ENGIE : 2021 Biodiversity Notebook

Biodiversity

Notebook

2021

EDITORIAL

Judith Hartmann • Directrice Générale adjointe en charge des Finances,

de la Responsabilité Sociétale d'Entreprise et des Achats

Preservation of biodiversity is a major challenge for humanity and is certainly of the same magnitude as climate

change. Numerous international reports have shown the urgency of taking action in the face of declining natural resources, whatever the species involved and wherever in the world they are threatened.

Along with its commitment to energy transition, ENGIE has chosen to join the fight against biodiversity loss and has done so for ten years now. The dominant role played by land in most of the Group's business operations gives us an advantage in helping to restore nature and allow species what they need to develop harmoniously. Reconciling economic activity and natural preservation is in no way a contradiction in terms. From now on, it's a necessity.

The Group also depends on nature for such businesses as hydroelectricity and energy production from biomass, and we interact continuously with nature in all our renewable energy development projects.

It is entirely possible to combine the fight against climate change with the fight against biodiversity loss. We are therefore careful to develop projects that fit into society's trajectory towards a carbon-neutral future in harmony with nature.

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BIODIVERSITY,

A KEY ISSUE FOR THE COMPANY

The Group attaches major importance to the preservation of biodiversity. As its activities are in constant interaction with natural ecosystems, it implements a proactive policy to reduce and control its footprint. It updated this strategy in 2020, in accordance with its purpose.

Long-term commitments to protecting biodiversity

While ENGIE benefits from the services provided by nature (biomass, watercourses, etc.), the activity of its industrial sites - the operation and extent of sites on the ground, the supply chain, etc. - is likely to interact with ecosystems and to change them. Since 2012, the Group has made external commitments to preserve biodiversity on a global scale, thus confirming the importance of biodiversity in its strategy and helping to achieve global targets in this area. In addition to its long-term commitment to the French National Biodiversity Strategy (Stratégie Nationale française pour la

Biodiversité or SNB), the Group recently became involved in several French and international initiatives: the Business and Biodiversity Pledge (Convention on Biological Diversity) in 2016, act4nature in 2018, with UNESCO in 2019 and act4nature International and Entreprises Engagées pour

la Nature-act4nature France in 2020/2021. For the past decade, the Group has also been supported by the French Committee of the International Union for Conservation of Nature (IUCN) and France Nature Environnement (FNE).

Solutions to reduce the impact of sites and production processes

According to the May 2019 IPBES (Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services) report, the main pressures on biodiversity relate to change of land use, overexploitation of resources, climate

change, pollution and invasive alien species. ENGIE's operations, like all industrial activities, have added to these pressures. The Group is applying solutions to mitigate the impact of each of them.

HYDROELECTRICITY

Impact on waterways due to disruption of the movement of aquatic species and sediments and the creation of risks of erosion and eutrophication of banks

The Group implements environmental programs to preserve flora and fauna in the zones of influence of hydroelectric power stations

SOLAR FARMS

Possible repercussions on habitat fragmentation due to land footprint

Farms can be used for agriculture, breeding or replanting local species

BIOMASS

COMBUSTION

Possible repercussions on forest ecosystems depending on logging decisions

The Group is committed to sourcing biomass from sustainably managed forests according to FSC (Forest Stewardship Council), PEFC (Program for the Endorsement of Forest Certification) or SBP (Sustainable Biomass Program) criteria

UNDERGROUND STORAGE

Large land footprint

Due to the implementation of ecological management, these sites are home to a rich biodiversity and participate in natural population movements

WIND FARMS

Possible repercussions on bats and birds: turbines disturb their habitat and can cause collisions

Wind farms are located in such a way as to avoid natural habitats and employ detection systems to stop turbines

LINEAR NETWORKS

The main factor underlying habitat fragmentation

Most of ENGIE's public service easements are now functioning ecological corridors

OFFSHORE WIND TURBINES

Potential problems with vibration, physical limitations and pollutants

Recently, the Group's offshore wind farms have been built with cutting-edge measures to protect biodiversity (aerial surveillance, GPS tracking, etc.)

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Challenges that bring opportunities

The degradation of biodiversity poses various risks for ENGIE's activities, the severity of which varies with the degree of reliance on natural ecosystems. However, biodiversity also represents an opportunity to create value for the Group.

