E1 Climate change

To meet the commitments of the Paris Climate Agreement, we need to switch to renewable energy sources. As a grid operator, we are helping to make this happen. At the same time, we emit greenhouse gases ourselves when we build a new energy system. By making sustainable choices and setting clear reduction targets, we are reducing our own CO₂-eq footprint.

Climate change is one of the most pressing challenges of our time. Transforming the energy system is essential to addressing this challenge, and as a grid operator, we are an indispensable link in the chain. Our most significant contribution to sustainability lies in ensuring that our grids enable our customers to adopt more sustainable practices. This is how we support the Paris climate goals. At the same time, we also emit greenhouse gases and impact the environment. We take responsibility for this impact and make sustainable choices in our operations. One of the ways we contribute to climate change mitigation is by setting greenhouse gas (GHG) reduction targets. We are also constantly seeking more sustainable alternatives to improve our energy mix.

The changing climate also directly impacts our business operations. Extreme weather events can disrupt the supply of energy to our customers. We therefore take measures to mitigate this risk.

This chapter explains our transition plan for climate change mitigation. It includes an explanation of our policies, measures and targets for climate change mitigation and adaptation. We also report on our CO₂-eq footprint and energy consumption and mix.

Within the climate change topic, we see the following impacts, risks and opportunities:

Environmental	Impact, risk or opportunity	Value chain	Time frame
Material topic
Climate change adaptation Extreme weather events	Potential negative impact: Flooding and/or extreme rainfall can disrupt the supply of materials needed for investments and grid expansion, cause equipment failure or damage, and lead to delays or interruptions in energy supply to customers.
	Potential risk: Flooding and/or extreme rainfall can cause damage to above-ground assets (particularly pipes, cables and transformer stations). This may result in higher operating costs, the deployment of emergency response services and/or potential reputational damage.
Climate change mitigation GHG emissions	Actual negative impact: GHG emissions from gas leakages, grid losses and emissions from value chain components and internal operations have a negative impact on climate and biodiversity.
	Potential risk: Reducing GHG emissions requires investment in measures that put pressure on achieving the ‘affordable energy grid’ target and on feasibility (availability of materials). Failure to meet GHG reduction targets and the resulting reputational damage may lead to reduced access to capital and higher interest/cost of capital.
	Potential opportunity: Reducing GHG emissions could have a positive impact on attracting financing by demonstrating environmental responsibility.
Energy Energy mix and consumption	Actual negative impact: Grid losses are associated with greenhouse gas emissions.
	Actual positive impact: Expanding the electricity grid helps improve the energy mix, resulting in lower GHG emissions.
	Actual positive impact: The transition from fossil fuels to sustainably generated electricity requires grid expansion as well as alternatives such as district heating.
	Actual risk: The inability to meet the growing demand for green energy transmission and the expansion of the electricity grid could result in the loss of investors and/or access to capital.
Climate change Transition infrastructure	Actual negative impact: Accelerating the replacement of infrastructure leads to higher costs and increased waste for society in the short term.
	Potential negative impact: Delays in upgrading or reinforcing infrastructure could have a negative impact on the pace of the energy transition and the achievement of Europe's climate change targets.
	Potential positive impact: Expanding and reinforcing the electricity grid enables the phasing out of fossil fuels, contributing to the sustainability of the Netherlands.

Strategy

Transition plan for climate change mitigation

We are committed to reducing GHG emissions and have set targets to reduce these emissions in the transition plan1 approved by the EB. ^{(ESRS E1-1 par. 16i)} Our target is to reduce GHG emissions in scope 1 and 2 by 25% in 2030 compared to the base year 2024. The target is based on a linear reduction from 2024 to 2050.^{(ESRS E1-1 par. 16a)} In 2025, we expect to set a 2030 scope 3 target.^{(ESRS 2 MDR-P par 65d)} 

The Policy, Measures and Metrics and targets sections explain how these scope 1 and 2 GHG emission reduction targets will be achieved, including the operational and capital expenditure that additional measures will entail and how this relates to the EU Taxonomy. ^{(ESRS E1-1 par. 16c en 16e)}

In the 2025 annual report, we will report for the first time on the progress of the transition plan.^{(ESRS E1-1 par. 16j)}  Enexis’ strategic plan serves as the foundation for our ESG strategy and the Transition plan for climate change mitigation.^{(ESRS E1-1 par. 16h)} The measures included in the transition plan are part of the ESG strategy. Financial planning for the measures is included in the business plan and investment plan. ^{(ESRS E1-1 par. 16h)}

Climate risk analysis

In the double materiality analysis, we identified three climate risks in addition to impacts and opportunities. These include a distinction between climate-related physical risks and climate-related transition risks.

Climate-related physical risk: ^{(ESRS E1 icm ESRS 2 SBM-3 par. 18)}

• Potential risk: Flooding/extreme rainfall can cause damage to above-ground assets (particularly pipes, cables and transformer stations). This may result in higher operating costs, the deployment of emergency response services and/or potential reputational damage.

Climate-related transition risks: ^{(ESRS E1 icm ESRS 2 SBM-3 par. 18)}

• Potential risk: Reducing GHG emissions requires investment in measures that put pressure on achieving the ‘affordable energy grid’ target and on feasibility (availability of materials). Failure to meet GHG reduction targets and the resulting reputational damage may lead to reduced access to capital and higher interest/cost of capital.

• Actual risk: The inability to meet the growing demand for green energy transmission and the expansion of the electricity grid could result in the loss of investors and/or access to capital.

In 2024, we conducted a climate scenario analysis with the help of experts. ^{(ESRS E1 icm ESRS 2 SBM-3 par. 19b).} We used the Intergovernmental Panel on Climate Change (IPCC) scenarios, also known as Representative Concentration Pathways (RCPs). We assumed two scenarios: a 1.5 degree Celsius (optimistic) and a 4.0 degree Celsius (pessimistic) increase in global temperature by 2100. To determine the impact on our service area, we follow the KNMI scenarios.2 ^{(ESRS E1 icm ESRS 2 IRO-1 par. 21)}

This broad-based climate scenario analysis considered the chronic and acute effects of heat, drought and flooding. The physical climate risk arising from this climate scenario analysis relates to a potential risk of increased flooding. In addition, climate-related transition risks have been identified in this climate scenario analysis. ^{(ESRS E1 icm ESRS 2 IRO-1 par. 20c).}

In the short to medium term (0-5 years), we do not expect an increase in the risk of flooding. However, there may be an increase in the long term. Our infrastructure is well-designed to withstand many extreme weather events such as flooding. ^{(ESRS E1 icm ESRS 2 SBM-3 par. 19c )} Historically, the probability of a (minor) flood in our service area is less than once in ten years. And in recent floods, outages have been limited, making the acute risk (and potential financial impact) acceptable for the time being. ^{(ESRS E1 icm ESRS 2 IRO-1 par. 20b).}

The rate of climate change and the pace and direction of the energy transition are uncertain. Therefore, in addition to these different climate scenarios, we also consider energy transition scenarios. ^{(ESRS E1 icm ESRS 2 IRO-1 par. 20a).} This includes the activities of our own operations, particularly the use of our physical assets such as the network of pipes, cables, transformers and stations in Enexis’ service area. The analysis also takes into account the upstream and downstream value chains. ^{(ESRS E1 icm ESRS 2 SBM-3 par. 19a).} The scenarios for the 2024 investment plan cover the period until 2035. The scenarios of the Integral Infrastructure Reconnaissance 2030-2050 (II3050-2), which focus on the development of a fully climate-neutral energy system by 2050, also served as a source for scenario development up to 2035 and for aligning these with the 2050 projections.

Locked-in GHG emissions

Locked-in GHG emissions are an estimate of what we will emit in the future. We have a risk of potential locked-in GHG emissions in our natural gas network: gas leaks release methane, a potent greenhouse gas. We are taking measures to reduce gas leaks. In addition, we no longer install new gas connections for low-volume consumers.

It is our legal duty to maintain the natural gas network during the transition period. Green gas and hydrogen can also be transmitted over this network. This can still lead to greenhouse gas emissions in and after 2050. A complete phase-out of these locked-in GHG emissions will not be possible. Note 13 (‘Intangible fixed assets’) of the consolidated financial statements further explains our future vision of the gas network.

Investments in economic activities related to gas and electricity

In 2024, we made significant investments in economic activities related to gas and electricity.3 ^{(ESRS E1-1 par. 16f)}