RWE : Sustainability Management Report 2023

Energised by nature.

Sustainability Management Report 2023

Highlights from 2023

45 TWh	89%
electricity from	of our investments are
renewable sources	in green technologies

20,135	0
employees working for	serious environmental
sustainable and	incidents
reliable energy (FTE)

Further reports

Annual Report with Non-financial Group statement 2023

Sustainability Strategy Report 2023 Sustainability Performance Report 2023

Sustainability Management Report 2023

Contents

01	Introduction	3
	Year in review	4
	About this report	5
02	Environment	6
	Climate change	7
	Biodiversity	8
	Circular economy & Waste management	9
	Electricity production and efficiency	10
	Water	11
	Pollution and air quality	12
03	Social	13
	Occupational health and safety	14
	Diversity, equity and inclusion	15
	Social responsibility	16
	Employment	17
	Training and skills development	18
	Human rights	19
04	Governance	20
	Compliance	21
	Data protection	22
	Cyber security	23
	Security	24
	Tax	25
	Stakeholder dialogue and advocacy	26

01 Introduction

Year in review	4
About this report	5

01	02	03	04
Introduction	Environment	Social	Governance	RWE Sustainability Management Report 2023
Year in review

Introduction

Year in review

We are RWE. Our company is at the forefront of the energy transition. Our operations around the globe ensure that people and businesses get the electric power they need in increasingly climate-friendly ways. Following the outbreak of the war in Ukraine in 2022, the situation on the energy markets was turbulent.

At RWE, we worked hard to prevent a gas and electricity supply crisis and the situation eased somewhat in 2023. Despite the challenging environment, we hit a number of milestones in our growth strategy in the year under review.

Our renewable power generation increased. As of 31 December 2023, we had power generation assets with a total capacity of 44.4 GW. Compared with 2022, our generation capacity increased by 5.1 GW. At 39 %, renewables accounted for the largest share of our generation capacity at the end of 2023. Natural gas was in second place with 36 %. Our most important renewable energy source is wind power (11.9 GW), followed by photovoltaics (4.2 GW), biomass (0.8 GW) and hydropower (0.5 GW).

Our electricity production from renewables increased by

27 %, driven in particular by photovoltaics. This is due to the fact that we acquired the US energy company Con Edison

Clean Energy Businesses on 1 March 2023 and have included it in our figures since then. The aforementioned acquisition led to a 546 % increase in photovoltaic production compared to the previous year. In wind power, we recorded an increase of 9 %, primarily due to more favorable weather conditions and the continued expansion of our generation capacities.

More electricity from renewables than from coal for the

first time. Of the total electricity we produced last year, 35 % came from renewable sources, which exceeded the share of coal (30 %) for the first time in the company's history. This milestone is testimony to the fact that we are pressing ahead with our ambitious 'Growing Green' strategy and making good progress with the transition to renewable energy.

In our mining area west of Cologne, the Rhenish mining region, we extracted 48.2 million metric tons of lignite last year. This is 17.1 million tons less than in 2022 - a consequence of the sharp drop in electricity production at our lignite-fired power plants.

Lower emissions, and a clear transformation path. Last year, our power stations emitted around 62 million metric tons of carbon dioxide equivalent, i. e. 23 million metric tons less that the year prior. This was attributable to lower emissions from conventional power generation, in par- ticular. Our specific emissions, i.e. CO2 emissions per megawatt hour of electricity generated, decreased from 0.55 metric tons to 0.48 metric tons.

Of our investments in the reporting period, 89 % were taxonomy-aligned. This means that the funds were

allocated to activities which are classified as sustainable under the EU taxonomy regulation. Our original goal was to achieve 90 % taxonomy-aligned CapEx by 2030. However, in 2023 we raised this target to 95 %.

To emphasise our efforts to transform, we have updated our climate targets with a clear commitment to a 1.5-degree aligned pathway: we are aiming to reduce our total Scope 1 and 2 emissions by 67.6 % and Scope 3 emissions by 42 %. 2022 will serve as a new base year.

