Taxonomy Disclosures

Net turnover recognized in accordance with IAS 1 item 82(a), as defined in Article 2(5) of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013:

’net turnover’ means the amounts derived from the sale of products and the provision of services after deducting sales rebates and value added tax and other taxes directly linked to turnover.

Accordingly, this included consolidated net turnover (for the most part, recognized in accordance with IFRS 15), including revenue recognized under IFRS 16 (Enea Group identifies itself as a lessor) and compensation due to the Group under the Act of 27 October 2022 on Emergency Measures to Reduce Electricity Prices and Support Certain Consumers in 2023 and 2024. Enea Group recognizes that these compensations fall within the definition contained in Directive 2013/34/EU.

The relevant amounts can be found in the Group’s Consolidated Financial Statements: in the Consolidated Statement of Comprehensive Income, in the Revenue from sales and other income item (which consists of Net revenue from sales, Compensation and Revenue from leases and operating subleases) and in Note 8 to the Consolidated Statement of Comprehensive Income.

Capital expenditures defined as increases in property, plant and equipment and intangible assets, right-of-use assets and investment properties, including those resulting from business combinations, as defined in the relevant IAS/IFRSs:

• IAS 16 Property, plant and equipment;
• IFRS 38 Intangible assets;
• IFRS 16 Leases;
• IAS 40 Investment Property.

This included the period’s consolidated increases in property, plant and equipment, intangible assets, right-of-use assets and investment properties.

The relevant amounts are included in the Group’s consolidated financial statements in the Notes to the consolidated statement of financial position, in a manner similar to the items indicated above:

• note 14. Property, plant and equipment – rows: Acquisition and Settlement of the acquisition of subsidiaries;
• note 15. Intangible assets (where goodwill has been omitted for the purposes of the key performance indicator) – row named Additions;
• note 16. Right-of-use assets – rows: Acquisition and Settlement of the acquisition of subsidiaries;
• note related to investment properties, due to its immateriality, was not presented, and increases in 2024 in this area were included in the indicator denominator to PLN 253 thousand.

Operating expenses understood as one of the five categories of direct, uncapitalized costs:

• related to research and development work;
• related to building renovation activities;
• related to short-term leases;
• related to maintenance and repair work;
• any other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment by the undertaking or third party to whom activities are outsourced that are necessary to ensure the continued and effective functioning of such assets.

This way, the consolidated amounts of costs incurred by the Group in 2024 relating to any of the above categories were taken into account.

As regards the OpEx ratio, given to its specific definition in the Taxonomy, it was not possible to make a direct reference to the consolidated financial statements. In this context, it should be noted that the denominator of the OpEx ratio for the purposes of the EU Taxonomy is not equal to the sum of operating expenses incurred by the Enea Group. The denominator of the OpEx ratio calculated for EU Taxonomy purposes was about PLN 884 million, while the Group’s were almost PLN 27.2 billion (as specified in note 9 to the Group’s Consolidated Financial Statements), which means that the basis for calculating the OpEx ratio for EU Taxonomy purposes was only 3% of all operating expenses (without taking any other operating activities into account).

The most important operating expenses in the Group include mainly: repair and maintenance costs (both as consumption of repair and maintenance materials and third-party repair and maintenance services) due to the extensive range of property, plant and equipment owned by the Group, including high-voltage lines, substations, switching stations (owned by Enea Operator), power units with boilers and auxiliary equipment, including the Green Unit (Enea Elektrownia Połaniec), mining pits and world-class machinery at LW Bogdanka or lighting assets such as road lighting (Enea Oświetlenie).

The Group performed an analysis of the various categories included in the definition of operating expenses, observing the disclosure requirements set forth in the Regulation 2021/2178, on the basis of which, within the category of “other expenditures relating to the day-to-day servicing of assets of property, plant and equipment”, it included in the denominator costs from the following categories: fire protection services and other fire prevention measures, cleaning services (in particular, maintaining cleanliness in buildings as a necessary element to ensure that they effectively fulfill their roles), mandatory specialized training for employees whose professional duties include solely the maintenance of power poles. The highest value of expenses in this regard is disclosed by Enea Operator and Enea Wytwarzanie.

In the process of assessing its activities for Taxonomy alignment, the Enea Group used its experience acquired during the preparation of last year’s ESG Reports of Enea Group and the Taxonomy-related disclosures contained therein. It should be emphasized that in the previous year (that is, from 1 January to 31 December 2023), the rules were in place for verifying activities in the context of requirements for the disclosures of non-financial corporations regarding Taxonomy eligibility and Taxonomy alignment with respect to the objectives of climate change mitigation and adaptation. Whereas, with respect to four other environmental objectives (sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems) and with respect to new activities for climate change mitigation and adaptation – only in the scope of eligibility.

