Sustainable Human Capital Management and Anti-Harassment Policy

Sustainable Human Capital Management and Anti-Harassment Policy

25 March 2025

The Board of Directors of IBERDROLA, S.A. (the “Company”) has the power to design, assess and continuously revise the Company’s Governance and Sustainability System, and specifically to approve and update policies, which contain the guidelines governing the conduct of the Company, and furthermore, to the extent applicable, inform the policies that the companies belonging to the group of which the Company is the controlling entity, within the meaning established by law (the “Group”), decide to approve in the exercise of their autonomy.

Human capital fundamentally determines the difference between competitive and efficient companies and those that are not, and between those that sustainably create value and those that gradually lose their capacity to generate long-term wealth and value. In this regard, the Company defines, designs and disseminates a model for the sustainable management of human capital that is at the forefront of best practices in the area. 

In exercising these powers, within the framework of legal provisions, the By-Laws and the Purpose and Values of the Iberdrola Group, and aware of the importance of the workforce as the main strategic asset and key element to achieve a successful business enterprise and comply with the purpose and values set forth in the Company’s Governance and Sustainability System, the Board of Directors hereby approves this Sustainable Human Capital Management and Anti-Harassment Policy (the “Policy”), the content of which is consistent with the provisions of the Policy on Respect for Human Rights and which respects, further develops and adapts the Ethical and Basic Principles of Governance and Sustainability of the Iberdrola Group with respect to the Company.

1.    Scope of Application 
This Policy applies to the Company. Without prejudice to the foregoing, it includes basic principles that, in the area of sustainable human capital management, complement those contained in the Ethical and Basic Principles of Governance and Sustainability of the Iberdrola Group and, to this extent, must inform the conduct and standards-setting of the other companies of the Group in this area in the exercise of their powers and in accordance with their autonomy. 

To the extent that listed country subholding companies form part of the Group, they and their subsidiaries, under their own special framework of enhanced autonomy, may establish principles and rules that must have content consistent with the principles of this Policy.

To the extent applicable, these principles must also inform the conduct of the foundations linked to the Group.

For companies that do not form part of the Group but in which the Company holds an interest, as well as for joint ventures, temporary joint ventures (uniones temporales de empresas) and other entities in which it assumes management, the Company shall also promote the alignment of its regulations with the basic principles regarding the sustainable management of human capital contained in this Policy. 

2.    Purpose 
The purpose of this Policy is to define, establish and disseminate a model for the sustainable management of human capital that makes it possible to ensure equal opportunity and non-discrimination, promote a multi-layered, diverse, inclusive and non-discriminatory professional environment that is respectful of people and promotes training and performance, prevents harassment, recruits, selects, manages, promotes and retains the best talent, encourages merit, uses the intellectual capital that constitutes a basic pillar for the creation and protection of value, and fosters a balance between personal and professional life, which will drive the professional and personal development thereof and result in a better experience for personnel and greater creativity and productivity, contributing to the achievement of business objectives for all of the foregoing reasons. 

The Company shall involve its professionals in the successful business enterprise that it develops and leads, offering them the opportunity to have a high-quality and stable job position in an appropriate environment, and with a work climate that is consistent with the principles of dignity, mutual respect, confidentiality, cooperation and trust, which generates motivation, which will promote the professional and personal development of the workforce and contribute to maximising performance and the creation of long-term value, and to greater creativity and productivity, thus contributing to the achievement of business objectives and to economic and social development.

The consolidation of the workforce shall be promoted with stable and quality jobs, appropriate salaries, competitive remuneration systems at the forefront of the market and the best practices in this area, professional development based on merits, standards and performance evaluations, a broad offer of training, and respect for private life and digital disconnection.

The management of human resources and capital, as well as professional relations, must be informed by compliance with applicable legal provisions, respect for the human and labour rights recognised therein, the eradication of conduct contrary to the values of the Company and to the ethics-based culture thereof, as well as by the alignment of the interests of the professionals with the strategic objectives established at the Group level. 

3.    Main Principles of Conduct 
The principles established in this section promote the development of the standardised global framework for the processes of managing human, social and intellectual resources and capital and talent established at the Group level in the following areas: (i) the prevention of harassment; (ii) the promotion of a professional, multi-layered, diverse, inclusive and non-discriminatory environment; (iii) the selection and hiring of professionals; (iv) knowledge management; (v) performance and professional development evaluations; (vi) the remuneration system; (vii) balance between personal and professional life; (viii) respect for private life and digital disconnection; and (vii) the labour climate.

