67

2021 INTEGRATED MANAGEMENT REPORT

RISK ANALYSIS OF THE 2030 DECARBONISATION PLAN

In 2021, the Carbon Cycle Panel presented our 2030 Decarbonisation Plan to the Strategy and Sustainability and Audit, Compliance, Ethics and Risk Committees, as well as to the Board of Directors, the Management Committee having monitored the entire process.

This plan takes into account climate change risks and opportunities based on the assessment of our Risk Management approach, so we can dig deeper in response to possible threats to the plan.

QUANTIFYING THE FINANCIAL IMPACTS ASSOCIATED WITH CLIMATE CHANGE

We undertook an impact quantification exercise on a five-year horizon. A long-term quantification exercise under quantitative scenarios is planned for 2022.

Our risk analysis and assessment oversees all aspects in their entirety, estimating the financial implications or costs associated with each risk and opportunity.

In terms of risk, the financial impact of the European Emissions Trading System and the EU's climate targets stands at over 100 million. In terms of opportunities relating to different emission-cutting technologies, the approximate value is also above 100 million, depending largely on technology development curves.

OTHER CLIMATE RISK AND OPPORTUNITY MANAGEMENT MECHANISMS

Besides the risk map, we have other mechanisms and metrics that allow us to monitor and set targets while managing climate risks and opportunities. They include:

· Continuously monitoring regulations and involvement with industry associations at national and European level.

· Monitoring metrics used by the Emissions Trading System in relation to emission trends and financial impacts.

· Evaluating technologies and raw materials to offer customers more sustainable products.

· Continuously monitoring technological developments as opportunities and measures to mitigate the risks identified.

· Implementing a supplier climate change survey to enhance our transparency and sustainability in the value chain.