Repsol
Delivering Value and Resilience through Sustainability
June, 2016
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Repsol S.A 2016
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This document contains statements that Repsol believes constitute forward-looking statements which may include statements regarding the intent, belief, or
current expectations of Repsol and its management, including statements with respect to trends affecting Repsol’s financial condition, financial ratios, results
of operations, business, strategy, geographic concentration, production volume and reserves, capital expenditures, costs savings, investments and dividend
payout policies. These forward-looking statements may also include assumptions regarding future economic and other conditions, such as future crude oil and
other prices, refining and marketing margins and exchange rates and are generally identified by the words “expects”, “anticipates”, “forecasts”, “believes”,
estimates”, “notices” and similar expressions. These statements are not guarantees of future performance, prices, margins, exchange rates or other events and
are subject to material risks, uncertainties, changes and other factors which may be beyond Repsol’s control or may be difficult to predict. Within those risks are
those factors and circumstances described in the filings made by Repsol and its affiliates with the Comisión Nacional del Mercado de Valores and with any other
supervisory authority of those markets where the securities issued by Repsol and/or its affiliates are listed.
Repsol does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected
performance, conditions or events expressed or implied therein will not be realized.
The information contained in the document has not been verified or revised by the Auditors of Repsol.
Repsol S.A.EM Division of Economy, Finance and Development. 09/06/2016
2
1.
Company Overview
•
Key Strategic lines 2016- 2020
•
An integrated company operating across the entire value chain
2.
Main challenges in Repsol
3.
Our commitments to sustainability
4.
Sustainability plans
5.
Corporate Governance
6.
Annexes
Repsol S.A.EM Division of Economy, Finance and Development. 09/06/2016
©
3
Company Overview
1
4
1. Repsol today:
Key Strategic lines 2016- 2020
VALUE
Shift from growth to value
delivery, prepared
for the next growth wave
Commitment to maintain shareholder
compensation
in line with current company level
PORTFOLIO MANAGEMENT
Capex flexibility
(~46% Capex reduction vs. 2014) (2)
Creating value through portfolio
management
(€6.2 B divestments: € 3.1 B in
2016-2017 period)
RESILIENCE
Top tier resilience among integrated
companies
Self-financing strategy even in a
stress scenario
FCF breakeven after dividends at
$40/bbl Brent(1)
EFFICIENCY
Synergies and company-wide
Efficiency Program
with strict accountability (3) :
€2.1 B/y savings target in 2018
(€1.5 B Opex + €0.6 B Capex)
> 50% target to be achieved in 2016
(1) Repsol released a FCF Breakeven at $50/bbl on strategic plan 2016-2020 presentation. FCF breakeven at $40/bbl with the revised scenario.
(2) Repsol released in 2015 full year results presentation an additional investment reduction for 2016-2017 period.
(3) In 1Q2016 projects have commenced that will secure 62% of the 2016 annual target and by quarter end 22% of the full year target had already been realized and booked.
5
1. Repsol today
An integrated company oparating across the entire
Value chain
~2.4 billion boe
proved reserves(*)
>700 kboepd
production
~1 million bpd
refining capacity
Core businesses:
Upstream and
Downstream
Integrated
business model
// Talisman acquisition //
• Transformative deal with a long-term
view
• Competitive multiples: EV/2P reserves
~$10/bbl
• E&P portfolio and competitiveness
upgrade
• Global scale and diversification
• Generates new oportunities
• Enhanced value-creation capabilities
30% stake in Nonoperated shareholding:
GNF
(*) As at 31/12/2015
Delivery on
commitments
Diversified and global
portfolio
World-class explorer
Capable and
talented workforce
Tier 1 Downstream
6
Main Challenges in Repsol
2
7
2. Main challenges in Repsol
Community relations and Human Rights Management
Framework: Respecting Indigenous Rights



Bolivia, Canada,
Colombia,
Ecuador, Papua
New Guinea and
Peru




Indigenous communities in Bolivia, Canada, Colombia, Ecuador, Papua New Guinea and
Peru
Repsol recognizes and respect the unique nature of indigenous, tribal and aboriginal
peoples and their rights, in accordance with existing legislation, and the obligations
established by International Labour Organization (ILO) Convention 169, whether
incorporated into the national legislation of the countries in which we operate or not
First O&G company operating in Latin America with an official policy explicitly supporting
indigenous rights defined by ILO Covenant 169, including right to free, prior and informed
consultation (FPIC)
Repsol establishes enduring relationships and long-term agreements with indigenous
communities in the area of influence of our projects and assets, based on principles of
respect, cultural sensitivity, integrity, responsibility, transparency and good faith.
Repsol carries out specific social performance reviews, human rights impact
assessments and develops community grievance mechanisms adapted to distinctive
features of indigenous peoples
Repsol operates with special preventive measures, such as anthropological contingency
plans, in operations close to areas inhabited by indigenous peoples living in voluntary
isolation
Repsol leads the issue in the O&G Sector: Repsol co-chairs the IPECA1 indigenous peoples
task force since 2014 and participates in the ARPEL2 Indigenous Peoples Working Group
1.-IPIECA: Global Oil and Gas Industry Association for Environmental and Social Issues
2.-ARPEL: Asociación regional de empresas del sector petróleo, Gas y Biocombustibles en Lationoamerica y el Caribe
8
2. Main challenges in Repsol
 Offshore deepwater safety
Deepwater
Offshore
Brazil, GoM, Africa, Canada
and others
•
•
•
•
Strict asset integrity procedures
Members of: Oil Spill Response (OSR), Joint Industry Project (JIP) of IPIECA 1
and OGP 2, and Global Well Containment Response Strategy
Emergency response in place
Non-operated assets run by experienced operators: Petrobras, Chevron,
BHP, Statoil, Eni
 Political Risk
Reshaping
portfolio
Custom made
approach
•
•
Balance of exposure to OECD countries : US, Canada, Norway, Europe.
With Talisman acquisition the percentage of OECD based production has
increased from 11% to 36%
•
•
•
Russia: Low profile, local alliances
Latin America: work closely with local governments
North Africa: limited activity to maintain current position in Algeria. Libya
is still stopped
South East Asia: take advantage of optimum relationship of Talisman with
South East NOC’s
•
(1) IPIECA:International Petroleum Industry Environmental and Conservation Association
(2) OGP: International association of Oil & Gas producers
9
2. Main challenges in Repsol
 Arctic operations
•
Arctic
•
•
•
•
Norway/Barents Sea: Not qualified as arctic operations. North-sea-type
operations
Alaska North Slope: onshore activity.
Russia: onshore activity
Alaska Chukchi Sea: We will not carry forward any operation.
Beaufort Sea: no operations in the medium term
10
Our commitments to
Sustainability
3
11
3. Our commitments to sustainability
Repsol: a company fully commited to
Sustainability
A sustainable Company: A company that is able to anticipate risks in order to manage
them properly, minimizing the impact of its activities and generating value for its
shareholders
 Sustainability Commission established on May 27th 2015
Company
Strategy gives
priority to
Sustainability
issues
 Policy on Sustainability approved on December, 16th 2015
 A General Direction has been created, containing in its denomination the
word “Sustainability”. It demonstrates the importance that company grants
to Sustainable devlopment in the present and future of our Bussiness
 Participation of the Senior Management in setting strategic objectives for
Safety and Environmental, 2020
Sustainability
Policy
 Establishment of objectives linked to safety and environmental targets,
for all emploeyees with variable remunetarion (safety and enviromental
targets weights between 10- 15% )
 Sustainability Plans and specific actions included in those, related to
Governance, Environment, Human rights, Labor practices, consumer affairs, fair
operating practices and the development of communities, between others
 Periodic review of the Companys’ performance in Sustainability by senior
Management
12
3. Our commitments to sustainability

