S U S T A I N A B I L I TY
R E P O R T
S U M M A R Y
2 0
1 7
The
value of
connected
energy
S U S T A I N A B I L I T Y
R E P O R T
S U M M A R Y
2 0
1 7
Ta b l e o f c o n t e n t s
2
S u s t a i n a b i l i t y R e p o r t 2 0 1 7 / S u m m a r y
w w w . r e e . e s
3
This Report presents
a summary of
the Sustainability
Report 2017. The full
version, as well as
the legal information
(Consolidated Annual
Accounts 2017 and
Corporate Governance
Report 2017) are
published solely in
electronic format
(browsable pdf) and
are available on the
corporate website
www.ree.es.
Sustaina bility
Report
2017
PDF
Corporate
Governance Rep ort
2017
PDF
Consolidated
Annual Accoun ts
2017
PDF
4
-
LETTER FROM
THE CHAIRMAN
AND THE CE
/ The year
in review, a
comprehensive
assessment
of 2017
10
12
16
20
-
KEY
PERFORMANCE
INDICATORS
/ Red Eléctrica
at a glance:
our performance
during 2017
01
THE COMPANY
/ The Red Eléctrica
Group
/ Activity in Spain
and international
activity
02
STRATEGY
/ Strategic Plan
2014-2019
/ Essential
strategies and
cross-cutting
strategies
03
COMMITMENT TO
SUSTAINABILITY
/ Our commitment
to sustainability
/ Sustainability
principles
/ Sustainability
priorities
26
34
44
60
04
ANTICIPATING
CHANGE AND
TAKING ACTION
/ Anticipating change
and taking action
/ Sustainability
opportunities
/ Risk management
/ Innovation
05
DECARBONISATION
OF THE ECONOMY
/ Energy transition
and climate change
/ Sustainable
development of the
transmission grid
/ Integration of
renewable energy
/ Energy efficiency:
demand-side
management
/ Reduction of the
carbon footprint
06
RESPONSIBLE
VALUE CHAIN
/ Good governance
/ Ethics and compliance
/ Economic impact and
financial soundness
/ Employees
/ Responsible
environmental
management
/ Supply chain
/ Customer orientation
07
CONTRIBUTION
TO THE
DEVELOPMENT
OF SOCIETY
/ Commitment
to society
/ Economic and
social contribution
of investment
projects
/ Tax transparency
T A B L E O F
C O N T E N T S
L e t t e r f r o m t h e C h a i r m a n a n d t h e C E O
4
5
Letter from the Chairman
and the CEO
Therefore, the Company
maintains a clear position
on this aspect as reflected
in its climate change action
plan, which, in addition
to taking on challenging
targets to reduce its carbon
footprint by the 2020 and
2030 horizons, includes
different courses of action
to contribute to an energy
model that is capable of
providing electricity based
on more emission-free
energy sources.
In this regard, the Company
has continued in 2017
with the sustainable
development of the
transmission grid and has
invested 411.8 million euros
in new infrastructure mainly
aimed at improving grid
reliability, favouring the
evacuation of renewable
energy and the development
of interconnections between
electricity systems.
Among the projects
undertaken, those aimed at
improving interconnections
with Europe are noteworthy
due to their major influence
on improving the quality
and security of the Spanish
electricity system and the
integration of renewable
energy.
Investment
I N T H E
T R A N S M I S S I O N
G R I D
411.8
m€
in new line
and new
substation
bays
I N V E S T M E N T
F O C U S
Improvement in
the reliability and
security of the grid
and the development
of interconnections
between electricity
systems.
These projects are aimed
at ensuring that by 2030
the Spanish electricity
system has a 15 %
interconnection capacity
in relation to the installed
power capacity in our
country, a milestone that
is a priority in Europe, as it
is an essential aspect for the
integration of the European
single electricity market.
Similarly, Red Eléctrica has
continued to guarantee
the security and quality
of the electricity supply,
making it compatible with
the maximum integration
of renewable energy. In
this regard, the work of the
Control Centre of Renewable
Energy has been key, as it
made it possible for 33.8 %
of the energy integrated into
the system on the Spanish
peninsula to have come
from renewable sources.
In addition, the Company
is carrying out projects
aimed at energy storage,
such as the construction
of the Soria-Chira pumped-
storage hydroelectric
power station in Gran
Canaria, conceived as
system operation tools
to optimise the efficiency
of the electricity system
and to safely integrate
renewable energy into
isolated systems.
JUAN LASALA
Chief Executive Officer
JOSÉ FOLGADO
Chairman of Red Eléctrica Corporación
consumer and which favours
growth and job creation.
Red Eléctrica, as the
centrepiece of the electricity
system, is a crucial player
in the transition to this
new energy model, whose
key elements must be
the electrification of the
economy, the maximum
integration of renewable
energy in the energy mix and
increasing energy efficiency,
ensuring at all times the
security of supply.
The challenge of combating
both the global warming
of the planet and climate
change is a priority issue on
the world agenda and is a
challenge that, as is made
clear in the energy targets
that the European Union has
set itself in the medium and
long term, requires making
economic growth compatible
with the reduction of
greenhouse gases.
To address this, it is
essential to accelerate
the transition to an energy
model that offers reliable,
affordable and increasingly
cleaner energy for the
Sustainability Report 2017 / Summarywww.ree.es
6
7
Complementary to these
projects, initiatives
are also carried out
regarding demand-side
management and energy
efficiency, in addition
to those undertaken for
the promotion of electric
mobility.
OTHER AREAS
OF BUSINESS
In the international arena,
the Red Eléctrica Group
has continued to manage
projects for the construction
and operation of electricity
grids in two border areas
between Peru and Chile.
During 2017, noteworthy
was the awarding of a new
concession contract for the
construction of a new line in
the southern region of Peru,
which will enable the closing
of the ring that makes up
the rest of the infrastructure
managed by the Group in
that area.
Value
C R E A T I O N
669.8
m€
of net profit
5.2 % higher than in 2016
S H A R E H O L D E R
R E T U R N
Shareholder
remuneration in the
form of dividends has
increased 7 % with respect
to the previous year.
On the other hand, in 2017
the Chilean subsidiary TEN
commissioned the first
interconnection between
the north and central
electricity systems of
the country, through the
Mejillones-Cardones
transmission line. Similarly,
the Group, through the
subsidiary REDENOR, has
been awarded the contract
for the construction of a new
project in northern Chile.
In the telecommunications
services business line,
the subsidiary REINTEL
has continued to
consolidate itself as a
telecommunications
infrastructure operator
of reference in Spain,
through the commercial
management and operation
of the country's largest
dark fibre optic network.
FINANCIAL
RESULTS
Focusing on the creation
of value, during 2017,
the Red Eléctrica Group
has shown stable growth,
achieving solid results and
an important strengthening
of its main solvency
ratios, while maintaining
a clear orientation towards
operational efficiency and
the permanent generation
of value.
Red Eléctrica
has been
recognised
as the top
company in
the world in
sustainability
in the Electric
Utilities
sector by the
Dow Jones
Sustainability
Index.
T H E R E D E L É C T R I C A
G R O U P ’ S C O M M I T M E N T
T O S U S TA I N A B I L I T Y
2 0 3 0
Based on four priorities:
anticipation change
and taking action,
decarbonisation of the
economy, responsible value
chain and contribution
to the development
of society.
This is reflected in the
sound financial results
obtained: net revenue
reached 1,941.2 million
euros, 0.5% higher than
the previous year, and
the EBITDA margin
stood at 78.3%.
Additionally, net profit
for the year amounted
to 669.8 million euros,
5.2 % higher than the
previous year, and
shareholder remuneration
in the form of dividends
increased by 7 % compared
to 2016; all this, in line
with the objectives set
out in the 2014-2019
Strategic Plan.
SUSTAINABILITY
COMMITMENT
The commitment to
sustainability taken on
by the Red Eléctrica
Group ever since the
Company began obtained
clear backing in 2017
through recognition by the
Dow Jones Sustainability
Index (DJSI) as the top
company in the world
in sustainability in the
Electric Utilities sector,
also reaching the leading
position in the Utilities
super-sector, which
encompasses the
electricity, gas and
water sectors.
On its path of continuous
improvement, the Company
has taken huge strides in the
management of this area
through the design of the
Sustainability Commitment
2030 of the Red Eléctrica
Group; a cross-cutting
commitment, with a
long-term vision and in
keeping with the Company's
strategy, which allows us
to establish a global scope
and a common framework
to give a better response
to stakeholders, increase
efficiency and showcase
all of the Group’s actions
in the field of sustainability.
The new commitment to
sustainability is based on
four priorities: anticipating
change and taking action;
decarbonisation of the
economy; a responsible
value chain; and contribution
to the development of
society. These priorities
will act as the key drivers to
respond to the challenges
and opportunities that the
Company faces. The design
of this commitment has
taken into account, among
others, the objectives
set in the United Nations
Sustainable Development
Goals, so that the
sustainability priorities
contribute significantly
to the achievement of
the SDGs.
Letter from the Chairman and the CEOSustainability Report 2017 / Summarywww.ree.es 8
9
The Sustainability Commitment 2030
of the Red Eléctrica Group: a cross-cutting
commitment, with a long-term vision and
in keeping with the Company's strategy.
In this new scenario of
sustainability, innovation is
conceived as an important
lever for growth and
anticipation, extending
to all areas of business
activity: digitalisation,
people, sustainability
and technology. Digital
transformation occupies
a priority position in order
to improve operational
efficiency, develop new
business models and
adapt the Group's human
capital to the Company's
transformation process
in the coming years.
The involvement of our
professionals and their
high level of expertise are
the basis of the success of
our business management.
To foster this commitment,
the Company is committed
to their training and
professional development,
an aspect that is enhanced
through the new Red
Eléctrica Campus, as the
corporate university.
Similarly, gender equality
and equal opportunity
is one of the aspects
where significant progress
is being made, as reflected
in the progressive increase
of women in the workforce
and in managerial
positions, and the
continued high level of
representation of women
on the Board of Directors.
Another aspect to which
the Company attaches
special significance is
health and safety at work.
