Governance (G)

C-G1-1 & C-G1-2 & C-G1-3 & C-G1-4 & C-G1-5| Board composition
(Data refer to PPC S.A)

C-G1-1: The President and CEO have expertise in Sustainable Development matters.
C-G1-2:  Mr. Georgios Stassis is the President and CEO, serving as an Executive Member, while Mr. Pyrros Papadimitriou is the Vice President of the Board of Directors and acts as an Independent Non-Executive Member of the Board.
C-G1-3: Percentage of female board members* -25%
C-G1-4: Percentage of non-executive board members- 70%
C-G1-5: Percentage of both non-executive and independent board members -50%

*  In accordance with Law 4706/2020, there must be adequate representation of women on the Board of Directors at a rate equal to 25%.

In the BoD of PPC, 25% corresponds to 2.75 and with the rounding to the previous integer 25% ultimately corresponds to representation on the BoD of 2 women.

PPC Group Annual Report 2022  (page:38-41)                                                                                                                                                                                                       

C-G2 | Sustainability oversight
(Data refer to PPC Group)

With Decision No. 142/09.11.2021, the Board of Directors established a Sustainability Committee with representation from top management, overseeing Sustainable Development and being responsible for updating the Board on Sustainable Development / Sustainability matters. The formation of this Committee was part of the action plan of the TCFD (Taskforce for Climate-related Financial Disclosure), which examines the risks the Company may face due to climate change in the course of its activities, as well as ways to address them.

The specific purpose of this Committee is at a minimum to engage in, understand, and report to the Board on issues related to:

(a) supervision, coordination, and promotion of policies and actions related to Sustainable Development / Sustainability and Climate,
(b) oversight of the identification, monitoring, and management of risks and opportunities related to Sustainable Development / Sustainability and Climate,
(c) oversight of the development, implementation, and monitoring of the Sustainable Development strategy and policy,
(d) oversight and approval of the Sustainable Development Report and the broader implementation of appropriate non-financial reporting frameworks and ESG disclosures (Environment, Society, Governance),
(e) oversight and monitoring of annual targets related to Sustainable Development / Sustainability, Creating Shared Value (CSV), and Climate for all Company Departments and functional units, while for HEDNO, monitoring its business plan concerning Sustainable Development on behalf of the shareholder, and
(f) submission of reports to the Board at regular intervals on these issues, with the ultimate goal of further informing the Board on Sustainable Development / Sustainability matters and overseeing them (Board oversight and awareness).

The Sustainability Committee consists of seven (7) members, namely the President and CEO of PPC S.A., in the position of the Committee's President, the three (3) Deputy CEOs, the Chief Financial Officer, the CEO of the subsidiary PPC RENEWABLES S.A., and the Director of Sustainable Development as the Secretary of the Committee and Deputy President of the Committee.

C-G3 | Materiality - Description of the materiality assessment process
(Data refer to PPC Group)

The PPC Group initiates its ESG information disclosure process by identifying subjects that are directly tied to its value creation capability and are consequently considered material for both the Group and its stakeholders. The materiality analysis necessitates regular updates, given its dynamic nature. Assessment cycles for material issues are conducted periodically to align with changes introduced by new regulatory frameworks.

While implementing the Materiality process for the year 2023 (for the purposes of this Report), the Group employed a Double Materiality approach. In accordance with European sustainability standards, the analysis focused on evaluating the impacts arising from the Group's activities—impacts that either affect or have the potential to affect the environment, society, the economy, and human rights. Additionally, the assessment considered how the Group is influenced or may be influenced by issues related to Sustainable Development, encompassing both risks and opportunities.

Encompassing both risks and opportunities, the analysis was conducted separately for the parent company PPC S.A. and its key subsidiaries, HEDNO and PPC Renewables. The final list of material issues at the Group level was derived from the compilation of individual results. In contrast to the 2021 process, where the level of materiality was assessed for each subject (single materiality), the Group took a pioneering step in 2022 with the adoption of a double materiality analysis. This approach is now mandatory under the new European regulation (Corporate Sustainability Reporting Directive - CSRD) and evaluates the materiality of impacts, risks, and opportunities associated with each sustainability issue.

