GREEN BONDS REPORTING 2017 CONTENTS

01/ PRESENTATION 02/ ECOLOGICAL 04/ ALLOCATION 05/ REPORTING OF SNCF RÉSEAU TRANSITION AND RAILWAY OF BORROWED FUNDS AND METHODOLOGY INFRASTRUCTURE OF THE GREEN BONDS P. 0 4 _SNCF RÉSEAU P. 1 8 _STRUCTURE PROGRAMME INDICATORS AND THE FRENCH RAILWAY P. 0 8 _THE “CLIMATE” OF THE SNCF RÉSEAU NETWORK BENEFITS OF RAIL IN THE FIGHT GREEN BONDS PROGRAMME P. 2 8 _MAP OF THE GREEN BOND AGAINST CLIMATE CHANGE 2017 SITES P. 0 5 _A CREDIT RISK _PREPARATION EQUIVALENT TO THAT P. 1 0 _THE SNCF RÉSEAU OF THE SNCF RÉSEAU P. 2 9 _GENERAL INDICATORS OF THE FRENCH STATE CARBON APPROACH GREEN BONDS PROGRAMME TABLE P. 1 1 _SNCF RÉSEAU P. 1 9 _ELIGIBLE PROJECT P. 3 0 _DETAILED REPORT EXTRA-FINANCIAL RATINGS CATEGORIES PER CATEGORY

P. 2 0 _TABLE P. 32_CATEGORY 1. INVESTMENTS OF ALLOCATIONS IN MAINTENANCE, MODERNISATION 03/ SNCF RÉSEAU’S AND ENERGY EFFICIENCY PROJECTS “GREEN BONDS FUNDING” P. 2 2 __DESCRIPTION CONCERNING THE RAIL SYSTEM OF THE FUND P. 1 4 _A “CLIMATE MANAGEMENT POLICY P. 33_CATEGORY 2. INVESTMENTS BONDS INITIATIVE” RELATED TO NEW RAIL LINES CERTIFIED ISSUE P. 2 4 _AUDITORS ASSURANCE AND RAIL LINE EXTENSIONS REPORT P. 1 5 _CHARACTERISTICS OF THE 2017 OPERATION 06/ ONE STEP FURTHER _TYPOLOGY AND GEOGRAPHICAL DISTRIBUTION OF INVESTORS

Photo: © SNCF Réseau /CAPA Pictures/Jean-Christophe Verhaegen. Design and execution:

04 SNCF RÉSEAU GREEN BONDS REPORT 2017 05 TURNOVER PER BUSINESS A CREDIT RISK LINE IN 2017 EQUIVALENT TO THAT OF THE FRENCH STATE Freight Intercity 2% trains 11% TER 01 38% As of 31 december 2017, as a 100% State-owned public entity, SNCF Réseau benefits from the strong support of the French 6.5 State based on its legal status (EPIC). BILLION EUROS As an EPIC, SNCF Réseau: INTRODUCTION Transilien 13% – is not subject to private-sector bankruptcy law; – may only be dissolved by an amending law transferring TO SNCF RÉSEAU its rights and obligations High-speed trains to another public entity. 35% SNCF Réseau: – performs a public sector mission and enjoys a natural monopoly position with no risk of deregulation; TRAFFIC IN 2017 – was included in the “Government Regional Related Entity” list by the European SNCF Réseau is one of the leading commission in 2002 and is eligible SNCF RÉSEAU Intercity trains AND THE FRENCH investors in with 3.2 billion euros trains (TER and to the ECB Public Sector Purchasing RAILWAY NETWORK invested in 2017; 7% Transilien) Programme. – ensuring the development 51% SNCF Réseau debt is seen by credit of the network. Freight rating agencies as implicitly 14% guaranteed by the French State.

