Environmental Policy

The Policy is intended to establish a framework of reference for integrating the protection of nature and the environment within the Group's strategy, as well as its investments and operations, and define the principles of conduct for environmental management and the management of natural capital.
The Company considers respect for the environment to be one of the central elements of the concept of sustainability, and particu- larly one of the three pillars for reaching a sustainable energy model, together with competitiveness and the safety of supply. The Group is therefore committed to continue taking a leading position in the development of a sustainable energy model, based on the use of renewable energy sources and smart grids, electrification, efficiency, reduction in emissions and digital transformation, where respect for and the protection of the environment is integrated into all of its activities and processes. The Group is also committed to compliance with environmental regulations and international best practices in this area.
Through a business model and supported by a practice favouring transparent information and ongoing dialogue, the Group res- ponds to the expectations of its Stakeholders with respect to the preservation of the environment, ever more stringent regulatory requirements, and constant scrutiny of management by analysts, assessors and various agents of society in general The Group's commitment to leadership in the development of sustainable energy is aligned with the achievement of Sustainable Development Goals (SDGs) six, seven, twelve, thirteen, fourteen, fifteen and seventeen approved by the United Nations.

This Policy applies to all companies of the Group, as well as to all investees not belonging to the Group over which the Company has effective control, within the limits established by law.
Without prejudice to the provisions of the preceding paragraph, listed country subholding companies and their subsidiaries, based on their own special framework of strengthened autonomy, may establish an equivalent policy, which must be in accord with the principles set forth in this Policy and in the other environmental, social and corporate governance and regulatory compliance policies of the Governance and Sustainability System.
At those companies in which the Company has an interest and to which this Policy does not apply, the Company will promote, through its representatives on the boards of directors of such companies, the alignment of their own policies with those of the Company. This Policy shall also apply, to the extent relevant, to the joint ventures, temporary joint ventures (uniones temporales de empresas) and other equivalent associations, if the Company assumes the management thereof.

To implement its commitment to the environment and boost environmental sustainability, the Group articulates the following main principles of conduct that apply to all of its activities and businesses and that shall be integrated within the internal decision-making processes:

1. develop a sustainable model that is respectful of nature, biodiversity and historical and artistic heritage;
2. comply with legal provisions and conform to applicable environmental standards.
3. apply the principle of mitigation hierarchy (avoid, minimise, restore and compensate as a last resort) in all activities;
4. promote innovation through research and support for the development of new technologies and best environmental practices;
5. use natural capital sustainably. In particular:
   • to make rational and sustainable use of water, managing the risks relating to water scarcity and ensuring that water used is returned to the environment in the desired condition;
   • improve the circularity of its business activities and those of its suppliers, through the sustainable use of natural resources, the implementation of life cycle analysis, the eco-design of its infrastructures, the application of the waste hierarchy, as well as the optimisation of waste management and the use of recycled materials;
   • integrate the protection and promotion of biodiversity into the Group's strategy and develop a business model that is sustainable and positive with nature;
6. conserve, protect and promote the development and growth of natural heritage;
7. implement Environmental Management Systems that apply precautionary and continuous improvement principles and place the environment at the centre of decision-making through:
   • assessing the environmental risks of its activities, facilities, products and services on a regular basis, improving and updating the mechanisms designed to prevent, mitigate or eradicate them;
   • ongoing identification, assessment and mitigation of the environmental impacts of the Group's activities, facilities, products and services;
   • management of risks and impacts by establishing objectives, programmes and plans that promote the continuous improvement of the Group's environmental processes and practices, and establishment of monitoring, control and audit mechanisms;
   • environmental training of the Group's professionals;
8. reduce environmental impact and improve the Group's environmental performance from a life-cycle perspective;
9. encourage the engagement of the Stakeholders in Iberdrola's business enterprise pursuant to the provisions of the Stakeholder Engagement Policy, which contemplates, among other things, the strong involvement of the Group's companies in the communities in which they operate and the creation of shared sustainable value for all of them;
10. raise awareness, train and involve the Group's professionals, subcontractors, suppliers and other Stakeholders in the commitments and principles of this Policy;
11. report transparently on environmental results and activities.

In order to achieve its commitment to nature and the environment and to promote environmental sustainability and respect for na- ture, the Group is working on three priority lines of action, in which the main principles of conduct set out in the preceding section shall be applied:

1. climate action;
2. protection of biodiversity;
3. circular economy.

For more informations on the environnement political of the Iberdrola group