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GRI 3-3,
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GRI 201-2,
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E-P3
Transition risks (also known as transformation risks) arise from the transition to a low-carbon economy and can be divided as follows:
- legal and regulatory risks – tightening of legal requirements and restrictions on climate aspects;
- technological risk – exclusion and replacement of conventional assets with innovative assets;
- market risk – high volatility and unpredictability of market energy prices;
- reputational risk – stigmatisation of energy companies as a result of perceiving the energy sector as the air polluter.
The major transition risk drivers associated with climate change include:
- tightening legal requirements for climate aspects;
- changing Customer demand and expectations for products and services provided by the Enea Group’s companies – among others, as a result of the development of prosumers, support for thermal insulation and construction of distributed heat sources;
- high volatility and unpredictability of market energy prices;
- inability to raise capital to finance operations based on non-renewable fuels;
- need for restructuring or re-branding resulting from a change in the business profile;
- decommissioning and replacement of assets that operate primarily on fossil fuels;
- other: regulatory, financial, social, technological, etc.
Physical risks arise from climate change. They include:
- acute risks driven by extreme weather events, such as:
- the increasing frequency of extreme temperatures never seen before in the regions concerned;
- the increasing frequency and intensity of strong and gusty winds;
- chronic risks resulting from long-term climate change such as:
- more frequent temperatures fluctuating around 0° Celsius threshold in winter;
- occurrence of milder winters in terms of snowfall;
- greater intensity of storms, which can cause flooding at any time of the year;
- rainfall of an erratic nature, resulting in longer periods without rain, intermittent storms:
- more frequent droughts and related restrictions in access to water, as well as increased risk of wildfires;
- increased evaporation processes, i.e. spontaneous and irregular evaporation of water from the surface of water reservoirs and flowing waters, soil and the moistened surface of inanimate objects, occurring mainly under the influence of solar radiation;
- progressive changes in the species composition of tree stands and weakening of their condition;
- depleted biodiversity;
- rising sea levels, flooding of coastal areas;
- social problems, related to the surge in migrations from areas affected by extreme climate change;
- social problems related to the health condition of the country’s population (climate-related diseases).
In 2023, the Group identified, assessed and monitored corporate risks with climate aspects in accordance with the ERM assumptions.
Climate Risk Management
Description of the Management and Supervisory Boards’ oversight of climate-related risks and opportunities
Description of the role of the Management and Supervisory Boards in identifying, assessing and managing climate-related risks and opportunities
The policies concerning the engagement of the Management Board as well as Directors and Officers, particularly their responsibilities in respect of climate change, allow stakeholders to analyse the organisation’s level of awareness of climate issues. The Management Board of Enea SA sets out and approves the goals and priorities of the ENEA Capital Group Climate Policy. The management boards of Enea Capital Group’s companies are in charge of conducting and organising subordinate processes in accordance with the goals and priorities contained in the ENEA Capital Group Climate Policy and for ensuring timely, reliable and complete reporting of climate-related activities. The Director of the Group Strategy and Development Management Department is responsible for implementing and updating the ENEA Capital Group Climate Policy.
Description of climate-related risks and opportunities identified by the organisation over the short, medium and long term
We analyse the risks related to the impact of climate change on the enterprise (transition and physical risks) as well as whether the two are interrelated and how.
Climate risk is defined as a future uncertain event related to the impact of climate change on the enterprise, the results of which may have a negative effect on the enterprise. In our analyses, we apply short term (until 2025), medium term (until 2030) and long term (until 2050) time horizons. The climate risk is applicable to the entire value chain.
In 2023, we identified, assessed and monitored enterprise risks that have climate aspects according to ERM assumptions.
Opportunities arising from climate change
Climate risks can be transformed into new opportunities opening up paths to new products or services that mitigate the climate change or help adapt to it.
Climate-related opportunities are defined as possibilities arising from the impact of climate change on the enterprise, which can have a positive effect on the company. Adaptation to climate change is understood as anticipating its effects and taking appropriate measures to prevent or limit the damage it may cause. Climate change mitigation, on the other hand, refers to efforts to reduce or prevent greenhouse gas emissions.
Our Group regularly identifies and evaluates climate-related opportunities in the short term (until 2025), medium-term (until 2030) and long-term (until 2050) time perspectives.
