EU Taxonomy KPI Report
| Revenues | CAPEXt | OPEXt | |||||
|---|---|---|---|---|---|---|---|
| bill. CZK | % | bill. CZK | % | bill. CZK | % | ||
| A | Taxonomy-Eligible activities | 110,1 | 38% | 24,2 | 72% | 6,7 | 60% |
| A.1 | Environmentally sustainable activities (Taxonomy-aligned) | 97,1 | 34% | 21,9 | 65% | 5,8 | 53% |
| Aligned activities | 63,6 | 22% | 17,8 | 53% | 2,3 | 21% | |
| Aligned activities - transitional (nuclear) | 33,5 | 12% | 4,1 | 12% | 3,5 | 32% | |
| A.2 | Taxonomy-Eligible, but not aligned activities | 13,0 | 4% | 2,3 | 7% | 0,8 | 8% |
| B | Taxonomy-Noneligible activities | 178,4 | 62% | 9,4 | 28% | 4,4 | 40% |
| Noneligible - neutral activities | 141,4 | 49% | 4,3 | 13% | 0,5 | 5% | |
| Noneligible emission activities | 36,9 | 13% | 5,1 | 15% | 3,9 | 35% | |
| A+B | TOTAL | 288,5 | 100% | 33,6 | 100% | 11,1 | 100% |
| A.1/A | Ratio of aligned vs. eligible activities* | 88% | 91% | 87% | |||
Revenues
CAPEXt
OPEXt
| Revenues % | CAPEXt % | OPEXt % | ||
|---|---|---|---|---|
| Aligned activities | 22 | 53 | 21 | |
| Aligned acitivities - transitional (nuclear) | 12 | 12 | 32 | |
| Aligned activities - total | 34 | 65 | 53 | |
| Taxonomy-Eligible, but not aligned activities | 4 | 7 | 8 | |
| Eligible activities - total | 38 | 72 | 60 | |
| Noneligible - neutral activities | 49 | 13 | 5 | |
| Noneligible emission activities | 13 | 15 | 35 | |
| Noneligible activities - total | 62 | 28 | 40 | |
CEZ Group reports our EU taxonomy key performance indicators in line with the Taxonomy Regulation and associated delegated acts. CEZ Group follows the Commission Notice from December 2022 and discloses full taxonomy KPIs for year 2022.
For the 2022 fiscal year, we report on two environmental objectives: climate change mitigation (CCM) and climate change adaptation (CCA). As our activities in the energy sector and energy services are primarily oriented towards substantial contribution to mitigation, we do not disclose standalone CCA disclosure. We do not perform material activity with contribution to adaptation and the list of CCA eligible activities would mirror CCM eligibility disclosure without any additional value.
CEZ Group discloses eligibility and alignment of own economic activities in line with legal requirements. For assessment, the existing technical screening criteria as of 1st January 2023 are applied, meaning both natural gas and nuclear energy criteria are used. The adopted changes in taxonomy classification in 2022 allowed us to include natural gas and nuclear energy activities as eligible activities. This change had a significant impact on our key performance indicators (KPIs) since nuclear energy is a large part of our generation portfolio. Natural gas facilities are significant in our generation portfolio and investment plan.
KPI disclosures include material activities. Eligible activities with low materiality are grouped under – Energy Services and Other Activities. Each activity included in our report (material or nonmaterial) has been assessed against EU taxonomy technical screening criteria.
Technical screening criteria consist of Substantial Contribution Criteria for climate change mitigation objective and Do No Significant Harm criteria for other five environmental objectives. The alignment is assessed on the level of a single economic activity or projects of a given company. The assessment of climate risks and social safeguards has a group-level importance and is managed on CEZ Group level.
Given the level of uncertainty in some definitions and interpretations of each screening criterion, our assessment is based on the best-effort-basis. The final assessment is based on our current understanding of the criteria and in-house ESG expertise. Our assessment is complemented by consultations with regulatory authorities, green bond SPOs from ESG rating agencies in 2021 and 2022, and with sectoral guidelines issued within the same timeline for various activities and sectors in EU. Additionally, the Commission draft notice published in December 2022 provided additional clarity and supported our assumptions and confirmed our approach as appropriate.
