Public affairs

Stakeholders, public affairs and transparency

Participation in the public life of the communities in which Iberdrola has a presence is an essential facet of its activities. Company engagement with the communities and, at the same time, conveying its positions to the various Stakeholders are two of the objectives of Iberdrola's public activities.

Iberdrola is regularly present in public and private associations, participates in public consultation processes, and maintains contacts with public administrations, among other activities. This participation is governed by compliance with the laws of each country, as well as with Iberdrola's internal policies and regulations, including, among others:

In such activities, Iberdrola assumes and promotes the basic principles of legality, loyalty, trust, professionalism, cooperation, reciprocity and good faith.

In line with its strategy, one of the most significant issues that Iberdrola addresses in its public activities is its role as a driver of an energy transition based on a safe, clean, and competitive system that contributes to a more sustainable future. In this regard, Iberdrola promotes the approval of objectives and frameworks for climate policies in line with the Paris Agreement from an ambitious perspective that creates value for society as a whole.

Our statement

Transparency

In line with the Iberdrola group's principle of transparency, below is a list of the participation of Iberdrola and the companies of the group in national and international associations and public consultation processes, as well as contacts with regulatory entities and financial contributions to political parties outside of Spanish territory.

This section does not contain information relating to Avangrid in compliance with United States of America legislation, so please refer to Avangrid's corporate website: https://www.avangrid.com/es/public-advocacy

Participation in national and international associations

Iberdrola participates, both at the global level and in the countries in which it has a presence, in various entities and associations defending its business interests and those of its main Stakeholders.

As indicated above, the company decides on its participation in these organisations taking into account consistency with the Corporate Purpose and Values, among which the energy transition and the fight against climate change are of paramount importance.

In 2023, the companies that make up the Iberdrola Group participated in 673 organisations, contributing to their support through the payment of membership fees and other items.

Below is a graph describing the distribution of financial contributions to the associations to which it belonged in 2023:

This chart does not take into account organisations of which Avangrid is a member due to the legal restrictions mentioned above.

A list of the main national and international associations to which Iberdrola and the companies of its Group belonged in 2023 can be found in the Statement of non-financial information.

In this area, the Group carries out an annual analysis of the degree of alignment of these organisations with the company's Statement of commitment to sustainable development, respect for and defence of Human Rights and the fight against climate change.

The Group's professionals responsible for the engagement with each association carry out the alignment analysis, taking into account the extent to which the positions and objectives pursued by these organisations and the activities they carry out are consistent with the aforementioned frameworks.

Both the publicly available information on the associations and the knowledge acquired by Iberdrola through participation in their committees and/or working groups are analysed, considering elements such as the real support for the achievement of a net zero emissions target in 2050, the deployment of renewable technologies according to the pace neccesary to achieve this emission reduction and the application of the just transition principles on this path.

As a result of this assessment, the positioning of the organisations is classified as aligned with, neutral or non-aligned to that maintained by the company in this area, and serves as a basis for decision-making regarding Iberdrola's future participation therein.

It should be noted that this alignment analysis excludes associations in which Avangrid participates as a result of the aforementioned legal restrictions. However, Avangrid's Code of Business Conduct and Ethics includes guidance on participation in political and civic activities, and the company has adopted its Political Education Protocol to assist employees in this area and to ensure that such activities are aligned with the company's stated policies and purpose.

The result of the analysis conducted in 2023 shows that 72%¹ of the organisations in which Iberdrola participates are aligned with the company's Statement of commitment to sustainable development, respect for and defence of Human Rights and the fight against climate change. The remaining cases (28%) correspond to organisations whose alignment has been classified as neutral.

In these cases, in which there is not complete alignment of the organisations with Iberdrola's position, the company continuously evaluates the suitability of its participation therein in order to defend its thesis and, thus, its interests and those of its Stakeholders. Iberdrola also works actively within them to promote its defence of the Paris Agreement and the energy transition.

In 2023, no organisation in which Iberdrola participates⁽¹⁾ has been identified that has been assessed as being non-aligned to the Statement.

(1) This calculation does not include the associations in which the listed subsidiary of the Iberdrola Group in the United States (Avangrid) participates.

Detailed analysis for key organizations and management of misalignment cases

Based on the global assessment indicated above, Iberdrola delves into a specific analysis of a group of organisations that are particularly relevant for their leadership, influence and contribution to the main processes of developing climate policies and promoting the energy transition.

