Abengoa Water's CSR Report

Innovative technology solutions for sustainability

ABENGOAWATER Annual Report 2014

Corporate Social Responsibility

Letter from the Chairman

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 01 Letter from the Chairman p. 1

01


Human development requires water resources, as a capital element for survival, social wellness and the future of civilisation. This is why any difficulties or obstacles to availability can become a true bottleneck for development, in the broadest sense of the term.

Climate change, with effects that are already noticeable, is set to heat up the pre-existing issue of water scarcity in the world, in a context of greater irregularities concerning the distribution, frequency and intensity of rainfall.

Because of this scenario, we need to employ technologies providing water in suitable conditions for usage, and this means we need to step up endeavours to collect and process water, and the resource needs to be reused with the costs required for this use being the first measure to ensure rationalisation.

Social-environmental conflicts surrounding water have recently led to the emergence of the concept of “water culture”, based on the recovery of the emotional and ethical values of water and the need to organise water management considering the common good of society, i.e., placing economic rationality at the service of the welfare goals of society. From a social viewpoint, water is much more valuable than a mere resource for economic uses: water is the source of life, it shapes the landscape and it is a cultural and identity point of reference for peoples. Therefore, the principles of equity, precaution, transparency, public participation and co-responsibility are core to attaining long-term sustainable management.

In this context, Abengoa Water is working on the development of water technologies which are increasingly more efficient and consistent with this new “water culture”, with a progressive international presence in several countries, contributing to the sustainability of water resources and, at the same time, consolidating a growth strategy based on

Carlos Cosín Fernández, CEO & Chairman of Abengoa Water

G4-1

As relevant facts in 2014, a highlight was the SAWS project for the supply of the city of San Antonio (Texas), consisting of the supply of 168,970 m3/day via a 225 km pipeline coming from a water treatment plant, which processes the water of 18 wells and three pumping stations. And we must not forget the Agadir project: a desalinisation plant (the largest in Morocco), which is to supply 100,000 m3/day of drinking water to the town of Great Agadir.

A focal point of 2014 was the first projects we are developing in the field of industrial water: AES-Gener, Carty, Masdar, etc. Furthermore, also in successful stages of development, we find the desalination plants in Almería, Chennai, Skikda and Honaine, which are currently operating normally and with availability figures in excess of 91.8 % (Chennai) and up to 98 % (Honaine), and 2014 was rounded off with the completion final testing stage of the desalinisation plant of Ténès in Algeria and Nungua in Ghana.


innovation, sustainable development and responsible management in the social, economic and environmental areas.

In this connection, our results in 2014 are bright and proof of sustainable growth, with a consolidated turnover of €72.12m, that is, an increase of 0.17 % in respect of the previous year.

Consolidated EBITDA in 2014 reached €30.20m and this involved profitability, understood as the ratio of EBITDA over sales, of 41.88%, mirroring the robustness and stability of the business model of Abengoa Water.

In 2014, the potential production capacity of Abengoa Water stood at 221.33 M m3/year of water, in line with figures for 2013, and thanks to our plants at Skikda (100,000 m3/day), Honaine (200,000 m3/day), Chennai (100,000 m3/day), Almería (50,000 m3/day), Cartagena (65,000 m3/day), Qingdao (100,000 m3/day) and Ténès (200,000 m3/day). Real production stood at 118.01 M m3/year, above the 102.17 M m3/year of 2013.

R&D and innovation plays a crucial role in the water industry, both in the improvement of efficiency of production processes and in the development of new technologies. At Abengoa Water, we currently have a solid portfolio of projects and initiatives in R&D and innovation, some of which become future businesses once their feasibility has been proved on an industrial and commercial level. In 2014, we invested a total of €7.6m on this item, which was around €3m more than the figure for the previous year, and this proves our commitment to innovation.

Abengoa Water is the sum of people working together, and our human capital provides the experience, talent and knowledge required to make us a standard-bearer in the water industry. At the end of 2014, our headcount was slightly above that of 2013, with a moderate and stable growth trend.

«Our results in 2014 are bright and proof of sustainable growth

Accra desalination plant

G4-1

maintained a sustained trend towards reduction over the past three years.

These lines are a brief summary of our mission, vision and main activities completed in 2014, and our commitment to a future in which the relevance of water for development is to be augmented; Abengoa Water is part of that future: providing technology and sustainable solutions to make that development possible.

With kind regards,

Carlos Cosín FernándezCEO & Chairman. Abengoa Water


Looking ahead, in 2015 we have ambitious strategic targets. We are going to maintain our leadership in desalinisation. We want to continue to be global leaders in desalinisation and to develop desalinisation solutions based on renewable energies, we are going to commit to the regeneration of urban wastewater for its reuse in agriculture and industry, to developing assistance systems for decision-making on the management of water on the water basin level, and as a tool for the optimisation of distribution networks; we are also developing technology allowing us to offer industrial clients integrated solutions for their process water, its treatment and the reuse of effluents, and we will offer outsourcing solutions in our specialty: water.

In relation to corporate social responsibility (CSR), one of the pillars of our strategy, in 2014 we have implemented our Strategic Plan and submitted it to a follow up, on the basis of the guidelines provided by Abengoa on this issue. In this context, in 2014 staff at Abengoa Water took part in the donation of time and volunteering (including 336 hours of solidarity holidays). For 2015, one of our challenges in the area is the launch of a Volunteering Plan allowing us to deepen the relationship with the community and guide the interest of employees in the area.

We have also improved our knowledge of the labour climate in the company with the ultimate goal of designing actions to benefit the improvement of the above on all levels of the organisation, and from the CSR and Sustainability Committee we ensure that every year we identify and increase awareness on relevant issues for the organisation with a participation process for internal and external assessment, emerging from our stakeholder groups.

And we continue to manage our commitment to mitigating climate change;

we manage Greenhouse Gas (GHG) emissions, with an annual measurement and audit both of our emissions and those of our suppliers, planning actions for their reduction. Our Carbon Footprint has

«Looking ahead, in 2015 we have ambitious strategic targets

G4-1, G4-2, G4-32

About this report

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 02 About this report p. 5

02

This Sustainability Report is externally reviewed by an independent company (Pwc) to ensure of the application of the AA1000 Assurance Standard (2008) and the GRI G4 requirements. In that review apply the principles of the AA1000 (2008) AccountAbility standard, with the expected degree of assurance (high), including the verification reports at the end of this document as an annex, in which is detailed the scope of work achieved and its conclusions.

The Report is finally reviewed by the Abengoa Water Board, and forwards it to the GRI Content Index Service, which verifies if the Context Index is correct and is aligned with the GRI (G4-32) general standards, who grants the seal (logo) if the verification process is correct. The report is done according to the option (In accordance option) “ Comprehensive”

Materiality (GRI) and Relevance (AA1000)

Materiality relates to the relevance of information for the business within the context of sustainability. Information is considered material when the omission or distortion of the above could have a decisive impact on stakeholders of the informing organisation.

Sustainability reports are not solely focused on a certain stakeholder group but, instead, on more than one and therefore contain very heterogeneous information. Abengoa Water has considered the analysis of materiality in drawing up this report with the purpose of offering an integrated view of the actions of the company on economic, social and environmental issues, to offer a response to the expectation of the audience and contribute to generate trust among its stakeholders.

In 2014, a materiality analysis was completed with a selection process of relevant CSR issues which is based on two analysis approaches which are entwined to obtain the final result, where external factors (those relating to the expectations of Abengoa Water stakeholders and the importance they attribute to the various issues) are key, and internal factors (which establish the importance of the various issues for the business, the management of the company and the achievement of the targets set forth in the business strategy). The use of both perspectives is


This document is submitted as the third annual sustainability report of Abengoa Water. The information contained herein deals with the activity of the company and its actions in 2014, including social and economic and environmental actions, in the framework of the internal rules of the organisation, the principles of the Global Compact (to which Abengoa has adhered) and the legislation of the countries in which Abengoa Water works.

The review of the application, implementation and development of the above is a priority target for the company and this is why audits are completed to verify the compliance with those policies and their adjustment to the processes, rules and action proceedings to guarantee transparency.

A reporting system has been defined, the target of which is the efficient and updated collection of consolidated and reliable data on the organisation, concerning relevant matters and indicators on CSR of the company to report these to stakeholders. In order to guarantee the reliability of the information provided, there is the requirement of systematic consistency of the data supplied, i.e. that data is traceable and re-constructible, exact and comprehensive in the identification and consideration of sources, and is submitted to internal controls allowing the prevention, detection and correction of errors.

This report has been drafted considering the principles governing the AA1000 Assurance Standard (2008), which are inclusiveness, relevance and responsiveness; in addition to the four principles regulated by GRI: materiality, participation of stakeholders, sustainability context and comprehensiveness. The principles of both AA1000 and GRI are interrelated and are based on the materiality principle.

2.1. Processes and principles for the drafting and review of the report

G4-15, G4-18, G4-22, G4-28, G4-29, G4-30, G4-33

• Water: efficiency of use, drinkability and processing

• Reduction of waste generation

• Biodiversity

• Identification and control of the source of raw materials

• Quality of the product or service

• Communication with local communities

On the basis of the internal and external assessment process of these issues or factors, a matrix was obtained on the basis of the procedure being employed, where items were classified into Focus (2 items) and Report (11 items), with the main items being the following:.


fundamental for compliance with the inclusivity principle defined under

• Human Rights

• Innovation

• Risk of corruption, bribery, fraudulent practices

and money laundering

• Financing

• Adjustment of the company to the

environment in which it operates

• Labour conditions: reconciliation of family life,

equal opportunities at work, professional

development, etc.

• Attracting and retaining talent

• Health and safety of own employees and

contractors

• Climate change

• Environmental accidents and their remedy

standard AA1000 (AS).

The analysis process of relevant affairs was completed on the basis of an internal procedure on this matter completed by Abengoa which defines the methodology to obtain the above, where the initial selection of relevant matters for Abengoa Water is completed on the basis of the study of factors considered transcendental.

The list of relevant issues identified was contrasted by a commission comprising 12 member of Abengoa Water from the various areas of the company and geographical areas, chaired by the Committee on CSR and Sustainability.

The commission, having analysed the materiality of the issues submitted by both internal sources (on the basis of the commissioning of items from members of the value chain of the company) and external sources (from stakeholders), and considering the nature and scope of each issue and the contributions of the Committee to tailor topics to the reality of the company, drew up this list of 16 factors:

G4-18, G4-19, G4-20, G4-21, G4-23, G4-26

Foco

Derechos Humanos

Innovation

Risk of corruption, brivery, fraudulent practices and money

laundering

Financing

Labour conditions. Reconciliation of family life.

Equal opportunities at work, professional development, etc

Attracting and retaining talent

Health and safety of own employees and contractors

Climate change

Water: efficiency of use, purification and

treatment

Reduction of waste generation

Biodiversity

Identification and control of the source of raw

materials Communication with local communities

Adjustment of the company to the environment where it

operates

Environmental accidents and their remedy

Quality of the product of service

0%

25%

50%

75%

100%

0% 25% 50% 75% 100%

Exte

rnal

rel

evan

ce

Internal relevance

Relevant issues 2014

application of water technologies to contribute to sustainable development and, throughout this report, it assesses performance in the context of its contribution to its stakeholders, to the communities in which it operates, and to the environment, climate change and biodiversity. Abengoa Water is becoming increasingly more active in the communication and dissemination of the importance of sustainability as it progresses as a company.

In 2014, activities relating to these issues were conducted, and there is a description on these matters in this report, such as, for instance, the drafting of a dossier on Water, Abengoa Water and Sustainable Development, of a multi-functional nature, devoted to all of our stakeholder groups or the definition of environmental goals, among other actions.

