Global trends such as decarbonization, electrification, urbanization, and digitalization are redesigning the energy industry in the direction of a new ecosystem that is gradually transforming the traditional model of the utility business.
It is therefore necessary to promote the fight against climate change, one of the primary challenges we face as a society, by promoting a global low-carbon economy. As stated by the World Economic Forum in its 2019 Global Risk Report, climate change is now the leading risk to society and will have a direct impact on long-term business performance.
Therefore, combating climate change and protecting the environment are among the responsibilities of a major global player in the energy industry such as Enel as we seek to achieve the full decarbonization of electricity generation by 2050, thereby helping to achieve the United Nations’ SDG 13. We are also committed to developing a business model that is aligned with the objectives of the Paris Agreement (COP21) to maintain the average global temperature increase well below 2 °C compared with preindustrial levels and to continue with efforts to limit this increase to 1.5 °C within a strategy based on a long-term view translated into practical objectives.
In addition to actions that focus on the generation mix, Enel is active in digitalization, electric mobility, energy efficiency, and innovation. Within this landscape, Enel’s commitment to the circular economy, which unites innovation, competitiveness, and environmental sustainability, engages all areas of the Group in working towards these objectives. Furthermore, Enel is committed to promoting transparency in climate disclosure as a way to demonstrate to its stakeholders that Enel’s ambition to tackle climate change is rigorous and determined. Therefore, Enel has made a public commitment to adopt the recommendations of Report on operations 163 the Task force on Climate-related Financial Disclosures (TCFD) of the Financial Stability Board, which in 2017 published specific recommendations on the voluntary reporting of the financial impact of climate risks.
As a result, within the scope of implementing these guidelines, Enel has updated the information concerning the management of climate-related issues. As such, this section has been structured around the four areas recommended by the TCFD, which represent the fundamental components of how organizations operate:
- Governance - Description of the role of Enel’s system of corporate governance with regard to climate-related issues and the role of management in assessing and managing such issues;
- Strategy - Overview of the main climate-related risks and opportunities over the short, medium and long term, as well as of the various physical and transition scenarios considered and the company’s strategy developed to mitigate and adapt to these risks and to maximize opportunities;
- Risks - Description of the process adopted by the Group to identify, assess and manage climate-related risks and opportunities (a section that is complementary to the section on the main risks and uncertainties);
- Metrics and targets - The main climate-related metrics used by Enel, including greenhouse-gas emissions and operational and financial indicators, together with the main targets set in order to promote a low-carbon business model.
Enel is playing a leading role in the energy transition and has adopted a business model that focuses on reducing the impact of climate change. Within this view, Enel is committed to promoting a sustainable energy model aimed at achieving full decarbonization and digitalization while enhancing the electrification of energy demand in order to promote the growth of a low-carbon economy. Enel’s organizational model and corporate governance establishes specific roles and responsibilities for the main governance bodies within the organization, thereby ensuring that climate-related risks and opportunities are given due consideration in all relevant decision-making processes.
Climate-related responsibilities of the governance bodies
Board of Directors - The Board of Directors of Enel SpA is responsible for analyzing and approving company strategy, including the Group’s annual budget and Business Plan, which include the primary objectives and actions that the company intends to pursue in order to guide the energy transition and deal with climate change. The Board of Directors also guides and evaluates the internal control and risk management system (“SCIGR”), while also determining the level and nature of risk that is compatible with the strategic objectives of the company and of the Group. The ICRMS is the set of rules, procedures, and organizational structures aimed at identifying, measuring, monitoring and managing the main risks of the company and its subsidiaries. These risks include those that could have an impact on the organization’s sustainability over the medium to long term, including climate-related risks. In 2018, the Board of Directors dealt with issues related to climate change and sustainability, as reflected in company strategies and operations, during 8 of its 18 meetings held.
The Board is supported mainly by two internal committees with regard to climate-related issues:
- Corporate Governance & Sustainability Committee - This Committee is responsible for assisting the Board of Directors in evaluation and decision-making processes related to sustainability issues, including climate-related issues connected with the company’s business, as well as the company’s interactions with stakeholders. The Committee examines the guidelines of the sustainability plan, including the climate-related targets of the plan, and also examines the general layout of the Sustainability Report and the Non-financial Report, including the approach to climate-related disclosures adopted for these documents, and provides opinions to the Board of Directors. The majority of the Committee is composed of independent directors, and, in 2018, it comprised the company Chairman, who acted as chairman of the Committee, and two independent directors. In 2018, the Committee dealt with issues related to climate change and sustainability, as reflected in company strategies and operations, during 4 of its 6 meetings held;
- Control and Risk Committee - This Committee supports the Board in carrying out its duties with regard to internal control and risk management. It also examines the consolidated financial statements, the Sustainability Report, 164 Annual Report 2018 and the Non-financial Report within the scope of their relevance to the internal control and risk management system (“SCIGR”), all of which include climate-related disclosures, and issues related opinions to the Board of Directors for the purposes of approval of these documents. The Committee is composed of non-executive directors, the majority of which (including the chairman) are independent. In 2018, the Committee was made up of four independent directors. In 2018, the Committee dealt with issues related to climate change and sustainability, as reflected in company strategies and operations, during 8 of its 13 meetings held.