 Policy on respect for
human rights based on the
UN Guiding Principles on
Business and Human Rights
Commitment to
safety
Excellence in
environmental
management
Respect for human
rights
Promoting a low
carbon strategy
Transparency
 Support of EITI1 since 2003.
 Adherence to Code of Best
Tax practices
 Registered at the EU
Transparency Register and
US Lobby register
 Remuneration disclosure


Commitment to Zero Accidents by
2020
Embedded safety culture
Strict asset integrity procedures
Ethical conduct
 Excellence in spill
prevention and response
 Optimized water&waste
management
 Biodiversity action plans
 Achievement reduction of
3.1 million tons CO2 by 2013
 Additional reduction of 1.9
million tons CO2 emissions
by 2020
 Promoting non- fossil fuel
energy initiatives
Anti-corruption
 Ethics and Conduct Regulation
 Anticorruption policy
 crime prevention model
1.- EITI: Extractive Industry Transparency Initiative
13
3. Our commitments to sustainability
Commitment to safety
Our objective : zero accidents
We have established targets to reduce PSIR1 and occupational safety (LTIFR2 and TRIR3).
FATALITIES:
• In 2015, two fatalities occurred during
the construction of a new LPG plant in
Cuzco (Peru) as a result of a landslide.
• In 2016, a fatality occurred during a 3D
seismic in Indonesia, due to a tree that
fell on the worker
PSRI TIER 1+ TIER 2
6
OCCUPATIONAL SAFETY
LTIFR
4
TRIR
2
0
2008 2009 2010 2011 2012 2013 2014 2015
2014
2015
Refining Spain
1.07
1.09
Chemicals
1.70
0.77
E&P
0.38
0.44
Repsol Peru
1.36
0.99
Global
0.78
0.65 *
* 17 % reduction compared to year 2014
 Sistematic Risk Management
 Risk assessment through the entire safety process lifecycle to prevent impacts on people, environment and
assets.
 Operations control through work permits and identification of critical elements of our facilities
 Focus on Process Safety
 Process Safety allows Repsol to address its main safety-related challenges
 Focus on avoiding accidents that could have grave consequences
 In 2014, the company base line of process safety accidents was created to define 2015-2020 specific goals
[1]
PSIR (Process safety incident rate): number of accidents from Tier 1 and Tier 2 processes accumulated over the course of the year, for every million hours worked.
[2]
[3]
LTIFR (Lost Time Injury Frequency Rate).
TRIR (Total Recordable Incident Rate).
14
3. Our commitments to sustainability
Commitment to safety
SMArt keys Program
A proactive safety plan accompanying the Company´s Strategic Plan together with
other actions under the safety strategy of Repsol.

Designed to prevent major industrial accidents. Focus on safety process .

Systematize the monitoring of leading indicators and the continued implementation of
prevention plans, reducing the possibility of major industrial accidents.

It works on two levels of action: Company (to systematize the implementation) and Asset (to
specify the implementation to the local reality).
Three axes:
People
 Focusing on people, their values and
beliefs, their behaviours and attitudes
on safety, to reduce accidents caused
by human factors
CULTURE
Processes
 Implementation of a HSE management
system, to facilitate integration of HSE
principles at operational level; focus on
operational discipline to ensure compliance
with procedures and work instructions;
verification of the implementation of Safety
procedures and application of lessons learned.
O-SEMS
/LEASSON
LEARNED
PLANTS
 A proper Design, implementation and
maintenance of safety barriers
guarantees the integrity of our facilities,
preventing failures on these barriers, an
therefore reducing accidents.
SAFETY
BARRIERS
15
3. Our commitments to sustainability
Commitment to safety
Our objective : Embedded safety culture
“The development of a Safety and Enviromental culture, embedded and
shared by the whole company, is crucial to achieve our goals”
Progress
Next Steps
•Culture Project: Definition of Repsol´s HSE Culture attributes and of maturity levels to be achieved
•Action Plan 2016-2020 to diagnose culture levels throughout the operational sites
• Three pilot projects developed in order to test the above mentioned diagnosis methodology: Bolivia E&P
business, LPG business in Spain, and petrochemical business in Portugal (Sines facilities)
•Keep on working on the HSE leadership Plan: 3,339 employees trained in 2014-2015
•Training in safety culture:. In 2015, the number of hours given on these topics came to 208,883, and 14,999
employess trained.
•Training programs in safety and the environment for contractors around 220,831 hours taught,.
•Keep on working on the smart Key Programs: identifying those human factors that may caused accidents.
•Training in Safety culture: increasing the number of training hours. Training should reach all employees and all
business units.
16
3. Our commitments to sustainability
Excellence in environmental management
Our objective : zero spills
Number of spills
Quantity spilled (tonnes)
Spill
prevention
and
response
2014
17
316[1]
2015
21
23
 In 2015, the amount of hydrocarbon spilled was
23 tons, less than the previous year, and it is
important to highlight that no relevant spill
occurred. The increase in the number of spills is
mainly due to Talisman’s incorporation