Thanks to this initiative and others completed, the purpose is to increase awareness of stakeholders and society at large on the imminent need to achieve a society of wellbeing via sustainable economic growth.

Comprehensiveness (GRI)

Comprehensiveness relates to appropriate coverage of indicators and material issues, to permit these to reflect significant social, economic and environmental impacts allowing stakeholders to assess performance of the informing organisation over the entire period covered by the report.

This report attempts to suitably reflect the implications, risks and challenges intrinsic to each activity and management line of Abengoa Water, allowing its accessibility to a broad and heterogeneous public. The document affords a greater priority to some issues over others, according to the materiality matrix provided in the analysis of relevant issues, and we have sought to offer further details on these aspects through case studies and specific examples.

To make comprehension of the text and information searches easier, and to increase homogeneity in the way the report is presented, we have attempted to follow a common structure for all chapters and sections.


As the matrix shows, the focus items for the values of the organisation are the following:

• Health and safety of own employees and contractors • Risk of corruption, bribery, fraudulent practices and money laundering

The 13 significant items are discussed in this Report in the relevant sections.

Participation of stakeholders (GRI) and

inclusivity (AA1000)

These two principles require that the informing organisation identifies the stakeholders, considers the above in designing the strategy and describes in the report how the above have responded to their expectations and concerns..

Abengoa Water has adapted to the analysis methodology of CSR affairs followed by Abengoa which, in the process of drafting and developing the CSR Strategic Plan, identified the main promoters within key stakeholder groups with the purpose of verifying their expectations and perceptions. The consultation with stakeholders is completed to find out the importance of the challenges identified, the perception of the performance of the company as to each issue, and the state of those matters regarded as relevant.

Meanwhile, Abengoa Water has a series of communication channels and mechanisms allowing it to keep an open and continuous dialogue with its stakeholders, in order to gather knowledge on needs and expectations, as detailed later on in this report.

Sustainability (GRI)

Abengoa Water focuses all of its activities on the development and

G4-24, G4-25, G4-26, G4-27

ComparabilityThe report permits the analysis of progress and changes. This report already allows the comparison with the previous year, therefore enabling a progress and track record of the company on the matter, indicators, changes in calculation methods, etc.

Accuracy

The level of accuracy and detail employed in drafting the report means that it can be used as a tool in the assessment of the performance of the organisation.

Reliability

Information included in the report is verified by a third party. Details included herein are supported by the appropriate documents and internal controls of the company, in line with the transparency commitment. In this regard, the reporting system used by the company is applicable, the purpose of which is to efficiently gather reliable consolidated data on the company, having the internal controls assisting in the prevention, detection and correction of significant errors in the data reported.

2.3. Significant changes in the reportIn drafting this report, the news and approaches dealt with in the CSRR 2014 of Abengoa have been considered, together with those of the CSRR of Abengoa Water itself of the previous year, in addition to the results and issues discussed at follow-up meetings of the CSR and Sustainability Committee, and/or periodical follow-ups of the CSR Strategic Plan Additionally, the formal structure and format of the layout has been slightly amended in respect of the prior report of 2013.


The coverage of indicators, understood as the set of performance aspects, is extensive to all work centres, companies and plants under the

management and capacity of Abengoa Water (See annex. consolidation perimeter).

Responsiveness (AA1000)

The CSR Strategic Plan defines the framework and the guidelines to be followed on sustainability using a set of actions integrating the expectations of stakeholders in the strategy of the organisation. Since 2012, Abengoa Water has been reinforcing its CSR reporting system including and maintaining improvements throughout 2014 in the Integrated Management System (IMS) and Sustainability Indicators (ISA), bringing together all relevant information concerning sustainability, making measurements and control on the performance of the company more accurate.

2.2. Principles on quality of the information disseminatedIn drawing up this report, we have attempted to reflect information following the quality principles set out by GRI.

Balance

The report reflects the positive and improvable aspects (challenges), allowing a reasonable assessment of the performance of the company, contributing to the process of identification of issues concerning the compliance with the above.

G4-13, G4-17


2.4. Contact informationFor further information on this report please contact:

Rafael Llorente OlazábalManager of IMS (integrated management systems) and SustainabilityCampus Palmas Altas. C/ Energía Solar nº 1, Palmas Altas 41014 SevillePhone: +34954937035 (37035) Mobile: +34608883251 (57552) Fax: +34955413373www.abengoawater.com

G4-31

Responsible management

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 03 Responsible Management p. 11

03

G4-7, G4-DMA

Abengoa Water bases its activities on a series of strategic goals:

> Maintaining our market share on a worldwide level as a company fostering desalinisation projects using reverse osmosis

> Expansion of the activities in the segment of development of water purification projects > Expansion to the segment of development of projects for purification and reuse of wastewater

> Expansion as a supplier of solutions for selected industrial water segments

> Gaining market share in the sector of services to municipal clients and expanding servi-ce activities for industrial clients

> Continuing on the path of technology development for the achievement of competiti-ve advantages sustainable over time

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 03 Responsible Management

3.1 Profile of Abengoa WaterAbengoa Water is a global technology-based company supplying integrated solutions to municipal and industrial companies in the following areas:

• Design, construction, operation and financing of water treatment plants

• Turnkey Projects

• Operation and maintenance of plants

• Process technology

• Services for management of infrastructures and water management

Our markets and solutions focus on the following:

• Municipal Water

- Desalination - Water purification - Wastewater - Reuse

• Industrial Water

- Energy - Refinery - Mining - Petroleum & gas

p. 12

Business lines

Concessions of water (sale of water)

• Desalination

• Reuse

• Drinking water

• Purification

• Power

• Oil & Gas

• Refining

• Mining

• O & M

• Industrial outsourcing

• Management of basins and networks

Industrial treatment plants (turnkey)

Water treatment and management services

• Improvement of processes, innovation and development of new technologies

• Technology agreements

Desalination

Reuse

Drinking water

Depuración

Clients

• Municipal clients (utilities)

• External industrial client

• Internal industrial client (Abeinsa)

• Municipal clients (utilities)

• Industrial client (external and internal)• Municipal client

{{

{ {Value generation chain of Abengoa Water

G4-3, G4-4, G4-12, G4-DMA, G4-7

3.3 Management, transparency and rigourThe foundation supporting Abengoa Water’s activities, growth and consolidation on the market, is its professional rigour and sustainability, and the fact that permanent and transparent dialogues are held with the various stakeholder groups (employees, clients, suppliers and community).

The model for management and growth of Abengoa Water is underpinned by the following:

• Developing a business providing solutions to create a more sustainable world

• Maintaining and consolidating a highly competitive human team

• Developing a permanent value-creation strategy with the generation of new options, defining the current and future businesses in a structured manner

• Diversifying geographically on new markets to offer greater potential

• Investing in R&D and innovation activities

These aspects are supported by three management vectors:

• Transparency and rigour in management

• Corporate social responsibility

• Fostering an entrepreneurial and innovative spirit


The registered address and main offices of Abengoa Water are situated at the Campus of Palmas Altas of Abengoa in Seville (Spain), at the address C/ Energía Solar nº 1, CP 41014, and there is also a work centre in Madrid (Spain), Paseo de la Castellana 43 4ª Planta, CP 28046, and a Technology Centre and Laboratory of R&D+i in Dos Hermanas, a town in the province of Seville (Bda. Fuente del Rey), situated in the extension of C/ Don Remondo s/n, CP 41703.

On an international level, there are offices located in Austin (Texas, United States), Beijing and Dalian (China), Abu Dhabi (Arab Emirates) and in Chile (Santiago de Chile), and there are concession offices in Algeria (Skikda, Honaine and Ténès), India (Chennai), Ghana (Accra) and Morocco (Agadir).

3.2 Mission, vision and valuesThe mission of Abengoa Water consists of fostering, developing and operating water treatment plants, using cutting-edge technology as a vector for growth and consolidation, with the purpose of creating value for clients, fostering sustainability of resources and contributing to the personal and professional development of its employees and the communities in which it operates.

This vision embodies becoming a leading company on a worldwide scale in the water sector, managing assets in property and expanding reuse activities and industrial outsourcing, at the same time as attaining a leading position in research and development of technologies for desalinisation, drinking water, purifying and reuse of water.

The most noteworthy values of Abengoa Water include honesty and respect for the stakeholder groups involved in its activities, in addition to the protection, defence and improvement of the environment, biodiversity and climate change.

p. 13

G4-5, G4-7,G4-56, G4-57, G4-58, G4-DMA, G4-HR2

Abengoa Water maintains the implementation and certification of an integrated system for quality management (in agreement with international standard ISO 9001), an environmental management certificate (standard ISO 14001) and a work health and safety certificate (standard OHSAS 18001), as an efficient tool for continuous improvement.

Among the most significant market awards attained to date we can highlight the following:

• Hihgly Commended Desalination Company of the Year 2006.

• Developer of the Year & Desalination Deal of the Year: Beni Saf, Algeria. 2007. GWI.

• Hihgly Commended Desalination Deal of the Year: Tlemcen Honaine, Algeria 2008. GWI.

• Desalination Company of the Year 2009. GWI.

• Hihgly Commended Water Company of the Year 2012 GWI.

• Desalination Company of the Year 2013. GWI.


The management bodies of the company are structured under a functional organisation chart consistent with the development vectors and axes.

p. 14

Dirección general

Concessions Servicies Process & Systems

Technology and innovation

CEO AW

Corporate

Organization & Systems

Administration

Structured Finance

Legal

Human Resources

Strategic Development and Communication

VP. BD Director

RoW

China

Latam

USA

Middle East

India

Internal Audit

Functional organisation chart of Abengoa Water

G4-HR2, G4-DMA


3.4 International presenceAbengoa Water operates in four of the five continents, with clients located in the United States, China, the Maghreb, Middle East, India, Latin America and Sub-Saharan Africa.

p. 15

Sales by geographical areas (M€) 2014 2013 2012 (*)

Spain 7.8 20.0 19.6

EMEA 28.0 25.3 23.2

Asia 22.4 26.5 6.1

USA 13.1 Sin datos Sin datos

Rest of countries 0.6 0.20 1.7

Total 72.1 72.0 51.0

(*) 2012 data differing from the figures published in this year’s report, consistent with the changes in consolidation criteria of IFRS-10 accounting standards concerning CFS.

G4-6, G4-8

Office

Project


Main magnitudes

Economic dimension

Environmental dimension Social dimension

p. 16

3.5 Dimensions of our responsible management

0.17 %increase of sales in respect of 2013

€30.2Mof EBITDA

€7.6Minvested in R&D and innovation

29projects of R&D and innovation under development

7patents requested and

4 granted in the year

50people dedicated to R&D and innovation (6 more than in 2013)

Reduction of 5 %of the Carbon Footprint (label) in respect of 2012

118 Mm3

of drinking water generated

49.31hours of training on average for employees at the company Abengoa Water

398employees, up 1.75 % on 2013

361hours of volunteering

G4-8, G4-9


Breakdown of economic figures

p. 17

Economic data (M€) 2014 2013 2012 (*)

Sales 72.1 72.0 50.6

Ebitda (1) 30.2 37.2 11.7

EAT [Earnings after Taxes] 8.5 3.8 3.4

Net Cash Flow 16.8 39.5 30.7

Total Assets 603.1 620.2 546.3

Equity 50.1 42.8 40.0

Net Financial Debt -334.2 -360.7 -387.4

Operating Margin (% Ebitda / turnover) 41.8 51.7 23.1

Profitability (% EAT over equity (ROE)) 17.0 8.8 8.5

Profitability (% EAT over total assets (ROA)) 1.4 0.6 0.6

Economic data (M€)

Ebitda / employees (K€) 72.9 0.1 0.0

Sales / employees (K€) 174.2 0.2 0.1

(1) EBITDA: earnings before interest, tax, depreciation and amortisation.

