Social and environmental management Sustainability 2019 · Grupo EPM 2017 greenhouse gas emissions...

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Social and environmental management

Sustainabilityreport 2019

Contribute to the harmony of lifefor a better world

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management

Social andenvironmental

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Materialtopics

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Climatestrategy

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ContentsClimate strategy..................................................................................................................................6

Strategy management..........................................................................................................10

Climate change mitigation...................................................................................................17

Adaptation to natural variability and climate change......................................................30

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Climate strategy

Through this strategy, Grupo EPM aims to achieve resilient and carbon-efficient businesses, through the integration of the climate variable in the different analyses and corporate decisions, thus contributing to sustainability and competitiveness, minimizing vulnerability to climatic risks and developing low GHG (greenhouse gas) emission operations in all the regions where the group offers its and services, under the principles of comprehensiveness, competitiveness, flexibility, and innovation.

With this purpose it seeks to respond to the precautionary principle enshrined in domestic and international law, as a guiding and protective principle of the environment whose purpose is to guide the conduct of all agents to prevent or avoid serious and irreversible damage to the environment; even when such damage is not at an ending or threatening stage but at a prior stage and different from the risk or danger of damage, and there is no absolute scientific certainty about its occurrence.

Relevance

The bidirectional relationship between climate events and Grupo EPM’s businesses requires maintaining a business development that considers the analysis of climate variables in its decision making.

Considering climate variability and change and their influence in the ecosystems, in the territories, and in the availability of natural resources, Grupo EPM needs to have strategies to provide its services, restructure its products, leverage its competitive advantages, and establish risk management systems that enable the group itself and its environments to adapt, thus favoring stronger economies in harmony with society and the environment.

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Main achievements

Challenges Achievements in 2019 Accomplishment

Obtain the certification of reduction of emissions caused by La Vuelta and La Herradura small hydroelectric power stations, the Jepírachi wind farm, and REDD+ EPM.

The designated operational entity verified:The capture of 63,636 tCO2 achieved between 2014 and 2017 by the REDD+ EPM project.The reduction of 73,285 tCO2e by the operation of La Vuelta and La Herradura small hydroelectric power stations, as well as the 24,604 tCO2e reduction achieved by the operation of the Jepírachi wind farm in 2018.The validation and verification body issued the opinion for the registration of the Porce III hydroelectric project in the Cercarbono standard for a first accreditation period 2011-2020; and it also issued the certification of 8,775,917 tCO2e reduced in the period 2011-2018.

Total

Obtain the certification of reduction of emissions caused by the Los Cururos wind farm operation during 2016, 2017, and 2018.

This milestone was eliminated due to the sale of EPM Chile. Not accomplished

Update the 2017 GHG inventory of emissions of Grupo EPM, based on the adjustments made to the calculation methodology by external assurance.

Grupo EPM 2017 greenhouse gas emissions inventory was updated based on the adjustments indicated by external assurance.

Total

Prepare and disclose the 2018 GHG inventory of the group with the adjusted methodology.

Grupo EPM 2018 greenhouse gas emissions inventory was prepared, incorporating gas leaks in air conditioning and refrigeration systems, leaks in fire extinguishing equipment and the estimation of emissions from organic waste composting processes, among others.

Total

Integrate the results of Phase II Climate Study conducted with the Universidad Nacional into the measures and actions defined in Grupo EPM’s Adaptation Plan.

The results and recommendations of the study carried out with the Universidad Nacional were discussed with the corresponding organizational bodies.The 2020 budget was allocated to continue climate scenario modeling.

Total

Integrate the climate risk analysis into the methodological system of business risk management and the control and monitoring systems.

The proposal for the climate risk model was completed and shared internally. The documents, the template for its implementation and the road map for 2020 were delivered.

Total

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Challenges

Challenges Year in which it is achieved

Scope and coverage

Company Business Territory

Establishment of indicators in mitigation and adaptation of Grupo EPM, based on the prioritized actions.

2020 Grupo EPM All the businesses

All the territories

Second auction of reduced tCO2 from EPM (carbon tax) 2020 EPM Electrical energy

Colombia – Antioquia

Verification of emissions reduction by the operation of the Jepírachi wind farm in 2019. 2020 EPM Electrical

energyColombia – Antioquia

Identification of new emission reduction projects to be registered in Colombian carbon standards. 2020 EPM All the

businessesColombia – Antioquia

Estimation of reduced emissions from internal mitigation initiatives. 2020 Grupo EPM All the

businessesAll the

territoriesImplementation of the Weather Research and Forecasting (WRF) climate model to monitor climate variables in businesses.

2020 EPM Electrical energy

Colombia – Antioquia

Incorporation of the climate risk model in business risk management (EPM and national energy affiliates). 2020 Grupo EPM Electrical

energy Colombia

Estimation of Grupo EPM's 2019 GHG emissions inventory. 2020 EPM All the

businessesColombia – Antioquia

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Related sustainable development goals

Related stakeholders

Colleagues Community State

GRI standards and EPM indicators

103-1 Explanation of the material topic and its boundary.103-2 The management approach and its components.103-3 Evaluation of the management approach.201-2 Financial implications and other risks and opportunities due to climate change.305-1 Direct (Scope 1) GHG emissions.305-2 Energy indirect (Scope 2) GHG emissions.305-3 Other indirect (Scope 3) GHG emissions.305-4 GHG emissions intensity.305-5 Reduction of GHG emissions.305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions.