KPI disclosure uses only Group data without the use of any external services or third-party estimates, in line with requirements for a nonfinancial company. The taxonomy disclosure follows international accounting standards (IFRS) used for Consolidated Financial Statements in the Annual Report, which are assessed by an independent auditor.
In the year 2022, CEZ Group realized 34% of its total operating revenues from activities that are sustainable and taxonomy-aligned. 65% of our investments were taxonomy-aligned and 53 % of OPEX were spend on sustainable activities. CEZ Group main sustainable activities are electricity distribution and energy generation from nuclear sources. These results are in line with declared decarbonization goals in VISION 2030 – Clean Energy of Tomorrow as well as our decarbonization trajectory for year 2030 validated by SBTi.
CEZ Group share of taxonomy-aligned revenues to eligible revenues is 88 %. This high ratio reflects the focus of our other economic activities, which have a significant contribution to the goal of climate change mitigation (mitigation).
CEZ Group strives for a high level of investment sustainability in line with our declared decarbonization goals. As part of our medium-term investment plan, we plan for 82 % alignment with the EU taxonomy. Of which we will make 18 % in transitional sustainable activities involving nuclear and gas power. In all cases, we design projects to meet the applicable environmental sustainability criteria of the taxonomy.
CEZ Group defines KPI Turnover as total operating revenues in line with IFRS. The denominator is based on the audited result of operating revenues from Consolidated Financial Statements in line with IFRS (2022 Annual Financial Report). These are accounting units of Sales of electricity, heat, gas and coal, Sales of services and other revenues, and Other operating income. Operational revenues from electricity generation by technology include revenues linked to generation, without trading operations and without revenues from provided ancillary services.
The share of CEZ Group revenues from taxonomy-aligned activities is 33.7%. These are predominantly revenues from distribution of electricity (12.5%) and nuclear power generation (11.6%). Other significant aligned activities include installation of energy efficiency equipment (2.8%), installation of heat pumps and rooftop photovoltaics in buildings (2%), hydro energy (1.9%), and district heating (1%).
Eligible, not aligned activities include mainly energy generation from natural gas which does not comply with screening requirements.
The KPI includes all capital expenditures which were realized in 2022 and disclosed in line with IFRS (excluding nuclear fuel procurement), and financial investments.
CEZ Group structure of investment is oriented mainly towards electricity distribution modernization and renewal (enabling category). Investment into transitional activities included mainly nuclear energy investments in existing locations.
CEZ Group defines Taxonomy operational expenses KPI as selected operational expenses in consolidated companies linked to equipment care, meaning maintenance and repair of facility and equipment.
KPI OPEXt includes the selected operating expenses of CEZ Group in line with a narrow KPI definition requirement by taxonomy disclosures regulation. KPI OPEXt is based on operational expenses on standardized accounts of Equipment Care (maintenance and repair) and on company values for R&D operational expenses which are linked to performed business activities.
Taxonomy-aligned activities reach a 52.6% share of KPI OPEXt. The result is predominantly based on maintenance and repair expenses in aligned nuclear facilities and electricity distribution infrastructure.
The noneligible category includes both activities with an environmental impact and activities without any environmental impact, thus outside the scope of taxonomy. We separate noneligible activities into two categories – neutral and emission activities.
The largest share of noneligible revenues is represented by neutral activities. These activities have low or no impact on the environment and are outside the scope of taxonomy. These activities are trading and selling commodities (electricity, gas), distribution of natural gas, manufacturing of components and servicing for energy technologies, ICT and telecommunication services, facility management, and other services. We also assess the operation of research nuclear reactors of CV Řež as a noneligible neutral activity, as it is not included in the EU taxonomy classification.
Emission activities are activities considered as noneligible with a direct impact on the environment. Emission activities include coal mining activities and generation of electricity and heat from coal sources. In 2022, the share of noneligible emission activities in total CEZ Group revenues was 13%. The share will gradually decline following our commitment of a planned coal phase-out in line with the SBTi.
Investments to coal energy are oriented towards modernization, maintenance, and ecologization of their operation. These investments are necessary for energy security and adequate heat supply until low-emission and zero-emission sources are in operation. Capex in mining activities is oriented towards retrofitting and modernization of mining and processing technology in line with development plans for current mining locations. Opex in noneligible activities is mainly connected to repair and maintenance of coal power plants and maintenance of mining equipment.