Sales by business lines (M€) 2014 2013 2012 (*)

AW Concessions 49.2 40.3 26.5

AW Services 16.3 16.7 15.5

AW Process&Systems 1.9 No data No data

Development of new R&D and innovation technologies 4.6 15.0 8.5

Total 72.1 72.0 51

(*) 2012 data differing from the figures published in this year’s report, consistent with the consolidation criteria changes in IFRS-10 accounting standards concerning CFS.

G4-8, G4-9, G4-EC1

The benefits of a strategic focus on CSR are many, such as, for instance, a more appropriate management of reputation, attracting and retaining talent; greater competitiveness, better positioning on the market, greater operational efficiency and cost reduction; the above not forgetting the improvement of the relationship with the supply chain and the community, the reduction of environmental risks, gaining access to a greater number of capital sources and generating opportunities.

Abengoa Water has continued working in 2014 to achieve sustainable growth accompanied by the integration of CSR in its activities, working to ensure that the potential impact is positive for society and for the environment with an ethical behaviour contributing to the general welfare of all, in line with our business model.

The relationship with our stakeholders is an essential milestone and we focus our efforts on improving the efficiency of dialogue channels and communication with the above.

Taking particular care in relation to the perception and opinion of our stakeholders, we have identified key issues concerning CSR on the basis of an internal procedure at Abengoa (see section 2), which has given rise to a series of relevant issues for the organisation:

• Human rights

• Innovation

• Risk of corruption, bribery, fraudulent practices and money laundering

• Financing

• Adaptation of the company to the environment in which it operates • Labour conditions: reconciliation of work-family life, Equal opportunities for work, professional development, etc.


3.6 Our policy and main aspects regarding CSR Corporate Social Responsibility (CSR) is a key strategic factor in the development of Abengoa Water’s activities on all levels and is one of the main pillars sustaining its strategy from the outset.

CSR is aligned with our activity, from the positioning of policies, a business model and behaviour, to our management system considering each and every one of its dimensions:

• Legal dimension, with comprehensive respect for current regulations underlying each and every one of the company’s actions

• Economic dimension, generating value and sustained growth

• Human dimension, protecting human rights

• Social dimension, supporting the development of communities amid which Abengoa Water operates

• Environmental dimension, respecting and ensuring the protection of the environment

The social responsibility of Abengoa Water is supported by:

• The professional Code of Conduct (defined on the level of Abengoa)

• The structure of the corporate government

• The model of sustainable development

• The internal and external audits of all its divisions and actions • A policy to support the communities where it is operates

p. 18

G4-DMA, G4-HR2

New challenges

Our challenge for 2015 is successfully and efficiently adjusting this Strategic Plan to the updates and new versions of the 2020 Framework Plan on the issue for Abengoa.

Therefore, the actions to complete are the following:

• Progress analysis of the assessment of the psycho-social risks of employees

• Defining the role of tutor for persons with potential joining Abengoa Water

• Developing professional itineraries

• Drafting an informational and training dossier on sustainable development and the commitment of Abengoa Water to employees, spokespeople of the company, suppliers and clients


• Attracting and retaining talent

• Health and safety of own employees and contractors

• Climate change

• Environmental accidents and the remedy of the above

• Water: efficient use, purification and treatment

• Identification and control of the sources of raw materials

• Quality of the product or service

• Communication with local communities

3.7 Our CSR Strategic PlanThe Strategic Plan sets forth the framework and the guidelines to be followed on CSR with the definition of strategic actions integrating the expectations of stakeholders and allowing the development of our capacities and business model.

At Abengoa Water, since 2012 we have been working on the drafting of our CSR Strategic Plan (based on the three horizons of McKinsey), taking as a starting point the CSR Strategic Plan of Abengoa defining the working theme areas and working lines, with the expected goals and results. This Plan was drawn up in 2013 in its first edition (June) and it was submitted to improvements, quarterly monitoring and updates in 2014.

The Plan (at the end of 2014) contemplates a total of 77 executable actions, 21 % of which are in the analysis stage, 10% are in progress or have started and 56 % have been implemented and are being developed at the company.

p. 19

ABENGOA WATER

ABENGOA

ABENGOA

WATER

G4-DMA, G4-HR2

the Sarbanes-Oxley Law: an internal channel placed at the disposal of employees via the intranet and an external channel at the disposal of third parties (accessible via web) to report allegations of irregularities or fraudulent acts or actions contravening the Code.

Furthermore, Abengoa Water has designed a series of training procedures extensive to all staff, it analyses psychosocial risks of the organisation and conducts a labour environment survey periodically for employees to discover their perception on the ethical climate, and on the integrity and compliance of the organisation.

Furthermore, there is a systematic approach to establish the level of non-compliance of the organisation in connection with situations where significant penalties and/or fines have been imposed (both of a criminal and administrative nature), relating to aspects such as the environment, marketing communications, supply and use of products and services, privacy and leakage of client personal data, monopolistic practices against free competition, incidents relating to violations of indigenous peoples’ rights, accounting fraud, corruption, discrimination at the workplace, etc.

Abengoa Water contemplates, processes and manages aspects and topics relating to CSR, analysing and resolving notices that may be received via the ethics channel, and no such notices were received in 2014.

In this context, Abengoa Water is supported by the website of Abengoa in informing suppliers and contractors on the Code of Conduct and the opportunity to use the reporting mechanisms provided on a special section of such website.

New challenges

• Inclusion of a clause in contracts informing on the Code of Conduct, and the opportunity to employ reporting mechanisms

The same challenge set in the previous year remains in force given that a more general modification to the General Purchase Conditions and


• Drafting the dialogue map in respect of stakeholders, persons or groups who are significant for the performance of Abengoa Water or who may be affected by the above, and identifying their expectations and interests in relation to Abengoa Water and also vice versa

• Drafting a procedure to assess perception and trust of critical promoters

• Developing a corporate volunteering programme considering the proposals of the members of Abengoa Water and the needs of the communities in which it operates, in connection with the mission of the business group

3.8 Integrity and compliance. Transparency and good governanceAbengoa Water is a company operating in several countries, with a significant number of employees and related companies, and this requires a commitment to transparency in management and good governance, which are the basis of relationships with stakeholders, generating added value, improving third-party communication, leveraging opportunities and maximising strengths.

Therefore, Abengoa Water is committed to fluent communication with all of its stakeholders using the appropriate communication channels.

Abengoa Water has the tools and procedures to ensure the performance of its activities in agreement with the laws, values, rules, procedures and standards applicable to it, whether its own ones or those of third parties.

Therefore, there is a Code of Conduct accessible to all employees on Abengoa’s website and on Connect@, in addition to the reporting channels enabled since 2007 in agreement with the requirements of

p. 20

• Procedure to assess the perception and trust of critical promoters

3.10 Risk managementAbengoa Water has a CSR risk management system allowing the identification of the main environmental and social risks. This assessment system, developed by Abengoa, allows the consolidation of risks at all facilities, the identification of risks, while at the same time fostering management of dialogue and conflicts with stakeholders of the same.

To attain this goal, we use the Universal Risk Model of Abengoa, and the inputs employed in computing such risks are the results emerging from the CSR risk analysis annually completed at the facilities that are relevant for the organisation and which assess, from the three different viewpoints, the nature of the facility itself, the non-compliance with targets and the perception of third parties, analysing a total of 27 risks associated to the most relevant areas of the organisation.

In this context, Abengoa Water has additionally completed the relevant survey on the labour climate in 2014.

New challenges

• Monitoring and assessment of psychosocial risks of the organisation

3.11 Fight against corruptionGood reputation is essential for Abengoa Water and therefore the values of honesty, integrity and good judgement of employees and managers are crucial for the organisation. The above are included in the Code of Conduct of Abengoa governing work relationships within the company among members of the company itself, and between such persons and their stakeholders.


information to suppliers shall be included.

3.9 Stakeholder dialoguesAbengoa Water is implementing an action plan and dialogues with all stakeholders with which it has a relationship. The main direct stakeholders of Abengoa Water are its own employees, clients, suppliers, the local communities in which it operates and society at large, including the media, public authorities and public bodies, both in their capacity of procurement bodies and as legislators and for financing authorities.

Abengoa Water devotes resources and efforts to generating a sustainable relationship of trust with its stakeholders using the various communication channels meeting the characteristics of each of the above, and at the same time other new channels are proposed and/or developed in response to what is meant to be a process undergoing constant change.

In this dialogue process, Abengoa Water considers the proposals and recommendations made by the Independent Panel of Experts on Sustainable Development (IPESD) including independent professionals of renowned international prestige in the environmental, social and economic areas. Their results and conclusions are considered in the analysis of Relevant Facts by Abengoa (see section 2), and these are subsequently incorporated into the procedure governing the identification of such relevant facts at Abengoa Water.

New challenges

In 2015, we are maintaining the challenges established the preceding year as that work require a term lasting longer than one year for its completion.

• Creation of a detail map of stakeholders with an updating and communication procedure

p. 21

G4-14


Abengoa Water, given its international projection, safeguards to prevent extortion, fraud and bribery and follows the provisions of the US Foreign Corrupt Practices Act (FCPA), a supplement to the requirements provided by section 404 of US Sarbanes Oxley (SOX) Act.

Furthermore, and as stated above, a special reporting channel is placed at the disposal of employees (via Abengoa’s website), which is a tool to report any potential irregularities in this regard.

There are specific procedures in place for the management of corruption risks, and for the provision of anticorruption policies, in addition to a computer programme based on these systems shared at Abengoa, which may be consulted by all users (employees) at any time.

p. 22

G4-DMA, G4-SO3, G4-SO4

Innovation and competitiveness

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 04 Innovation and competitiveness p. 23

04

design, EPC, commissioning, O&M, decommissioning and assessment of a pilot desalinisation plant in UAE which, applying advanced technologies, mostly showcases low energy consumption and a high potential to be powered by renewable energies.

The main features of the pilot plant proposal is a seawater desalinisation plant using reverse osmosis (SWRO) with a production of 1.000 m3/day, equipped with pre-treatment with membranes using micro/ultra-filtering (MF/UF) and hybridised with membrane distillation (MD) units with the goal of concentrating part of the brine generated in the process and increasing the global production by 60 m3/day.

Target

Generation of know-how and the development of our own technology, on the basis of four research projects, focusing on desalinisation, treatment and reuse of water, membranes and sustainable solutions.

Human capital and resources

This accomplishment is possible thanks to the effort of a team comprising 50 researchers specialising in membranes, the desalinisation process and water treatment.

We have an R&D and innovation centre with a surface of around 3,000 m2, located in Seville (Dos Hermanas), with cutting-edge facilities for research, laboratories and control centres and telematics monitoring of plants in operation.

Investment in R&D and innovation

In 2014, investment in R&D and innovation at the company reached €7.6m (a sharp increase vis-à-vis the €4.7m in 2013) at a total of 28 projects under development (7 new projects this year), and this proves the clear orientation of the company to innovation in its activities.

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 04 Innovation and competitiveness

R&D and innovation plays a fundamental role in the water sector, both from the viewpoint of the improvement of efficiency of current production processes and in the development of new technologies for water treatment.

The vision at Abengoa Water is based on a strong and decisive commitment to innovation, research and development in subjects concerning water such as desalination, drinking water, purification and reuse.

The management policy at Abengoa Water includes its position on the subject, considering innovation as a fundamental tool for the sustainable development of the business, and differentiation, improvement and competitiveness.