In 2017, there was an
improvement in the main
accident indicators for both
Company employees and
employees of contracted
companies. Compared
to 2016, the frequency
rate and severity rate
experienced a reduction
of 29.6 % and 44.4 %
respectively within the
Group's companies in
Spain. Similarly, in the
contracted companies the
frequency rate was reduced
by 29 % and the severity
rate by 13 %.
G E N D E R E Q U A L I T Y
Red Eléctrica
continues to
progressively
increase the number
of women in the
workforce and in
managerial positions.
For the Red Eléctrica
Group, good governance,
ethics and compliance
are fundamental pillars
to ensure the proper
functioning of the
business activity.
For this, the Company
has a series of corporate
conduct rules that establish
the values and business
conduct guidelines,
and it has a compliance
system in place aligned
with the best practices in
this area, aimed at ensuring
that the organisation
adequately respects the
established obligations
and the commitments
undertaken; all this, based
on a proactive culture
of risk management.
Red Eléctrica is aware
that its long-term
sustainability depends
on providing a service
that adds value to
society and generates
a positive impact on
society. Therefore, one
of its priorities is to
contribute to the economic,
environmental and social
progress of society, for
which it complements its
projects in the territory with
collaborative programmes
that generate shared value
in the communities in which
the Company’s facilities
are located.
In addition, to assess
the beneficial impact
of its projects on society,
the Company has adopted
a methodology that allows
the contribution of its
investment, as a dynamic
element of the country's
economic activity, to be
measured.
This contribution is
supplemented, in turn,
through a commitment
that ensures maximum
respect and care for
the environment in the
Company’s execution
of its activities throughout
the useful life of the
facilities. Furthermore,
said commitment fosters
biodiversity protection,
through the development
of various courses of action
aimed at its conservation,
or the promotion of projects
in collaboration with public
administrations, NGOs and
other stakeholder groups.
Lastly, it should be
noted that Red Eléctrica
voluntarily adheres to
various initiatives that
strengthen its commitment
to sustainability, including
the commitment acquired
through the principles of
the United Nations Global
Compact.
Equal
O P P O R T U N I T I E S
83.3
%
of new
appointments
to managerial
positions have
been women
24.8 % of women
in the workforce of the
Group’s companies in Spain
hold managerial
positions
O C C U PAT I O N A L
H E A LT H & S A F E T Y
Significant reduction
in the accident frequency
and severity rates
in 2017.
Letter from the Chairman and the CEOSustainability Report 2017 / Summarywww.ree.es K e y p e r f o r m a n c e i n d i c a t o r s 2 0 1 7
10
S u s t a i n a b i l i t y R e p o r t 2 0 1 7 / S u m m a r y
w w w . r e e . e s
11
Key performance indicators 2017
GOOD
GOVERNANCE
BUSINESS
FINANCIAL
DATA
EMPLOYEES
ENVIRONMENTAL
SOCIAL
INDEPENDENT
BOARD MEMBERS
WOMEN
ON THE BOARD
ATTENDANCE
AT THE
SHAREHOLDERS’
MEETING
REDUCED
BOARD
58.3
%
N/C
33.3
%
-3.1 pp
58.5
%
12
members
-2 pp
N/C
KM
OF LINE
AVAILABILITY OF
THE PENINSULAR
GRID
FIBRE-OPTIC
NETWORK
INTEGRATION
OF RENEWABLE
ENERGY
43,793
km
+0.3 %
98.28
%
-0.03 pp
33,000
km
+2 %
33.8 %
of the total
electricity
generated
-7 pp
NET
REVENUE
EBITDA
NET
PROFIT
DISTRIBUTION
OF DIVIDENDS
1,941.2
M€
+0.5 %
1,519.5
M€
+2.3 %
669.8
M€
+5.2 %
0.9188
€/share
+7 %
GROUP
WORKFORCE
WOMEN
IN THE
WORKFORCE
ACCIDENT
FREQUENCY
RATE
TRAINING
1,815
people
+2.3 %
24.2
%
+0.7 pp
1.71
-29.6 %
108
hrs/ employee
+31.7 %
DIRECT
EMISSIONS
(Scope 1)
LINES
MARKED WITH
BIRD-SAVING
DEVICES
RESTORATION
OF HABITATS
(Red Eléctrica
Forest)
ENVIRONMENTAL
MANAGEMENT
EXPENDITURE
28,765
t CO₂ eq.
-8.7 %
332 km
in areas of
critical
priority
+52.3 %
778 ha
recovered
(2009-2017)
+2.2 %
+0.4 %
22.7
M€
INVESTMENT IN
THE COMMUNITY
TOTAL TAX
CONTRIBUTION
OF THE GROUP
CUSTOMER
SATISFACTION
LOCAL
SUPPLIERS
6.5
M€
662
M€
8.3
out of 10
+1.6 %
-2.8 %
N/C
94 %
of purchases
+3 pp
The figures shown in small circles reflect the variation compared to 2016.
pp: percentage points N/C: no change
The business, environmental and social indicators correspond to the companies of the Group in Spain.
01
T H E
C O M P A N Y
13
projects in Peru and Chile),
the definitive consolidation
of its telecommunications
activity (with the creation
of REINTEL), and the
development of energy
storage infrastructure in
the Canary Islands (with the
creation of REINCAN).
The Red Eléctrica Group
The Red Eléctrica Group
has had a holding structure
since 2008 to strengthen the
separation and transparency
of regulated activities (the
electricity business in Spain)
from the rest of the Group’s
activities. Red Eléctrica
Corporación is the parent
company.
The main activity of the
Group is carried out by
Red Eléctrica de España,
whose role is transmission
agent and operator of the
Spanish electricity system
(TSO -Transmission System
Operator).
The Group’s international
business is geared towards
investment in electricity
transmission infrastructure
abroad. This activity,
initiated in 1999, and with
a current presence in Peru
and Chile, is managed
through the companies
integrated into Red Eléctrica
Internacional.
In recent years there
has been a significant
boost concerning the
diversification of activities
of the Red Eléctrica Group,
with significant advances in
international business (new
R E D E L É C T R I C A G R O U P ( 2 0 1 7 )
W o r k f o r c e
1,815
people
R e v e n u e
1,941.2
M€
S t o c k m a r k e t c a p i t a l i s a t i o n
10,124
M€ (at year end)
E l e c t r i c i t y a c t i v i t y
i n S p a i n
93%
of revenue
O t h e r
a c t i v i t i e s
7%
of revenue
Sustainability Report 2017 / Summarywww.ree.es
Activity in Spain
International activity
14
15
ELECTRICITY
ACTIVITY
Red Eléctrica de España is
the sole transmission agent
and operator (TSO) of the
Spanish electricity system.
Its mission is to guarantee
the security and continuity
of the Spanish electricity
supply at all times, and
to manage the development
and maintenance
of a safe and reliable
transmission grid.
TELECOMMUNICATIONS
ACTIVITY
The Group’s
telecommunications
business is conducted
through the subsidiary Red
Eléctrica Infraestructuras
de Telecomunicación
(REINTEL). Its main activity
is the leasing of dark fibre
and sites and technical
spaces for housing
telecommunications
equipment.
ENERGY STORAGE
ACTIVITY IN THE
CANARY ISLANDS
Red Eléctrica Infraestructuras
en Canarias (REINCAN)
focuses on promoting energy
storage projects in the
Canary Islands, developed as
system operator tools to help
guarantee supply, improve
system security and optimise
the integration of renewable
energy on the islands.
R E D E L É C T R I C A
D E E S PA Ñ A
manages a
transmission grid
of about 44,000 km
of electricity line and
operates an electricity
system with 100 GW
of installed power
capacity.
R E I N T E L
manages and
operates a fibre-optic
network of more than
33,000 km of cable
deployed along the
electricity transmission
grid and the railway
network.
R E I N C A N
will build the
Soria-Chira pumped-
storage hydroelectric
power station that
will enable the further
development of
renewable energy
in the Canary Islands.
ACTIVITY IN PERU
Red Eléctrica Internacional
owns 100 % of:
∫ Red Eléctrica Andina
(REA), specialised in the
maintenance of electricity
infrastructure.
∫ Red Eléctrica del Sur
(REDESUR), which together
with its subsidiaries,
develops electricity
transmission projects in
southern Peru. In 2017,
the Company was awarded
a new project in the area.
ACTIVITY IN CHILE
Red Eléctrica Internacional
through its subsidiary Red
Eléctrica Chile owns:
∫ 50 % of Transmisora
Eléctrica del Norte
(TEN), which in 2017
commissioned the
interconnection line
between the electricity
systems of the central
zone and northern Chile.
∫ 70 % of REDENOR which
was awarded a new project
in northern Chile in 2017.
R E D E L É C T R I C A I N T E R N A C I O N A L
manages, through its subsidiaries in Peru and Chile,
the Group’s international business, which is geared
towards the construction and operation of electricity
transmission grids outside of Spain.
With the incorporation of the new projects for 2017, the
Company will manage more than 1,300 km of line in Peru
and almost 1,500 km in Chile.
PERU
TES4
2017
TES
2010
Lima
REDESUR
1999
TES3
2015
TES2
2015
REDENOR
2017
TEN
2016
Santiago
CHILE
220 kV Tintaya-Azángaro line (TES4)
REDESUR - TES - TEN
TES2 - TES3 - REDENOR
500 kV
220 kV
T.E.S.: Transmisora Eléctrica del Sur
(subsidiaries of REDESUR)
01 The companySustainability Report 2017 / Summarywww.ree.es
02
17
Strategic Plan 2014-2019
The Strategic Plan
2014-2019 focuses
not only on the
execution of Red Eléctrica’s role as
TSO in Spain but also on reinforcing
efficiency criteria and driving the
expansion of the business base as
an alternative path for growth and
the creation of value.