This selection includes organizations that meet, totally or partially, different relevant criteria, such as their active participation in the global climate agenda or in the elaboration of the main regulatory packages in the field of energy transition, the presence of global actors in their membership, the leadership exhibited in the international summits on climate change (COPs), the geographical reach of their campaigns and the impact they have on governments and the media.

Taking into account the above, in 2023 Iberdrola carried out a specific analysis of 64 organizations, including industrial and sectoral associations, alliances, foundations, think tanks, NGOs and other international organizations.

For each of them, this extended analysis specifically details:

the objectives they pursue,
the main advocacy activities in which they have been involved, as well as
the specific role played by Iberdrola in its governing bodies and in the execution of the main activities they carry out.

The analysis also includes an assessment of the degree of alignment of each organization with the practical implementation of the Paris Agreement and the promotion of the energy transition. To this end, Iberdrola has created an objective and scientifically based analysis methodology that considers elements such as the support granted by the organization to:

the science of climate change,
the achievement of a Net Zero emissions target by 2050,
interim commitments (to 2030) consistent with the 1.5°C target;
and the deployment of green technologies and just transition.

Finally, the conclusions of the analysis also allow us to identify the options available to the company to redirect possible episodes of misalignment between the activities of the organization and the elements indicated above.

For more information on the organizations subject to this detailed alignment analysis click on the following link [PDF].
For more information on the methodology used for this analysis and the framework for managing possible episodes of misalignment click on the following link [PDF].

Participation in public consultation processes

The company also actively participates in the public consultations carried out by regulatory entities to obtain the opinion of the agents involved on regulatory initiatives and national and European energy policies. In addition, it participates in the official processes for processing regulations and in monitoring their application. In all of these processes, Iberdrola states its positions in defence of decarbonisation and the energy transition in legitimate defence of its interests and other Stakeholders.

In some of the markets in which the Group is present, these contributions to the legislative process are recorded in public transparency registers that make it possible to know the objectives of each process, as well as the specific contribution made by each organisation.

The main public consultation processes in which the companies of the Iberdrola Group participated in 2023 are detailed below.

