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CHAPTER 4 Responsible management

For each of the risks identified and the climate change-related events assessed, management actions have been pro- posed taking into account the inherent and residual risk once these actions have been completed. In addition, the opportu- nities associated with climate change for our company were identified (resource efficiency, use of new energy sources, creation of new products and services or presence in different markets, among others) as well as the resilience of our business. The strategy to be able to be- nefit from the advantages offered by these new opportunities involves the applica- tion of efficiency plans in our activities and operations, taking into account our climate ambition.

In 2019 we translated the risks arising from climate change into an Impact-

Probability matrix over a five-year horizon, which is considered to be short term under TCFD analysis. In 2020 Cepsa will continue to develop the financial analysis under medium- and long- term scenarios, 2030 and 2040-2050, respectively.

The analysis of physical risks associated with climate change was submitted to the Risk Control Operating Committee in September 2019 and accepted for in- clusion in Cepsa's general risk map. Also, the risks of transition to a low-carbon economy are already considered to be included among the strategic risks in the general risk map, while those related to compliance were already included in the map. This has been a milestone in Cep- sa's development and positioning in the face of climate change.

Cepsa has included climate change ma- nagement in its short-term strategy, which is understood to be over a five-year horizon, coinciding with our long-term plan for the business units.

The long-term strategy for climate change, with a 2050 horizon, is in line with the positions of the industry asso- ciations to which we belong, and the le- gitimate defence of our interests that has been made in the regulatory field in each of the sectors to which we belong.

The two pillars of our strategy are effi- ciency and transformation, derived from our analysis of risks and opportunities. Efficiency will allow us to undertake a certain reduction of emissions with cost-efficiency criteria. Transformation derives from the scenario of energy tran- sition and changes in society that de- mand new types of energy.

STRATEGY