2.1 Approach to Report

Transparent information on economic, social and environmental issues.

This report brings together the information required to meet our commitments and legal and financial reporting obligations as well as our commitments to sustainability reporting. The aim of the report is to provide transparent information on economic, social and environmental issues which have been identified as most relevant to the company and its stakeholders. It also deals with corporate governance and ethics during 2018. Since 2010, REN has combined financial and sustainability reporting in a single document issued every year.

The consolidated and individual financial statements were approved by the Board of Directors at their meeting of 21 March 2019. The remainder of this report was also generally approved by the Board in 2019. It is the Board of Directors' opinion that the information in this report accurately reflects the financial position of the Group and its different subsidiary companies and provides a balanced overview of its present situation, policies, organization, practices and operating results in areas of sustainability considered to be most relevant in compliance with the reference Standards and Directives as implemented.

This report is complemented by the following publicly available information:

• Sustainability brochure 2018

• Company Website

Financial reporting

The consolidated financial statements have been drawn up on the assumption that operations are to continue using the accounting books and records of the companies included in the consolidation (Note 6). This accounting information is maintained in accordance with accountancy standards in effect in Portugal, adjusted during the consolidation process so that the consolidated financial statements are in accordance with International Standards on Financial Reporting as implemented throughout the European Union, in effect for financial years starting on 01 January 2018. Both the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the International Accounting Standards (IAS), issued by the International Accounting Standards Committee (IASC) and respective interpretations – SIC and IFRIC, issued by the International Financial Reporting Interpretation Committee (IFRIC) and Standard Interpretation Committee (SIC), which have been implemented in the EU should be understood as forming part of those standards.

The attached financial statements were drawn up in accordance with Portuguese law, including Decree Law No 158/2009 of 13 July 2009, updated by Decree Law No 98/2015 of 2 July and by Ministerial Implementing Order No 220/2015 of 24 July, and also in accordance with the structural concept, accountancy, reporting and other requirements applicable to the financial year ending 31 December 2018.

For further information on the principles and rules followed for financial information, please see Chapter 6.

The accounts were audited by Errnst & Young, Audit & Associates, SROC.

Sustainability reporting

This report, as with previous reports, was drawn up in accordance with GRI (Global Reporting Initiative) guidelines, the international standard for the development of sustainability models.

Following GRI guidelines and in accordance with the conformity option 'broad based', an analysis was conducted of the materially relevant areas which provided the focus of the report on social, environmental and economic issues.

REN respects the commitment arising from having joined, in 2005, the United Nations Global Compact (UNGC) initiative to provide information on its progress in implementing the ten principles regarding human rights, employment protection, environmental protection and anti corruption measures This report is also the vehicle for this information and as such, the correspondence table between the content of this report and the GRI and UNGC references is included. Further information on the UNGC initiative can be consulted on the REN website.

It is REN's aim to meet the principles set out in Standard AA1000AP (inclusion, materiality, responsiveness and impact). This report also demonstrates how these principles are incorporated into the management of our business, more specifically with regard to the information in Chapter 5.

The sustainability information in this report was subject to independent external verification by PwC, in accordance with the principles of Standard ISAE 3000 (International Standard on Assurance Engagements 3000) and with GRI Standards and the Standard AA1000AP (Accountability Principles – 2018). This check provides a limited reliability assurance level.

Coverage

This report covers the financial and sustainability performance of all REN Group companies from 01 January 2018 to 31 December 2018.

List of material aspects

In accordance with GRI Standards requirements, this report focuses mainly on the issues identified as relevant in the materiality analysis. In line with GRI recommendations, REN listened to its stakeholders and took into consideration other external and internal factors such as peer sustainability references and reports. This material was used to sample materially relevant topics for purposes of sustainability management. This resulted in a new sustainability strategy based on three pillars – economic, environmental and social. These pillars provided the basis for determining the areas of sustainability seen as relevant for the purposes of this report.

Material topics were considered to be environmental policy/environmental management systems, safety, reliability, quality and supply security, health and safety at work, impact on communities, prevention of climate change and the management of human capital and diversity. Other topics included were economic performance, respect for human rights – control tools and demand management.

Further information on this process is available in the chapter on sustainability and in the GRI Table in this report, where the list of material aspects is also duly identified and addressed.

REN list of material aspects for reporting purposes which do not correspond directly to any of the priority areas of the REN sustainability strategy, although they may partially overlap some of these areas:

• Economic Performance;

• Respect for human rights – control tools;

• Demand management.

REN list of material aspects for management purposes (priority areas of REN sustainability strategy):

• Safety, reliability, quality and supply security;

• Management of human capital and diversity;

• Health and safety at work;

• Environmental policy/Environmental management systems;

• Prevention of climate change;

• Impact on communities.

REN list of material aspects for sustainability reporting purposes:

• Safety, reliability, quality and supply security;

• Management of human capital and diversity;

• Health and safety at work;

• Environmental policy/Environmental management systems;

• Prevention of climate change;

• Impact on communities;

• Economic Performance;

• Respect for human rights – control tools;

• Demand management.

Contact

For further information please contact us:

sustentabilidade@ren.pt and ir@ren.pt