Cloudberry Clean Energy Annual report 2020

43 Cloudberry Annual report 2020 Sustainability The Taxonomy In March 2020, the European Union published a taxonomy to classify sustainable activities. The EU Taxonomy contains implementation guidance for companies and financial institutions. This includes technical criteria for e.g., production of electric- ity from hydropower and from wind power. The Taxonomy includes several principles and mitigation criteria’s such as threshold for facilities to operate at life cycle emissions lower than 100g CO 2 e/kWh, declining to 0g CO 2 e/kWh by 2050 and “Do no significant harm assessment”. Internal analysis and estimates of life cycle emissions from Cloudberry’s hydro and wind projects indicates emissions far below 100g CO 2 e/kWh. The taxonomy report (technical annex chapter 4.5) specifically pinpoint power densities of hydropower. According to the report, hydropower facilities with a power density above 5 W/m 2 are currently exempt from conducting the Product Carbon Footprint (“PCF”) or Greenhouse Gas (“GHG”) Lifecycle Assessment. Internal analysis and calculations within Cloudberry’s hydropower projects resulted in estimated power densities far above 5 W/m 2 . In other words, according to the proposed Taxonomy matrix, Cloudberry has highly efficient hydropower plants relative to the impacted areas. The legislation formalizing this taxonomy has not yet been adopted and Cloudberry will continue to monitor the development of the EU Taxonomy for sustainable activities closely. Meanwhile, Cloudberry is in close dialogue with both national and European organizations and associations and awaits the outcome of the concluded consulting process. The company is aware of the potential consequences for the hydropower sector if the legislation will be formalized and is preparing for potential risk mitiga- tion actions. Way forward Cloudberry will monitor national and international climate politics and their potential impact on our strategy and business. We strive to ensure that the company makes the right decisions and assess- ments on how climate and climate politics might affect us. We are currently strengthening our risk strategy by including the topics identified in the materiality assessment where climate and renew- able energy are core topics. The climate-related risk assessment will be established as an annual process, and the identified climate-related risks will be incorporated into our general risk management and reporting. Cloudberry`s segments Production and Develop will, from 2021, include climate-related risks and opportunities in their business reviews presented to the Board of Directors. As a part of integrated risk management, the Board of Directors will also review and determine how to respond to different climate-related risks including regulatory, legal, and market risks, as well as the physical risks to our assets. The Board of Directors will oversee the expected progress towards the set goals and the plans of action related to the defined climate-related risks and opportunities. The Board of Directors and its work is also described in the corporate govern- ance section later in this report. The corporate management is responsible for ensuring the implementation of the sustainability objectives and operating effectiveness of the internal control systems and for development of key risk mitigation plans. Ownership and management of all risks will be assigned to specific members of the management. Implementation of risk mitigating actions will be the responsibility of the managers of the individual business segments. The management team will at least half-yearly follow up on key mitiga- tion plans. Progress will be reported in yearly reports and presented in annual board meetings. In 2021, Cloudberry will use the baseline established in 2020 to determine future emission reducing targets. The targets will be evaluated and confirmed by the Board of Directors along with the governance and management of financial climate risks and opportunities and the overall sustainability strategy. Land use and ecological sensitivity The development and operations of wind farms and hydropower plants have an impact on both land areas and river systems. For wind farms, their environmental impact is first and foremost through their visibility in the landscape and their noise and shadow. Hydropower plants impact the water flow, fish and sediment load. The development of both wind and hydro power plants, utilize land particularly in the construction phase.