E S S E N T I A L S T R A T E G I E S
Development
of the TSO role
Efficiency
Expanding the
business base
C R O S S - C U T T I N G S T R A T E G I E S
S T R A T E G Y
Innovation
Excellence
People
Sustainability Report 2017 / Summarywww.ree.es 18
19
Essential strategies
and cross-cutting strategies
Essential
strategies
DEVELOPMENT
OF THE ROLE AS TSO
The main activity of Red
Eléctrica is linked to its role
as sole transmission agent
and operator of the Spanish
electricity system. Therefore,
the Company's core strategy
focuses on:
∫ the development of an
increasingly meshed
transmission grid that is
more robust and better
interconnected, and
∫ the efficient operation of
the electricity system, with
the aim of contributing to
a sustainable energy model
through the safe integration
of renewable energy and the
promotion of projects oriented
towards energy efficiency.
innovation as a lever for growth
that will allow us to respond to the
great challenges of the future.
EXCELLENCE
Consolidate ourselves as
a sustainable company, through
a management that is both
ethical and committed to the
stakeholders, maintaining
a position of reference in the
field of excellence.
EXPANSION
OF THE BUSINESS BASE
Development of regulated
activities that are different from
the current and unregulated
activities in the scope of
telecommunications and the
management of infrastructure,
as well as expansion into other
geographical areas, with the
aim of driving the growth
path of the Company in the
coming years.
Cross-cutting
strategies
EFFICIENCY
Improvement of efficiency
levels, generating value through
the optimisation of operating
margins, in order to mitigate
the impact of the decrease
in the profitability of new
investments as a result of the
new remuneration model.
INNOVATION
Promote innovation as an
integral part of the operational
process, boosting technological
PEOPLE
Commitment to a healthy
working environment that favours
the organisation of work and
the well-being of employees.
This commitment enables the
Company to optimise resources
and foster talent in order to
tackle the challenges it faces.
S T R A T E G I C P L A N S N A P S H O T
T A R G E T S
2 0 1 4 - 2 0 1 9
A C H I E V E M E N T S
2 0 1 4 - 2 0 1 7
I n v e s t m e n t
2 0 1 4 - 2 0 1 9
4,575 M€
E f f i c i e n c y
2 0 1 4 - 2 0 1 9
≥200 basis
EBITDA margin in 2019
points
F i n a n c i a l
s t r u c t u r e
3.5X
Net debt / EBITDA (average)
G r o w t h
2 0 1 4 - 2 0 1 9
5-6% 7%
EPS (CAGR)
DPS (CAGR)
CONSOLIDATED
ACTIVITIES
3,575 M€
NEW
ACTIVITIES
1,000 M€
60%
Made to date
∫ EBITDA
margin 2017
∫ Control
of operating costs
Pending
77%
Made to date
and earmarked
78.3%
3.5X
2 0 1 4
2 0 1 5
2 0 1 6
2 0 1 7
∫ EPS growth
∫ DPS growth
6.1%
7%
CAGR
2014-17(1)
CAGR
2014-17
(1) Calculated using 2013 as the base year.
Legend > EPS: Earning Per Share / DPS: Dividend Per Share / CAGR: Compound Annual Growth Rate.
02 StrategySustainability Report 2017 / Summarywww.ree.es
03
C O M M I T M E N T T O
S U S T A I N A B I L I T Y
Our commitment
to sustainability 2030
21
In 2017, the Board of
Directors approved the
Sustainability Commitment
2030 of the Red Eléctrica
Group. This commitment
offers a long-term focus,
capable of both responding
to new challenges and
seizing opportunities that
may arise in terms of
sustainability, and that is
far-reaching in scope and
applicable to all activities
of the Group.
S U S T A I N A B I L I T Y
P R I O R I T I E S
Responsible
value chain
_
The Red
Eléctrica Group
has undertaken
a commitment
to sustainability
which is strategic,
cross-cutting
and with a
long-term vision.
Decarbonisation
of the economy
_
Anticipating
change and
taking action
_
Contribution
to the
development
of society
_
Sustainability Report 2017 / Summarywww.ree.es Cornerstones of sustainability
Sustainability priorities
22
23
The Red
Eléctrica Group
understands
that ensuring
its continuity
and success
depends on its
commitment to
sustainability
through the
creation of
shared value
for all its
stakeholders in
the responsible
development
of its activities.
This commitment is
based on ten principles
defined in the Corporate
Responsibility Policy
of the Company and is set
out as four sustainability
priorities identified as
the key drivers to respond
to the challenges and
opportunities that the
Company faces.
Sustainability
B A S E D O N
Financial
sustainability
Talent,
diversity and equality
Excellence
and corporate
responsibility
Partnerships
with our
stakeholders
Innovation
Creation of
shared value
Corporate
governance
and ethics
Care for the natural
environment
Transparency
Respect for
Human Rights
Anticipating change
and taking action
Responsible
value chain
Promote a corporate
culture of innovation and
flexibility that allows us to
identify growth opportunities
and respond to the challenges
of the future, anticipating
and adapting both to global
trends and to the regulatory
environment arising from
the new energy model.
Extend our commitment
to responsibility to all
links in the value chain,
ranging from our own people
to suppliers and customers,
accomplishing this through
the creation of partnerships
and by basing it on
our governance and
integrity model.
The four sustainability
priorities are deployed
through specific multiannual
plans for the companies
of the Group and
programmes of annual
projects. In 2017, the overall
degree of fulfilment of the
sustainability programme
was 91 %.
Decarbonisation
of the economy
Contribution to the
development of society
Be a proactive agent
in the energy transition
towards a zero-emission
model, advocating for
the electrification of the
economy and the efficient
integration of renewable
energy, through a robust
and better interconnected
grid, as well as the
development and operation
of energy storage
systems.
Contribute to the
economic, environmental
and social progress of
society, through the provision
of a key service in a safe
and efficient manner.
This is achieved by
promoting environmental
conservation, the quality
of life and social well-being
of people and involving
the community in the
execution of our activities,
with the goal of generating
mutual benefit.
E X C E L L E N C E I N
M A N A G E M E N T
In 2017, the Company
renewed the European
Seal of Excellence 500+
with a score of over
700 points.
03 Commitment to sustainabilitySustainability Report 2017 / Summarywww.ree.es 24
25
STAKEHOLDER
MANAGEMENT
Red Eléctrica has a
stakeholder management
model that ensures the
adequate management of the
relevant economic, social and
environmental impacts of its
activities on stakeholders.
This stakeholder management
model incorporates the
requirement for rules and
standards of reference
(AA1000, IQNet SR10,
ISO26000 and Global
Reporting Initiative).
In 2017, Red Eléctrica reached
the highest score (100 points)
in the Dow Jones Sustainability
Index criteria, which assesses
a company’s commitment
and performance with regard
to its stakeholders.
Overall
S A T I S F A C T I O N
of all the
stakeholders
analysed
in 2017 was
8.49
OUT OF 10
LEADERSHIP IN
SUSTAINABILITY
The Red Eléctrica Group
has been recognised as
the best company in the
world in sustainability in the
Electric Utilities sector by
the Dow Jones Sustainability
Index (DJSI), with an overall
score of 93 points out of
100, reaching the highest
rating in 12 of the 23 criteria
assessed.
Similarly, the Company leads
the Utilities super-sector,
encompassing the electricity,
gas and water sectors.
As a result of this excellent
assessment, Red Eléctrica
has received the ‘Gold Class’
award in ‘The Sustainability
Yearbook 2018’ given by
RobecoSAM.
M A I N R E C O G N I T I O N S R E C E I V E D B Y
R E D E L É C T R I C A R E G A R D I N G S U S T A I N A B I L I T Y
to all the SDGs, although
it contributes to Goal 7
(Affordable and clean energy),
9 (Industry, innovation
and infrastructure) and 13
(Climate action) mainly due
to the nature of its business
activities.
CONTRIBUTION
TO THE SUSTAINABLE
DEVELOPMENT GOALS
(SDGS)
The design of the Group’s
Sustainability Commitment
2030 has taken into
account the objectives
set in the Sustainable
Development Goals, so that
the sustainability priorities
contribute significantly
to the achievement
of the SDGs.
In this regard, Red Eléctrica
endeavours to contribute
GOALS MOST
CLOSELY LINKED
TO THE COMPANY’S
ACTIVITIES
03 Commitment to sustainabilitySustainability Report 2017 / Summarywww.ree.es 04
A N T I C I P A T I N G
C H A N G E A N D
T A K I N G A C T I O N
27
Anticipating change
and taking action
The current global context
is determined by a constant
change in which companies
must identify the trends
that will affect them in
the future, focusing their
management in a proactive
way that is capable of
converting potential risks
into opportunities.
In this regard, the Red
Eléctrica Group takes on
the following commitment
as one of its sustainability
priorities.
Promote a corporate culture
of innovation and flexibility
that allows us to identify growth
opportunities and respond to
the challenges of the future,
anticipating and adapting both to
global trends and to the regulatory
environment arising from the new
energy model.
Sustainability
opportunities
_
Anticipating
change and
taking action
_
Innovation
_
Risk
management
_
Sustainability Report 2017 / Summarywww.ree.es
Sustainability opportunities
Risk management
28
29
Within the Sustainability
Commitment 2030, the
Red Eléctrica Group has
identified a series of global
challenges and opportunities
that define the roadmap
the Company will follow
in the coming years.
The fight against climate
change is one of the main
existing challenges that
offers the opportunity to
advance towards a more
sustainable energy model,
in addition to promoting
the electrification of the
economy and fostering
electric mobility. In this
regard, the need to increase
the share of renewable
energy in the electricity
system through the
connection of new facilities
and the optimisation of
their management, together
with the enhancements
necessary to improve
system efficiency and
changes in mobility policies,
with the promotion of
rail transport and the
development of electric
vehicles, represent a clear
need for new investment
in the transmission grid, in
terms of new infrastructures
and interconnections and,
therefore, represent a clear
business opportunity for the
Company.
C H A L L E N G E S A N D O P P O R T U N I T I E S
Actively
collaborate
in the definition
of the future energy
model, identifying
opportunities to
generate value in
the services offered.
Encourage
the participation
of society in all
development stages
of a project by
integrating social and
environmental criteria.
Consolidate
innovation
as a key lever
for growth, thanks
to the application
of new knowledge
and ways of
expanding on
existing knowledge.