This is why Abengoa Water works with the best professionals in the new technology development via its R&D+i department. Abengoa Water currently has a solid portfolio of projects and initiatives of R&D+i, some of which may become future business as technologies evolve and the feasibility of the above is proven on an industrial and commercial scale.

There is a strategic R&D and innovation Plan setting out the strategy and general technology vision of the organisation, in which framework a series of R&D and innovation programmes are structured and developed, from which multiple innovative projects arise using the latest know-how and state-of-the-art technologies in the industry. This is why the business views this process as being one of the main working lines of the company, serving as a technology foundation to support the remaining areas, imbuing high added-value to the activities and development of the business.

In the scope of R&D and innovation, a highlight is that in the course of 2014, the company was selected as one of the four awardee companies for the development of the “Renewable Energy Seawater Desalination Program” fostered and co-funded by the Masdar Company. This was a significant step forward for the Company as the award brings recognition for its leadership in technology design and innovation in the area of water. The scope of the work relates to the co-development,

p. 24

2011 2012 2013 2014 2014 1S 2014 2S

Explanation

Requested in the year 6 0 0 6 2 4 see Note 1

Accumulated applications 7 7 7 13 9 13 see Note 2

Granted in the year 0 1 1 4 0 4 see Note 3

Accumulated grantings 0 1 2 6 2 6 see Note 4

Requested in the year 6 2 6 7 2 5 see Note 5

Accumulated applications 7 9 13 20 15 20 see Note 6

Granted in the year 0 1 1 4 0 4 see Note 7

Accumulated grantings 0 1 2 6 2 6 see Note 8

Reporting Period 2014

Reporting Frequency Annual

Priority patents

Patents

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 04 Innovation and competitiveness

Patents

The relevance and importance placed by Abengoa Water in its R&D and innovation activities makes it necessary to guarantee the protection of these developments and research with legal industrial and intellectual property tools.

Therefore, the organisation is the holder of rights on several relevant developments, and at year-end 2014, there are a total of seven patents requested in the year and four granted.

p. 25

Note 2:

Note 3:

Note 4:

Note 6:

Note 7:

Note 8:

Note 5:

5.1. The computation shall consider both priority patent applications, in addition to those purchased in the year, and patents resulting from the start of national stages and regional offices (one by office in the case of EPO and GCC and one by country in the case of national stages). PCT patents shall solely be accounted when it is the priority patent and still had not been extended to national stages. At the time at which such PCT priority patent had been extended to national stages, the application for a patent shall be accounted in each country, extensive to the recipient office in which such PCT was applied for.

5.2. When a divisional patent was made on a request (priority request, extension of the priority request in another country, EPO or PCT), as many divisional patents as parts into which it had been divided shall be accounted, as of the year in which such division occurred.

Note 1:

In the case of abandonment of a patent already granted, this abandonment shall be subtracted from the computation of priority patents granted accumulated in the year in which it was abandoned and whenever all the patents of the same family had been abandoned.

In the case of abandonment of a patent, this abandonment shall be subtracted from the computation of priority patents accumulated in the year in which it was abandoned and whenever all the patents of the same family had been abandoned.

In the computation of priority patents granted, a patent is to be accounted as granted when at least one of the patents of its family was granted although the patent was not a priority patent. In the case of acquisition of patents, these shall be accounted when any patents in the family had already been granted.

In the case of abandonment of a patent already granted , this abandonment shall be subtracted from the computation of granted patents accumulated in the year in which it was abandoned and whenever all the patents were of the same family.

1.1. The calculation of priority patents considers both patents purchased (in this case to be calculated in the acquisition year which does not have to match the priority year) with the patent applications, but in both cases soleLy the priority patents shall be accounted, that is, the first patent or application for a patent requested (both in the case of national office OEPM [Spanish Office for Patents and Trademarks], USA, etc. such as EPO, PCT etc.).

1.2. The patents or applications for divisional patents are accounted within the computation of priority patents whenever the above had not arisen from a certain priority patent, and in the year in which these are created, which does not need to match the priority year. Divisional patents arising from a patent of a non-priority family are regarded within the account of patents requested in the year, and again the year in which these arise does not need to match the priority year

1.3. The Continuation in Parts (US) and Addition Patents (ES) are accounted as an independent priority patent in the year in which these are submitted which does not need to match the priority year.

1.4. Provisional requests of the USPTO are to be accounted in the calculation of priority patents, as these are always a first request of the patent submitted, and therefore for the computation they shall be equivalent to a patent submitted on a national level in the USA.

In the case of abandonment of any of the patents of the family, this shall be subtracted from the computation of accumulated requested patents, irrespective of whether all patents in the family had been abandoned or not.

The count of patents granted in the year shall include both priority patents granted, and also those of the family which had been granted (granted patents shall not include PCT patents or EPO patents until the entry into force of the community pàtent, accounting all validations via EPO as granted with the exception of that of the country of the priority patent).

In 2014, the feasibility of the implementation and certification of UNE 166002 at the organisation has been studied. A decision on the matter shall be reached in 2015 on the basis of the conclusions, external circumstances and framework strategies of Abengoa concerning R&D and innovation.

Progress of the state of patents at Abengoa Water

R&D+i indicators

Commitment and challenges for Sustainable Development

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 05 Commitment and challenges for Sustainable Development p. 26

05

5.1 With our stakeholders

5.1.1. Employees

People are the capital asset generating value and wealth of the organisation and, therefore, Abengoa Water safeguards the forging of ideal conditions for its staff to flourish, with the goal being to foster talent and attain excellence.

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 05 Commitment and challenges for Sustainable Development

Abengoa Water, in the framework of its strategy and sustainable development, focuses its commitment on:

• Service to clients

• Professional and human development of employees

• Development of sustainable solutions of water with full respect and care for the environment

• Growth of the communities where its activities are being implemented

• Offer of new services, technologies and innovative solutions surrounding water

The processes of the company are completed under an integrated management system (IMS) which, since 2012, has a triple certification from AENOR, an independent authority accredited by ENAC (Spanish National Accreditation Authority).

- UNE EN ISO 9001: 2008 for quality - UNE EN ISO 14001: 2004 for environmental management - OHSAS 18001: 2007 for prevention of employment risks and improvement of employee health and safety conditions

Abengoa Water follows the guidelines of GRI (Global Reporting Initiative) for the definition, monitoring and measurement of sustainability parameters for businesses and maintains an updated panel of sustainability indicators on the basis of such system used as a method of monitoring and measuring performance of the company and of the IMS.

Using this monitoring panel (including the ESIs – Environmental Sustainability Indicators–), reliable information is collected on social, environmental and economic aspects, strengthening efficiency of management, improving decision-taking and minimising associated risks.

p. 27

Human capital by professional category 2014 2013 2012 (*)

Managers 22 20 25

Middle Managers 66 81 72

Engineers and qualified staff 153 104 86

Professional assistants 25 48 47

Operatives 116 124 126

Trainees 16 14 13

Total 398 391 369

Headcount 2014

Sex

Hombres 294

Mujeres 104

Age (figure excluding trainees)

20 - 30 90

31 - 40 202

41 - 50 81

51 - 60 23

> 60 2

G4-10, G4-DMA, G4-LA13


As at 31 December 2014, the headcount of Abengoa Water amounted to 398 people - including trainees - and the figure was higher than that of 2013.

The turnover of employees (unwanted voluntary resignations) in 2014 was of two, the same as in 2013, and this reflects positively on management.

In relation to the number of managers by countries, these are mostly concentrated in Spain, and there are 15, and 7 managers are located outside Spain, and in general terms the same levels as former years are maintained.

p. 28

By geographical areas No. managers

Spain 15

China 2

India 1

Algeria 2

USA 1

Morocco 1

Attraction, development and retention of talent

Abengoa Water works to attract, grow and retain talent and ensures that it has the necessary profiles to implement its strategy and objectives.

Abengoa Water fosters and facilitates traineeship programmes for trainees by reaching agreements with universities, vocational training institutes and business schools, through FOCUS-Abengoa Foundation, and it is additionally present in specialised professional networks employed as a tool for recruitment and identification of talent.

There is a full skills-based management programme for the assessment of performance and professional development of all employees, completed

using the computer programme People Center in agreement with 12 skills provided, thus gaining simplicity and improving the efficiency of the process.

Abengoa Water is working on a process to identify potential managers and it assists them in their talent-development process using the Manager Development Programme, supplementing the Intercommunication Plan, boosting programmes for talent identification and professional projection.

Furthermore, there is a special system for such assessment based on a 360º Feedback methodology for managers, implanted for the entirety of such managers.

In 2014, a work climate survey was completed laying the groundwork for the proposal and materialisation of improvement actions in this regard.

Abengoa Water, on the basis of the monitoring of actions and challenges of its CSR Strategic Plan in 2014, has successfully implemented the extension of skills-based management in the companies in the USA in 2014, starting actions in 2014 to attain the challenges proposed a year earlier, which were: the introduction of a tutor role for new members, the establishment of an action plan for the items with the worst assessment in the climate survey, and the development of Professional Itineraries. However, these are challenges planned for the forthcoming period, given that they were not fully implemented in 2014.

G4-10, G4-EC6, G4-DMA


Training

Training staff is one of the essential aspects, and 19,722.14 h of training were delivered at the parent company in financial year 2014, and this involved a figure of 49.31 training h on average per employee at the company.

p. 29

Tipo de formación Asistencias formativas Horas realizadas

Formación idiomas 163 4.421,40

Formación corporativa 1.528 6.106,01

Formación prevención de riesgos 512 1.705,88

Formación general 997 7.530,00

Prácticas profesionales 13 3.396,00

Total general 3.213 19.722,14

In this context, Abengoa Water has its own course catalogue adapted to its needs and targets where e-learning methods are prioritised. Training levels in the company are maintained the same as in previous years.

New challenges

• Training concerning social responsibility and sustainable development at our work centres, on the basis of an information dossier on water, Abengoa Water and sustainable development

This challenge was made in the CSRR 2013, but it is maintained in this period as its contents were completed at the end of 2014.

Labour policy

In the framework of the adhesion of Abengoa to the United Nations Global Compact and as a result of the commitments contained in its Code of Conduct, Abengoa Water is working under a labour

responsibility policy, integrated in its management system, guaranteeing continuous development in social performance, with the commitment to:

• Integrate management of labour social responsibility in the corporate strategy of the company

• Guarantee the compliance with applicable legal regulations and of any other commitments made in this area

• Fostering the principles of the Global Compact in its scope of action

• Promoting and fostering personal and professional development of the people at the company, nurturing the creation of ideal working conditions and championing continuous training

• Recruiting, hiring, training and cultivating qualified professionals for the performance of their activities, irrespective of their race, religion, colour, age, sex, civil status, sexual orientation, nationality and physical or mental disability

• Ensuring that there is a suitable preventive culture, in agreement with the occupational risk prevention policy at the company and the OHSAS management system

• Creating the necessary conditions to facilitate balance between the personal life and professional lives of employees

• Assessing and revising social behaviour of the company, providing transparent information on the above, and establishing programmes for continuous improvement

Abengoa Water has a role called employee coordinator, who acts as a worker representative to channel and deal with all matters concerning employees in respect of the chairman of the organisation, in addition to providing an ethical channel and employee portal whereby suggestions, contributions and improvements suggested by staff are centralised and managed, as stated in the previous sections of this document.

G4-15, G4-LA9,G4-LA10,G4-LA11,G4-DMA


Remuneration policy

The remuneration policy at Abengoa Water fulfils legal regulations, and considers the capacity, performance and quality of work, guaranteeing equality in treatment and opportunities to the human team, with no differences based on gender, professional category or geographical areas.