Scope and coverage

TerritoryColombia - AntioquiaColombia - CaldasColombia - Malambo, AtlánticoColombia - Norte de SantanderColombia - QuindíoColombia - RisaraldaColombia - SantanderChileEl SalvadorGuatemalaMexicoPanama

BusinessesWater supply Sanitation Electrical energy Natural gas

CompaniesEmpresas Públicas de Medellín - EPMAguas Regionales EPMAguas de MalamboEmpresas Varias de Medellín - EmvariasCentral Hidroeléctrica de Caldas - CHECElectrificadora de Santander - ESSAEmpresa de Energía del Quindío - EDEQCentrales Eléctricas del Norte de Santander - CENSDistribuidora de Electricidad del Sur - DelsurEmpresa Eléctrica de Guatemala - EegsaElektra Noreste - ENSA

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Strategymanagement

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Strategy management

In 2019, Grupo EPM’s climate strategy was implemented with priority actions in energy efficiency, sustainable mobility, renewable energy, ecosystem conservation, and use of

opportunities derived from emissions management.

EPM structured and registered the Porce III hydroelectric project in the Colombian Cercarbono standard, for a first credit period (2011-2020) and verification of the reduction of 8,775,917 tCO2

(2011-2018).

The first auction of 550,000 certified emission reductions (CER) from the operation of EPM’s La Vuelta and La Herradura small hydroelectric power stations was held for large commercial

customers in Colombia who need to meet carbon tax obligations.

With this action, the company obtained income of approximately COP 8,500 million that will be reinvested in the development and strengthening of climate initiatives.

Climate change poses important challenges for the human race and the global economy. It is considered as one of the main challenges in sustainable human development; therefore, it becomes a key aspect of study and comprehensive analysis from the environmental, social, political, economic, technological, regulatory, and cultural perspectives to define business stances.

Fixing strategies based on the aforementioned perspectives enables the companies to face the challenge posed by their growth and development considering the climate impact.

Management in 2019

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Main progress

Emissions inventory

In the quest for a carbon neutral operation from 2025, the company estimates its carbon footprint annually. It includes national and international businesses and affiliates. For 2019, the calculation was 912,020.43 tCO2e, which showed an increase with respect to 2018, when the EPM inventory was 182,064 tCO2e and that of Grupo EPM was 619,117 tCO2e. The main variations were in thermal generation due to the continuous operation of La Sierra thermal power station during December.

For the calculation, methodological adjustments were incorporated and internal workshops were held in order to achieve knowledge transfer, standardize criteria, and progress in strengthening the analysis and provision of information. To see the breakdown of the EPM and Grupo EPM inventory, go to the “Climate change mitigation” action.

Emission factor

EPM committed since 2012 to keep its emission factor below the factor of the National Interconnected System (abbreviated SIN in Spanish), which it has been achieved since then. EPM’s emission factor for 2019 was 0.0279 tCO2e/MWh, while the national power emission factor was 0.1644 tCO2e/MWh; this shows that EPM’s emissions remain below the SIN. The highest power consumption of Grupo EPM was recorded in thermal generation (58.19%), in its own vehicle fleet and stationary equipment (12.03%), and in water supply (11.72%).

Emissions offset and low-carbon products

The technical working group for the analysis of offset alternatives and low-carbon products was maintained. Emission reduction projects, potential offset initiatives, and opportunities arising from emissions management were monitored.

At the end of 2019, there are six projects registered by EPM with different national and international emission reduction standards. Through these projects, EPM achieved the following goals:

• The first verification of the capture of 63,636 tCO2e by the REDD+ EPM project (2014-2017). It should be noted that this project stems from one of the commitments made by EPM in its 2012 climate declaration.

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• Verification of the reduction of 73,285 tCO2e by the operation of La Vuelta and La Herradura small hydroelectric power stations (2018) and 24,604 tCO2e by the Jepírachi wind farm operation (2018).

• Verification of the reduction of 8,775,917 tCO2e by operation of Porce III hydroelectric project (2011-2018).

• Renewal of the third and last credit period of the Jepírachi wind farm and La Vuelta and La Herradura small hydroelectric power stations (2019-2025).

Income worth COP 8,415 million was obtained from the first auction of 550,000 certificates available from the La Vuelta and La Herradura small hydroelectric power stations as well as COP 2,570 million from the sale of 746,356 renewable energy certificate (REC) or REC certificates of origin from the Jepírachi wind farm, La Vuelta and La Herradura small hydroelectric power stations, and Porce III hydroelectric project.

In addition, progress was made in the analysis of scenarios and projections of the emissions inventory by 2030 to propose the scheme of goals and offsets among the group, for the contribution to the carbon neutral operation commitment.

The accounting matrix for emissions, cost, and income management was designed.

Risk analysis and climate risk scenarios

• Implementation and monitoring of adaptation measures by the different businesses and companies of Grupo EPM.

• Integration of actions with the integrated water resources and biodiversity management strategy.

• Formulation of the climate risk model integrated into the business risk analysis methodology.• Design of a proposal for the establishment of a specialized technical group to carry out a

permanent study of climate scenarios with an impact on businesses, considering the results and recommendations of the Phase II Climate Study, carried out by the Universidad Nacional.

For further details, read the section “Adaptation to climate change and variability”.

EPM and Colombia emission factor in 2019

EPM’s emission factor / SIN’s emission factortCO2e indicator / MWh year 2016 2017 2018 2019

EPM’s emission factor 0.0513 0.0097 0.0096 0.0279SIN’s emission factor 0.2100 0.1100 0.1070 0.1644

Source: EPM.

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EPM’s emission factor remains below the national emission factor.

The variations resulted from an increase of 740.59% in natural gas for the generation of 159.25 GWh at the La Sierra thermal power station in 2019, compared to 19.29 GWh generated in 2018, due to the support it must offer to the power generation committed by EPM to the Ituango hydroelectric project.