Again in 2018, the company organized a specific induction program aimed at providing the directors with a sufficient understanding of the fields in which the Group operates, including climate-related issues and their impact on business strategy and company operations.
Chairman - Within the role of guiding and coordinating the efforts of the Board of Directors, as well as overseeing implementation of the Board’s resolutions, the Chairman plays a proactive role in the approval and monitoring of business and sustainability strategies, of which growth by way of low-carbon technologies and services is one of the pillars. In 2018, the Chairman also led the Corporate Governance & Sustainability Committee.
CEO and General Manager - This person is vested with broad powers of company management, with the exception of those powers reserved to the Board of Directors, and, in execution of these powers, has established a sustainable business model by defining strategies aimed at guiding the transition to a low-carbon energy model. This position reports to the Board of Directors regarding the execution of these powers, including business-related activities in line with Enel’s commitment to dealing with climate change. The CEO is also the appointed senior officer responsible for the ICRMS. Finally, the CEO represents Enel in various initiatives related to climate change and hold important positions in institutions of global renown, such as the United Nations Global Compact, the United Nations Sustainable Energy For All, and the multi-stakeholder platform of the European Commission regarding the Sustainable Development Goals.
Enel’s organizational model for managing climate-related issues
Enel has a management team in which climate-related responsibilities have been assigned to specific functions that help guide Enel’s leadership in the energy transition. Each area is responsible for managing the climate-related risks and opportunities of relevance to that area:
- Holding company functions (i.e. Administration, Finance & Control; Audit; Innovability; and Health, Safety, Environment & Quality) are responsible for analyzing the scenarios and for managing the strategy and financial planning process aimed at promoting renewable energy, the decarbonization of the energy mix, asset digitalization, and the electrification of energy demand;
- Global service functions (i.e. Procurement and Digital Solutions) are responsible for implementing sustainability and climate change related criteria in supply chain management and fostering the development of digital solutions to support the implementation of technologies enabling the fight against climate change;
- Global Business Lines (i.e. Enel Green Power; Thermal Generation; Trading; Infrastructure & Networks; and Enel X) are responsible for developing activities related to the promotion of renewable energy generation, the optimization of thermal capacity, the digitalization of the electric grid, and the development of enabling solutions in the energy transition and the fight against climate change (e.g. electric mobility, energy efficiency, efficient lighting and heating systems);
- Regions and Countries (i.e. Italy, Iberia, Euro-Mediterranean Affairs, South America, North and Central America, Africa, Asia and Oceania) are responsible for promoting decarbonization and guiding the energy transition towards a low-carbon business model within their areas of responsibility. The Europe & Euro-Mediterranean Affairs function is responsible for defining the Group’s position on climate change, for low-carbon policies, and for the regulation of international carbon markets within Europe
In addition, Enel has established the following two management committees chaired by the CEO, the responsibilities of which include climate-related issues:
- the Group Investments Committee: this Committee approves investments related to business development. The Committee is also responsible for ensuring Report on operations 165 that all investments are fully in line with the Group’s commitment to promoting a low-carbon business model and achieving full decarbonization by 2050. The Committee is made up of the heads of Administration, Finance & Control; Innovability; Legal & Corporate Affairs, and Procurement, as well as the regional heads and the heads of the various Business Lines;
- the Group Risks Committee: the objective of this Committee is to ensure that the organizational structures involved in managing operating risks are in line with business strategies and objectives, while engaging management in strategic decisions concerning risk policy, management and control
The incentive system related to climate change
The company’s remuneration policy includes various mechanisms aimed at making progress towards the energy transition, and specifically:
- a short-term variable component (or MBO) that may include objectives related to the specific function of each manager involved. This may, for example, include objectives tied to the development of renewable energy for managers within the Enel Green Power Global Business Line, or related to products and/or services for the energy transition within the Enel X Global Business Line;
- a long-term variable component that, beginning in 2018, includes a climate-related target for the reduction of CO2 emissions per kWheq for the Enel Group over the next three years, which accounts for 10% of total longterm variable remuneration.
Strategic planning, value creation, and climate change
Enel is committed to adopt a strategy based on meeting the objectives of the Paris Agreement (COP21). By way of strategic planning and risk management integrated with sustainability and climate-related issues, the Enel Group has created sustainable value over the long term. Over the last four years (2015-2018), the Group has increased profitability while achieving objectives related to decarbonization, digitalization, and customer service. The Group’s Strategic and Business Plan 2019-2021 (the Plan) calls for continuing along this virtuous path based on a long-term view and the achievement of a series of predetermined objectives.
|Renewables||Renewable capacity (% of total)||41%||46%||55%|
|CO2||CO2 emissions (kg/kWheq)||0.409||0.369||0.345|
|Retail free-market customers||Milions||17||22||36|
|New businesses||Gross margin (billions of euro)||-||0.5||0.9|
|Simplification||Group earnings to total earnings (%)||64%||72%||71%|
|Cash generation||FFO - Gross investment (billions of euro)||1.8||2.5||4.4|
|Remuneration of shareholders||Dividend per share (€)||0.16||0.28||0.36 (1)|
(1) Dividendo minimo garantito (floor).