The chart below shows the percentage difference between the average initial salary and the local minimum inter-professional wage (MIW), considering the various professional categories for companies making up 80% of the headcount.

p. 30

2014 Average monthly salary paid by categories on joining €

MIW Graduate Clerical Operative

Spain €9,034.20 €30,748.00 €17,445.00 €20,628.15

Algeria €2,047.35 €5,539.86 - €4,788.24

India €498.06 €3,630.91 - €1,708.66

Ghana €696.84 - - -

Social benefits

In order to achieve a suitable labour climate or environment as a foundation for the commitment of the organisation, employees (including full-time and part-time employees) are offered social benefits to foster work / life reconciliation in the framework of the rules laid down in this regard by Abengoa.

Among these benefits, the following have been offered in 2014:

• Life and accident insurance

• Restaurant service at the work centre in Campus Palmas Altas

• Study grants

• Gymnasiums to do physical exercise and locations to complete group activities, and also the organisation of and participation in internal tournaments and other sports activities

• Subsidised nursery service at Campus Palmas Altas

• Medical service to improve the health coverage of employees at work centres with over 300 people

• Pensions plan, designed in agreement with the special features of each of the countries in which the company operates, applying the regulations of each region

• Social assistance

• Summer residence at La Antilla (Huelva), available at affordable prices for all employees in summer months

• Schedule flexibility at the main work centres

• Social assistance to employees: via a social action department, for the follow-up of personal, family, social issues, or specific economic issues

• Social fund to assist employees in circumstances of economic need, via the Focus-Abengoa Foundation

• Free transport service to Campus Palmas Altas from several locations in the city of Seville

Protection of Human Rights

The international projection of Abengoa Water and its strategy make it necessary to safeguard respect for human rights within the organisation, of its value chain and area of influence, and the areas in which it operates.

G4-11,G4-EC3,G4-EC5,G4-LA2, G4-LA7, G4-LA8, G4-LA13, G4-HR3, G4-DMA

The protection of fundamental human rights is integrated in the procurement process, in which suppliers and subcontractors voluntarily sign their adherence to the Social Responsibility Code (SRC), specifying and communicating the policy on the issue.

In 2014 (the same as in previous years) there were no claims, incidents or complaints on the matter and no activities involving risks to discrimination, freedom of association, child exploitation or forced labour, or violation of human rights and/or cases relating to the violation of the rights of inhabitants of the locations, territories and communities where its activities are carried out have been found.

In 2014, there was a successful initial diagnosis to implement and certify Standard SA 8000 in the organisation, the conclusions of which are to be studied in 2015 to take an appropriate decision and to start implementation or not.

Work health and safety

The company integrates prevention of occupational risks in its strategy and applies the above to all areas, organisational levels, staff, subcontractors and activity lines.

The occupational risk prevention policy of Abengoa Water is drafted in agreement with the compliance of applicable sector regulations in the communities and countries in which it operates.

Abengoa Water has efficiently implemented a procedure to assess risks at all work centres, drafted with the contributions of all employees, in addition to a special control system of contractors.

In agreement with the prevention policy of Abengoa Water and Common Management Rules, there is a Prevention Committee as a monitoring and control body, comprising the management of the company, the managers of each area, and the technicians of the prevention service. At the committee, meeting on a quarterly basis, targets are set, the progress of work hazards is analysed, together with the main statistical indicators


In this vein, the company prohibits forced labour and child exploitation and supports any actions addressed to eradicating the above when it is able to do so. Abengoa Water submits all of its operations to continuous assessment and review, measuring their impact on human rights and it is doing this in over 14 companies that are part of its group and in the continents were its activities are carried out.

All employees are under the single scope of application of supra-company employment regulations, irrespective of the nature of the activities or the countries in which such activities are completed. Moreover, and in addition to being covered at all times by the legal system of each country in which it works, legal regulations are especially important to the company, materialising through collective bargaining agreements of the industry, territory agreements or the agreements pertaining to the company itself, signed by the workers, unitary representatives or the trade unions, as applicable.

Abengoa Water respects and supports free association of workers, which is regarded as a right and which it fosters and guarantees through dialogue and permanent information to the representatives of each division or department.

Prior information on any structural, functional or organisational changes happening is placed at the disposal of employees, whether on a one-to-one basis or via representatives or the managers of areas, according to the pre-notice periods provided under legislation in force and in collective bargaining agreements.

Abengoa Water is committed to all these principles in its labour practices and has implemented the internal mechanisms to allow the guarantee of professional actions of employees in agreement with the Universal Declaration on Human Rights of the United Nations and the protocols of the above.

Training is one of the most significant tools at its disposal to prevent incidents connected to the violation of human rights, investing so that employees are aware of corporate culture and also the mission, vision and values of the organisation and the Code of Conduct.

p. 31

G4-LA5, G4-LA7, G4-LA8, G4-LA13, G4-HR3, G4-HR7, G4-HR10, G4-HR11, G4-DMA

allows an anticipation of client needs and facilitates the channelling of their needs, improving the efficiency of their treatment.

Client satisfaction

Success in fulfilling our clients’ expectations is one of the requirements and maxims of the company, and therefore their satisfaction is a cornerstone of our business.

At Abengoa Water, in addition to committing to and guaranteeing products, solutions and innovative and reliable services, we set in motion and/or adapt or improve systems and tools allowing knowledge to be gathered on the expectations, opinion and degree of satisfaction of our clients, with the ultimate purpose of improving this perception where applicable and whenever it is within our reach.

To attain this we use the following tools:

• Client satisfaction questionnaires

• Questionnaires on internal perception of staff

• Internal and/or client periodical meetings

• Analysis of causes of incidents, claims and complaints, whether internal or from our clients

New challenges

With the goal of reinforcing the relationships and feedback from clients, Abengoa Water is committed to continue working with the challenge of reviewing the system of measurement of client satisfaction in detail, with the purpose of improving the efficiency and adaptability to the context and relationship with the type of client.


on the issue, and work is completed on the annual planning of prevention activities (PPA), on the basis of the risk-assessment results, problem resolution reports (PRRs), improvement actions (IAs), internal and external audit reports and the application of new legislation.

Awareness, information and training of staff is fostered, with the purpose of building a solid prevention culture, which becomes obvious with the internal target of zero accidents, fulfilled in 2014.

Some of the most relevant aspects or indicators in this regard in 2014 are the following:

• The index of occurrence is 0, the same as in 2013 and less than in 2012, and this reflects better results on the issue and also stability

• The seriousness index is 0, the same as in 2013, and less than the result of 2012

• Absences arising from work accidents amounted to 0.33 %

• The total percentage of absenteeism was 2.27 %, above the figure of 1.88 % in 2013, and there is room for improvement

• Absenteeism arising from common illnesses reached 1.57 %

In 2014, numerous training activities have been completed for ORP and safety which have had a knock-on effect on the track record of good results, such as for instance an Emergency Plan, Road Security, Biological Agents, plant risks, PVD, etc.

5.1.2 Clients

Abengoa Water has appropriate tools for the management of its client portfolio, with a highlight being the application of Business Action, whereby management actions completed with each client are coordinated, managing the large synergy potential among the companies of Abengoa. This management model prevents duplicities,

p. 32

G4-DMA, G4-LA5, G4-HR7, G4-PR5

5.1.3 Suppliers

There are procedures allowing the management and control of reputational risks throughout the supply chain and which contribute to improve trust relationships between the company and its suppliers.

Suppliers of Abengoa Water are part of the business line of management of construction (Abeinsa 100%), and other services, among which 30% comprises companies of Abengoa and the remainder are external (lawyers, consultants, etc.).

There are special procedures whereby purchases are assessed and there is an annual assessment of the behaviour and performance of suppliers, which need to be previously accepted under criteria of social responsibility, sustainability and risks.

In 2014, no critical suppliers (with external risks) were found and therefore no specific audits on suppliers were completed.

Significance of suppliers for development

Abengoa Water is aware of the significance of suppliers to realise a better level of competitiveness and leadership on the market and to ensure high added value, rigour and quality in the services rendered to end clients. This is why Abengoa Water favours integration and alignment of its suppliers in the activities, policies and commitments of the company.

Abengoa Water makes its suppliers participate in the preparation of bids for clients, both in the completion of commercial activities (business development) and in the multiple meetings and services to clients of our solutions and proposals. Abengoa Water regards that the participation of local suppliers in the implementation of its projects is key and this is why it contributes to local economic development, the creation of local employment and the settling of population.


Guarantee of compliance of requirements and agreements

Thanks to the imperatives of the IMS at the company, mechanisms are provided for identification, assessment, planning, control and monitoring; guaranteeing the assessment of compliance with all legal sector requirements applicable, in addition to others of another nature which had been committed to and/or agreed to by clients.

In 2014, no incidents arising from the non-compliance of legal regulations and/or voluntary codes of clients were detected.

Communications, marketing and privacy

For Abengoa Water, this issue is a key element for its activities as an essential communication medium for the projection of its image and behaviour towards all the external parties concerned and stakeholders.

There is an internal procedure for the control of external communications included in the IMS of the organisation. This control system involves the existence of a chain or flow of authorisations and internal approvals finally arriving to the chairman of the company in order to ensure the alignment of the above with the strategy of the organisation.

Abengoa Water guarantees the validity, integrity and security of information in its power and, in particular, the personal information relating to clients. To succeed in this goal, there is a security policy encompassing all companies within Abengoa Water.

In 2014, no incidents, claims or issues relating to the respect of privacy of data and/or client communications have been identified.

In this vein, Abengoa Water reported its performance and commitment on the issue of social responsibility in 2014, and published the CSRR 2013 on the company’s website.

p. 33

G4-DMA, G4-LA14, G4-LA15, G4-PR5

A focal point in this regard is the value provided by local companies to the value and supply chain of Abengoa Water, whilst at the same time fostering the expansion, consolidation and progress of the above, increase the hiring of employees on their staff, internationalising, etc.

Of vital importance is the fact that projects of Abengoa Water contribute in themselves to produce and/or manage water, a scarce resource, in a sustainable manner in such communities, satisfying the basic need of availability of water in these areas and benefitting development.

Abengoa Water uses the Focus-Abengoa Foundation as an avenue for part of its social action. Since its creation in 1982, the Foundation is accommodated at the heart of Abengoa and it is the active tool to orchestrate the social work of the various business groups, including Abengoa Water. The foundation is involved in projects for social integration and re-integration, cooperation in the defence of the environment, and other activities linked to technology and social development.

In 2014, Abengoa Water took part in programmes of Abengoa for time donation (bank of tasks) and solidarity holidays.

In this frame of reference, cooperation has been supplied with time donations of 25 h, which was more than the hours totalled in 2013 (19 hours), and also a total of 361 hours of volunteering, 336 h of which took place on solidarity holidays. 28 % of the hours devoted in the entirety of Abengoa to remote volunteering came from Abengoa Water, which was less than the 50 % figure recorded in 2013.

Actions in Ghana were patent, with training activities for communities close to the plant in Accra, which included the distribution of desalinated water to break psychological barriers surrounding its consumption.

Additionally, in the framework of the sustainability agreements reached by Abengoa with Manchester United Football Club, Abengoa Water shall propose and implement solutions to revamp water management at Old Trafford, especially rainwater, with improvements of the purifying station and the treatment of well water, etc.


Social responsibility code for suppliers

Since 2012, Abengoa Water requires its suppliers to adhere to the Social Responsibility Code (SRC) for suppliers and subcontractors, including clauses based on the United Nations Global Compact and inspired by international standard SA 8000.