Various measures have been implemented to prevent accidental spills:
o Reviewed procedures
o Improved management systems
o Reviewed of control mechanisms
o Best available technologies



Drills carried out in E&P, refining, chemical facilities and LPG.
Capability review: E&P protocol used to check the emergency response capacity
Repsol has developed and patented an early detection system for oil spills, using proprietary
technology that uses advanced detection software and complex algorithms to interpret spill signals
Developing response capabilities against large marine spills, as part of our Global Critical Management
Programme (GCMP)
Agreements with means and service providers, such as: 1.- Oil Spill Response (OSRL)→ entered into an
agreement to collect the spillage and to recover the affected area. 2.- Wild Well control →as part of
our global strategy based on containing wells. Agreement entered into for the installation of capping
stack systems to control the outflow of hydrocarbons in the event of a spill,


[1] We
2013
14
15
had four significant spills in 2014: a hydrocarbon spill in the Pampilla refinery in Peru, a diesel spill in Marketing Perú, a diesel spill in Ecuador and a synthetic drill mud spill in
Angola.
17
3. Our commitments to sustainability
Excellence in environmental management
Biodiversity and Ecosystem Services
Our objective: The Prevention and minimization of any negative
environmental impact in all our operations, especially in sensitive,
biologically diverse and protected natural environments
First O&G company to implement the IPIECA Biodiversity and Ecosystem Services Management Ladder
methodology to analyze the current situation of our assets and to identify the following steps to take in each.
• Ecosystem Services Reviews carried out in Peru ( Block 57) and Colombia, in collaboration with the
Fauna and Flora International NGO. The study has provided a number of recommendations that aim to
strength Repsol’s environmental systems and to incorporate ecosystem services reviews.
• BAP1 in Bolivia, Peru, Ecuador and Trinidad &Tobago
• 100% of E&P sites have been evaluated and 52 % qualified with some type of biodiversity risk
• Working lines to conserve and /or improve the biodiversity, with 90% of implementation so far.
• Active participation in different international environmental and social forums, such as IPIECA, IOGP, CrossSector Biodiversity Initiative or the Proteus consortium with UNEP2-WCMC3.
•
Progress
Next Steps
• Inclusion of ecosystem services criteria into the operational management system. It comprises the
revision of Repsol rules for the management of biodiversity and ecosystems services and its
implementation in the company
1.- BAP: Biodiversity Actions Plans
2.- UNEP: United Nations Environment Programme
3.- WCMC: World Conservation Monitoring Center
18
3. Our commitments to sustainability
Excellence in environmental management
Resource Use Efficiency: Water
Repsol has defined a water management improvement action plan
for 2015-2020 that is specific to each installation, establishing a
company goal of 85% compliance with the work lines
Progress
Next Steps
•We have developed our own tool, Repsol Water Tool, which incorporates aspects of the Global Water Tool (adopted by
IPECA1) and Local Water Tool (Adopted by GEMI2), the two main methodologies developed and adapted to the oil and gas
industry to identify and evaluate the impacts and threats associated with water.
•This tool has enabled us to draw up a water management map, which we have used to work on defining the company’s
baseline, and to define a 2015-2020 water management improvement action plan.
•The Action Plan is focused on three work lines: 1.- improved inventory quality→ in 2015 we have worked on
implementing water management indicators and the definition of instrumentation plans. 2.- preparation for future
regulatory requirements→ in 2015 we highlight the work carried out to modify and / or prepare for water discharges
treatments and 3.- reduction in competition for resources→identifying water consumption reduction actions,
increasing reused water, and applying improvements for efficient water use in operations
•Implementation of the action plan: the 85% goal has been surpassed thanks to the efforts of the various
businesses, reaching an implementation of close to 95%.
•Keep on working on the inclusion of new actions to go forward with the current action plans
•Inclusion of new non-conventional assets in the Repsol Water Tool
1.- IPIECA: Global Oil and Gas Industry Association for Environmental and Social Issues
2.- GEMI: Global Environmental Management Initiative (GEMI)
19
3. Our commitments to sustainability
Excellence in environmental management
Resource Use Efficiency: Waste
Our objective : reduce waste by 50 kilotons by 2020
Working to improve waste management throughout the life cycle of our
processes in order to minimize our impact on the environment.
Progress
•Company waste map redesigned.
• 9 kilotons of waste reduced during 2015
• Improvement goals in E&P through the implementation of the company's EPPs: 100% of the Environmental
Performance Practice (EPPs) planned were implemented.
• Reduction actions carried out in all areas:
• 1.- Refining and Chemical facilities: efficiency in tank cleaning increased, improvements in waste drying and
internal flows reused.
• 2.- E&P: actions to reduce the quantity of waste landfilled through our own recovery or that of third-parties.
• 3.- Lubricants: participation in the Ecoembes Integrated Management System (IMS), an inverse logistics
system implemented.
• Compliance and revision of the potential reduction of some of the actions identified for the period 20152020.
• Implementation of good practices which derive from the action plan in other parts of the company
Next Steps
20
3. Our commitments to sustainability
Promoting a low carbon strategy
Energy Efficiency and Climate Change
Our objective : to reduce 1,9 million tons of CO2 by 2020
More than 4.0 MtCO2 have been reduced since 2006
Progress
•About 150 efficiency actions are taken every year in our facilities and activities as part of the long term plans to reduce
energy consumption and CO2 emissions.
•Around 425 M€ of investments planned in CO2 and energy efficiency measures by 2020
•Repsol continues implementing a global energy management system (EnMS) under ISO 50001 standard: five refineries,
two chemical plants, one E&P assets and eight lubricant, asphalt, and specialities facilities are currently been certified.
•We are working to recognize and reduce the greenhouse gas emissions of our products, and for this reason we are
developing diverse initiatives to quantify and verify our carbon footprint under the technical specification ISO 14067.
• Numerous R&D+I research projects: Polyol polycarbonate ecodesign pilot using CO2 as raw material an reducing carbon
footprint
• Repsol continues on the track to verify Methane emissions under ISO14064.
•Repsol is working to define a plan to mitigate methane emissions in our Upstream installations, and is on the track to join
the CCAC (Climate and Clean Air Coalition) initiative promoted by the United Nations.
Next Steps • 2014-2020 Plan based on: New approaches to look for opportunities + Identification of technology advances +
Extension of best practices / EnMS to different Business Units
21
3. Our commitments to sustainability
Promoting a low carbon strategy
Energy Efficiency and Climate Change
OUR POSITION ON CLIMATE CHANGE