Reliance on nature	Regulatory changes	Dialogue with	Market risks	Financial risks
All the energy production processes	In addition to the existing conditions	local stakeholders	Changing consumer preferences	These include insurance, access to
implemented by ENGIE rely on	for operating permits and due	Good biodiversity management	for products with a reduced impact	capital and the loss of investment
ecosystemic services, making	diligence, regulations on biodiversity	improves local integration with	on biodiversity, or buyers' demands	opportunities, as investors
them vulnerable to any disturbance	are intensifying. ENGIE has	stakeholders and increases the	for the protection of biodiversity	increasingly incorporate the
to these. Understanding which	anticipated these developments and	acceptability of ENGIE's activities	in the supply chain, can create	biodiversity footprint into their
ecosystem services underpin	is committed to offering innovative	over the long term, including for the	market risks.	investment strategies
production processes helps the	solutions to reduce and offset	development of renewable energy.
Group improve its performance by	its impacts.
preventing natural hazards and by
making its processes more resilient.

Philippe Zaouati

CEO of Mirova

As the sixth mass extinction of biodiversity is in progress at an unprecedented rate, the financial system must play its part so that more investments are directed towards activities that protect and regenerate nature. In this context, Mirova, along with BNPP AM, Axa AM and Sycomore AM, has taken an innovative approach combining expertise in modeling Iceberg Data Lab data and the methodological development of I Care and Consult in order to develop a tool enabling investors to incorporate biodiversity into their investment decisions. The transparency of the chosen approach will positively contribute to the required convergence towards standardized indicators and may serve as a catalyst for action by businesses. This initiative constitutes a solid basis for the international work currently under way at the TNFD (Taskforce on Nature-related Financial Disclosures) and by the Finance for Biodiversity Pledge, to which we are contributing.

BUSINESS CASE

Green solar farms in the

United States

Since 2016, the US subsidiary of ENGIE has incorporated the issue of biodiversity into the design of its solar parks. An assortment of 25 local floral and herbaceous species, providing

an ecosystem conducive to wildlife, particularly pollinating insects, has thus been established over the entire surface area occupied by the farms. This technique also helps prevent soil erosion and degradation, absorb rainwater, and reduce airborne dust by 80%. Today, this system is in place at all of ENGIE's Distributed Renewables solar farms.

Strengthening of strategy in 2020

Since 2012, the Group's strategy has been based on a cross- functional approach - avoiding, reducing and offsetting - and four major areas: raising awareness of biodiversity and improving the Group's skills on the ground, strengthening its commitments to preserve biodiversity, developing innovative solutions to preserve biodiversity on sites and ensuring transparent practices for external stakeholders. This strategy is broken down into concrete actions: for example, leading a network of experts and in-house training courses on biodiversity, drafting a guide for ecological site management, developing nature-based solutions as much as possible, involving stakeholders and communicating and establishing progress reports.

In 2020, ENGIE updated its policy following various observations and recommendations: the major pressures on the environment identified by the IPBES1, the SDGs2 and the shared commitments made as part of the Group's participation in act4nature international and EEN-act4nature France. Several targets were set as a result:

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• By 2022, all of the development projects submitted to the Group Commitments Committee will have to follow the "avoid, reduce, offset" cross-functional approach, in consultation with stakeholders. This approach will be expanded to all development projects by 2025.
• By 2030, ENGIE is committed to having all its industrial sites ecologically managed and all its industrial activities and major projects subject to environmental plans.
• The identification of around ten nature-based solutions by 2022

ENGIE will also supplement its strategy by carrying out an in-depth analysis of the impacts and reliance of its activities on its value chain, raising employee awareness of biodiversity issues and setting up a platform for the exchange of good practices.

BUSINESS CASE

Ecological site management at Storengy

Storengy reinvented the classic Facility Management model (maintenance services for green spaces, cleaning and security), by developing a new concept, Ecological Facility Management (ECO-FM), which responds to a double paradigm: transforming the preservation of biodiversity into an opportunity to create value, and seeing its

14 French industrial sites, covering around

1,500 hectares, as links in a chain, helping to strengthen ecological continuity. ECO-FM, which has been in place since early 2018, constitutes a global tool for managing the general aspects of biodiversity, responding to the environmental, social, energy and economic challenges of the enterprise.

Denis Leca

Head of Biodiversity at Storengy

Nature has never stopped short at the gates of our industrial sites. It is at home there, and always has been.

Managing our sites in an environmentally friendly way is a lesson in humility and living together that reminds us every day that we are indivisible from Nature.

1. Intergovernmental science and policy platform on biodiversity and ecosystem services
2. Sustainable Development Goals