2020 Integrated Management Report

REPSOL Group 2 0 2 0 Integrated Management Report Translation of a report originally issued in Spanish. In the event of a discrepancy, the Spanish language version prevails About this Report | Management Report The Repsol1, as a further show of its commitment to transparency, has drawn up a Management Report that Management integrates both financial and non-financial information, specifically information on sustainability. This report is Report intended as the cornerstone of the Group's annual public reporting. This Management Report faithfully presents the Repsol Group’s business, results and financial position, together with a description of the main risks and uncertainties it faces, and the approach set out in the Strategic Plan. It also provides information on Sustainability, including the Environmental, Social and Governance (ESG) areas. The report not only complies with applicable legal requirements2 but is aligned with best practice and, in particular, with the recommendations of the “International Integrated Reporting Framework” of the International Integrated Reporting Council (IIRC), the “Guía para la Elaboración del Informe de Gestión de las Entidades Cotizadas” of the CNMV, Spain's securities market regulator, and the European Commission Guidelines on non-financial reporting (methodology for reporting non-financial information) (2017/C 215/01). Preparation of The financial information included in this document, unless expressly indicated otherwise, has been prepared information in accordance with the Group’s reporting model described in Note 4 “Business information”3 of the 2020 consolidated financial statements. Some of the financial indicators and ratios are considered Alternative Performance Measures (APMs) in accordance with the European Securities Markets Authority (ESMA) Guidelines4. The report must be read together with the 2020 Consolidated Financial Statements, which have been filed along with this Report with the CNMV (www.cnmv.es) and are also available at www.repsol.com. The information relating to the Sustainability indicators is presented in accordance with the Global Reporting Initiative (GRI)5 using the "comprehensive” option. Appendix IV "GRI Index" contains a list of the Sustainability indicators included throughout the report, in other public reports released by the Company, or reported in Appendix III "Additional Sustainability Information." These indicators, together with the additional information required by Law 11/2018, comprise the Statement of Non-Financial Information, the content of which is set out in Appendix V “Statement of Non-Financial Information”. Sustainability figures and indicators have been calculated according to corporate rules that specify the criteria and common methodology to be applied to labor, environment, human rights and social issues that is described in detail in each of its sections. This information is verified by an external auditor (PwC), according to ISAE 3000 (Verification report available atwww.repsol.com ). Additionally, in 2020 the Report voluntarily includes indicators according to the SASB “Sustainability Accounting Standards Board” (Appendix VI). Lastly, the 10 Principles of the United Nations Global Compact have been taken into account in drawing up this information. The forward-looking information contained in this document reflects the plans, forecasts or estimates of the Group's management at the date of their authorization for issue. Such forward-looking information is based on assumptions that are considered reasonable, and cannot be considered as a guarantee of the entity's future performance, in the sense that such plans, forecasts or estimates are subject to risks and uncertainties, meaning that the future performance of the Group will not necessarily coincide with what was initially planned. Mission, Repsol’s mission (its reason for being) is to provide energy to society efficiently and sustainably. vision and Our vision (where Repsol is heading) is to be a global energy company that relies on innovation, efficiency and respect to create sustainable value in the service of societal progress. principles of Repsol has laid down principles of action –“Efficiency, Respect, Foresight and Value Creation”– and a set of action: Company behaviors –“Results-Oriented, Accountability, Cooperation, Entrepreneurial Attitude and Inspiring Leadership”– to make our mission a reality and our vision an attainable challenge. Further information available at www.repsol.com 1. Henceforth, the names "Repsol," "Repsol Group" or "the Company" are used interchangeably to refer to the company group consisting of Repsol, S.A. and its subsidiaries, associates and joint arrangements. 2. Among others, the Spanish Commercial Code, the Consolidated Text of the Spanish Companies Act and Law 11/2018 of 28 December, which amends the Commercial Code, the Consolidated Text of the Companies Act and the Auditing Act as regards non-financial information and diversity, and transposes into Spanish law Directive 2014/95/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups. 3. In 2020, Repsol redrew the scope of its business segments, which are now three: Exploration and Production (Upstream), Industrial and Commercial and Renewables. For more information, see section 4.1. 4. Appendix I, "Alternative Performance Measures", includes the reconciliation between the adjusted figures and those corresponding to IFRS-EU financial information. 5. All GRI standards are followed in their 2016 version, with the exception of the Water (2018), Occupational Health and Safety (2018) and Tax (2019) standards. Management Report | Message from the Chairman Dear shareholders, Message In a matter of months, the COVID-19 virus has triggered a global health and economic crisis which in Spain has caused an 11% dip in GDP, according to initial estimates released by the National Statistics Institute, from well above the EU average. It has also given rise to a significant increase in unemployment. Given the sense of despondency that seems to have the Chairman taken hold in society, I would like to convey a message of cautious optimism and assure you that our country has the resources and assets needed to embark on the recovery and build a more resilient economy. Spain must base its recovery on the main strengths of its economy, which include industry. This is one of the country’s most valuable strategic assets, as shown during the lockdown, when companies such as Repsol guaranteed the supply of basic energy products and services for mobility and households. I would like to thank all the employees at our industrial complexes, LPG plants, and service stations, who, like so many others, continued to work on-site during these testing months and helped the company fulfil an essential public service. The hard work carried out during this period has shown once again that industry is part of the backbone of the Spanish economy and is one of its main driving forces. In our country, 80% of private research and innovation is related to industry, which dedicates 2.1% of its Gross Value 1 Message from the Chairman | Management Report Spain needs a broad national pact to promote its industry, which will allow us to strengthen the sector and make it compete at the cutting edge of technology Added to R&D+I, four times more than the services sector. Industry also Public-private partnerships will not only be needed to manage generates quality employment, with 95% of contracts being full-time, these funds. Spanish industry needs the government’s support 81% permanent and salaries between 20% and 25% higher than in the to continue generating wealth, with fiscal policies that recognize services sector. The refining business alone generates 40 billion euros and reward the efforts of companies that invest in creating jobs a year in turnover, while generating 200,000 direct and indirect jobs in and innovation; environmental policies that do not undermine our Spain. industrial competitiveness vis-à-vis industries in countries that are less Yet despite these figures, the reality is that both Europe and Spain demanding in this area; and suitable regulatory frameworks to eliminate have been losing industrial capacity for some time. Spanish industrial the uncertainty that serves only to hinder investment decisions by GDP is 16% and the European average is 19%, compared to 20% and companies. 21% respectively in 1996. As a society, the decline of industry has We must therefore get on the same page and work together to undoubtedly made us more vulnerable, as seen at the beginning of the strengthen our industry. If we succeed, this sector will become one pandemic when European countries encountered serious difficulties in of the main drivers of the economic recovery and job creation, while supplying health equipment. continuing to play a prominent role in the energy transition, another of Therefore, one of the conclusions we can draw from what has happened the great challenges we face as a society. so far during this pandemic is that we need to increase the weight of the Industry, a key element in the energy transition industrial sector within the wider economy by promoting sectors with The industrial sector, to which Repsol belongs, has much to say in the more technology and higher added value, as indeed the European Union energy transition, which is a global challenge involving all governments, has been urging its Member States to do for years. This will allow us companies, and citizens.

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