Ferrovial is developing new business lines aimed at achieving the decarbonization of the economy and providing solutions to adapt to the effects of climate change.

CLIMATE STRATEGY

The company has a decarbonization plan, Deep Decarbonization Path (excluding services activity), which establishes the roadmap for achieving the 2030 emissions reduction target and is structured along four main lines:

• Target of 100% consumption of electricity from renewable sources by 2025.
• Achieving 33% of emission reduction from fleet vehicles by 2030.
• 20% reduction in emissions through energy efficiency in asphalt plants.
• 10% reduction in emissions associated with construction machinery through the implementation of energy efficiency measures.

Ferrovial was the first company in its sector worldwide to establish and have its emissions reduction targets endorsed by the Science Based Targets initiative (SBTi). The company has set the following targets:

• Reduce Scope 1&2 emissions in absolute terms by 35.3% in 2030 (base year 2009)¹ .
• Reduce Scope 1&2 emissions in relative terms (tCO₂ e/M€) by 42.9% in 2030 (base year 2009).
• Reduce Scope 3 emissions in absolute terms (excluding capital goods and purchased goods & services categories) by 20% in 2030 (base year 2012).

Ferrovial actively participates in the public projects developed by SBTi, contributing technical knowledge of its sector. The climate strategy and the greenhouse gas emissions reduction plan are put to a consultative vote at the annual General Shareholders’ Meeting.

Carbon Footprint

Since 2009, the company calculates and reports the carbon footprint for 100% of its activities under the operational control approach as an organizational boundary. The calculation methodology is mainly based on GHG Protocol (WRI&WBCSD), while maintaining compliance with ISO 14064-1. The emissions reported are as follows:

Scope 1²: those from sources owned or controlled by the company. They come mainly from the combustion of fuels in stationary equipment (boilers, furnaces, turbines, etc.) to produce electricity, heat or steam; fuel consumption in fleet vehicles owned or controlled by the company; diffuse emissions, those not associated with a specific source, such as biogas emissions from landfills; and channeled emissions, GHG emissions generated through a source, excluding those from fuel combustion.

Scope 2³: emissions generated as a result of the consumption of electricity purchased from other companies that produce or control it. The GHG Protocol Scope 2 Guidance standard has been followed and the emissions reported are based on the market-based method, which reflects the effort being made by the company to use and purchase renewable electricity. However, emissions are also calculated on a location-based basis (see more information in the GRI Annex).

Scope 3⁴: indirect emissions occurring in the value chain. Ferrovial calculates all Scope 3 emissions following the guidelines set out in the Corporate Value Chain (Scope 3) Accounting and Reporting Standard published by the GHG Protocol Initiative, the WRI and the WBCSD. Categories 9, 10, 13 and 14 of this protocol do not apply to Ferrovial. More information in the GRI Indicators Annex, page 174.

Ferrovial’s absolute and relative emissions during the last three years were as follows:

Performance 2022:

The Deep Decarbonization Path sets out the company’s decarbonization guidelines. As part of this program, Ferrovial is committed to the implementation of energy efficiency measures and the purchase of electricity from renewable sources, to the detriment of fossil fuel consumption.

In 2022, Scope 1&2 emissions have been reduced by 25.35% in absolute terms and 73.57% in intensity compared to the base year. The reductions achieved were well above the targets set for the year, which means that we are meeting the roadmap established by the company. This year, 70% of the electricity consumed was of renewable origin.

Offset

Ferrovial, in its commitment to decarbonization, contemplates voluntary compensation of 100% of direct emissions not reduced by 2050 through nature-based projects and mitigation beyond the value chain.

The Ministry for Ecological Transition and the Demographic Challenge has awarded Ferrovial the highest recognition achieved for its work for “Calculate”, “Reduce” and “Compensate”. This was thanks to the Compensa project, carried out in Torremocha de Jarama (Madrid), which seeks to recover the vegetation of an agricultural area lacking trees, converting it into a CO₂ absorption forest. With its development, an area of 7.7 hectares has been reforested in the last three years with a total of more than 4,000 trees that will absorb about 2,000 tons of CO₂ over the next 50 years.

Likewise, through the Electricity Generation project, based on Wind Energy in Gujarat (India), up to 10% of the emissions emitted will be progressively offset over the next four years.

By 2022, 4% of emissions have been offset as part of the reduction commitment.

Risks and opportunities related to climate change

Ferrovial incorporates the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) in its process of identifying, analyzing and managing risks and opportunities related to climate change, as well as in its Integrated Annual Report.

The company periodically performs an assessment and quantification of risks and opportunities in all its businesses and geographies in different time horizons: short term (2025), medium term (2030) and long term (2050). The methodology includes transition scenarios, focused on the degree of implementation of climate change policies, presented annually by the International Energy Agency in the World Energy Outlook, as well as physical scenarios that include various GHG emissions concentration cases and their physical impacts on the climate, analyzed by experts from the Intergovernmental Panel on Climate Change (IPCC).

In the risk analysis performed, the methodology used takes into account the duration of the contract and the company’s role in it. This means that in those projects in which Ferrovial only participates in the construction phase of the infrastructure, the risks and, therefore, their financial impact are lower than in those in which it is involved throughout the useful life of the infrastructure.