This year’s disclosures were prepared in the full scope, analyzing the Taxonomy eligibility and alignment of the activities with all six environmental objectives.

In order to fulfill the obligations under Commission Delegated Regulation (EU) 2021/2178 with respect to the 2024 disclosures, all Enea Group entities were engaged in the process of evaluating their business activities. A number of internal training workshops and consultations were conducted to familiarize and consolidate the knowledge of representatives of the companies with the applicable regulatory requirements to ensure their ability to thoroughly analyze the activities of these companies in terms of the eligibility and alignment of their activities with the Taxonomy.

The analysis of the technical screening criteria and the “do no significant harm” principle was carried out by the departments and business units responsible for reporting data of those companies in the Enea Group that, in a preliminary analysis, established Taxonomy eligibility of their business activities. Industry experts were also involved to support the analysis of the technical screening criteria and the “do no significant harm” principle. The Group’s Controlling Department was responsible for the collection and aggregation of data. We have engaged industry experts responsible for technical aspects related to revenue-generating infrastructure, our investments or expenses to confirm the requirements set forth in harmonized Commission Delegated Regulation (EU) 2021/2139, Commission Delegated Regulation (EU) 2022/1214, and Commission Delegated Regulation (EU) 2023/2486.  

In the case of the economic activities assessed for their substantial contribution to climate change mitigation, we had to conduct an assessment of climate risk and exposure to that risk in order to satisfy the “do no significant harm” requirement.

The risk and exposure assessment was carried out by the departments and business units responsible for data reporting in the following entities: Enea Ciepło, Enea Elektrownia Połaniec, Enea Elkogaz, Enea Nowa Energia, Enea Operator, Enea S.A., Enea Serwis, FW Bejsce, Lubelski Węgiel Bogdanka, Miejska Energetyka Cieplna Piła, PAD RES Genowefa, PRO-WIND, PV Tykocin, WMC SPV 2, WMC SPV 4. The assessment was carried out for activities that met all other taxonomic criteria after the initial analysis. Other Enea Group companies did not report Taxonomy-aligned economic activities.

Each of the economic activities reviewed in terms of Taxonomy alignment was assessed in the context of the twenty-eight physical climate-related hazards listed in the classification in Appendix A to Commission Delegated Regulation (EU) 2021/2139. At the first stage of climate risk assessment, for each activity verified for Taxonomy alignment, the companies identified the existence of appropriate system elements enabling the conduct of the respective activity: product/service manufacturing sites, transportation lines, administrative buildings, critical suppliers, key customers, necessary utilities, employees and others. A compilation of system elements was made in terms of their locations determining the exposure to climate-related hazards, and in terms of the recorded realization of physical climate risks for the respective system element in the past. Based on this information, climate-related hazards that have no effect on the activity subject to the review due to their absence in the locations where the activity is conducted or the absence of a causal link between the harmful effects and the reviewed activity.

All activities considered to be Taxonomy-aligned have demonstrated a substantial contribution to the climate change mitigation. In their case, the assessment of climate risk and exposure to this risk was limited to “do no significant harm” requirements. After the initial analysis of the exposure to climate-related hazards, we produced a list of hazards identified as relevant to the reviewed activities for each company and each system element. At the second stage of the risk and exposure assessment process, the Companies assessed the amount of anticipated financial effects and likelihood of materialization of hazards of adequate system elements for the economic activities subject to the assessment. The companies applied the risk assessment criteria according to the Enea Group Enterprise Risk Management Methodology.

The analysis process identified one material risk at the level inherent to activity 4.8. Electricity generation from bioenergy at Enea Elektrownia Połaniec. However, the risk is mitigated by the already implemented and fully functional physical and non-physical adaptation solutions which reduce the risk to a below material level. No material physical climate risks were identified for the other economic activities subject to assessment.

We have also carried out an analysis of compliance of economic activities carried out in 2024 with the minimum safeguards as defined in Article 18 of Regulation (EU) 2020/852. The assessment was overseen by the Controlling Department and involved internal units responsible for specific areas relevant to minimum safeguards, such as those responsible for the HR and compliance areas. For the analysis, we used Article 18 of Regulation (EU) 2020/852 of the European Parliament and of the Council as a starting point, while relying on the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles for Business and Human Rights, and on the explanations provided in the Platform on Sustainable Finance (Final Report on Minimum Safeguards). In accordance with the latter’s guidelines, the analysis of compliance with minimum guarantees was conducted based on a checklist that covered the following four thematic areas: (i) human, labor and consumer rights, (ii) corruption, (iii) fair competition, and (iv) taxation. The checklist was completed based on applicable documents and extensive internal consultations within the Enea Group.