Based on the broad range of opportunities arising from the climate change, we have identified the ones that ensue from the following sources:
- resource efficiency (saving of resources),
- reduction of transmission losses,
- switch to low-carbon energy sources,
- development and/or expansion of new low-carbon products and services,
- access to new markets and technologies,
- diversification of supply sources (security of supply).
In 2023, in response to the challenges of transforming the electricity sector, we adopted the ENEA Capital Group Climate Policy. The Policy accounts for the issues linked with ensuring energy security in the context of the Enea Group’s efforts to reduce global warming and adapt to the ongoing climate change.
As a complementary document to our Strategy, the Policy defines the Group’s ambitions in terms of reducing our climate impact, and it indicates what management methods we intend to use in our adaptation to the existing and forecasted climate change. The Policy will also help us achieve the objectives of the EU’s climate and energy policy and attain the goals of international commitments related to the reduction of greenhouse gas emissions.
Our plan is that the Enea Group Development Strategy should lead to sustainable transformation that will build the Group’s value through achieving climate neutrality. To this end, the Enea Group intends to embark on the following:
- Development of renewable energy sources based on state-of-the-art technologies. The increase in the RES installed capacity will be achieved through:
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- acquisitions
- own projects
- cooperation with business partners.
- Building long-term Customer loyalty and lasting relationships with Customers. With the help of modern technologies it will be possible to reduce the cost of reaching the Customer, and thus maintain ongoing relationships.
- Implementation of innovations and new technologies in the Enea Group. Efficient implementation of RES projects and projects focused on new technologies, and the prioritisation of such undertakings will enable us to develop a competitive advantage in the area of generation.
At the initial stages our journey towards climate neutrality, to maintain energy security, we intend to use biomass and gas as a low-emission transition fuel. Our investments in this field will be limited to the replacement of some generation capacities. Conventional low-carbon sources will stabilise the developing RES capacity.
The climate change and the energy transition aimed to slow down its pace might create both new opportunities and threats to the Enea Group’s operations. That is why our Group continually examines the possible climate scenarios, including those that are in line with the Paris Agreement and are intended to limit the global temperature increase to less than 2°C, and ultimately to 1.5°C compared to the pre-industrial era. In 2023, we conducted a scenario analysis which provided insight into the factors that could affect the Enea Group’s value and business opportunities.
The climate scenario analysis carried out by the Group covered three time horizons and two climate scenarios:
- short term – until 2025,
- medium term – until 2030, in two climate scenarios: below 2°C and 4°C,
- long term – until 2050, in two climate scenarios: below 2°C and 4°C.
We identified, among others, the following activities that enable adaptation to the climate change by mitigating climate risks:
- adapting the Enea Group’s assets and business operations to the changing climate conditions, as well as adopting the Group’s development directions accordingly;
- offering products and/or services that allow Customers to adapt to climate change;
- creating higher revenue from sales of eco-friendly products and services;
- taking climate aspects (including climate-related risks and opportunities) into account when assessing new investments;
- active participation in the transition towards a climate-resilient circular economy;
- cooperation with business partners and social stakeholders to adapt to climate change and improve energy efficiency.
Risk management
The Enea Group regularly identifies enterprise risks (including non-financial ones) related to its operations and manages them accordingly, ensuring that the organisation is adequately prepared for the potential consequences, should any of the risks materialise.
This cyclical assessment of enterprise risks is carried out by the respective risk owners, in accordance with the requirements of the ENEA Group Enterprise Risk Management Methodology. The process involves updating the assessment of the likelihood that the given risk will materialise and the potential implications of that materialisation in terms of the financial and reputational, health and safety and environmental impacts. The estimation of the likelihood of risk materialisation and the assessment of potential implications make it possible to classify the risks as critical, key, medium and low. Next, risk owners define mitigating actions aimed at reducing the likelihood of risk occurrence and the effects of the risk materialisation, as well as response plans to be followed in the event that the risks materialise.
All identified and assessed risks related to the operations of specific Group’s companies are entered into the so-called Risk Register. The members of the companies’ management boards are notified of new and archived risks, material changes in risks as well as potential operational events related to the identified risks. Moreover, the management boards of individual companies and the Enea SA’s Management Board receive periodic reports on the status of enterprise risks.
The key authority in the risk management process is the Risk Committee. It is an internal team within the Enea Group, established in order to support the Management Board of Enea SA in the following areas:
- managing enterprise risk in the Enea Group,
- managing business continuity in the Enea Group,
- managing the Compliance area in the Enea Group,
- managing insurance policy in the Enea Group.