A company that invests in its people - aiming for a safe and

inclusive organisation. Our workforce remains committed to our purpose - this is reflected in yet another increase in our engagement index, which measures the motivation of our workforce in a Group-wide survey. In the year under review,

our engagement index was up by 4 % on the previous year, coming in at 88 %. This exceeded our target of 80 %, meaning that all key indicators have improved based on a Group-wide participation rate of 78 % (2022: 74 %).

At RWE, we are committed to high standards in occupational health and safety: The key performance indicator established for occupational safety is the number of work-related accidents among in-house and contract staff resulting in at least one day of absence for every 1 million work hours (LTIF). The LTIF remained constant at the previous year's level of 1.5, outperforming the target within the RWE Group of 1.9. No fatal accidents occurred during the period under review.

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01	02
Introduction	Environment
About this report

03	04
Social	Governance	RWE Sustainability Management Report 2023

Introduction

About this report

As the world faces increasing environmental and social challenges, the importance of sustainable business practices cannot be overstated. To ensure long-term success, it is essential for companies to be transparent about their impact on the environment and society. This report provides a detailed overview of our management of sustainability topics, including the steps we have taken to mitigate our environmental impact and promote social responsibility.

At RWE, we are proud to have been generating electricity for over 125 years now. A lot has changed since the day our company produced its first kilowatt hour - including the way we think about sustainability. Today, RWE is transforming into a global player in renewable energy. With our 'Growing Green' strategy, we will invest over € 55 billion in renewables. Our growth strategy is supplemented by our nine priority topics on sustainability - climate change, biodiversity and recultivation, innovation, circular economy, diversity, equity and inclusion, occupational health and safety, social responsibility, compliance and ethics, and sustainable investments. This report covers these topics and other issues where we and our stakeholders see the potential impact of and on our business activities.

Sustainability is at the heart of what we do. We believe that our responsibility is to lead the way to a net zero world. Power generation companies face a number of unique challenges when it comes to sustainability. One of the biggest is the significant environmental impact associated with generating electricity, particularly through the burning of fossil fuels such as coal, oil, and natural gas. This impact includes air and water pollution, greenhouse gas emissions, and the depletion of natural resources. While renewable energy is generally considered to be more sustainable than fossil fuels, there are still challenges associated with scaling up renewable energy production and integrating it into the grid.

We believe that by being open and honest about our performance, we can build trust with our stakeholders.

We recognise that stakeholder expectations for transparency about sustainability practices are increasing. This report is a key part of our commitment to transparency and accountability. To ensure the quality and comparability of our sustainability disclosures, we have adhered to the standards issued by organisations such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate- Related Financial Disclosures (TCFD) when preparing this information.

• GRI has published a comprehensive set of sustainability reporting standards that cover economic, environmental and social performance.
• The SASB focuses on sustainability disclosure standards that are relevant to specific industries.

• The TCFD makes recommendations on climate-related financial disclosures to help companies understand and disclose the risks and opportunities associated with climate change.

These standards provide a framework for reporting on sustainability issues and help us to ensure that our disclosures are both relevant and reliable. By applying these standards, we can provide our stakeholders with consistent and comparable information about our sustainability performance, which helps to build trust and enhance our reputation. We also monitor the expanded landscape of expectations for our reporting, such as ESG ratings. We adapt our reporting to changing expectations and regularly evaluate whether new information is necessary or whether existing information still offers added value for our stakeholders.

This report sets out our approaches consistently and is an

opportunity to get to know RWE better. In this report, we present the challenges posed by the different sustainability issues and set out our approach to tackling those challenges. We want to highlight how we are organising our work at RWE, what our goals are and what progress we made in the year under review. We hope that this report will serve as a valuable resource for our stakeholders and provide insights into our sustainability practices and performance.

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02 Environment

Climate change	7
Biodiversity	8
Circular economy & Waste mgmt.	9
Electricity production and efficiency	10
Water	11
Pollution and air quality	12

01	02
Introduction	Environment
	Climate change

Environment

Climate change

The challenge

Climate change is one of the most pressing environmental issues facing businesses and society today. It is causing rising sea levels, more frequent severe weather events and increasing global temperatures. According to the Intergovernmental Panel on Climate Change (IPCC), human activity, particularly the burning of fossil fuels, is the main cause of climate change. To address this issue, businesses must reduce their greenhouse gas emissions and transition to cleaner energy sources.

