SUSTAINABILITY

ECONOMIC TOPICS
ECONOMIC TOPICS

GRI 201-1 – DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED

GRI 201-2 – FINANCIAL IMPLICATIONS AND OTHER RISKS AND OPPORTUNITIES FOR THE ORGANIZATION’S ACTIVITIES DUE TO CLIMATE CHANGE

According to the International Renewable Energy Agency (IRENA), renewable energy, coupled with energy efficiency gains, can provide 90% of the CO2 emissions reductions needed by 2050 to stay within the Paris Agreement boundaries. In this scenario, renewable technologies could generate more than 80% of all electricity by 2050, including a 52% share from wind and solar which would have to grow from today’s approximately a 5.5% share. The leading role of renewables has been noticed by governments around the world and most countries have included renewable energy targets in their NDCs.

A clean energy revolution is naturally underway not only because it is sustainable but also because economically, onshore wind and solar PV costs have been declining and these technologies are now among the cheapest sources of energy in a growing number of countries, as highlighted by Lazard, Bloomberg New Energy Finance and IRENA. The competitiveness of renewables has been clearly evidenced in 2017 with wind (onshore and offshore) and solar PV’s tenders beating a record of low prices all around the globe.

This awareness is increasingly growing in all sectors. Corporations, for instance, have been signing power purchases agreements (PPA) with renewable generators in order to fill their electricity needs. Renewables represent now an increasingly share of new investments in power-generating facilities1 and according to BNEF, renewable energy sources are set to represent almost 75% of the investments in new power generation technologies until 2040. Not surprisingly, Europe’s major utilities pledged to become carbon-neutral “well before 2050” and even several oil and gas major companies have significantly increased their investment in renewables during the recent years. Funding institutions are also stepping back from fossil fuel projects; the World Bank announced in December 2017 that it would cease to finance upstream oil and gas after 2019 and investment funds, such as the Norway’s wealth fund, banks and pension funds have announced similar pledges. Likewise, global green bond2 issuance hit a record of USD 155.5 billion in 2017 and could reach USD 250-300 billion in 2018, according to a research from the Climate Bonds Initiative.

According to a study published by IRENA, the EU could double the renewables’ share in its energy mix, cost effectively, even without considering the economic value associated with health and environmental benefits. The share could rise to 34% in the total energy mix and up to 50% in the electricity mix (compared to 29% in 2015).

GRI 201-3 – DEFINED BENEFIT PLAN OBLIGATIONS AND OTHER RETIREMENT PLANS

Information on EDPR benefit plan obligations, can be found in Note 10 in the Financial Statements.

GRI 201-4 – FINANCIAL ASSISTANCE RECEIVED FROM GOVERNMENT

Information on EDPR financial assistance received from government through Production Tax Credits, Cash Grants and other Tax savings in the US, can be found in Income from institutional partnerships in US wind farms and Amortization of deferred income (government grants) in the Consolidated Income Statement and additional details on Note 7, Note 12 and Note 30 in the Financial Statements.

GRI 202-1 – RATIOS OF STANDARD ENTRY LEVEL WAGE COMPARED TO LOCAL MINIMUM WAGE

The values presented in the table below, show the average standard entry-level wage compared to the local minimum wage for each one of the countries where EDPR has presence. To protect the privacy of employees’ wages in those countries where the headcount is smaller, the analysis is not disclosing the information by country and gender.

Note: European ratio is calculated by using the sum of the entry-level wages (in €) of every country where EDPR operates (except Belgium, that was removed to protect the privacy of employees due to the small headcount) and the sum of the minimum wage of all these countries (in €). 2016 data has been restated using the same criteria.

Note 1: Canada and Mexico information was also removed to protect the privacy of employees in the country due to the small headcount.

GRI 202-2 – PROPORTION OF SENIOR MANAGEMENT HIRED FROM THE LOCAL COMMUNITY

The Code of Ethics contains specific clauses of non-discrimination and equal opportunities in line with the company’s culture of diversity. This is reflected in the procedures for hiring people via a non-discriminatory selection processes.


1. According to Bloomberg, global clean energy investment in 2017 was the second highest ever at USD 333.5 billion and representing an annual increase of 3%
2. Debt instruments to be used for projects that promote climate and environmental sustainability purposes

 

A potential employee’s race, gender, sexual orientation, religion, marital status, disability, political orientation or opinions of any other nature, ethnic or social origin, place of birth or trade union membership are not considered.

