Encavis : sustainability report 2023

 SUSTAINABILITY JOURNEY

Sustainability Report 2023

E n c a v i s

F o u n d a t i o n

Economics

Environment

People

Governance

Contents ENCAVIS

Foreword

About this report

Organisational structure

Business model

Value creation structure

Our shared values

FOUNDATION

A superb sustainability strategy

Active listening

Sustainability strategy

03	ECONOMICS	15	PEOPLE	27
03	Growing the Encavis AG portfolio	16		Attractive employer	28
04	Portfolio management for institutional investors	17		Social commitment	32
05	Operational Excellence	18
06	We make it possible!	20
07
08

09	ENVIRONMENT	22	GOVERNANCE	35
10	Carbon-neutral power production	23		Compliance management system	36
11	A promising outlook for biodiversity­			Corporate responsibility
13	and the environment	24		doesn't end at our doorstep	38
				A last look back before we move on	41
				GRI Index	42
				Company details	48

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E n c a v i s

F o u n d a t i o n

Economics

Environment

People

Governance

FOREWORD

GRI 2-22

DEAR ALL,

During the course of 2023, our world once again suffered under the severe backlash of global warming. The now familiar cycle of heatwaves, record temperatures, prolonged periods of drought and catastrophic flooding came thicker and faster than ever before. As life gets harder, people call with increasing urgency for solutions that will help us achieve the climate goals so necessary to our survival.

Renewable energy sources are one of the most effective weapons available in the fight against global warming. Our portfolio of wind farms and solar parks already plays an important role in creating a low-emission energy system.

Our personal, primary environmental goal is to achieve carbon neutrality by 2040. In the reporting year, our carbon reduction goals were validated by the SBTi (Science Based Targets initiative), who confirmed that our actions align with the guidelines issued by the Paris Agreement. These aim to restrict global warming to 1.5°C.

Expanding our capacities sustainably, however, is all a matter of taking the right approach. Above all, we need to expand our portfolio in a way that will not negatively impact the quality of life of future generations. Ensuring we do business in a manner that is sustainable over the long term means focusing on far more than just economic success factors.

The sustainability journey is one we must all travel together - we, our suppliers, shareholders, investors, partners, employees and everyone else with whom we collaborate in one form or another. Join us on our journey, and read our sustainability report to find out more about our progress in 2023. As in previous years, we focus on key themes in the fields of eco- nomics, environment, people and governance. We define specific goals for each of these fields to ensure our progress is both transparent and verifiable.

All credit is due to our employees when it comes to our potential to change things for the better. We'd like to take this opportunity to say a big thank you to all of them for their dedication and willingness to embrace and implement change! We'd also like to say thank you to the external stakeholders who accompany us on our journey. We appreciate all feedback, and we look forward to remaining in dialogue with you this year.

And now... enjoy the read!

Dr Christoph Husmann,	Mario Schirru,
Speaker of the Board	CIO/COO Encavis AG
and CFO Encavis AG

Dr Christoph Husmann

and Mario Schirru

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E n c a v i s

F o u n d a t i o n

Economics

Environment

People

Governance

ABOUT THIS REPORT

GRI 2-1,2-2,2-3

This sustainability report, approved by the Board of Encavis AG, relates to the Encavis Group. The reporting period of this report is 1 January 2023 to 31 December 2023. This corresponds to the reporting period of the annual financial statements of Encavis AG, which were published on 26 March 2024. The editorial deadline for this report was 26 March 2024.

To ensure transparency and completeness of our reporting, we adhere to the following frameworks and guidelines:

GLOBAL REPORTING INITIATIVE (GRI)

We use the GRI Standard as the basis for our ESG dataset.

Sustainability Report 2023

In this report, we focus on our sustainability strategy based on the material topics we have identified.

This report uses gender-neutral language wherever possi- ble. All texts are inclusive of all gender identities.

The sustainability report is available in German and Eng- lish. In the event of discrepancies, the German version shall prevail.

GREENHOUSE GAS PROTOCOL (GHG)

We are fully compliant with the GHG Protocol Corporate Accounting and Reporting Standard for Scopes 1, 2 and 3.

SUSTAINABLE DEVELOPMENT GOALS (SDGS)

Our sustainability approach is guided by the 17 Sustainable Development Goals (SDGs) of the United Nations.

ESG Report 2023

This report contains our ESG metrics.

Annual Report 2023

Our annual report provides a transparent picture of the strategic, operational and financial position, structure and development of Encavis.