Showcase
the contribution of the
Red Eléctrica Group in
the achievement of
objectives defined in
global commitments,
such as the Paris
Agreements (COP21)
and the Sustainable
Development Goals.
Anticipate
the future
needs
of professional
profiles, guaranteeing
a professional
environment capable
of attracting and
retaining the talent
needed to tackle the
future scenario.
The
Comprehen-
sive Risk
Management
System
facilitates
the fulfilment
of the strategies
and objectives
of the Group.
The Red Eléctrica Group
has a comprehensive
risk management system
in place that facilitates the
fulfilment of the Group’s
strategies and objectives,
ensuring that risks that
could affect them are
identified, analysed,
assessed, managed and
controlled systematically,
with uniform criteria
Structu re of m anag ed and controlled r isk in 2017
%
Electricity system
operational risks
Other
operational risks
Comprehensive
Corporate
Security
Financial and
counterparty
34
19
9
9
8
9
6
3
2
TSO
regulation
Business
abroad
Other
regulation
Environmental and that
related to people
Telecommunications
business
04 Anticipating change and taking actionSustainability Report 2017 / Summarywww.ree.es 30
31
and within the level of
acceptable risk approved
by the Board of Directors.
This system, which
conforms to the ISO
31000 standard on the
principles and guidelines
in risk management, is
complemented by a Policy
and a General Procedure
for comprehensive risk
management and control
based on the Integrated
Framework for the
Management of Corporate
Risk COSO II (Committee
of Sponsoring Organizations
of the Treadway
Commission).
MONITORING AND
CONTINGENCY PLANS
In the process of
identification, analysis,
assessment and control
O U R R I S K
M A N A G E M E N T
System
contemplates
the monitoring
of more than
500
ACTION
PLANS
Aimed at reducing
the risk level and which
includes more than
300 KPIs to monitor
their evolution
Classificatio n of manage d and
con trolled risks in 2017
%
3
30
67
High-level risks
Medium-level risks
Low-level risks
of risks, the necessary
actions are established
to reduce the level of
risk and bring it to the
acceptable risk value.
In 2017, work was
undertaken on the
development of the
regulatory compliance
and comprehensive
security risks map.
In addition, the Company
has contingency plans
that govern various
crisis situations that
could potentially arise
in the event of an electrical
incident (in order to
guarantee the security
of supply), or may affect
the environment, people,
the operation of the
Company, the availability
of its systems, the business
results or any other event
with an impact on the
reputation of the Company.
R E D E L É C T R I C A
has an action guide
for the management
of cyber-incidents,
which was updated
in 2017.
Innovation
The Red Eléctrica Group
remains committed to
promoting innovation as
a lever for growth and
efficiency by incorporating
technologies, solutions
and new ways of working
that promote and facilitate
a cultural change in the
Group in order to tackle
future challenges and for
its long-term sustainability.
For this, the Company has
an innovation strategy
for 2016-2019 aimed
at spreading innovation
to all areas of business
activity, focusing mainly
on four vectors: people,
technology, digitalisation
and sustainability.
INNOVATION
VECTORS
STRATEGIC
PLAN
2014-2019
INNOVATION
STRATEGY
2016-2019
Cross-cutting strategy and lever
for the fulfilment of the Company’s
strategic plan.
Spreading innovation to areas
of activity where the Company
considers that innovation will be
more relevant in the upcoming years:
people, technology, digitalisation and
sustainability: innovation vectors.
People
The voice of the employee
Occupational health and safety
Talent management. Digital
transformation
Technology
Disruptive research
Discontinuous innovation
Automatisation and robotics
The state of the equipment
and facilities
Taking advantage of new resources
Digitalisation
Digital transformation
and mobility solutions
Cybersecurity
Optimisation of systems
Sustainability
Landscape integration
of facilities
Saving resources and
preventing contamination
Biodiversity
Climate change
Sustainable or circular
economy
Social acceptance
of facilities
04 Anticipating change and taking actionSustainability Report 2017 / Summarywww.ree.es 32
33
Based on the objectives
and guidelines set out
in the innovation strategy,
multi-year plans are
established per vector
in which the key actions
and specific activities
to be undertaken in each
of them are defined.
In the last three years, the
average investment in innovation
projects stands at 9.17 million
euros per year, and the average
number of projects underway
is 80.
Evoluti on of innovatio n
76
9.6
76
8.6
85
9.3
10
5
100
80
60
40
20
2 0 1 5
2 0 1 6
2 0 1 7
Innovation expenditure (M€)
Nº of projects
Regarding technological
innovation projects,
during 2017, work has
been carried out on
85 projects. A few of the
most significant ones
are detailed below.
Most significant
projects currently
underway
BEST PATHS
European project to
overcome the technical
barriers that the current
pan-European electricity
grid may encounter when
attempting to safely integrate
massive amounts of energy
from renewable sources.
MIGRATE
Project aimed at improving
the understanding of the
behaviour of the electricity
system with a high
penetration of devices
based on power electronics.
VEGETA
Development of a new
methodology to optimise
the plan for managing
the vegetation growing
along the routes of the
high-voltage electricity lines.
TRAFO SOSTENIBLE
Approval of the use
of natural ester fluids as
a refrigerant in standard
power transformers.
Innovation
P R O J E C T S
85
PROJECTS
underway
during 2017
T H E D I G I TA L
T R A N S F O R M AT I O N
S T R AT E G Y
Structured
on three axes:
• Cultural change
• Data technology and
governance
• Efficiency
and new business
DIGITAL
TRANSFORMATION
In 2017, the Company
established a digital
transformation strategy
for the Group that serves
as a fundamental element
for the deployment of the
key actions of the strategic
plan and that will facilitate
the transformation process
of the Company in the
coming years.
In keeping with this,
the digital transformation
of the Company seeks
to improve operational
efficiency, develop new
business models and adapt
the Group’s human capital
so that staff are effective
working in a digital
company.
GRID2030 Innovation programme
Multi-year collaborative innovation programme, a pioneering
initiative in Spain, which explores innovation of a technical or
socio-economic nature related to the operation and transmission
of electricity.
Together with other actors of the sector (researchers, start-ups
and companies), we analyse and debate the future of electricity
systems, identify the challenges associated with this and
accelerate the development of disruptive technological solutions.
04 Anticipating change and taking actionSustainability Report 2017 / Summarywww.ree.es 05
D E C A R B O N I -
S A T I O N O F
T H E E C O N O M Y
35
Decarbonisation of the economy
Climate change is a global
challenge that occupies
a high priority on the
international agenda.
The objective is to make
economic growth compatible
with the reduction of
greenhouse gases (GHG), in
the medium and long term,
in order to limit the global
warming of the planet.
In this regard, the Red
Eléctrica Group takes on
the following commitment
as one of its sustainability
priorities.
Be a proactive agent in
the energy transition towards a
zero-emission model, advocating
for the electrification of
the economy and the efficient
integration of renewable
energy, through a robust and
better interconnected grid,
as well as the development
and operation of energy
storage systems.
Energy transition
and climate change
_
Reduction
of the
carbon
footprint
_
Energy
efficiency:
demand-side
management
_
Decarbonisation
of the economy
_
Transmission
grid
development
_
Integration of
renewables
_
Sustainability Report 2017 / Summarywww.ree.es Energy transition and climate change
Sustainable development of the transmission grid
36
37
The Company gears all its
actions towards making
the European Union’s
commitment to energy goals
and the fight against climate
change a reality, and thus
contribute to accelerating the
energy transition.
Therefore, aware of its key
role in the electricity system,
Red Eléctrica has adopted
a voluntary commitment in
T R A N S I T I O N
T O A N E W
E N E R G Y
M O D E L
K E Y
E L E M E N T S
Electrification
of the
economy
Maximum
integration of
renewables
Energy
efficiency
Security of supply
this field, as reflected in its
Climate Change Action Plan
that sets out the emission
reduction targets to be
achieved in the 2020 and
2030 horizons and includes
the main measures for this
to be achieved.
Climate Change Action Plan
Contribution to a sustainable
energy model
Reduction of the carbon
footprint
Develop new electricity
infrastructure to facilitate
the electrification of the
economy, connect new
renewable power capacity
and provide electrical power
for the railway network.
Achieve the maximum
integration of renewable energy.
Contribute to greater energy
efficiency through demand-side
management measures.
Improvement of the calculation
of the carbon footprint.
Reduction of SF6 gas
emissions.
Decrease in emissions derived
from the consumption of
electricity.
Improvement of efficiency
in mobility, seek greater
involvement of the supply chain
and increase the offsetting of
emissions.
Positioning
and disclosure
Involve stakeholders in the
commitment to fight climate
change through:
Actions aimed at raising
awareness on how the
electricity system works
The promotion of demand-side
management measures
and the fostering of energy
efficiency.
Adaptation
to change
Identify and evaluate
both the risks and
the opportunities arising
from climate change
and develop actions
based on this analysis
aimed at mitigating
its effects.
The development
of transmission
grid
infrastructure
is carried out
in accordance
with that set
out in the
current
infrastructure
planning (2015-
2020), which is
binding in nature
for Red Eléctrica.
This planning includes
the projects of new
electricity infrastructure
necessary to guarantee
the supply nationwide,
taking into consideration
economic efficiency and
the sustainability of the
electricity system.
TRANSMISSION
GRID CONSTRUCTION
In 2017, investment in
the transmission grid has
basically been allocated
to security of supply, the
Grid
C O N S T R U C T I O N
New lines
147
km
of new line
110 new
substation bays
resolution of technical
restrictions, the development
of interconnections between
electricity systems and
providing electrical power
for the high-speed train.
Throughout 2017, 147 km
of new line and 110 new
substation bays were
commissioned, and the
transformer capacity was
increased by 1,210 MVA,
with an overall total
investment in the
transmission grid of
411.8 million euros.
Invest ment in the transmission gr id
m€
2 0 1 7
2 0 1 6
2 0 1 5
411.8
398.5
410.7
200
400
600
05 Decarbonisation of the economySustainability Report 2017 / Summarywww.ree.es
38
39
The development of new electricity interconnections
with Europe will be one of the main challenges to be
addressed in the coming years.