SNCF Réseau owns and manages With its 54,000 employees, SNCF Réseau the French national rail network. has generated a turnover of 6.5 billion euros 480 RATING LONG SHORT with an operating margin (EBITDA - MILLION AGENCIES TERM TERM SNCF Réseau’s main responsibilities: earnings before interest, tax, OF TRAINS- KILOMETER – ensuring fair access to the rail depreciation and amortisation) Fitch AA F1+ network for 26 rail transport companies of 1.9 billion euros and a net result and 11 regional transport authorities; of -0.2 billion euros in 2017. – organising and developing rail traffic: Moody’s Aa2 P-1 15,000 trains circulate daily, transporting more than 5 million passengers per day; High-speed Standard & AA A-1+ – ensuring the maintenance and trains Poor’s enhancement of the network, 27%

04 SNCF RÉSEAU GREEN BONDS REPORT 2017 05 02 As the most ECOLOGICAL eco-friendly mode of transport, railway TRANSITION transport has AND RAIL a critical role to play in the transition INFRASTRUCTURE to a low carbon economy.

06 SNCF RÉSEAU GREEN BONDS REPORT 2017 07 THE “CLIMATE” BENEFITS OF RAIL GHG EMISSIONS PER MODE OF TRANSPORT IN THE FIGHT AGAINST CLIMATE CHANGE TGV, LYRIA, IDTGV, 3 TRANSILIEN 6 INTERCITIES 11 , , ALLEO, ELIPSOS, GALA 8 to 27 30 TER Passengers In France, rail transport, which accounts for 10% of traffic (freight and LONG DISTANCE BUS (OUIBUS) 44 passengers), emits less than 1% of all GHG emissions from transport. CARPOOLING 74 CARS, LONG DISTANCE TRAVEL 90 CARS, LONG DISTANCE/SUBURBAN TRAVEL 148 PLANE (DOMESTIC FLIGHTS) 168 REGIONAL OR DEPARTMENTAL BUS 171 SINGLE PASSENGER VEHICLE 207 BREAKDOWN PER SOURCE OF GHG EMISSIONS (EXCLUDING LULUCF1) IN FRANCE IN 2014 02040 60 80 100 120 140 160 180 200 220

Grams equivalent CO2 per passenger-km

ENERGY INDUSTRY: 8.6%

Agriculture: 7 TRANSPORT: 28.5% RAIL 17.25% MARITIME 17 Energy COMBINED 21 consumption: Freight MANUFACTURING AND RIVER 34 69.7% 77 Industrial CONSTRUCTION INDUSTRY: 13.1% Sources: TRUCK procedures and AIR 552 TERTIARY/RESIDENTIAL: 15.8% - Passengers: methodology solvents: 8.75% note on CO2 information OTHERS: 3.8% for transport services 0 20 40 60 80 100 120 140 160 180 200 220 Waste material: (2016, statistics obtained from SNCF, MEDDE, ADEME). Grams equivalent CO2 per tonne-km 4.3% - Freight: SNCF Cargo (2014), SNCF Logistics (2011), ADEME. GHG EMISSIONS PER MODES OF TRANSPORT IN FRANCE AS A % (INCLUDING FOD)

Heavy Two wheelers: 1.2% This can be explained by: sheet, given that transport goods Utility – the low amount of energy needed in France accounts for close vehicles: vehicles: for rail traction (wheel-rail contact to 30% of total GHG emissions 21.3% 19.1% vs tyre-road); of France (i.e. 133 MtCO eq). Off-road AIR: 3.5% 2 vehicles: – mass-transport; 5.3% – the high use of electricity Moreover, the advantages of rail Private vehicles: (78% of trains use electric traction), transport are not limited to low levels RIVER AND MARITIME: 1% 53.2% only 7% of which is generated of CO2 emissions. There are other RAIL: 0.4% by fossil fuels in France. benefits such as lower air pollution, OTHERS: 0.4% fewer accidents, optimised use Thus, any modal shift from air of space, less noise and a lower Source: Citepa, June 2016 and road to rail is greatly beneficial negative biodiversity impact. 1. LULUCF: Land use, Land Use Change and Forestry. to the GHG emissions balance