Our ambitions

We want to be net zero in all three scopes of the Greenhouse Gas Protocol (GHG Protocol) by 2040.

As part of this journey, we have set science-based emission reduction targets for 2030. We have updated our targets to fully commit to a 1.5-degree aligned pathway, by setting our sights on reducing total Scope 1 and 2 emissions by

67.6 % and our Scope 3 emissions by 42 %. Our base year for these assessments is 2022. For our updated targets, we are currently working to become certified in accordance with the standards of the Science Based Targets initiative (SBTi), which focuses on reducing rather than neutralising emissions in the energy sector.

03	04
Social	Governance

Our approach

We are committed to the goals of the Paris Climate Agree- ment, which seeks to limit global warming to a maximum of 1.5-degrees Celsius above pre-industrial levels. Decarbonisation of the electricity sector is a major factor. We emit greenhouse gases above all from our conventional power stations. At the same time, however, our capital expenditure on renewable energy is enabling us to switch to climate-friendly electricity production. Our business activities also contribute to emissions outside of our own operations, which are referred to as Scope 3 emissions. These stem, for example, from the production of goods and services which we purchase as well as from the sale of gas and lignite products.

Our targets have been approved by the Executive Board, which is regularly consulted on the current situation as well as any adjustments that may need to be made. The implementation of concrete actions to meet our ambitious targets, is in the hands of our functions and Group companies.

By rapidly expanding renewable energy, we are making our contribution to decarbonising the electricity system. We will retrofit or close existing fossil-fuelled and conventional generation assets by 2030. We develop deployment schedules for our existing gas-fired power stations that enable them to generate electricity in a climate-friendly manner. Research in conversion to hydrogen plays a major role in this context, as does carbon capture and storage (CCS) technology in some countries. We are also working on making our indirect emissions even easier to measure and working with partners to reduce them.

RWE Sustainability Management Report 2023

Progress

• We are accelerating our growth in renewable energy: besides our raised climate reduction targets, we have updated our 'Growing Green' strategy as well. We are now aiming to build 65 GW of global capacity by 2030 to decarbonise our portfolio, with plans to invest € 55 billion in renewables, storage technologies, flexible generation and hydrogen projects.
• Our power plant portfolio emitted around 62 million metric tons of carbon dioxide equivalent, i. e. 23 million metric tons less than the year prior, which translates to a reduction in CO2 emissions of 27 % in fiscal year 2023. This was attributable to lower emissions from conventional power generation, in particular. Carbon intensity - i. e. Scope 1 and 2 emissions per unit of electricity generated - therefore dropped to 0.48 CO2e/MWh from 0.55 CO2e/MWh in the previous year.

Indicators

We report on our generation capacities and electricity production, as well as on the emissions from our power plants and on greenhouse gas emissions in accordance with the GHG Protocol. We also publish various intensity figures, which primarily relate to emissions per unit of electricity. Further information can be found in our Sustainability Performance Report 2023 that we publish separately.

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01	02	03	04
Introduction	Environment	Social	Governance	RWE Sustainability Management Report 2023
	Biodiversity

Environment

Biodiversity

The challenge

Biodiversity loss is a major environmental challenge that societies and businesses must tackle. Human activity, such as infrastructure development, agriculture and mining lead to habitat destruction and fragmentation, overexploitation and pollution, which is causing a significant decline in biodiversity worldwide. According to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), up to one million species are at risk of extinction. Their loss would have serious implications for ecosystems and human wellbeing.

Our ambitions

We aim for all our assets to achieve a net-positive impact on biodiversity from 2030 onwards.

Our approach

We have made biodiversity one of the priorities of our sustainability strategy. Comparable strict environmental legislation and approval conditions in the countries we operate in, set the baseline for our biodiversity activities. Through a variety of measures, audits, and assessments we comply with the often extensive permit requirements.

Responsibility for the fulfilment of our legal obligations relating to planning and building, operating as well as decommissioning our assets rests with the Group companies. Our experts follow our mitigation hierarchy to avoid, minimise, regenerate and if necessary compensate for potential biodiversity impacts. With our ambition of net- positive impact we want to go even further. These principles have been established in our biodiversity policy, which we put into effect in 2022.

