Provisions related to nuclear generation comprise provisions for back-end nuclear cycle expenses (management of spent fuel and radioactive waste), provisions for plant decommissioning and provisions for last cores. Obligations can vary noticeably depending on each country’s legislation and regulations, and the technologies and industrial scenarios involved. Details of these provisions are provided in notes 15 and 17.
Provisions related to environmental schemes include provisions for greenhouse gas emission rights, renewable energy certificates and energy savings certificates. In 2020, these provisions totalled €1,192 million (€1,517 million in 2019, see note 17.2).
Contingent liabilities also exist in connection with environmental litigation, such as the dispute concerning the Ausimont SpA industrial complex. These liabilities are described in note 17.3.
Climate issues are taken into account in valuing long-term assets through impairment testing. The long-term scenarios used for electricity prices in countries where the Group does business are consistent with the trajectories of European decarbonisation targets, particularly as set in the Paris climate agreement (see note 10.8).
Significant impairment has been booked on most of the thermal assets controlled by the Group in recent years (see note 13 to the consolidated financial statements at 31 December 2015 and similar notes to the financial statements of subsequent years).
Since 2013 the Group has made five Green Bond issues for a value equivalent to €4.5 billion, in order to support its development in renewable energies. It has invested around €2.5 billion per year to such operations.
After the two Green Bond issues chiefly intended to finance the building of new wind and solar power projects by its subsidiary EDF Renewables (€1.4 billion in November 2013 and $1.25 billion in October 2015), the Group expanded its Green Bond Framework to finance investments in the renovation and modernisation of its hydropower assets in mainland France.
The new Framework was first applied to a €1.75 billion issue in October 2016 and then to a JPY 26 billion issue in two tranches in January 2017. The Group extended the scope of its Green Bond Framework further in early 2020 by opening it up to international hydropower assets, energy efficiency projects and biodiversity conservation projects
On 8 September 2020, EDF made a landmark offering of unsecured senior Green Bonds convertible into new shares and/or exchangeable for existing shares of the Company (OCEANEs Vertes) maturing in 2024, for the nominal amount of approximately €2.4 billion.
This was the largest convertible bond issue in Europe since 2003 (excluding bonds redeemable in shares), the largest convertible Green Bond issue ever undertaken, and the largest Green Bond issue ever by a European corporate issuer.
The Green Bonds are included in the Group’s borrowings, see note 18.3.2. Allocation of the funds raised by EDF’s Green Bond issues is certified by one of the Statutory Auditors: see section 6.7 of the Universal Registration Document.
The EDF group is strongly committed to Corporate Social Responsibility (CSR) and advocates closer ties between non-financial performance and financing strategy.
The credit lines indexed to the Group’s sustainable development performance incorporate a cost adjustment mechanism.
EDF SA has a €4 billion syndicated credit line with more than 20 banks that incorporate a margin adjustment mechanism linked to Group performance on three KPIs: direct CO2 emissions, French residential customers’ use of online consumption monitoring tools, and electrification of EDF’s light vehicle fleet.
The Group has also signed 7 renewable bilateral credit lines indexed on ESG criteria (incorporating a cost adjustment mechanism based on the Group’s performance on certain KPIs or its rating by a nonfinancial ratings agency), amounting to a total €1.6 billion.
At 31 December 2020, ESG-indexed renewable credit lines, which were undrawn, totalled over €5.6 billion, or 51% of the EDF group’s total undrawn credit facilities (see note 18.4).
The selected KPIs reflect the EDF group’s major environmental commitments, principally cutting greenhouse gas emissions (CO2) by 50% by 2030, closing down coal-fired plants in France and the United Kingdom with a view to achieving carbon neutrality by 2050, and completing electrification of the whole EDF group vehicle fleet by 2030. The focus on consumption monitoring tools reflects the Group’s ambition to provide its customers with energy solutions appropriate to their needs.
They are a concrete illustration of EDF’s raison d’être, which was enshrined in the Group’s articles of association in May 2020.
In 2020 the Group continued its programme of gross operating investments, which amounted to €16.5 billion gross and included €16 billion of gross investments in intangible assets and property, plant and equipment (see notes 4 and 10.7) and €0.5 billion of gross financial investments.
As part of its work on the European taxonomy for sustainable activities, the Group has estimated its rate of gross operating investments validated as green by the European Union. Under the chosen methodology these investments do not include gross financial investments or “corporate” investments such as renewal of IT equipment or vehicle fleets.
In 2020, close to 94% of the Group’s investments met its low-carbon objectives: 51% of investments concerned the nuclear sector, and 43% were compliant with the European taxonomy for sustainable activities (by a method currently based on the Technical Expert Group report of March 2020) notably including production of renewable energies (e.g. hydropower, wind and solar power), networks, and energy services. These figures are likely to be revised in the light of changes in “Taxonomy” regulations, particularly when the delegated acts are published in 2021. The low-carbon investment strategy is also reflected in the objective of converting some of the Group’s coal or oil-fired units to low-carbon generation methods.