08 SNCF RÉSEAU GREEN BONDS REPORT 2017 09 THE SNCF RÉSEAU SNCF RÉSEAU CARBON APPROACH EXTRA-FINANCIAL RATINGS

Although rail transport is a key Several extrapolation ratios (per million Reflecting this policy and CSR strategy, contributor to France’s low carbon euros invested) are therefore established SNCF Réseau is monitored by two extra- transition, SNCF Réseau nonetheless to calculate both the carbon footprint financial rating agencies, Vigeo and strike for greater energy efficiency and avoided carbon emissions for renewal Oekom Research, which have awarded and reducing it’s own GHG emissions. projects, as well as for new line it the ratings given in the table below. and extension projects. SNCF Réseau has thus made a commitment to reduce its energy These ratios are subject to revision consumption and its GHG emissions each year based on studies conducted RATING AGENCIES RATING POSITION OF SNCF RÉSEAU by 25% between 2015 and 2025. by SNCF Réseau. Vigeo 66/100 2nd from a panel of 38 European companies To achieve this, actions have been Since 2015, SNCF Réseau has produced in the logistics/transport sector. identified and initiated. a first Bilan Carbone® (Carbon Balance – For all our activities: sheet) for track renewal projects using Oekom B- 1st ex-aequo from a panel of 45 Global companies tertiary, operational activities, projects a mobile workshop known as a “Suite Research in the transport infrastructure management (related to the Green Bonds programme); Rapide” (90 km between Narbonne and sector. – For the primary sources of Montpellier), identified actions to reduce GHG emissions: energy required GHG emissions and created a tool for construction, service vehicles, to assess the emissions of similar projects. train engines, materials used, etc. In 2017, a second carbon audit of track The rating obtained from Vigeo for comprehensive measures to preventing Knowing the carbon weight renewal projects using a high intensity the environmental aspect (73/100) is local pollution such as low nuisance of SNCF Réseau activities is the starting track renewal unit was conducted between accompanied by the following comment: equipment and programs to reduce point for actions for improvement Gevrey and Sennecey. This resulted local pollution, and to cooperate and commitment as part of a sustainable in updating of the footprint ratios used ”The main elements accounting for the with stakeholders involved through development approach. It helps identify for track renewal projects and for EFTI score increase remain the more exhaustive regular dialogue processes.” priorities for optimisation and improves renewal projects. approach to management of climate our operational methods. change issues through more reliance The latest ratings reports from In order to industrialise the approach, In 2018, SNCF Réseau will introduce a new on renewable energy and facilities and these two agencies are available SNCF Réseau is currently preparing carbon accounting procedure specifically fleet optimization programs throughout on the SNCF Réseau website. an operational tool to calculate for switch renewal projects. This procedure the Company’s operations. In addition, and report the GHG emissions will refine the carbon impact methodology SNCF Réseau appears to have developed of the company’s main activity, in order to improve the accuracy of i.e. maintenance and modernisation the carbon footprint calculation, as it will of the national rail network. distinguish between a switch renewal operation and a track renewal operation

In order to calculate the carbon impact by applying a ratio of tCO2/million euros of all projects financed using Green specific to switch renewal projects. Bonds, SNCF Réseau extrapolates values per million euros invested rather than Other Bilans Carbone® (Carbon Balance calculating the impact of each individual sheets) will be produced for other types project. of projects to consolidate our knowledge as part of a continuous improvement approach.

10 SNCF RÉSEAU GREEN BONDS REPORT 2017 11 03 In July 2017, SNCF RÉSEAU’S SNCF Réseau launched “GREEN the longest Green Bond BONDS ever issued FUNDING” in euros.

12 SNCF RÉSEAU GREEN BONDS REPORT 2017 13 A “CLIMATE BONDS INITIATIVE” MAIN CHARACTERISTICS CERTIFIED ISSUE OF THE GREEN BONDS 2017 OPERATION

In 2017, SNCF Réseau, the owner Lastly, SNCF Réseau, as a member of and operator of the French railway the GBP and the Finance for Tomorrow2 MARCH JULY network, rated Aa2 (Moody’s), initiative, fully participates in the AA (S&P), AA (Fitch), launched discussions and market developments ISSUER SNCF Réseau SNCF Réseau two public benchmark Green Bonds of Green Bonds. RATING Aa2 (Moody’s) / AA (S&P) / AA (Fitch) Aa2 (Moody’s) / AA (S&P) / AA (Fitch) for a total issuance of €1750 million: - In March, €1000 million at 1%, The proceeds from this green bond have ORDER BOOKS 1.1 billion euros more than €900 million maturing in March 2034 (17 years) been used to finance the renovation - In July, €750 million at 2.25%, of the structural network and develop FINAL SIZE 1 billion euros 750 million euros maturing in December 2047 (30.5 years) new projects. ISSUE DATE 27 March 2017 11 July 2017