The values for the national emission factor correspond to the calculation made by XM, as the country’s official source to date.

Source: https://www.xm.com.co/Paginas/detalle-noticias.aspx?identificador=2383

Balance of renewable energy certificates 2019

Balance of accumulated and redeemed certificates

Power plant

Accumulated issued as of

2019

Redeemed in 2017

Redeemed in 2018

Redeemed in 2019

Total redeemed as of 2019

Balance

Jepírachi 44,762 0 23,164 21,598 44,762 0La Vuelta 34,066 0 6,733 8,482 15,215 18,851La Herradura 66,414 1,191 24,775 25,966 40,448

Porce III 2,322,238 461,000 1,132,362 691,501 2,284,863 37,375Total 2,467,480 462,191 1,162,259 746,356 2,370,806 96,674

Source: EPM. Directorate of Markets.

As of 2019, a total of 2,467,480 renewable energy certificates from Jepírachi, La Vuelta, La Herradura, and Porce III have been issued, of which 2,370,806 have been redeemed. This represents an approximate income of COP 4,204 million. Of this amount, COP 2,570 million corresponds to 2019.

The income received from this initiative will be reinvested in the development of new projects.

https://www.xm.com.co/Paginas/detalle-noticias.aspx?identificador=2383

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Projects to reduce emissions by 2019

Emission reduction projects registered in international carbon standards.

Project Standard Credit period

Estimated tCO2e

reduced

Verified tCO2e reduced

2016 2017 2018 2019

Jepírachi wind farm

Clean development mechanism

2004-2025 25,631 22,590 1,358 24,604 NDA

La Vuelta and La Herradura small hydroelectric power stations

2005-2025 77,149 72,908 85,559 73,285 NDA

Bello WWTP 2015-2035 79,640 NA NA NA NDA

REDD+ EPM project:

Climate, community, and biodiversity

2014-2033 5,462 63,636between 2014-2017 NDA NDA

Porce III hydroelectric project

Cercarbono 2011 - 2020 1,139,242 1,038,409 1,246,901 1,328,608 NDA

Ituango hydroelectric project

Verified Carbon Standard (VCS)

2018-2027 4,383,088 NA NA NA NA

Source: Sustainable Development Management.

The estimated tCO2e reduced correspond to those recorded in the project design document. The 2019 tCO2e will be in the process of verification between 2020-2022.

Verification of the reduction of emissions is carried out for the expired year.

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201-2 Financial implications and other risks and opportunities due to climate change.305-1 Direct (Scope 1) GHG emissions.305-2 Energy indirect (Scope 2) GHG emissions.305-3 Other indirect (Scope 3) GHG emissions.305-4 GHG emissions intensity.305-5 Reduction of GHG emissions.

Scope and coverage

TerritoryColombia - AntioquiaColombia - CaldasColombia - QuindíoColombia - RisaraldaColombia - SantanderColombia - Norte de SantanderColombia - Malambo, AtlánticoChileEl SalvadorGuatemalaPanama

BusinessesWater supplyElectrical energy Sanitation Natural gas

CompaniesEmpresas Públicas de Medellín - EPMAguas Regionales EPMAguas Nacionales EPMEmpresa de Aguas del Oriente AntioqueñoEmpresas Públicas de Rionegro - EPRioAguas de MalamboEmpresas Varias de Medellín - EmvariasCentral Hidroeléctrica de Caldas - CHECElectrificadora de Santander - ESSAEmpresa de Energía del Quindío - EDEQCentrales Eléctricas del Norte de Santander - CENSDistribuidora de Electricidad del Sur - DelsurEmpresa Eléctrica de Guatemala - EegsaTecnología Intercontinental -TicsaHidroecológica del Teribe - HETElektra Noreste - ENSA

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Climate change mitigation

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Climate change mitigation

The public lighting program of the EPM power transmission and distribution business met its challenge in the technological change of public lighting in the city of Medellín, through

the installation of 2,151 LED light points that allowed for energy savings of 41,544 kWh and a decrease of 6.83 tons of CO2e.

EPM water supply and sanitation put into operation the Aguas Claras WWTP, through which it is estimated that 84% of the wastewater in the metropolitan area of Valle de Aburrá will be

treated while contributing to the reduction of the region’s carbon footprint.

As part of its commitment to improve air quality and sustainable mobility in the metropolitan area of Valle de Aburrá, EPM installed natural gas for 4,264 vehicles during 2019, 80% of

which used the financing plan offered by the company, for an approximate amount of COP 2,800 million per year. Currently, there are about 25,000 vehicles converted to natural gas in

metropolitan area of Valle de Aburrá.

Considering the pollutants emissions per kilometer travelled, by replacing diesel Euro IV freight and public transport vehicles with natural gas vehicles, reductions of over 94% are

obtained for particulate matter, 94% for volatile organic compounds, 95% for nitrogen oxides, and 99% for sulfur oxides.

As part of the natural gas, water supply, and sanitation businesses, EPM began a project to use the biogas generated at the San Fernando WWTP to inject it into the natural gas network as a biomethane. The project was approved at the feasibility level and will be implemented between 2020-2022. It will allow the efficient use of energy resources, raw materials, and

reduction of methane and carbon dioxide emissions. High efficiency technologies are expected to treat 100% of the biogas, allowing the capture of more than 98% methane.

Set of actions, initiatives, projects, and programs developed by the company with the purpose of avoiding and reducing GHG emissions in its processes and operations.

