C-G1 Composition of the Board of Directors

Chair attribute: Entrepreneur - The BoD Chairman was not an executive member
Number of Board of Directors members who are women: 2
Number of Board of Directors members who are non-executive: 6
Number of Board of Directors members who are non-executive and independent: 5

The percentage of Board of Directors members who are women (%) = 28.6%

The percentage of Board of Directors members who are non-executive (%) = 85.7%

The percentage of Board of Directors members who are non-executive and independent (%) = 71.4%

FULL NAME POSITION EXECUTIVE/ NON-EXECUTIVE INDEPENDENT/ DEPENDENT PROFESSION COMMENCEMENT OF TERM END OF TERM
BAKATSELOS Nikolaos Chairman Non-Executive Independent Entrepreneur 17/10/2019 16/10/2022*
MANOS Anastasios Member Executive Dependent Marine Mechanical Engineer 17/10/2019 16/10/2022
VERTELLIS Socrates Member Non-Executive Independent Lawyer 17/10/2019 16/10/2022*
LAPPA Christina Member Non-Executive Independent Lawyer 17/10/2019 16/10/2022*
ONOUFRIADOU Aikaterini Member Non-Executive Independent Economist 17/10/2019 16/10/2022*
PADOUVAS Elias Member Non-Executive Independent Electrical Engineer & Economist 17/10/2019 16/10/2022*
MASOURAS Konstantinos Member Non-Executive Dependent Workers' representative 28/6/2019 27/6/2022

* It should be noted that these members' terms of office of the specific expired on 08/03/2022, when a new Board of Directors was elected.

Board composition - ESG related qualifications of the board members (Annual Financial Report 2021, pages 23-24)

 

C-G2 Sustainability oversight - Description of approach to sustainability oversight

The department at HEDNO in charge of sustainable development issues is the Corporate Communication & Sustainable Development Branch which is part of the Executive Office. This Branch is the first point of reference and collaboration for all Sustainable Development and ESG issues and projects arising for HEDNO as a result (either directly or indirectly) of the wider obligations and commitments of the Group.

One of the main duties of the Branch is to collect sustainable development index-related and ESG data for HEDNO in collaboration with the Sustainable Development Department of PPC S.A. for the main purpose of preparing the Group’s Annual Sustainable Development Report as per the GRI and the Athex ESG Index but also in compliance with international publication and recommendation standards such as the TFCD (Taskforce for Climate-related Financial Disclosures), the GRI Electric Utilities Sector Supplement, the AccountAbility AA1000 principles and the Greek Sustainability Code. The Branch supports PPC’s Sustainable Development Department on behalf of HEDNO by carrying out the data collection procedure specified in its Sustainable Development Report. This procedure involves preparing questions to the competent General Managers on Sustainable Development issues as well as receiving and collecting the respective responses (quantitative and qualitative data) through online forms and interviews which facilitate their uniform processing. The collected data are approved by the competent Directors at HEDNO and are sent to the Sustainable Development Department of PPC S.A. which assesses the data and may ask for clarifications, amendments or additional information, if necessary. The accuracy of the data included in the Report is verified by the Departments from which it has been collected. Αt the same time, an assurance audit is carried out by a third party, under the supervision of the Corporate Communication and Sustainable Development Branch of HEDNO in cooperation with PPC.

The approval of the Report is carried out in two stages

  1. Each department which has participated in the Report is asked to check and approve the final representation of its data on the document.
  2. The final Report is checked by the Sustainability Committee which is responsible for the final approval of the Report as per BoD decision no. 142/9.11.2021.

Finally, the content of the Report is forwarded to the Sustainability Committee (L.4706/80) and the BoDs of the parent company and the subsidiaries included in the Report.

At parent-company level, the Sustainability Committee was established as per BoD decision no. 142/9.11.2021 of the PPC S.A. and is represented by the top management which is responsible for supervising Sustainable Development for the PPC Group and for briefing the PPC S.A.’s Board of Directors and its subsidiaries on Sustainable Development/Sustainability issues.

The Sustainability Committee meets every quarter and consists of PPC S.A. and PPC Renewables CEOs, as well as representatives from PPC S.A.’s senior and top management. With regard to HEDNO, the Committee is responsible for monitoring its business plan in relation to Sustainable Development issues and on behalf of the shareholders and therefore provides briefing the HEDNO’s CEO on the decisions and actions of the Committee after each meeting.