In line with its commitment to become No eligible projects in category 3 SETTLEMENT DATE 30 March 2017 20 July 2017 a leading issuer in the Green Bond (“Other investments linked to the global market, SNCF Réseau issued a total climate change challenges, the protection MATURITY DATE 27 March 2034 20 December 2047 of €2.65bn of Green Bonds in less of biodiversity and natural resources”) than a year, making it one of the world’s were identified in 2016. However, PRICE/ REOFFER YIELD 98.570% / 1.104% 98.570% / 2.300% 15 largest Green Bonds issuers. the eligible projects from the first COUPON 1% annual 2,25% annual two categories generally include provisions In order to define the most stringent for protection of biodiversity and natural SPREAD OATs + 34 bp OATs + 37 bp standards in terms of green financing resources. The impact indicators reflecting and to thus become a global point the policy of preserving resources are given of reference in the transport sector, in part 5 of this report. the bond issue launched by SNCF Réseau TYPOLOGY AND GEOGRAPHICAL is in line with the Green Bond In 2017, approximately 35% of annual Principles 2016 (GBP) and has issuances by SNCF Réseau on the DISTRIBUTION OF INVESTORS also been awarded Climate Bonds financial markets were in the form of Initiative (CBI) certification, Green Bonds. SNCF Réseau Green Bond Others 5% by Oekom Research. issuances are likely to be included in Scandinavia 5% the Barclays MSCI Green Bonds Index. Asia 11% France 44% Others 38% Switzerland 4%

SRI investors Netherlands 7% 62%

United Kingdom 6%

1. Excluding China onshore. 2. Finance for Tomorrow is an initiative led by the players of the Financial Centre Germany 17% to promote sustainable finance in France and internationally. It contributes to reorienting financial flows towards a low carbon and inclusive economy, in line with the Paris Agreement and the Sustainable Development Goals (SDG). Source: SNCF Réseau.

14 SNCF RÉSEAU GREEN BONDS REPORT 2017 15 04 The resources from ALLOCATION the issuance of Green Bonds are allocated OF NET to projects for PROCEEDS the renovation and modernisation on the core network as well as the completion of new lines.

16 SNCF RÉSEAU GREEN BONDS REPORT 2017 17 STRUCTURE OF THE SNCF RÉSEAU GREEN BONDS CATEGORIES The proceeds of the Green Bond were allocated to investments PROGRAMME OF ELIGIBLE PROJECTS corresponding to one of the following three categories.

The green bonds issued by the 4 pillars structure developed INVESTMENTS RELATED TO Projects to renovate tracks 2 Category 1 SNCF Réseau have the same in 2016 by the ICMA Green Bond MAINTENANCE, and traction power supply UPGRADE AND ENERGY characteristics as conventional Principles. The 2016 version EFFICIENCY OF THE infrastructure, and signalling bonds in terms of credit risk. of the Green Bonds programme RAIL SYSTEM system upgrades. The projects Nevertheless, they have some (Green Bond Framework) is available eligible for this category additional characteristics on the SNCF Réseau website3. necessarily concern in terms of reporting obligations, investments for the renovation monitoring the correct allocation The Second Opinion, issued of the core network, consisting of the most of funds to eligible projects and by Oekom Research, confirms used and 100% electrified assessment of the environmental the compliance of the SNCF Réseau part of the network impact of eligible projects. Green Bonds framework with the (lines in UIC groups 1 to 46). ICMA Green Bond Principles (2016). The 2016 version of this Second Category 2 INVESTMENTS RELATED Projects related to new Party Opinion (SPO) is available TO NEW LINES lines and line extensions, PREPARATION 4 AND LINES EXTENSIONS on the SNCF Réseau website . improving access to OF THE SNCF RÉSEAU the network for passengers GREEN BONDS Lastly, the SNCF Réseau Green Bonds and freight mobility. PROGRAMME programme complies with with Low For example LGV Est, Carbon Transport Eligibility Criteria LGV SEA, LGV BPL, (V1.0). established by the CBI. LGV CNM high-speed lines etc7. CLIMATE BONDS Oekom Research is also responsible for verifying the compliance of this Category 3 OTHER INVESTMENTS LINKED Projects related to the CERTIFIED BOND “ISSUE” alignment on behalf of the CBI. TO GLOBAL CLIMATE CHANGE protection of biodiversity CHALLENGES, PROTECTION The 2017 version of this certification OF BIODIVERSITY AND NATURAL and natural resources awarded by Oekom Research RESOURCES surrounding SNCF’s existing SNCF Réseau has complied network. with the principles laid out is available on the SNCF Réseau 5 by the Climate Bonds Initiative (CBI), website . and particularly with Low Carbon Transport Eligibility Criteria (V1.0)1. Drawing on best market practices, the framework developed by SNCF Réseau is also based on