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As part of the implementation of Grupo EPM’s climate strategy, significant progress was made by businesses and companies related to energy efficiency, renewable energies, and sustainable mobility. Thus, the following has been achieved:

Energy efficiency

• Due to the delay in the commissioning of the Ituango hydroelectric project, an exclusive contract was entered into to guarantee the supply of natural gas for 3 years, starting on December 1, 2019, for La Sierra thermal power station. This action supports the power generation demand.

• Through the Llame Antes de Excavar (Call before You Dig) program and the installation of excess flow valves, leaks in the natural gas distribution and transportation system were reduced, which contributes to lower methane emissions, since natural gas contains between 83%-98% of this greenhouse gas.

• EPM’s La Alpujarra district heating and cooling, which started operations in 2016, remained active. It is recognized as a sustainable energy-efficient solution that uses waste heat, reduces heat island effects, CO2 emissions by 30%, and 100% of ozone-depleting substances (ODS).

• The EPM transmission and distribution business fulfilled 100% of its plan for the prevention, management, and replacement of SF6 gas. It addressed all the leaks reported and replaced 17.74 kg as of December 2019.

• Due to changes in lighting, a reduction of 32,725,413 kWh was achieved in the EPM building. • As for the water supply business, EPM achieved 34.28% self-generation at the San

Fernando WWTP from the biogas generated and began testing for the implementation of the cogeneration system at the Aguas Claras WWTP.

• Aguas de Malambo made progress in implementing actions to reduce energy consumption by 20% at its wastewater treatment plant.

• CHEC recorded 7.51% in its annual losses compared to the estimated 8.27%. Therefore, it reduced its losses by 0.76%, meeting its annual reduction target. It also achieved the replacement of four 33 kV voltage level switches with vacuum SF6 quenching medium. To reduce SF6 emissions, it began the process of characterizing and reviewing the energy performance of facilities, substations and major plants, in order to propose improvements and energy efficiency action plans. It also achieved that 19% of its customers (7,477) were linked to the e-bill initiative, exceeding the expected goal of 15%.

• EDEQ achieved an energy loss rate of 8.28%, which means 101% fulfillment of its annual goal of 8.37%. It also received certification for its 2018 emissions inventory in compliance with the requirements of the first year of its 2018-2021 carbon neutral operation.

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• CENS closed 2019 with an energy recovery indicator of 11.91% in relation to the goal of 12.20%.

• ESSA put into operation the machine for the recovery and treatment of SF6 gas. It achieved a control indicator of 1.5% for power equipment, meeting the goal set for maintenance below 3% for the year.

• Eegsa achieved a reduction of 0.04% in the total energy loss rate with respect to 2018 and 0.02% with respect to technical energy losses. Eegsa continued its maintenance work in substations to increase its SF6 control rate.

• Delsur continued the gradual shift from fluorescent lighting to LED lighting, replacing a total of 226 lamps. It also included the measure for all new projects, carried out preventive actions in the emission of greenhouse gases associated with energy losses, managed to document the energy efficiency specifications for the acquisition of new electrical equipment, and obtained a 3% reduction in electrical energy consumption with respect to 2017.

• ENSA carried out an inventory of air conditioners according to the type of gas and last maintenance, in order to estimate GHG emissions due to their operation.

Renewable energies

• The EPM – Invenergy partnership was formalized to invest, develop, build, operate, and maintain power generation parks with wind or solar technologies (including the possibility of rooftops) in Colombia. Progress was made in the study of 18 new projects to expand the company’s renewable power generation portfolio (five hydroelectric, eight wind, and five solar projects).

• The pilot project of photovoltaic solar energy in EPM reservoirs (100 kW – floating panels) showed relevant results of reduction in water evaporation, improvement of energy efficiency, and decrease in algae growth. Cost and performance advantages are analyzed.

• CENS carried out proceedings before the Mining and Energy Planning Unit (abbreviated UPME in Spanish) to ensure the viability of the distribution and commercialization of 220 MW of energy from nonconventional renewable sources.

• Through commercial management, progress was made in obtaining subsidies from the Colombian Ministry of Mines and Energy to connect users of the non-interconnected area (NIA) in the Quindío region to individual photovoltaic solar solutions.

• CHEC has an installed capacity of 25.92 kWp (kilowatt peak) and an approximate generation of 3,000 kWh/month for the supply of photovoltaic energy in the company’s facilities.

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• CHEC and EPM obtained the financial model for the development of the geothermal project in the region of Nereidas (Manizales) and the small hydroelectric power station in the Guacaica river basin (PGU5). The environmental legal proceedings are still in progress.

• An inter-institutional agreement was reached in Malambo to carry out a pilot project to install solar panels in its water treatment plant and replace the 100 kWh consumption.

• Eegsa put out to tender 60 MW for suppliers with renewable technology to contribute to climate change mitigation through its energy distribution and commercialization processes.

• ENSA started the project to install 450 solar panels of 325 W each to provide self-consumption in several of its facilities. The estimated reduction for the first year is 196,413.75 kWh/year and 138 tons of CO2 per year.

Sustainable mobility

• Through public-private partnerships for mobility, EPM promoted the use of vehicular natural gas (VNG) and electrical energy as key elements to mitigate air pollution in the metropolitan area of Valle de Aburrá.

In the natural gas component:

• 3.800 bonds were delivered for installation of VNG equipment, of which EPM contributed about COP 1,400 million. A total of 411 buses of the massive transport system and 4 Emvarias garbage compactor vehicles began to operate, for a total of 63 vehicles.

• As of December 2019, there are 503 dedicated vehicles in the region, including buses, trucks, dump trucks, and taxis, as well as 17 stations. The company acquired three tank cars for drinking water service and put into operation a dump truck, a vacuum truck, and a bus.