 

C-G3 Materiality - Description of the materiality assessment process

The methodology and the result of the materiality analysis which was carried out in summer 2021 for HEDNO S.A are presented in the 2020 Sustainability Report, pages 105 and 108-109

In the context of the 2021 Sustainable Development Report, in the third quarter of 2022, Focus Groups took place in collaboration with PPC S.A. and the participation of the senior management to update the material issues, as these had resulted from the above mentioned materiality analysis in June 2021 for the purposes of the 2020 Sustainable Development.

The materiality analysis complies with the 2016 GRI Standards by incorporating part of the requirements for the analysis of the materiality of 2021 GRI Standards (positive and negative impact) to ensure that the next report fully covers the requirements of the standards in relation to the definition of the material issues, which can add long-term value to the operational activities of the Group and reflect the significant financial, environmental and social impact.

 

C-G4 Sustainability policy - Description of sustainability policy and fundamental principles (G)

Sustainable Development Policy

The Audit and Procurement Committee was informed about HEDNO's Sustainable Development Policy and actions on sustainable development issues as well as the goals set and analyzed in the Sustainable Development Report.

HEDNO, recognizing that the principles of Sustainable Development are an element of its responsible course and continuous development, has developed a Sustainable Development Policy that is inextricably linked to its values and mission.
More specifically:

The Sustainable Development Policy is the basic framework of the Company's commitment to the continuous effort to improve the economic, environmental and social value it creates, for those who have legitimate interests from its operation, but also for society as a whole.

HEDNO's strategic philosophy is "Creating Shared Value", that is, the creation and measurement (total value) of the shared benefit among the Company, Society and the Environment, which will result from the transformation of the value production chain and operation of the Company and the formation of a new corporate culture, guided by Sustainable Development and the principles of the circular economy, where these can be applied.

For this reason, the approach of Sustainable Development is fully in line with the business model and its transformation needs, investing in integrated, innovative and high- quality services and products, shaping a better working environment and mutual benefit relations, focusing on economic development (Profit), environmental care (Planet) and social welfare (People).

It closely monitors global developments, challenges and commitments that our country has undertaken, and aspires to become a pioneer in its industry in southeastern Europe, in order to become an example of sustainable development for the wider region.

It develops, integrates and gradually implements a Sustainable Development Policy that contributes to: (a) strengthening the Company (b) the national energy transformation of the country also through a fair growth transition in the context of the Green Deal implementation, and (c) growth at group level in southeastern Europe.

The strengthening of a customer-centered approach in the Company's structures, focusing on the needs of the wider Greek society, Digitalization and operational efficiency, expanding in new activities and protecting biodiversity and the environment, are the pillars of its broader strategy.

The goal of the Sustainable Development Policy is for HEDNO to be a reference point for employees, who either work for it or wish to work in a business environment that will operate according to the principles of the Sustainable Development Policy followed by the Company.

At the same time, attracting more investment funds and investors that will give impetus to the plan for the transformation of the business is another goal.

In this context, HEDNO is committed to monitor and be evaluated according to the international ESG criteria and standards (Environment – Social – Governance), with the ultimate goal of being transparent and informing all stakeholders (including financial institutions) about its performance on climate change and sustainable development issues.

The goal of HEDNO's sustainable development policy is harmonization at Group level following common practices and principles.

The UN Sustainable Development Goals over a time frame till 2030, are the Company compass to enhance its economic, social and environmental contribution to the maximum possible extent.

HEDNO, on the basis of best practices in terms of transparency and commitment of the organizations on the issues of Sustainable Development and Responsible Entrepreneurship, has drafted since 2020 on an annual basis, a Report on Sustainable Development, in the context of the PPC Group comprehensive Report, on the basis of Global Reporting Initiative (GRI) international standards, which includes (a) its strategy on a Group level in the field of Sustainable Development based on the analysis of the substantive and other recognized Sustainable Development issues, opportunities and risks associated with the Group business model and in relation to the environment in which it operates, (b) the programs which it applies, (c) the results thereof, (d) the commitments it has undertaken, (e) the objectives it sets, as well as (f) the data / indicators it is under obligation to monitor and make public, in order to inform all the interested parties, with full transparency, reliability, consistency and continuity for the next few years.