The risks identified may have an impact related to increased operational costs, increased investment, reduced profits, loss of share value or damage to infrastructure, and their magnitude will depend on the climate scenario analyzed, its location, type of project and time horizon. In response to these impacts, the group has implemented a battery of mitigation and adaptation measures.

Mitigation measures

• Development and implementation of the Deep Decarbonization Path, internal emissions reduction plan.
• Shadow Carbon Pricing: design and application of internal carbon pricing mechanisms for new investments.
• Consideration of raw material and energy price increases in contract negotiations.
• Search for innovative technological solutions to reduce energy consumption and emissions.
• Study and collaboration with key stakeholders for the development of projects that favor the transition to a low-carbon economy.

Adaptation measures

• ADAPTARE: development of a methodology and tool for the identification and analysis of physical climate risks that considers the climate projections foreseen by the IPCC in the short, medium and long term in the projects.
• Definition and implementation of an adaptation program that includes specific measures for each project, from design to operation.
• Contracting of insurance coverage for physical damage to infrastructures.

Shadow Carbon Pricing

The company applies a methodology to economically quantify the potential climate risk of its most relevant investments in the Shadow Carbon Pricing modality with the aim of considering this impact in new investments. The tool considers the direct and indirect emissions of each project in its entirety, applying variable prices per ton of carbon for different time horizons, geographies and types of infrastructure. In 2022, carbon prices have been updated and geographies have been expanded.

BIODIVERSITY

Ferrovial recognizes the key role played by biodiversity in the provision of services that support the economy and social welfare. For this reason, it has a recently approved Biodiversity Policy, integrated into the management system that governs the organizational and operational processes of all its contracts. This policy articulates the organization’s principles on:

• Conservation and protection of species and natural ecosystems.
• Application of hierarchy criteria to mitigate negative impacts.
• Responsible use of natural resources.
• Combating deforestation.
• Application of nature-based solutions.
• Integration of natural capital in risk management.

The company has various mechanisms in place to facilitate compliance with these principles: some are mandatory (environmental impact statements and other legal requirements) and others are voluntary (environmental management system in accordance with the ISO 14001 standard and the internal tool for calculating the natural capital debt called INCA, whose methodology is aligned with the Natural Capital Protocol standard).

Additionally, in order to promote these principles among its collaborators and beyond its value chain, the organization participates in working groups on this matter with the Ministry for Ecological Transition and the Demographic Challenge (Fundación Biodiversidad) and other groups in Europe (Green Growth Group) promoting initiatives for the protection and conservation of biodiversity and ecosystems. It has also participated in the public consultation on the development of the GHG Protocol Land sector and removals guidance standard.

CIRCULAR ECONOMY

The circular economy aims to keep the value of products, materials and resources in the economy for as long as possible, optimizing the consumption of materials and minimizing waste generation. It is also a solution to a problem that directly impacts the deterioration of the environment and allows us to identify new business opportunities.

For this reason, during 2022 Ferrovial has launched its Circular Economy Plan, presented to the Board of Directors. Its main lines are:

• Promote the reuse and recycling of waste, prioritizing the minimization and recovery of waste. An annual target of 80% reuse of soils has been established, as well as 70% reuse of construction and demolition waste (CDW). In turn, the water treatment plants are committed to the valorization of sewage sludge with an annual target of 80% of the sludge generated for agricultural use, composting or thermal drying.
• Promote an efficient use of resources by applying circularity criteria, as well as the use of recycled materials, either by reusing or recycling materials in activities or by managing the supply chain to acquire materials with recycled content.
• Reducing the environmental impact of the company’s activities. To this end, we are working to adopt the principles of the circular economy in all processes, products and services.

WATER FOOTPRINT

Water is one of the environmental resources that has suffered the greatest impact in recent years, with effects derived from climate change such as water stress, deterioration of water quality due to contamination, as well as a growing demand for drinking water.

Ferrovial’s Water Policy recognizes water as a limited and irreplaceable natural resource and its access as a fundamental human right. In order to manage the resource positively, the focus is on its availability, quality and impact on ecosystems.

Ferrovial has developed a methodology for calculating its water footprint that quantifies the impact of the company’s activities on this resource. It takes into account the following aspects:

• The source of water catchment, giving different weights depending on its origin.
• The country’s water stress.
• The destination of discharges and their quality depending on the treatment they have received.

The methodology measures the impact of water consumption and discharges from the company’s activities (Business Water Index – BWI). For this index, a target has been set to achieve a 20% reduction by 2030, compared to 2017. In 2022, a reduction of 29.7% was obtained compared to 2017 (-7.8% vs. 2021).

In addition, water treatment activities together with social action projects (projects aimed at improving access to water and sanitation in vulnerable communities) define two indexes that offset the negative impact: Water Treatment Index (WTI) and Water Access Index (WAI), respectively. To ensure this positive contribution, Ferrovial aims to offset 70 times the BWI annually (WTI + WAI > 70 BWI). In 2022, the BWI has been offset 125 times (117 times in 2021).

Ferrovial plays a key role in water management, contributing to solving the main challenges of water supply, quality, sanitation and pollution, especially in areas with water scarcity. The company is working on the implementation of more appropriate treatments to eliminate contaminants of emerging concern, as well as antibiotic-resistant bacteria. This management is an effective tool in the fight against climate change, as well as a sign of our commitment to society.