European Institutions
- Revision of the EU Electricity Market Design (EU EMD).
- Verification of market needs in relation to the ETS Innovation Fund and revision of its legal framework.
- Reducing carbon emissions: review of emission standards for heavy-duty vehicles.
- Electricity market: reform of the EU electricity market arrangements.
- Net Zero Industry Act (NZIA).
- 2040 climate target.
- Hydrogen bank: Pilot auction for renewable hydrogen production.
- Sustainable investment - EU environmental taxonomy.
- Heat Pump Action Plan.
- Verification of the appropriateness of the application of the Polluter-Pays Principle (PPP) to the environment.
- Industrial carbon management - Carbon Capture and Storage (CCUS) deployment.
- Monitoring of Foreign Direct Investment (FDI): assessment and review of the EU framework.
- Energy Union and Climate Action - Review report on the Governance Regulation.
- EU Emissions Trading System (EU ETS) - revised rules.
- Network Code on Requirements for Grid Connection of Generators.
- Network Code on Demand Connection.
- Consultation on the Spanish market reform plan (Capacity Market).
- EU Emissions Trading System (EU ETS): update of free allocation rules.
- European Resource Adequacy Assessment 2023.
*In its response to these consultations, Iberdrola always authorises their public accessibility. All of them are available through the European Transparency Register or the websites of other European institutions calling for consultation".
Spain
Autonomous Communities (administrative regions in Spain):
- Environmental taxes on the operation of wind and photovoltaic farms in the Autonomous Community of Aragon.
- Galician Climate Law.
- Promotion of the social and economic benefits of projects using Galicia's natural resources.
- Energy Transition and Climate Change Law of the Basque Country.
- Energy, Climate and Air Strategy of the Comunidad de Madrid - Horizon 2030.
- Authorisation, verification and inspection procedures for high-voltage electricity installations in the Community of Madrid.
Spain’s National Markets and Competition Commission (CNMC):
- Electricity system operating processes to adapt exceptional support measures between electricity systems.
- Difficulties in deploying renewable energy infrastructure at the local level.
- Criteria for calculating the average final price of energy in the electricity market.
- Methodology and conditions for accessing and connecting to the electricity networks of electricity demand facilities.
- Adjustment to be made to the annual remuneration of electricity transmission and distribution companies for the use of fibre optics.
- Electrical operating procedure on active demand response service.
- Calculation of the regulatory account balance of the electricity system operator at the end of 2022.
- Charging infrastructures for electric vehicles (EV).
- Forward contracts.
- Adaptation of electrical operating procedures (OPs).
- Regulatory demonstration project on voltage control of electricity demand.
- Granting of exemptions from European connection requirements.
- Establishment of the values of the Access Tolls to the Electricity Transmission and Distribution Networks to be applied as from 1 January 2024.
- New formats on self-consumption and replenishment.
- Access and Demand Connection.
- Circular 3/2020, on the methodology for electricity network tolls.
- 2020 Distributions Remuneration.
- Modification of the conditions relating to balancing and OPs for the participation of the Spanish peninsular electricity system in the European balancing platforms MARI and PICASSO.
- Determination of generation access capacity to the transmission and distribution networks.
- Modification of the market operating rules and OPs 3.1, 3.2 and 14.4 for implementing European intraday auctions.
Government:
- Access to state roads to speed up the processing of charging points permits.
- Supply conditions and independent aggregator.
- Information on Sustainability.
- Development of renewable energy communities and citizen energy communities.
- Regulation of the Consumer Arbitration System.
- Catalogue of standardised energy efficiency measures.
- Regulatory bases for the granting of aid to innovative energy storage projects within the framework of the PRTR and Resolution for the first call for proposals.
- Granting of access capacity for synchronous renewable electricity generation modules at just transition junctions.
- Tender for the concession of evacuation access capacity at the Lancha 220 kV just transition junction.
- Update of the National Integrated Energy and Climate Plan (PNIEC) 2023 2030.
- Possible tender for a technical assistance contract related to line C of the Industrial Decarbonisation PERTE.
- Promotion mechanism for biofuels and other renewable fuels.
- Procedure and requirements applicable to the granting of evacuation access capacity to the electricity transmission network for synchronous electricity generation modules from renewable sources at the Garoña 220 kV, Guardo 220 kV, Lada 400 kV, Mudéjar 400 kV and La Robla 400 kV just transition junction.
- Approval of a new ITC BT-53 of the REBT and modification of the Regulation and other ITCs, as well as ITC RAT-09 of the Regulation on technical conditions and safety guarantees in high-voltage electricity installations.
- Future amendment of Law 1/2005 transposing the EU Emissions Trading System (EU ETS).
- Modification of the winter action plan for the operation of the gas system.
- Determining the Value of Lost Load (VoLL) and the reliability standard (RS).
- Application for free allocation 2026 2030 and exclusion of installations from 2026.
- Call for the competitive concurrence procedure for the granting of the favourable compatibility resolution for the purposes of recognition of the additional remuneration regime for NPT electricity systems.
- Methodology for updating the remuneration for operating standard installations.
- Establishment of the conditions for the provision of the mandatory market maker service in the natural gas sector.
- Modification of specific aspects of the Electricity Transmission Network Development Plan 2021-2026.
- Contribution obligations to the National Energy Efficiency Fund in 2024.
- Electricity charges by 2024.
- Granting of access capacity to the electricity grid at the Lancha 220 kV junction.
- Re-establishment of the National Energy Commission.
- Regulation of electricity production in offshore facilities.
- Amendment of the General Regulation of Coasts.
- Sustainable Consumption Act.
- Economic Regime for Renewable Energies (REER).
- Calls for proposals grants for singular projects for biogas and biomethane installations.
- Calls for proposals grants for Renewable Value Chain projects.
- Calls for proposals for grants for renewable energy circular economy projects.
- Calls for proposals for grants for energy efficiency in the industrial sector.
- Calls for proposals grants for projects in Hydrogen Clusters or Valleys.
- Aid for singular renewable energy projects.
- Regulation of the Carbon Fund for a Sustainable Economy.
- Incentive programme for unique pilot projects in energy communities.
- Regulation of the Statute of Electro-intensive Consumers.
Operador del Mercado Ibérico de Energía (OMIE) (Iberian Energy Market Operator):
- Adaptation of the Operating Rules of the Daily and Intraday Electricity Markets to the new European intraday auctions (IDA).
Red Eléctrica (REE):
- Operating procedures for the Active Demand Response Service (ADRS).
- Operating procedure for "Autonomous start-up service".
- ISP 15 operating procedures and Self-consumption.
- Modification of the Balance Sheet Conditions and the OPs for participation in the European platforms MARI and PICASSO.
* The consultation and public participation procedures are available through the websites of the organisations that have launched them. In Spain: www.miteco.gob.es and www.cnmc.es
United Kingdom
Renewable Energy and Sustainability:
- The design of the Contracts for Difference investment process over time.
- Permitted development rights for renewable energy facilities.
- Energy Strategy and Just Transition Plan. Net Zero sector skills.
- Longer-term market reform through a review of the electricity market arrangements.
- Review of renewable energy targets in Wales.
- Longer-term approach towards carbon pricing.
- Strategic Framework for biodiversity consultation.
Retail Market Regulation and Policies:
- Consultations on the price cap and debt-related costs.
- Changes in the EBIT margin methodology in the price cap.
- Review on involuntary PPM installations.
Consumer Protection:
- Consumer protection standards and policy options.
- Review of guaranteed standards & performance for switching supplier.
Infrastructure and Networks:
- Longer-term reform of the Capacity Market.
- Longer term reform through a review of electricity market arrangements.
- Consultations on the regulation of offshore hybrid assets.
- Proposals for the regulation of heat networks.
- Clean Heat Market Mechanism.
- Reforms in the process of electricity connections.
* The consultation and public participation procedures are available through the websites of the launching organisations. In the UK: www.gov.scot, www.ofgem.gov.uk and www.gov.uk
Brazil
Neoenergia has participated in several public consultations in 2023 with various agencies and bodies involved:
- ANEEL (Agencia Nacional de Energía Eléctrica [National Electricity Agency]): Updates on access applications, operation and maintenance tariffs, and the consideration of energy storage systems as agents.
- ARPE (Agencia Regional de Pernambuco [Regional Agency of Pernambuco]): Neoenergia contributed to defining specific tariffs for the operation and maintenance of gas distribution facilities.
- ONS (Operador Nacional do Sistema Eléctrico [National Operator of the Electrical Brazilian System]): Neoenergia has supported the obligation of adequate financial guarantees when entering into CUST contracts (Contratos de Uso do Sistema de Transmissão [Transmission System Use Contracts]).
- MME (Ministerio de Minas e Energía [Ministry of Mines and Energy]): Neoenergia has prioritised the security and resilience of the electricity system in emergency situations and has promoted the voluntary participation of thermal plants in mechanisms to reduce inflexible generation.
* The consultation and public participation procedures are available through the websites of the organisations that have launched them. In Brazil: Ministério de Minas e Energia
Mexico
Iberdrola Mexico has participated in public consultation processes during the year related to:
- Emissions Trading System.
- Electromobility Regulation.
United States