In the electrical component:

• It was closed with a total of 20 public charging stations with 600 users, more than 1,100 vehicles in operation, 66 electric buses, and 7 taxis.

• Public financing for electric bicycles and motorcycles was implemented as well as an agreement for the financing of electric vehicles for EPM employees.

• Five new facilities were built for internal charging for EPM customers, reaching a total of 50. • Progress was made in the joint structuring with Renting Colombia for the first all-electric

car rental project in the country. The first electric truck project was also promoted through this system.

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The following was achieved through the Sustainable Business Mobility Plan:

• A total of 136 executives and 324 employees in teleworking, 56 of which entered the program in 2019.

• Flexible hours were maintained with five working days scheduled in a staggered manner from 6:00 a.m.

• A total of 180 new people joined the En Bici al Trabajo (Bike-Riding to Work) program, for a total of 705. There are 221 bike parking spaces in the head office and 24 in alternate offices.

• The EnBici mobile application was enabled and now it has 471 users.

In the international affiliated companies of Grupo EPM:

• EDEQ put two electric vehicle semi-fast charging stations into commercial operation and developed a 90% internal charging offer.

• ESSA opened the first public fast and slow charging station for users of this technology. • CENS promoted sustainable mobility systems for its employees, installed 8 bike parking

spaces with a capacity of 72 bikes, and the first electric vehicle came into operation.• Aguas Regionales provided 54 electric bicycles for employee use and initiated a campaign

for carpooling. • Aguas de Malambo purchased eight electric bicycles that will be used to monitor the

drinking water service networks. They are intended to reduce greenhouse gas emissions by 20%.

• Eegsa implemented financing plans for motorcycles and electric bicycles among its employees, joined the Association of Electric Mobility of Guatemala, and sponsored four electric mobility events.

• Delsur installed the first charging station for electric vehicles in the country, carried out a road test to promote electromobility, and participated in the technical committee of the Transport Commission, in the Legislative Assembly, to promote the bill for the entry of electric vehicles into El Salvador.

• ENSA installed three charging points for electric cars at its head office and three at its alternate office. It also made progress in adapting the site for the installation of electric bicycles.

Each company and business has prioritized actions in its road map for 2020, which will be monitored and controlled in order to facilitate the fulfillment of common challenges and the construction of indicators by component, within the mitigation plan of Grupo EPM’s climate strategy.

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GHG emissions inventory (scope 1 and 2), Grupo EPM and EPM

GHG emissions inventory (tCO2e)

Grupo EPM 2016 2017 2018 2019Scope 1 590,694 60,471 93,397 267,862Scope 2 306,841 516,580 525,720 644,157Total 897,535 577,051 619,117 912,020

EPM 2016 2017 2018 2019Scope 1 514,664 45,480 84,572 236,298Scope 2 131,972 92,179 97,492 162,298Total 646,636 137,659 182,064 398,596

Source: Idsos application. Sustainable Development Management.

Grupo EPM’s 2019 inventory includes the GHG emissions of: EPM, ESSA, CHEC, EDEQ, CENS, ENSA, Delsur, Eegsa, HET, Aguas de Malambo, Aguas Regionales EPM, Aguas del Oriente, Emvarias, and Adasa. The GHG protocol methodology is followed and the CO2 , CH4 , N2O, SF6 , and HFC gases are included.

There is a considerable increase compared to 2018, mainly due to a 740.59% increase in natural gas for the generation of 159.25 GWh at the La Sierra thermal power station in 2019, compared to 19.29 GWh generated in 2018, due to the support it must offer to the power generation committed by EPM to the Ituango hydroelectric project.

Minor changes are reported in the 2018 inventory calculation, due to the inclusion of EPRio, and the registration of emissions from composting.

Note: The annual inventory is calculated for the expired year.

Direct (Scope 1) GHG emissions. They include the emissions from the sources owned or controlled by the company, as well as the emissions from vehicles of the company’s fleet, the emissions from steam or boilers, and the fugitive emissions from the company’s air conditioners, ducts, or systems.

Energy indirect (Scope 2) GHG emissions. They include the emissions from the electrical consumption and those from heat, steam, and refrigeration sources that are acquired externally, as well as those associated with losses of power in the transmission and distribution networks.

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Details of scope 1 and 2 emissions of Grupo EPM by activity

Grupo EPM's GHGemissions in 2019

912,020.43 tCO2e(100.00%)

Electricity losses intransmission and

distribution networks

607,469.87 tCO2e(66.61%)

Fugitive emissionsin reservoirs

89,045.78 tCO2e(9.76%)

Consumption of fossilfuels for power generationin thermal power stations

99,264.50 tCO2e(10.88%)

Emissions in anaerobicsludge digestion

38,417.61 tCO2e(4.21%)

Consumption of fossilfuels in vehicles and

stationary equipment

23,679.85 tCO2e(2.60%)

Consumption of electricalenergy in facilities

36,688.11 tCO2e(4.02%)

Emissions fromburning / use of

biogas in WWTPs

7,208.44 tCO2e(0.79%)

SF6 leaks in powertransmission and

distribution

3,384.24 tCO2e(0.37%)

Emissions in WWTPs

4,266.55 tCO2e(0.47%)

Composting oforganic waste

1,204.45 tCO2e(0.13%)

Gas leaks indistribution networks

365.44 tCO2e(0.04%)

Refrigerants inair conditioners

893.68 tCO2e(0.10%)

Emissions from leaks in fire

extinguishing systems

131.60 tCO2e(0.01%)

LPG consumption ingeneration plants

0.32 tCO2e(0.00%)

Source: Idsos application.

