SSE PLC

GOVERNANCE AND ACCOUNTABILITY [...] GOVERNING THE NET ZERO TRANSITION PLAN [...] This Net Zero Transition Plan is governed and approved by the SSE Board. This is in line with the Board's role to set SSE's purpose, vision and strategy and consider wider stakeholder matters, including priorities surrounding SSE's principal sustainability impacts – the most material of which is climate change. As head of the Board, the Chair is responsible for ensuring the Board receives the required information to ensure the ongoing validity and clarity of the Plan for SSE's individual context. The implementation of the Plan is the responsibility of the Group Executive Committee (GEC). Through leadership of the GEC and as head of executive management, the Chief Executive retains ultimate responsibility for the management of climate-related initiatives under the Plan and in turn, driving progress. In support of this, the Chief Executive will agree the annual objectives and priorities for the Chief Sustainability Officer who is a direct report. The Chief Sustainability Officer (CSO) advises the Board, GEC, Group Risk Committee and Business Units on climate-related matters and the Net Zero Transition Plan. Governance of the Net Zero Transition Plan sits within a wider context of sustainability governance following a comprehensive review of ESG governance pathways in 2021. [...] ALIGNING ENGAGEMENT AND COMMUNICATIONS WITH NET ZERO [...] SSE actively and positively advocates for more ambitious climate change policy to achieve net zero and, with it, a more favourable climate for investments in renewable and low-carbon generation and investment in electricity networks. SSE only conducts lobbying and advocacy activity that is in line with the goals of the Paris Agreement and its own net zero strategy and ambitions. SSE is transparent around its polices and advocacy on climate change. One way it does this is through undertaking an annual review of its trade association memberships to ensure that the policy positions of the organisations it is part of are aligned with its own principles on climate change. These principles are drawn from SSE's Climate Change Policy and are aligned to the Paris Agreement. SSE discloses the results of this review annually on sse.com alongside any action taken as a result of the review.

Trade associations climate review

A number of SSE's stakeholders seek increased transparency around its polices and advocacy on climate change. SSE has undertaken a thorough review of its trade association memberships during 2022/23 to ensure that the policy positions of the organisations it is part of are aligned with its own on climate change. The results show that of the 28 trade associations which were in scope, 22 were found to be fully aligned and six partially aligned. You can find the full review, alongside the scope and methodology, below.

Trade Associations Climate Review 2022/23
Trade Associations Climate Review 2022/23 – scope and methodology
Trade Associations Climate Review 2021/22
Trade Associations Climate Review 2021/22 – scope and methodology
Trade Associations Climate Review 2020/21
Trade Associations Climate Review – scope and methodology

• SSE advocates for fair, just and accelerated actions to achieve net zero through working with policy makers, trade associations and other key stakeholders. SSE will only undertake advocacy activity that is in line with the goals of the Paris Agreement and its own net zero strategy and ambitions. [...] The Group Executive Committee is responsible for the Group strategy and driving climate-related performance programmes across the organisation. [...] The Audit Committee has oversight of SSE's annual TCFD disclosures in the Annual Report.

###### Policy Advocacy
Meaningful action to deliver more sustainable renewable energy projects cannot take place in a vacuum and is beyond the ability of individual companies to change independently. Without the right policy and regulatory frameworks to value sustainability, there will be a 'race to the bottom' and a loss of opportunities to deliver projects which have wider societal benefit. We will continue to engage with key stakeholders to influence the policy and regulatory landscape to accelerate decarbonisation. [...] ###### Policy Advocacy on Non-Price Criteria in Renewable Energy Auctions
In June 2023, SSE Renewables published a position paper calling on governments and regulators across Europe and internationally to make greater use of non-price criteria in offshore wind energy auctions, whether for seabed leasing or for contracts for difference (CfD). The paper outlines how the use of non-price criteria in auctions is important to deliver renewables projects which are deliverable, on time and on budget, and provide long-term value to society and the environment. This would require criteria related to the track record and deliverability of projects, sustainability (decarbonisation, circularity, workforce and skills, ecological protection and enhancement) and supply chain development. Following the publication of the position paper, we have been engaging constructively in discussions on this topic at a UK, European and global level through organisations such as Wind Europe, Global Wind Energy Council (GWEC), and the Global Offshore Wind Alliance; as well as directly with governments and regulators.

