BUSINESS MODEL AND VALUE CREATION

Transcription

1 BUSINESS MODEL AND VALUE CREATION.1 Stakeholder management. Enagás in the gas value chain.3 Matters identified in the international infrastructure in which Enagás takes part.4 Our value creation process

2 BUSINESS MODEL AND VALUE CREATION Stakeholder engagement.1 Engaging stakeholders is crucial for efficient management of key issues and, therefore, for generating and creating value. STAKEHOLDER MANAGEMENT [G4-4, G4-5, G4-6] Annual stakeholder consultation (surveys, meetings, interviews, etc.) - Materiality - Performance - Cooperation Internal checks on results and planning of courses of action (update of the Sustainable Management Plan) Communication to stakeholders of commitments acquired The aim of the stakeholder management carried out by Enagás is to achieve levels of engagement (dialogue and cooperation) that allow us to identify stakeholders' needs and expectations in order to integrate them into management and set in motion initiatives for shared value creation. More information: see section Cooperation initiatives. information: visit the Sustainability section on our corporate website. Results of the 014 stakeholder consultation Preparation of a stakeholder map of relationship environments Stakeholder map Sector regulation MINETUR CNMC ENTSOG European institutions CFE MEXICANA CRE (Mexico's Energy Regulating Commission) Southern gas region regulatory authorities International development International investment partners Critical suppliers for business development of groups within each relationship environment Reputation Media Financing Banks Prioritisation (level of importance and impact) Share listing / Stock market Investors Analysts Rating agencies CNMV Selection of the most significant stakeholders Business operations Spanish gas system shippers Spanish gas system operators Employees Directors and Provincial Heads of Industrial and Energy Area Critical suppliers for business operation Local environment Performance Evaluation of aspects such as accessibility, transparency, speed and proactivity in service provision. l Overall rating of 3.54/4 l Most highly valued aspects: accessibility and transparency l Room for improvement in speed and proactivity (compared with other Areas of engagement of energy efficiency, the development of new services relating to gas natural and the economic and social development of local communities as areas where projects could be carried out in cooperation with Enagás. These results are submitted to the Sustainability Committee, which is defined at General Management level and reports to the Appointments, Remuneration and CSR Committee (the highest governance body on sustainability). [G4-37] Materiality Prioritisation of the material aspects on which it will focus its management. It will report its performance and targets in this report: l Economic performance and cost efficiency l Occupational health and safety l Ethical compliance and respect for human rights l Human capital management l Environmental management l Impact on local communities Furthermore, issues that are important outside the organisation (upstream and downstream), together with the related impact on the company, are reported. More information: see section. Enagás in the gas value chain. 4 Enagás 5