Among the projects
developed, noteworthy are
those aimed at improving
interconnections with Europe
due to their enormous
influence on improving the
quality and security of the
Spanish electricity system and
the integration of renewable
energy. In this regard, in 2017
work was carried out on:
∫ the commissioning of a
phase shifter on the Arkale-
Argia 220 kV line, and
I N T E R C O N N E C T I O N W I T H F R A N C E V I A T H E B A Y
O F B I S C A Y / K E Y D A T A
∫ at the beginning of
the public information
consultation process of the
submarine interconnection
project with France through
the Bay of Biscay. This new
electricity link will increase
the exchange capacity
between Spain and France
up to 5,000 MW.
SERVICE QUALITY
The service quality indicators
once again show the high
level of security and quality
of supply provided by
Red Eléctrica’s facilities, as
reflected in the availability
rates of not only the
peninsular grid but also
that of the grids of the
Balearic Islands and the
Canary Islands. This is
achieved, in part, through
the efficient application of
sustainable and responsible
maintenance policies
regarding the transmission
grid facilities.
Electricity transmission
gr id infrastructu re
km of line
Overhead lines (km)
Submarine cable (km)
Underground cable (km)
Substation bays (nº)
Transformer capacity (MVA)
Peninsular and non-peninsular cumulative data as at 31 December 2017.
Provisional data pending audit.
Total
43,793
42,011
835
947
5,601
86,654
(%)
Quality
I N D I C A T O R S
HIGH
DEGREE
OF SECURITY
AND QUALITY
of supply
provided
by electricity
facilities
Thanks to the
efficient application
of maintenance
policies
INCREASE IN
EXCHANGE CAPACITY
UP TO
5,000 MW
4 CABLES
2 PER LINK IN
DIRECT CURRENT
370 km IN LENGTH
(280 km is
SUBMARINE)
2 x 1,000 MW
TRANSMISSION
CAPACITY
Ser vice qu ality.
Transm ission grid
availability rate
Peninsular transmission grid
Balearic Islands transmission grid
Canary Islands transmission grid
Provisional data pending audit.
2015
2016
2017
97.92
96.86
96.74
98.31
96.93
98.06
98.28
97.84
98.12
R E D E L É C T R I C A
manages around
44,000 km of
electricity line
nationwide.
05 Decarbonisation of the economySustainability Report 2017 / Summarywww.ree.es
Integration of renewable energy
40
41
As operator of
the electricity
system, the
core mission of
Red Eléctrica
is to guarantee
the security
and quality of
the electricity
supply,
maximising
the integration
of renewable
energy.
To this end, the control and
supervision work carried
out by the Control Centre
of Renewable Energy (CECRE)
is essential.
During 2017, the production
of energy from renewable
sources represented 33.8%
of the total energy production
generated in the peninsular
electricity system.
In line with previous years,
noteworthy is the important
contribution of wind power
generation with 19% of the
total production. This ranks
wind in second place, behind
nuclear energy, among the
technologies included in the
complete set of generating
facilities in the peninsular
system.
Renewable
E N E R G Y
33.8
%
share of
the electricity
generation mix
on the peninsular
electricity system
The Soria-Chira
pumped-storage hydroelectric
power station (Gran Canaria)
The construction of this
power station between the
reservoirs of Soria and Chira
will be an essential tool
to advance towards the
sustainability of the new energy
model in the Canary Islands,
since, in addition to improving
the security of supply, it will
enable a greater development
of renewable energy on the
island of Gran Canaria.
Almacena Project
This electrochemical storage
system (with a power of 1
MW and a capacity of 3 MWh)
came into operation in 2014 in
Carmona, Seville, and over the
years has served the purpose
of testing functionalities
geared towards favouring
the integration of renewable
energy and the improvement
of the operational services of
the system.
ENERGY
STORAGE
PROJECTS
In order to improve the
guarantee and security of the
system and the integration
of renewable energy, Red
Eléctrica is carrying out
several projects aimed at
energy storage, conceived as
a tool for the system operator
that helps optimise the
efficiency of the electricity
system.
Electricity genera tion with renewa ble
energ y on the Spa nish p en insu la (1)
%
2 0 1 7
2 0 1 6
2 0 1 5
33.8
40.8
36.9
10
20
30
40
50
(1) Renewables: hydro, wind, solar photovoltaic, solar thermal,
other renewable and 50% of urban solid waste. Does not include
pumped-storage generation.
Wind power
G E N E R A T I O N
19
%
share in
the peninsular
electricity
generation mix
S O R I A - C H I R A
P O W E R S TAT I O N
This pumped-storage
hydroelectric power
station will have
a turbine power
capacity of 200
MW and a pumping
capacity of 220 MW.
05 Decarbonisation of the economySustainability Report 2017 / Summarywww.ree.es
Energy efficiency: demand-side management
Reduction of the carbon footprint
42
43
Red Eléctrica continues
to actively work on the
promotion, development and
dissemination of initiatives
in the field of demand-side
management and smart grids,
with the aim of contributing
to maintain the guarantee
of supply and promote the
integration of renewable
energy, the reduction of
polluting gas emissions and
fostering the sustainable use
of energy.
The main initiatives in
the field of demand-side
management are described
below:
Smart grids
Active citizen
Initiatives in this field
are aimed at anticipating
solutions in the field of
new energy storage
technologies, dynamic
capabilities of the grid,
monitoring of grid elements
and infrastructure,
self-consumption,
the electric vehicle and
new consumer options all
of which are already currently
shaping the electricity grid
of the future.
In the transition towards a
new, more dynamic energy
model, the role of citizens as
key protagonists in system
operation is becoming
increasingly prominent.
Therefore, it is essential to
promote initiatives to make
information about the situation
of the system available to
citizens or to disseminate
recommendations on best
practices for efficient
consumption.
Interruptibility
Service
Electric
vehicle
Profiling
Service
Through this tool,
the industrial consumers
that provide this service
reduce their consumption,
at the request of the system
operator, up to certain
predetermined values,
thus providing a fast and
efficient response to
the needs of the
electricity system.
In 2017, the CECOVEL
project (Electric Vehicle
Control Centre) was
commissioned, an
initiative to support
electric mobility that allows
the demand originating
from the recharging of
electric vehicles to be
monitored.
With the aim of having
a greater knowledge of
the hourly consumption of
households, small businesses
and services, since 2013 the
PERFILA project has been
underway, which enables
the analysis of hourly data
coming from a panel of 25,000
consumers who have a smart
meter. This information
has been used to draft
the proposals regarding the
initial consumption profiles
of recent years.
Red Eléctrica
strives to
improve the
calculation of
its emissions
and reduce
them as much
as possible.
In 2017, the review of existing
reduction targets was carried
out to align them with the
commitment adopted in
Paris (COP21) to limit global
warming.
CONTROL OF
SF6 EMISSIONS
The main direct emissions
derived from the activities
of Red Eléctrica are those
of sulfur hexafluoride (SF6)
and for this the Company
has various courses of
action underway aimed at
improving knowledge about
and control of the gas and
the reduction of leaks. These
include: improvement in
the control procedures,
supply of the most efficient
equipment with the lowest
leakage rate, training on gas
handling procedures and the
development of innovation
projects to improve its
management.
Direct greenhouse
ga s em issions
2 0 1 7
28,765
t CO₂ eq.
-8.7%
Emission reduction targets
2020
Reduction of 10% of total
emissions from scope 1 and 2
per MWh transported compared
to 2015.
2030
Reduction of 60% of the total
emissions from scope 1 and 2
per MWh transported compared
to 2015.
EFFICIENCY IN
ELECTRICITY
CONSUMPTION
In 2017, a reduction of 82.6%
of the emissions associated
with electricity consumption
was achieved with respect
to 2015, thanks to the
implementation of efficiency
measures and the contracting
of renewable energy for its
supply to the Company.
SUSTAINABLE MOBILITY
Red Eléctrica has been
working for some years on the
optimisation of work-related
travel and the reduction of
emissions associated with
them. To this end, it has a
Sustainable Mobility Plan in
place whose main courses of
action are: an improvement
of the energy rating of
the vehicles used, the
optimisation of business
trips and the rationalisation
in the use of private vehicles
for the daily commute.
OFFSETTING
EMISSIONS
In order to advance more
quickly in reducing the carbon
footprint, it is important to
focus on ways of offsetting it.
In this regard, the Company
offsets its emissions through
the planting of trees as part
of the ‘Red Eléctrica Forest’
project.
05 Decarbonisation of the economySustainability Report 2017 / Summarywww.ree.es
06
R E S P O N S I B L E
V A L U E C H A I N
45
Responsible value chain
Society now enjoys a level of
empowerment which allows
it to demand that companies
act more responsibly in the
way they do business. This
responsibility encompasses
all the activities carried out
by a company, including the
management of its supply
chain and the relationship
with its customers and
stakeholders.
In this regard, the Red
Eléctrica Group takes on the
following commitment as one
of its sustainability priorities.
Extend our commitment to
responsibility to all links in the
value chain, ranging from our own
people to suppliers and customers,
accomplishing this through the
creation of partnerships and by
basing it on our governance and
integrity model.
Responsible value chain
_
Customer
focused
_
Supply
chain
_
Responsible
environmental
management
_
Good governance
_
Ethics and
compliance
_
Economic
impact and
financial
soundness
_
Employees
_
Sustainability Report 2017 / Summarywww.ree.es 46
47
Good governance
From the outset, Red
Eléctrica has maintained
a constant and firm
commitment to adopting
best corporate governance
practices. This is made
possible not only by
complying with the
applicable legal regulations
and the most widespread
national and international
recommendations on the
subject, but also by voluntarily
implementing a series of
measures and initiatives
targeted at the core of the
most important issues
regarding good governance
of the Company, and which
are of most concern to and
demanded by shareholders,
investors and the markets.
Noteworthy actions in 2017
BOARD
ACTIVITY
• Implementation of the
Regulations of the Board
of Directors approved in
December 2016.
• Complete digitalisation of
the sessions of the Board of
Directors and its Committees.
• Ongoing reinforcement
of gender diversity on the
Board of Directors with the
appointment of a female
nominee director.