As far back as 2015, we developed a set of guidelines that establishes measures to protect and promote biodiversity in the Rhenish lignite mining region in Germany. By taking early and continuous measures such as environmental compatibility audits and monitoring, we ensure that our activities have the least possible impact on existing ecosystems and their flora and fauna. Taking necessary precautions to protect biodiversity where possible and suitable is an integral part of the way we work.

We build knowledge on impacts on biodiversity and wildlife coming from the energy sector and promote collective learning and knowledge transfer. We follow best practice guidance in science-based target setting, such as from the Science Based Targets for Nature (SBTN). Our commitment to protecting biodiversity is also reflected in the fact that we were one of the first companies that adopted the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD).

Progress

• In 2023 we contributed to the development of cross-industry standards by trialling applications and providing feedback on them. We carried out a nature impact assessment according to the preliminary SBTN guidelines and shared learnings while testing their fresh water targets guideline. We are currently supporting the TNFD to develop guidance for the energy sector and are working with SBTN to ensure their guidelines are applicable to the energy industry.
• Operationally, we have progressed and launched pilot schemes, one example being our onshore wind farm in Nysäter (Sweden), where we are examining how best to encourage biodiversity in a forest setting. An environmental compatibility audit prompted us to create a 'creotope' to create habitats for ecologically important plants and animals, e. g. by transforming meadows with deadwood and sand piles. Redesigning these areas is expected to improve biodiversity. These pilot projects help us identify which measures can be best implemented in a forest environment. We will continually monitor the impact these changes have on biodiversity over the lifetime of the wind farm and apply these learning to other projects.

Indicators

We are currently assessing ways to measure our impact on biodiversity. As this is a challenge for businesses globally, we are committed to supporting initiatives such as the SBTN in order to establish new approaches for impact measurement. Further information can be found in our Sustainability Performance Report 2023 that we publish separately.

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01	02	03	04
Introduction	Environment	Social	Governance	RWE Sustainability Management Report 2023
	Circular economy &
	Waste mgmt.

Environment

Circular economy & Waste mgmt.

The challenge

The circular economy is a model of sustainable production and consumption that aims to minimise waste and maximise resource efficiency. We believe that the circular economy will have a positive impact and mitigate risks in the long run, since the world, and therefore RWE as well, faces growing resource scarcity and waste management challenges. As a transitioning business is significantly changing our asset portfolio to shift to renewable and flexible energy, a significant use of materials and components requires an increasing focus on circularity aspects.

Our ambitions

We gradually implement the principles of a circular economy in our way of working. Reducing the consumption of natural resources, minimising waste and designing our assets so that we maximise the reuse and recycling of materials, we aim to maximise our compatibility with the circular economy by 2050.

One goal for our core business is to achieve a recovery rate of over 90 % by 2030. This figure reflects the share of

materials and components no longer needed as well as of our waste that is not disposed of in landfill sites or incineration plants but is instead put through a recovery, extraction or recycling process to ready it for reuse.

This quota does not consider ash from our lignite-fired electricity generation that is used internally to recultivate land in line with applicable permits.

Our offshore wind business, for example, is aiming to transition to using completely recyclable blades wherever possible by 2030 and increase the portion of recycled steel in any new procurements to 40 % by 2030. Our Renewables Europe & Australia business wants to raise the average lifetime of assets and the share of reused and refurbished components.

Our approach

We have detailed our efforts to help build a circular economy in a Group policy and framework. The framework highlights three core circular principles, namely reducing consumption and increasing the inflow of circular materials, enhancing material (re)use and lifetime as well as minimising end-of-life treatment. Every Group company carries the responsibility to derive a goal-orientated roadmap through to at least 2030 and then implement.

With waste specifically, we follow the waste hierarchy: avoid, reuse or recycle and, if necessary, dispose. Designated waste officers monitor the application of prescribed measures and take appropriate precautions. We reduce the amount of waste produced as far as possible by optimising our plants and also by ensuring that waste management is a key part of our planning and

procurement processes.