The Group’s commitment can also be seen in the objectives pursued in relation to the United Nations’ Sustainable Development Goals (SDGs), specifically: inclusive and equitable quality education (SDG 4); access to clean, affordable energy (SDG 7); inclusive and sustainable economic growth (SDG 8); industry, innovation, and infrastructure (SDG 9); and sustainable cities and communities (SDG 11). Enel is working to achieve the full decarbonization of electricity generation by 2050, in line with the objectives of the Paris Agreement and with the science-based targets, while also helping to achieve the United Nations’ SDG 13.
Our model of value creation is based on a long-term vision that aims to take advantage of opportunities in the energy transition in three main areas: (i) the decarbonization of our generation capacity (increase of about 11.6 GW in the Group’s renewables capacity8 and decrease of about 7 GW in thermal capacity by 2021 compared with 2018); (ii) infrastructure development (+10% of electricity distributed over the distribution network in 2021 compared with 2018; 3.4 million lamps by 2021; some 455,000 public and private electric vehicle recharging points by 2021) and new customer services (9.9 GW of demand response by 2021; 173 MW of distributed storage installed per year by 2021) at the service of electrification and urbanization; and (iii) the digitalization of assets, customers, and human capital (€5.4 billion in investment for the period 2019-2021).
Climate-change reference scenarios
The Group develops financial and macroeconomic scenarios over the short, medium and long term to support both business and strategic planning and the investment evaluation process. This makes use of economic and statistical models progressively integrated with climaterelated data by introducing projections related to physical and transition scenarios in order to have a broad and consistent view of the landscape both in countries in which the Group has a presence and in those of potential interest. Forecasts of the main variables are constantly compared against the most authoritative international sources.
The Group has taken two physical scenarios representing two distinct, extreme pathways of concentrations of greenhouse gases (GHGs) developed by the Intergovernmental Panel on Climate Change (IPCC) in order to include the most extreme pathways of those that are plausible:
- Representative Concentration Pathway 2.6 (RCP 2.6): a climate-change scenario consistent with limiting global warming to below 2 °C by 2100 (mean of +1 °C over the period 2081-2100 based on the IPCC Fifth Assessment Report);
- Representative Concentration Pathway 8.5 (RCP 8.5): a business-as-usual scenario that represents the most pessimistic forecast of containing GHGs, resulting in a mean temperature increase of 3.7 °C over the period 2081-2100.
In order to study the effects of climate change and related transition scenarios, the Group has entered into a collaboration with the International Centre for Theoretical Physics (ICTP) concerning the geographical downscaling of global climate scenarios. Downscaling enables detailed forecasts at a greater resolution so as to track the business impact of a series of relevant variables, such as temperature, rain levels, snow levels, solar radiation, and wind. This approach produces a model that integrates climate change with the other country-level variables, starting with the countries of greatest relevance to the Group and then extending out to global coverage. Integration of the scenario analyses with climate-related variables will result in an increasingly important tool supporting informed strategy and operating decisions.
The initial results of the scenario analysis and climate data have shown that significant, chronic changes will take place gradually over the coming decades.
Changes compared with historical trends will be gradual, with limited effects in both scenarios until 2050, but with more extreme, chronic effects under RCP 8.5 from 2050 to 2100 compared with historical trends and RCP 2.6. Studies of Europe and South America have pointed to a general increase in temperature with a greater impact in southern Europe and in Central and South America and of particular intensity by 2100. In these areas, rainfall levels could significantly decline after 2050 under RCP 8.5 forecasts, but could increase in northern Europe (e.g. Scandinavia). Differences in solar radiation patterns, on the other hand, could be more significant beginning in 2100 in the regions most exposed to a significant reduction in rainfall, whereas wind patterns could experience less homogeneous variations.
Regarding the transition scenario definition, the Group refers to the leading international sources, such as the International Energy Agency (WEO Sustainable Development Scenario; WEO Current Policies Scenario; ETP 2017 2 °C Scenario 2DS; Beyond 2 °C Scenario B2DS), the International Renewable Energy Agency (Reference case, Remap case), and Bloomberg New Energy Finance (BNEF New Energy Outlook).
