Energias de Portugal

EDP has set targets to reduce its scope 1, 2 and 3 (Categories 1, 2, 3, 4, 5, 6, 7, 11 and 15) emissions by 90% and its scope 3 (Category 3) emissions by 90% by 2040, compared to 2020. It also has targets to reduce its scope 1 and 2 emissions intensity by 96% and scope 1 and 3 (Category 3) emissions intensity by 95% by 2040, compared to 2020. All these targets have been validated by the Science Based Targets initiative (SBTi) as consistent with a 1.5°C pathway. Furthermore, EDP has interim SBTi-validated targets consistent with a 1.5°C pathway which aim to reduce its scope 3 (Category 3) emissions by 45% by 2030, reduce its scope 1 and 2 emissions intensity by 95% by 2030 and reduce its scope 1 and 3 (Category 3) emissions intensity by 80% by 2030, compared to 2020. This target aligns with the company’s 1.5°C pathway.

EDP’s emissions intensity between 2017 and 2022 decreased by about 16% per year, at a rate greater than that required by its 1.5°C pathway between 2022 and 2027. This was driven by an increase in the company’s proportion of low-carbon electricity generation from about 56% in 2027 to about 74% in 2022, accompanied by a reduction in thermal coal from about 31% in 2017 to about 11% in 2022. However, EDP is projected to moderately exceed its carbon budget for 2022-2037. EDP is taking steps to transition to a low-carbon pathway by phasing out coal generation by 2025 and gas by 2030, and is aiming to expand its renewable energy capacity to 33 GW by 2026.

To support its net-zero greenhouse gas (GHG) emissions by 2040 target, EDP has established various low-carbon business models. EDP aims to achieve 33 GW of installed renewable capacity by 2026 and reach 1.5 GW of hydrogen electrolyser capacity by 2030. In addition, EDP plans to expand its energy storage capacity by adding 0.5 GW of battery storage capacity by 2026. EDP also plans to enhance its electricity network and reduce distribution power losses through increased smart meter coverage and advanced analytics, and to phase out coal by 2025 and gas by 2030.

EDP invested about 75% of its total research and development (R&D) spending on low-carbon technologies between 2019 and 2022, which falls just short of the sectoral expectation of 80%. The company conducts R&D into battery and energy storage systems, smart grid integration, renewable energy generation, sustainable mobility, and green hydrogen production, along with demand response, energy efficiency products and sustainable mobility. EDP has also allocated about 18% of its R&D expenditure to non-mature technologies, investigating demand side management (DSM) and demand response programmes.

EDP does not disclose sufficient data on its purchased power for resale between 2017 and 2022. Therefore, alignment of the emissions intensity of the company’s purchased power for resale could not be assessed against its 1.5°C pathway. By reporting purchased power for resale and indicating any associated certification from the wholesale energy market attached to this purchase, EDP can demonstrate its commitment to ensuring its purchased power supports its decarbonisation pathway.

EDP has set targets to reduce its scope 1 and 2 emissions intensity by 95% by 2030 and by 96% by 2040, compared to 2020. The company also has targets to reduce its scope 1 and 3 (Category 3) emissions intensity by 80% by 2030 and by 95% by 2040, compared to 2020. Additionally, it has a target to reduce its scope 1, 2 and 3 emissions by 95% by 2040 compared to 2020.

EDP plans to phase out coal by 2025 and gas by 2030. These goals are supported by the company’s objectives to achieve 33 GW of installed renewable energy capacity and 0.5 GW of battery energy storage systems capacity by 2026, and 1.5 GW of hydrogen electrolyser capacity by 2030, along with implementing smart grid technologies. EDP’s Business Plan 2023-2026 has allocated USD 20.88 billion worth of investment to renewables, client and energy management, and its digitalisation goal.

EDP increased the proportion of its total energy generation from renewable sources from 67% in 2019 to 74% in 2022. By the end of 2022, EDP’s smart meter coverage covered the entire distribution network in Iberia, allowing the company to have 80% of its energy metered.

EDP’s emissions intensity for its own generation decreased between 2017 and 2022 at a rate greater than that required to align with its 1.5°C pathway in 2027. EDP does not disclose sufficient data on its purchased power for resale between 2017 and 2022. As such, its emissions trend for power purchased for resale and whether this aligns with the company’s 1.5°C pathway could not be assessed.

EDP’s objective to achieve net-zero scope 1, 2 and 3 emissions by 2040 is supported by plans to significantly increase renewable energy capacity and its commitment to phase out coal and gas by 2025 and 2030, respectively. However, the company is not on track to achieve its targets because its emissions intensity has slightly increased since its base year 2020.

The company commits to engaging in social dialogue with workers and unions. It also discloses the categories of stakeholders it engages with on a just transition, including local authorities, trade unions, employment institutions and service providers. However, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. The company has time-bound indicators to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. For example, creating a certain number of jobs and ensuring access to EV charging points to their customers. However, no evidence was found of the company engaging in social dialogue with stakeholders as part of the just transition planning.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. Furthermore, it discloses the actions it takes to create jobs, including investment in new renewable projects that generate employment. However, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company has a commitment to re- and up-skill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it offers internal training and has collaborated with the national institute for skilling and employment to enable reskilling following the closure of a power plant. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders.

No relevant disclosure was found to show if the company identifies the impacts of the low-carbon transition on social protection for workers and affected stakeholders. However, the company shows contribution to the social protection of workers and affected stakeholders by providing community funds and prioritizing redeployment of workers. The company discloses its process for understanding the alignment of its lobbying activities with policies and regulation that support the just transition. However, no relevant disclosure was found to show the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. Furthermore, the company discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks. The company takes action to mitigate these risks in its own operations and supply chain, and it engages with affected stakeholders. Additionally, the company has a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. However, no evidence was found of a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity. Nevertheless, the company commits to gender equality and women’s empowerment.

The company commits to protecting personal data, and discloses a privacy statement regarding use of personal data. While the company discloses its global tax strategy, no relevant disclosure was found of the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. Additionally, the company specifies that it does not make political contributions.