Net indebtedness comprises total loans and financial liabilities, less cash and cash equivalents and liquid assets. Liquid assets are financial assets consisting of funds or interest rate instruments with initial maturity of over three months that are readily convertible into cash and are managed according to a liquidity-oriented policy.
Net indebtedness are as follows:
| (in millions of euros) | Notes | 31/12/2021 | 31/12/2020 |
|---|---|---|---|
| (in millions of euros) Loans and other financial liabilities |
Notes18.3.2 | 31/12/2021 69,406 |
31/12/2020 65,591 |
| (in millions of euros) Derivatives used to hedge liabilities |
Notes18.7.1 | 31/12/2021 (3,762) |
31/12/2020 (1,986) |
| (in millions of euros) Cash and cash equivalents |
Notes18.2 | 31/12/2021 (9,919) |
31/12/2020 (6,270) |
| (in millions of euros) Debt and equity securities – liquid assets |
Notes18.1.2 | 31/12/2021 (12,737) |
31/12/2020 (15,028) |
| (in millions of euros) Net indebtedness of assets held for sale |
Notes3.2.1 | 31/12/2021 - |
31/12/2020 (17) |
| NET INDEBTEDNESS | NET INDEBTEDNESSNotes
|
NET INDEBTEDNESS31/12/202142,988 | NET INDEBTEDNESS31/12/202042,290 |
The Group’s net indebtedness amounts to €42,988 million at 31 December 2021 (€42,290 million at 31 December 2020). The ratio of net indebtedness to operating profit before depreciation and amortisation at 31 December 2020 is 2.39.
Following the adoption in May 2020 of its raison d’être, “To build a net zero energy future with electricity and innovative solutions and services, to help save the planet and drive wellbeing and economic development”, and in line with its CAP2030 strategy, the Group revised the architecture of its Corporate Social Responsibility (CSR) commitments. 16 CSR commitments were defined around four key issues: Carbon neutrality and Climate, Preserving the planet’s resources, Wellbeing and Solidarity, and Responsible development. This CSR grid is applied to all projects in the commitment phase, to make sure they are aligned with the Group’s raison d’être.
The Group’s financial statements reflect issues relating to climate change and sustainable development through the dimensions presented below: implementation of its investment and divestment strategy and a sustainable financing strategy; expenditure incurred specifically in response to environmental issues, particularly under applicable laws and regulations; and the valuation methods used for the Group’s assets and liabilities.
Concerning regulations, on 10 December 2021 the European Union adopted the Delegated Act supplementing Article 8 of European regulation 2020-852 of 18 June 2020 which aims to classify economic activities based on their contribution to the achievement of environmental objectives. This “Taxonomy regulation” is part of the European strategy to promote emergence of sustainable finance that contributes to attainment of carbon neutrality by 2050, particularly by encouraging capital inflows into sustainable investments. It is applicable from 31 December 2021 and requires groups subject to the non-financial reporting obligation, as is the case for the EDF group, to publish three new indicators: the share of sales, capital expenditure and operating expenditure associated with European taxonomy eligible, then taxonomy-aligned economic activities. The laws applicable at 31 December 2021 do not cover nuclear electricity generation, which is a dominant activity for the Group, nor do they cover activities relating to natural gas. After several months of debate, a draft Delegated Act specifically for nuclear and gas operations was sent to the 27 member states of the European Union on 31 December 2021 for a consultation period that ended on 21 January 2022. The final Delegated Act was published on 2 February 2022 and must be approved or rejected by the European Parliament within four months.
The results of the Group’s work to establish these three indicators are presented in the Group’s report on its non-financial performance, in section 3.8.3 “Details on the taxonomy” of the 2021 Universal Registration Document.
The regulatory frameworks and accounting principles for greenhouse gas emission rights, renewable energy certificates and energy savings certificates are presented respectively in notes 5.4.3, 10.2 and 17.2.
The European Union’s Emissions Trading System (EU ETS) exists to fight climate change and reduce greenhouse gas emissions.
This system, which applies in all EU countries, sets an annual cap on emissions. Businesses (including EDF) receive or buy emission quotas, then the following year surrender to the European Commission a number of greenhouse gas emission rights corresponding to their Scope 1 emissions for the year elapsed, such as direct greenhouse gas emissions from production of the goods sold (e.g. electricity, heat, steel, paper, etc.). Fines are payable if there is a shortfall (€110 per tonne of CO2 not covered by quotas, and an obligation to cover these amounts by quota the following year).
The cap is being progressively reduced in order to bring down the total emissions in Europe.
The legislative framework of the EU-ETS for the fourth trading period (2021-2030) has been tightened up to achieve the emission reduction targets set in the 2030 Climate and Energy framework, and the EU’s contribution to the Paris Climate Agreement adopted in 2015 (which set a general target of a 40% cut in emissions compared to 1990 levels for the whole EU) (1). One key step was accelerating annual quota reductions to 43 million tonnes per year (2.2% below the allocations for 2010).
The European Commission also presented a package of proposals on 14 July 2021 entitled “Fit for 55”, intended to bring the European Union closer to the augmented target of cutting CO2 emissions by at least 55% (compared to 1990 levels) by 2030. The quota system is likely to change after a process of negotiation in the European institutions that is expected to last between 12 and 18 months.
In the EDF group, the entities concerned by application of these European regulations are EDF, Edison, Dalkia, PEI and Luminus. The Group no longer receives free emissions quota allocations.
The volume of emissions at 31 December 2021 stood at 17 million tonnes (19 million tonnes for 2020 including EDF Energy).
(1) The current EU ETS allocations trajectory does not yet include changes to be made in application of the Fit for 55 package