In Repsol we believe that two global goals have to be pursued:
 To mitigate climate change and
 To provide access to affordable energy in order to support economic growth and development

We set up and deploy ambitious energy efficiency programs to reduce energy consumption and
GHG emissions as one of the key elements of our strategy. These programs pursue long term
targets which have been made public in order to facilitate their progress by the stakeholders.

We are convinced that innovation and technological development are essential for ensuring reliable
and sustainable energy supply in the long term.
22
3. Our commitments to sustainability
Promoting a low carbon strategy
Energy Efficiency and Climate Change
Moving from stakeholders engagement to partnerships
Transparency
•
CDP is one of the most important
questionnaires about climate
change. It requests information on
the risks and opportunities from
the world’s largest companies on
behalf of 822 institutional
investor signatories with a
combined US$95 trillion in assets.
•
Repsol has been recognized as one of the best
O&G companies for its Carbon Strategy. In 2015
we have obtained 100/100 score in disclosure.
Our methodology for the assessment of the risks
implied by climate change, the quality and
effectiveness of our energy efficiency plans and
our transparency in the GHG emissions have been
highly valuated in the last years.
2013 2014 2015
Maximum score of
the Energy Sector
(Disclosure)
Repsol score
(Disclosure)
Repsol score
(Perfomance)
98
100
100
98
96
100
B
B
B
Climate Change Initiatives
•
 Long-term solutions: the working group area is sharing and developing a broad and meaningful vision of the
future energy mix.
 Role of Natural Gas: the group is exploring opportunities to save and use natural gas in areas such as power
generation, transportation and homes.
 Carbon Reduction Instruments & Tools: the area is exploring the company policies and process that can
help manage emissions and improve operating and product efficiency.
OGCI is an industry-driven
initiative officially launched at
the UN Climate Summit in 2014.
It aims to catalyze action on
climate change.
•
IPIECA is the global oil and gas
industry association for
environmental and social issues.
Repsol joint the initiative in June 2015. We are working in 3 different focus areas:
Repsol is actively involved in several work streams:






