Cloudberry Clean Energy : The TCFD Recommendations 2023

The TCFD recommendations

Cloudberry Clean Energy ASA

2 Cloudberry Clean Energy ASA The TCFD Recommendations

Content

The TCFD Recommendations	3
TCFD Context Index	4
Governance	5
Strategy	6
Risk management	14
Metrics and targets	15
Appendix	18

Cloudberry Clean Energy ASA

3

The TCFD Recommendations

The TCFD Recommendations

There is a growing demand for standardized, climate-related risk disclosure in the financial sector, and creditors and investors are increasingly asking for reporting that is consistent, comparable, and clear. The Task Force on Climate-Related Financial Disclosure (TCFD) developed recommendations to enhance market transparency and stability and encourages standardized reporting of financially material climate-related risks and opportunities to provide investors, lenders, and insurers with comparability when assessing and pricing companies.

The TCFD recommendations are grouped into four areas of disclosure that represent core elements of how organizations operate: governance, strat- egy, risk management, and metrics and targets. Moreover, the framework separates recommended disclosures into three main categories: risks related to the transition to a lower-carbon economy, risks related to the physical impacts of climate change, and climate-related opportunities. The TCFD has also incorporated potential financial impact as an integral part of its disclosure recommendations.

Cloudberry is in the process of adopting the requirements of the European Corporate Sustainability Reporting Directive (CSRD). In 2023, Cloudberry conducted a double materiality assessment. In the annual sustainability report, we will disclose the material sustainability topics in Cloudberry considering our impact on the environment, people, and society, along with sustainability-related financial risks and opportunities that are relevant to the company. Cloudberry is working to gather the necessary information to be able to meet the full CSRD requirements in the future.

Core Elements of Recommended Climate- Related Financial Disclosures

Governance

The organization's governance around climate- related risks and opportunities

Strategy

The actual and potential impacts of climate-related risks and opportunities on the organization's busi- ness, strategy, and financial planning

Risk Management

The processes used by the organization to identify, assess, and manage climate-related

Governance

Strategy

Risk

Management

Metrics and

targets

Metrics and Targets

The metrics and targets used to assess and manage relevant climate-related risks and opportunities

4 Cloudberry Clean Energy ASA TCFD Context Index

TCFD Context Index

Governance	Strategy
Disclose the	Disclose the actual and
organization's	potential impacts of
governance around	climate-related risks
climate-related risks and	and opportunities on the
opportunities.	organization's business,
	strategy, and financial
	planning where such
	information is material.
Recommended disclosures

Risk Management

Disclose how the organization identifies, assesses, and manages climate-related risks.

Metrics and Targets

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.

1. Describe the board's oversight of climate- related risks and opportunities
2. Describe the management's role in assessing and managing climate-related risks and opportunities

1. Describe the climate- related risks and opportunities the organization has identified over the short, medium, and long term.
2. Describe the impact of climate-related risks and opportunities on the organization's business, strategy, and financial planning.

1. Describe the organization's process for identifying and assessing climate-related risks.
2. Describe the organization's processes for managing climate- related risks.

a) Disclose the metrics used

by the organization to

assess climate-related

risks and opportunities

in line with its strategy

and risk management

process.

b) Disclose Scope 1, Scope

2, and, if appropriate,

Scope 3 greenhouse gas

(GHG) emissions, and the

related risks.

1. Describe the resilience of the organization's strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario

1. Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization's overall risk management.

c) Describe the targets used

by the organization to

manage climate-related

risks and opportunities

and performance against

targets.

In the changing world we are living in, with rising temperatures, climate-related policy changes, and emerging technologies, both risks and opportunities are becoming more prominent. Failure to limit global warming to 1.5 °C may cause severe changes in the world`s climate, with subsequent dramatic consequences for the planet. The effect of climate change also has consequences for our operating assets that we need to consider in our business planning.