In 2023 SSE maintained political engagement at the highest levels in pursuit of the NZAP Plus strategy. SSE's advocacy effort has been in support of policies and regulatory measures which can deliver investment and accelerate the building of clean energy infrastructure. SSE's political engagement is cross-party and supports the existing political consensus around the need to deploy clean energy infrastructure in order to deliver on existing climate commitments; bolster energy security and economic resilience through more homegrown energy; and deliver investment and jobs in the green economy. [...] In the last six months SSE has held constructive engagements with UK political stakeholders including the Prime Minister; Leader of the Opposition; Secretaries of State at relevant government departments and their counterparts across all main political parties; the First Minister of Scotland and key members of Scottish Government and Scottish Parliament. In the Ireland SSE have met the Taoiseach and Minister for Environment, Climate and Communications. SSE is increasingly engaging political stakeholders in international jurisdictions, most notably the European Union, where the company has a growing presence.

Transparent political engagement and advocacy

**Political engagement**
Regulators, non-departmental public bodies and institutions of government have a key role to play in the sector in which SSE operates, and we are therefore required to engage with them on a regular basis.

We work to the standards set out in SSE's Group Political and Regulatory Engagement Policy and aim to maintain the highest standards of probity in our engagement with government and regulators. We aim to work in line with relevant best practice and, where applicable, regulation and legislation, and ensure any representations made by us are fair and balanced and represent our position truthfully and honestly.

SSE remains politically neutral and does not contribute to political parties or political campaigns; and we avoid doing anything that could be construed in any way as solicitation of favour.

SSE's political engagement policy and procedures are available to all interested parties. We comply with the disclosure requirements of the voluntary EU Transparency Register, established by European Commission to provide transparency around the groups and organisations undertaking activities aimed at influencing the formulation or implementation of EU policy and legislation.

**Trade association membership**
Trade associations are not-for-profit organisations that act on behalf of industry and support the development of industry standards. One of the key ways in which SSE advocates on policy positions of importance to SSE, and the wider energy industry, is through its membership of Trade Associations. For transparency, SSE's three most material trade association memberships are outlined below.

Energy Networks Association (ENA)

Energy Networks Association (ENA) represents the 'wires and pipes' transmission and distribution network operators for gas and electricity in the UK and Ireland. Its members control and maintain the critical national infrastructure that delivers these vital services into homes and businesses. ENA's overriding goals are to promote the UK and Ireland energy networks ensuring networks are the safest, most reliable, most efficient and sustainable in the world. As the owner of the high voltage electricity transmission network across the north of Scotland, and the Distribution Network Operator (DNO) responsible for delivering power to 3.8m homes and businesses across central southern England and the north of Scotland, SSEN's ENA membership is important not only to make sure that our voice is heard in discussions regarding today's energy system but crucially in the work to overhaul electricity networks for a net zero world.

Energy UK

Energy UK is the trade association for the GB energy industry with a membership of over 100 suppliers, generators, and stakeholders with a business interest in the production and supply of electricity and gas for domestic and business consumers. As the broadest based energy company in the UK and Ireland, SSE considers membership of Energy UK, which represents the entirety of the energy value chain, to be vital in engaging key policy makers on net zero policies.

Renewable UK

Renewable UK supports over 400 member companies to ensure increasing amounts of renewable electricity are deployed across the UK and access markets to export all over the world. Its members are business leaders, technology innovators, and expert thinkers from right across industry. As the leading developer of renewable energy in the UK and Ireland and currently constructing what will be the world's biggest offshore wind farm, SSE Renewables is committed to engaging with valued stakeholders via Renewable UK to ensure that increasing amounts of renewable electricity are deployed across the UK.

