EDF_REGISTRATION_DOCUMENT_2017

2.

RISK FACTORS AND CONTROL FRAMEWORK Risks to which the Group is exposed

In particular, the Group faces legal risks in all of its activities and in its various markets. Legal risks relating inter alia to the statutory and regulatory framework, operating activities, partnerships set up and contracts concluded with customers and suppliers are described below and mentioned in sections 2.1 “Risks to which the Group is exposed” and 2.3 “Dependency factors”. Key litigation, proceedings and arbitrations in which the Group is involved are described in section 2.4 “Legal proceedings and arbitration”. The measures taken by the Group to control the risks and activities to which it is exposed are described in section 2.2 (“Control of the risks and activities of the EDF group”). Chapter 2.5 describes the EDF group’s insurance program.

The Group operates in an environment that is experiencing profound change, which generates various risks, some of which are beyond its control and come in addition to the risks inherent to its business operations. The Group describes hereinafter the material risks to which it considers itself exposed. One or more of these risks could have an adverse effect on the Group’s activities or results. Moreover, other risks, of which it is currently unaware, or which it deems not material, may also have the same adverse effect. The risks presented below in Chapter 2.1 “Risks to which the Group is exposed”, concern risks related to the regulation of the energy markets, risks related to the economic, competitive and societal context, risks related to the transformation and operational performance of the Group and risks specifically related to the nuclear activities of the Group.

2.1

RISKS TO WHICH THE GROUP IS EXPOSED

The Group operates in an environment that is experiencing profound change, generating numerous risks, some of which are external. They are in addition to the risks inherent in its business lines. Below, the Group describes the main risks to which it considers that it is exposed. One or more of these risks could have an adverse effect on the Group’s activities or results. Moreover, other risks, of which it is currently unaware, or which it deems not material, may also have the same adverse effect. The issues associated with the risks to which the Group is exposed are multi-criteria. They may be strategic or operational and may depend on regulations and on the economic or general context. The risks caused by factors external to the Group are described in sections 2.1.1 and 2.2.2. The risks associated with the regulation of energy markets are described in section 2.1.1 “Risks associated with the regulation of energy markets”, particularly the regulation of the electricity market, for which it is necessary to take into account: competition rules, especially in Europe and France, where most of the Group’s ■ activities are conducted; public policies in the field of energy. ■ In section 2.1.2 “Risks related to the economic and general context”, a description is given of the risks caused by exposure to the energy markets in which the Group operates, as well as the risks caused by changes to competition and new societal expectations, economic circumstances and elements of public policy or general

regulation in the various countries and territories where the Group exercises its activities. The risks caused by factors internal to the Group are described in sections 2.1.3, 2.1.4 and 2.1.5. In section 2.1.3 “Risks related to the transformation of the Group” a description is given of the risks associated with changes to the portfolio and model of activity of the EDF group, and to its transformation, in its industrial, services and sales activities. In section 2.1.4 “Risks related to the operational performance of the Group”, a description is given of the risks associated with the control of its operational activities in its various industrial, services and sales activities. Section 2.1.5 is devoted to the specific risks related to the Group’s nuclear activities, which involves additional risk factors and specific measures, notably with regard to the overriding requirements of nuclear safety and the long-term capital-intensive nature of the activity. The exposure to risk may vary according to the geographical scope and duration. The potential impact of these risks may produce effects at very different time horizons, ranging from very short term (less than a year) to very long term (up to several decades or more, given the nature of the relevant industrial activities). The geographical scope of exposure of the Group to its main risks is described in the table below.

106

EDF I Reference Document 2017