Galp Energia SGPS S A : CDP Climate Change - Response 2023

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Indicate whether you are able to provide a unique identifier for your organization

Provide your unique identifier

Yes, an ISIN code

PTGAL0AM0009

Yes, a SEDOL code

B1FW751

Yes, a Ticker symbol

GALP PL

Yes, a Ticker symbol

GALP.LS

Position

Responsibilities for climate-related issues

of

individual

or

committee

Board-level

At Galp, the integration of climate and energy transition related risks and opportunities - over the short, medium and long-term - in the Company's strategic formulation process and investment planning

committee

represents a key factor towards a rigorous oversight needed to execute an ambitious energy transition strategy. The Company recognises the importance of responsible leadership and of the

definition of robust and effective governance mechanisms that integrate key climate and energy transition related challenges into our strategy.Due to the importance and potential impact of climate-

related risks and opportunities in Galp's operations, revenues and the materiality of these topics for society, investors and other stakeholders, they are overseen by the Board of Directors (BoD) and

the Executive Committee (ExCom), where the CEO is the designated member responsible for climate strategy. The BoD and the ExCom play a central role in overseeing the investment proposals, to

ensure that they are compatible with the decarbonization and energy transition strategy, measured based on their impact on the carbon metrics and targets. The BoD annually approves the 10-year

business plan that materializes the Company's energy transition strategy, its short- and long-term incentives, and the risk appetite statements for the main risks that the Company faces in the execution

of its strategy. In Addition, the BoD regularly reviews Galp's risk portfolio and oversees the Company's consolidated performance, which includes climate-related disclosures, and progress on climate-

related targets, as reported in the Integrated Management Report approved by the BoD. The Sustainability Committee, supported by the Risk Management (RM) Committee, is the board-level

committee responsible for climate-related topics, being key in assisting the Board in integrating sustainability principles into the decision-making process and ensuring that the main risks and

opportunities (including climate-related topics) that we face are identified and continually managed. The Chairman of the Sustainability Committee was also the vice-Chairman and the Lead

Independent Director of the Board, and a member of the Risk Management Committee. The BoD and the Sustainability Committee, RM Committee, Remuneration Committee and Audit Board have

oversight on climate-related issues, including associated risks and opportunities, which are relevant to the delivery of long-term value in the context of the energy transition.

Chief

The CEO is a member of Board of Directors and Executive Committee and the designated member responsible for climate strategy. The Board of Directors (BoD) oversees the Company's strategic

Executive

formulation process and investment planning, along with the Executive Committee (EC). Energy transition and decarbonization are priority matters managed directly by the Executive Committee. It is

Officer

the Executive Committee that proposes to the Board of Directors the company's strategy, including its climate strategy, objectives and targets and oversees the implementation of that strategy,

(CEO)

monitoring the performance of carbon metrics and the fulfilment of the climate targets. Business and annual investment plans are also overseen by the Executive Committee in order to ensure the

alignment with the energy transition and climate targets.

Board-level

The Risk Management Committee, comprising 3 non-executive Board members, is responsible for advising the Board on the oversight and monitoring of Galp's main risks, including climate-related

committee

risks; evaluating the compliance with risk tolerance levels and the implementation and effectiveness of decided mitigation actions; assessing Galp Group's internal control and risk management

systems; issuing appropriate opinions and recommendations; and evaluating compliance with Galp's risk management policy. It collaborates with the Sustainability Committee in identifying and

quantifying climate-related risks.

Chief Risk

The Chief Risk Officer (CRO), a member of the Board of Directos and the Executive Committee, ensures, among others, that risk appetite, including climate-related risks, is considered in decision-

Officer

making, oversees and guides the risk assessment processes and the definition and implementation of response actions across the organisation; and ensures that the risk management guidelines

(CRO)

defined by the Executive Committee are complied with and reflected in the internal risk management standards.

Board-level

The Audit Board supervises risk management (including climate-related risk), internal control and internal auditing systems, while also controlling the Company's financial information. It also supervises

committee

the company's activity, receives and processes reports of irregularities and is the internal body responsible for assessing corporate governance matters. The Audit Commi ttee oversees the supervision

of the internal auditing system and reports to the Board of Directors.