This approach enables Enel to associate a series of assumptions and variables to the potential climate-related scenarios, including pathways to develop a scenario consistent with the Paris Agreement (COP21). The transition scenario include variables such as demand for energy and services or assumptions about electrification, the use of electric vehicles, and the prices of commodities and CO2 . In order to reach this objective, a sharp reduction in emissions from power generation, high renewable energy source penetration, and the use of effective policy mechanisms and measures with regard to carbon pricing are expected. Within this landscape, we are also expecting an increase in energy efficiency, and in the electrification of industrial and residential consumption as well as in the transport industry. This transition towards lower carbon emissions and efficiency in the use of energy could lead to a gradual uncoupling of economic growth and the consumption of resources and, consequently, to lower demand and lower prices for fossil fuels.
Description of climate-related risks and opportunities
The Group’s strategy and positioning ensure resilience and adaptation as well as mitigation capabilities with respect to the evolution of the external context associated to climate change, thanks to a strategy, a business model, and a position of leadership that are aligned with the Paris Agreement (COP21) and which are centered around the axes of sustainability and flexible growth of utilities:
- world leader among private-sector operators in terms of installed capacity in renewable energy (about 43 GW);9
- world leader among private-sector operators of distribution networks in terms of customers served (some 73 million);
- world leader among private-sector operators in terms of retail power and gas customers (about 70 million);
- approximately 6 GW of demand response managed worldwide.
Risks and opportunities are described by taking into account the physical and transition scenarios and with the support of the various components of long-term strategy assessment described in the section on risks (e.g. materiality analysis, ESG risk analysis, competitive analyses, etc.).
The Group is working to gradually integrate the models of scenario analysis and strategic planning with climate models in order to establish more accurate relationships between the climate scenarios themselves, the macroeconomic landscape, the energy scenarios, and business fundamentals.
The information presented below is the result of a preliminary impact analysis that, by assessing the potential long-term effects (beyond 2030) and analyzing the Group’s portfolio over the period of the Strategic Plan (2019-2021), associates sensitivity analyses of operational and industrial phenomena related to physical and transition variables
With regard to the risks and opportunities associated with physical variables, and taking the IPCC pathways as points of reference, we analyzed the trends in the following variables and associated operational and industrial phenomena with potential risks and opportunities: (i) change in mean temperatures and potential increase and/or decrease in energy demand; (ii) change in mean rainfall and snow levels with a potential increase and/or decrease in hydroelectric generation; (iii) change in mean solar radiation and wind with a potential increase and/or decrease in solar and wind generation. In addition to chronic trends, the frequency and impact of these events have been looked at in terms of extreme events potentially resulting in unexpected physical damage to assets. However, work to perfect these analyses is ongoing. According to the scenarios used, significant, chronic changes in the variables analyzed, even in the event of increases, would have a material impact mainly over the long term.
By integrating financial strategy with sustainability and innovation, the Group has already implemented a series of actions aimed at mitigating potential risks and taking advantage of opportunities related to physical variables, such as the digitalization plan aimed at, inter alia, implementing systems and plans of preventive maintenance and, in particular, resilience plans for the infrastructures of the electrical grid. Enel is also active throughout the electricity value chain (i.e. generation, distribution and sales) and has a diversified portfolio of assets, in terms of both generation technologies (with a marked increase in renewables, especially wind and solar) and the markets and geographi9 Includes operated capacity. 168 Annual Report 2018 cal areas in which we operate, thereby minimizing climaterelated risks and their overall financial impact.
The Group also adopts the best strategies of prevention and protection in order to reduce the potential impact on the communities and territories surrounding our assets. All areas of the Group are subject to ISO 14001 certification, and the potential sources of risk are monitored by way of internationally recognized environment management systems (EMSs).
As for the risks and opportunities associated with transition variables, and based on the various scenarios mentioned above in combination with the various factors involved in the identification of risks (e.g. the competitive landscape, the long-term outlook for the industry, materiality analyses, etc.), we analyzed the trends in the following drivers and related potential risks and opportunities: (i) prioritizing the phenomena of greatest relevance in terms of climate change; (ii) distinguishing between the short term (less than 3 years), medium term (3-5 years), and long term (beyond 5 years); and (iii) connecting these drivers to the TCFD recommendations for the classification of risks and opportunities.
Short-term risks and opportunities and strategic actions of mitigation and adaptation:
- introduction of laws and regulations for getting through the transition and the Paris Agreement introducing stricter emission limits and/or altering the generation mix not driven by price signals;
- increasing focus within the financial community on ESG issues with potential future benefits in terms of the availability of capital, which is also tied to financial sustainability, and of new products and markets (e.g. green or other sustainable bonds);
- technological maturity and full competitiveness of renewable energy, both large-scale and small-scale, with positive effects on return on investment.
