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www.cdp.net | @CDP
CDP Investor Research
“Flicking the switch:
are electric utilities prepared for a
low carbon future?”
M...
www.cdp.net | @CDP
Content
 Key findings of the report
 Overall engagement themes
 Company level engagement topics
 Ne...
www.cdp.net | @CDP
Key findings of the report
Page 3
www.cdp.net | @CDP
Scope of our research: geographies
Page 4
 Our report covers European electric utilities, as European ...
www.cdp.net | @CDP
Electricity production by geography
Page 5
www.cdp.net | @CDP
Scope of our research: companies
Page 6
 We consider only companies that responded to CDP’s 2014 Clima...
www.cdp.net | @CDP
The Super-League Table
Page 7
 Ranks companies based on a number of emissions-related metrics.
 In ag...
www.cdp.net | @CDP
Scope of our research: four key areas linking emissions-related metrics to earnings
Page 8
www.cdp.net | @CDP
Super League Table for European electric utilities
www.cdp.net | @CDP
Carbon risk
Page 10
www.cdp.net | @CDP
Carbon risk: methodology
Page 11
 We analyse carbon risk for the utilities based on their global asset...
www.cdp.net | @CDP
Carbon risk summary
Page 12
www.cdp.net | @CDP Page 13
Production by resource type and emissions intensity
www.cdp.net | @CDP
Metric 1: Carbon cover
Page 14
www.cdp.net | @CDP
Metric 2: Emissions intensity in 2013
Page 15
www.cdp.net | @CDP
Metric 3: Reduction in emissions intensity
Page 16
www.cdp.net | @CDP
Metric 4: Emissions targets
Page 17
www.cdp.net | @CDP
Scenario analysis: carbon risk exposure and impact on earnings
Page 18
 We assess utilities’ carbon ri...
www.cdp.net | @CDP
Scenario analysis: carbon risk exposure and impact on earnings
Page 19
www.cdp.net | @CDP
Renewable energy sources
Page 20
www.cdp.net | @CDP
Renewable energy sources: methodology
Page 21
 We assess the utilities’ renewables generation portfoli...
www.cdp.net | @CDP
Renewable energy sources summary
Page 22
www.cdp.net | @CDP
Renewable energy sources summary: other renewables
Page 23
www.cdp.net | @CDP
Renewable energy sources summary: hydro
Page 24
www.cdp.net | @CDP
Metric 1 (i): Production from other renewables in 2013
Page 25
www.cdp.net | @CDP
Metric 1 (ii): Production from hydro in 2013
Page 26
www.cdp.net | @CDP
Metric 2 (i): % change in installed capacity of other renewables
Page 27
www.cdp.net | @CDP
Metric 2 (ii): % change in installed capacity of hydro
Page 28
www.cdp.net | @CDP
Metric 3: % Increase in installed capacity of other renewables relative
to increase in domestic market
...
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Metric 4: Renewables country attractiveness
Page 30
www.cdp.net | @CDP
Coal exposure
Page 31
www.cdp.net | @CDP
Coal exposure: methodology
Page 32
 We perform a detailed review of the generation portfolio of coal a...
www.cdp.net | @CDP
Coal and renewables as % of electricity production
Page 33
www.cdp.net | @CDP
Coal exposure summary
Page 34
www.cdp.net | @CDP
Metric 1: Production from coal in 2013
Page 35
www.cdp.net | @CDP
Metric 2: Change in installed capacity of coal over 2010-2013
Page 36
www.cdp.net | @CDP
Metric 3: Proportion of subcritical coal power plants by production
Page 37
www.cdp.net | @CDP
Metric 4: Proportion of subcritical coal power plants by capacity
Page 38
www.cdp.net | @CDP
Water risk
Page 39
www.cdp.net | @CDP
Water risk: methodology
Page 40
 We evaluate water risk facing utilities based on the following metric...
www.cdp.net | @CDP
Water risk summary
Page 41
www.cdp.net | @CDP
Metric 1: Water strategy
Page 42
www.cdp.net | @CDP
Metric 2: Supply chain management
Page 43
www.cdp.net | @CDP
Metric 3: Risks and Opportunities
Page 44
www.cdp.net | @CDP
Metric 4: Water use intensity
Page 45
www.cdp.net | @CDP
Metric 5: Targets and goals
Page 46
www.cdp.net | @CDP
Overall engagement themes
Page 47
www.cdp.net | @CDP
Engagement
 Individual and collaborative engagement with companies prioritised by CDP
 CDP actively s...