Annual Report 2023

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Environment

ORGANISATIONAL STRUCTURE

GRI 2-1

People

Governance

Group

PV Parks

Based in Hamburg, Encavis is one of the largest independent electricity producers in the renewable energies sector in Europe and a service provider for green electricity. With a team of almost 400 employees, Encavis manages its business activities via five segments.

The PV Parks segment includes all of our own solar parks in Germany, Italy, France, the UK, the Netherlands, Spain, Denmark and Sweden, as well as any holding companies.

The Service segment consists of Encavis Technical Services GmbH and the Italian Stern Energy S.p.A., which has been fully consolidated since the 2022 financial year, in addition to their national subsidiaries for services in Germany, the UK, France and the Netherlands. This segment also includes other service companies and battery storage solutions as well as the Encavis AG business transactions allocated to this segment.

The Wind Farms segment comprises all of the company's proprietary wind farms in Germany, Italy, France, Denmark, Finland and Lithuania, as well as the associated holding companies.

The Asset Management segment includes the business activities of Encavis Asset Management AG and those activities of Encavis GmbH that relate to the Asset Management business area, as well as other companies assigned to this business area.

The Administration segment consists of the administration -related business transactions of the Group's parent company, Encavis AG, and the business transactions of Encavis GmbH assigned to this segment. This segment also includes Encavis Finance B.V. and other companies assigned to administration.

Service

Wind Farms

Asset Management

Administration

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Governance

BUSINESS MODEL

GRI 2-1,2-6

Encavis drives the energy transition by creating tailored solutions for challenges in the energy sector. We work with partner companies to cover each and every link in the supply chain. Having gained many years of experience in the field, our primary focus is on onshore wind farms and solar parks.

We exploit the multi-faceted potential of generating electricity from renewable sources. As an independent company, we operate environmentally friendly, emission-free power plants and have been steadily expanding our portfolio here since 2009. Our core focus is on acquiring and operating solar parks and onshore wind farms. When we acquire new plants, we focus on keeping a healthy balance between projects that are still in the development phase, projects that are just starting up and projects that are already up and running reliably with guaranteed feed-in tariffs or long- term PPAs. Our development projects or finished plants are located in various European countries that are characterised by a stable economic and political environment and reliable investment and framework conditions.

Business is currently booming in the field of O&M (opera- tion and maintenance) for solar plants. This work is handled by our 80%-owned subsidiary Stern Energy S.p.A., which is based in Parma, Italy. In order to further reinforce the Group's O&M services and become market leader for third- party customers in Europe in this field, Stern Energy S.p.A has now opened branches in Germany, the Netherlands, the UK and France, and plans to expand next in Denmark and Spain.

Further, our subsidiary Encavis Asset Management AG offers institutional investors attractive opportunities for investing in renewable energy parks. This line of business allows Encavis to grow its power production portfolio more quickly and create synergies with investment partners. The Asset Management segment includes all services inherent to this area of business - from initiating funds and structuring investments for professionals who wish to invest in renewable energy to acquiring and operating the power plants in which the investors own a share.

Our portfolio currently comprises around 230 solar parks and 90 wind farms in Germany, Italy, France, the UK, Austria, Finland, Sweden, Denmark, the Netherlands, Spain, Ireland and Lithuania. In total, these generate some 3.6 GW of elec- tricity. Our Asset Management segment operates around 40 of these solar parks and nearly 50 of the wind farms on behalf of third parties.

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Environment

People

Governance

VALUE CREATION STRUCTURE

GRI 2-6

Encavis business activities

Project planning	Mining & Processing	Construction	&	Financial	Purchase
structuring

Operation

Portfolio energy

management

Sale / renaturation or repowering/ revamping

Sites are evaluated, feasibility

studies are conducted and regulatory approvals are obtained.

Scheduling and project

planning

Raw materials for the various components of the plants are mined and processed.

Raw material procurement

Refinement

Wind and solar parks

are built.

Construction of wind and solar

power plants

We negotiate PPAs (power purchase agreements), loans and viable power plant solutions.

Financial structuring

We acquire the plants

for our portfolio (Encavis AG) and for professional investors (Encavis Asset Management).

Acquisition of the wind and

solar power plants

We manage, maintain and

optimise the plants.

Operation and main-

tenance

We market the sustainably

produced electricity.

Management of the facilities

and energy business

The plants are sold. When

their lifecycles end, the plants are renaturated, revamped or repowered.

