EDF / 2020 Universal Registration Document

3 NON-FINANCIAL PERFORMANCE Appendixes and concordance tables

3.9.4 Description of physical risks 3.9.4.1

Summary of EDF group climate risks

Risk category

Description

Potential impact for the EDF group

Production: drop in nuclear production due to heat sink; Low water flow for dams in southern countries; Accelerated wearing of materials; Transmission and Distribution: drop in network capacity; Fire risk; All business lines: rise in the cost of insurance; Deterioration of working conditions for employees and service providers Production: slow-down or potential temporary halt of production facilities; Impacts of higher flood waters; Transmission and Distribution: power cut offs Production: change and drop in hydropower production; Decreased yield of nuclear and thermal power facilities; Risk of submersion of infrastructures on seacoasts (particularly island regions); Proliferation of organisms that plug water intake; Risk of microbial growth in cooling circuits; Transmission and Distribution: diminished capacity of transmission lines; Sales: drop in heating demand; Increase in air-conditioning demand Risk of cancellation of licences, risk of litigation following exceptional climatic events, risk of litigation related to EDF group publications, particularly as regards the duty of care. Risk involved in the sharing of water resources due to multiple uses and multiple stakeholders in a context of increasing water scarcity situations Risk involved in the necessary land resources for renewable energy due to restrictive regulations (biodiversity, agricultural lands) and the legitimacy of sharing with numerous stakeholders. Opportunity: as a low-carbon leader, the EDF group is called on to play a key role in decarbonisation of the European economy. Opportunity: increased demands of own consumption, energy efficiency, electric mobility, green deals and low carbon Opportunity: decarbonised electricity is recognised as an indispensable means to deliver decarbonisation to the economy. Risk/Opportunity: risk of instability to the system in case of a high penetration rate of renewable energies; Key role of nuclear energy usable together with renewable energies to ensure stability of the network Risk/Opportunity: potential emergence of technologies such as CCSU, thermal solar, small modular reactors, storage or in the area of negative emissions Risk/Opportunity: risk in case of European taxonomy having an impact technologically; Opportunity to provide the EDF group with sustainable financing (Green Bonds, positive incentive loans) Risk of stranded thermal assets after regulatory changes or carbon price increase Potential impact for the EDF group

Increase of heatwaves and droughts

Risks related to extreme events

Increase of strong wind events, storms, tornados and floods

Increase of average temperatures / Increase of sea levels

Risks related to chronic events

Description of risks and transition opportunities 3.9.5.2

Risk category

Description

Legal risks

Climate-related litigation

Tension over uses of water

Political and regulatory risks

Tension over access to land and use of soils Political difficulties to achieve the objectives of the Paris Agreement

Change in customer expectations

Customer – market risks

Change in uses of electricity

Stability and security of electricity networks

Technological risks

Transition technologies

Access to competitive financing

Financial risks

Stranded assets

The main actions implemented by the EDF group to manage climate-related risks are described in section 2 “Risk factors and control framework” and section 3.2 “EDF, company committed to the energy transition”.

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EDF - UNIVERSAL REGISTRATION DOCUMENT 2020