Medium-term risks and opportunities and strategic actions of mitigation and adaptation
- use of more efficient means of transport from the point of view of climate change, particularly with regard to the development of electric vehicles and recharging infrastructures;
- development and/or expansion of (new) assets (e.g. storage) and/or low-carbon services (e.g. Energy-as-aService) in response to technological progress and shifts in investment from the supply side to the demand side of energy in order to move beyond the Paris Agreement with benefits in terms of new revenue opportunities;
- use of low-carbon sources of energy as the mainstream segment of the energy mix in countries with opportunities to develop renewable resources and with flexibility in their electricity and energy systems with positive impacts in terms of return on investment and new business opportunities;
- increase in the level of competition and convergence of opportunities from diverse fields with opportunities to access new markets, services and/or partnerships or for the entry of new players into the energy industry;
- regulatory changes with a view to integrating new digital and renewable technologies and to driving infrastructure resilience with potential benefits in terms of introducing new mechanisms of remuneration tied to environmental performance and innovation.
Long-term risks and opportunities and strategic actions of mitigation and adaptation:
- uncertainty and volatility in business drivers (e.g. macroeconomics, energy, climate, etc.) that are growing and persistent as new paradigms, with effects on price indicators, on the cost of raw materials and technologies, on the value of assets, and on reputation;
- gradual increase in the decentralization of the energy and electricity industries with a shift towards distributed technologies and resources, which leads to new business and investment opportunities with a focus on the customer and on the needs of infrastructures.
By integrating financial strategy with sustainability and innovation, the Group has already implemented a series of actions aimed at mitigating potential risks and taking advantage of opportunities related to transition variables. Of particular note are the main actions concerning the energy and climate transition:
- a decarbonization strategy for power generation, resulting in a reduction of thermal fossil fuels of over 6 GW from 2015 to 2018 and an increase of about 6 GW in renewable sources to bring carbon-free power generation to 51% of the total and emissions to 0.36 kgCO2 /kWheq. The Plan calls for a further reduction of 7 GW in thermal generation by 2021 and the addition of 11 GW of renewable energy, which would bring carbon-free generation to 62%;10
- financial strategy aimed at integrating ESG issues, leading to a sustainable approach to debt management, including by issuing green bonds – with Enel having issued three green bonds for a total of €3.5 billion – and collaboration with leading international development banks and financial institutions (e.g. the World Bank, the European Investment Bank (EIB), and other banks dedicated to regional development);
- strategy to develop renewable energy, both on a large scale with the Enel Green Power Business Line with an IRR/WACC spread of around 150 bps and with the Enel X Business Line by developing distributed solutions for large and small customers;
- strategy to develop electric mobility and new services with the Enel X Business Line, which, as of 2018, has about 3 MW of installed distributed storage and manages some 2.5 million lamps, 49,000 public and private electric vehicle recharging points, and more than 4 million property units connected to the fiber-optic network. The 2019-2021 Business Plan calls for bringing annual installed storage to 173 MW, lamps to 3.4 million, recharging points to 455,000, and property units connected to the fiber-optic network to 8.5 million;
- strategy to develop renewable-energy PPAs with players in various industries, as well as a series of technology and other strategic partnerships supported by innovation efforts that take advantage of a global network of innovation hubs created to develop technology startups of the greatest potential and to transform ideas into business solutions;
- plan for the digitalization of assets, of customers, and of human capital, which reached around €1.5 billion in 2018. The plan calls for a total investment of €5.4 billion;
- investment plan focused entirely on the transition to renewable energy and related networks and customers. From 2015 to 2018, about €8 billion has been invested annually, over 90% of which dedicated to low-carbon products, goods and/or services and, therefore, to the energy transition. The plan calls for maintaining this level of investment and of focus on climate change.
The Group’s integrated risk management system
In the performance of our operations, which encompass a diverse range of countries, markets and industry segments, Enel is exposed to various types of risks over the short, medium and long term (e.g. commodity risk, financial risks, and strategic risks, including in relation to climate change). In order to effectively deal with events that could lead to risks and opportunities, Enel has adopted an internal control and risk management system (“SCIGR”). This system consists of the set of rules, procedures, and organizational entities aimed at identifying, measuring, monitoring and managing the main corporate risks within the Group. More specifically, the SCIGR seeks to safeguard company capital and ensure the efficiency and effectiveness of corporate processes, the reliability of information provided to the corporate bodies and to the market, and the compliance with laws, regulations, as well as with the corporate bylaws, and internal procedures.
Given the importance of identifying, monitoring and managing the climate-related risks that could have an impact on achieving company objectives, the Board of Directors is committed to developing guidelines to ensure that decisions at all levels of the Group are consistent with risk appetite.
To this end, the Board has established a Control and Risk Committee to provide support in making decisions concerning approval of the Business Plan and of financial reporting. This Committee also provides the Board of Directors with opinions concerning the system of internal controls and risk management guidelines so that the main risks of Enel SpA and its subsidiaries – including any risk that may affect the sustainability in a medium/longterm perspective – are properly identified, measured, managed and monitored.
The Group also has specific internal committees composed of senior management that are responsible for governing and overseeing risk management, monitoring and control.
Identifying risks and opportunities
The identification of risks and opportunities within the Group’s business and strategic planning process is designed to manage short-term (less than 3 years), the medium-term outlook (3-5 years), and the revision of long-term ambitions (beyond 5 years).