www.cdp.net | @CDP
Overall engagement themes: carbon risk (1)
Three key requirements for companies:
1) Set clear, strong, ...
www.cdp.net | @CDP
Overall engagement themes: carbon risk (1)
Page 50
2) Set targets and demonstrate progress to achieve e...
www.cdp.net | @CDP
Overall engagement themes: renewable energy sources (2)
Renewable Energy Sources (RES): an assessment o...
www.cdp.net | @CDP
Coal exposure: production from coal, especially inefficient coal, and the risk of
stranded coal assets
...
www.cdp.net | @CDP
Water risk: potential physical risks may reduce production and constrain the growth of the
power genera...
www.cdp.net | @CDP
Overall engagement themes: water risk (4)
Page 54
2) Set clear, strong, long-term water
targets and inc...
www.cdp.net | @CDP
Carbon risk: areas for company engagement
Page 55
www.cdp.net | @CDP
Other renewables: areas for company engagement
Page 56
www.cdp.net | @CDP
Coal exposure: areas for company engagement
Page 57
www.cdp.net | @CDP
Water risk: areas for company engagement
Page 58
www.cdp.net | @CDP
Company level engagement topics
Page 59
www.cdp.net | @CDP
RWE
Page 60
Rank Carbon risk Renewables Coal exposure Water risk
13 E D E D
Key strengths Key Engagemen...
www.cdp.net | @CDP
EnBW
Page 61
Rank Carbon risk Renewables Coal exposure Water risk
12 E C D n/a
Key strengths Key Engage...
www.cdp.net | @CDP
Endesa
Page 62
Rank Carbon risk Renewables Coal exposure Water risk
10 D E C C
Key strengths Key Engage...
www.cdp.net | @CDP
Iberdrola
Page 63
Key Engagement actions
 Scores consistently very well across all four emissions
inte...
www.cdp.net | @CDP
Enel
Page 64
Rank Carbon risk Renewables Coal exposure Water risk
4 B B C B
Key strengths Key Engagemen...
www.cdp.net | @CDP
Centrica
Page 65
Rank Carbon risk Renewables Coal exposure Water risk
2 A C A B
Key strengths Key Engag...
www.cdp.net | @CDP
Verbund
Page 66
Rank Carbon risk Renewables Coal exposure Water risk
3 A D A n/a
Key strengths Key Enga...
www.cdp.net | @CDP
EDP
Page 67
Rank Carbon risk Renewables Coal exposure Water risk
5 C A C B
Key strengths Key Engagement...
www.cdp.net | @CDP
EDF
Page 68
Rank Carbon risk Renewables Coal exposure Water risk
6 B D B C
Key strengths Key Engagement...
www.cdp.net | @CDP
Fortum
Page 69
Rank Carbon risk Renewables Coal exposure Water risk
7 B E B E
Key strengths Key Engagem...
www.cdp.net | @CDP
GDF Suez
Page 70
Rank Carbon risk Renewables Coal exposure Water risk
8 C C C C
Key strengths Key Engag...
www.cdp.net | @CDP
E.ON
Page 71
Rank Carbon risk Renewables Coal exposure Water risk
9 C B D D
Key strengths Key Engagemen...
www.cdp.net | @CDP
SSE
Page 72
Rank Carbon risk Renewables Coal exposure Water risk
11 D B E E
Key strengths Key Engagemen...
www.cdp.net | @CDP
Next steps
Page 73
www.cdp.net | @CDP
Next Steps
 Individual engagement with companies
 Collaborative engagement with companies
 Dialogue ...
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CDP Investor Research - Flitching the switch

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The Portfolio Decarbonisation Coalition presented the results of an investor research titled "Flicking the switch: are electric utilities prepared for a low carbon future?" at an event organised by Finsif, CDP and Sitra on 25 August 2015. The theme of the event was "Managing climate risk in investments".