Cloudberry Clean Energy ASA

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The TCFD Recommendations

Governance

Disclose the company's governance around climate-related risks and opportunities.

Figure 1: Board-level oversight

General Meeting

Nomination

Committee

Board of Directors

ESG		Audit		Compensation
Committee		Committee		Committee

Climate-related issues are of high importance to Cloudberry and are integrated into Cloudberry`s overall business strategy and processes. Before a project investment decision, relevant risks are assessed by the Management and later presented to the Board of Directors. The climate-related risks are an integral part of the discussions and evalua- tions. The overall responsibility thus sits within the Board of Directors. In addition, Cloudberry`s overall

risk management process and all risks perceived by the company and its business segments are subject to a quarterly review by the Audit Committee, and an annual thorough review by the Board. The climate-related risks will in addition be assessed by the ESG committee and discussed along with all other relevant risks. The Board of Directors and its work is also described in the company`s Corporate Governance Report.

Figure 2: Executive Management oversight

Chief Executive

Officer

Finance

ESG / Organization /

Compliance

Development		Production		Operations (Captiva)

The Executive Management team assesses and manages climate-related risks and opportunities, with the highest level of responsibility lying with the Chief Executive Officer and the Chief Compliance and Organization Officer. The manager of the

individual business segment is responsible for assessing relevant risks and for implementing risk-mitigating actions. The Executive Management team follows up quarterly on key mitigation plans and reports annually to the Board of Directors.

6 Cloudberry Clean Energy ASA The TCFD Recommendations

Strategy

Disclose the actual and potential impacts of climate-related risks and opportunities on the company`s business, strategy, and financial planning where such information is material.

Cloudberry integrates principles of governance throughout the organization as a key topic that strengthens our sustainability strategy. Such a commitment requires a continuous evaluation of the current climate-related risks and opportunities that could potentially affect Cloudberry's opera- tions. Cloudberry annually updates and assesses climate-related risks and opportunities related to our business development and expansion. Expanding on our climate ambitions, a climate transition plan will be developed, forming an integral part of the overall company strategy. Cloudberry will establish a roadmap to measure and reduce greenhouse gas emissions for both near-term and long-term objectives and actions. Two workshops have been facilitated by a third party, the first was held in 2020, and an update to the risks- and opportunities assessment was carried out in 2022. Key personnel in Cloudberry participated in the mentioned workshops and additional meetings to uncover potential changes from the previous climate risks and opportunities assessment. This process involved personnel from the sustainability, operations, compliance, development, and finance divisions. Additionally, an assessment was conducted during the second half of 2023 to incorporate the newly acquired wind farm portfolio Odin in Denmark. Several changes were identified given the changing physical and transition-related dynamics in the current market.

In total, ten changes to the risks and opportunities were identified. Following the workshop, a summary report was developed outlining the key elements of each risk and opportunity. To accurately monitor and evaluate risks and opportunities, Cloudberry has defined and updated its thresholds for time horizon,

the likelihood of occurrence, and financial impact according to the guidelines of the TCFD framework.

Cloudberry recognizes the impact climate-related risks and opportunities may have on its financial planning. Cloudberry has conducted assessments of and performance on eligible, aligned, and non-eligible economic activities on the KPIs outlined in the EU Taxonomy. The company assessed the business activities against the eligibility and alignment criteria for the two EU environmental objectives: climate change mitigation and climate change adaptation. The analysis serves as a foundation for calculating our KPIs as they relate to eligible and aligned Turnover, Capex, and Opex. The company`s EU Taxonomy Report 2023 outlines how our activities contribute substantially to the EU Taxonomy objectives without doing any significant harm and complying with the minimum safeguards. The detailed report is accessible on the company's website.

See Appendix A for an overview of risk identified changes in the 2022 assessment, and Appendix C for a summary of the full-year 2023 Taxonomy alignment.