Medium- and long-term planning starts with a strategic assessment of the external landscape and climate-related issues, which involves the following activities:
- macroeconomic, energy and climate scenario analysis - a series of global and local analyses and forecasts to identify the main macroeconomic, climate and energyrelated drivers over the short, medium and long-term horizon;
- competitive landscape analysis - a set of analyses to compare financial and operating performance as well as environmental, social and governance (ESG) performance of competitors and players of other sectors in order to monitor, guide and support the Group’s competitive advantage and leadership position;
- Industry view - an overview of the macro-trends affecting the business environment and impacting an assessment of the Group business through an extensive internal and external collaborative approach;
- strategic dialogue - an ongoing process of engaging the Board of Directors, management, and employees in the definition of strategies. This process ensures that there is agreement as to the Group’s priorities;
- analysis of ESG risks - analysis to identify the potential ESG risks to which the Group may be exposed, due to geographical distribution and operations; it is conducted based on an analysis of external studies such as the World Economic Forum’s Global Risk Report, studies by leading ESG investment analysts, and internal studies such as materiality analyses or due diligence concerning human rights;
- ESG landscape analysis and materiality assessment - Enel conducts ESG and materiality analyses using an approach that takes account of the guidelines based on numerous international standards (e.g. Global Reporting Initiative, UN Global Compact, SDG Compass, etc.) with the goal of identifying and assessing priorities for stakeholders and correlating them with the Group’s strategy
Assessing risks and opportunities
Enel is committed to setting up and structuring periodical monitoring and assessment processes of risks and opportunities associated both with physical variables trends, related to acute and chronic climate-related events, and with transition scenarios related to changes in the socioeconomic landscape and in laws and regulations concerning the fight against climate change.
For the ex ante assessment of risk levels, a Plan risk analysis, including exposure to climate-related factors, will be presented each year to the Control and Risk Committee. With regard to ex post monitoring, the various risk factors, including the main climate-related variables that could have an impact on the Group’s objectives and operations, will be periodically evaluated and revised.
These activities will be undertaken starting from 2019, while at the operational level there are already processes in place to monitor the risk of damage to assets and infrastructures caused by climaterelated extreme events or natural disaster, as well as the consequent risk of prolonged unavailability of such assets.
Managing risks and opportunities
Consistently with the Strategic Plan, the Business Lines submit investment proposals for approval to the relevant Investments Committees, composed of Business Line senior management. Moreover, the Group Investments Committee approves investments above a certain threshold or concerning particularly innovative projects.
The Investments Committee approval is based on a joint assessment of both return and risk aspects. The risk assessment includes a quantitative analysis of economic, financial and operational risk factors and a qualitative analysis of all risk categories in order to determine the potential impact on the investment return and the appropriate mitigation efforts. The units responsible for developing each project identify the specific factors that could influence the expected return on investment, including certain environmental and climate-related risks (e.g. an increase in the frequency of extreme environmental and climate-related events and changes in national laws and regulations regarding the fight against climate change). The Group is committed to further developing the investment analysis framework to explicitly include an assessment of each project contribution to the improvement of the Group’s climate resilience.
Metrics and targets
The following metrics and targets are used to measure and manage the risks and opportunities connected with climate change.
Main climate change indicators
|Generazione da fonte rinnovabile (incidenza % sul totale)||39,5||32,7||6,8||-|
|Generazione a zero emissioni (incidenza % sul totale)||49,1||43,3||5,8||-|
|Potenza efficiente netta certificata secondo lo standard ISO 14001 (incidenza % sul totale)||98,5||99,0||(0,5)||-0,01%|
|Rendimento medio parco termoelettrico (%) (1)||40,1||40,7||(0,6)||-|
|Emissioni specifiche di CO2 dalla produzione complessiva (kg CO2/ kWheq) (2)||0,369||0,411||(0,042)||-10,2%|
|Fabbisogno specifico di acqua per produzione complessiva (l/kWheq) (3)||0,38||0,44||(0,06)||-13,6%|
|Prelievo di acqua in zone water stressed (%) (4)||12||9||3||-|
|Produzione con consumo acqua in zone water stressed (%) (4)||8||8||-||-|
|Emissioni dirette di gas serra - Scope 1 (mln teq)||94,80||105,51||(10,71)||-10,2%|
|Emissioni indirette di gas serra - Scope 2 (mln teq) (5)||1,09||1,19||(0,10)||-8,4%|
|Altre emissioni indirette di gas serra - Scope 3 (mln teq) (5)||6,78||7,14||(0,36)||-5,1%|
|Totale consumi diretti di combustibile (Mtep)||37,0||41,3||(4,3)||-10,4%|
|Prezzo di riferimento della CO2 (euro)||13,0||5,3||7,7||-|
|EBITDA per prodotti, servizi e tecnologie low carbon (miliardi di euro) (6)||14,5||13,4||1,1||8,2%|
|CAPEX per prodotti, servizi e tecnologie low carbon (miliardi di euro) (6)||7,5||7,6||(0,1)||-1,3%|
|Incidenza CAPEX per prodotti, servizi e tecnologie low carbon sul totale (%) (6)||89,0||88,9||0,1||-|
(1) Le percentuali sono state calcolate secondo la nuova metodologia che non considera gli impianti O&G italiani in fase di dismissione/marginali. I valori non tengono in considerazione il consumo e la generazione per la cogenerazione relativa al parco termoelettrico russo. Il valore medio di rendimento e calcolato sugli impianti del parco ed e pesato sui valori di produzione.