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CDP Investor Research - Flitching the switch

  1. 1. www.cdp.net | @CDP CDP Investor Research “Flicking the switch: are electric utilities prepared for a low carbon future?” May 2015 Page 1
  2. 2. www.cdp.net | @CDP Content  Key findings of the report  Overall engagement themes  Company level engagement topics  Next steps Page 2
  3. 3. www.cdp.net | @CDP Key findings of the report Page 3
  4. 4. www.cdp.net | @CDP Scope of our research: geographies Page 4  Our report covers European electric utilities, as European companies provide the most comprehensive responses to CDP’s 2014 questionnaire.  Responders by market cap and by region: • Europe, 85% ; US, 45%; Rest of the world, 25%; • The current lack of responses outside of Europe make these datasets less useful.  European utilities’ production by geography: • Europe: 75% (including 50% in their domestic market); • LatAm (10%), Russia (6%), US (4%) and rest of the world (5%).  Our research covers the global assets of the European electric utilities. However, we assess the carbon exposure and impact on earnings based only on the utilities’ European assets, as the EU is one of only a few regions with a carbon trading market.
  5. 5. www.cdp.net | @CDP Electricity production by geography Page 5
  6. 6. www.cdp.net | @CDP Scope of our research: companies Page 6  We consider only companies that responded to CDP’s 2014 Climate Change questionnaire.  We select 13 European electric utilities for our study, including 10 of the top 12 European utilities by global electricity production.  Together represent around 80% of electricity produced by European utilities and US$380 billion in market cap.  The largest non-responders were CEZ (2.3% share), Polska Grupa Energetyczna (1.9%) and Public Power Corp (1.3% share).  Data sources: we have used CDP’s extensive databases and also external data from organisations such as Eurostat, Eurelectric, CARMA, Enipedia, European Wind Energy Association, as well as publically available company data.
  7. 7. www.cdp.net | @CDP The Super-League Table Page 7  Ranks companies based on a number of emissions-related metrics.  In aggregate could have a material impact on company performance.  Our SLT rankings are not intended as definitive winners and losers for investment purposes; however, it is more a proxy for business-readiness in an industry where a significantly higher carbon price is required to meet stringent long term emissions-reduction targets.  We would flag that companies towards the bottom of our SLT are possibly higher risk investments than those towards the top.
  8. 8. www.cdp.net | @CDP Scope of our research: four key areas linking emissions-related metrics to earnings Page 8
  9. 9. www.cdp.net | @CDP Super League Table for European electric utilities
  10. 10. www.cdp.net | @CDP Carbon risk Page 10
  11. 11. www.cdp.net | @CDP Carbon risk: methodology Page 11  We analyse carbon risk for the utilities based on their global assets, with the exception of our carbon cover metric where we calculate the risk exposure based on assets exposed to the EU ETS (on average the utilities generate 75% of their electricity in Europe).  Metrics used: • Carbon cover: measure of how many times utilities can pay their carbon cost using EBIT; • Emissions intensity in 2013 (normalised by revenue and production); • Reduction in emissions intensity over 2010-2013; • Emissions-reduction targets set by the utilities against science-based targets.
  12. 12. www.cdp.net | @CDP Carbon risk summary Page 12
  13. 13. www.cdp.net | @CDP Page 13 Production by resource type and emissions intensity
  14. 14. www.cdp.net | @CDP Metric 1: Carbon cover Page 14
  15. 15. www.cdp.net | @CDP Metric 2: Emissions intensity in 2013 Page 15
  16. 16. www.cdp.net | @CDP Metric 3: Reduction in emissions intensity Page 16
  17. 17. www.cdp.net | @CDP Metric 4: Emissions targets Page 17
  18. 18. www.cdp.net | @CDP Scenario analysis: carbon risk exposure and impact on earnings Page 18  We assess utilities’ carbon risk exposure under three carbon pricing scenarios: • 2013: we adopt the average carbon price for 2013 of EUR4.35; • Scenario 1: we use a carbon price of EUR18. This is considered by Sandbag, an NGO which lobbies for coal divestment, as a price needed for a large-scale switch from coal back to gas production (based on a EUR16/MWh gas price – with a USD75/tonne coal price and EUR6/tonne carbon price); • Scenario 2: we use a carbon price of EUR30. This is cited by the EU electricity association as a carbon price that needs to be reached by 2020 in order to have any chance of achieving the EU’s 2030 target of 45% of electricity generated from renewables.  Limitation: we assume a constant emissions intensity (at 2013 levels). • We appreciate that the change in carbon price would affect the switch between gas and coal. Hence for utilities that own both of these power generation sources may choose among them leading to their carbon cost exposure would increase at a slower rate than the carbon price and in a non-linear fashion.