Climate-related risks and opportunities identified over the short, medium, and long term

We have used the TCFD framework to identify and assess climate-related risks relevant to the com- pany`s positive or negative financial or strategic impacts on a company level. They are addressed in the table below. Cloudberry will continuously analyse and assess its climate-related risk strategy to detect other risks and opportunities.

Cloudberry Clean Energy ASA

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The TCFD Recommendations

TCFD		Like-	Financial	Time
Risk	lihood 1	Impact 2	Horizon 3 Description	Risk mitigation	Opportunity

Extreme	High	Low	Short	Exacerbated wear-and-
Winds				tear of wind turbines
				(i.e., increased service
				and maintenance/
				repair costs). Higher
				risks/costs during
				construction (e.g.,
				wind days and
				delayed construction).
				Temporary stop in
				production causes loss
				in production time, due
				to extreme winds.

Cloudberry has emergency plans on- site on all our producing assets. A contingency plan is established. The company uses certified and well-proven technology aims for long service contracts with solid counterparts and ensures that agreements with contractors have substantial buffers

on weather-exposed operations.

Finding solutions for how future wind turbines (or upgrades of older wind turbines) can maximize production based on increased wind strength. It

also opens for the opportunity to build wind parks in areas that are less sensitive.

Extreme	High	Low	Short	Damage and lost	The technical standard
rainfall				production to	and capacity of our
				hydropower stations	dams and pipelines
				(including higher	are designed to
				insurance premiums),	withstand most
				as well as lost revenue	floodings. Cloudberry
				from overflowing dams.	has emergency plans
				Increased precipitation	on-site all its producing
				levels can also trigger	assets. Heavy rain
				temporary floods,	poses difficulties
				presenting a threat	concerning soil
				of harm to electrical	erosion and the risk of
				equipment within	landslides. Prolonged or
				the wind farm and	heavy rain wears away
				complicating access for	the soil surrounding
				repair tasks.	wind turbines, resulting
					in potential degradation
					of infrastructure.

It is likely that new permits include demands of creating regulation dams

to our assets for flood prevention. An opportunity to increase the company's production capacity and be able to take full advantage and

be more efficient in producing more power. Overall, increased precipitation will most likely increase revenue for the company.

Changing High	Medium Long	Changes in average	Positioning and	Wind farms will in most
weather		temperatures will	preparing the company	cases get more hours
patterns		impact the climate	to cope with scenarios	of production due to
		of Norway, Sweden,	from changes in	increased wind, and
		and Denmark where	weather patterns by	the production at hydro
		Cloudberry's current	investing in technical	plants will increase with
		operations are located.	capabilities and	more rainfall, and fewer
		Overall warmer	solutions. With the	water-frozen days in the
		climate with increased	Captiva portal, the	rivers and lakes due to
		temperatures can	company has access	warmer temperatures.
		lead to increased	to a live overview of all	Furthermore, with a
		rainfall, wind, storms,	our producing assets	warmer climate, comes
		and longer periods	with an operational	snow melting to a larger
		of drought. These	status, and the weather	degree than normal,
		climate changes may	situation at the	and hydropower plants
		affect and disrupt	locations. Cloudberry`s	that previously have
		Cloudberry's energy	mitigation strategy	been water frozen
		production. Possible	for changing weather	during winters might
		scenarios are flooding	patterns is also	be able to produce
		at hydro plants resulting	reflected in Cloudberry's	power during the winter
		in less production. More	portfolio developments,	season.
		storms and lightning	being diversified within
		increase the risk of	hydro-, wind and
		damaging wind farm	potentially sun power
		blades and electrical	development and
		equipment, potentially	production.
		causing months-long
		production downtime.
		Droughts leading to
		low water levels forcing
		the company to reduce
		or even fully stop the
		electricity production.