6. The International Union of Railways (UIC) has established a method to classify lines depending on the traffic loads supported by the infrastructure as well as the type of traffic. Group UIC 1 corresponds 1. The annexe Low Carbon Transportation is available at www.climatebonds.net to lines with very heavy loads, and at the opposite end of the scale, group UIC 9 corresponds to lines 2. ICMA: International Capital Market Association. with very light loads. The main lines of the French railway network are in UIC groups 1 to 4. The major lines 3. bit.ly/GBond2016 with lighter loads fall under UIC groups 5 and 6. The lines with low loads in the UIC groups 7 to 9 correspond 4. bit.ly/GBondSPO to the regional network in general. 5. bit.ly/GBondOekom 7. More details page 40/41.

18 SNCF RÉSEAU GREEN BONDS REPORT 2017 19 THE ALLOCATION IN DETAIL TABLE OF ALLOCATIONS

The following table shows In 2017, SNCF Réseau reviewed 2016 2017 the allocation of the issuance the rules for selecting assets eligible To In- To of Green Bonds for 2017 to be financed in the second category Allocation Green Green Allocation INVESTMENTS be vest- be according to the three eligible of the Green Bonds Program: IN MILLION EUROS allocat- ments Bonds Bonds allocat- investment categories. “investments related to new lines ed Scope Scope ed and line extensions”. (2016 Definitions +2017) – “Theoretical allocation”: From 2018, SNCF Réseau will take into MAINTENANCE amount of the projected investments consideration a project’s investments AND UPGRADE 710 593 2 669 1,366 1,959 1,508 451 for 2017 budget. without taking into account any delays in settlement of its grants (acquired Tracks & switches 590 494 1,632 1,025 1,519 1,170 349 – “Green Bonds scope”: grants vs collected grants) to facilitate Signalling 100 83 321 197 280 215 64 amounts of investments actually tracking of net investments over time. Traction power 20 16 173 36 52 40 12 made by SNCF Réseau in each supply infrastructure of the categories as on 31/12/2017. Tunnels, bridges nd 0 195 108 108 83 25 – “Green Bonds allocation”: and Earthworks allocation per categories of the net 0 0 349 0 0 0 0 resources obtained from the issuance Others of Green Bonds until to 31 dec 2017. NEW LINES AND LINES EXTENSIONS 176 0 225 225 225 225 0 – “Yet to be allocated”: amounts of eligible investments in 2017 not allocated LGV Est Phase 2 14 0 6 6 6 6 0 to a Green Bonds issuance and which SEA 73 0 23 23 23 23 0 may consequently be reused in 2018. BPL 53 0 147 147 147 147 0 CNM 36 0 50 50 50 50 0 OTHERS PROJECTS 0 0 0 0 0 0 TOTAL 886 593 2,894 1,591 2,184 1,734 451

Source: SNCF Réseau.

20 SNCF RÉSEAU GREEN BONDS REPORT 2017 21 DESCRIPTION OF THE FUND MANAGEMENT POLICY

For proceeds yet to be allocated The full allocation for the these amounts could be placed 2017 operation was carried out on SRI mutual funds, bank deposit on 24th January 2018. or cash in bank in order to ensure traceability of the fund management policy.

GREEN BOND 2017 TEMPORARY MANAGEMENT OF PROCEEDS (IN M€) & VALUE DATE Net Proceeds 1-Jan-17 30-Mar-17 3-Jul-17 20-Jul-17 1-Aug-17 1-Sep-17 31-Oct-17 1-Dec-17 29-Dec-17 24-Jan-18 Issues 2016 0.34

Issues 2017 994 740 692 92 -391 -391 Monetary funds SRI

Bank deposit 300 -300 300 -150 -150

Cash 0.34 2 -2 348 -200 -148

Sub-Total 0.34 994 -302 740 -200 -148 -150 -391 -150 -391

TO BE ALLOCATED 0.34 994 692 1,432 1,232 1,084 934 543 393 2

Source: SNCF Réseau.

