Strategy, transition plan, and climate risk analysis

Transition plan for climate mitigation

Our 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, E1 SBM-3 AR7c)}

The Climate mitigation chapter outlines how we intend to achieve our scope 1 and scope 2 greenhouse gas (GHG) reduction targets. It explains the operational and capital expenditure associated with the additional measures and clarifies how these relate to the EU Taxonomy.^{(ESRS E1-1 par. 16c en 16e)}

In March 2025, we presented our climate mitigation transition plan, which was approved by the Executive Board. The transition plan is based on the climate risk analysis carried out by Enexis in collaboration with experts. It defines the targets and measures for reducing GHG.^{(ESRS E1-1 par. 16i)} Our objective is to reduce scope 1 and scope 2 emissions by 25% by 2030 compared to the 2024 baseline. This target is based on a linear reduction pathway from 2024 to 2050.^{(ESRS E1-1 par. 16a)} In the first half of 2026, we expect to establish a 2030 target for scope 3 emissions.^{(ESRS 2 MDR-P par 65d)}

This Annual Report is the first to report on progress against our climate mitigation transition plan.^{(ESRS E1-1 par.16j)}

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 risk: ^{(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 resources). 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 growing demand for green energy transmission and the expansion of the electricity grid could result in investor loss and/or access to capital.

In 2025, we conducted a climate scenario analysis with expert input. No business units or relevant value-chain parties were excluded from this analysis.^{(ESRS E1 SBM-3 AR6)} The update did not result in any significant changes compared to the 2024 analysis.^{(ESRS E1 icm ESRS 2 SBM-3 par. 19b)} We used the Intergovernmental Panel on Climate Change scenarios, also known as Representative Concentration Pathways. We based our analysis on two updated scenarios: a global temperature increase of 1.7°C (optimistic) and 4.0°C (pessimistic) by 2100. To determine the impact on our service area, we follow the KNMI scenarios. ^{(ESRS E1 icm ESRS 2 IRO-1 par.21)}

The climate scenario analysis considered both the chronic and acute effects of heat, drought, and flooding. The most important physical climate risk identified in this climate scenario analysis is the potential for increased flooding. In addition, climate-related transition risks have been identified in this climate scenario analysis through a double materiality 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 climate-related physical risk. However, this may increase in the long term. Our infrastructure is designed to withstand extreme weather events, including 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 10 years. In recent floods, outages have been limited, making the acute risk and potential financial impact acceptable for now. ^{(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, we are considering climate and energy transition scenarios. ^{(ESRS E1 icm ESRS 2 IRO-1 par. 20a)} These scenarios concern our own operations, particularly the use of our physical assets such as the network of pipes, cables, transformers, and stations. The analysis also considers the upstream and downstream value chains. ^{(ESRS E1 icm ESRS 2 SBM-3 par. 19a)}

The scenarios for the 2026 investment plan extend through 2050. Together, the scenarios outline the likely range of energy demand and supply in the coming year.

The climate scenarios are reflected only to a limited and indirect extent in the financial statements; we apply a declining‑balance depreciation method to gas assets as a result of the long‑term outlook for the gas network, as described in note 5. This outlook is based on the policy principles of Netbeheer Nederland. ^{(ESRS E1-AR15)}

Locked-in GHG emissions

Locked-in GHG emissions are an estimate of future emissions. We face the risk of locked-in GHG emissions in our natural gas network: gas leaks release methane, a potent greenhouse gas. We are therefore taking measures to reduce gas leaks. We maintain existing gas connections, but as a rule, we no longer install new gas connections for low-volume consumers.

It is our legal duty to maintain the natural gas network. Through this network, it may also be possible to transport sustainable gases, such as biomethane and hydrogen, in the future. As a result, greenhouse gas emissions may still occur after 2050. A complete phase-out of these locked-in greenhouse gas emissions is therefore not possible. In ‘Note 13 Intangible fixed assets’ of the consolidated financial statements, we explain our long-term vision for the gas network. ^{(ESRS E1  par. 16d)}

Investments in economic activities related to gas and electricity

In 2025, we made significant investments in economic activities related to gas and electricity.1^{(ESRS E1-1 par. 16f)}