EDF_REGISTRATION_DOCUMENT_2017

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

EDF group, the leader in low-carbon electricity EDF group is one of the world’s leading electricity producers, not only in terms of net installed capacity and electricity generation, but also in terms of carbon performance with direct emissions currently at 82gCO 2 /kWh (1) , a carbon intensity six times less than the global average in the sector. EDF group’s leadership in reducing emissions has also been recognised by the Global 500 Greenhouse Gases Performance study for 2010-2015 by Thomson Reuters, which ranked the Group 12th out of the 500 largest companies in the world, in terms of emissions reductions. To maintain its leadership, EDF made a new emission reduction commitment, compatible with current scientific understanding The CAP 2030 strategic project aims to make EDF “an efficient, responsible electricity company that champions low-carbon growth”, Related to CAP 2030, the first Corporate Social Responsibility goal (CSRG no. 1: go beyond the requirements of the 2°C goal set by the Paris Agreement by drastically reducing our CO 2 emissions) outlining the Group’s determination to cut its emissions was formulated in May 2016. This ambition will be embodied by a target to reduce Group emissions that includes the goals set by the Paris Agreement. In order to set this target, EDF mainly uses the Sectoral Decarbonisation Approach (SDA) developed by the CDP initiative, United Nations Global Compact, WRI and WWF “Science based targets (SBTi)”. EDF group is implementing the resources necessary to meet this ambitious carbon reduction target It aims to further cut CO 2 emissions from its generation asset portfolio and make wise investment decisions, in order to maintain a balanced, low-carbon generation mix, combining renewable and nuclear generation and thus maintaining its leading position in low-carbon electricity generation. This also involves preserving good nuclear flexibility, in order to strengthen its compatibility with the development of renewable sources. Furthermore, R&D helps prepare the future generation fleet and energy system, by recommending measures for optimising thermal power plants (2) , integrating intermittent renewable energies, or through work on smart electricity systems. Incorporating climate change priorities into its investment strategy and policy Climate change represents a major financial challenge for EDF. In the context of its investment policy, EDF uses medium-long term scenarios that include carbon prices (3) enabling it to assess the profitability of future investments and plan the Group’s strategy; financial commitments are scrutinised in line with the CAP 2030 strategy (4) and commitments made by the Group, including a two degree decarbonisation objective. Scenarios including a high carbon price enable the Group to focus its investments on low-carbon assets, increasing the profitability of its largely low-carbon generation facilities. The description of the scenarios used in this respect, as well as their consequences, remain confidential. Maintaining its position as a leader in renewable energies See section 3.2.3 "Development of renewable energies". Relying on nuclear power, the cornerstone of EDF’s low carbon strategy Nuclear power generation has made a clear contribution to low-carbon growth (materiality issue no. 8 Position of nuclear power in the energy mix). It must be assessed in line with requirements regarding safety, fleet renewal, skills maintenance, presence in international markets, modularity and competitiveness. EDF’s nuclear power contributes to carbon efficiency in France and Europe. It is difficult to evaluate CO 2 emission reductions in the French economy, but it is worth pointing out that average emissions in the sector are around fifteen times higher in

Europe compared to those of EDF in France. In addition to this carbon efficiency, nuclear power is a useful way of supporting the development of renewables by further developing its load-following abilities (between 20% and 100% of the capacity of a unit in thirty minutes).

Drastically reduce CO 2 asset portfolio EDF is committed to reducing CO 2

emissions from the fossil

emissions from its energy mix both in France and

abroad (materiality issue no. 9 Reducing fossil-fuel emissions) In France, EDF changed its fossil generation resources by closing 10 of its 13 coal-fired units (2,835MW), and by closing the fuel oil power plant in Aramon (1,370MW). Pursuant to the decision of the Central Works Council dated 21 September 2016, EDF shut down the last oil-fired units. Units 1 to 4 in Porcheville and unit 2 in Cordemais were permanently shut down in 2017 (2,975MW). The closure of unit 3 in Cordemais (700MW) is scheduled for 2018. Pursuant to the PPEs (5) in Corsica and French Guyana, the closures of power plants in Vazzio (Corsica) and Dégrad des Cannes (French Guyana) are scheduled for 2023. The shutdown of the last coal units in metropolitan France (three of which are EDF generation units) is planned for 2023 in accordance with the current PPE. In the UK, EDF Energy still operates almost 4GW of coal-fired power plants, which are currently essential to the UK’s supply and demand balance. These power plants are to be closed by 2025, according to the decisions of the UK government. Furthermore, EDF Energy, as part of its “better plan” is aiming to lower its emissions to 50gCO 2 /kWh in order to maintain its position as UK’s leading low-carbon producer. EDF Energy intends to make strategic investments in renewable energies and nuclear power in order to reach this ambitious target. In Belgium, in 2017 EDF Luminus closed the Ghent-Ham gas-fired power plant. The gas-fired power plants in Angleur, Izegem and Seraing will be closed over the next two years, pursuant to an internal decision made by the Company. In the rest of continental Europe, excluding France, EDF is implementing the results of the strategic review of its fossil fuel-based energy generation assets. The increase in greenhouse gas emissions observed between 2016 and 2017 mainly relates to lower hydropower capacity, the improved but lower than expected availability of French nuclear power plants and the improved availability of the Group’s remaining coal-fired power plants (which, given market rules and prices, were despatched in preference to gas-fired power plants). EDF therefore advocates a minimum CO 2 price in order to limit the use of coal-fired power plants before they are definitively shut down or partly replaced with biomass. More generally, the Group is working to optimise the performance of all of its thermal fleet. Generating a comprehensive GHG report Although the Group historically publishes its direct CO 2 emissions, since 2011 EDF has performed annual GHG reporting also covering its indirect emissions (scopes 1, 2 and 3) thus going above and beyond its regulatory obligations. Since 2013, a gradual initiative has been in place to also carry out GHG reporting at Group level, using a harmonised methodology, based on the GHG Protocol Corporate Standard. The work already begun gives a good idea of the direct and indirect emissions of the Group as a whole. Direct emissions by EDF group are almost all caused by fossil-fuelled electricity generation, and amounted to around 50 million tonnes of CO 2 , with very few other sources of direct emissions. Indirect emissions are now higher than direct emissions, given the electricity generation decarbonisation policy and the relatively low level of direct emissions: most indirect emissions come from the combustion of gas sold by EDF, the electricity purchased to serve our end customers, upstream fossil and nuclear fuels used in the power plants, and the amortisation of the emissions associated with the construction of our power plants. Other indirect emissions, such as emissions associated with purchasing goods and services, employee travel and electricity consumed for our own use are, proportionally, very limited. Any emissions relating to the Group’s investments in non-consolidated assets were not included.

3.

Direct emissions, excluding life cycle analysis of generation plants and fuel. (1) See section 3.3.2 “Adapting the Group’s business to climate change”. (2) In addition to other regulated commodities and variables. (3) This is done within EDF’s commitment Committee. (4) PPE: multi-year energy plan. (5)

167

EDF I Reference Document 2017