Energy efficiency
Methane emissions
Adaptation to climate change
Scope 3 GHG emissions
Reporting
Low Emissions Pathways
23
3. Our commitments to sustainability
Promoting a low carbon strategy
Energy Efficiency and Climate Change
TRENDING TOPICS ON CLIMATE CHANGE
Stranded
assets
Carbon
pricing
• The stranded assets concept offers limited analysis for key uncertainties and aspects such as
developing new innovative technology.
• Gas (lowest carbon-intensive fossil fuel) represents nowadays a great portion of our business
(71% of our reserves).
• The main part of the company valuation is supported by proven reserves. The risk of stranded
assets based on resources seems limited today.
• Decisions on making new investments will continue to be based on expected risk-weighted returns.
The issue of climate change and possible climate policy regulations are incorporated also into such
decisions.
• Repsol supports carbon pricing as a policy framework that will contribute to provide our
businesses with a clear roadmap for future investment.
• We believe carbon pricing encourages the most efficient ways of reducing emissions widely and
increases investment in low carbon technologies.
• To be effective carbon pricing should be embedded in a coherent policy frameworks which
safeguards a sector’s international competitiveness.
• Repsol includes a carbon pricing in their strategic plans assigning an annual cost based on a
path of CO2 prices. This carbon price is taken into account by the business units that participate in
carbon markets.
24
3. Our commitments to sustainability
Promoting a low carbon strategy
Energy Efficiency and Climate Change
Repsol commitment to climate change, following the United Nations Conference on
Climate Change in Paris
 As signatories to the document “Paris Pledge for Action” we support the Agreement and we are
working to ensure that our company is a part of the solution to the climate problem.
 We strive for major energy efficiency in all our operations, for the contribution to increasing the
presence of Natural Gas in the global energy mix and for keep on working on the development of Carbon
Capture Storage (CCS).
 Limiting the temperature scenario not only to 2° C, but also to a possible 1,5 º C, will only be achievable
through Innovation and Technology. These two factors depend largely on the efforts and investments
made in the industrial sector and those made by private companies.
The Impact for
Repsol:
• The company has, for a considerable amount of time, been
committed to the goal of mitigating climate change, and we
are already working through our CO2 emissions reduction
and Energy Efficiency plans.
• The company recently signed up to the OGCI (Oil & Gas Climate
Initiative), providing a further indication of our commitment to
reducing GHG emissions.
25
3. Our commitments to sustainability
Promoting a low carbon strategy
Transport electrification
Biofuels
•
•
IBIL (50% owned by Repsol Nuevas Energías) first
recharging operator for electric vehicles registered with
the National Energy Commission (recharging service based
•
on 100% renewable energy)
•
More than 700 operational public and private charging
points in 2014
•
~ USD 2 Million invested in R&D in 2015 to promote the
electric mobility through IBIL.
Repsol helps to reduce CO2 emissions through the use of
biofuels, including bioethanol in gasolines and biodiesel and
vegetable oil in gasoils
Two lines of action:
o The development of advanced biofuel projects (using
non-food raw materials, biomass)
o The production of Hydrotreated Vegetable Oil
(obtained from oleaginous seeds ) and hydrobiodiesel in
our refineries
Proactive development of new technologies
Downstream initiatives
Repsol early detection of spills
•
•
Detection of oil spills without human
intervention
System already working at Casablanca
platform and in the Tarragona marine
terminal. Projects initiated in the Petronor
and La Pampilla refineries in 2015
•
Use of auto gas (automotive LPG) in direct injection
liquid phase engines.The reduction in CO2 emissions
against gasoline has come to 14.9%
•
Optimize heating oil to obtain a product bettersuited to the most advanced boiler technologies
reducing emissions by 30%
•
Asphalt recycling and low temperature
installation technology diminishes waste and
emissions
26
3. Our commitments to sustainability
Anti corruption/ Ethical conduct
Repsol is committed to fighting against corruption in all its forms and
establishing mechanisms to prevent corrupt or fraudulent activities
Ethics and Conduct
Regulation
 On line training available to employees
 Due to the integration of Talisman, Ethics and Conduct regulation will be
reviewed in 2016 to unify it with the other ethics codes of the group and
adapt it to the company’s new circumstances
Ethics Committee
 Channels in place to enable all employees or third parties to submit
queries relating to the Ethics and Conduct Regulation and report any
potential incidents of non-compliance in a fully confidential manner
Audit and Control
Corporate Division
 Supports non-compliance investigation
 Evaluates control processes efficiency
Anti-corruption
policy
 Applies to employees, partners, contractors and suppliers
 Set of regulations that develops mechanisms for the prevention,
detection and investigation of corruption.
Crime Prevention
Model
 A formal framework of regulations, procedures and controls, that
provide a means of reasonably ensuring that the risks of crimes being
committed are suitably identified, monitored, evaluated and controlled
27
3. Our commitments to sustainability
Transparency
Transparency is a key value for Repsol and a guarantee of the
company’s ethical performance, its commitment to ensuring that all
financial and non-financial information is complete and accurate, and
its willingness to engage in dialogue with all stakeholders
EITI and other
initiatives
Code of Best Tax
Practices
 Support for initiatives to promote financial transparency in the
international extractive sector and in the countries where we operate
 We support EITI since its foundation in 2003: We belong to the Peru
group since 2011 and cooperate with Trinidad Tobago working group
since 2015
 Adherence to the Code of Best Tax Practices, evidencing our
opposition to the use of non-transparent tax structures
EU and US lobbies  Repsol is registered at the US lobby register and at the European
Union Transparency register.
Disclosure
Transparency
 Continuous improvement on remuneration disclosure
 Disclosure of engagement report
28
3. Our commitments to sustainability
Respect for Human Rigths (I)
Policy on Respect
for Human rights

Community
Relations and
Human Rights
Management
Framework





Based on the UN Guiding Principles on Business and Human Rights “ Protect,
Respect and Remedy”
Development
NEWGlobal
Global
Framework
management
system
as a of
result
Development ofofaaNEW
Framework
andand
management
system
as a result
the of the
integration between
and
Talisman
integration
betweenRepsol
Repsol
and
Talisman, based on leading International Standards (
Based
on
leading
International
Standards
( IFC, UNGP, OECD guidelines)
IFC, UNGP, OECD guidelines)
Community
Relations
and
Human
Rights
Strategic
Lines
201620202020
already
defineddefined
Community Relations and Human Rights Strategic
Lines
2016already
Community relations
relations and
Human
Rights
should
involved
everybody
every where.
Community
and
Human
Rights
should
involved
everybody
every where.

Community
relations
and
human
rights
embedded
in
all
decision
making
processes
of the of
 Community relations and human rights embedded in all decision making processes
business.
the business.

Planned,risk
riskbased
based and
and extensive
engagement
withwith
communities.
 Planned,
extensive
engagement
communities.
 Due Dilligence on Human Rights in our own activities and with our contractors
 Due Dilligence on Human Rights in our own activities and with our contractors
Where should be
heading?

Due Dilligence
Process

A community relations and human rights focus and capacity must be present in the
due-diligence processes prior to acquisitions, to identify and assess the associated
social risks at all stages of the life cycle of projects operated by the Company (operated
activity); and also in projects not operated by the Repsol Group, as social risks
associated with these projects (non-operated activity) may also exist.
All social risks, impacts and opportunities linked to an operated/non operated
activity (will be regulated under our policy, its fulfilment defined though specific
objectives and KPIs.
1.- IFC: International Finance Corporation ( World Wide Group)
2.-UNGP: United Nations Guding principles on Business and Human Rights
3.-OECD: Organisation for Economic Co-operation and development
29
3. Our commitments to sustainability
Respect for Human Rigths (II)
A new organizational
model for the E&P
Bussiness
 For the first time Global Community Relations and Human Rights Function exists,
pending directly from the Safety, Environment and Sustainability Division and one level from
the CEO
 Community Relations Local teams have functional dependency of Global team which
allows the global team to set yearly goals linked to variable wage.
 Local community relations teams already stablished in 11 countries, with direct impact
on E&P Bussiness Unit
Respect for Human Rigths (II)
Training on Community
Relations and Human
Rights
Human Rigths Impact
Assesment:
Community Grievance
Mechanisims
 Mandatory online training program on Human Rights
 Face to Face workshops on the global Commnuity Relations & Human Rights
framework
 Face to Face workshops on specific processes: community grievance mechanisms;
human rights impact assessments
 3 projects carried out, 2 additional downstream projects
 Develop internal guidance on HRIA to support internal practitioners
 Support Bussiness Units in the implementation process
 Pilot Project in an operated asset jointly with IPIECA ( Peru) and one existing project in
Bolivia
 Diagnosis of existing Community Grievance Mechanisms in assets ( Bolivia and Peru)
 develop an internal guidance on How to support internal practitioners
 Support Business implementation and improvement processes
30
Sustainability Plans
4
31
4. Sustainability plans
Influence Area
Operations
Added complexity