  19. 19. www.cdp.net | @CDP Scenario analysis: carbon risk exposure and impact on earnings Page 19
  20. 20. www.cdp.net | @CDP Renewable energy sources Page 20
  21. 21. www.cdp.net | @CDP Renewable energy sources: methodology Page 21  We assess the utilities’ renewables generation portfolios based on their generation from hydro and other renewables, evaluating the extent to which companies are capturing the opportunities in renewables, and in doing so mitigating their carbon risk exposure.  Metrics used: • % production from hydro and other renewables in 2013; • Increase in installed capacity from hydro and other renewables over 2010-2013; • A comparison of companies’ increase rate in installed capacity from other renewables with that of their domestic markets; • The attractiveness of the markets they are exposed to.
  22. 22. www.cdp.net | @CDP Renewable energy sources summary Page 22
  23. 23. www.cdp.net | @CDP Renewable energy sources summary: other renewables Page 23
  24. 24. www.cdp.net | @CDP Renewable energy sources summary: hydro Page 24
  25. 25. www.cdp.net | @CDP Metric 1 (i): Production from other renewables in 2013 Page 25
  26. 26. www.cdp.net | @CDP Metric 1 (ii): Production from hydro in 2013 Page 26
  27. 27. www.cdp.net | @CDP Metric 2 (i): % change in installed capacity of other renewables Page 27
  28. 28. www.cdp.net | @CDP Metric 2 (ii): % change in installed capacity of hydro Page 28
  29. 29. www.cdp.net | @CDP Metric 3: % Increase in installed capacity of other renewables relative to increase in domestic market Page 29
  30. 30. www.cdp.net | @CDP Metric 4: Renewables country attractiveness Page 30
  31. 31. www.cdp.net | @CDP Coal exposure Page 31
  32. 32. www.cdp.net | @CDP Coal exposure: methodology Page 32  We perform a detailed review of the generation portfolio of coal and lignite of each utility.  The utilities reduced their combined installed capacity by 3% pa over 2010-13; however, favourable economics for coal plants meant that operating hours and therefore coal production increased over the period.  Metrics used: • Production from coal and lignite in 2013; • The reduction of installed capacity of coal and lignite over 2010-2013; • The percentage of subcritical coal plant (i.e. the least efficient and the most carbon intensive coal-fired power generation) in utilities’ coal fleet, in terms of installed capacity and production.
  33. 33. www.cdp.net | @CDP Coal and renewables as % of electricity production Page 33
  34. 34. www.cdp.net | @CDP Coal exposure summary Page 34
  35. 35. www.cdp.net | @CDP Metric 1: Production from coal in 2013 Page 35
  36. 36. www.cdp.net | @CDP Metric 2: Change in installed capacity of coal over 2010-2013 Page 36
  37. 37. www.cdp.net | @CDP Metric 3: Proportion of subcritical coal power plants by production Page 37
  38. 38. www.cdp.net | @CDP Metric 4: Proportion of subcritical coal power plants by capacity Page 38
  39. 39. www.cdp.net | @CDP Water risk Page 39
  40. 40. www.cdp.net | @CDP Water risk: methodology Page 40  We evaluate water risk facing utilities based on the following metrics: • water strategy • supply chain management • risks and opportunities • water use intensity • targets and goals
  41. 41. www.cdp.net | @CDP Water risk summary Page 41
  42. 42. www.cdp.net | @CDP Metric 1: Water strategy Page 42
  43. 43. www.cdp.net | @CDP Metric 2: Supply chain management Page 43
  44. 44. www.cdp.net | @CDP Metric 3: Risks and Opportunities Page 44
  45. 45. www.cdp.net | @CDP Metric 4: Water use intensity Page 45
  46. 46. www.cdp.net | @CDP Metric 5: Targets and goals Page 46
  47. 47. www.cdp.net | @CDP Overall engagement themes Page 47
  48. 48. www.cdp.net | @CDP Engagement  Individual and collaborative engagement with companies prioritised by CDP  CDP actively supporting institutional investors in Individual and collaborative engagement with companies  Will provide additional information, support and coordination when needed.  Work in progress – share your thoughts and ideas  Traffic light coding: Green = good performance Amber = monitor performance, possible concern Red = area of concern, engage with company Page 48
  49. 49. www.cdp.net | @CDP Overall engagement themes: carbon risk (1) Three key requirements for companies: 1) Set clear, strong, long-term emission reduction targets, both absolute and intensity, in line with science-based targets. Emission reductions are key to meeting existing regulatory requirements, being prepared for future requirements and providing economic solutions for customers. Page 49 Carbon risk: exposure to carbon risk is directly linked to the cost of meeting regulatory demand
  50. 50. www.cdp.net | @CDP Overall engagement themes: carbon risk (1) Page 50 2) Set targets and demonstrate progress to achieve emissions reductions. 3) Demonstrate resilience to a shifting price of carbon.