###### Government and regulators

Constructive engagement aims to ensure fair energy sector frameworks for energy customers and investors.

###### How we engage
Group engagement

- Through SSE's Political Engagement Policy under
which it makes representations to the institutions of
government in a politically neutral way consistent
with the company's core purpose.

- Ongoing constructive dialogue with Ofgem
on networks regulatory price controls, market
design and carbon pricing, CCS and hydrogen.

- Panel discussions and thought leadership reports to
engage stakeholders with key issues.

Board engagement

- Board oversight of the implementation
of SSE's Political Engagement Policy and
corresponding advocacy priorities.

- Monitoring of engagement activity and
responses to regulators to ensure that strategic,
financial, investment and operating frameworks
remain aligned to the external landscape."
"SSE has a clear Political Engagement Policy that sets out principles for any employees who make representations to institutions of governments or to legislatures on the Company's behalf. [...] There is regular engagement with the Board and Group Executive Committee on political and regulatory developments which may impact SSE's operations or strategy. Further details are available on page 132  of the Directors' Report.

ALIGNING ENGAGEMENT AND COMMUNICATIONS WITH NET ZERO

SSE actively and positively advocates for more ambitious climate change policy to achieve net zero and, with it, a more favourable climate for investments in renewable and low-carbon generation and investment in electricity networks. SSE only conducts lobbying and advocacy activity that is in line with the goals of the Paris Agreement and its own net zero strategy and ambitions.

SSE is transparent around its polices and advocacy on climate change. One way it does this is through undertaking an annual review of its trade association memberships to ensure that the policy positions of the organisations it is part of are aligned with its own principles on climate change. These principles are drawn from SSE's Climate Change Policy and are aligned to the Paris Agreement. SSE discloses the results of this review annually on sse.com alongside any action taken as a result of the review.