Climate change
Global Stakeholders
Human rights
Supply chain
How to widen the view?
How to include all stakeholders?
How to involve the whole
organization?
32
4. Sustainability plans
CSR Model
Stakeholders’
expectations on Repsol
Aligning performance to
expectations
List of actions:
Sustainability plans
Sustainability Committees:
Include multidisciplinary executive members which
make decisions on the actions to close the gap with
expectations
which compose the sustainability plan
3 levels of implementation:
GLOBAL
COUNTRY
OPERATION
33
4. Sustainability plans
Progress
574
16
693
532
427
14
800
700
12
600
10
500
8
400
6
61
4
5
2
0
2011
278
Nº of committees
Nº of actions
 Number of actions is low
compared to previous year
because of efficiency:
Sustainability Plan 2016 has
deleted No innovative actions. A
process of review, prioritazion
and simplification of all actions
has been done.
300
200
5
13
15
15
15
2012
2013
2014
2015
2016
100
0
Actions are related to closing the gap in a variety of topics:
Sustainability plans approved in the year 2016
Nº of Actions
Governance
Human Rights
Labor Practices
Safety
Environment
Anticorruption and Ethics
Value Chain
Fair operating practices
Consumer issues
40
44
66
77
99
20
44
3
14
Community involvement and development
125
Total
532
34
Corporate Governance
5
35
5. Corporate Governance
Shareholder structure
10.24%
8.48%
4.95%
Caixabank S.A.
Sacyr Vallehermoso, S.A.
Temasek
Institutional
Free Float
76.33%
Retail
Investor
Free Float
14.20%
Total number of shares as of May 2016: 1,442 million
36
5. Corporate Governance
Board of Directors
The company's Board of Directors recognizes that a solid commitment to corporate governance is
critical to establishing trust and credibility with investors.
Directors may not hold more
than 4 mandates 1 in other
listed companies
Presence of
External
Directors
Rotation of
independent
Directors
% of Board
independence
% of
Committee
Independence
Repsol currently has no
overboarded Directors
 The majority of the Board (81.3%) consists of Non Executive Directors
 Market Practice: The tendency is to decrease the presence of Executive directors
6.41%
 None of the Independent Directors have been on the Company’s board for more than 12
years
 Implementation of the international standard (12 years cap) in our legal framework and
in our internal regulations (art. 13.2.j) of the Regulations of Board of the Directors)
 1/2 of the Board is independent
 Market Practice: Good Governance Code for Listed Companies recommends having 1/2
of the Board Independent