• Appointment, ratification
and re-election of three
directors at the General
Shareholders’ Meeting,
with an average of 97.88%
of the votes in favour.
• Development and
implementation of the new
Compliance System.
• Assessment of the Board of
Directors with the collaboration
of a new external consultant.
Shareholder structure
%
4
10
Spanish
Institutions
Minority
Shareholders
20
SEPI
66
Foreign
Institutions
ADAPTATION AND REVISION
OF PROCEDURES
• Review and approval of the
contingency plans for the
succession of the Chairman
of the Board and the CEO.
• Adaptation of the Internal Code
of Conduct on the Securities
Market to the European
Regulation on Market Abuse.
• Approval of the new Induction
Plan for new board members.
COMMUNICATION
• New design and revision
of contents of the Annual
Corporate Governance
Report 2017.
• Transparency in matters
of tax policy.
• Annual disclosure of
improvements regarding
corporate governance.
RECOGNITIONS
• Corporate governance
recognition, for the second
year in a row, by the prestigious
English publication ‘Ethical
Boardroom Magazine’.
• Recognition as a global and
European leader in the utilities
and super-utilities sector in
the Dow Jones Sustainability
World Index and the Dow Jones
Sustainability Europe Index.
G O V E R N A N C E S T R U C T U R E O F R E D E L É C T R I C A
G E N E R A L S H A R E H O L D E R S ’ M E E T I N G
B O A R D O F D I R E C T O R S
A S A T 3 1 D E C 2 0 1 7
33.3% WOMEN
1
1
CHAIRMAN
CHIEF
EXECUTIVE
OFFICER
7
INDEPENDENT DIRECTORS
58.3%
A P P O I N T M E N T S
A N D R E M U N E R A T I O N
C O M M I T T E E
C HAIR MAN
Independent
director
3
NOMINEE
DIRECTORS
A U D I T
C O M M I T T E E
C HAIR MAN
Independent
director
60%
Independent
directors
80%
Independent
directors
06 Responsible value chainSustainability Report 2017 / Summarywww.ree.es
B O A R D O F D I R E C T O R S
A S A T 3 1 D E C 2 0 1 7
Ethics and compliance
48
49
CHAIRMAN
José
Folgado Blanco
NOMINEE
DIRE CTORS
(SEPI)
CHIE F E XECUT IVE
OF FI CER
Juan Francisco
Lasala Bernad
IN DE PE ND EN T
DI REC TOR S
Fernando
Fernández
Méndez de Andés
Member of the Audit
Committee
Carmen Gómez
de Barreda
Tous de
Monsalve
Member of
the Appointments
and Remuneration
Committee and Lead
Independent Director
María José
García Beato
Member of
the Audit Committee
Antonio
Gómez Ciria
Chairman of
the Audit Committee
Santiago
Lanzuela Marina
Member of
the Appointments
and Remuneration
Committee
GENERAL COUNSEL
AN D SECRETARY
OF THE BOARD
Socorro
Fernández Larrea
Member of
the Audit Committee
José Luis
Feito Higueruela
Chairman of
the Appointments
and Remuneration
Committee
Mercedes Real
Rodrigálvarez
Member of
the Appointments and
Remuneration Committee
Rafael García
de Diego Barber
Non-Board Director
Arsenio Fernández
de Mesa y Díaz del Río
Member of
the Audit Committee
Alberto
Carbajo Josa
Member of
the Appointments and
Remuneration Committee
Ethics and compliance
for the Red Eléctrica Group
are fundamental pillars for
the proper functioning of the
business activity. To this end,
it has a series of corporate
conduct rules that establish
the values and business
conduct guidelines that must
be undertaken by every single
person in the Red Eléctrica
Group in the performance of
their professional activities.
In addition, the Company
develops a Compliance
System aligned with the
best practices in this area,
aimed at ensuring that the
organisation adequately
respects the established
obligations and the
commitments undertaken.
Noteworthy
actions in 2017
• Definition of a specific
methodology for the
assessment of
compliance risks.
• Drafting of the preliminary
map of compliance risks.
• Development of the
awareness and disclosure
plan regarding the
compliance system.
• Launching of the
Compliance Forum.
(100 points) in the Code
of Conduct / Compliance /
Anti-corruption and Bribery
section of the Dow Jones
Sustainability Index.
Similarly, it has a human
rights management model
aligned with the Guiding
Principles on Business and
Human Rights of the United
Nations.
For the third consecutive
year, the Company has
obtained the highest score
I N T E G R I T Y M O D E L
Compliance
system
Criminal
risk
prevention
programme
Code of Ethics
Supplier
code of
conduct
Guide
for the
prevention
of
corruption
06 Responsible value chainSustainability Report 2017 / Summarywww.ree.es Economic impact and financial soundness
Employees
50
51
During 2017, Red Eléctrica
showed stable growth, in
line with that established
in its strategic plan. The
Company has obtained
solid results and an
important strengthening
of its main solvency
ratios, maintaining a
clear orientation towards
operational efficiency and
the permanent generation
of value.
SHAREHOLDER
RETURN
In 2017, direct return to the
shareholder in the form
of dividends grew by 7%
compared to the previous
year. The gross dividend
to be distributed is 0.9188
euros per share.
Key finan cial indicators
Revenue
Gross operating profit (EBITDA)
Net operating profit (EBIT)
Profit before tax
Net profit
Non-current assets
Equity
Operating cash flow after taxes
Total investment (1)
Net Financial Debt
Financial
debt structure
%
FIXED VS.
VARIAB LE RATE
On 5 January 2018, a gross
interim dividend pay-out of
0.2549 euros per share was
made, with 0.6639 euros per
share pending distribution
89
11
Credit
rating
Fixed rate
Variable
rate
SHO RT-TERM VS.
LO NG-TERM
86
14
Long-term
debt
Short-term
debt
Red Eléctrica has been given a
long-term credit rating of ‘A-’
by Standard & Poor’s with a
stable outlook and a short-
term rating of ‘A-2’. Meanwhile,
Fitch has given Red Eléctrica
a long-term rating of ‘A’ with a
stable outlook, and ‘F1’ in the
short term.
Both rating agencies indicated
the predictability and recurring
nature of earnings as well
as the soundness of the
income statement as some of
Company’s strengths.
Red Eléctrica
is committed
to stability in
employment,
equal
opportunities,
talent
management
and
occupational
health and
safety.
At the end of 2017, the
Red Eléctrica Group had
a total workforce of 1,815
people, 2.3 % more than
in 2016. 96 % of the total
(1,741 people) work in
Spain and 4 % in Peru and
Chile. However, it should be
noted that the majority of
the employees work for Red
Eléctrica de España.
(m€)
%
0.5%
2.3%
2.8%
4.6%
5.2%
-0.5%
5.9%
3.6%
2016
2017
1,932.3
1,486.0
1,003.3
850.8
636.9
9,256.8
2,920.5
1,146.9
643.1
1,941.2
1,519.5
1,031.4
890.2
669.8
9,214.2
3,093.4
1,187.9
510.2
-20.7%
4,949.5
4,791.8
-3.2%
Key em ploym ent indicators (1)
Total workforce
Women (%)
Men (%)
Women in managerial positions (%)
People with some type of disability (%)
Creation of net employment (Nº of posts)
Average age
Average length of service (years)
Undesired external turnover (%) (2)
Total turnover (%) (2)
Permanent contracts (%)
2015
2016
2017
1,697
1,682
1,741
23.1
76.9
20.2
0.8
15
44
15
1.6
2.1
23.7
76.3
21.8
0.8
-15
45
16
2.0
2.8
24.4
75.6
24.8
0.8
35
45
16
2.6
3.7
99.9
99.8
98.3
(1) Investment in 2016 included 199.8 million euros corresponding to the acquisition of 50 % of the Chilean company TEN.
(1) As of 2017 data includes: Red Eléctrica de España + Red Eléctrica Corporación + REINCAN + Red Eléctrica Internacional +
REINTEL. (2) Data includes: Red Eléctrica de España + Red Eléctrica Corporación.
06 Responsible value chainSustainability Report 2017 / Summarywww.ree.es
52
53
Red Eléctrica has obtained the
highest score (100 points) in
the Dow Jones Sustainability
Index evaluation in the criteria
Development of Human Capital
and Labour Practice.
G R U P O R E D E L É C T R I C A
Workforce
The Company offers its
employees quality and
stable employment, and
outstanding professional
career development.
In 2017, 100 % of the
appointments to managerial
positions were covered
through internal promotion.
1,815
PEOPLE
P R I N C I P L E S O F T H E H U M A N
R E S O U R C E S D I R E C T O R P L A N
Equal
opportunities
Work-life
balance
Efficiency
Respect
for diversity
Fair and
personalised
treatment for all
professionals
Red Eléctrica
offers the same
Professional
development
opportunities
to men and
women.
Proof of this
is that 83.3 %
of the new
appointments
to managerial
positions were
women.
DIVERSITY
AND EQUALITY
For Red Eléctrica, it is
essential to promote a
quality work environment
based on ethical conduct,
respect, diversity and
equality. In order to ensure
that the commitment
to these principles is
fulfilled, the Company
develops various initiatives
aimed at guaranteeing
a discrimination-free
environment that promotes
Percentag e
of wom en
I N T H E W O R K F O R C E
diversity when faced with
barriers of gender, age and
disability.
24.4
%
I N M A N A G E R I A L P O S I T I O N S
24.8
%
Training hou rs
per em ployee
2 0 1 7
2 0 1 6
2 0 1 5
108
82
100
Investment in training
per employee
€
2 0 1 7
2 0 1 6
2 0 1 5
4.398
3.431
3.984
Data of the Group in Spain.
TALENT
MANAGEMENT
To promote the training and
professional development
of its employees, the
Company has opted for
a global model of talent
management, which in
2017 focused on the design
and optimisation of the
training model, aligning
the content with the three
business levers of the new
Red Eléctrica Campus:
strategy and leadership,
transformation and
innovation, and culture.
Red Eléctrica
Campus
In 2017, the Red Eléctrica
Campus project was
completed, becoming
the Company’s corporate
university. Its mission is
to serve as a platform for
the deployment of the
strategy, values and
culture of the Red Eléctrica
Group that facilitates
the achievement of
business objectives.