Strengthening climate governance Addressing the challenge of climate change is core to SSE's strategy and is therefore at the centre of many Board considerations and decision making throughout the business. SSE has a structure in place to facilitate strong and robust governance of climate-relate issues, with accountability ultimately laying with SSE's Chief Executive. More detail of SSE's climate- and sustainability-related governance can be found on page 9 of this report and page 40 of SSE's Annual Report 2021. SSE took steps to strengthen climate-related governance in 2020/21, which included the Group Risk Committee assuming oversight of SSE's internal TCFD process and disclosures. From 2021/22 governance will be further strengthened, with the Audit Committee of the Board to take oversight of the annual TCFD report and the reform of the Safety Health and Environment Advisory Committee to include sustainability oversight includes a focus on climate adaptation. In addition, in 2021/22, the Remuneration Committee will undertake a review of its Remuneration Policy with consideration to be taken of potentially embedding sustainability metrics within long-term incentive plans for SSE's Executive Directors. Proposed climate resolution SSE believes that both the company and its investors will benefit from enhanced engagement on climate-related issues. Having worked closely with investor group Climate Action 100+ over 2020/21, SSE is therefore proposing an enabling resolution to its 2021 Annual General Meeting (AGM) that will establish a framework for annual votes on its Net Zero Transition report at future AGMs. Advocating for climate action In May 2020, SSE published 'A greenprint for building a cleaner, more resilient economy' which outlines a set of practical proposals for the UK Government, aimed at helping the economy recover from the coronavirus crisis whilst taking climate action to achieve net zero. This was closely followed by the publication of a similar document for Ireland. The documents each covered five priority areas, including increasing deployment of offshore wind, decarbonising thermal generation and decarbonising heat and transport. SSE has undertaken extensive advocacy in support of the proposals set out in its greenprint documents over the course of 2020/21, with specific activity including: - UK ETS: SSE welcomed the establishing a UK Emissions Trading System (ETS) in December 2020 and has called upon the UK and the European Union to agree a link between the UK ETS and EU ETS as soon as possible in order to benefit from a wide ranging, liquid and mature carbon market. - Addressing barriers to offshore wind connection: In February 2021, SSEN Transmission, supported by Scottish Renewables, published a paper calling for a review and reform of the current transmission charging methodology to support decarbonisation at the scale and pace required to reach net zero. - Making the case for pumped storage: SSE's proposed 1.5GW Coire Glas pumped hydro storage scheme could provide an invaluable low-carbon resource to help cost effectively manage the fluctuations of the electricity system. SSE has engaged with the UK and Scottish governments on the current policy and market framework which are not yet suitable for attracting investment in such large-scale storage projects. - Increasing support for carbon capture and storage (CCS): SSE has urged the UK Government to increase ambition to multiple power CCS projects by 2025 and 2030. By delivering cutting-edge projects like SSE Thermal's Keadby 3 and Peterhead 2, the UK can accelerate the shift to net zero while maximising the benefits of a green recovery in the UK's industrial heartlands. Trade association membership SSE is a member of four principal trade associations that align with its business objectives and enable it to work collaboratively across the energy sector on matters of shared interest. In its annual CDP Climate Change Programme response, available publicly on its website, SSE reports on its key trade association memberships, their position is on climate change and whether that aligns with SSE's position. SSE takes a firm position on climate change and the urgency with which it needs to be addressed, and actively and positively advocates to drive accelerated climate action to achieve net zero. SSE works closely with the trade associations of which it is a member and engages with them on a continuous basis. As a result, its position on climate change is usually aligned to that of the trade associations. However, for prudence, SSE will undertake a thorough review of its trade association membership over 2021/22 to ensure explicit agreement that their positions on climate change are consistent with its own. Where a trade association may be identified as having a considerably different position on climate change which SSE believes to be detrimental, it will, in the first instance, work with the trade association to try and influence or strengthen their position on the issue. If the outcome of this proves unsatisfactory to SSE, it will end its membership of the particular trade association.

SSE proactively advocates for more ambitious climate change policy to achieve net zero and conducts advocacy in line with the goals of the Paris Agreement and its own net zero strategy. In 2023/24 SSE's continued to advocate for the acceleration of renewables deployment, transforming the electricity networks, clear commitments for low carbon flexible generation and a just transition. In 2023/24 SSE publicly supported the European Commission's proposal for an EU climate target to cut emissions by at least 90% by 2040 from 1990 levels. [...] In addition, SSE reviews its trade association memberships annually to ensure that the organisations of which it is a member also advocate in line with the ambitions of the Paris Agreement. [...] Trade Association Climate Review 2022/23 – see sse.com/sustainability [...] Detail of climate advocacy activities – pages 30 and 31 of the Sustainability Report 2024

The Safety Health and Environment Committee monitors environmental performance indicators and incidents with high potential and ensures effective action is taken to manage environmental risks. [...] The Managing Director, Corporate Affairs and Sustainability is responsible for reporting SSE's sustainability and climate change impacts to stakeholders.

trade associations that align with its business objectives and enable it to work collaboratively across the energy sector on matters of shared interest. SSE works closely and engages with these trade associations on a continuous basis to ensure that their principles on climate change are consistent with those of its own. In December 2021, SSE published the first annual review of its trade association memberships in relation to its net zero ambitions and the goals of the Paris Agreement. The results showed that, of the 20 trade associations considered within scope, 19 were aligned overall and one was partially aligned. None of the trade associations assessed were identified to have opposing climate-related views. SSE will continue to engage with all trade associations that were found to be aligned and will undertake a process to seek increased engagement where partial alignment was identified, with results of action taken to be disclosed in the next annual review later in 2022. More information can be found in SSE's Trade Association Climate Review available at sse.com/sustainability.

|Climate Advocacy|• SSE advocates for fair, just and accelerated actions to achieve net zero through working with policy makers, trade associations and other key stakeholders. • SSE will only undertake advocacy activity that is in line with the goals of the Paris Agreement and its own net zero strategy, both aligned to limiting global temperature rises to 1.5oC. • SSE will complete a review of its Trade Associations activity against the goals of the Paris Agreement and report on its findings annually.