Our principles
HEDNO is committed to adhering to the principles of responsible entrepreneurship and Sustainable Development:
• Social Responsibility
• Transparency and Integrity
• Compliance with international standards on health and safety
• Flexibility, endurance and adaptability
• Responding to the interests and aspirations of all interested parties
• Compliance with the relevant regulatory framework in force
• Respect for international rules on proper professional functioning and professional ethics
• Respect for Human Rights
• Protection of the Environment and Biodiversity
• Tackling the phenomenon of climate change
• Promoting innovation and research
• Integrating the principles of the Circular Economy

Stakeholders & key issues-opportunities and challenges
Communication and cooperation with interested parties is particularly important for HEDNO and is part of the Company's operation, so that it understands the effects of its activity and improves its performance taking into account the needs and expectations of all the parties it affects and is affected by.

HEDNO focuses its attention on issues related to the creation of long-term value for the Company but also more broadly for the economy, society and the environment where it operates. In order to identify the essential issues of Sustainable Development, on which the Company's strategy should focus for the coming years and which concern and affect stakeholders, a Materiality Analysis based on the three ESG pillars, Environment, Society and Governance (we request participation with a short anonymous questionnaire in the prioritization (based on the evaluation of stakeholders) of the relevant material issues on Sustainable Development for the company. This is carried out every 2-3 years, with the participation of representatives from all stakeholder groups and from all regions of the country. The process of defining substantive Sustainable Development issues is carried out (in accordance with Global Reporting Initiatives {GRI} Standards) in the light of the operational identification and assessment process for risks and opportunities.

The detailed presentation of the process as well as the substantive issues that arise are presented in the annual Sustainable Development Report that is published, which includes further analysis and evaluation of HEDNO's performance on these substantive issues, as well as the way in which it contributed effectively to the implementation of the national policy for the transition to a low-carbon economy.

HEDNO, in the framework of cooperation with the European Bank for Reconstruction and Development (EBRD), has also undertaken the implementation of an Environmental and Social Action Plan (ESAP), which includes a series of measures, policies and practices related to the environmental, social / labor and corporate governance of the Company.

 

C-G5 Business ethics policy

HEDNO S.A. has a Code of Conduct, which, in particular, in article 11 (on bribery issues) and, in particular, in articles 3, 8, 9,10, 16, 18 and 20 thereof (for issues of business ethics in general), contains regulations on anti-bribery issues and business ethics and conduct in general. HEDNO does not currently have independent-distinct policies-codes of business ethics or for the fight against bribery.

 

C-G6 Data security policy

HEDNO S.A. has a Data Security Policy
The main data protection standards it recognises and/or is bound by are:
• GDPR,
• NIS
• ISO 27001:2013 (The Information Technology and Digitisation Department) is already certified according to ISO 27001 from Dec 2019 until today)
• National Cyber Security Strategy (2020-2025)

 

A-G1 Business model

Our vision is to become a Distribution Network Operator that innovates, inspires, is socially responsible and operationally flawless and facilitates the energy transition.

Our objectives:

  • To ensure the economic, reliable and safe management of electricity for our customers, by providing high-quality service
  • To ensure the satisfaction of our employees, making us a desirable choice as an employer
  • To expand out strategic infrastructure aiming at a modern and resilient network
  • To facilitate the energy transition, decentralisation and digitalisation of the Greek energy market, by assuming a mediating role in the integrated market
  • To set standards commensurate with technological developments, which will shape new economic behaviours and increase our social responsibility
  • To act as a catalyst for progress for the Greek economy and society by creating added value for all Stakeholders.

Strategic pillars:

  1. Network development, resilience and model workforce
  2. Automated and smart network
  3. Superior quality customer experience
  4. Market facilitation and new Services

The Company has adopted all the modern principles of corporate governance as included in its published Code of Conduct.