3 Materiality analysis [G4-DMA] Enagás' materiality analysis forms part of an overall Culture of Innovation and Shared Value with Stakeholders project that was launched in 013 in the wake of the assessment conducted using the EFQM excellence model. The internal working group leading this project updates the stakeholder map in line with the strategic goals and identifies the priority stakeholders for each significant relationship environment. Process for carrying out the materiality analysis [G4-18] A material aspect reflects reflects the company's significant economic, environmental or social, impacts of that substantively influence the decisions of stakeholders Materiality matrix [G4-19, G4-DMA] The results of the process determine the material aspects on which the company should focus its management efforts (aspects rated as high or very high both internally and externally). Level of importance for Enagás High Medium Material aspects Economic performance and cost efficiency Occupational health and safety Ethical compliance and respect for human rights Human capital management (talent, training and diversity) Environmental management Definition of materiality of aspects Prioritisation of material aspects Internal validation Review Low 1 Low Medium High Level of importance for our stakeholders Impact on local communities 1 Biodiversity 5 Impact on local communities 9 Human rights Climate change (emissions and energy efficiency) 6 Training and performance 10 Economic performance and cost efficiency 3 Dumping and waste 7 Occupational health and safety 11 Anti-corruption 4 Diversity and equality 8 Employment (talent) The first step in the process is to define materiality: an aspect is material when it reflects the company's significant economic, environmental or social impacts, or substantively influences the assessments and decisions of stakeholders regarding the organisation's ability to create value in the short, medium and long term. The second step is to identify the material economic, social and environmental aspects -taking the aspects reflected in the GRI G4 guide as a starting point-, the internal selection of the material aspects -involving the assessment by the working group and management of the stakeholders- and, lastly, external consultations with stakeholders. The identification criteria used are: the company's profile and activity; the Enagás' value chain; the Strategic Update; Enagás' Visión 00 corporate social responsibility strategy; the risks and opportunities of the gas industry, the regulatory framework, regulations, international agreements and significant voluntary standards. With regard to the stakeholders the company consults, it takes into account the opinion of a small group of people identified in the Enagás Stakeholders Map, whose opinion may be regarded as representative of the group to which they belong. The third step, as a result of this process, is to prioritise the material aspects on which the company must focus its management efforts, as illustrated in the Materiality Matrix table on the following page. Following an internal validation, a review is carried out of the material aspects. This leads, where appropriate, to a new identification phase. The findings of the annual stakeholder consultation are reported to the Sustainability Committee and the Appointments, Remuneration and CSR Committee. [G4-37, G4-45] Results of the 014 customer consultation (companies related to the business operations) Business operation [G4-4, G4-7] Enagás transmission company Enagás Technical System Manager Percentage and number of responses Assessment of services provided by Enagás Services Shippers 84% (4) 8./100 Capacity management and viability analysis, infrastructure System operators (transmission and distribution 67% (6) 77.1/100 operation and programming, etc. Shippers 58% (30) 78.6/100 Programming, System operators (transmission and distribution In addition to this global consultation, other annual consultations with more detailed and specific content are carried out with customers and employees. More information: see section Results and impact on our team. 6% (8) 7.6/100 operations, distribution, balances, etc. 6 Enagás 7

4 . ENAGÁS IN THE GAS VALUE CHAIN Enagás is the sole transmission company for the trunk network in Spain, the Technical System Manager of Spain's Gas System and an international transmission company. Enagás' activities represent part of the natural gas value chain, through which we create value for our stakeholders and positive impacts on society. The following chart illustrates Enagás' material aspects and upstream and downstream activities. Extraction Extracting natural gas from gas field Liquefaction Freezing gas to -160 º C, to reduce volume for transmission LNG maritime transport Transporting LNG in methane tankers from country of origin to destination country Regasification Returning gas to its original gaseous state (natural gas). Electricity demand Natural gas transmission Natural gas is transmitted through the highpressure network Conventional demand (domestic-commercial and industrial) MATERIAL ASPECTS IN ENAGÁS' VALUE CHAIN Economic performance and cost efficiency Occupational health and safety UPSTREAM MATERIAL ASPECTS Ethical compliance and respect for human rights Human capital management (talent, training and diversity) DOWNSTREAM MATERIAL ASPECTS Vessel loading/ offloading Offloading LNG at the plant and loading vessels with LNG Distribution to customers Distributing natural gas to end customers for consumption Conflicts in communities Environmental management CO emissions arising from natural gas combustion activities for generating electricity and for satisfying conventional demand Truck loading Loading LNG onto trucks Greenhouse gas emissions and soil pollution Impact on local communities Health and safety of local communities Underground storage Storing natural gas in existing geological structures MATERIAL ASPECTS IN THE SUPPLY CHAIN CO emissions and energy efficiency Prevention of fraud, corruption and bribery, and respect for human rights Occupational health and safety [G4-1] 8 Enagás 9