Audit and Control Committee: Composed exclusively of independent directors
Nomination Commitee: Majority independent / Chairman is independent
Compensation Comitee: Majority independent / Chairman is independent
Sustainability Comitee: Majority independent / Chairman is independent
1.- According to Repsol’s internal regulations it will be considered as one single mandate all those mandates held in companies belonging to the same group as well as
those Board memberships held as proprietary director proposed by a company of said group although the stock held in the company or the level of control may not
qualify to consider said company as part of the group.
37
5. Corporate Governance
Board of Directors
Separated CEO/Non Executive Chairman, Diversity and Transparency
Separated
roles of CEO
and Non
Executive
Chairman
Gender
Diversity
Geographical
diversity
Transparency
on
remuneration
 The roles of the CEO and Chairman have been separated as of April 30, 2014 with the appointment of Mr.
Josu Jon Imaz as CEO.
 In 2015, the Company continued implementation of this program and in its meeting on April 30, 2015 the
Board of Directors attributed all executive functions to the CEO.
 The AGM 2015 re-elected the Chairman as non-executive board member for a period of 4 years being
classified now as External Director in accordance with Art. 529 duodecies of the Spanish Companies Act
and Article 3 of the Board Regulations.
 Female directors make up 6.25% of the Boards External Directors.
 Repsol has committed to increase the proportion of women in leadership positions in Spain to 30% by 2020
as recommended in the Good Governance Code for Listed Companies.
 Repsol’s Board recognizes that the presence of foreign Directors can add value to the decision-taking
process.
 In line with the multinational nature of Repsol, the Board is committed to include foreign born members
with solid international experience, such as Henri Philippe Reichstul (Brazil), Rene Dahan (Dutch) and J.
Robinson West (United States)
The Company continues improving the disclosure on the remuneration issues and the implementation of international
best practices.
 The Annual Remuneration Report is submitted for consultation vote to the General Shareholders Meeting. On
2016 AGM the Report was approved by 95.011% of the share capital attending the meeting.
 The AGM 2015 approved also the Remuneration Policy for the Directors for the years 2015, 2016 and 2017 (majority
of 93.945%). This Remuneration Policy was prepared in response to the new regulatory framework and reflects best
practices on good governance and also Repsol's unflinching commitment to ensuring the utmost transparency.
 From 2009 to 2016 the fix pay for Directors has only increased 2.5% in total
 The Company applies the limit of 2 years severance payment when proposing the appointment of new Executive
Directors (as in the case of the CEO).
38
Annexes
6
39
Annexes
Main KPI Evolution
Social Indicators
Social
2013
2014
2015
Repsol personnel (number)
Accident frequency rate (Repsol and contractor staff)
Training in safety and occupational health (hours)
Deaths (number)
Personnel covered by collective agreement (percentage)
Women staff (percentage)
Women in management posts (percentage)
Women on the Board of Directors (number)
Total turnover rate (percentage)[11]
Investment in training (millions of euros)
Training per employee (hours)
Repsol staff who receive performance evaluations (percentage)
Disabled persons (number)
Teleworking staff (number)
Incidents of discrimination (number)
Voluntary social investment (millions of euros)
Local purchases as percentage of total purchases
Evaluations of the performance of contractors and suppliers (number)
Audits on contractors and suppliers (number)
Expenditure on private and public security (millions of dollars)
Litigation due to allegations of anticompetitive behaviour (number of cases initiated)
Communications received under the Ethics and Conduct Regulation (number)
Dissmissals for failure to comply with the Ethics and Conduct Regulation (number)
24,214
0.59
208,891
0
57
32
15
2
7
19.63
40
60
671
1,222
2
24.58
85.3
1,261
171
44.11
2
8
69
24,460
0.85
234,510
0
56
33
15
2
7
17.5
44
63
656
1,411
1
26.03
83
2,237
100
40.53
2
2
64
27,166
0.92
220,831
2
49
33
15
1
7
17.8
45
67
663
1,716
3
22.78
82.13
4,369
59
38.39
1
8
63
40
Annexes
Main KPI Evolution
Enviromental Indicators
Environmental Indicators
2013
2014
2015
Number of spills that reach the environment
14
17
21
Volume of hydrocarbon spills that reach the
environment (tons)
15
316
23
176,8
178,4
214
14,2
13,9
21,04
Fresh water withdrawn (kilotons)
54,203
54,729
57,303
Reused water (kilotons)
9,473
9,945
8,964
Water discharged (kilotons)
38,965
35,920
49,859
460
199
384
Hazardous waste (tons)
66,315
66,430
49,097
Non-hazardous waste (tons)
182,693
167,200
94,453
Spills
Energy and Carbon Management
Energy Consumption (106 GJ)
Direct emissions of CO equivalent (million tons)
Water Management
Hydrocarbons in water discharged (tons)
Waste Management
41
Safety, Enviromental and Sustainability
42
Annexes
Safety indicators
 Lost time injury frequency
rate
Own Employees
Contractors Employees
Combined
 Total recordable injury frequency
rate
2,7
0,85
0,92
2,6
2,5
0,59
2,4
2,3
2,2
2,1
0,6 0,55
0,92 0,78
1,12 0,79
2013
2014
2015
Safety and Enviromental Audit
carried out in 2015 1
Internal
Certification
External
Other
TOTAL
1.- As of 3Q 2015
2,59
2,38
2,25
2013
2014
2015
2
Main OHSAS 18001 certifications by activity in 2015
Number
280
81
63
30
454
Activity
Refining
Chemicals
E&P
Gas&Power
LPG
Lubricants and Specialities
Technology Center
Centers certified under
OHSAS 18001
%
6 of 6
6 of 6
4 of 16
0 of 1
24 of 32
13 of 13
1 of 1
100
100
25
0
78
100
100
43
Annexes
CO2 Emission reduction achieved per year
Emission reduction achieved in the year
Accumulated emission reduction achieved in previous years
4,50
0,38
4,00
0,52
MtCO2
3,50
0,44
3,00
0,44
0,62
2,50
2,00
0,39
0,20
1,50
1,00
0,58
0,50
0,58
0,27
0,86
2,24
0,17
1,02
1,23
2,68
3,12
3,64
4,02
1,61
0,00
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
44
Accident in LPG Peru
June 11th, 2015. Two fatalities occurred during the construction of a new LPG
plant in Cuzco (Peru) as a result of a landslide
While a trench was being dug in an excavation project, peat was found, a material which is harmful to foundations due to its low resistance
to compression. This meant the trench had to be made deeper. Following the instructions given by engineering management, they decided
to remove the peat.
With machinery, they reached a depth of approximately 6 m, where they found higher quality natural material (clay). In order to measure the
depth of the excavation, two workers entered the trench while the construction manager supervised the work from above. At that moment
the wall collapsed, trapping them both underground.
An investigation committee were formed with employees from de LPG Peru and Safety and Environment Division. Facilities were analyzed,
interviews to the workers implicated were done and more than 100 documental evidences were collected.
- 9 IAR were developed and accepted
Root Causes
- According to OSHA, two workers die every month
Procedures
11%
in the US due to trench collapses
Organization
11%
- Basic associated rules: excavations, confined space entry
45%
Inadequate training
and permit to work
33%
Communication
Lessons Learned:
• Excavations, although a common and seemingly simple activity, are one of the main causes of fatal accidents. Therefore, it is very
important that safety procedures are rigorously applied.
• Appropriately assess and communicate risks so that workers perceive them appropriately and do not expose themselves to danger.
• For construction projects ensure that there is independent safety supervision in the field at all times.
• Manage contractors responsibly, ensuring their competence and compliance with safety requirements.
45
Accident in 3D Seismic Operation. Indonesia
January 15th, 2016. A fatality occurred during a 3D seismic operation in Indonesia,
due to a tree that fell on the worker
While waiting for the water supply to continue drilling activities, one crew of BPS Drilling Unit was hit by a falling tree at his
back neck and trapped in between fallen tree and mud pump frame. Paramedic, that was close to the area, provided first aid to
the injured person. The worker was evacuated and one hour later after the incident, the ambulance arrived at BGP clinic but
the worker was declared death.
The investigation committee concluded that falling trees
hazards were not identified in the Hazid and Job Safety
Analysis.
There were a lot of fallen trees, dead trees and decayed trees
in the seismic area. Logging activity was present in the area by
third party.
There was no tree cutting activity by the seismic operation.
Lessons Learned:
• Do a risk assessment
• Stop the job when unsafe conditions/actions are observed
• Continuous Hazard identification and mitigation to address dynamic hazards and external hazards (Third parties)
46
Human Rights
47
Our commitments with sustainability
Repsol Human Rights Policy
On June 16, 2011, the United Nations Human Rights Council unanimously endorsed the Guiding
Principles for Business and Human Rights, making the framework the first corporate human
rights responsibility initiative to be endorsed by the United Nations.
The UNGPs have received wide support from states, civil society organizations, and even the private sector.
Repsol has been walking towards the application of the Guiding Principles:
 In July 2013 Repsol approved its Policy of Respect for Human Rights, following
the specific recommendations set out in the United Nations “Protect, Respect
and Remedy” framework and its Guiding Principles on Business and Human
Rights.
 This policy has been approved at the highest level in the company and it is
being implemented through a specific Business Unit. Our policy covers
Repsol’s human rights commitments for all activities with all stakeholders,
including employees, local communities, customers, partners and other
business contacts, and indicates what is expected in these activities.
 Through the implementation of these principles, the company has been able
to consolidate a culture of respect for human rights and now is mature
enough to take further steps, developing a new Global Framework and
management system as a result of the integration between Repsol and
Talisman.
48
Our commitments with sustainability
Repsol Community Relations policy
Repsol goal on
Community
Relations
o
To achieve and maintain strong and enduring relationships with communities in the area of influence of
our projects, based on trust, mutual respect and shared- valued, through proactive engagement and
management of social impacts and opportunities
o
Identifying social baseline, social impacts and social risk management is already embedded in
Repsol’s Comunity Relations Policy and standard, integrating now both Repsol and Talisman
commitments.
o
The new model allows a better prevention and mitigation on Human Rights impacts
A new organizational model for E&P Bussiness
For the first time of a Global Community Relations and Human Rights Function exists, pending directly from
the Safety, Environment and Sustainability Division and one level from the CEO
Community Relations and
Human Rights
(D. SE & Sustainability)
Global Level
Head of Business
(RU / BU / EO)
•
•
Community
Relations
function
Country Level (Bussiness)
•
•
•