Sale / demolition and renatur-

ation / repowering

Building material

Module and system

production

Renaturation,

e.g. Afforestation

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OUR SHARED VALUES

We are a successful growing company with a corporate culture that is actively shaped by the employees. Together we have developed the following values, which we live by every day.

SHARING	SEIZING	VALUING	STICKING	SHAPING	ASSUMING	FOCUSING ON OUR
ENTHUSIASM	OPPORTUNITIES	TRUST	TOGETHER	THE FUTURE	RESPONSIBILITY	CUSTOMERS

'We enjoy	'We actively seize	'We trust each	'We stick together,	'We actively shape	'We take respon-	'We value our
working towards	opportunities and	other and can	support one another	the future and act	sibility for our	customers and
mutual success.'	are committed	rely on one	and look out for each	responsibly.'	own actions.'	focus on them
Our passion for renew-	to achieving our	another.'	other.'	In everything we do, we	Dealing responsibly	through and
goals.'			though.'
able energies and for			consider the future con-	with our environment
our work drives our daily		Trust connects us with	We are convinced that top	sequences of our actions.	is our main goal. We
actions and forms the	We don't wait for oppor-	our colleagues and	performances are only possible	We act with foresight,	take responsibility for	We know our markets
basis for developing our	tunities to come to us, we	our business partners.	in a working environment that	approach issues with deter-	our own actions and	and value our cus-
company and achieving	take the initiative ourselves.	We consider reliability	encourages team spirit. Feeling	mination and confidently	always lead by example.	tomers. We deliver
our goals together.	We review opportunities	and transparency	great and sharing joyful expe-	apply our strength and	We approach others	quality and stand for
	that arise for their long-	the basis for trust-	riences creates the space to	knowledge. Our actions	proactively and don't	competence. We ask
	term feasibility and imple-	based collaboration	achieve great things. We respect	are always reliable and	look the other way.	the right questions
	ment them professionally,	and good business	each other and consider our	sustainable - to benefit us,		and respond to our
	together. We also always	relationships.	diverse workforce an enrichment.	our partners, our society		customers' needs.
	look for opportunities to		We respect and support one	and our environment.
	improve what we already		another and treat ourselves and
	have in place.		our business partnerships fairly.
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Environment

People

Governance

Foundation

A strong anchor

Our sustainability work builds on a strong foundation. We focus hereby on embedding it meaningfully in our organisational struc- tures. We also focus on our most important stakeholder groups and on our ten strategic priorities - and how we approach them.

E n c a v i s

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Environment

People

Governance

A SUPERB SUSTAINABILITY STRATEGY	corporate goals and monitors progress. The committee met
	further development of the company, defines non-financial
GRI 2-9,2-12,2-13,2-14	virtually several times in 2023.

Sustainable action is integrated into the operational and strategic company processes at Encavis.

			a			SUSTAINABILITY & COMMUNICATIONS
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THE SUPERVISORY BOARD'S ESG COMMITTEE

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The Sustainability & Communications department, which falls under the remit of the Board Spokesman, is responsible for Group-wide sustainability management. This department coordinates individual measures and defines corresponding key performance indicators. What's more, the employees in this department are responsi-

an ESG committee to the audit committee to reflect the growing importance of sustainability. During the reporting year, both the ESG committee and the audit committee took a closer look at the current status of internal audits as well as the 2023 Governance Report. The ESG committee and the audit committee convened twice during the reporting year.

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ble for preparing the sustainability reporting as well as organising and monitoring the communication with key stakeholders. In addition, this department oversees compliance with many ESG policies and commit- ments. Sustainability-related topics are operationally implemented decentrally in the various departments.

SUSTAINABILITY COUNCIL

The Sustainability Council, which was founded in April 2021, consisted of five members in the reporting year: two Management Board members of Encavis AG, two Management Board members of Encavis Asset Management AG, and the head of the Sustainability & Communications depart- ment. Based on the preparatory work of the Sustainability

• Communications department, the Sustainability Coun- cil makes central strategic decisions for the sustainable

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SUSTAINABILITY TASK FORCE

Since the beginning of 2020, an in-house Sustainability Task Force has been driving the implementation of internal sustainability measures. The task force is made up of representatives from several business areas of the Encavis Group. It meets regularly and shares information about progress made that has a lasting impact within the Group. In the reporting year, this team organised and conducted various activities, such as the Charity Runs in Hamburg and Munich, Giving Back Week and a Christmas gift campaign for children in need.

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