5 With regard to the impact arising from the material aspects outside the organisation (upstream and downstream, and the supply chain): In our scope 3 emissions inventory we report the greenhouse gas emissions of a sample of our main suppliers. More information: see sections 6.5. Climate change and energy efficiency and Supplier assessment We assess suppliers in relation to occupational safety, labour relations, the environment and other factors. We work with companies from the gas industry through participation in working groups in the area of gas infrastructure security (Marcogaz). Upstream, the company monitors conflicts in local communities, since they may have an indirect impact on the company. For example, the Ukraine crisis might speed up the process to build international connections with France in order to enable Europe to cope with an eventual supply crisis. PERU TgP - Coga GSP South Peru Gas Pipeline (5%) 1,134 km of gas pipelines Stakeholder management in the local environment. There is a Community Relations team at each segment of the route. Transportadora de Gas del Perú (TgP, 0%) Compañía Operadora de Gas del Amazonas (COGA, 30%) Project in progress 79 km of gas pipelines Environmental management. 13 points along the gas pipeline are monitored. Development of local communities. Over 140 projects fostering local development in areas such as education, culture, health and productivity, for the benefit of more than 30,000 inhabitants of the local areas involved. CHILE 3 Quintero LNG plant (majority shareholder) Development of local communities. Various projects are being conducted focusing on local development: Urban projects. Funding of architecture and engineering development projects Competitive funding. Aimed at organisations in Quintero. Projects to support the fishing community in the area. LNG terminal Under construction / planned Compressor station Gas pipelines.3 MATTERS IDENTIFIED IN INTERNATIONAL INFRASTRUCTURE.4 IN WHICH ENAGÁS TAKES PART[G4-0, G4-1] OUR VALUE CREATION PROCESS [G4-, G4-EC1] Although the report scope refers to the impact of operations carried out by Enagás in Spain, participation in foreign operations is becoming MEXICO increasingly significant. Therefore, the company began to identify the most significant issues in the areas of safety, the environment and the development of local communities involving Enagás' international investees. Enagás uses the capital management model in the Integrated Reporting framework to define its value creation process. Our business model transforms capital (financial, material resources, intellectual, human, social and relational capital) into impacts, both on our business and on individuals, communities and the environment. Our strategy, our leaders, and the risks and opportunities arising from the operational context, together with our performance and outlook are factors that determine the scope and extent of our impacts. Soto La Marina TLA Altamira Morelos Soto La Marina compressor station (50%) 3 turbocompressors of 15.3 MW each Safety. A SCADA system was installed to reduce possible leakage and damage. The system detects leakage and significant breakage so that emergency procedures may be executed Stakeholder management at local level. The stakeholders were involved in the project, the most important being the municipal council and the "ejidos" (groups that administer common land). As a result, risks relating to the impact on communities were mitigated and various initiatives designed to improve facilities and accesses were launched. Gas emissions. Since it was designed, the project includes the best technologies available for reducing gas emissions. The facility's maximum estimated volume of venting is around 9kg of natural gas, which will only be produced on exceptional occasions to facilitate the security of the facility or in maintenance operations. Noise. The compressor station was designed to minimise the problems of noise (a muted exhaust gas system, soundproofed turbines, a double wall and fence all the way along the station with a three metre gap, etc.). Morelos gas pipeline (50%) km of gas pipelines Biodiversity. A flora and fauna rescue programme was carried out to restore a surface area of 1.3 km, for which Enagás invested 1,674,575. TLA Altamira plant (40%) 70 employees Gas emissions: 5 t CH 4 Safety. TLA has a record of over 8 million staff hours worked without registering any disabling injuries. It is OHSAS certified. Environmental management. The plant is ISO certified. LNG terminal More information: see section Biodiversity conservation. Under construction / planned Compressor station Business (trust-building) 404.9Mn Value distributed to capital providers 1.3 per share 60% Independent directors 3.54/4 Performance appraisal by our stakeholders Local communities (economic and social development) 4.9 % Net job creation 84.7Mn Value distributed to employees 185.Mn Value distributed to suppliers 1.6Mn Investment in the community 101Mn Value distributed to the company through the payment of taxes People (commitment) 7/10 Employee satisfaction 0.7 % Voluntary turnover rate 3.60 Incidence rate of sick leave of own staff and contractors Environment (environmental protection) 118,588 t CO e Avoided through energy efficiency initiatives 51 Our main suppliers committed to combating climate change (participation in CDP initiative) Reduction of 11% and 9% in CO emissions in the transmission network and the underground storage facilities compared with 013, respectively 30 Enagás 31