The materiality analysis examined the entire value chain for both the parent company and its subsidiaries, HEDNO and PPC Renewables. It considered the latest trends and challenges in the broader socio-economic environment where the Group operates. Furthermore, it incorporated various international and sectoral sustainable development standards, initiatives, and data sources, such as the GRI Standards 2021, the SASB reporting standards, the Athens Stock Exchange's ESG Disclosure Guide, and the European Sustainability Reporting Standards (ESRS). Additionally, the results of a comparative analysis of similar companies at European and national levels, concerning critical Sustainable Development issues for responsible operation and strategy implementation, were utilized.

The double materiality analysis for the year 2022 was carried out through the following phases:

1. UNDERSTANDING THE OPERATIONAL FRAMEWORK

• Understanding the business model, activities and business relationships in the value chain for each of the Group companies.
• Identification of relevant ESG issues taking into account environmental, social and governance (ESG) criteria, sustainability standards (e.g. ESRS, GRI, SASB, etc.), ESG requirements used by specialized ESG indicators and rating organizations (e.g. MSCI, etc.) and corresponding analyses of material ESG issues of peer organizations.
•  Identification of stakeholders’ categories that affect and/or are affected by each Group’s company operation.

2. IMPACT IDENTIFICATION AND ASSESSMENT

• Identification and understanding of positive and negative (actual and potential) impacts on the economy, the society, the environment, human rights, resulting from the Group's activities and its business relationships.
• Conducting survey to assess the impact of each Group company on sustainability issues with the participation of representatives from all stakeholder groups.
• Evaluation of the results of the survey, based on stakeholder responses.

3. IMPACT PRIORITIZATION AND IDENTIFICATION OF THE MOST IMPORTANT IMPACTS FOR REPORTING

• Prioritization of material sustainability issues based on the significance of each issue.
• Materiality threshold setting to determine the most significant issues, relying on the analysis of the effects created or likely to be created by the Group's activities.

4. IDENTIFICATION AND ASSESSMENT OF THE LEVEL OF FINANCIAL MATERIALITY

• Recording and assessing the opportunities and risks that currently affect or may affect the Group's financial position and performance in relation to the material sustainability issues that have been identified.

5. IDENTIFICATION OF THE MOST IMPORTANT MATERIAL ISSUES BASED ON DOUBLE MATERIALITY ANALYSIS

• Integration of findings derived from both the Impact Materiality analysis and the Financial Materiality analysis.
• Evaluation of the results of double materiality.
• Validation of a list of material issues by the Group's Management.

C-G4 | Sustainability policy
(Data refer to PPC Group)

In 2022, the Sustainable Development Policy was approved, setting the basic framework for the Group's commitments on sustainability issues. The aim is to ensure the integration of Environmental, Social, and Governance (ESG) factors into the Group's (and individual companies') strategy, governance, and operational model. The main objective of this initiative is to create long-term value for Society, the Enterprise, and Stakeholders, with the least possible impact on the Environment. Additionally, it aims to improve ESG disclosures, taking into account the fundamental economic, social, and environmental impacts of the PPC Group.

The Sustainable Development Policy of the Group outlines how the Group approaches Sustainable Development issues, in relation to its strategic plan and the need for the transformation of its business model, considering the prevailing socio-economic trends and the financial impact of Sustainable Development issues on the Group. It also emphasizes the commitment to responsible operation and ensuring absolute transparency across the entire range of its business activities.

Sustainable Development Policy

C-G5 | Business ethics policy
(Data refer to PPC S.A)

Continuing its efforts for continuous improvement across all levels of its activities and adapting to changes in the regulatory framework, the Company has developed the 'Ethics and Ethical Behavior' Program. The central tool of this program is the Code of Conduct, adopted by the Company since 2018, which was recently revised on June 9, 2022, by the Board of Directors due to changes in the regulatory environment.