 

A-G2 Business ethics violations

Employees to whom the Company has imposed disciplinary penalties regarding offences of corruption, abuse of power, embezzlement of money, theft, breach of trust, bribery, acceptance of bribery, fraud, forgery, false certifications or falsification of documents, use of a false certification and violation of official secrecy (number of employees) = 0

 

A-G3 ESG targets - Short-term targets associated with strategic ESG objectives
Environment (Ε) Short-term objectives Medium-term objectives Long-term objectives
  Implementation, in collaboration with the Network Department and a specialized Consultant, of the project for the provision of services for the design and development of Carbon Footprint Inventory Methodology of HEDNO. The aim of the project is to identify the sources of HEDNO’s greenhouse gas emissions, both direct (Scope 1) and indirect (Scope 2 & Scope 3), which may result indicatively from fuels, electricity consumption,  employee commuting, supply chain, fixed equipment and electricity losses in the Network, in order to calculate the Carbon Footprint and then adopt an integrated system for recording, calculating, monitoring and disclosure of the carbon footprint on an annual recurring basis in compliance with ISO 14064:2018. This project is expected to be completed within 12 months. Thus, 2021 has been chosen as the base year for the collection of the required data and the calculation of the carbon footprint.  – THE OBJECTIVE HAS BEEN ACHIEVED Environmental licensing of substations and warehouses in order to reduce their environmental footprint Energy retrofit of buildings housing HEDNO’s Departments (indicatively and on a case-by-case basis: LED lighting, heat pump, electric vehicle charging system, Building Management System-BMS, etc.)
  Design and Development of the Carbon Footprint Inventory System based on the ISO 14064-1 standard in order to validate and verify greenhouse gas emissions by an accredited external body.    
  Development of a System for Recording Environmental Incidents/environmental impacts that take place during the implementation of network projects.    
  Development and Implementation of an Environmental Management System in order to improve the environmental performance of HEDNO.    
  • Organization of educational workshops to raise staff awareness regarding environmental issues and the adaptation to climate change in collaboration with scientific personnel (climate change awareness campaigns - workshops)
• AN OBJECTIVE THAT HAS BEEN ACHIEVED WAS ADDED: An informative workshop was held to promote the environmental awareness and responsibility of the contractors of maintenance and construction network projects on Environmental Incidents and Adaptation to extreme weather events due to climate change.		 Participation in climate and energy research projects, co-funded by the EU (e.g., Horizon Europe Work Programme 2021-2028), to make use of modern tools, technologies, and methods (e.g., early warning systems) used to prevent climate risks and be prepared against the impact of climate change (e.g., extreme weather events). Distribution Networks’ upgrades with the aim of enhancing resilience and protecting the environment.  This action includes projects for upgrading MV overhead networks, by changing the Network traversing, replacing the overhead Network with an underground one, replacing the overhead network structures with more robust ones, increasing the number of poles, etc., as well as the construction of underground networks in settlements of special cultural or touristic importance and in city centers
  Participation in LIFE projects that are co-funded by the EU for the protection of biodiversity with a view to adopting new technologies and implementing interventions in locations that are vulnerable due to endangered species of wild fauna and flora.     
    Projects to upgrade the overhead Distribution Network in forest areas and Natura areas in order to improve the reliability of the Network and the protection of the flora and wild fauna (e.g., migratory birds). More specifically, these projects achieve: (i) the improvement of the forest landscape by limiting tree pruning and cutting activities, (ii) the release of woodlands that can be reforested, as well as (iii) the reduction of incidents of animal deaths due to electric shock on the overhead lines. These projects include: (i) replacement of the bare conductors of MV overhead networks with covered conductors or twisted cables, (ii) rearrangement of overhead Networks along the road network (where feasible), (iii) construction of underground parts of said Networks, and installation of insulating covers on the Network components that are installed within forest areas

Increase of installed capacity in selected HV/MV Substations (addition of new power transformers or replacement of existing ones with bigger ones) in order to remove technical restrictions and be able to free up electric ‘space’ for adding new RES units in the context of supporting the transition to climate neutrality by 2050, in line with European objectives.