Pursuant to the ENEA Capital Group Climate Policy, which was adopted in 2023, special attention should be paid to risks related to the climate change. In the future these risks will be identified under a dedicated process, they will be subject to ongoing and periodical monitoring and reporting for the needs of the Enea Group. Mitigation measures will also be planned for the identified climate risks.
As part of this process, the organisational units of the Enea Group’s companies will identify and periodically report climate risks to the Enea SA’s Climate Transition Office, which will coordinate and support the development of recommended courses of action to be taken by the Group’s companies in connection with the impact on climate or the direct impact of climate on the assets of the Group.
The owners of the identified climate risks will be responsible for their management, monitoring and prioritising, as well as for identification of the relevant mitigating actions.
Before the adoption of the ENEA Capital Group Climate Policy, climate-related risks were selected from amongst the enterprise risks identified, prioritised and periodically assessed by their owners under the enterprise risk management process, in compliance with the assumptions of the ENEA Group Enterprise Risk Management Policy and the ENEA Group Enterprise Risks Management Methodology. These risks, like other types of enterprise risks, are subject to ongoing and cyclical monitoring and reporting for the needs of the parent company and the Enea Group.
Following the introduction of our climate policy, climate-related risks are identified within the framework of a dedicated process laid down in the methodology constituting a separate internal regulation. These risks will be managed, prioritised and periodically assessed by their owners within the framework of our climate risk management process.
Metrics and targets
The Group has established certain metrics the values of which reflect the climate change, such as:
- greenhouse gas emissions, Scopes 1, 2, 3 (Chapter 3, table: Greenhouse gas emissions in the Enea Group, 2023),
- consumption of electricity (Chapter 3, table: Consumption of electricity by the Enea Group, 2023),
- intensity of greenhouse gas emissions (Chapter 3, table: Intensity of greenhouse gas emissions from the Enea Group’s generation units),
- assumptions for investment in new RES capacity – as estimated capital expenditures (Chapter 4 Innovation and contribution to Poland’s economy).
Moreover, the established energy efficiency values are seen as a tool to support the organisation in achieving its emission reduction targets. We have also selected metrics and targets to assess the potential impact of climate change on our organisation and the opportunities arising from climate change. Furthermore, we are developing our system of monitoring and reporting to track progress towards achieving our goals under international climate commitments.
Our Group is committed to minimising carbon emissions throughout the value chain, with a view to achieving climate neutrality in 2050. These ambitions are aligned with the European Union’s climate goals and public expectations. The main directions of the Enea Group’s climate neutrality efforts include, in addition to the transition away from combustion of fossil fuels, the development of renewable energy sources and the improvement of energy efficiency.
The ENEA Capital Group Climate Policy is based on the Paris Agreement which stipulates that the EU economy will be the first to become carbon neutral by 2050, whereby it will be possible to limit the global average temperature increase to no more than 1.5°C above pre-industrial levels. Our Group’s efforts associated with achieving this goal are aimed at mitigating climate risks – both transition risks and physical risks.
Our disclosure of greenhouse gas emissions for 2023 can be found in Chapter 3 of this Report, in table: GHG emissions in the Enea Group, 2023.
The Group sets short- and long-term goals linked with the climate and revises them at least once every 5 years.
They include:
- achieving climate neutrality from 2050 onwards (in terms of greenhouse gas emissions in Scopes 1 and 2),
- reduction of greenhouse gas emissions until 2050:
- 2025 – 192 kg CO2/MWh,
- 2030 – 254 kg CO2/MWh,
- 2040 – 201 kg CO2/
- increase of the installed RES capacity in the Enea Group:
- 2025 – 920 MW,
- 2030 – 1 510 MW,
- 2040 – 3 580 MW.
- Goals of investment in new RES capacity:
in 2023–2042, the planned capital expenditures for Renewable Energy Sources are estimated at PLN 13.8 billion. The structure of capital expenditures for new capacity from renewable energy sources is as follows1):- offshore 19%
- onshore 21%
- photovoltaics 36%
- biogas 7%
- energy storage facilities 16%.
1) Approx. 0.03% of the expenditures on renewable energy sources will be allocated to hydropower plants; due to rounding, the expenditures on individual technologies might not add up to 100%