(2) Le emissioni specifiche sono calcolate considerando il totale delle emissioni da produzione termoelettrica semplice, combinata di energia elettrica e calore, rapportate al totale della produzione rinnovabile, nucleare, termoelettrica semplice, produzione combinata di energia elettrica e calore (compreso il contributo del calore in MWh equivalenti).
(3) A seguito dell’adozione del nuovo GRI 303, da quest’anno il valore finora indicato come consumo specifico viene indicato come fabbisogno specifico. Con fabbisogno si intende il quantitativo complessivo di acqua prelevata, comprensivo del riutilizzo dei reflui, necessario al funzionamento della centrale. Il fabbisogno specifico da produzione complessiva e calcolato considerando il totale dei consumi di acqua da produzione termoelettrica semplice, combinata di energia elettrica e calore, nucleare, rapportato al totale della produzione termoelettrica semplice e combinata di energia elettrica e calore (compreso il contributo del calore in MWh), rinnovabile e nucleare. Non rientra in questo valore il prelievo di acqua utilizzata per il raffreddamento a ciclo aperto, che viene poi restituita al corpo idrico originario. Relativamente al 2018, il valore di fabbisogno di prelievo di acqua ha subíto una variazione dovuta a un cambio nel criterio di rendicontazione adottato nel settore nucleare, dove l’acqua di raffreddamento restituita al corpo idrico recettore non viene piu contabilizzata, al pari di quanto gia operato per tutti gli impianti che adottano un sistema di raffreddamento “a ciclo aperto”. Sulla base del ricalcolo, nel 2017 i prelievi complessivi di acqua per processi produttivi sono pari a 112,2 milioni di m3.
(4) Il World Resources Institute (WRI) ha definito “water-stressed area” una zona per la quale la disponibilita di acqua pro capite annua risulta inferiore a 1.700 m3.
(5) Emissioni di “Scope 2”: la stima delle emissioni indirette di CO2 relative al 2018 dovute ai consumi elettrici delle attivita di distribuzione di elettricita, movimentazione del combustibile, estrazione del carbone, gestione immobiliare e all’energia elettrica acquistata da rete dagli impianti idroelettrici e effettuata come prodotto dei consumi elettrici, per i rispettivi coefficienti ponderati di emissione specifica dell’intero mix di generazione dei Paesi in cui il Gruppo Enel opera (fonte: Enerdata - https://www.enerdata.net/). A seguito di un cambio di metodologia, il dato relativo al 2018 comprende anche l’energia acquistata dalla rete per il pompaggio degli impianti idroelettrici. La quota di emissioni relativa alle perdite di rete per l’energia elettrica consumata e stata inclusa nello Scope 3, e non piu nelle Emissioni di Scope 2. Il dato relativo al 2017 e stato ricalcolato. “Scope 3”: la stima delle emissioni indirette di CO2 relative al 2018 e provenienti dal trasporto del carbone via mare e effettuata a partire dal quantitativo trasportato (equivalente al 69,5% del totale del carbone utilizzato), prendendo in considerazione navi Panamax con portate di 67.600 tonnellate, che coprono distanze medie di 700 miglia marine percorse in 22 giorni di crociera, con un consumo di 35 tonnellate al giorno di olio combustibile, e un coefficiente di emissione di 3,2 kg di CO2 per ogni litro di olio bruciato, considerando anche i tre giorni di sosta per lo scarico cui e associato un consumo di 5 tonnellate di olio combustibile. La stima delle emissioni indirette di CO2 provenienti dal trasporto ferroviario del carbone e effettuata a partire dal quantitativo trasportato (equivalente al 30,5% del carbone utilizzato) e prendendo in considerazione treni con portate di 1.100 tonnellate, che coprono distanze medie di 1.400 km con un consumo di 6,9 kWh/t per ogni 100 km trasportati e un coefficiente di emissione medio di Enel nel mondo. La stima delle emissioni indirette di CO2 provenienti dal trasporto dei materiali di consumo, olio combustibile, gasolio, biomassa solida, CDR (Combustibile Derivato da Rifiuti) e rifiuti e effettuata, a partire dai quantitativi trasportati di materie prime, prendendo in considerazione autocarri con portate di 28 tonnellate, che coprono distanze medie (di andata e ritorno) di 75 km con un consumo di 1 litro di gasolio per ogni 3 km percorsi e un coefficiente di emissione di 3 kg di CO2 per ogni litro di gasolio bruciato.