Information about Avangrid is available on its corporate website.

Contacts with public bodies

Iberdrola maintains regular contact with public bodies in order to convey its views and defend its business interests and those of its shareholders and customers. These contacts take various forms, ranging from face-to-face meetings with representatives of public administrations to the signing of agreements for cooperation and participation in initiatives and projects of common interest.

The most significant milestones in Iberdrola's activity in 2023 and early 2024 in this area are set out below:

European institutions
Company representatives held meetings with various areas of the European institutions responsible for energy, climate, internal market and environmental issues. In particular, the meetings focused on the following issues:
- 2040 climate target.
- Competitiveness and the single market.
- Development of transmission and distribution infrastructure.
- Transition to clean energy.
- Renewable energy sources and auction design.
- Implementation of Fit-for-55 legislation.
- Implementation of the REPowerEU plan.
- Renewable Hydrogen.
- Energy storage.
- Innovation in clean technologies.
- Development of grids and electrification.
- Electricity market design.
- Skills.
Spain
In 2023, relations with state public administrations involved contacts with the ministries related to the sector and their technical departments, especially the Ministry for Ecological Transition and the Demographic Challenge (MITECO). Likewise, the competent energy regulator (Comisión Nacional de los Mercados y la Competencia - CNMC) and the Institute for the Diversification and Saving of Energy (IDAE) were agents with whom the company interacted and collaborated closely throughout the year. As in other markets, 2023 was a year of great complexity in the energy sector, which led to strong regulatory activity.