22 SNCF RÉSEAU GREEN BONDS REPORT 2017 23 AUDITORS ASSURANCE REPORT

SNCF Réseau appointed KPMG to give — allocation of proceeds from the Green a independent assurance on selected Bond to the eligible projects mentioned information disclosed in the green bond in paragraph “Table of Allocations” report. on page 21; — the description of the proceeds Extract from the conclusion management policy mentioned in of the KPMG assurance report paragraph “Description of the fund “We believe that the evidence we have management policy” on pages 22 and 23; obtained is sufficient and appropriate — the “Total carbon impact of to provide a basis for our conclusion. the expenses financed by Green Bonds” indicator mentioned in paragraph Based on the procedures performed, “Global overview” on page 34.” nothing has come to our attention that The KPMG assurance report must be causes us to believe that the Verified read in its entirety. It is available on Information is not presented fairly the SNCF Réseau website. in the Annual Report, in all material respects, in accordance with the Guidelines, including with regard to: — compliance of the projects mentioned in paragraph “Table of Allocations” on page 21 with the eligibility criteria defined by SNCF Réseau in its Green Bond Framework;

24 SNCF RÉSEAU GREEN BONDS REPORT 2017 25 05 SNCF Réseau REPORTING AND has developed a specific method METHODOLOGY for measuring OF THE the impact of its rail network renewal GREEN BONDS and line creation policy, in terms PROGRAMME of greenhouse gas emissions INDICATORS and protection of resources.

26 SNCF RÉSEAU GREEN BONDS REPORT 2017 27 MAP OF PROJECTS FINANCED 2017 ALLOCATION INDICATOR TABLE BY THE GREEN BOND 2017 ISSUE

CATEGORIES INDICATORS RESULTS

INVESTMENTS GREENHOUSE GASES (GHG) EMITTED IN MAINTENANCE, AND AVOIDED EMISSIONS MODERNISATION AND – Greenhouse Gas emissions

ENERGY EFFICIENCY due to the renewal project 657 ktCO2eq PROJECTS CONCERNING – Greenhouse Gas emissions avoided

THE RAIL SYSTEM thanks to the renewal project 6,329 ktCO2eq

PROTECTION OF RESOURCES – Share of re-used and recycled rails (tons) 100% – Share of re-used ballast (tons) 30 to 50% – Volume of wooden sleepers recycled for energy purposes 67,753 tons

INVESTMENTS RELATED GREENHOUSE GAS (GHG) EMISSIONS TO NEW LINES – Greenhouse Gas emissions

AND LINE EXTENSIONS due to the project 80 ktCO2eq

– Emissions avoided 277 ktCO2eq

PROTECTION OF RESOURCES – Number of hectares compensated 6,430 – Number of wildlife crossings created 1,253

OTHER INVESTMENTS LINKED The category is to be expanded as it groups several TO THE GLOBAL CLIMATE CHANGE projects that are less significant in terms of amounts, CHALLENGES, THE PROTECTION but important for the overall corporate strategy. OF BIODIVERSITY AND NATURAL RESOURCES

High-speed line UIC line 1 to 4 Electrified line Other line Projects relating to: Tracks, including “Suite Rapide” Installation of signalling/centralised network command Switches Engineering works and earthworks Catenaries New lines and their junctions

28 SNCF RÉSEAU GREEN BONDS REPORT 2017 29 In order to calculate the carbon impact For Narbonne-Montpellier’s carbon DETAILED REPORT of all projects financed using Green footprint, the emission factor used Bonds, SNCF Réseau extrapolates values for the sleepers is the sum of emissions PER CATEGORY per million euros invested rather than from steel (0.7%) and concrete (99.3%). calculating the impact of each individual The decision to adopt the emission project. factors for reinforced concrete increases