In 2014, we have not detected any incidents or claims arising from non-compliance with the principles enforceable for our suppliers and subcontractors on the subject of corporate social responsibility.

It was not regarded necessary to create a section of the website of Abengoa Water for suppliers including SRC information, as such information is channelled through and supported by the website of Abengoa.

With the purpose of reinforcing the quality of relationships with suppliers, training such suppliers on sustainable development, managing and controlling reputational risks, in 2014 the contents of an informational dossier on water, Abengoa Water and sustainable development were released, which is also geared at suppliers. This challenge was proposed in the CSRR 2012 and it is still in force in 2014 as it is still in the preparation stage.

New challenges

• Laying out, disseminating and using the dossier prepared

5.1.4 Community

Abengoa Water is committed to sustainable development jointly together with the communities in which it is present and where it is developing projects, the construction and operation of its plants and sustainable solutions.

p. 34

G4-EC9, G4-LA14, G4-LA15, G4-SO1, G4-SO2, G4-DMA, G4-SO9, G4-SO10, G4-PR5

- San Antonio Hispanic Chamber of Commerce

- American Water Intelligence

- Centa (Seville)

- Official Chamber of Commerce of Spain in China, Office in Beijing

- European Chamber of Commerce

- Water working group at the European Chamber of Commerce

- China Desalination Association (CDA)

- Seawater and Brackish water Desalination Branch, the Membrane Industry Association of China (MIAC)

The challenges posed in the preceding year have been launched in 2014, with the first steps being taken for the future propelling of a corporate volunteering programme. Notwithstanding the initial actions (meetings) completed, the project has been halted to be re-launched under the same umbrella provided by Abengoa. Notwithstanding the above, our challenges in this area shall be the development of lines of social assistance and/or environmental measures aligned with our mission, vision and values.


Also noteworthy is the membership of the company to numerous associations, offices, institutions and agents connected to the community in the various countries where it acts and/or on an international level, including the following prominent organisations:

- International Desalination Association (IDA)

- Colorado River Water Users Association

- Texas Water Recycling Association

- National Association of Clean Water Agencies (NACWA)

- National Association of Water Companies (NAWC)

- International Water Association (IWA)

- European Innovation Partnership on Water (EIP)

- Eureka Acqueau Cluster (Acqueau)

- Water Supply and Sanitation Technology Platform (WssTP)

- Spanish Technology Platform of Environmental Technologies (Planeta)

- Spanish Technology Platform for Water (PTEA)

- Technology Association for Water Treatment (ATTA)

- Spanish Association for Supply and Sanitation (AEAS)

- Spanish Association for Desalinisation and Reuse (AEDyR)

- Water Reuse Association (WRA)

- Texas Water Conservation (TWCA)

- Texas Desal. Association (TDA)

p. 35

G4-16, G4-EC9, G4-SO1, G4-SO2, G4-DMA, G4-SO9, G4-SO10


Improvement of environmental

management

Abengoa Water has a strong commitment to the improvement of its environmental management, set forth in its management policy and materialising in its IMS system, which focuses on the improvement of the environmental impact of its activities.

The integrated management system (in agreement with international standard ISO 14001:04) allows the company to be aware of the impact of its activities to reduce risks and generate opportunities in environmental issues, using technologies to assist in the prevention, mitigation or adjustment of such impact.

Abengoa Water is committed to using natural resources in a rational way and guarantees environmental sustainability of its products, services and processes, completing an environmental analysis prior to starting its activities, investments and studies.

Abengoa Water, in the framework of its IMS, proposes improvements, conducts internal audits and studies targets, and has managers in environmental issues and sustainability coordinating such management at all work centres, projects, plants and activities.

Abengoa Water is aware of the need and importance that all members of the organisation know the impact of its activities on the environment, both on the normal functioning of the above and in potential situations. Given the above, any training on environmental issues is included in the general training processes of the company, with periodical training plans that involve a systematic assessment of the efficiency of the above. In 2014, training on the environment has been delivered to staff to improve awareness and management in work roles.

Moreover, and as mentioned beforehand, since 2012, Abengoa Water employs and maintains a panel of indicators relating to sustainability. The panel is known as the System of Environmental Sustainability Indicators (ESAs), which is being incorporated into the IMS to improve the management of the business.

The purpose of this system is to collect consolidated and reliable data concerning relevant quantitative and qualitative indicators on sustainability, for the good management of the above and to ensure transparent reporting to stakeholders of the company.

The indicators system (ESA) contemplates environmental groups of items such as water, energy, odours, noise, spills, soils and underground water, emissions, raw materials, products and services, waste, transport and biodiversity.

Abengoa Water keeps its environmental policy updated on its website, and it has established and/or maintains targets and improvement plans in environmental aspects such as emissions, water consumption, and energy efficiency, among other issues.

Combat against climate change and

GHG emissions

Combating climate change and its relationship with water scarcity is one of the main pillars supporting our commitment to sustainability. In this context, this position is included in the integrated management system policy.

Climate change is understood at Abengoa Water from two viewpoints, on the one hand, concerning management of the impact of this phenomenon on the company and, on the other, from the valuation on markets of the commitment of Abengoa Water to searching for solutions to contribute to resolving the issue of global warming.

Abengoa Water applies Abengoa’s own methodology to gain knowledge

5.2. With the environment, climate change and biodiversity

G4-14, G4-EC2, G4-EN30, G4-SO1, G4-SO2, G4-SO9, G4-SO10, G4-DMA


on and to inventory GHG emissions of its activities and the monitoring of such emissions, including both direct and indirect emissions, and encompassing those of suppliers and subcontractors. For Abengoa Water, GHG emissions are part of the mix of variables and criteria to pursue in the development or start-up of activities, projects and feasibility studies.

The aim of the inventory consists of an availability of in-depth knowledge on GHG emissions causing climate change, to assess the situation of the above in respect of competitors, identifying opportunities for improvement, reducing risks, appraising the environmental commitment of suppliers and labelling products and services of the company, including an amount of GHG emissions per unit of product or service provided in CO2 equivalent (Carbon Footprint).

The Carbon Footprint of Abengoa Water was 3.16 Kg CO2/m3 of desalinated water in 2014, which was somewhat above the figure for 2013, but lower than the total of 2012, which stood at 3.33 Kg CO2/m3. Therefore the company continued with the sustained reduction of its figures since 2011, where the total was 3.37 Kg CO2/m3. A further highlight is that in 2014, the global footprint was calculated using the procedure and framework guidelines of Abengoa.

This indicator is measured in agreement with the parameters and requirements of internationally-recognised protocols such as the GHG Protocol, and this inventory system is verified by an independent third party (AENOR), in agreement with the international standard ISO 14064.

New challenges

• Extension of the computation of the carbon footprint to other products/services, when the above are developed. This challenge, starting in previous years, is maintained as it still has not become applicable

Improvement and conservation of

biodiversity

Abengoa Water is aware that the loss of biological diversity is one of the most important issues facing the current world, and that companies are significant actors in this process.

Abengoa Water manages the impact of the organisation on nature sites and the biological wealth of the locations where it acts, from the initial stages of its activities (development of the business and management of design), up until the end of the useful life of its plants and facilities, and also in the course of the process of management of construction, and during the operating and production stages.

In this vein, the policy of the integrated management system entails the concept on the basis of the express commitment to sustainable development and care for communities, which is implicitly extensive to the care for and conservation of biodiversity: nature sites, ecosystems, flora, fauna, inherent natural values, etc.

Abengoa Water considers and submits to a follow-up the impacts of its activity on biodiversity in its internal procedure for the identification and assessment of environmental issues, and this work is accentuated in the project stage with the incessant search to suitably fulfil such procedure, above all in relation to potential impact on sensitive areas, always considering industry regulations applicable in each case in the various countries where operations take place.

As a consequence of regulatory processes to authorise facilities, it was necessary to fulfil the stage of worksite and/or operation with environmental conditions relating to biodiversity such as the drafting of plans for landscape integration and/or the implementation of reforesting, actions centring on the protection of plant and animal species, etc. In addition, in this regard it is of paramount importance to draw up Monitoring Plans on the impact of brine waste at desalination plants.

The challenge of drawing up biodiversity maps has been refocused as the

G4-EC2, G4-EN30, G4-DMA


Raw materials

Energy

company does this implicitly in processes of go/no go on an environmental level in the stage of the project and environmental impact studies or study of alternatives. Furthermore, as a result of the analysis of relevant facts this item is outside the range of relevance (see section 2), and therefore the CSR proposals linked to biodiversity are not currently applicable to the company’s strategy.

Value of the main environmental

indicators

This section provides the magnitudes of the main environmental indicators of Abengoa Water, which have been computed on the basis of special protocols for the measurement and calculation of each indicator. Given the nature of the activities completed by Abengoa Water, we offer the most relevant elements associated to the various environmental aspects, and the purpose is not to furnish a comprehensive list of all of the above, but instead to aggregate and consolidate available data to provide an adjusted and real image of the environmental impact of the organisation.

Water

Material consumption(Tonnes)

2014 2013 2012

Total 8.330,09 12.849,47 12.324,29

Oils/ Greases / Waxes 0,53 2,557 2,48

Paper 1,069 1,615 3,60

Non renewable Chemichals 8327,33 11348,00269 11147,31

Minerals 0,907 1,239 1,21

Renewable Chemichals 0 1496,00 1169,50

Recovering 0,2520 0,1398 0,14

Direct consumption of energy(Terajoules)

2014 2013 2012

Natural Gas 0,000 0,183 0,14

Petroleum 2,060 37,740 1,73

Indirect consumption of energy (kWh)

2014 2013 2012

Electric power 241.044.925 249.850.307 226.175.371

Total collection of water by sources (m3) 2014 2013 2012

Network Water 2.059,76 2.215,93 2.150,70

Seawater 157.726.095,32 168.103.473,00 151.085.993,90

Volume of recycled and reused water (m3) 2014 2013 2012

Use/process 172,40 699,84 717,12

Production (m3) 2014 2013 2012

Produced water (handover to third parties for reuse)

72.175.021 76.065.404 70.649.432,00

G4-EN1, G4-EN2, G4-EN3, G4-EN4, G4-EN5, G4-EN6, G4-EN7, G4-EN8, G4-EN9, G4-EN10, G4-EN11, G4-EN12, G4-EN13, G4-EN14, G4-EN15, G4-EN16, G4-EN17, G4-EN18, G4-EN19, G4-EN20, G4-EN21, G4-EN22, G4-EN23, G4-EN24, G4-EN25, G4-EN26, G4-EN27, G4-EN28, G4-EN30, G4-EN31, G4-DMA, G4-EN32, G4-EN33

Environmental initiatives

Throughout 2014 several initiatives were completed to make our business model more sustainable as far as the environment is concerned.

With the goal of reducing GHGs of all activities of the company, thus saving emissions produced by transport due to work, by fostering videoconferencing in committees and distance meetings, and promoting online training.

Therefore, in addition to the measures, mobility plans and technologies fostering sustainability at the Campus de Palmas Altas (Seville), a further highlight is the sustainability of the R&D and innovation centre of Dos Hermanas (Seville), equipped with systems to capture solar energy and ACS heating systems, systems for the use of ground-based thermal inertia, collection of rainwater for irrigation, use of recycled and recovered materials, and a control system of the facilities for energy saving and the inventory and offsetting of CO2 emissions thanks to an energy audit completed.

Moreover, in 2014, a series of targets have been proposed and assessed at Abengoa Water within environmental programmes for the management of the organisation, which are submitted to periodical assessment and corrective actions in the framework of the IMS.