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Details of scope 1 and 2 emissions of EPM by activity

EPM's GHGemissions in 2019

398,596.85 tCO2e(100.00%)

Electricity losses intransmission and

distribution networks

134,256.78 tCO2e(33.68%)

Fugitive emissionsin reservoirs

88,578.27 tCO2e(22.22%)

Consumption of fossilfuels for power generation in thermal power stations

98,165.36 tCO2e(24.63%)

Emissions in anaerobicsludge digestion

38,417.61 tCO2e(9.64%)

Consumption of fossilfuels in vehicles and

stationary equipment

3,843.65 tCO2e(0.96%)

Consumption of electricalenergy in facilities

28,041.50 tCO2e(7.04%)

3,698.19 tCO2e(0.93%)

1,204.45 tCO2e(0.30%)

Emissions in WWTPs

1,441.72 tCO2e(0.36%)

Composting oforganic waste

416.89 tCO2e(0.10%)

100.61 tCO2e(0.03%)

Refrigerants inair conditioners

365.44 tCO2e(0.09%)

Emissions from leaks in fire

extinguishing systems

66.05 tCO2e(0.02%)

Gas leaks indistribution networks

0.32 tCO2e(0.00%)

Emissions fromburning / use of

biogas in WWTPs

SF6 leaks in powertransmission and

distribution

LPG consumption ingeneration plants

Source: Idsos application.

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EPM’s GHG emissions inventory (scope 3)

EPM’s emission inventory (scope 3)

Concept / Indicator

2016 2017 2018 2019

Ton CO2e % Ton CO2e % Ton CO2e % Ton CO2e %

Goods and services * 16,118 0.64% * 16,118 0.58% * 16,118 0.70% * 16,118 0.64%

Capital assets * 525 0.02% * 525 0.02% * 525 0.02% * 525 0.02%Fuels 67,355 2.67% 2,049 0.07% 2,218 0.10% 10,369 0.41%Waste 42,143 1.67% 51,767 1.85% 59,224 2.58% *** 68,051 18.07%Land transport + air transport 4,756 0.19% 2,363 0.08% 2,631 0.11% 3,685 0.15%

Transportation of personnel ** 3,260 0.05% ** 3,260 0.12% 3,124 0.14% 3,938 0.16%

Use of products sold 2,390,537 94.76% 2,718,413 97.28% 2,208,003 96.34% 2,023,557 80.55%

Total 2,524,694 100.00% 2,794,494 100.00% 2,291,843 100.00% 2,512,087 100.00%

Source: Sustainable Development Management.

* Values of 2012 are used.** Values of 2015 are used.*** The 157,002 tons of wood generated due to the filling of the Ituango project’s reservoir are excluded. It is estimated that this waste would generate around 385,841 tons CO2e. • Scope 3 emission inventory uses the calculation baseline of 2012 and follows the GHG Protocol methodology and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard, published by the WRI and the WBCSD. • In the “goods and services” and “capital goods” categories, the same values as in 2012 are maintained. • The results show that the highest emissions are still those associated with the consumption of products sold by the company. • Despite the implementation of alternative means of transportation for employees (bicycle, teleworking, carpooling, etc.), there is a considerable increase in the emissions produced by their commuting between 2017 and 2019, mainly due to the gradual increase in the number of employees during this period, since they were 6,500 in 2017, 7,153 in 2018, and 7,917 in 2019.

Note: Other indirect (Scope 3) GHG emissions. They include the rest of the indirect emissions as a result of the activities of the company that do not come from the company’s sources or sources controlled by the company (production of acquired materials; work trips; transportation of raw materials, fuels, and products; and consumption of products or services offered by the company).

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SOx and NOx emissions – Grupo EPM

SOx and NOx emissions – Grupo EPMConcept / Indicator (Ton /

year) 2017 (1) 2018 (2) 2019 (3)

NOx and SOx emissions NOx SOx NOx SOx NOx SOxLa Sierra thermal power station (isokinetic sampling). 3.89 0.00 2.53 0.00 21.74 0.11

Transportation of personnel, supplies, and products in vehicles of the group.

70.26 1.02 44.31 0.43 56.82 0.45

Adasa 60.45 3.21 28.32 1.50

Total 74.15 1.02 107.29 3.63 106.89 2.06

Source: EPM calculations. (Emission factors taken from the EPA’s AP-42).

(1) Including EPM, Aguas de Malambo, Aguas del Oriente, Aguas Regionales, CENS, CHEC, Delsur, ENSA, ESSA, Eegsa, HET, and Ticsa.

(2) Including EPM, Adasa, Aguas de Malambo, Aguas del Oriente, Aguas Regionales, CENS, CHEC, Delsur, ENSA, and ESSA. Adasa reports for the first time in 2018.

(3) Including EPM, Adasa, Aguas de Malambo, Aguas del Oriente, Aguas Regionales, CENS, CHEC, Delsur, Emvarias, ENSA, and ESSA.

The main variations in NOx in this period are due to power generation from natural gas by La Sierra thermal power station from December onwards, as well as to previous tests carried out with ACPM for this plant.

Power generation with natural gas will continue for three years, in order to support the generation commitment assumed by the company with the Ituango project.

SOx: sulfur dioxide.

NOx: nitrogen oxide.

The calculations are made based on the consumption of compounds and emission factors obtained from the United States Environmental Protection Agency (EPA). The different emissions it considers include: VOC (g/km), OC (g/km), CO2 (g/km), NOx (g/km), SO2 (g/km), PM (g/km), and benzene (g/km). These are calculated according to the type of vehicle, equipment, and fuel used in the company.