There are no specific procedures explicitly requiring local recruitment. However, a high percentage of EDPR employees’ are hired from the same country in which the company operates.

71% of the new Directors have been hired internally.

GRI 203-1 – INFRASTRUCTURE INVESTMENTS AND SERVICES SUPPORTED

Wind and solar energy require infrastructure investments which benefit surrounding communities.

This includes the reinforcement of existing electricity networks and the rehabilitation of existing roads or the construction of new roads.

The investment in roads is necessary in order to transport heavy equipment (wind turbine components, power transformers, etc.) to the site during construction. The improved road system facilitates future maintenance activities after construction works, as well as improves access to remote locations for the surrounding communities. During the operation of the wind farms, these roads are maintained and further opportunities may be identified to increase the positive impact in the community.

The integration of the generation capacity may also require upgrades in the distribution and transmission grids that belong to the system operators. Those upgrades indirectly benefit the quality of service offered in the surrounding areas by minimizing electricity supply interruptions.

In 2017, EDPR invested €7 million to develop community roads and €1.6 million to improve public electric facilities.

GRI 203-2 – SIGNIFICANT INDIRECT ECONOMIC IMPACTS

Renewable energy technologies are viewed not only as tools for mitigating climate change, but are also increasingly recognized as investments that can provide direct and indirect economic advantages by reducing dependence on imported fuels (and hence, improving trade balances), enhancing local air quality and safety, advancing energy access and security, propelling economic development, and, creating jobs.

GRI 204-1 – PROPORTION OF SPENDING ON LOCAL SUPPLIERS

At EDPR, there is no specific policy or in-house procedure for preferring locally based suppliers.

Nevertheless, under equal commercial terms, EDPR chooses local suppliers in order to enhance the socio-economic sustainability of the 12 countries across Europe and the Americas where it is present.

In this way, around 99%* of the purchases were sourced from local suppliers (purchases in countries of operation of EDPR).

Moreover, during the construction of the company’s projects, the local community can see an influx of temporary local construction workers and suppliers that provide a positive impact on the local economy.
Note: * is based on # of purchase orders placed in 2017.

GRI 205-1 – OPERATIONS ASSESSED FOR RISKS RELATED TO CORRUPTION

EDPR analyses all the new markets were enters operations through a Market overview. This study also evaluates the corruption risk.

EDPR during 2015, implemented an Anti-Bribery Policy of application to all EDPR Group. This Anti-Corruption Policy involves a series of procedures regarding the relationships of EDPR employees with external parties, namely the approval of certain actions regarding hospitality to and from external parties, charitable donations, and sponsorships.
Additional information on the Whistleblowing Channel and the Ethics Channel can be found at Section 5 Corporate Governance, C. II. Reporting Of Irregularities or visit the ethics information on the corporate governance section, in the website, Moreover, additional information is detailed in the Integrity and ethics Section.

 

Anti-Bribery Policy is available at www.edpr.com

GRI 205-2 – COMMUNICATION AND TRAINING ON ANTI-CORRUPTION POLICIES AND PROCEDURES

There is a strong commitment by the Company in relation to the dissemination and promotion of compliance with the Code of ethics, which includes Bribery & Corruption section, available to all employees through training, questionnaires, and open discussions of the findings. To this extent, from March to December 2016, EDP offered an online Ethics training (“Ética EDP”) available to all employees of both Europe/Brazil and North America. This course achieved a major participation of around 900 EDPR employees. This type of training will be performed periodically.

GRI 205-3 – CONFIRMED INCIDENTS OF CORRUPTION AND ACTIONS TAKEN

EDPR has no knowledge of any corruption-related incidents recorded during 2017.

Moreover, the company has internal procedures to monitor compliance with the Code of Ethics and defines actions to be taken in case of incidents.

Additional information on the Whistleblowing Channel and the Ethics Channel can be found at Section 5 Corporate Governance, C. II. Reporting Of Irregularities or visit the ethics information on the corporate governance section, in the website, www.edpr.com. Moreover, additional information is detailed in the Integrity and ethics Section.

 

GRI 206-1 – LEGAL ACTIONS FOR ANTI-COMPETITIVE BEHAVIOR, ANTI-TRUST, AND MONOPOLY PRACTICES

EDPR has no knowledge of any legal actions for anti-competitive behavior, anti-trust or monopoly practices recorded during 2017.

For additional information related to Economic topics, please refer to Business Environment, Financial, Employees, Communities and Safety Organization Structure Sections.