In this context, the main contacts with the bodies previously mentioned focused on issues such as the following:
- Electricity market reform and European standardisation of measures during crises.
- Setting European environmental objectives.
- Long-term storage and capacity mechanisms.
- Environmental tax reform, based on the Polluter-Pays Principle (PPP), reducing the tax burden on electricity.
- Methodology for financing the Bono Social.
- Accelerating renewables deployment.
- Improving the remuneration framework for networks to encourage investment and take advantage of the industrialisation opportunities associated with decarbonisation and the energy transition.
- Next Generation Programme funds.
- Access to the demand network for industrial electrification and new industries that can enjoy the competitive advantage in energy prices associated with the energy transition process in Spain.
- Promotion of electric mobility and decarbonisation of buildings.
- Impact on the levy paid by nuclear power plants for future dismantling and radioactive waste management costs due to the revision of the 7th General Radioactive Waste Plan and the decision to cancel the project for the Centralised Temporary Waste Storage Facility at Villar de Cañas.
The company's relationship with regional and local institutions focused on areas such as the following:
- Energy planning, especially with regard to the deployment of renewable technologies and grid development.
- Authorisation processes for renewable installations, charging points and other infrastructures.
- Regional climate change strategies.
- Development of decarbonisation of buildings and transport.
United Kingdom
Scottish Power makes frequent contacts at corporate or business level with UK public institutions at national, regional or local level. At the national level, the company maintained ongoing relations with various ministries, the energy regulator (Ofgem) and other public servants.

The interactions carried out, in the context of a time of great complexity in the energy sector, involved issues such as the following:
- Ongoing emphasis on energy security.
- Energy price caps and rising energy bills and proposals for short- and long-term relief.
- Reform of capital allowances regime, making “full expensing” permanent.
- Acceleration in the deployment of renewable energies and the transmission network.
- Need for agile regulation to support the network investment process.
- Acceleration in the planning of all infrastructure to support decarbonisation targets.
- Review of electricity market agreements.
- Energy efficiency.
- Green hydrogen policy.
In addition, ScottishPower has interacted with representatives of regional and local public administrations. The main issues addressed throughout 2023 and 2024 were as follows:
- Planning related to renewable energy deployment and grid development.
- Decarbonisation goals, covering heat, transport, industry, green hydrogen and net zero emission targets.
- Proposals for a Scottish Heat in Buildings Bill ScotWind programme enabling wind developers to apply for offshore land use rights to plan and construct facilities in Scottish waters.
- Thermal and energy efficiency policies and programmes. Environmental permitting and regulation.
- Increasing importance on biodiversity and circular economy.
Brazil
Throughout 2023, Neoenergia has participated in various institutional activities that have involved contact with members of the federal and national public administrations, the national operator of the electricity sector (ONS) and the national electricity agency.

The main issues discussed in these meetings were:
- ANEEL and ONS: Neoenergia has interacted with these agencies to optimise the use of the transmission system and strengthen the regulation of renewable sources. It has also contributed to the regulatory agenda to include storage systems.
- Senado Federal: Neoenergia has monitored bills on green hydrogen and the regulatory framework for offshore wind energy, actively participating in the discussion and proposing amendments.
- Câmara dos Deputados: Neoenergia has closely followed bills on renewable energy and tariff reduction, ensuring the inclusion of coal-fired power plants in auctions or tenders to secure electricity generation capacity.
- Carbon Regulatory Framework: Neoenergia has participated in defining emission limits and creating the Brazilian Greenhouse Gas Emissions Trading System (SBCE).
Mexico

Iberdrola Mexico has not maintained this type of contact during the year.
United States

Information about Avangrid is available on its corporate website.

Financial contributions to political parties

Iberdrola is a politically neutral company.

In Spain, contributions to political parties are prohibited by the Code of Ethics.

In the financial year 2023, none of the group companies, with the exception of the United Kingdom, the United States and Australia, contributed to the financing of political parties.

In the Non-Financial Information Statement of the company more information could be found at this respect.

Coordination of climate action at the company

Iberdrola has an internal climate change working group that ensures the coordination and exchange of information regarding the company's climate action. All jurisdictions and relevant corporate areas, including communication, legal services, ESG, investor relations, regulation, etc., participate in this group. The group reports on the main milestones and progress relating to the global climate agenda as well as those relating to the main countries and areas (European Union) of interest to Iberdrola. It also sets out the lines of action followed and the strategies adopted for Iberdrola's participation in the main conversations, campaigns, high-level and technical forums, as well as in public consultation processes in the area of climate action.

The climate change working group is a very useful tool for coordinating positions and actions internally, as well as for sharing and exchanging relevant information regarding climate action to be taken into account by the various areas and jurisdictions. This effort to coordinate and share information makes it possible to analyse the degree of alignment of the Company's actions with the objectives of the Paris Agreement and the promotion of the energy transition, as well as to ensure that this alignment is maintained in all cases – in accordance with the provisions of corporate policies.

Corporate purpose and values

A model that prioritizes the people and the planet.

Stakeholder capitalism

A commitment to long-term, sustainable value creation.