  51. 51. www.cdp.net | @CDP Overall engagement themes: renewable energy sources (2) Renewable Energy Sources (RES): an assessment of utilities’ RES portfolio and potential opportunities Companies should demonstrate a clear strategy to increase production from renewables. Page 51
  52. 52. www.cdp.net | @CDP Coal exposure: production from coal, especially inefficient coal, and the risk of stranded coal assets 1) Demonstrate a clear strategy to shift from coal-fired assets to lower-carbon assets 2) Increase disclosure on the different grades of coal plants, including the sub-critical plants (SCP) Page 52 Overall engagement themes: coal exposure (3)
  53. 53. www.cdp.net | @CDP Water risk: potential physical risks may reduce production and constrain the growth of the power generation business 1) Demonstrate your awareness of water risks and opportunities and how these could affect the success of your organization’s growth strategy Page 53 Overall engagement themes: water risk (4)
  54. 54. www.cdp.net | @CDP Overall engagement themes: water risk (4) Page 54 2) Set clear, strong, long-term water targets and increase the quality and availability of water accounting data at a river basin level.
  55. 55. www.cdp.net | @CDP Carbon risk: areas for company engagement Page 55
  56. 56. www.cdp.net | @CDP Other renewables: areas for company engagement Page 56
  57. 57. www.cdp.net | @CDP Coal exposure: areas for company engagement Page 57
  58. 58. www.cdp.net | @CDP Water risk: areas for company engagement Page 58
  59. 59. www.cdp.net | @CDP Company level engagement topics Page 59
  60. 60. www.cdp.net | @CDP RWE Page 60 Rank Carbon risk Renewables Coal exposure Water risk 13 E D E D Key strengths Key Engagement actions  RWE has reduced its installed coal capacity and has not been substantially increasing its production emissions-intensity relative to others at the bottom of the league table.  RWE is bottom of the SLT with very high coal production and therefore a high carbon risk.  Incomplete disclosure on production by country and resource type  Given it is operating in a receptive domestic market, it should increase its investments in non- hydro renewables
  61. 61. www.cdp.net | @CDP EnBW Page 61 Rank Carbon risk Renewables Coal exposure Water risk 12 E C D n/a Key strengths Key Engagement actions  EnBW has demonstrated an effort to reduce its coal installation capacity even though coal represents nearly half of its production.  EnBW has a consistently high-risk carbon profile  EnBW should be encouraged to replace its coal production with renewables sources, especially given its domestic market’s receptiveness  EnBW can improve its ranking as CDP will engage the company on its water risks
  62. 62. www.cdp.net | @CDP Endesa Page 62 Rank Carbon risk Renewables Coal exposure Water risk 10 D E C C Key strengths Key Engagement actions  Endesa’s production sources are highly diversified, with a low proportion coming from coal and a significant percentage from hydro and nuclear.  Explore scope for reduction of coal capacity and shift towards non-hydro renewables.  Should address its increase in carbon emissions intensity and get back on track for its emissions targets.
  63. 63. www.cdp.net | @CDP Iberdrola Page 63 Key Engagement actions  Scores consistently very well across all four emissions intensity-related metrics.  A world leader in renewables (wind especially) and has one of the lowest exposures to coal.  Reduction of gas and coal production over the last few years and switch to renewables.  Bottom performer on the extent of new and non-hydro renewable installed capacity.  High percentage of subcritical (most polluting and least efficient) coal-fired plants in the company’s total coal fleet. Rank Carbon risk Renewables Coal exposure Water risk 1 A A B A Key strengths
  64. 64. www.cdp.net | @CDP Enel Page 64 Rank Carbon risk Renewables Coal exposure Water risk 4 B B C B Key strengths Key Engagement actions  High sales-adjusted carbon emissions intensity.  High coal exposure: significant percentage of electricity coming from coal.  Lacking presence in countries that are more attractive for non-hydro renewables.  Good overall performance, with a consistent B grade in 3 emissions-related metrics.  Among the world’s top five wind farm owners.  Ranked in the top 3 in terms of water strategy, targets and goals.
