EDF / 2020 Universal Registration Document

3 NON-FINANCIAL PERFORMANCE CSR governance

Identifying the environmental risks The 2020 risk mapping (1) update reconfirmed the risk analysis and did not highlight new environmental risks. At the end of 2020, the Group has eight high-threshold SEVESO sites (2) and 32 low-threshold sites (3) . In 2020, 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 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 in summer and droughts increasing the pressure on both environments and some of the Group’s business lines such as hydropower and nuclear activities. 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 based on: an active investment policy incorporating the best available technologies (BAT) ● 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”). The industrial incident at the Lubrizol Seveso site in France (non-EDF site) led to a change in the regulatory framework in terms of risk and hazard control and generated specific internal feedback in order to identify avenues for progress in the layout and protection of storage facilities. In France, a comprehensive “environment – sustainable development” training programme features both business line and cross-disciplinary training focusing on themes of environmental management, standards and regulations, and environmental analysis. In 2020, 1,545 employees received training representing 12,710 hours (4) . The “environmental skills development” network contributes to forecasting and managing both skills in this field and experts’ career paths. Locally, each of the Group’s operational units and companies identify events that could have an environmental impact, manage emergency situations that could result from them, conduct corresponding crisis response drills, implement monitoring and communicate on environmental events under its responsibility. High-stake environmental event In 2020, actions to closely supervise and monitor production processes have made it possible to avoid high-stake environmental events (5) with a significant impact on the environment. Certain operational events such as hydrocarbon leaks and alignment deficiencies in effluent transfers may result in litigation arising from complaints lodged by NGOs or associations and notices to comply issued by national regulatory authorities (ASN, DREAL, etc.). In 2020, penalties imposed on EDF totalled €500 for a 5th class offence in Flamanville.

Reduction of chemical risk When it is technically feasible, in order to reduce the pollution risks, the Group’s entities have also implemented a programme to eliminate or substitute certain chemical substances with more environmentally-friendly products. This work focuses as a priority on CMR (carcinogenic, mutagenic, or toxic for reproduction) substances or those considered worrying. Substitute products are often environmentally certified, e.g. cleaning products (regarding our subsidiaries Citelum, Électricité de Strasbourg (ÉS) and data centres). Following on from the R&D studies, substitutions are implemented, such as: environmentally acceptable oils for hydraulic production, fluids for thermal and nuclear power plant turbines in France and the United Kingdom, varnishes and paints (Industrial Division, Property Management and Citelum), and the decision by the Real Estate Department to stop using pesticides. Furthermore, EDF, Hydro, Property Management, Enedis and ÉS are continuing with their programmes to decontaminate equipment with concentration higher than 50 ppm for PCBs (6) and PCTs (7) . These action plans continued in 2020 are on target. Complete disposal is set for the end of 2025 for EDF R&D, EDF SEI, EDF PEI, Cyclife France and Dalkia. It should be noted that thermal and nuclear generation lines no longer have any equipment exceeding the threshold. Compensation 3.5.2.5.6 Total compensation Total compensation is a key component in recognising the contribution of every staff member to the Group’s performance. It contributes to employee engagement, increases the loyalty of talent and adds to the Group’s attractiveness. Accordingly, the Group is committed to offering its employees fair and competitive compensation, while paying great attention to the quality and level of social welfare it proposes, particularly in terms of cover against the major risks of life. The Group accordingly formally introduced a total compensation and fringe benefits policy. It covers all employees of the main companies controlled by the Group. The Group’s main foreign companies’ compensation and social welfare systems have been reviewed based on this policy. The total compensation policy is based on four main principles: competitiveness in the external market; internal consistency and fairness; financial sustainability; and communication. It is based on fixed compensation and individual and/or collective variable compensation which serves to recognise the achievement of objectives, connected to the companies’ economic results. There is a direct and visible link between the employee’s contribution and the related compensation. The Group’s companies guarantee the meeting of the minimum legal or professional requirements in each country and the absence of discrimination. EDF is reaffirming its priorities in terms of recognition and updates its policies by: improving the integration of recognition into its managerial practices and ● processes; strengthening the link between personal contribution (performance, ability to ● adapt and take the initiative) and financial recognition; and developing variable compensation schemes, linked to the Company’s financial ● performance, to recognise through differentiation. Lastly, to meet the challenges of employee and manager recognition, a project to modernise the pay classification system for the Electricity and Gas Industries branch was launched in 2019 and will continue in 2020 and 2021. For total gross remuneration, please refer to the note on employee expenses.

(1) See section 2.1.2.1 "Risk mapping and the report on the control of activities and risks”. (2) These sites include Bellefontaine B, Pointe Jarry, East Port and Jarrie in France, Hole House in the UK, and Collalto, Cellino and San Polito in Italy.

(3) 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. (4) Within the scope of EDF SA. (5) High-stake environmental event: an event causing serious environmental damage (areas, resources and natural environments, sites and landscapes, air quality, animal and plant species, biological diversity and balance) combined with extensive media coverage or a financial impact of more than €3 million. An event causing environmental damage and likely to affect human health falls within the scope of a high-stake environmental event for the EDF group.

(6) PCB: Polychlorobiphenyls. (7) PCT: Polychloroterphenyls.

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EDF - UNIVERSAL REGISTRATION DOCUMENT 2020