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SOx and NOx emissions – EPM

SOx and NOx emissions – EPMConcept / Indicator (Ton /

year) 2017 (1) 2018 (2) 2019 (3)

NOx and SOx emissions NOx SOx NOx SOx NOx SOxLa Sierra thermal power station (isokinetic sampling) 3.89 0.00 2.53 0.00 21.74 0.11

Transportation of personnel, supplies, and products in vehicles of the group.

12.04 0.11 16.53 0.13 14.70 0.17

Total 15.93 0.11 19.07 0.13 36.44 0.28

Source: EPM.

(1) 308 automobiles and pickup trucks, 291 motorcycles, 94 trucks and buses.(2) 302 automobiles and pickup trucks, 281 motorcycles, 103 trucks and buses.(3) 266 automobiles and pickup trucks, 278 motorcycles, 76 trucks and buses in 2018.

The main variations in NOx in 2019 are due to power generation from natural gas during December at La Sierra thermal power station and prior testing with ACPM.

Other emissions – Grupo EPM

Other emissions – Grupo EPM

Concept / Indicator (Ton) Benzene Particulate matter CO VOCs

2017 (1) 0.16 2.26 103.06 9.622018 (2) 0.10 1.61 71.31 8.442019 (3) 0.16 4.50 71.40 9.81

Source: EPM.

(1) Including EPM, Aguas de Malambo, Aguas del Oriente, Aguas Regionales, CHEC, Delsur, ENSA, and ESSA. (733 automobiles and pickup trucks, 313 motorcycles, 296 trucks and buses).(2) Including EPM, Aguas de Malambo, Aguas del Oriente, Aguas Regionales, CENS, CHEC, Delsur, ENSA, ESSA, Eegsa, HET, and Ticsa. (601 automobiles and pickup trucks, 307 motorcycles, 395 trucks and buses).(3) Including EPM, Adasa, Aguas de Malambo, Aguas del Oriente, Aguas Regionales, CENS, CHEC, Delsur, Emvarias, and ESSA. (596 automobiles and pickup trucks, 302 motorcycles,* 378 trucks and buses).

There are variations in particulate matter and volatile organic pollutants, mainly due to the update in the report of the number of vehicles that includes Emvarias.

*According to the 2019 report, Emvarias added to its fleet 89 waste collection vehicles that use natural gas.

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Other emissions – EPM

Other emissions – EPM

Concept / Indicator (Ton) Benzene Particulate matter CO VOCs

2017 (1) 0.05 0.49 36.67 3.362018 (2) 0.05 0.76 38.31 3.962019 (3) 0.06 0.56 32.76 4.17

Source: EPM.

(1) 308 automobiles and pickup trucks, 291 motorcycles, 94 trucks and buses.



Significant decreases in particulate matter and carbon monoxide emissions are reported as a result of the decrease in EPM’s vehicle fleet in this period.


305-1 Direct (Scope 1) GHG emissions.305-2 Energy indirect (Scope 2) GHG emissions.305-3 Other indirect (Scope 3) GHG emissions.305-4 GHG emissions intensity.305-5 Reduction of GHG emissions.305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions.

Scope and coverageTerritoryColombia - AntioquiaColombia - CaldasColombia - QuindíoColombia - RisaraldaColombia - SantanderColombia - Norte de SantanderColombia - Malambo, AtlánticoChileEl SalvadorGuatemalaPanama


CompaniesEmpresas Públicas de Medellín - EPMAguas Regionales EPMAguas de MalamboEmpresas Varias de Medellín - EmvariasCentral Hidroeléctrica de Caldas - CHECElectrificadora de Santander - ESSAEmpresa de Energía del Quindío - EDEQCentrales Eléctricas del Norte de Santander - CENSDistribuidora de Electricidad del Sur - DelsurEmpresa Eléctrica de Guatemala - EegsaElektra Noreste - ENSAHidroecológica del Teribe - HET

Adaptation tonatural variability andclimate change

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Adaptation to natural variability and climate change

Based on the climate risk matrixes of the companies and businesses of Grupo EPM and the analysis of the business risk methodology, a proposal was prepared for the Comprehensive Climate Risk Management module, which aims to facilitate the identification, analysis, and permanent management of climate risks as appropriate at the group, business, company,

project, or process levels.

The Phase II Climate Study was completed, providing climate scenarios by 2040 for the areas of greatest interest to water supply and power businesses located in Antioquia. Temperature rises, storms, and dry periods are expected to impact power generation, water supply, and

electrical energy distribution.

EPM water and sanitation was able to complete the water source quality modeling of La Fe reservoir and the first stage of the sewerage modeling. These reports will be integrated with

the results of climate modeling to define adaptation strategies.

Set of strategies, measures, and projects duly identified, assessed, and prioritized over time, in accordance with the scale of risk related to climate events, to strengthen the response capacity of businesses, services, surroundings, and communities and to contribute to the continuation of the company despite the climate changing conditions.

Management in 2019

Seeking to implement the measures established in Grupo Empresarial EPM’s Adaptation Plan, either through its management focal points (knowledge, communities, infrastructure, ecosystems) or its cross-cutting themes (cultural transformation, financing, inter-institutional management, follow-up, and monitoring), progress was made during 2019 in actions aimed at strengthening climate knowledge, risk analysis, reviewing and updating contingency plans, and inter-institutional management. The most recurrent actions were those aimed at conservation, planting, reforestation, and payment for environmental services.

