as the Covid health crisis, can, through the disruptions it generates, constitute an aggravating risk factor. The initial impact of such power failures could be repair costs incurred to re-establish power or restore the network. Power failures may also generate capital expenditures if it were decided, for example, to install additional generation or network capacity. This could also cause a decline in the Group’s turnover. Finally, they could have a negative impact on the Group’s financial position or reputation with its customers and all its stakeholders, particularly if the power outage were to be partly attributable to it. 4G – Industrial safety and impact on environmental assets, including biodiversity. The Group operates facilities for which accidents could, in the event of a failure in industrial safety, have serious consequences on the human or natural environment, particularly in terms of biodiversity and environmental capital (soils and water). Criticality in view of the control actions undertaken: Moderate. The Group operates or has operated facilities which, as part of their day-to-day operations, can, may or may have been the cause of incidents, industrial accidents having environmental and health impacts. The Group’s facilities may be located in industrial areas where other activities subject to similar risks exist, which means that the Group’s own facilities may be impacted by accidents occurring at neighbouring facilities owned by other operators and not under the Group’s control. Biodiversity issues concern all the Group’s facilities and projects, particularly in France where EDF is a landowner and a manager of natural resources of great importance. The risk management studies carried out on each industrial site integrate potential health or environmental impacts and avoidance measures in the event of accident situations. In this respect, feedback from the fire that occurred on 26 September 2019 at the Lubrizol plant in Rouen will be included in the analyses. This issue is all

(1) Source: www.iaea.org/pris

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EDF - UNIVERSAL REGISTRATION DOCUMENT 2020

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