3.1    Main principles of conduct to prevent harassment 
The Company makes a firm decision to prevent and combat harassment (defined as unwanted verbal or physical conduct of a moral or sexual nature that is intended to or has the effect of attacking the dignity of a person or creating an intimidatory, hostile, degrading, humiliating or offensive environment for such person) and for this reason the Company adopts and promotes the following main principles of conduct:

a)    Foster a preventive culture as regards any expression of any form of workplace violence, intimidation or harassment, through dissemination, education and training activities that occur annually to promote up-to-date knowledge in this area and the establishment of specific programs that include measures of protection, support and information for victims.

b)    Encourage leaders to set an example within their purviews, promoting a respectful professional environment.

c)    Endeavour to ensure that the principle of zero tolerance towards any conduct that involves intimidation or harassment is effectively applied.

d)    Implement solutions and measures to safeguard the well-being of the persons affected by this behaviour, endeavouring to ensure that there will be no retaliation and adopting the measures that are necessary, including such disciplinary measures as are deemed appropriate, if applicable. 

e)    Encourage the development and use of artificial intelligence systems in human capital processes in a way that promotes equality at the same time as eliminating biases and prejudice with discriminatory effects and permit adequate tracking and transparency and that users are aware that they are communicating or interacting with an artificial intelligence system, pursuant to the provisions of the Policy on the Responsible Development and Use of Artificial Intelligence Tools.

3.2    Main principles of conduct in relation to fostering a multi-layered, diverse, inclusive and non-discriminatory professional environment
The Company believes that fostering a multifaceted and diverse professional environment, where the workforce are respected and included (with the inclusion of professionals understood as the recognition and appreciation of the different perspectives that each individual can contribute, generating opportunities for people to develop their full potential and also fostering a sense of belonging that makes them feel valued and part of a group or community) and where non-discrimination (understood as any distinction, exclusion or preference based on race, colour, sex, religion, age, political opinion, national extraction or social origin that has the effect of nullifying or altering equal opportunity or treatment in the professional sphere) is promoted, constitute organisational values and competitive differentials. In order to foster them, the Company adopts and promotes the following main principles of conduct:

a)    Endeavour to ensure non-discrimination among its professionals and positioning against any practice associated with prejudice on grounds of nationality, ethnic origin, skin colour, marital status, family responsibilities, religion, age, disability, social status, health, gender, sexual orientation, gender identity and expression, or any other condition or characteristic of a person that is not related to the requirements to perform their job.

b)    Promote an organisational culture and management processes that enable its professionals to contribute their abilities, skills, knowledge and experience, regardless of any personal or social conditions or circumstances. 

c)    Encourage multifaceted and varied representation within the various decision-making bodies and levels, encouraging participation in consultative and decision-making areas on the basis of merit and professional achievements.

d)    Strengthen respect and equality of career opportunities, both internally and externally. 

e)    Foster an inclusive culture based on respect and collaboration.

f)    Promote physical and technological accessibility and support professionals with disabilities, encouraging the effective occupation thereof.

g)    Facilitate the internal mobility and interaction of professionals to create networks and teams that take advantage of multiculturalism, skills, knowledge and experience.

h)    Implement measures that foster integration and togetherness and increase pride in contributing to excellence and the creation of long-term value.

i)    Promote a professional environment where the dignity of professionals is respected.

j)    Propose measures to help minimise inequalities that arise, taking into account the abilities, skills, knowledge and experience of professionals.

k)    Promote the legally recognised rights of freedom of association in order to preserve the choice of each person in their relationship with trade unions and the conduct of these organisations in the defence of their legitimate interests.

l)    Protect pregnancy, childbirth and post-delivery as specific situations of the female group, endeavouring to ensure that this does not negatively affect their professional career, and facilitate co-parenting between women and men.

m)    Include content in leadership programmes that encourages better decision-making in processes related to people management and contributes to advance towards the search for excellence, merit-based promotions and a more inclusive culture.

3.3    Main principles of conduct in relation to the selection and hiring of professionals
The success of the business enterprise is critically dependent upon attracting, selecting and retaining the best talent in order to engage professionals with the behaviour reflected in the Purpose and Values of the Iberdrola Group and in the Code of Conduct for Directors, Professionals and Suppliers and to have a workforce that is capable, competent, qualified and motivated. 

