EDF_REGISTRATION_DOCUMENT_2017

3.

ENVIRONMENTAL AND SOCIETAL INFORMATION − HUMAN RESOURCES Act positively within communities and strengthen dialogue

many actions are carried out in the French islands and the Overseas ■ Departments. In Corsica, information campaigns about tree pruning have been organised in schools through associations. This campaign was reinforced with companies working with state services after an accident that occurred in 2017. In French Guyana, there were operations in the illegal neighbourhoods on “spontaneous” housing where non-conforming facilities represent a real danger. In Martinique, an information campaign was organised around risks related to power lines (brochure, web site, social networks, press) and on the fact of working close to power lines for construction and agricultural professionals. In Reunion, a specific brochure for pruning was printed, and there was information in the press following a tropical storm. During the cyclone season, EDF systematically reminds its customers of the safety instructions to be obeyed. We inform our customers after storms or cyclones to advise them not to touch cables or wires on the ground. 3.5.7 The materiality matrix identifies the theme of responsible purchasing as one of its material issues (issue no. 34 duty of care and responsible purchasing). This refers to responsible relationships with suppliers. Responsible purchasing 3.5.7.1 EDF’s responsible purchasing approach is at the heart of the Group’s social and environmental responsibility policy. The Group’s new purchasing policy, signed in 2017, defines that the Group’s values must be respected by suppliers and that obligations in terms of sustainable development and social responsibility must be systematically included in contracts, in particular through the signing of a sustainable development charter (established in 2014 and updated in 2016). Contracts include clauses that allow contractual relationships to be challenged in the event of non-compliance or serious deviations observed, for example during an audit conducted on the basis of legal obligations and sustainable development and social responsibility obligations. This is because the Group’s Purchasing Department implements an assessment programme for all contract holders that may involve risks identified during the risk mapping process for risks related to sustainable development, via a system of self-assessments or audits depending on the type of supplier. Moreover, the purchasing policy promotes regional involvement, support for local development, in particular by giving preference to relationships with SMEs as well as the use of the protected worker sector and structures for integration through economic activity. In implementing purchasing contracts, the Group Purchasing Department ensures that supply chain risks of suppliers are controlled, and also that there if financial fair treatment with respect to suppliers, in particular through pricing actions or the deployment of collaborative reverse factoring which gives them the possibility of pre-financing their invoices before the contractual due date, as soon as EDF (1) issues the payment voucher. Under the Group Purchasing Policy signed in 2017, the EDF group Purchasing Department ensures that actions carried out in the Group’s Purchasing Departments (excluding RTE) are consistent, defines the general framework of the policy and manages the organisation of the purchasing function. Most entities and subsidiaries, such as Dalkia or EDF Energy, have implemented sustainable development charters and sustainable development and social responsibility assessment systems. Supplier relations 3.5.7.2 EDF is one of the first signatories of the Responsible Supplier Relations Charter created in 2010 by the ombudsman and the national procurement council. In 2017, a follow-up audit confirmed the “Supplier Relations” Label conferred on EDF in 2015 by the Ministries of Economy and Finance, to reward companies that have sustainable and balanced relationships with their suppliers. RESPONSIBLE PURCHASING

Backed by the Group’s ethical values, the Group’s Purchasing Department has implemented a Code of Good Conduct for players in the contract process, combining strict ethical rules, principles of good sense and recommendations of good practices for its employees. A Sustainable Development Charter between EDF and its suppliers reinforces and lays out the principles of the Group’s Ethics Charter as part of supplier relations. The ethical undertaking signed by each buyer lists the principles to be complied with in relationships with current and prospective suppliers. In 2017, EDF reinforced its monitoring mechanisms for its suppliers, by setting up a conformity undertaking. All suppliers can bid for tenders only if they have signed this undertaking. The undertaking covers the following themes: corruption, money laundering, financing of terrorism, absence of conflicts of interest. The main subsidiaries include a specific clause in their general terms of purchase (Clause 18 or its equivalent) relating to sustainable development (environmental and social clauses). In 2017, the Group Purchasing Department stepped up its proactive programme of “Productivity Partnerships” with suppliers in a win-win approach. Results are on the rise (gains of €56.8 million in 2017, gains of nearly €50 million in 2016 and gains of nearly €27 million in 2015) It organises forums and meetings with suppliers and service providers to reinforce dialogue, promote local sourcing and the upskilling of local companies. Specific programmes have been set up for this purpose. They include “One river, one region” to provide support to regions and service providers in the environment of hydroelectric generation facilities. The Group Purchasing Department also organises supplier days around a specific theme (artificial intelligence in October, followed by manufacturing and related risks and intellectual services in November 2017. Lastly, in collaboration with the R&D Department, it organised the 4 th “SME and Innovation” Forum. Service provider surveys are conducted by various Group entities to assess the level of satisfaction of service providers with their relationship with EDF. Assessment of suppliers 3.5.7.3 Compliance by suppliers and their subcontractors with the environmental and societal commitments is mainly controlled by a system that prioritises assessments according to a sustainable development – Corporate Social Responsibility risk mapping covering EDF’s 253 purchasing segments (2) . This mapping was drawn up based on the following criteria: societal (impact of the quantity of labour, impact of the qualification of labour, impact of relocation of labour); environmental (risk in the development and use of the product or service, risk of non recycling); economic (risk of corruption). After they have been scored, these segments are classified into four risk categories (16 major risk segments, 33 strong risk segments, 149 average risk segments, 55 low risk segments). At the end of 2017, less than 500 suppliers belonged to the major (1/3) and strong (2/3) risk categories. The Group’s Purchasing Department uses Afnor’s Acesia internet assessment and dialogue platform to send these questionnaires. This tool makes it possible for purchasers and suppliers to share an approach of continuous improvement in corporate social responsibility. Moreover, during consultations, EDF can use these CSR assessments as aptitude or attribution criteria. In 2017, the EDF group Purchasing Department carried out 224 new “Sustainable Development – Social Responsibility” assessments divided between 173 questionnaires and 51 audits, based on the CSR risk mapping of the purchasing segmentation. At the end of 2017, nearly 1,500 suppliers had been questioned and 730 had been assessed and controlled. The objective is to send a questionnaire to all suppliers with contracts for an amount of over €400,000, with a major or strong risk level.

EDF enables its suppliers to benefit from interest rates based on its own financial risk and credit standards. (1) Enedis insourced its entire purchasing function in 2017, the mapping of the Group Purchasing Department therefore has 253 segments in 2017 compared with 265 in 2016. (2)

190

EDF I Reference Document 2017