Responsible for developing the corporate community relations &
Human rights framework (minimum requirements)
Responsible for assuring implementation at local level
Complying with Repsol's CCRR & HR standards
Allocating CCRR & HR tasks within the BU and provide resources,
training and capacities
Raising CCRR & HR awareness within the BU teams
Community Relations Local teams have functional dependency of Global team which allows the global team to set yearly goals linked to
variable wage.
Local community relations teams already stablished in 11 countries, with direct impact on E&P Bussiness Unit
49
Our commitments with sustainability
Community relations and Human Rights
Management Framework
Repsol has developed a Global Framework based on leading international standards (IFC1,
UNGP2, OECD3 guidelines)
 Result of the integration process with Talisman.
MANAGEMENT
SYSTEM
 Includes processes and activities aimed at preventing and mitigating
negative impacts and maximizing opportunities in communities directly
and indirectly influenced by the company.
 Based on O&G sector standards on social performance.
 Covering main international requirements regarding social performance.
 Human Rights Policy
POLICIES
STANDARDS
 Community Relations Policy
 Community Relations standard. Includes minimum performance
requirements for the whole company
 Social Investment Approval and Reporting Procedure (in progress).
1.- IFC: International Finance Corporation ( World Wide Group)
2.-UNGP: United Nations Guding principles on Business and Human Rights
3.-OECD: Organisation for Economic Co-operation and development
50
Our commitments with sustainability
Community relations and Human Rights
Management Framework
Human Rights impact assessments
First experiences applying HR
lens
Inclusion of
HRIA
requirements
in company
Policy and
standard
Carry out
HRIA specific
in operations
with support
from experts
 3 projects carried
out
 2 additional
downstream
projects
Consolidation
lessons learned
Develop
internal
guidance on
HRIA to
support
internal
practitioners
 First draft
Reinforce
implementation
Improvement
Support
Business Units
in the
implementation
process
 Downstream
 Upstream
 Guidance tested
in other
countries
Follow-up
 Internal and
external leverage
 Support and
assurance
AWARENESS & TRAINING
51
Our commitments with sustainability
Community relations and Human Rights
Management Framework
Community Grievance Mechanisms
First experiences applying HR lens
Inclusion of
CGM
requirements
in company
Policy and
Standard
Consolidation
lessons learned
Pilot project in an
operated asset
jointly with IPIECA
Diagnosis of existing
Community
Grievance
Mechanisms in
assets
 Self-assessment
on the efectiveness
of the existing CGM
Reinforce
implementation
Develop internal
guidance on
“How to develop
an effective
CGM” to
support internal
practitioners
 First draft of
the guidance
Improvement
Support
Business Units
in the
implementation
and
improvement
processess
 Upstream
 Downstream
 Guidance tested
in other
countries
Follow-up
 Support
 Assurance
 Reporting
AWARENESS & TRAINING
52
Main Sustainability Indexes
53
Annexes
Main Sustainability Indexes and Initiatives
Repsol has led the Oil & Gas sector for two consecutive years, in the 2011 and 2012
editions of the prestigious Dow Jones Sustainability Indexes.
The company also leads the Oil & Gas sector on the European index (DJSI Europe).
54
Annexes
Main Sustainability Indexes and Initiatives
Repsol is the leading oil and gas company in 2015 for carbon disclosure, according
to the Climate Disclosure Leadership Index (CDLI), comprising the top 50
international companies in communication and transparency on climate change
2010
2011
2012
2013
2014
2015
Maximum Energy sector score
90
92
98
98
100
100
Minimum score for Energy
sector companies to be eligible for the CDLI
88
90
95
97
98*
100*
Repsol’s score
88
89
98
98
96
100
Repsol´s evolution CDLI
A
B
A-
B
B
B
100
Maximun Energy Sector Score
98
96
Minimum score for Energy
sector companies to be eligible
for the CDLI
94
92
90
Repsol’s score
88
86
2010
2011
2012
2013
2014
2015
Our Company has won recognition for its energy efficiency and carbon management
for the third time in the last five years
(*) Since 2014 leaders are identified by geographical area and not globally as in previous years. According to 2014 score, Repsol is among the companies with the highest score in
transparency of the Energy sector.
55
Repsol Investor Relations contact details:
•
Mr. Luis Pedrosa, Front Office, Corporate Access and ESG Manager
[email protected]
+34 91 7537443
•
Ms. Leticia Padura, ESG Manager
[email protected]
+34 91 7535988
THANK YOU
©
Repsol S.A.EM Division of Economy, Finance and Development. 09/06/2016
Repsol
Delivering Value and Resilience through Sustainability
June, 2016