Along these lines, the Company adopts and promotes the following principles of conduct in this area:

a)    Identify, include, motivate and retain the best talent.

b)    Value and promote internal talent.

c)    Endeavour to ensure that selection and hiring, whether managed internally or subcontracted to external entities, are carried out exclusively on the basis of merit and capability, including, during the entire process and at the final stage, all candidates meeting the knowledge, aptitudes, abilities and skills profile required for the various positions, promoting fair treatment during the process and keeping professionals with family or similar personal connections from holding posts directly reporting - either hierarchically or functionally - to the professionals with which they are connected.

d)    Endeavour to ensure that selection and hiring processes are rigorous, objective and impartial, avoiding biases and barriers that prevent equal access to professional opportunities, promoting multifaceted and diverse representation in the composition of the interviewing panels, and in any event prioritising the hiring of the most qualified candidates, avoiding any interference in the selection processes.

e)    Implement selection and hiring processes that endeavour to ensure that the candidates are persons who are respectable and competent, aligned with the provisions of the Purpose and Values of the Iberdrola Group and with the principles and guidelines assumed in the Code of Conduct for Directors, Professionals and Suppliers, and which permit the identification and rejection of those who lack the required competence in view of their personal record.

f)    Endeavour to ensure that during the talent recruitment and selection process, candidates are provided with an experience that prioritises clear communication and frequent feedback in the development of an efficient process and a reliable infrastructure.

g)    Facilitate the access of young people to their first job through scholarship programmes and other agreements.

h)    Present candidates with a valuable, attractive and comprehensive professional offer, based upon competitive remuneration, a broad offering of professional training and development, a healthy and safe work environment, contribution to the business enterprise, and measures that facilitate a balance between personal and professional life.

i)    Promote hiring using stable contracts.

3.4    Main principles of conduct in relation to knowledge management
The intellectual capital of the Company depends to a large extent on all of the people that comprise it, but also depends on its operational and organisational structures and on internal and external relations with the Company’s Stakeholders, as well as on the dissemination and knowledge thereof within the Group’s boundary. Organisational and personal training must therefore be permanent and ongoing, and must be in line with the strategy established at the Group level.

To disseminate knowledge and promote continuous learning and cultural exchange such that operational efficiency is increased, the Company adopts and promotes the following principles of conduct that enable it to truly and effectively exploit intellectual capital:

a)    Align knowledge management with the competencies, skills and requirements set out in the strategy established at the Group level, such that an intelligent organisation is structured with the capacity for continuous learning, innovation and digital transformation.

b)    Establish a line of work to constantly improve the initiatives and their application at all Group-level business units, putting in place the resources required to enable the development and internal dissemination thereof through communication, awareness-raising and training, as well as the efficient use thereof. 

c)    Identify the knowledge of each professional and make it accessible to others, thereby generating a multiplier effect.

d)    Recognise the value of the existing knowledge within the Group, boosting its development and promoting the sharing and internal dissemination thereof and a business culture that encourages the dissemination of this knowledge.

e)    Incentivise coexistence and the exchange of knowledge between different generations as a source of continuous enrichment and innovation.

f)    Promote professional methods and environments that favour the sharing of ideas and knowledge.

g)    Recognise different forms of knowledge.

h)    Promote the education and training of all professionals in the knowledge and skills required for the proper performance of their work.

i)    Preserve the financial value that knowledge and business information represent.

j)    Respect the intellectual and industrial property rights of third parties in the management of knowledge.

3.5    Main principles of conduct in relation to performance and professional development evaluations
Evaluations of the professionals and communication of the results thereof to those evaluated are an essential aspect of their professional training. The Company adopts and promotes the following principles of conduct in this area:

a)    Conduct annual performance evaluations based on objective criteria and on the suitability of professionals, on the basis of their individual and collective professional performance.

b)    Communicate the results thereof to the employees evaluated, so as to favour their professional development and contribute to the creation of a feedback culture.

c)    In the process of salary evaluation or review, avoid direct participation by staff who might have a conflict of interest with the professionals involved.

3.6    Main principles of conduct in relation to the remuneration system
The Company considers it a priority for the remuneration system to promote human capital as a factor differentiating it from its competitors. The following principles of conduct must guide the remuneration systems that the Company adopts and promotes:

a)    Favour the attraction, hiring, retention and loyalty of the best professionals.

a)    Promote homogenisation of working conditions and the benefits received by part-time and full-time professionals.

b)    Promote the principle of equal pay for work of equal value in the establishment of working conditions, ensuring adequate and competitive wages, including, where applicable, a collection of benefits adapted to the various social and labour realities.

c)    Maintain consistency between its strategic positioning and that of the Group and its objective of excellence, as well as the international and multicultural reality of the Group.

d)    Recognise and remunerate the dedication, responsibility and performance of its professionals through the use of neutral and objective criteria related to merit, skill and the results obtained thereby.

e)    Promote appropriate integration of the professional into their workgroup, establishing remuneration terms based on the responsibilities and other demands of the job position.

f)    Position itself and remain at the forefront of the market.