8 Cloudberry Clean Energy ASA The TCFD Recommendations

TCFD		Like-	Financial	Time
Risk	lihood 1	Impact 2	Horizon 3 Description	Risk mitigation	Opportunity

Transitional Risks and Opportunities

Policy and legal

Significant High	High	Short	Significant changes	Being at the forefront	Stricter energy
changes in			in the regulatory	is of high importance	Regulations and
regulatory			framework could	when preparing for	CO2 taxes lead to
framework			have an impact on	significant changes	possibilities for the
			the renewable energy	in regulatory	renewable energy
			sector. The European	framework, Cloudberry	sector and provides
			Union has through its	has a dedicated	business opportunities.
			announced ambitions	group working	With regulatory
			and strategies set out	with government	frameworks such as
			an ambitious pathway	relations and market	the EU Taxonomy
			for reducing emissions.	communication.	and Corporate Social
			Upcoming reporting	Priorities and guidelines	Responsibility Directive
			legislations such as the	are prepared to	(CSRD) comes revised
			Corporate Sustainability	safeguard that the	directives. Cloudberry
			Reporting Directive	company takes	values standardization
			(CSRD) standardizes the	position where	of laws and standards
			reporting requirements	possible. Cloudberry	which speeds up the
			for companies and sets	is working proactively	transition of capital
			out disclosures that	through cooperation	towards the renewable
			covers the three main	with organizations,	energy sector, and
			pillars of sustainability,	municipalities, the	the company is well
			E, S & G. Similarly,	industry, through the	positioned to capitalize
			the EU Taxonomy	media and meetings	on the increased
			requires companies	with politicians in the	demand for renewable
			to classify their	Government and the	energy projects and
			products and services	Parliament.	assets.
			according to a set of
			sustainability criteria.
			These regulations will
			directly impact the
			demand for renewable
			energy sources. The
			new taxation for the
			renewable energy
			sector in Norway
			consisting of an
			increased tax on
			onshore wind and a
			windfall tax on hydro
			and wind power, could
			slow down or interrupt
			plans of upgrading and
			developing renewable
			energy plants. This is
			a risk to a necessary
			green shift in Norway.

Revised	Medium Medium Short	Historically the	Cloudberry is following	The REPowerEU
permit		process of receiving	political proposals and	Plan (2022) and the
regulations		concession for	industry association's	intention to speed
		constructing a power	recommendations	up the oncoming
		plant has been long	on new or revised	green transition may
		due to a more stringent	regulations. Cloudberry	contribute to that
		regulatory process.	seeks to involve with	permit regulations may
		This is especially	local communities,	be revised and shorter
		relevant for wind. With	municipalities,	time schedule for future
		the introduction of	and other relevant	developing projects.
		REPowerEU Plan (2022)	stakeholders from	In Sweden there is
		the concession process	greenfield projects but	an ongoing political
		will be reduced with	also on M&A processes	process on wind
		the goal to produce	to secure potential	development projects,
		more renewable energy	mitigations plans	to move the local "veto"
		in the near future. For	in regard to revised	from municipalities to
		hydropower, revision	regulations.	national level, which
		of existing hydropower		may speed up the
		regulation plans is		process of concession
		considered low risk as		and revised permit
		the concessions are		regulations.
		perpetual.

Cloudberry Clean Energy ASA

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The TCFD Recommendations

TCFD		Like-	Financial	Time
Risk	lihood 1	Impact 2	Horizon 3 Description	Risk mitigation	Opportunity