SSE has undertaken a thorough review of its trade association memberships to ensure that the policy positions of the organisations it is part of are aligned with its own on climate change. [...] SSE works closely with trade associations and seeks to ensure that its principles to reach net zero align with those of the trade associations of which it is a member. [...] Within this policy, SSE commits to only conduct lobbying and advocacy activity that is in line with the goals of the Paris Agreement and its own net zero strategy and ambitions. This commitment includes SSE's direct advocacy activities and advocacy that the company conducts through its trade association memberships. [...] As well holding regular membership for these trade associations, SSE is often represented on the boards and committees of key trade associations. In 2021/22 the SSE Group was a member of four principal trade associations in Great Britain: Energy Networks Association, Energy UK, RenewableUK, and Scottish Renewables. It has employees on the Boards of each of these organisations to support good and transparent conduct by these trade associations. Each of these organisations has established committees to oversee their advocacy activities, and SSE is also represented on each of these committees. [...] Through these arrangements, SSE's Corporate Affairs directorate maintains an overview of trade associations' advocacy activities. [...] SSE does not contract organisations to undertake lobbying activity, for the purposes of influencing public decision making, and regularly reviews its trade association memberships to ensure that they are still relevant for SSE's business activities. [...] SSE seeks to ensure that the trade associations of which it is a member also undertake advocacy that aligns with the goals of the Paris Agreement. It works closely with these trade associations, engaging with them on a continuous basis, and as a result, they are usually well aligned.

SSE promotes an open and transparent approach to stakeholder engagement which is supported by governance and accountability at both Group and Business Unit level. Through the course of its daily interactions with a broad range of stakeholders, SSE seeks to ensure that their perspectives are built into its business plans and objectives at every stage. [...] SSE is a member of several diverse trade associations that align with its business objectives and enable it to work collaboratively across the energy sector on matters of shared interest. SSE works closely and engages with these trade associations on a continuous basis to ensure that their principles on climate change are consistent with those of its own. SSE's annual review of the net zero ambitions of its trade association memberships can be found in SSE's Trade Association Climate Review available at sse.com/sustainability. The report once again confirms that none of the trade associations assessed were identified to have opposing climate-related views. SSE will continue to engage with all trade associations and report its assessment annually.

SSE proactively advocates for more ambitious climate change policy to achieve net zero and conducts advocacy in line with the goals of the Paris Agreement and its own net zero strategy. In 2022/23 SSE's climate advocacy was focused on the acceleration of renewables deployment to deliver net zero and avoid future cost-of-living crises. The importance of progress on decarbonising thermal generation, heat, and transport has also been an advocacy priority for the Group in 2022/23. In addition, SSE reviews its trade association membership annually to ensure that the organisations of which it is a member also advocate in line with the ambitions of the Paris Agreement. [...] The measures the Company uses to align its public policy engagement and external communications with the Net Zero Transition plan [...] By consulting shareholders annually on its Net Zero Transition report SSE's objective is that both the Company and its shareholders benefit from enhanced climate-related engagement. Given that shareholders may have multiple motives when voting on such a matter, the Company wishes to clarify that if there is a significant vote against, it would hold discussions with shareholders through its Investor Relations and Environmental, Social and Governance (ESG) engagement programme and seek information from them about why they did not support the proposed resolution, inform all shareholders about the results of that process and announce its intended measures aimed at taking them into account.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]SSE works to embed policies and processes that support the delivery of climate action in line with clear principles aligned to the Paris Agreement and a 1.5oC pathway. During 2021/22, SSE continued to advocate for accelerated climate action with focus on increasing deployment of renewable generation and decarbonisation of thermal generation, heat and transport.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes