Governance

CEZ Group is committed to transparent and effective sustainability and ESG governance. In July 2021, we established an ESG Office led by the Chief Sustainability Officer (CSO), Kateřina Bohuslavová. The CSO reports directly to the CEO, Daniel Beneš. They are both sustainability leaders in CEZ Group. ESG Office is responsible for everyday sustainability agenda, non-financial reporting, coordination of ESG initiatives, and management of ESG working groups.

ESG Strategic Steering Committee (SSC) is the highest level of ESG management. The rights and responsibilities of the SSC are set out in the ESG Strategic Steering Committee Charter. The SSC determines CEZ Group’s sustainability strategy and monitors the progress of ESG initiatives and working groups. The SSC also monitors the fulfillment of targets set in VISION 2030—Clean Energy of Tomorrow. The ESG Sponsor and the Chairman of the SSC is Daniel Beneš, CEO and Chairman of the Board of Directors. The ESG Executive Sponsor and the Vice-Chairwoman of the SSC is the CSO, Kateřina Bohuslavová. Other members of the SSC are the members of the Board of Directors, the Strategy Director, the Communication and Marketing Director, the Legal Affairs Director, and the Audit and Compliance Director.

ESG Executive Steering Committee (ESC) is the managerial and operational level of governance and coordination of the ESG agenda. The Chairwoman of the ESC is Kateřina Bohuslavová, CSO. Its members are representatives of all Divisions and key departments in terms of ESG management.

ESG Initiatives are projects led by teams managed within one division to implement ESG objectives approved by the SSC across the CEZ Group. The ESG initiatives are headed by managers appointed by the initiative sponsors.

ESG Working Groups are cross-divisional management teams that implement ESG objectives approved by the SSC across the CEZ Group. The ESG Working Groups are headed by leaders appointed by the Chairwoman of the ESC.

CEZ Group is committed to the highest quality of sustainable management. Each member of the Board of Directors, the CSO, and other top management are enrolled in an ESG-related certified educational program. The programs will be completed in the summer of 2022 and include higher education institutions in the United States of America and Czechia.

We aim to disclose governance, strategy, risk management, and metrics and targets in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We review the latest scientific evidence and evaluate climate scenarios to build our strategic resilience in the short, middle, and long terms. To address any blind spots, we cooperate with an independent third-party consultancy – S&P Global.

Climate risk analysis has a high priority. It will be completed and published in a separate TCFD report in the second half of 2022.

We believe that providing equal opportunities and promoting diversity and inclusion is a natural way of doing business innovatively and sustainably. We reject discrimination of any kind. All our actions and activities are regularly monitored, evaluated, and transparently communicated. CEZ Group has had a long history of promoting diversity.

In 2014, we were one of the first signatories of the European Diversity Charter in Czechia. Following the Diversity Charter, we are committed to maintaining a workplace environment open to all, irrespective of their gender, race, skin color, nationality, ethnicity, religion, disability, age, sexual orientation, political affiliation, or trade union membership.

In April, we joined the Pride Business Forum Memorandum and committed to creating an open environment for LGBT+ employees.

CEZ Group supports women at work and their career advancement in multiple ways. We offer flexible working hours, company kindergartens, and day camps for children, and we maintain contact with employees on parental leave and offer them support when they return to work. They can keep in touch with the company and take advantage of workshops and courses while on parental leave and after return to work.

We determine remuneration respecting objective and gender-neutral criteria. We respect and strive to comply with the principle of equal pay and equal working conditions for equal or equivalent work.

CEZ Group’s values are the basis of the corporate culture on which we have grown over the years. The values represent shared beliefs and desired conduct expected of all our employees. Embedded in key governing policies, these values are naturally integrated into the company.

CEZ Group management promotes ethical values in all business activities and conduct. Management clearly states its objective in two primary documents: the Code of Conduct Policy (Code of Conduct) and the Compliance Management System Policy.

Approved in 2019, the Compliance Management System (CMS) Policy covers the topics of corporate ethics, corruption prevention, criminal risks, competition rules, etc. Given its broad scope, CMS Policy has sought to create a unified and effective tool for managing risks of non-compliance and rules of behavior.

Our ethical rules include cooperation with suppliers and business partners. The rules translate specific requirements into the Commitment to Ethical Conduct, which forms a part of contracts with suppliers and is publicly available on the company’s website. We monitor compliance with the rules set out in the Commitment to Ethical Conduct through compliance checks. Naturally, a breach of the rules may lead to the termination of the business relationship.

In 2021, the departments of Procurement and Compliance met the requirements for the certification of the anti-corruption management system according to ISO 37001:2016. We were the first company listed on the Prague Stock Exchange and the first energy company in Central Europe to meet the international standard.

Direct or indirect discrimination and harassment have no place in our company culture. The nondiscrimination principles are set out in the Code of Conduct and the Ethical Conduct Policy. Practical anti-discrimination measures, procedures, and guidelines are in place to ensure compliance with these principles. The principles aim to create a culture of cooperation based on diversity, mutual respect, and protection of vulnerable groups. We strongly advocate diversity, equal opportunities, and a respectful working environment.

Training on ethics and anti-bribery rules is mandatory for all employees during on-boarding and at least once a year. The 45minute training session on preventing corruption and conflicts of interest reflects the complexity of this topic.

The Whistleblowing Hotline is an effective CMS tool to report violations of the Code of Conduct or concerns about suspected misconduct. The Hotline is designed to ensure the anonymity of all whistleblowers (i.e., employees, customers, business partners, or third parties/public) and to protect them from sanctions, discrimination, and other retaliation.

Being the largest energy group in Czechia, compliance with anti-competitive and anti-trust rules is central to our business conduct. Hence, prevention of anti-competitive behavior and compliance with related legislation take priority on the CMS agenda.

Regular and systematic internal audits and compliance checks are performed to verify compliance with all the above-specified rules. They assure the governing bodies that the management and control systems are operational and that significant risks are covered. Audits are performed by the Audit and Compliance Department, whose independence and efficiency come under the scrutiny of the ČEZ, a. s., Audit Committee.

Tenders follow applicable law, internal procurement policy, and procedures. Implementing tenders transparently while ensuring impartiality, efficiency, and optimal contract conditions is the main goal of purchasing departments. As part of the tender, we review many parameters (e.g., financial, ISO credentials, and applicant’s business in high-risk countries), including reputational risks, and law violations. We enter into relationships only with suppliers willing to honor obligations specified in the Commitment to Ethical Conduct. Depending on the nature and purpose of the procurement, we consider the benefits of innovation when setting conditions, evaluating tenders, and selecting suppliers.

Responsible and transparent tax governance is one way to honor our commitments to society. The Group’s approach to tax management is incorporated in internal policies and guidelines, which describe a general framework and details of responsibilities related to the tax agenda.

Information security is one of the major aspects of our operations. We go to great lengths to meet the highest security standards and manage the risks involved. Given CEZ Group’s strategic goal to digitize 100 % of key customer processes by 2025, we see compliance with strict data protection standards as an imperative.

We manage critical information infrastructure and information systems of essential services in line with the Cyber Security Act No. 181/2014 Coll. We check compliance with the Act annually by an internal audit. We also responsibly secure the computer systems used for nuclear safety management pursuant to the Atomic Act No. 263/2016 Coll.

Raising awareness and understanding of cyber security is a key part of our employee training. Therefore, regular training of CEZ Group employees takes place every two years. The goal is to teach employees how to develop good internet habits, how to recognize malicious emails, and how to use mobile phones and online services safely.

We are aware of our role in society and the responsibility this role inevitably entails. Our management emphasizes ethical principles in all employee and supply chain conduct. Through sound business ethics and relations, we strive to pave the way for trust with both shareholders and stakeholders.

• Safety and environmental protection policy
• Diversity policy
• Diversity charter policy
• Community relations policy
• Memorandum pride business forum

In accordance with the CEZ Group's interest, management systems are being introduced to support corporate management. These management systems are certified by accredited certification bodies or verified by independent bodies designated for this purpose, in accordance with the expectations of stakeholders. Certification of individual companies within the CEZ Group promotes transparency and communication to the general public and other stakeholders.

• Environmental Management System
• Information Security Management System Certification
  
• Anti-Bribery Management System

The Sustainability Report is prepared in line with globally recognized reporting frameworks to meet the highest transparency standards. We apply the Core option of Global Reporting Initiative (GRI) Standards 2020, the Sustainability Accounting Standards Board (SASB) standard for electric utilities and power generators, and the World Economic Forum (WEF) metrics and disclosures. We report Greenhouse Gas (GHG) emissions in line with independently verified emissions under the EU Emissions Trading System (EU ETS) for a substantial part of Scope 1. We use GHG Protocol for the remaining part of Scope 1, Scope 2, and Scope 3.