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Knowledge and infrastructure

• The Phase II Climate Study conducted by EPM with the Universidad Nacional indicates that temperature rises are expected for the period 2040-2070 (0.9°C-2.4°C), as well as decreases in quarterly accumulated precipitation, and more consecutive days without rain that will affect flow regulation and water supply sources in the main basins of interest to EPM. These will need to be considered in order to strengthen measures related to design, infrastructure operation, energy complementarity analysis, and sediment and flow management.

• As part of the proposal for the Comprehensive Climate Risk Management Module, a redefinition was included for the description of the climate risk category of “natural and anthropogenic risks”, and the list of climate risks to be included in the list of business risks was determined. The plan for implementation from 2020 onwards was analyzed.

• Two servers were installed in EPM’s computer network, which will enable the development of climate modeling exercises by a group of experts in the water supply and power business and will provide timely signals for the group’s climate adaptation plan.

• The company maintained a constant participation at the national, sectoral, union, and territorial levels, in matters of climatic interest, action plans, and development of bills and regulations.

• In compliance with Decree 2157 of 2017 of the Colombian Ministry of Environment and Sustainable Development, the power generation business prepared and submitted to the National Environmental Licensing Authority (abbreviated ANLA in Spanish) the disaster risk management plans (abbreviated PGRD in Spanish) for the major power generation plants (Guatapé, Playas, Termosierra, Porce II, Porce III, Riogrande, and the Guatrón power generation plant); it also made progress in identifying the risk to the Sonsón I and II, Pajarito I and II, Julio Simón Santamaría, La Vuelta, La Herradura, and Caracolí small hydroelectric power stations.

• EPM transmission and distribution carried out disaster management plans for 61% of the substations and 100% of the transmission lines, which include an emergency and contingency plan. It is expected that 100 per cent of the plans will be completed by 2020.

• EPM water and sanitation is making progress in assessing the needs for strengthening hydrometeorological instrumentation in drinking water supply basins.

• Aguas Regionales continued to monitor hydroclimatic variables to prevent and minimize the occurrence of climatic risks in areas of interest to the company. It included climate variables in the updating of contingency plans for water supply and sewerage with operational and commercial areas, continued with the assessment of alternative sources of water supply (groundwater and surface water) and with the optimization and expansion of sewerage networks. It also monitored and updated the current sanitation plans for their subsequent approval by the environmental authorities.

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• Aguas de Malambo approached companies in the sector to learn about contingency plans and analysis of opportunities for the study of alternative sources of drinking water supply.

• CHEC achieved the approval of the strategic business risk “Risks derived from climate change and other natural events”; it participated in the articulation of local and regional actions where integral climate change management plans are currently defined (abbreviated PIGCC in Spanish), and made progress in the instrumentation for the monitoring of hydroclimatic variables.

• Trelec was able to insure against all risks, including the climate variable, 84 power substations, and promoted technological actions for risk monitoring.

• Delsur monitored climate conditions through El Salvador Ministry of Environment. It monitors online the behavior of climatic phenomena and plans the availability of the necessary personnel to respond to network failures due to the occurrence of climatic events.

Communities and ecosystems

In this area of climate strategy management, Grupo EPM aims to articulate efforts, commitments, and management of matters related both to the group’s climate adaptation measures and to the integrated water resources and biodiversity management. In this regard, there has been significant progress to develop conservation, offset, and forest management initiatives as well as to contribute to the goal of water protection, community programs, and engagement with voluntary inter-institutional agreements, such as BanCO2.

In summary:

• CHEC took part in the development of the program Mujeres Cafeteras Sembrando Sostenibilidad (Women Coffee Growers Planting Sustainability) for the planting of 108,000 trees in basins that serve rural water supply systems, in alliance with the Departmental Committee of Coffee Growers of Caldas. A total of 14 new families joined the BanCO2 Program.

• EDEQ planted 970 trees in the municipality of Salento, Quindío, and continued with the establishment of biological corridors, ecological restoration, and the second phase of the Proyecto Armonía Electrovegetal (Electro-plant Harmony Project), through which 690 trees were planted in 22 different locations in the city of Armenia.

• CENS paid for BanCO2 environmental services and continued with its commitments in the water protection indicator.

• Eegsa continued with the agreement to protect 17.57 ha within the United Nations National Park and installed 2,650 meters of shielded cable in the distribution network.

• ENSA continued the process of reforesting 100% of the trees felled at a ratio of 1 to 1 by 2020.

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To see the detailed progress of these actions, please refer to the chapter “Water conservation and biodiversity”.

By 2020, priority will be given to actions in the road map of each company and business, which will be monitored and controlled in order to facilitate the fulfilment of common challenges and the construction of indicators by component within the adaptation plan of Grupo EPM’s climate strategy.


201-2 Financial implications and other risks and opportunities due to climate change.

Scope and coverage

TerritoryColombia - AntioquiaColombia - CaldasColombia - QuindíoColombia - RisaraldaColombia - SantanderColombia - Norte de SantanderColombia - Malambo, AtlánticoChileEl SalvadorGuatemalaPanama


CompaniesEmpresas Públicas de Medellín - EPMAguas Regionales EPMAguas de MalamboEmpresas Varias de Medellín - EmvariasCentral Hidroeléctrica de Caldas - CHECElectrificadora de Santander - ESSAEmpresa de Energía del Quindío - EDEQCentrales Eléctricas del Norte de Santander - CENSDistribuidora de Electricidad del Sur - Delsur Empresa Eléctrica de Guatemala - EegsaEPM ChileElektra Noreste - ENSA

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Sustainabilityreport 2019

www.sostenibilidadgrupoepm.com.co/en/

Social and environmental management Sustainability 2019 · Grupo EPM 2017 greenhouse gas emissions...

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