Following the assessment, we concluded that the Enea Group conducted its activity in 2024 in accordance with the minimum safeguards. The elements of the due diligence process in terms of the above guidelines are based in the Group’s activities by adoption and implementation of a number of documents, notably the Enea Group Code of Ethics, the Enea Group Compliance Policy (establishing the compliance system in the Enea Group), the Policy against workplace harassment, discrimination and other unacceptable conduct, the Policy for reporting breaches and protecting whistleblowers in the Enea Group and the Enea Group Code of Conduct for Contractors, the Rules for Offering and Receiving Gifts in the Enea Group and the Contractor Review Procedure in the ENEA Group, which define the values and principles of conduct adopted by the Group. The Group also has a Tax Strategy in place and publishes relevant information annually as provided for therein. The Group is committed in the adopted regulations to respecting human rights concerning, among other things, freedom of religion, conscience, freedom of expression, equal treatment and the prohibition of all forms of discrimination and harassment. At Enea S.A., child labor, forced labor and any forms of slavery or servitude are prohibited. The observance of these values and principles is required of both employees of Enea Group companies and their counterparties. The documents also cover issues related to counteracting corruption, in own business and external relations, and unfair competition. The Enea Group considers counteracting corruption to be one of the most important elements of its Compliance System. The sources of anti-corruption regulations in the Enea Group are, in particular, the Enea Group Compliance Policy, Enea Group Contractor Review Procedure and the Rules for Offering and Receiving Gifts.

The Group identifies potential negative impacts within the scope of the OECD and UN Guidelines, primarily as part of the double materiality analysis process for the required disclosures. In the process of analyzing double materiality, potential negative impacts, such as human rights violations in the supply chain and the impact of transition on employees, were identified. Within the framework of the broader processes of compliance management and corporate risk analysis, the Enea Group also identifies and evaluates the risk of corruption and bribery, and tax risk. With regard to the identified potential negative impacts, the Group takes a number of preventive measures, including information and education measures (various internal training courses), awareness-raising (campaigns) and control measures (e.g. occupational health and safety visits). The Group also takes mitigation and corrective measures, in particular on the basis of the policies for reporting breaches and protecting whistleblowers and counteracting workplace harassment.

The Group and its individual companies have introduced the internal whistleblowing system, while in the parent company, the whistleblowing system is accessible not only to the company’s own workforce, but also to staff of contractors in the value chain and members of the local community. The applicable mechanisms offer various reporting channels, both anonymous and non-anonymous, using digital (application or email) and analogue solutions. Depending on their nature, reports are analyzed by dedicated bodies such as the Compliance Committee or Workplace Harassment Committee, which decide also on corrective measures appropriate to the analyzed cases.

The Enea Group collects quantitative data relevant to the minimum safeguards in various areas, including data on complaints filed through whistleblowing mechanisms, occupational health and safety metrics (e.g. workplace accidents), training, data protection incidents, etc. The Group also reports on elements relevant to the due diligence process both internally and externally. These policies and reports are published on the Group’s websites.

Finally, the Group cooperates with stakeholders, which is one of the key elements of the due diligence process. This dialogue primarily involves employees and their representatives, in particular the trade unions. In this case, it is the most structured and takes on various forms. The Group allows their employees to express views and influence important matters concerning the organization and working conditions, governance or organizational culture. The Group companies also conduct a dialog with local communities as part of the ongoing activities. This dialog is adapted to the needs, circumstances and projects.

More information has been provided in the „Social disclosures” chapter of the report of the operations.

In 2024, the proceedings for the reinstatement of employees due to unlawful termination of employment relationships with them were completed. In assessing the impact of these cases on compliance with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, consideration was given to the recommendations of the EU Platform on Sustainable Finance, which indicated that for certain categories of breaches, the status of non-compliance with the minimum safeguards continues until the company proves that measures for improvement have been taken, thus making the recurrence of the breach unlikely. Accordingly, it was concluded that the measures taken by the Human Resources Management Department even before the completion of the proceedings in response to the breaches, aimed at, among other aspects, minimizing the risk of unlawful termination of employment, make the recurrence of the breaches in question unlikely. In addition to the situations described above, in 2024 no other judgments were issued against Enea Group companies and no other proceedings were completed with an ascertainment of the existence of breaches related to minimum safeguards (such as breaches in the areas of human rights, labor rights, corruption or fair competition).

Therefore, we concluded that the Enea Group conducted its activity in 2024 in accordance with the minimum safeguards.