EDP Energias de Portugal S A : ESG Report 9M22

9M22 | ESG Report

BRASIL

Parque Eólico

Aventura II

Leading on ESG matters at EDP

Key Highlights

The conflict in Ukraine, in addition to its humanitarian and economic implications, act as a reminder that now is the time to double down on efforts to drive the energy transition. There remain a myriad of challenges and the energy crisis now sits against the backdrop of a severe drought in Iberia, reaffirming the importance of a diversified portfolio to ensure system sustainability and the accelerated need to invest in renewables.

It is a time of adversity and opportunity. EDP's performance in the first 9 months of the year demonstrates the company's resilience and a clear role as a renewable leader. We've reiterated our commitments to doubling our renewable installed capacity, reinforcing power grids, investing €24bn by 2025 and becoming coal free by 2025 and all green by 2030.

At EDP, we're looking beyond our 12 strategic sustainability objectives set out to 2030. As a member of the UN Global Compact CFO Task Force for the Sustainable Development Goals (SDGs), the group remains committed to 9 of the 17 SDGs. We've submitted this quarter our annual Communication on Progress regarding the four principles which supplement the UN Global Compact's 10 Principles, providing guidance to companies toward sustainable finance to achieve the SDGs.

EDP believes the issuance of Green Financing Instruments is an important tool to encourage the transition to a low-carbon economy, providing financial backing to existing/new projects that contribute to this transition. In this context, EDP has updated its Green Bond Framework during 2022. Moreover, aligned with our efforts on decarbonization and renewables growth, during this quarter we have successfully issued a five-year revolving credit facility ('RCF'), maturing in 2027, with potential extensions up to 2029, in the amount of €3.65 billion, being EDP's 1st Sustainability Linked Loan. This instrument is aligned with the Sustainability-linked Loan Principles from the Loan Market Association and holds two ESG KPIs:

percentage reduction of scope 1&2 GHG emissions and weight of installed capacity from renewable sources within EDP Group.

We have little time to fight climate change - it is code red for humanity, according to the UN. We've listened closely to societal voices and trend analysis enabling the business to act swiftly to meet expectations of ESG rating agencies while staying true to our motto "Changing Tomorrow Now".

Environment

Renewable energy is instrumental to building a greener world. Relevant governmental support packages have been approved, namely RepowerEU and the Inflation Reduction Act in the US, playing a crucial role in incentivizing renewables growth. At EDP, we plan to grasp the emerging opportunities and continue to play an active role in changing the current energy panorama and providing global solutions.

This quarter was also marked by our active involvement in Climate Week NYC 2022. EDP's participation in several forums, like the UN Private Sector Forum and the SDG Investment Forum, Corporate Leaders Group's kick-off the preparatory work for the Group's positioning and participation at COP27.

Social

EDP launched the A2E CSR Fund 4th edition, with an increased amount of €1M/year, reinforcing our commitment to a fairer energy transition by delivering renewable energy to communities disconnected from the electricity grid. 158 projects have applied for this edition (+40% vs. 3rd edition) across 5 countries in the African continent (Nigeria, Rwanda, Mozambique, Malawi and Angola).

We believe we have an important role in promoting

efficiency, inclusion and literacy in the energy transition. We've backed our impact commitment with an investment of €16.5m by in Q3 2022.

EDP continues to lead on innovative work with communities. Under 'Futuro Ativo Sines' (Active Future Sines), a Just Transition project for Sines decommissioned coal plant, we've developed a series of initiatives with the Sines community to contribute to the conversion of the economy and employment in the region. This project was selected by the World Economic Forum as an international case study to promote the transition from coal to renewable energy and named Community Involvement Program of the Year at the Environmental Finance Awards.

Governance

EDP continues to be fully committed to the highest standards and practices of corporate governance and reporting. We have recently achieved our highest score for compliance under the IPCG Corporate Governance Code since it was introduced in 2018. We have also improved our score on WBCSD Reporting Matters, with our Sustainability Report 2021 ranked at #7 among 154 annual reports of all the WBCSD members analyzed, and the 1st among utilities.

Rui Teixeira

Executive Board Member

As regulation evolves, we will continue to be proactive in the adoption of the most recognized reporting standards. The indicators included in this report are selected based on their relevance to investor communities and our business operations. For more sustainability information please see full-year EDP Sustainability report here.

Our annual sustainability report follows other voluntary regulatory reporting frameworks, namely the Task Force on Climate-related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB) and the Portuguese Securities Market Commission (CMVM).

ESG Report 9M22

2.

ESG performance at a glance

Target

Indicator

Unit

9M22

9M21

%

2025

2030

		Revenues aligned with EU taxonomy	%	47%	66%	-19p.p.	70%	>80%
		Scope 1 & 2 Emissions Intensity	gCO2/kWh	182	167	9%	~100	0
		Renewables Generation	%	70%	76%	-5p.p.	85%	100%
Environment	Coal Installed Capacity	%	10%	8%	+2p.p.	0	0
Total Waste	kt	295	242	22%	118	30

						Employee Engagement (top tier company)1
						Female Overall	%	27.0%	26.4%	+1p.p.	30%	35%
Social		Accident Frequency Rate2	Fr	1.72	1.81	-5%	1.55	<1
						Female on Leadership	%	27.9%	26.0%	+2p.p.	30%	35%
					ESG & equity linked compensation for Top Management3
						Cybersecurity	bitsight rating	810	810	0%	Keep advanced4
Governance		Top quartile in ESG rating Performance5

During the 1st nine months of 2022, the current energy crisis in Europe, driven by restrictions on gas sourcing, combined with a severe drought in Iberia, led to a significant increase in thermal production. Thus,

revenues aligned with the EU Taxonomy decreased to 47%.