3.7    Main principles of conduct in relation to the balance between personal and professional life
The Company encourages a balance between the personal and professional life of the members of the workforce through the following main principles of conduct, which it adopts and promotes:

a)    Foster the organisation of working conditions and implement measures that promote respect for the personal and family life of professionals and facilitate the achievement of an optimal balance between the latter and professional responsibilities, particularly those related to flexibility of time and place of work.

b)    Address, among other things, the situations of single, married, domestically partnered, divorced, separated, widowed and plurally cohabiting persons, with or without children, in situations of pre-adoption and adoption, and with any other particular family or emotional circumstances, including the specific bond arising with animal companions, as living sentient beings. 

c)    Favour the hiring of those suppliers that favour a balance between the personal and professional life of their personnel.

3.8    Main principles of conduct in relation to respect for private life and digital disconnection
The most recent organisational dynamics and the implementation of new technologies promote organisational efficiency, but at the same time can blur the limits between the time dedicated to work and private life. 

In line with the foregoing, the Company adopts and promotes the following principles of conduct to promote the effective separation of the personal and professional areas and encourage its professionals to be able to fully develop their personal life in a way that is compatible with, and enriches, their professional activities, with a particular focus on disconnection from digital devices: 

a)    Promote appropriate digital disconnection guidelines intended to encourage respect for rest time and facilitate the full development of a professional’s personal life outside working hours and with the least possible interference from their professional obligations, which should only occur when the need is justified.

b)    Establish the standards for disconnection, which should take into account the specific situation of the different groups of professionals, particularly including: (i) those who must make themselves particularly available due to their high level of responsibility, their engagement in work covering territories in different time zones, or their state of preparedness to meet unpredictable needs, and (ii) those who engage in their work completely or predominantly from a distance, and particularly from their homes.
In this latter case, standards should be defined to ensure full respect for personal life and disconnection from professional responsibilities, without prejudice to the business powers to control work and the required flexibility in working hours. 
These guidelines for disconnection should be appropriate, based on the responsibilities of the different workforce groups and should cover the multiple and varied digital communication and information instruments supplied to professionals for the performance of work, particularly mobile devices, computers and tablets enabled for remote work or that receive professional e-mails.

3.9    Main principles of conduct in relation to the labour climate 
The Company shall promote a labour climate consistent with the principles of dignity, mutual respect, confidentiality, cooperation and trust, which generates motivation and fosters the well-being of the workforce, and shall make available to its professionals tools and protocols to minimise the possibility of burnout, work-related stress or anxiety, as well as means to enable them to generate resilience in the face of adversity, whether work-related or even those that come from the personal sphere.

Along these lines adopts and promotes the following principles of conduct: 

a)    Recognise that the work culture and environment contribute significantly to boosting the ability of professionals to make healthy lifestyle choices, as well as to raise their awareness of the importance of physical health in the personal and professional sphere.

b)    Advocate for a healthy lifestyle that is not limited to preventing the occurrence of certain diseases, but promotes physical, mental and emotional well-being, encouraging professionals to regularly engage in physical activity and reduce sedentary practices. 

c)    Facilitate collaboration and interaction among the professionals of the Group’s companies that stimulate the raising and discussion of initiatives and ideas. 

d)    Promote team-building actions aimed at generating a work environment that is consistent with the principles of dignity, mutual respect, confidentiality, cooperation and trust among professionals, improving existing links with the goal of creating a cohesive and motivated team. 

e)    Facilitate access to physical, mental and emotional health initiatives by promoting choices that improve collective health, providing access to healthy food choices, assisting in the process of avoiding bad habits and fostering motivating work environments.

4    Human Capital Management and Promotion
Human capital management and promotion are key aspects to improve the Company’s position vis-à-vis its competitors. 

Therefore, in the process of analysis and deliberation prior to the adoption of its resolutions, the Board of Directors generally gives special consideration to the impact that its decisions might have on the human capital management and promotion strategy.

The Company also works continuously to configure a value offering addressed to its professionals that favours the selection, hiring, promotion and retention of the best talent, and promotes and values internal talent.

One of the fundamental aspects of global human capital promotion and management is the encouragement of training, which the Company considers as a key element of professional qualification and development, and as a gateway to opportunities for promotion within the boundary of the Group.

5    Training Programmes and Plans 
Implementation of training programmes and plans that support advanced professional training for the performance of the job, adjustment to technological and organisational changes, adjustment of the workforce to the Company’s requirements and greater capacity for professional development. Additionally, they facilitate processes of knowledge refreshment and ongoing reconversion of skills, so that technologies, innovation and training make up an interactive triangle that operates to advance sustainable competitiveness at the Group level.

Training programmes and plans are supervised for effectiveness and must include aspects relating to respect for human rights, as well as foster a culture of ethical conduct, without exclusionary or discriminatory biases. 

They must be comprehensive, such that the technical, social and human aspects are considered as a whole in order for professionals to develop in their work not only the best qualifications, but also the principles and values to be promoted with society at the Group level.

6    Instruments
The Company has the following instruments to promote the principles set forth in this Policy:

a)    Applicable legal provisions, the rules established in the Governance and Sustainability System and other regulations and internal procedures that complement and further develop them. Particularly, the Compliance Policy and the Internal Reporting and Whistleblower Protection System for the principles set forth in section 3 above. 

b)    The procedures and guidelines to further develop this Policy approved by the Human Resources Division (or such division as assumes the powers thereof at any time).

c)    Collective bargaining agreements or equivalent agreements governing aspects relating to human resources management, as well as the existing specific monitoring mechanisms.

d)    Channels for communication and dialogue with the workforce, and particularly mixed subcommittees or committees involving the participation of professionals, professional climate or satisfaction surveys, meetings with the executive chairman and the members of senior management, specific meetings, the corporate website and the various intranets of the Group’s companies.

e)    International mobility programmes aligned with the Group’s Business Model to favour the exchange of experiences and knowledge, professional development and the promotion of human capital, and the firm establishment of a Group-level culture.

f)    Training programmes and plans that foster the development of intellectual capital and the promotion of professionals within the companies of the Group and the training and preparation of the workforce in the knowledge and skills required to properly carry out their work.

g)    Dissemination, education and training activities related to the prevention of harassment and discrimination, developed with sufficient regularity to promote up-to-date knowledge in this area.

h)    A specific programme for the training and monitoring of management personnel that favours internal promotion and ensures orderly succession in senior management positions and other key positions within the Company and the other companies of the Group.

i)    Occupational risk prevention programmes and processes and a global workplace safety and health system based on defined standards applicable to all companies of the Group.  

j)    Guidelines and programmes to promote physical, mental and emotional well-being and a healthy, safe and pleasant working environment that fosters the personal and professional development of the workforce and addresses their global training concerns.

7    Implementation and Monitoring 
For the implementation and monitoring of the provisions of this Policy, the Board of Directors is assisted by the Company’s Human Resources Division (or such division as assumes the powers thereof at any time), which shall prepare the guidelines and procedures for human capital management and promotion by the Company in accordance with the purpose and principles established in this Policy. These guidelines and protocols may establish the general principles that inform the rules that the other companies of the Group approve in this area within their respective scope of autonomy.

The Human Resources Division (or such division as assumes the powers thereof at any time) is responsible for the implementation of this Policy and the achievement of its objectives, and it shall establish a procedure for regular monitoring and reporting. 

The Company’s Human Resources Division (or such division as assumes the powers thereof at any time) shall coordinate with the corresponding divisions of the other companies of the Group within their respective purviews. In particular, it relies on the support of the human resources divisions (or such divisions as assume the powers thereof at any time) of the other companies of the Group, which handle the implementation and monitoring of the human resources policies and strategies.

To exercise its powers, the Human Resources Division (or such division as assumes the powers thereof at any time) may create specialised global committees in areas like the selection and hiring of professionals, training, remuneration systems and social-welfare benefits, which will act in coordination with any local committees that the human resources divisions (or such divisions as assume the powers thereof at any time) of the country subholding companies decide to create.

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This Policy was initially approved by the Board of Directors on 17 February 2015 and was last amended on 25 March 2025. 

In this latest amendment, the Board of Directors resolved to combine the content of the Policy with that of the Equal Opportunity and Anti-Harassment Policy, the Selection and Hiring Policy and the Knowledge Management Policy, producing a single, updated policy called the Sustainable Human Capital Management and Anti-Harassment Policy.