Risks and Opportunities	Technology
Transitional

Improved	Medium Medium Medium Technology related	Cloudberry will maintain	By closely monitoring
technol-	to hydro and wind	a portfolio of assets	technological
ogies	generators experience	employing relevant and	developments,
	rapid improvements.	efficient technology	Cloudberry can adapt
	Captiva, a company	and will ensure that	and seize opportunities
	owned by Cloudberry,	its operating portfolio	that arise from
	is a data-driven	remains competitive in	technology shifts. Being
	operator, manager, and	an evolving landscape.	a smaller company
	developer of renewable	The company invests	allows Cloudberry to be
	energy, which delivers	in power plants	agile and implement
	management services	of expected high	strategic initiatives
	within operations	technical standards	rapidly as required
	and maintenance,	and prioritizes technical	by technological
	e.g., technical and	solutions that are	developments.
	commercial digital	well-proven and	Technical
	services, and	delivered by reputable	improvements, solutions
	operational intelligence,	suppliers. As a part of	and services will
	visualization and	Cloudberry`s overall	increase the production
	reporting solutions	strategy, and with the	of renewable energy
	to renewable energy	data-driven Captiva,	and improve profitability.
	projects in the Nordics.	Cloudberry delivers	This influences and
		management services	results in attractive
		within operations and	insurance terms and
		maintenance. The	funding. In addition,
		company relies on	the improvement of
		being updated on new	technical solutions
		technologies related	enables an increase in
		to power production,	the output of renewable
		operations, and market	energy technologies
		activities. Cloudberry	without adding any
		is well-informed of	negative environmental
		ongoing initiatives and	impact.
		promising technologies.

10 Cloudberry Clean Energy ASA The TCFD Recommendations

TCFD

	Like-	Financial	Time
Risk	lihood 1	Impact 2	Horizon 3 Description	Risk mitigation	Opportunity

andOpportunities

Volatile	High	High	Short	It is difficult to predict
power				power prices. Power
prices				prices may rise from
				volatility in commodity
				prices increased
				CO2 prices, or higher
				electricity demand, or
				they might fall from
				an expanded supply
				for instance due to
				government-issued
				incentives.

Cloudberry cautiously follows the market fundamentals and power price forecasts in the short- and long-term. To mitigate the downside risk

of volatile power prices, Cloudberry is positioning its production portfolio so that the company is not dependent on one price area as a hedge toward lock-in effects in the case of depressed prices in certain price areas. Cloudberry has a well-developed overall risk management strategy including price hedging of electricity, and a small portion of the portfolio with PPA to secure fixed income in the short- and medium- term. This strategy further includes close monitoring of market developments, with a special focus on the Nordics.

Cloudberry believes there are strong, fundamental drivers behind a stable, relatively high prices Nordic power market going forward, such as increase in consumption from both electrification and new power intensive industries.

The company's ability to execute on both transactions and new investments without affixing a PPA to projects, may enable Cloudberry to both act on investment opportunities and investment decisions others cannot. With a strong financial capability, Cloudberry may also find opportunities in assets in distress due to, for example, short-term lower power prices, such as seen in for example NO3 and NO4 during the summer of 2022.

Risks	Market
Transitional

Supply	High	Medium Short	More extreme weather
chain			conditions may
			cause disruptions in
			Cloudberry's supply
			chain. Certain products
			and components are
			dependent on very few
			suppliers often in Asia.
			A flooding in China
			may lead to delayed
			deliveries of crucial
			components during
			the construction stage,
			or when a turbine on
			a wind power plant
			needs replacement
			of a component.
			Consequently, extreme
			weather could disrupt
			the production and
			transportation of the
			specific component,
			which could delay or
			shut down a renewable
			energy plant. In
			addition, there is not
			much willingness to
			enter into long-term
			contracts with suppliers
			anymore due to the
			unpredictable situation,
			possible disruptions
			and volatile prices.
			This increases the risk
			of higher costs in our
			projects.

Long-term relationships with crucial suppliers are helpful in times of supply chain issues. In addition, it is a priority to have suppliers

that are located as close as possible to the construction site to take down the risk of disruptions in the supply chain and the environmental impact. Cloudberry also seeks to reduce the number of suppliers and steps of sub-suppliers in the supply chain to increase control and transparency. For maintenance of our power plants, the company will consider the need for a backup storage of crucial components that need regular replacement.

By prioritizing more nearby suppliers, Cloudberry will gain a greater degree of control over its value chain and reduce the environmental impact. It will also be easier to follow up with the suppliers during the construction stage, during maintenance and repair which reduces the downtime of a power plant.