In order to highlight the positive – the calculation of the carbon footprint the value to 80.6 tCO2/million euros consequences of the projects financed consists of establishing a summary Several extrapolation ratios (per million if we compare both carbon audits. by its issuance of Green Bonds, of Greenhouse Gas emissions resulting euros invested) are therefore established SNCF Réseau wished to quantify from a line renewal or creation project3, to calculate both the carbon footprint Rails: Generally, the underlying the impact of these projects in the fight according to existing carbon analysis and avoided carbon emissions for assumption regarding the proportion against greenhouse gas emissions. methods. renewal projects, as well as for new line of recycled steel was 20%. The specific To achieve this, SNCF Réseau, – the calculation of the emissions avoided and extension projects. value for Narbonne-Montpellier’s carbon in collaboration with Carbone 41, by a line renewal or creation project accounting was 5%, however, although has drafted a specific methodology2 consists of comparing the emissions from These ratios are subject to revision the 20% figure has been retained that establishes the principles the transport system in both scenarios, each year based on studies conducted for the 2016 Green Bonds Report. and method used to calculate one without the execution of the project, by SNCF Réseau. The new calculation, based on the last the carbon impact of these projects. and the other with it. carbon audit, assumes 15% recycled Since 2015, SNCF Réseau has conducted steel in the rails. The carbon impact is obtained by As defined in the methodology, an initial carbon audit of track renewal comparing the carbon footprint the carbon impact of projects financed projects using a mobile workshop known Calculation of the catenary ratio (emissions resulting from the by Green Bonds is calculated as a “Suite Rapide” (90km between is mainly based on a life cycle analysis. project) with the emissions avoided by subtracting avoided emissions Narbonne and Montpellier). It has also In order to take into account

(during the project operation phase): from emissions generated by projects. identified necessary measures to reduce CO2 emissions relating to the energy GHG emissions and created a tool to used for installation, organization assess the emissions of similar projects. of the worksite as well as the transport CARBON of materials required for the site, FOOTPRINT In 2017, the track renewal projects the EFTI ratio is based on the carbon ratio was amended by taking accounting data used for track renewal IMPACT into consideration the last track renewal projects. OF RENEWAL PROJECTS project carried out between Gevrey and Sennecey. This ratio rose from In 2018, SNCF Réseau will establish ® EMISSIONS 361 tCO2 / million euros to 456 tCO2 / a new Bilan Carbone specifically AVOIDED million euros. The increase of 95 tCO2 / for switch renewal projects. SNCF million euros is the result of a more currently allocates the same carbon CARBON IMPACT OF THE PROJECTS accurate valuation for certain phases weighting to this type of operation FINANCED BY of the track renewal process, as well as as it does to a track renewal operation. THE GREEN BOND changes to some emission factors, This Bilan Carbone® will distinguish mainly concerning the concrete sleepers. between a switch renewal operation CARBON and a track renewal operation FOOTPRINT Prestressed concrete sleepers: by applying a ratio of tCO2 / million IMPACT OF THE Currently there is no emission factor euros specific to switch renewal DEVELOPMENT OF NEW RAIL LINE data for prestressed concrete sleepers. projects. PROJECTS For Gevrey-Sennecey’s carbon footprint, SNCF Réseau has used available EMISSIONS data for reinforced concrete. AVOIDED

1. Carbone 4 is an independent consulting firm specialised in low carbon strategy and adaptation to climate change. 2. This methodology is available at -reseau.fr/fr/finance-durable 3. The scope of this summary covers all direct and indirect emissions upstream and downstream of the works carried out, but does not cover the operation and maintenance of the infrastructure in question.

30 SNCF RÉSEAU GREEN BONDS REPORT 2017 31 CATEGORY 1 CATEGORY 2 INVESTMENTS INVESTMENTS RELATED IN MAINTENANCE, TO NEW LINES MODERNISATION AND LINE EXTENSIONS AND ENERGY EFFICIENCY PROJECTS OF THE RAIL SYSTEM

CARBON IMPACT OF THE RENEWAL EXPENSES FINANCED CARBON IMPACT OF DEVELOPMENTS AND NEW LINES BY GREEN BONDS PROJECTS EXPENSES FINANCED BY THE GREEN BONDS

Traction Tunnels, TOTAL TOTAL Tracks Switches power Signalling bridges Est 2 BPL SEA CNM supply and EXPENSES FINANCED infra- Earth- BY GREEN BONDS 2017 6 147 23 50 225 structure works (€M) EXPENSES FINANCED CARBON FOOTPRINT (IN THOUSAND TONS OF CO EQ) BY GREEN BONDS 2017 (€M) 980 189 40 215 83 1,508 2 ... ALLOCATED TO