Emissions, spillage and waste

Environmental management and biodiversity

Total weight of waste managed (Tonnes) 2014 2013 2012

Not hazardous 42,260 20,061 11,760

Dangerous for the environment (*) 13,050 4,740 1,220

(*) Data including managed amounts of noxious and hazardous waste jointly.

Environmental expenses and investment (€) 2014 2013 2012

Environmental training 6.377,52 4.831,00 1.590,00

External certification of management systems 10.873,50 13.926,00 21.301,00

Persons/activities 90.000 90.000,00 90.000,00

Treatment/removal of waste 4.400,73 4.570,26 Sin datos

Other costs 22,5 Sin datos 171,24

Total greenhouse gas emissions (Tonnes of CO2)

2014 2013 2012

Total verified emissions 227.979,95 243.734,24 235.192,16

Water spilled (m3) 2014 2013 2012

Brine (discharge to mass of surface water) 88.313.865 90.995.538 72.726.819,71

G4-14, G4-EN1, G4-EN2, G4-EN3, G4-EN4, G4-EN5, G4-EN6, G4-EN7, G4-EN8, G4-EN9, G4-EN10, G4-EN11, G4-EN12, G4-EN13, G4-EN14, G4-EN15, G4-EN16, G4-EN17, G4-EN18, G4-EN19, G4-EN20, G4-EN21, G4-DMA, G4-EN22, G4-EN23, G4-EN24, G4-EN25, G4-EN26, G4-EN27, G4-EN28, G4-EN30, G4-EN31, G4-EN32, G4-EN33

GRI G4 Content Index

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 06 GRI G4 Content Index p. 40

06

G4-DMA


General Standard Disclosures

General Standard Disclosures Page / direct answer Omission(s) External Assurance

Strategy and analysis

G4-1 2,3,4 Yes, 54

G4-2 4 Yes, 54

Organizational profile

G4-3 12 Yes, 54

G4-4 12 Yes, 54

G4-5 13 Yes, 54

G4-6 15 Yes, 54

G4-7 11,12,13 Yes, 54

G4-8 15,16,17 Yes, 54

G4-9 16,17 Yes, 54

G4-10 27,28 Yes, 54

G4-11 30 Yes, 54

G4-12 12 Yes, 54

G4-13 9 Yes, 54

G4-14 21,36,39 Yes, 54

G4-15 6,29 Yes, 54

G4-16 35 Yes, 54



Identified material aspects and boundaries

G4-17 9 Yes, 54

G4-18 6,7 Yes, 54

G4-19 7 Yes, 54

G4-20 7 Yes, 54

G4-21 7 Yes, 54

G4-22 6 Yes, 54

G4-23 7 Yes, 54

Stakeholder engagement

G4-24 8 Yes, 54

G4-25 8 Yes, 54

G4-26 7,8 Yes, 54

G4-27 8 Yes, 54

Report profile

G4-28 6 Yes, 54

G4-29 6 Yes, 54

G4-30 6 Yes, 54

G4-31 10 Yes, 54

G4-32 4, 54,55,56 Yes, 54

G4-33 6 Yes, 54

Governance

G4-34 53 Annual Report 2014 Abengoa Yes, 54









G4-41

152 Annual report 2014 Abengoa

The duties and competencies according to the

established rules can be summarized as follows:

reporting to the board on the company’s annual

accounts, informing on changes in accounting

criteria, overseeing internal auditing functions,

calling board meetings and having an

understanding of the !nancial reporting process

and internal control systems.

Yes, 54












G4-53


Pages 65 and 66 of the annual report on the

remuneration of directors. “By virtue of the

duties performed by the Board of Directors,

policy regarding remuneration of Abengoa

directors is prepared, debated and formulated

within the Appointments and Remuneration

Committee, taking the resulting proposal up

with the Board of Directors to be submitted for

approval by the company’s General

Shareholders’ Meeting.

Yes, 54





Ethics and integrity

G4-56 13 Yes, 54

G4-57 13 Yes, 54

G4-58 13 Yes, 54

Specific Standard Disclosures

DMA and Indicators Page / direct answer Omission(s) External Assurance

Category: Economic

Material aspect: Economic performance

G4-DMA 11,12,13,14 Yes, 54

G4-EC1 17 Yes, 54

G4-EC2 36,37 Yes, 54

G4-EC3 30 Yes, 54

G4-EC4 28,139 Annual Report 2014 Abengoa Yes, 54

Material aspect: Market presence

G4-DMA 11,12,13,14 Yes, 54

G4-EC5 30 Yes, 54

G4-EC6 28 Yes, 54

Material aspect: Indirect economic impacts

G4-DMA 34,35 Yes, 54

G4-EC7 130 Annual Report 2014 Abengoa Yes, 54

G4-EC8 130 Annual Report 2014 Abengoa Yes, 54

Material aspect: Procurement practices

G4-DMA 33,34 Yes, 54

G4-EC9 34,35 Yes, 54



Category: Environmental

Material aspect: Materials

G4-DMA 36,37,38,39 Yes, 54

G4-EN1 38,39 Yes, 54

G4-EN2 38,39 Yes, 54

Material aspect: Energy

G4-DMA 38,39 Yes, 54

G4-EN3 38,39 Yes, 54

G4-EN4 38,39 Yes, 54

G4-EN5 38,39 Yes, 54

G4-EN6 38,39 Yes, 54

G4-EN7 38,39 Yes, 54

Material aspect: Water

G4-DMA 38,39 Yes, 54

G4-EN8 38,39 Yes, 54

G4-EN9 38,39 Yes, 54

G4-EN10 38,39 Yes, 54

Material aspect: Biodiversity

G4-DMA 38,39 Yes, 54

G4-EN11 38,39 Yes, 54

G4-EN12 38,39 Yes, 54

G4-EN13 38,39 Yes, 54

G4-EN14 38,39 Yes, 54

Material aspect: Emissions

G4-DMA 38,39 Yes, 54

G4-EN15 38,39 Yes, 54

G4-EN16 38,39 Yes, 54



G4-EN17 38,39 Yes, 54

G4-EN18 38,39 Yes, 54

G4-EN19 38,39 Yes, 54

G4-EN20 38,39 Yes, 54

G4-EN21 38,39 Yes, 54

Material aspect: Effluents and waste

G4-DMA 38,39 Yes, 54

G4-EN22 38,39 Yes, 54

G4-EN23 38,39 Yes, 54

G4-EN24 38,39 Yes, 54

G4-EN25 38,39 Yes, 54

G4-EN26 38,39 Yes, 54

Material aspect: Products and services

G4-DMA 38,39 Yes, 54

G4-EN27 38,39 Yes, 54

G4-EN28 38,39 Yes, 54

Material aspect: Compliance

G4-DMA 36,37,38,39 Yes, 54

G4-EN29 There is no fines Yes, 54

Material aspect: Transport

G4-DMA 86,89 Annual Report 2014 Abengoa Yes, 54

G4-EN30 36,37,38,39 Yes, 54

Material aspect: Overall

G4-DMA 38,39 Yes, 54

G4-EN31 38,39 Yes, 54

Material aspect: Supplier environmental assessment

G4-DMA 38,39 Yes, 54



G4-EN32 38,39 Yes, 54

G4-EN33 38,39 Yes, 54

Material aspect: Environmental grievance mechanisms

G4-DMA 91 Annual report 2014 Abengoa Yes, 54

G4-EN34 There is no reclamations Yes, 54

Category: Social

Sub-category: Labor practices and decent work

Material aspect: Employment

G4-DMA 27,28,29,30 Yes, 54

G4-LA1 28,101,173 Annual Report 2014 Abengoa Yes, 54

G4-LA2 30 Yes, 54

G4-LA3 101 Annual Report 2014 Abengoa Yes, 54

Material aspect: Labor/ Management relations

G4-DMA 107 Annual Report 2014 Abengoa Yes, 54

G4-LA4

159 Annual Report 2014 Abengoa

Abengoa employees are informed beforehand

of any structural or organizational changes oc-

curring within the company, whether individua-

lly or through their representatives, in accor-

dance with prior notice timeframes established

under the law and in collective agreements

Yes, 54

Material aspect: Occupational health and safety

G4-DMA 31,32 Yes, 54

G4-LA5 31,32 Yes, 54

G4-LA6 28,113 Annual Report 2014 Abengoa Yes, 54

G4-LA7 30,31 Yes, 54

G4-LA8 30,31 Yes, 54



Material aspect: Training and education

G4-DMA 29 Yes, 54

G4-LA9 29 Yes, 54

G4-LA10 29 Yes, 54

G4-LA11 29 Yes, 54

Material aspect: Diversity and equal opportunity

G4-DMA 27,30,31 Yes, 54


Material aspect: Equal remuneration for women and men

G4-DMA 27,30,31 Yes, 54

G4-LA13 27,30,31 Yes, 54

Material aspect: Supplier assessment for labor practices

G4-DMA 33,34 Yes, 54

G4-LA14 33,34 Yes, 54

G4-LA15 33,34 Yes, 54

Material aspect: Labor practices grievance mechanisms

G4-DMA 27,28,29,30 Yes, 54


Sub-category: Human rights

Material aspect: Investment

G4-DMA 13,14,18,19 Yes, 54

G4-HR1There has been no agreements with suplliers

related to this termsYes, 54

G4-HR2 13,14,18,19 Yes, 54

Material aspect: Non-discrimination

G4-DMA 13,14,18,19 Yes, 54

G4-HR3 30,31 Yes, 54



Material aspect: Freedom of association and collective bargaining


G4-HR4 No complaints in the period Yes, 54

Material aspect: Child labor

G4-DMA 107 (Annual report 2014 Abengoa) Yes, 54


Material aspect: Forced or compulsory labor



Material aspect: Security practices

G4-DMA 31,32 Yes, 54

G4-HR7 31,32 Yes, 54

Material aspect: Indigenous rights



Material aspect: Assessment



Material aspect: Supplier human rights assessment

G4-DMA 31 Yes, 54

G4-HR10 31 Yes, 54

G4-HR11 31 Yes, 54

Material aspect: Human rights grievance mechanisms





Sub-category: Society

Material aspect: Local communities

G4-DMA 34,35,36.54 Yes, 54

G4-SO1 34,35,36.54 Yes, 54

G4-SO2 34,35,36,54 Yes, 54

Material aspect: Anti-corruption

G4-DMA 22 Yes, 54

G4-SO3 22 Yes, 54

G4-SO4 22 Yes, 54

G4-SO5 No complaints in the period Yes, 54

Material aspect: Public policy



Material aspect: Anti-competitive behavior






Material aspect: Supplier assessment for impacts on society

G4-DMA 34,35,36 Yes, 54

G4-SO9 34,35,36 Yes, 54

G4-SO10 34,35,36 Yes, 54

Material aspect: Grievance mechanisms for impacts on society





Sub-category: Product responsibility

Material aspect: Customer health and safety


G4-PR1


In 2014, 98.74 % of the company’s pro-

ducts and services were evaluated in terms

of health and safety

Yes, 54

G4-PR2 Not occured in the period Yes, 54

Material aspect: Product and service labeling


G4-PR3


In 2014, 98.52 % of the company’s pro-

ducts and services are subject to information

and labeling. Services were evaluated in

terms of health and safety

Yes, 54

G4-PR4


In 2014, there were no reports of any cases

of non-compliance with regulations or vo-

luntary codes pertaining to information and

labeling of products and services

Yes, 54

G4-PR5 32,33 Yes, 54

Material aspect: Marketing communications

G4-DMA 128 Annual report 2014 Abengoa Yes, 54

G4-PR6


The company has no banned or disputed

products. See Appendix C to consult the list

of the company’s products and services

Yes, 54


Material aspect: Customer privacy




G4-PR8 No complaints in the period Yes, 54




Annexes

ABENGOAWATER Annual Report 2014 / Corporate Social Responsibility | 07 Annexes p. 53

07


A. Consolidation Perimeter

ABENGOAWATER

Perímeter

AW Share

K19 Abengoa Water 100% Spain Office

M04 Abengoa Water Beijing Co. Ltd 100% Beijing Office

J78 Abengoa Water USA 100% USA Office

I35 ADS 34.17% Concession

K03 MBH 25.50% Concession

K02 Ténès 51% Concession

M09 B. D. Developments Ghana 95% Concession

UCN Ute Chennai 100% O&M

USK Ute Skikda 67% O&M

UAL Ute Almería 50% O&M

J35 BA Ténès 100% investor

F82 Geida Skikda 67% investor

H36 Geida Tiemcen 50% investor

M10 A.W Nungua 81.90% investor

E07 A.W. Investments Ghana BV 100% investor

B. External verification report

PricewaterhouseCoopers Auditores, S.L., C/Concejal Francisco Ballesteros, 4, 41018 Sevilla, España Tel.: +34 954 981 300 / +34 902 021 111, Fax: +34 954 981 320, www.pwc.es R. M. Madrid, hoja 87.250-1, folio 75, tomo 9.267, libro 8.054, sección 3ª. Inscrita en el R.O.A.C. con el número S0242 - CIF: B-79 031290

A free translation from the original in Spanish. In the event of a discrepancy, the Spanish language version prevails.

