Annual Report 2020

Sustainability Report

Introduction

With the Paris Climate Agreement, most countries in the world have set ambitious targets to reduce greenhouse gas emissions to help slow down climate change. By 2050, Europe is expected to become the first continent to only emit unavoidable greenhouse gases and fully compensate this low level of emissions. Switzerland has also set itself the target of net zero greenhouse gas emissions by 2050.

Energy consumption and power production are key factors in achieving the global climate targets. The only way to successfully tackle climate change is with a decarbonised energy supply.

In 2020, humanity faced a monumental challenge in the COVID-19 pandemic. All levels of society and business were affected. At the end of November 2020, the Federal Office for Civil Protection defined the two greatest risks in the third edition of its national risk analysis “Katastrophen und Notlagen Schweiz” (Disasters and Emergencies in Switzerland): power shortage and pandemic. The potential economic and social losses in both scenarios are high, and both have a relatively high probability of occurrence. As one of the largest electricity producers in Switzerland, Alpiq is well aware of its responsibility for security of supply. As part of its comprehensive business continuity management activities, Alpiq was quick to introduce measures to prevent the spread of the virus in the company, to protect employees and relatives and to maintain the operating business at all times – including with a view to its contribution to maintaining security of supply. Alpiq has managed the challenges posed by the COVID-19 pandemic well to date.

Climate protection and security of supply are an integral part of Alpiq’s purpose. In 2020, the Board of Directors and Executive Board jointly refined the purpose and both are committed to implementing it in practice: Alpiq’s sustainable energy business contributes to a better climate and improves the security of supply. In 2020, the Board of Directors and Executive Board reviewed the corporate strategy based on this purpose.

Alpiq is a European company with Swiss roots

Alpiq pursues a sustainable, financially sound and risk-adjusted business model and has a solid foundation. The robust business model is based on operating and selling highly flexible Swiss hydropower, Swiss nuclear energy, flexible gas-fired combined-cycle power plants in Italy, Spain and Hungary, as well as wind power plants and photovoltaic systems in multiple European countries. Alpiq uses this ideal foundation and its energy expertise to optimise its business by operating third-party plants and marketing the electricity produced there through its European energy trading business as well as the direct sale of energy to business customers across Europe.

Alpiq will continue to expand its energy trading activities and energy sales to business customers based on its successful core business and in order to optimise the risk-bearing capacity and profitability of its portfolio. In addition, it invests specifically in increasing the flexibility of existing electricity production plants, and it will increasingly operate third-party plants and sell their electricity, in particular in the field of new renewable energies. The development and expansion of digital competences and applications is a high priority in this regard.

The refinement of the Alpiq purpose in 2020 has placed greater focus on the topic of sustainability. Even in the past, Alpiq largely transacted business in compliance with ESG standards (E stands for environmental, S for social and G for governance). The aim of Alpiq’s existing and future transactions will be to create the greatest possible sustainable value for its stakeholders. For the very first time, Alpiq will provide an overview of the economic, ecological and social values the company is sustainably creating for its stakeholders.

This initial overview on the topic of sustainability is partly based on the standard set down by the Global Reporting Initiative (GRI). Alpiq refers to the GRI standards based on the GRI index at the very end of this document. A project team with experts from across the Alpiq Group defined the internal and external stakeholders and, from a long list, chose the topics that qualified as important to both Alpiq and the relevant stakeholders.

In future, Alpiq will prepare a sustainability report in compliance with the Core option of the GRI standard. In doing so, Alpiq will report on additional important topics and GRI standards, expand the contents of the disclosure and enter into dialogue with the defined stakeholders.

In principle, the scope of this overview is limited to the fully consolidated entities of the Alpiq Group. Alpiq holds direct participations in nuclear power plant companies in Switzerland and indirect participations in such companies internationally, but these are not fully consolidated. However, because this topic is of great importance to the Alpiq Group, the issue of nuclear power plants is also covered.

This overview on the topic of sustainability is an integral part of the Alpiq Holding Ltd. Annual Report.

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