CARBON FOOTPRINT (IN THOUSAND TONS OF CO2EQ) EXPENSES FINANCED 358514 80 BY THE GREEN BONDS ... ALLOCATED TO EXPENSES FINANCED 447 86 4 82 38 657 AVOIDED EMISSIONS (IN THOUSAND TONS OF CO EQ) BY THE GREEN BONDS 2 ... ALLOCATED TO

AVOIDED EMISSIONS (IN THOUSAND TONS OF CO2EQ) EXPENSES FINANCED 2 99 30 145 277 BY THE GREEN BONDS ... ALLOCATED TO EXPENSES FINANCED 4,219 814 183 753 359 6,328 CARBON IMPACT (FOOTPRINT – AVOIDED EMISSIONS. IN THOUSAND TONS OF CO EQ) BY THE GREEN BONDS 2 ... ALLOCATED TO

CARBON IMPACT (FOOTPRINT - AVOIDED EMISSIONS) (IN THOUSAND TONS OF CO2EQ) EXPENSES FINANCED 0.7 – 41 – 25 – 131 – 197 BY THE GREEN BONDS ... ALLOCATED TO EXPENSES FINANCED – 3,772 – 728 – 179 – 671 – 332 – 5,671 AVERAGE CARBON BY THE GREEN BONDS NEUTRALITY TIME 7.4 YEARS OF NEW LINE PROJECTS AVERAGE CARBON NEUTRALITY TIME 4 YEARS OF REPAIR PROJECTS

Details of calculations, assumptions, estimations and extrapolations, as well as source data with their years, are available in the SNCF Methodological Guide “Evaluating the carbon impact of a Green Bonds programme dedicated to investors in railway infrastructure” available at www.sncf-reseau.fr

32 SNCF RÉSEAU GREEN BONDS REPORT 2017 33 GLOBAL OVERVIEW ONE STEP FURTHER

The total carbon impact allocated to Therefore, in total, the expenses All of the documents related expenses financed by the Green Bonds financed by the Green Bonds 2017 to this Green Bonds programme 2016 is obtained by adding: reduce the GHG emissions (Green Bonds Framework, - the carbon impact allocated to of the transport system by 5.9 million Second Party Opinion, Climate Bonds expenses financed by Green Bonds tons equivalent CO2. Initiative certification, presentation for the renewal projects (category 1); of Green Bond investors, etc.) are - the carbon impact allocated to expenses The carbon impact of the SNCF Réseau available on the SNCF Réseau website, financed by Green Bonds for new rail Green Bonds 2017 is equivalent to in the section “SRI/Green Bonds”: line projects (category 2); the carbon footprint of approximately sncf-reseau.fr/fr/finance-durable 12,000 French citizens over forty years. All the information concerning the SNCF Réseau CSR policy TOTAL CARBON IMPACT OF THE EXPENSES FINANCED is available on the dedicated pages of the SNCF Réseau website: BY GREEN BONDS AS ON 31 DECEMBER 2017 sncf-reseau.fr/fr/a-propos/ developpement-durable RENEWAL PROJECTS - 5,671,700 T CO EQ 2 The SNCF Réseau responsible activity report (2017) is available at NEW RAIL LINE PROJECTS - 196,900 T CO EQ 2 flipbook.sncf-reseau.fr/rar-2017 TOTAL - 5,868,600 tCO eq 2 The SNCF Réseau Green Bonds programme methodology is available here: sncf-reseau.fr/fr/ressources/ publications-financieres/methodologie- carbone-sncf-reseau

All the CSR reports, indicators, and methodologies can be accessed on the dedicated page “Reports and indicators”: sncf-reseau.fr/fr/rapports-et-indicateurs

34 SNCF RÉSEAU GREEN BONDS REPORT 2017 35 DISCLAIMER This document is being furnished to you solely for your information on a confidential basis and may not be reproduced, redistributed or passed on, in whole or in part, to any other person.

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36 SNCF RÉSEAU GREEN BONDS REPORT 2017 37 SNCF-RESEAU.FR