This project will serve as
a model to manage the
transformation of the
Company in the coming years.
06 Responsible value chainSustainability Report 2017 / Summarywww.ree.es
HEALTHY WORKPLACE
Red Eléctrica promotes
the best practices in
occupational health and
safety and well-being
through the commitment
and leadership of the
management team. To this
end, it has the ‘healthy
workplace’ model in place,
a key element for the
promotion of occupational
health and safety, which
H E A L T H Y W O R P L A C E M O D E L / P R I N C I P L E S
Health resources
Provide the workforce
with tools to improve
their state of physical
and mental health,
contributing to their
well-being and quality
of life.
Community
involvement
Actions carried out by the
Company that can impact
on the improvement of
the health and well-being
of the families of their
employees and the local
communities in which the
Company’s facilities are
located.
Physical work
environment
Provide the necessary
means to perform the
tasks associated with
the role under the
optimal health and
safety conditions.
Psychosocial work
environment
Implement tools and
resources regarding
the management and
organisation of work that
promote the physical and
psychosocial well-being of
employees.
54
55
86 % of the workers took part in the
working climate survey conducted
in 2017, which encompassed the
entire Group, and resulted in a
satisfaction level of 8.9 out of 10.
Significant
reduction
I N A C C I D E N T
I N D I C A T O R S
(employees)
revolves around four main
lines of action.
One aspect to which the
Company attaches special
significance is health and
safety at work. In 2017,
there was an improvement
in the main accident
indicators for both Company
employees and employees
of contracted companies.
Compared to 2016, the
frequency rate and severity
rate experienced a reduction
of 29.6 % and 44.4 %
respectively within the
Group’s companies in Spain.
Health
promotion
In 2017, Red Eléctrica
received recognition from the
Spanish National Institute of
Safety, Health and Well-being
at Work for its ‘Best Practices
for the Promotion of Health
in the Workplace’ model and
has won the Ágora Bienestar
Award 2017.
Similarly, in the contracted
companies the frequency
rate was reduced by 29 % and
the severity rate by 13 %.
Accident
freq uency rate
( E M P L O Y E E S )
4.52
2.49
2.82
1.71
2.43
2013 2014 2015 2016 2017
Accident
sever ity rate
( E M P L O Y E E S )
0.14
0.12
0.12
0.09
0.05
2013 2014 2015 2016 2017
Data of the Group in Spain.
-
29.6
%
in the
frequency rate
-
44.4
%
in the
severity rate
Compared
to 2016
06 Responsible value chainSustainability Report 2017 / Summarywww.ree.es 56
57
100 % of
projects
undergo
an
Environmental
Impact
Assessment.
B I O D I V E R S I T Y
Red Eléctrica’s facilities
occupy just 0.08 % of the Red
Natura Española (Natura 2000
Network).
Of the total infrastructure
existing in 2017, only 15 %
of the lines and 5.9 % of the
substations are located in
protected areas (Red Natura).
Responsible environmental management
Red Eléctrica carries out all
its environmental protection
activities in accordance with
the principles established
in its environmental policy
and has an environmental
management system
certified according to the
ISO 14001 standard and
registered in the Community
Eco-Management and Audit
System (EMAS). In 2017,
the Company approved a
new multi-year Biodiversity
Action Plan that lays down
the challenges and main
objectives for the period
2017-2021.
I N T E G R A T I O N O F F A C I L I T I E S I N T O T H E E N V I R O N M E N T
Protection of archaeological and
ethnological heritage
• Archaeological survey prior to the works.
• Presence of an archaeologist when
the results of the survey so determine.
• Digital mapping of catalogued
heritage (ARQUEORED Project).
Minimising the impact
on the socio-economic
environment
• Use of a boom crane or
helicopter for assembling
electricity towers.
• Restoration of areas
affected by the works
(slopes, roads, accesses,
enclosures) and the
recovery of crops.
• Improvement in the
noise reduction levels
generated by the
facilities (ACURED
Project).
Reduction of the visual impact of facilities
• Design of electricity towers that blend better into the landscape.
• Landscape integration of substation buildings.
• Restoration of affected areas and the creation of vegetation screens.
Protection of
habitats and species
Preventive and corrective
measures to avoid the
alteration of the habitat of
certain species of fauna
and flora, and the impact on
vegetation (HABITAT Project).
Prevention
of forest fires
Signing of agreements for
the prevention of forest
fires, collaborating with
public administrations (12
agreements).
Biodiversity
conservation
• Participation in projects
for the conservation
of wildlife (11 birdlife
projects) and flora (‘Red
Eléctrica Forest’ and
‘Posidonia oceanica
Marine Forest’ in Majorca).
• Development of
innovation projects
(VEGETA Project).
Protection of birdlife
Multi-year marking plan
with bird-saving devices
for electricity infrastructure
in critical priority areas.
332 km of line marked
(45 % of the total scheduled
to be marked).
06 Responsible value chainSustainability Report 2017 / Summarywww.ree.es
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59
Supply chain
The Supplier
Code of Conduct
guarantees the
sustainable
management
of the supply
chain.
Red Eléctrica has a
sustainable supply chain
management model that is
governed, among other things,
by the Procurement Policy
guidelines and falls within the
framework of the relationship
established in the Supplier
Code of Conduct.
In this regard, the Company
incorporates criteria regarding
occupational health and
safety, environmental, ethics
and the working conditions
of its suppliers as part of its
entire purchasing process. For
key and recurring supplies,
these requirements are
verified initially in the supplier
qualification process and,
subsequently, as part of
the relationship maintained
between the parties going
forward.
In 2017, the Company
managed its purchases of
goods and services through
1,054 suppliers, for a total of
624.7 million euros. 74% of
this amount corresponds to
services and civil works, while
the remaining 26% was for
materials and equipment. 94%
of the aforementioned amount
was awarded to suppliers with
head offices in Spain and 99%
of purchases were made within
the European Union
SOCIAL AUDITS
In order to verify compliance
with the Supplier Code of
Conduct, during 2017 the
Company conducted social
audits of 75 suppliers. These
audits are focused on those
supplies that may have a high
impact (potential or actual) on
working conditions and ethical
conduct. Similarly, these audits
are conducted on suppliers who
have been identified as having
committed an infringement of
an ethical nature.
Pillars of the sustainable
management of the
supply chain
• Continuous search for the lowest
expected cost for the Company.
• Segregation of functions in the
supply process and transparency
in its management.
• Ethical management of
suppliers and subcontractors
and their ongoing professional
development.
• Minimisation of risks associated
with the supply chain.
Code
O F C O N D U C T
75
AUDITS
conducted on
suppliers
during 2017
Regarding
compliance
with the Supplier
Code of Conduct
S O C I A L
A U D I T S
As a result of
social audits,
improvements or
action plans have been
agreed with 63 % of
the suppliers.
Customer orientation
Red Eléctrica has a System
Operator Code of Conduct,
which guarantees maximum
transparency, confidentiality,
ethics and objectivity in its
duties and responsibilities as
electricity system operator.
In addition, the Company is
obliged to publish information
regarding the price of energy
in the markets, as well as
information on processes
associated with the system
Information platforms
‘e-sios’ website
Platform to ensure compliance
with the legal requirements for
communication and disclosure
of information on system
operation.
IESOE website
Regional information platform
for operators of the French,
Portuguese, Moroccan and
Spanish electricity systems.
operation, guaranteeing at
all times the confidentiality
of the data provided by the
market agents. For this
reason, confidentiality is
based on the applicable
legal requirements as well
as on other guidelines
and is reflected in its
internal procedures. The
communication and
publication of information
takes place through various
channels, as shown below.
ENTSO-E transparency website
Platform designed to send data
from the electricity markets,
according to the provisions of
the Transparency Regulation.
SmartVIu App
Application for mobile devices
that shows the status of the
peninsular electricity system in
real time.
Other information channels
Voluntary Price for the Small
Consumer (PVPC)
Information related to the PVPC,
in compliance with the provisions
of Royal Decree 216/2014.
CTSOSEI
Bi-monthly committee in which
information is provided on the
operation of the electricity
systems of Spain and Portugal.
Reporting to ACER
(Agency for the Cooperation
of Energy Regulators)
Information on explicit capacity
auctions and electricity
nomination procedures
regarding capacities
communicated by the
participants in said auctions.
Customer
S A T I S F A C T I O N
S T U D I E S
The latest
study obtained
an overall average
rating of
8.3
OUT OF 10
Conducted
in 2016
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07
C O N T R I B U T I O N
T O T H E
D E V E L O P M E N T
O F S O C I E T Y
61
Contribution
to the development of society
Companies are increasingly
aware that their long-term
sustainability depends on
providing a service that
contributes value to society.
Therefore, it is necessary to
generate a positive impact on
the social environment, whereby
the social footprint is one of
the key drivers of its corporate
management.
In this regard, the Red Eléctrica
Group takes on the following
commitment as one of its
sustainability priorities.
Contribute to the economic,
environmental and social progress
of society, through the provision of
a key service in a safe and efficient
manner. This is achieved by promoting
environmental conservation, the quality
of life and social well-being of people
and involving the community in the
execution of our activities, with the goal
of generating mutual benefit.
Contribution to
the development
of society
_
Tax
transparency
_
Commitment
to society
_
Socio-economic
contribution of
the projects
_
Sustainability Report 2017 / Summarywww.ree.es
Commitment to society
62
63
The Company
complements
its projects in
the territory
through
collaboration
programmes
that reflect
its social
commitment
and contribute
to the progress
of the
communities
in which its
facilities are
located.
The Red Eléctrica Group
focuses its socio-
environmental commitment
towards the creation of shared
value with society, promoting
actions and investments
aligned with its business
objectives. At the same time,
this commitment generates
value for the Company while
having a positive impact on
society and on the territory
and its inhabitants.
SOCIAL COMMITMENT
The social programme of
Red Eléctrica mainly includes
actions aimed at the socio-
economic development of the
territory; the conservation,
protection and enhancement
of the natural heritage
of the municipalities; the
dissemination of knowledge
regarding how the electricity
system works; and
transparency in reporting.