  65. 65. www.cdp.net | @CDP Centrica Page 65 Rank Carbon risk Renewables Coal exposure Water risk 2 A C A B Key strengths Key Engagement actions  Very satisfactory overall performance in the 4 emissions-related metrics  Ranks top in low-emissions intensity (no coal assets; about half of energy production comes from nuclear and the other half from gas).  Very low percentage of renewables in the company’s total electricity production.  Below average increase compared to its domestic market for new and non-hydro renewable installed capacity  Poor water strategy
  66. 66. www.cdp.net | @CDP Verbund Page 66 Rank Carbon risk Renewables Coal exposure Water risk 3 A D A n/a Key strengths Key Engagement actions  Low percentage of non-hydro renewables in the company’s total electricity production.  Lacking presence in countries that are more attractive for renewables (excluding hydro).  Engagement needed to clarify water strategy  Very good performance in the carbon risk and coal exposure metrics.  One of the leaders in low-carbon emissions intensity.  Has one of the lowest coal exposures due to high proportion of hydro.
  67. 67. www.cdp.net | @CDP EDP Page 67 Rank Carbon risk Renewables Coal exposure Water risk 5 C A C B Key strengths Key Engagement actions  Shift from gas to coal production: ranks bottom in carbon emissions intensity reductions for 2010- 2013.  Almost no increase in non-hydro renewables installed capacity during the same period.  A world leader in renewables (wind especially), due to a high percentage of electricity coming from wind and a solid presence in countries that are more attractive for non-hydro renewables  Among the top performers for water management
  68. 68. www.cdp.net | @CDP EDF Page 68 Rank Carbon risk Renewables Coal exposure Water risk 6 B D B C Key strengths Key Engagement actions  Very small percentage of non-hydro renewables in the company’s total electricity production.  High percentage of subcritical coal power plants in the company’s total coal fleet.  High water-use intensity.  Good score on carbon risk and coal exposure metrics (majority of production coming from nuclear).  Significant increase in non-hydro renewables installed capacity (above domestic market average).  Robust water risks and opportunities assessment as well as targets and goals assessment.
  69. 69. www.cdp.net | @CDP Fortum Page 69 Rank Carbon risk Renewables Coal exposure Water risk 7 B E B E Key strengths Key Engagement actions  Very low score on the non-hydro renewables metric.  One of only three companies to have increased its installed coal capacity from 2010-2013.  Unclear water management strategy.  Performs relatively well in the carbon risk and coal exposure metrics: low percentage of electricity produced from coal.  One of the top performers in terms of carbon cover and reduction in emissions intensity.  Has significantly increased its non-hydro renewables installed capacity during 2010-2013.
  70. 70. www.cdp.net | @CDP GDF Suez Page 70 Rank Carbon risk Renewables Coal exposure Water risk 8 C C C C Key strengths Key Engagement actions  Has obtained an A grade for its CDP performance band (2014).  Has one of the lowest percentage of subcritical coal power plants in its total coal fleet by capacity.  Has developed a strong overall water strategy.  Has strongly increased its installed coal capacity.  Poor carbon emissions intensity.  Far off track from reaching its emissions targets (risky in a climate of increased regulation and penalties).  Poor water risks and opportunities assessment.
  71. 71. www.cdp.net | @CDP E.ON Page 71 Rank Carbon risk Renewables Coal exposure Water risk 9 C B D D Key strengths Key Engagement actions  Good performance on renewables. E.ON plans to focus on increasing their renewables capacity.  Currently reducing its installed capacity and exposure to coal.  Encouraging E.ON to reformulate its water strategy, focusing on engaging its supply chain on water management.  Even though E.ON is planning on reducing its coal exposure, it is currently operating a large fleet of subcritical plants.
  72. 72. www.cdp.net | @CDP SSE Page 72 Rank Carbon risk Renewables Coal exposure Water risk 11 D B E E Key strengths Key Engagement actions  SSE ranks near bottom of three metrics, with 83% of its energy production coming from non-renewable, highly emitting fossil fuel sources, principally coal.  SSE did not respond to investor requests for transparency via CDP’s 2014 water questionnaire.  SSE is increasing its installed renewables capacity.  SSE has decommissioned two of its coal plants, retaining just one.
  73. 73. www.cdp.net | @CDP Next steps Page 73
  74. 74. www.cdp.net | @CDP Next Steps  Individual engagement with companies  Collaborative engagement with companies  Dialogue with Aiming for A coalition on Centrica and SSE  Updates to league tables when appropriate Page 74

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