Il dato e una stima approssimata delle emissioni fuggitive di metano (CH4) del carbone importato e utilizzato dal Gruppo Enel per la produzione termoelettrica. Il dato non tiene conto delle emissioni dovute al trasporto di lignite. In seguito al nuovo approccio metodologico i dati relativi al 2017 sono stati ricalcolati. La quota di emissioni relativa alle perdite di rete per l'energia elettrica consumata e stata inclusa nello Scope 3, e non piu nelle Emissioni di Scope 2.
(6) Nella categoria di “prodotti, servizi e tecnologie low carbon” sono considerate le Linee di Business: Enel Green Power, Infrastrutture e Reti, Enel X e Mercato (per l’80%, escludendo il gas).
Net efficient generation capacity by primary energy source
|Potenza efficiente netta termoelettrica:|
|- ciclo combinato (CCGT) (1)||17.244||17.251||-7||-|
|- olio combustibile/gas (1)||10.027||10.078||-51||-0,5%|
|Potenza efficiente netta nucleare||3.318||3.318||-||-|
|Potenza efficiente netta rinnovabile:|
|- biomasse e cogenerazione||42||57||-15||-26,3%|
|Potenza efficiente netta complessiva||85.620||84.917||703||0,8%|
(1) Dato ricalcolato sulla base di una riclassificazione degli impianti TG.
Net efficient generation capacity by geographical area
|Nord e Centro America||3.826||3.533||293||8,3%|
|Potenza efficiente netta complessiva||85.620||84.917||703||0,8%|
Net electricity generation by primary energy source
|Energia elettrica netta prodotta da fonte termoelettrica:|
|- ciclo combinato (CCGT)||38.134||44.381||(6.247)||-14,1%|
|- olio combustibile/gas||24.832||26.855||(2.023)||-7,5%|
|Energia elettrica netta prodotta da fonte nucleare||24.067||26.448||(2.381)||-9,0%|
|Energia elettrica netta prodotta da fonte rinnovabile:|
|- biomasse e cogenerazione||108||108||-||-|
|Energia elettrica netta prodotta complessiva||250.339||249.876||463||0,2%|
In addition to the targets indicated in the “Strategy” section, the following additional targets are linked to the fight against climate changes.
Net electricity generation by geographical area
|Nord e Centro America||12.433||9.793||2.640||27,0%|
|Energia elettrica netta prodotta complessiva||250.339||249.876||463||0,2%|
|Nord e Centro America||12.433||9.793||2.640||27,0%|
|Energia elettrica netta prodotta complessiva||250.339||249.876||463||0,2%|
In 2018, Enel had an installed capacity of 85.6 GW, up about 0.7 GW compared with 2017 following the entry into service of new renewable plants. More specifically, the increase is attributable to new wind farms in the United States and solar plants in Mexico. The additional capacity installed in 2018 amounted to 2.7 GW, mainly in North, Central and South America. The difference between the overall increase in the Group’s capacity and the new renewable capacity is due to the fact that during the year some renewable plants left the Group’s scope of consolidation as part of the BSO (Build, Sell and Operate) process.
Generation in 2018 came to 250 TWh, unchanged compared with 2017. However, overall generation showed a change in the production mix, with a reduction in thermal generation offset by greater output from renewable sources, mainly hydroelectric but also wind and solar. As a consequence, the electricity generated by Enel in 2018 from zero-emission sources amounted to about 49% of the total, a considerable increase compared with 2017.
With a view to reducing its environmental impact, the Group has set itself the goal of achieving specific CO2 emissions of less than 0.35 kg/kWheq by 2020. This objective is in line with the target set for 2030, the year in which the Group plans to have reduced specific CO2 emissions to 0.23 kg/ kWheq. Absolute CO2 emissions showed a marked decrease compared with 2017 thanks to the significant reduction in the Group’s net thermal generation, in particular from coal and combined-cycle plants. In 2018, specific CO2 emissions (0.369 kg/kWheq) were 10% lower than the previous year (0.411 kg/kWheq). Specific atmospheric emissions of SO2 and NOX also declined by about 11% and 9% respectively. Dust fell steeply (-37%) compared with 2017, mainly due to work to improve the dust abatement system in Russia, and, secondarily, lower thermal generation from coal in Italy and Spain.
The objectives that Enel has set itself as part of the strategy to tackle climate change also include certain assumptions such as a reference price for CO2 of €18 in 2021 and enable us to forecast, inter alia:
- EBITDA from low-carbon products, services and technologies11 of €17 billion in 2021;
- CAPEX for low-carbon products, services and technologies of €7.7 billion in 2021;
- a ratio of CAPEX for low-carbon products, services and technologies to total capex of 90.1% in 2021.
11 “Low-carbon products, services and technologies” include the Business Lines of Renewable Energy, Infrastructure and Networks, Enel X and Sales (80%, excluding gas).