Gross investments, increasing more than 2x to €5.5bn in 9M22, of which 96% allocated to renewables and electricity networks activities.

Renewables represented 70% of electricity generated by EDP in 9M22, which compares with 76% in the same period last year.

Specific CO2 emissions increased in 9M22, due to the increase in the thermal generation output in Iberia.

Total waste increased by 22% YoY, mainly explained by the increase in the operation of the Iberian thermal power plants.

Employee Engagement is 1% below the High Performing Companies. EDP continously promotes the definition of action plans throughout the organization to respond to employee feedback, reinforcing employees engagement.

In 9M22, female representation stood at 27% of EDP's workforce, representing 1p.p. increase versus 9M21.

Accident Frequency rate decreased to 1.72 in 9M22 (-5%). EDP continues determined to strengthen the culture of Occupational Health and Safety, having started in 2021 a new program, "Playitsafe", to raise awareness of the importance of building and adopting safe habits at EDP.

Sustainable Finance Disclosure Regulation (SFDR) Indicator

1. Above the high performing norm, including results of surveys done to more than 875,000 employees in 50 high performing organizations and is based on company financial performance and engagement and enablement scores. 2. Number of accidents at work with absence/fatalities, per million hours worked (including employees and contractors); 3. Applicable to Board of Directors and top management; 4. >= 740; 5. Includes DJSI, FTSE4Good, MSCI and Sustainalytics.

ESG Report 9M22

3.

Operational highlights committed to a renewables path

Installed Capacity (MW)1,2

24,515 MW

26,111 MW

Renewables	79%	79%

Coal	8%		10%
Gas	12%		11%
Other		1%		1%
		9M21	9M22

Electricity Generation (GWh)

43,165 GWh

45,770 GWh

Renewables	76%	70%

Coal	12%		12%
Gas	10%		15%
Other		2%		2%
		9M21	9M22

HYDRO COEFFICIENT (%)9M22 9M21 %

Portugal	37%	113%	-76p.p.
Spain	50%	100%	-50p.p.
Brazil 3	98%	67%	+30p.p.
RENEWABLES INDEX4 (%)	0%	-5%	+5p.p.
ELECTRICITY DISTRIBUTED (GWh)	64 023 63 302	1%
Portugal	34 013	33 197	2%
Spain	10 129	10 603	-4%
Brazil	19 881	19 501	2%
CUSTOMERS CONNECTED (#th)	11 545	11 380	1%
Portugal	6 413	6 355	1%
Spain	1 382	1 375	1%
Brazil	3 751	3 651	3%
TOTAL ENERGY CONSUMPTION	31 856	28 301	13%
Total Renewable consumption (GWh)	1 002	1 147	-13%
Fuel	4	4	1%
Electricity	999	1 144	-13%
Self-generatednon-fuel renewable energy	948	1 097	-14%
Total Non-Renewable consumption	30 853	27 154	14%
Fuel	29 547	24 263	22%
Electricity	1 307	2 890	-55%
Energy consumption intensity (MJ/€)	7	9	-17%

Sustainable Finance Disclosure Regulation (SFDR) Indicator

1.EBITDA MW; 2. Other includes Nuclear, Cogeneration & Waste; 3. Brazil hydro coefficient refers to ENA index; 4. Renewables Index (vs. LT avg. Gross Capacity Factor).

ESG Report 9M22

4.

New services highlights committed to drive new client solutions and smarter networks

ENERGY EFFICIENCYUNIT 9M22 9M21 %

	Energy Services Revenues / Turnover 1	%	7.8%	9.4%	-2p.p.
	Energy Efficiency Services Revenues	€ m	643	270	138%
	DISTRIBUTED SOLAR
	As a service - Installed Capacity 2	MW	549	176	213%
	Portugal	MW	85	51	66%
Spain	MW	9	3	170%
Brazil	MW	55	31	80%
US	MW	104	89	17%
APAC	MW	292
Other	MW	4	1	310%
Secured Capacity 3	MW	520	107	387%
E-MOBILITY
Light fleet electrification	%	15%	12%	+3p.p.
Electric charging points 4	#	4 272	2 906	47%
Clients with electric mobility solutions	#	60 700	38 747	57%
SMART METERS
Iberia	# m	5.8	5.2	12%
Brazil	# m	0.4	0.3	37%
ELECTRICITY GRID LOSSES
Portugal	%	8.9%	8.4%	+0.5p.p.
Spain	%	4.7%	4.4%	+0.2p.p.
Brazil (São Paulo)	%	8.0%	8.5%	-0.6p.p.
Brazil (Espírito Santo)	%	12%	12.5%	-0.6p.p.
CUSTOMERS WITH SUSTAINABLE SERVICES5	%	35%	15%	+21p.p.
CO2 SAVINGS DOWNSTREAM6	ktCO2	8 950	8 531

1. Energy service: Services provided under energy supply, installation of more efficient and/or building retrofit, and sustainable mobility, which generate revenues for the company; 2. As a service capacity installed at EOP, including inorganic capacity. 3. Cumulative secured capacity during business plan 21-25 (excludes EDPR). 4. Includes public, private and charging points inside EDP facilities installed; 5. Sustainability Services concept aligned with EU taxonomy. Excludes Health Insurance, Fatura Segura and Gas Certification. Includes only B2C electricity clients; 6. CO2 avoided by carrying out efficiency improvement measures that lead to a reduction in customer consumption, as well as measures to replace energy sources with other less CO2-emitting ones, namely replacing fossil fossils with renewable energy sources or sustainable mobility - annual value.

ESG Report 9M22

5.