EDF_REGISTRATION_DOCUMENT_2017

3.

ENVIRONMENTAL AND SOCIETAL INFORMATION − HUMAN RESOURCES Meeting the challenges of climate change

3.3

MEETING THE CHALLENGES OF CLIMATE CHANGE

Priorities Anthropogenic emissions of greenhouse gases (GHG), and CO 2 emissions in particular, are the main causes of climate change (IPCC, AR5). In the near future, we will have to confront more frequent, longer-lasting heat waves, more extreme weather events in many regions of the world, and a rise in average sea levels (IPCC, AR5). Energy production now accounts for 60% of global anthropogenic greenhouse gas emissions, 40% of which are linked to electricity and heat generation (IEA, 2016). Electricity industry operations have an impact on climate change; the electricity and heat generation sector alone produces 25% of anthropogenic CO 2 emissions (IPCC, AR5). However, due to the heavy use of low-carbon energy sources in its generation mix, the EDF group’s direct impact on climate change is ultimately relatively low (1) .

EDF group is aware of both the impact of its operations on climate change, and the impact of climate change on its operations. That is why, as a responsible company and as part of CAP 2030, it is rolling out an ambitious strategy to fight against climate change. This is a transformational strategy which aims to address climate change risks, contribute to the main sustainability challenges and grasp the opportunities this new context offers. With CAP 2030, EDF group aims to be a flagship electricity generator in global terms and an efficient, responsible electricity company that champions low-carbon growth. To achieve this, the Group has a strategy designed to anticipate climate change risks (both to operations and the asset portfolio) and to seize the opportunities offered by this new context. Our aim is to provide tomorrow’s energy solutions today.

CO 2 emissions due to heat and electricity generation (1) (gCO 2 /kWh)

2017

2016

EDF group

82 25

77 19

EDF

Direct emissions, excluding life cycle analysis of generation plants and fuel. (1)

Strategy for fighting climate change In this context, EDF group’s strategy for fighting climate change focuses on two areas: decarbonising and adapting to climate change (5) .

Use of this low-carbon electricity is a major positive contribution in terms of avoided emissions. The global average is 506gCO 2 /kWh (2) (2015) and the average of the main European electricity providers is 275gCO 2 /kWh (3) (2016). Climate change is already impacting the electricity sector; the EDF group must anticipate and tackle three series of major changes which affect its operations: regulatory changes: global electricity demand is set to grow by nearly 80% by ■ 2050 (4) ; with this in mind, a consensus has been formed around decarbonising electricity generation as an effective way of reducing CO 2 emissions; this involves for example setting targets in the Energy Transition for Green Growth Law in France, those of the Climate Change Act in the UK, and those of the 2020 and 2030 Climate and Energy Packages of the European Union. The 2015 Paris agreement, seeking to keep the rise in temperatures “well below 2°C compared to pre-industrial levels” sums up this underlying trend; regulatory changes tending towards an increase in CO 2 prices represent an opportunity for EDF, which is likely to increase the profitability of the Group’s largely carbon free generation facilities; changes in technology and competitive positioning: energy is increasingly ■ decentralised, low-carbon and digital. Customers are playing an increasingly active role in their consumption and generation of electricity; new economic models are emerging that throw the competitive positioning into question; climatic changes likely to impact the Company’s assets and change physical ■ operating conditions.

3.3.1

EDF GROUP’S DECARBONISATION

STRATEGY EDF group’s decarbonisation strategy is first and foremost based on an ambitious industrial policy focused on a low-carbon generation. This policy entails action to promote increased electrification as a way of removing carbon from the economy. Finally, EDF is innovating to enable its customers to optimise their energy consumption. Decarbonising electricity generation 3.3.1.1 To maintain its leadership, EDF is making a new emission reduction commitment (6) , in line with current scientific understanding, and is putting the necessary resources in place.

Direct CO 2 emissions by kWh generated are low compared with industry averages. The combustion of gas sold by the Group to end customers makes up a large part of its indirect (1) emissions. Most up-to-date statistic available for CO 2 emissions generated by power plants and combined cycles, CO 2 Emissions from Fuel Combustion, International Energy Agency, 2016, (2) data for 2014. Climate Change and Electricity, European carbon factor Benchmarking of CO 2 emissions by Europe’s largest electricity utilities, PWC, 2018 (data for 2016). (3) Energy Technology Perspectives 2016, International Energy Agency. (4) With a number of drivers, such as a high-performance electricity mix which is competitive and already low-carbon, a robust process for identifying risks and opportunities and for (5) managing priorities at the very highest corporate levels, a strategy for fighting climate change at the very heart of EDF’s strategy which is embedded in the Group’s businesses, R&D which helps attain the medium and long term energy and climate targets of the energy transition, an investment policy in line with priorities, suitable human resources and an appropriate remuneration policy, etc. The Group’s aim is to set a quantitative emissions reduction target for scopes 1 and 2 by using the Sectoral Decarbonisation Approach developed as part of the “Science-based (6) targets” initiative.

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EDF I Reference Document 2017