INDEPENDENT ASSURANCE REPORT ON THE 2014 CORPORATE SOCIAL RESPONSIBILITY REPORT

To the Board of Directors of Abengoa Water, S.L.U.: Scope of the work We have performed a reasonable assurance engagement on the following aspects of the 2014 Corporate Social Responsibility Report (hereinafter referred to as “2014 CSRR”) of Abengoa Water, S.L.U. and its Group of Companies (hereinafter referred to as “Abengoa Water”) for the financial year ending 31 December 2014:

the 2014 indicators regarding the general and specific standard disclosures proposed in the “Sustainability Reporting Guidelines” of the Global Reporting Initiative (GRI) version 4 (G4) (hereinafter referred to as “G4”) and referred to in the section entitled “GRI G4 Content Index” of the CSRR, reviewing that they are in line with the Internal Protocols of Abengoa Water’s Integrated Sustainability Management System (ISMS),

the adaptation of the contents of the 2014 CSRR, so that it is in line with the principles of inclusivity, materiality and responsiveness established in the “AA1000 AccountAbility Principles Standard 2008” issued by AccountAbility, Institute of Social and Ethical Accountability (hereinafter referred to as “AA1000APS (2008)”), as stated in the section entitled “Processes and principles for the drafting and review of the report” of the CSRR.

Responsibility of Abengoa Water’s Management The preparation of the 2014 CSRR and the contents of the report are the responsibility of Abengoa Water’s Management, which is also responsible for establishing, adapting and maintaining the internal control and management systems where information is obtained and the systems for applying the AA1000APS (2008) principles. Our responsibility Our responsibility is to issue an independent reasonable assurance report based on the work that we have carried out in accordance with the guidance of the ISAE 3000 Standard “Assurance Engagements Other than Audits or Reviews of Historical Financial Information” issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) for a reasonable level of assurance. Furthermore, we have also carried out our work in accordance with AA1000 Assurance Standard 2008 (hereon, AA1000AS (2008)), of AccountAbility, under a Type 2 high assurance engagement, which corresponds to reasonable assurance as per ISAE 3000. A reasonable assurance engagement consists of applying procedures to obtain evidence on the processes and controls used to prepare the CSRR. The procedures selected depend on professional judgment and include an assessment of the risks of material inaccuracies due to fraud or error. In carrying out this risk assessment, we have taken into account relevant internal controls for adequate preparation and presentation by the company of the information to be reviewed, to establish review procedures which are appropriate in the circumstances.

G4-32G4-DMA, G4-SO1, G4-SO2


Page 2 of 4

For the purpose of this report, we have asked Management and the units of Abengoa Water which have helped Abengoa Water to prepare and create its 2014 CSRR various questions and we have applied certain procedures including, in general and amongst others, the following procedures:

Meetings with Abengoa Water’s staff and management to ascertain the procedures for collecting information and the control environment for each of the selected indicators, the management procedures, systems and approaches used when considering and complying with AA10000APS (2008) principles, in order to obtain the information required for the external review.

Analysis of the adaptation of the indicators included in the general and specific standard disclosures of the GRI Content Index, to the GRI's G4 Guidelines and to the Internal Protocols of the Integrated Sustainability Management System (ISMS) of Abengoa Water.

Analysis of the procedures for obtaining and for internal control and validation of the selected indicators, including control reviews.

Review of the internal IT control environment in relation to information systems which support the preparation and reporting of selected indicators.

Verification, by substantive testing applied to a sample, of the quantitative and qualitative information of the selected indicators and whether they have been appropriately compiled from the data provided by Abengoa Water’s sources of information. For financial information included in the selected indicators, we have verified that it is obtained from Abengoa Water’s 2014 consolidated annual accounts, audited by independent third parties.

Verification that an independent third party has verified the data on energy consumption and greenhouse gas emissions included in the selected indicators and whether such data are in line with Abengoa Water’s internal NOC-05/003 standard, in accordance with the international ISO 14064-3:2012 standard.

Assessment and sampling of management practices and documentation available regarding the systems for participation by stakeholders and procedures for communications and responses to material issues, and review of the opinions of external stakeholders and the Independent Panel of Experts on Sustainable Development (IPESD).

We consider that the evidence which we have obtained provides an adequate basis for our conclusions. Independence We have carried out our work in accordance with the independence standards required by the Code of Ethics of the International Federation of Accountants (IFAC). In accordance with the International Standard on Quality Control 1 (ISQC 1), PwC has a global quality control system which includes documented policies and procedures on the compliance of ethical requirements, professional standards and applicable regulations. The work has been carried out by a team of people specialised in the company’s social, environmental and financial performance, with a wide range of experience in reviews of this type of information.

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Conclusion In our opinion, on the basis of the work which we have carried out:

The 2014 indicators regarding the general and specific standard disclosures, whose scope and limitations in the review are stated in section “GRI G4 Content Index” of the CSRR, have been reliably and adequately prepared, in all significant aspects, in accordance with GRI's G4 Guidelines and the Internal Protocols of the Integrated Sustainability Management System (ISMS) of Abengoa Water.

The 2014 CSRR has been prepared, in all material aspects, in accordance with the principles of inclusivity, materiality and responsiveness established in the AA1000APS (2008). Specifically:

Regarding the foundation principle of inclusivity, Abengoa Water’s Management has established several procedures for the engagement and participation of its stakeholders, to incorporate its expectations on the development of its corporate social responsibility strategy.

Regarding the principle of materiality, Abengoa Water’s Management has an adequate structured system to identify and prioritise material issues for the organisation and its stakeholders.

Regarding the principle of responsiveness, Abengoa Water’s Management has established several procedures to give appropriate responses to material issues and expectations of stakeholders.

Recommendations During our review, some observations and recommendations have come to our attention which we will present to Abengoa Water’s Management. Set out below is a summary of the main recommendations regarding improvements in the application of the AA1000APS (2008) principles of inclusivity, materiality and responsiveness, which do not alter the conclusions given in this report. Inclusivity Abengoa Water has ongoing talks with its stakeholders via different communication channels and has systematic mechanisms to ascertain their expectations and priorities. We recommend that Abengoa Water continue looking into this matter, particularly focusing on those stakeholders who are specifically relevant to its business activities and territories. In 2014 Abengoa Water has also worked on developing communications with local communities in territories where it operates carrying out specific and personalised actions locally which boost the capacity of local stakeholders to participate and improve their knowledge of the key aspects of water. We also suggest that Abengoa Water continue promoting, systematising and prioritising the dialogue actions which enables the stakeholders to be directly involved in the development of a responsible and strategic response to sustainability, by drawing up and implementing the Corporate Social Responsibility (CSR) master plan at the level of the business group. Materiality In 2014 Abengoa Water has reviewed and improved its procedures for analysing material issues in line with the recommendations of GRI’s G4 Guidelines and has analysed the impact of these issues throughout its value chain. Regarding these procedures, we recommend that Abengoa Water continue making advancements to identify and communicate material issues, prioritising key stakeholders for its business activities and territories. By prioritising key stakeholders, Corporate Social Responsibility (CSR) master plans at the level of the business group will have greater focus, establishing specific actions for each case based on the materiality of each issue in the different territories and their impact on the various points in Abengoa Water’s value chain.

G4-32


C. Certifications

ISO 14001:2004

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Responsiveness Abengoa Water is currently creating a new Strategic CSR Plan (SCSRP), as part of Abengoa’s new corporate Strategic CSR Plan, for forthcoming years up to 2020 whereby CSR will play an important role in terms of the strategic development of its operations. Abengoa Water has continued to improve its system for reporting CSR. We recommend that Abengoa Water continue with its work on communication and transparency mechanisms for stakeholders, especially internally with staff and externally with local communities where it operates and with contractors, so that it can examine the specific needs of each group carefully and make a communication which focuses on CSR commitments and the level of performance using key indicators which look closely at its business activities and territories. We also recommend that in line with the new corporate SCSRP, Abengoa Water continue updating and developing its CSR master plan at the level of its business group and that it continue incorporating the expectations of the stakeholders in the geographies where it has a presence, on material issues for these territories and within the scope of its chain value. PricewaterhouseCoopers Auditores, S.L.

Mª Luz Castilla

25 May 2015

G4-32


ISO 9001:2008OHSAS 18001:2007

G4-DMA, G4-SO1, G4-SO2, G4-32


Environmental Management SystemQuality Management System

G4-32


Inventory of greenhouse gas emissions

ASOCIACIÓN ESPAÑOLA DE NORMALIZACIÓN Y CERTIFICACIÓN (AENOR). C/ GÉNOVA 6, 28004 MADRIDPágina 1 de 1

Verification Statement of AENOR for Abengoa Water Corporation the Inventory of greenhouse gas emissions corresponding to the

year 2014

DOSSIER: 1993/0205/HCO/01

Abengoa commissioned the Spanish Association for Standardisation and Certification (AENOR) to make a reasonable revision of its inventory of greenhouse gases (GHG) for the year 2014.

AENOR is accredited by Entidad Mexicana de Acreditación (OVVGEI 004/14) according to ISO 14065:2007, to conduct GHG verifications according to ISO 14064-3:2006 in the Energy Sector.

The scope of the verification is established for the activities carried out by the companies belonging to Abengoa represented in 2014 annual report, “Corporate Social Responsibility”, available in Abengoa’s website (http://www.abengoa.com).

Abengoa was responsible for reporting its GHG emissions considered in accordance with the reference standard ISO 14064-1:2006.

For the verification it was agreed to consider as material discrepancies those omissions, distortions or errors that could be quantified and result in a difference of more than 5% with respect to the total of emissions declared.

The company Abengoa Water Corporation belonging to Abengoa is part of the scope of the verification mentioned above.

The GHG report of the company fulfills the requirements of the standard ISO 14064-1:2006.

The data that have been contributed to GHG report of Abengoa which was subject to verification, in the information consolidation process, have been:

EMISSIONS t CO2e

165,07

155.749,66

72.062,00

Lead Verifier: Raúl BLANCO BAZACO

Madrid, 16 March 2015

Occupational Health and Safety

Management System

G4-32


Risk Management System

Abengoa Water's CSR Report

Technology

Transcript of Abengoa Water's CSR Report