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Frequency

Governance mechanisms into

Scope of

Please explain

with which

which climate-related issues are

board-

climate-

integrated

level

related

oversight

issues are a

scheduled

agenda item

Scheduled -

Reviewing and guiding annual

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In accordance with the Regulations of the Board of Directors (BoD), Galp's BoD meets periodically, if possible once a month, and also whenever

all meetings

budgets

Applicabl

convened by the Chairman of the Board of Directors or by any two directors, to review and guide the company's strategy, monitor the implementation

Overseeing major capital

e>

of strategic guidelines and performance against objectives. The BoD approves strategic investments/divestments in excess of €75 million and

expenditures

annually approves the Company's annual Budget, which is an integral part of the 10-year Business Plan. According to the key long-term variables

Overseeing acquisitions, mergers,

approved by the BoD to assess investments, valuations must embed a long-term carbon price assumption.

and divestitures

Galp has the ambition of driving and thriving through the energy transition, reshaping its high-quality portfolio, and becoming a net zero company by

Overseeing and guiding employee

2050. This ambition is overseen by the Board of Directors and the Executive Committee to ensure that climate & energy transition targets, risks and

incentives

opportunities are integrated into our strategic formulation process and investment planning. The BoD also regularly reviews Galp's risk portfolio , its

Reviewing and guiding strategy

short- and long-term incentives, which include climate related KPIs and overviews Galp's consolidated performance as reported in the Integrated

Overseeing the setting of corporate

Management Report, including environmental and emissions related indicators and performance. Climate related risks have been identified as a

targets

significant risk and as such are managed by the Board of Directors and Executive Committee.

Monitoring progress towards

Regarding the Executive Committee (EC), the respective meetings are held mostly on a weekly basis for reviewing and guiding plans of action, risk

corporate targets

management policies, setting performance objectives, among others, including to approve investments below 75M€, also considering a long-term

Reviewing and guiding the risk

carbon price assumption.

management process

The Sustainability Committee is the Board level committee responsible for climate-related issues, being key in assisting the BoD in integrating

Other, please specify (Defining the

sustainability principles into the decision-making process and, with the support of the Risk Management Committee, ensuring that the main risks and

risk management strategy ,

opportunities we face are identified and continually managed.

approving the Risk Management

The Sustainability Committee, Executive Committee and Board of Directors, are informed on a quarterly basis on Galp's carbon metrics performance

Policy, approving the risk appetite,

against targets and are updated on the decarbonisation roadmap status or any key climate change related issues via a specialized report, prepared

Supervising risk portfolio, always

by the corporate Strategy and Sustainability team, with the support of the Risk Management team, when necessary.

including climate related risks)

Scheduled -

Overseeing and guiding the

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During 2022 the Board of Directors had several energy transition focused sessions that covered topics such energy scenarios, decarbonisation

some

development of a transition plan

Applicabl

targets, climate related governance and risk management, capital stewardship and the EU Sustainable investment taxonomy, the just transition and

meetings

e>

ESG index performance. Dedicated sessions on the evolution of new energies (e.g. green hydrogen) also took place. The objective of these sessions

is to inform the board on the context and challenges of the energy transition and assist them in the guidance and oversight of a future energy

transition plan based on the current energy transition strategy and planned investment of 70% of net CAPEX in low carbon projects in the 2023-2025

period.

Board

Criteria used to assess competence of board member(s) on climate-related issues

Primary

Explain why your organization

member(s)

reason for no

does not have at least one board

have

board-level

member with competence on

competence

competence

climate-related issues and any

on climate-

on climate-

plans to address board-level

related

related

competence in the future

issues

issues

Row

Yes

The Board of Directors oversees Galp's strategy and climate-related topics. Within the Board there are several members with relevant

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1

competences on climate and energy transition related issues. The CEO has extensive experience in the energy sector and the Oil&Gas

Applicable>

industry, as well as in developing energy transition / decarbonisation strategies, including the development of new, low carbon and

sustainable energies. In addition, the CEO also has relevant experience regarding the impact of climate risks and opportunities on

strategic lines and competitiveness, as well as the appropriate allocation of capital, with a focus on low and zero carbon businesses,

whilst maintaining our financial discipline.

In 2022, the Vice-Chairman of the Board of Directors was also the Chairman of Galp's Sustainability Committee, a member of Galp's Risk

Management Committee and the Lead Independent Director of Galp's Board of Directors. He has ample experience in the areas of

corporate governance, international business and sustainable value creation.

Other members of the Board have significant experience in the sustainable mobility, renewable energy, and energy storage businesses in

different geographies, including in the risk management, business development and trading areas.

In 2022, we had upskilling sessions for the challenges of the energy transition.

- Several Galp Executive Committee and Board members participated in energy transition related events (e.g. Galp Electric Summit, CNN

Portugal Summit, etc) and during BoD meetings climate and ESG issues were addressed, such as climate risks, decarbonization targets,

energy scenarios, ESG regulation and the impact of the war on energy markets.

- During 2022, several workshops were also held for Executive and Board members on various topics such as hydrogen, renewables,

strategy, among others. A specific energy transition session was given to the Board of Directors in mid-2022, involving the Strategy &

Sustainability team as well as some specialized external partners, which addressed topics on the global energy perspective and response

to the energy transition and how Galp contributes, our climate strategy, our ESG performance and just transition journey.

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