Green Finance Taxonomy

In order to support the achievement of the objectives of the European Green Deal, recognising the importance of the financial sector and with the aim of combating greenwashing, the European Union included Regulation EU 2020/852 (known as the EU Taxonomy) in the 2018 Action Plan, which establishes the criteria for determining whether an economic activity can be considered environmentally sustainable.

According to the Taxonomy, an economic activity is considered sustainable if:

• it contributes substantially to one or more of the EU's six environmental objectives;
• it respects the principle of "Do No Significant Harm" (DNSH), i.e. does not harm any of the other objectives;
• it presents minimum safeguard requirements in order to comply with the OECD guidelines for multinational companies and the UN Guiding Principles on business and human rights.  

Also for 2023, following the 'by technology' approach used in the Directors’ Report of the Annual Report, we examined the impact of the ERG Group's businesses. We then explored, in addition to the two climate objectives, the Supplementary Delegated Climate Act (Delegated Reg. 2023/2485) and the Delegated Environment Act (Delegated Reg. 2023/2486), which set out the requirements for the four environmental objectives (sustainable use and protection of water and marine resources, transition to a circular economy, prevention and control of pollution and protection and restoration of biodiversity and ecosystems) were analysed.

From the analysis conducted, the activities carried out by the ERG Group are 100% aligned with the EU Taxonomy, in continuity with the results of 2022. Activity 4.1 (Electricity generation using solar photovoltaic technology) and activity 4.3 (Electricity generation from wind power) contribute in a significant manner to mitigating climate change. The CapEx plan is also 100% in line with the Taxonomy, as it focuses on the development of the wind and solar business.

For the calculation of the KPIs, the data present by technology in the Directors’ Report of the Annual Report at 31/12/2023 were used, and in compliance with the FAQs published by the European Commission, these were considered net of the impact of the fair value of the hedges, as a purely financial transaction, and of the contribution of corporate, as it does not participate directly in the production process3. Therefore aligned revenues, costs (understood as the difference between EBITDA and revenues) and investments with the recalculated group total were compared.

We avoided double counting, as consolidated figures were used net of intercompany eliminations.

Analysis Results 2024

Reported Data
For the purposes of the Taxonomy, the following were considered:

• Revenue: Consolidated revenue (738.1 €M) net of the fair value of hedges (7.7 €M in revenue) for a total net amount of 730.4 €M
• Costs: Costs of only maintenance (70.1 €M) and personnel (9.2 €M) for a total of 79.2 €M
• CapEx: Consolidated CapEx (553.0 €M) net of goodwill (41.5 €M) for a total net amount of 511.5 €M Capital expenditure also includes intangible concessions and licences.