 

Installation of energy storage systems for further promoting and efficiently using the RES.
    Establishing and monitoring of indicators for the quantification and evaluation of the resilience of Distribution Networks against climate change.  
    Use of electric fleet to promote eMobility  
      Increase the level of digitization of the Distribution Networks - Implementation and establishment of remote monitoring via telemetry, an activity that will be achieved with the gradual installation of smart meters to almost all Network users. Telemetry will contribute to energy savings, as smart meters will allow dynamic energy pricing (application of a multi-zone electricity tariff with different charges during the 24-hour period), an increase of RES penetration, as well as the promotion of the development of new flexibility services (e.g., smart charging).
      Procurement and installation of wooden poles impregnated with water-soluble preservatives instead of wooden poles impregnated with creosote (which has been recognized by the EU as a chemical agent that can cause environmental pollution).
SOCIETY (S)  Short-term objectives Medium-term objectives Long-term objectives
  Organization and implementation of staff well-being programmes to promote the psychosocial health of employees. Design and adoption of a Contractor Management System to improve Health and Safety, including (i) the Selection of contractors in an effective and transparent manner based on predetermined Health and Safety criteria (ii) Supporting contractors in the implementation of a Health and Safety system by monitoring and identifying weak points, as well as providing support/training regarding the assessment and monitoring of risks to which they are exposed for the work they perform in the Distribution Networks, incorporating the lessons learned and good practices in updated versions of the Plan (HSP) and the Health and Safety File (HSF) (iii) Conducting regular inspections of compliance with Health and Safety procedures (iv) Evaluation of the performance level of contractors in the implementation of projects - monitoring and statistical analysis of accidents of contractor's staff  
    Educational support of external contractors and private sector engineers regarding RES designs via targeted/specialized training programmes in the HEDNO Schools, which will be carried out by experienced technical staff of the Company.  
    Design and implementation of the “New Information System Serving Network Users” project (HERCULES), the subject of which will be the creation of a new, modern, integrated, centralized information system that will aim at the qualitative upgrade of the services provided to the staff, as well as the Network users (consumers, suppliers, producers, municipalities).  
Governance (G) Short-term objectives Medium-term objectives Long-term objectives
    Internal restructuring based on the Company’s strategic objectives and the Network Development Plan, in order to integrate sectors that will include issues of resilience and adjustment to climate change, management of Contractors, etc. Similarly, it is noted that the recently adopted (August 2022) Operating Regulation of HEDNO S.A. contains specific stipulations regarding ESG issues and in particular sustainable development (see in particular article 29 of the aforementioned HEDNO Operating Regulation) with a corresponding provision for the future adoption of more specific HEDNO Policies on these issues, policies which upon their adoption will be incorporated as Annexes to the Operating Regulation of HEDNO S.A.  

 

 

A-G4 Variable pay
% of variable pay= Amount of variable pay, in Euros 457,290/3,527,917 Total executive's remuneration, in Euros * 100 = 13%

Assumptions, hypotheses, limitations used for calculations

Variable pay (bonus) of the company’s executives divided by their total earnings.

A-G5 External assurance

Limited independent external assurance is provided for the following indicators:

Athens Stock Exchange ESG Reporting Guide Disclosures Description
C-E1 Direct emissions (Scope 1)
C-E2 Indirect emissions (Scope 2)
A-E3 Waste management
C-S1 Stakeholder engagement
C-S7 Collective bargaining agreements
C-G3 Material topics

 

SS-G1 Whistleblower policy

HEDNO has not adopted yet a policy and specific procedure on whistleblowing issues, taking into account that the national transposition legislation has not been adopted yet. It is noted that our company is launching the required actions for adopting the relevant policy and procedure, as well as any required relevant measure and action (e.g. electronic platform for receiving and managing requests).

In addition, it is also noted and stressed that basic principles, regulations (including the obligation of HEDNO S.A. employees to report a conduct that is unlawful, reprehensible or in general requiring further investigation) related to this issue, are included on the one hand in the full framework and procedure of disciplinary provisions of the PPC Staff Regulation which is applied proportionally by HEDNO S.A. in accordance with the company’s BoD Decision No. 139/2013, and on the other hand in provisions of the current Code of Conduct of HEDNO S.A. (see in particular articles 8, 9 and 17 thereof).

 

 

SS-G2 Critical risk management

There is currently no standardised risk management procedure and risk categories; data still in progress by the competent SOPTND branch.

 

 

SS-G3 Systemic risk management

HEDNO implements the procedures specified in the respective standards (ISO-31000:2018, ISO-31010:2019) on risk identification, assessment, analysis, evaluation and management by selecting the "Taxonomy" methodology for classification and the "Risk Register" methodology for recording and monitoring risks.