Progress

• Especially Renewables companies continued to implement the chosen measures around reuse and refurbishment of components. We continued with engaging in partnerships with suppliers for joint development of circularity measures.
• We integrated the newly acquired US business Clean Energy and further improved the quality of data regarding outflow / waste in identified business areas. This will allow us to report on e.g. a recycling rate as a dedicated fraction of recovery in future, for example.
• Following successful testing at our German offshore wind farm Kaskasi, in 2023 we decided to equip 44 of 100 wind turbines in RWE's largest construction project Sofia off the British coast with recyclable rotor blades. These rotor blades can be dismantled at the end of their life cycle and recycled for reuse of the material.
• The dedicated team in Conventionals continued to optimize circularity in the dismantling of our nuclear and other power plants. In numerous also small-scale projects we sell redundant forklift trucks, chemicals or surplus stock and identify recycling and recovery opportunities. In demolition projects we achieve recovery rates of >95 %.

Indicators

We have achieved a recovery rate for our core business of 83 % in 2023. Further waste and circularity figures can be found in our Sustainability Performance Report 2023 that we publish separately.

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01	02	03	04
Introduction	Environment	Social	Governance	RWE Sustainability Management Report 2023
	Electricity production
	and efficiency

Environment

Electricity production and efficiency

The challenge

In view of the constantly growing global demand for energy, it is crucial to make the best possible use of available resources and increase efficiency. Therefore, measures to enhance production hours and energy efficiency play an important role.

Our ambitions

RWE is constantly working to improve its energy and environmental performance so as to avoid unnecessarily burdening the climate, the environment and society. Our environmental protection and energy efficiency measures go beyond merely complying with statutory and licensing requirements.

Our approach

To ensure sustainable, cost-effective production of energy, we focus on implementing technological improvements while conscientiously using energy in our power plants,

office buildings, vehicle fleets and other facilities. To help our customers use energy responsibly, RWE offers high- quality, tailored technical solutions relating to power plant operations, energy infrastructure and energy trading. With a wide range of services, we enable companies and organisations to make their operations more efficient, safer and more sustainable.

Where renewable energy is concerned, it is paramount to optimise efficiency - especially by selecting appropriate sites. Wind and insolation conditions in particular play crucial roles in successfully generating electricity. We regularly evaluate potential new locations worldwide from both technical and economic perspectives. This helps us identify the sites with the best prospects for harvesting renewable energy. Where wind energy is concerned, optimising the details of wind farm designs and turbine layouts is an important step for using available wind resources more efficiently while maximising the energy output of installed turbines. Among other things, it is essential to optimally space them to prevent wake interactions and throttling from reducing the yield. RWE's Resource Assessment team applies a variety of methods and tools to help minimise wind farms' systemic losses and costs while maximising the energy they produce. We are also achieving more efficient power generation by modernising our portfolio of conventional power plants and gradually decommissioning older ones. Other measures include tapping the potential of combined heat and power (cogeneration) in our plants. We use the heat to meet our own needs and / or supply it to companies in the form of thermal energy or steam.

Progress

• In the year under review, our production sites in Northern and Central Europe reported similar wind speed velocities to the long- term average, while those in Southern Europe and North America measured lower wind speeds. In comparison to 2022, wind conditions have improved at most RWE sites in Europe, whereas wind levels were lower in the United Kingdom and North America. The utilisation of run-of-river power stations depends on precipitation and melt water volumes. In Germany, where most of the RWE Group's hydropower plants are located, these volumes were above the long-term average and also significantly above the previous year's figure.
• Our Major Correctives team implemented RWE's self-perform model, collaborating with various stakeholders to efficiently execute main component exchanges across multiple wind farm sites and platforms in Europe from March to November 2023. We safely and successfully replaced 49 main components within schedule and budget, including significant first-time tasks such as main bearing exchanges at our Rampion and Amrumbank West offshore wind farms. Looking ahead, the team aims to enhance processes, expand team capacity, and share expertise across RWE.

Indicators

We report on the average wind farm utilisation in our Annual Report for both our onshore and offshore business. Further metrics can be found in our Sustainability Performance Report 2023 that we publish separately.

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