Socio-economic development
of the territory
In 2017, Red Eléctrica
collaborated on more than
260 initiatives, among which
we can highlight construction
projects or improvement of
municipal infrastructure,
collaboration on projects
of social relevance with an
impact on tourism, promotion
of the cultural wealth of the
territories and projects for
the restoration of emblematic
buildings.
Protection of
natural heritage
One of the challenges
undertaken by the Company
in keeping with its biodiversity
commitment is to promote
the conservation of natural
heritage through active
participation or the promotion
of projects in collaboration
with the public administration,
NGOs and other stakeholders.
Social innovation
Red Eléctrica has taken
another step forward in its
commitment to generate
shared value, creating a model
of social innovation to identify
the challenges, needs and
opportunities of each territory,
in order to work hand-in-hand
by providing innovative and
effective solutions for the
development of the social
environment concerned.
In 2017 the Company
participated in several
biodiversity conservation
projects in eleven
autonomous communities,
most of which are linked to
the conservation of birdlife
and the restoration of
habitats. Among the latter
noteworthy are the following:
∫ ‘Red Eléctrica Forest’:
the planting of trees in
order to recover degraded
natural spaces, support
the development of local
economies and offset a part
of the Company’s emissions.
∫ ‘Red Eléctrica Marine
Forest’: restoration of
Posidonia oceanica seagrass
meadows in the Bay of
Pollensa (Balearic Islands).
Dissemination of knowledge
The Company plays an
active role in disseminating
information and raising
awareness regarding the
operation of the electricity
system and acknowledges
that a more informed society
has a greater capacity to
develop and maintain a
P O S I D O N I A O C E A N I C A
S E A G R A S S M E A D O W S
The Posidonia oceanica
seagrass meadows recovery
project received the ‘Good
Practice of the Year Award
2017’ from the Renewable Grid
Initiative (RGI).
‘A highway behind the wall
socket’ exhibition
The objective of this exhibition is to explain the electricity supply
process, from generation to consumption, showcasing the activities
of the Company as TSO of the Spanish electricity system, in addition
to making citizens aware of the need to consume electricity in an
efficient and responsible manner.
In April 2017, this travelling exhibition moved to the City of Arts and
Sciences in Valencia, where it received more than 550,000 visitors.
This exhibition, which began its journey in 2010, has travelled to nine
Spanish cities accumulating a total of more than 900,000 visits.
R E D E L É C T R I C A F O R E S T I N F I G U R E S 2 0 0 9 - 2 0 1 7
778 ha
Surface area
recovered
1,843,941 €
Invested
647,053 ud
Trees and shrubs planted
184,771 t de CO2 eq.
Emissions offset
07 Contribution to the development of societySustainability Report 2017 / Summarywww.ree.es
64
65
In 2017, noteworthy was the
launch of the new website of the
telecommunications subsidiary REINTEL
sustainable energy model
that effectively meets the
energy needs of citizens.
Information transparency
Throughout 2017,
information transparency
along with an educational
approach has continued
to be the basis of the Red
Eléctrica’s relationship with
the media. Efforts have
focused on reporting on the
development of the core
activity - the transmission
of electricity and system
operation - as well as the
Company’s international
business and all its activity
regarding sustainability (25 %
of the 71 press releases
issued in 2017 and 66 % of
the information published in
the ‘Entrelíneas’ blog were
related to sustainability
issues).
A key tool in the field of
transparency is the corporate
website that contributes to
improving general knowledge
regarding the Company’s
activities, in addition to
acting as a direct channel
of communication with
stakeholders.
REE in the
classroom
This project is aimed at
helping children become
efficient consumers
of the future who are
respectful towards the
environment and through
their actions contribute to
the sustainability of the
electricity system.
In this regard, in 2015,
the Company created the
digital educational game
‘entreREDes’ through which
students of secondary
education learn about
the functioning of the
electricity system and
review the contents of the
school curriculum in a fun
and entertaining way. Until
2017, in collaboration with
educational institutions,
18 training activities were
organised, in which more
than 8,370 school students
from 10 autonomous
communities took part.
In 2017, visits to the website
remained above two million
hits and more than one
million downloads of various
publications were registered.
The corporate website is
ranked 12th among the best
websites of the IBEX 35
companies, according to the
international Webranking
survey 2017-2018 conducted
by the consultancy firm
Comprend.
More than
2
million accesses to
the corporate website
14
Meetings and press
conferences held with
the media
57
Interviews and
statements
TIES WITH
THE COMMUNITY
Red Eléctrica promotes and
maintains a permanent
relationship with the local
communities in which its
facilities are located, not
only during the process
of construction of new
infrastructure but also
throughout the entire lifecycle
of the facilities.
In 2017, noteworthy was the
signing of 96 collaboration
agreements with public
and social entities for the
execution of projects mainly
regarding socio-economic,
environmental, educational and
cultural development aspects.
In the case of local councils,
the Company fosters close-
knit ties with communities
to inform on the need for
facilities, as well as to promote
dialogue that facilitates the
carrying out of projects in a
sustainable manner and with
complete social acceptance.
INVESTMENT
IN THE COMMUNITY
In 2017, the Company
contributed 6.5 million
euros to the development or
promotion of social initiatives;
an amount obtained by
applying the methodology
of the LBG (London
Benchmarking Group).
Amicable
agreements
were reached
with 94% of
land owners
affected by
projects whose
permitting
process was
completed in
2017.
Investment in
T H E C O M M U N I T Y
6.5
m€
earmarked for the
development and
promotion of social
initiatives
el 59% is aligned with
business activities
Social initia tives - scop e of a cti on
%
6
4
8
34
27
21
Socio-economic
development
Education
Environment
Social
well-being
Art and
culture
Other
07 Contribution to the development of societySustainability Report 2017 / Summarywww.ree.es Economic and social contribution
of investment projects
Tax transparency
66
67
The investment effort
made by Red Eléctrica
generates a beneficial
impact for society in that
the investment made
has a boosting effect on
the country’s economic
activity, as the stimulation
of production generates
increased wealth (measured
through GDP). As a
consequence, employment
is increased, and therefore
public administrations have
access to more income
that can be dedicated
to improvements in the
general well-being of
society.
During 2017, Red Eléctrica
adopted a methodology
based on the implicit
activity multipliers obtained
in the Input-Output Tables
that allows the level of
general activity that is
generated from an initial
investment to be estimated.
The calculations are made
taking into consideration
three major impacts: direct,
indirect and induced.
In 2017, Red Eléctrica made
a total investment in the
transmission grid of 412
million euros, of which it is
estimated that 102 million
euros were allocated to
the import of the goods
necessary to carry out the
activity. The remaining,
Total impact of the investment
in the transmiss ion grid
Direct
Indirect
Induced
Totals
Production (m€)
Income - GDP (m€)
310
121
Employment (nº of jobs)
2,100
Tax revenue (m€)
48
300
126
2,276
48
30
10
307
4
640
257
4,683
100
310 million euros,
corresponds to direct
investment in Spain whose
impacts, after applying the
methodology adopted, are
outlined below.
DIRECT IMPACT
Estimation and valuation of
the following: the production
chain, the creation of
employment and the incomes
generated in the national
economic system as a result
of an initial investment.
INDIRECT IMPACT
In order to execute the
initial investment, the direct
awardees need to acquire
other goods and services
(intermediate consumption)
from the rest of the
production systems, which,
in turn, demand other goods
and services from their own
suppliers, which ends up
generating new income and
new employment.
INDUCED IMPACT
This impact reflects the
effect derived from all the
income generated in the
previous stages. In this
regard, it incorporates
both the impact of final
consumption derived from
all the income generated, as
well as the tax collected by all
public administrations when
applying the various taxes to
the total of the activity and
the income generated.
The Tax Strategy
of the Red Eléctrica Group,
approved by the Board of
Directors, is based on three
core values: transparency,
good governance and
accountability.
Continuing the good
practice initiated in
2014, and with the aim
of voluntarily offering tax
A N N U A L TA X
T R A N S PA R E N C Y R E P O R T
Within the framework of
the Code of Good Tax Practices,
the Red Eléctrica Group
has voluntarily submitted the
Annual Tax Transparency Report
2016 to the Spanish
Tax Authority.
information to different
stakeholders, with greater
transparency, the Company
publishes its Total Tax
Contribution, in order to
highlight the relevant
economic and social
function derived from the
Group’s tax payments
Total Tax Contribution 2017
Tax borne
Tax collected
Total tax contribution
Spain
238
414
652
Peru
Chile
Others (UE)
2
5
7
2
1
3
-
-
-
(m€)
Total
242
420
662
K E Y D A T A I N 2 0 1 7
662 m€
Total Tax
Contribution
More than
3,200 m€
Tax borne
in the period
2013-2017
43%
of the
generated
value
earmarked for
the payment
of taxes
99%
of the
Total Tax
Contribution
paid in
Spain
34%
Tax
Contribution
compared to
the revenue
figure of the
Company
07 Contribution to the development of societySustainability Report 2017 / Summarywww.ree.es
Published by:
RED ELÉCTRICA
Paseo del Conde
de los Gaitanes, 177
28109 Alcobendas
(Madrid)
Tel. +34 91 650 85 00
www.ree.es
Edition and
co-ordination
Communication
and Corporate Image
Department of
Red Eléctrica
Graphic design
and layout
dis_ñ
estudio@dis-n.es
Photograph
iStock (Getty Images)
Red Eléctrica’s
photographic archives
Other data about
the publication
March 2018
English translation by
Wayman English International
www.waymanenglish.com
This English version is
a translation of the original
and authentic Spanish
text found in the ‘Informe
de Sostenibilidad 2017
Resumen’, originally issued
in Spanish. In the event
of discrepancy,
the Spanish-language
version shall prevail.
Red Eléctrica works
on selecting the most
legible typographical font
for their publications.
The typographical fonts
Geogrotesque and Klavika
have been used for the texts
and graphics in this report.
Paseo del Conde
de los Gaitanes, 177
28109 Alcobendas
(Madrid)
www.ree.es