This program also includes policies that elaborate on the principles and values of business ethics adopted and implemented by the Company. Specifically, the relevant policies and regulations include:

- Anti-Corruption and Bribery Policy
- Conflict of Interest Policy
- Workplace Violence and Harassment Policy
- Enforcement Policy & Report/Complaint Handling Procedure
- Corruption, Gifts and Hospitality (Anti-Corruption and Anti Bribery Policy)
- Personal Data Protection Policy
- Human Rights Policy
- Sustainable Development Policy, with an integral part being the Environmental Policy
- Related Party Transactions Regulation
- Insider Trading Regulation

These policies, in combination with the revised Code of Conduct, contribute to promoting transparency and the rule of law within the Company. They establish a culture of ethics and integrity.

Code of Conduct

C-G6 | Data security policy -Cybersecurity
(Data refer to PPC S.A)

In 2022, the Company, through an extensive cybersecurity transformation programme, ensured its integration into the broader corporate strategy, from the development of new digital products and services to ensuring the confidentiality, integrity and availability of information and data of both the Information Technology (IT) and Operational Technology (OT) environments.

In the broader context of the transformation, the already existing Framework of Information Systems Security (FISS) has been updated, describing the basic security requirements in terms of:

• risk assessment
• supply chain risk management
• identity management and access control
• system and application security throughout their life cycle
• threat detection and response to vulnerabilities and risks
• management of security incidents
• awareness-raising and training of its personnel and partners regarding information security

Personal Data Protection

A-G1 | Business model
(Data refer to PPC Group)

Discussion of business model and the creation of value 

The Group is the largest organization for the production, supply, distribution and sale of electricity in the Greek market.

Its main competitive advantages are:

• It is the largest Greek industry.
• It is the largest integrated energy company with thermal electricity production, renewable energy sources, natural gas and electricity trading, electricity distribution and electromobility services and products.
• It holds the first place in terms of the number of electricity customers in Greece.
• It has the largest electricity production capacity in Greece (11.1 GW) with thermal and hydroelectric power plants, as well as Renewable Energy Sources facilities. In 2022, it produced 23 TWh which covered 43.6% of total demand.
• It has an Innovation Hub staffed with highly qualified scientists possessing extensive expertise.

Through its various companies, the Group operates as follows:

Public Power Corporation (PPC S.A.) is the largest electricity supplier in Greece, serving approximately 5.6 million customers nationwide. In 2022, these customers consumed 62% of the total electricity supplied.

PPC S.A. was founded in 1950, with headquarters at 30 Halkokondyli str. in Athens, and is listed on the Athens Stock Exchange since 2001. It has lignite mines and electricity production and distribution facilities. PPC S.A. operates in Greece, Bulgaria, North Macedonia, Albania and Turkey.

On June 1st, 2022, the merger of PPC S.A. with the absorption of 100% of the subsidiaries of Lignitiki Megalopolis S.A. and Lignitiki Melitis S.A., was completed.

Α-G2 | Total amount of monetary losses as a result of business ethics violations
(Data refer to PPC Group)

The Company has not been fined for violations in relation to business ethics issues.
Therefore, the amount of money for such fines was €0.

A-G3-1 & A-G3-2 & A-G3-3 | ESG targets - Long-term targets associated with strategic ESG objectives
(Data refer to PPC Group)

Sustainability Report 2022, pg: 72-76

Α-G4 |  Variable pay
(Data refer to PPC S.A)

Percentage of executive’s variable pay

16.94%

The amount of variable pay does not include employer contributions.

The total annual remuneration (excluding employer contributions) for executives has been calculated from the level of hierarchy of Director and above. This is because, from this level up to the CEO, variable remuneration is received, following the applicable compensation policy. In 2022, only bonuses were received, and not shares.

Α-G5 | External assurance
(Data refer to PPC Group)

Sustainability Report 2022, page299

SR-1-2 | Sustainability Report – Date of the Publication
(Data refer to PPC Group)

Date of the Publication: 09/12/2023

Sustainability Report 2022