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Sustainability Plan 2017-2019

We are seeing major transformations in our reference framework, which are taking place ever more quickly and offer the energy sector new challenges and opportunities. They are interconnected changes which are reflected in a new global scenario characterized by a technological and digital revolution, by growth in the population and its expectations, in a context of climate change and pressure on the use of natural resources.

In a world which is growing in terms of its energy needs, there is ever greater penetration of electric vehicles. Energy consumption is increasing but with still more than 1 billion people who do not have access to energy or have limited access.

Renewables are the energy source which is growing most strongly, while the others are stable or falling slightly. Distributed generation plays an increasingly important role and in this context electricity networks, both for transmission and distribution, are ever more important and various industrial sectors are converging on them, thus de facto changing the competitive context.

So it is increasingly important not only to be aware of and anticipate technological developments, but also what society around us wants, thus ensuring that communities understand and share the strategy and investments which a large group such as Enel can provide.

In relation to this context, Enel has identified some key emerging risks:

  • cyber security, which represents an essential element in the digital transformation plan. Enel has developed a strategy aimed at protecting information, assets and emerging technologies (for example IoT). In this context a dedicated unit has been created and a new operating framework has been defined in order to unify management of the issue with a risk based strategy and to disseminate Security by Design practices, launching training and awareness-raising projects; 
  • the paradigmatic change in the world of energy and the transformation in utilities’ business model. New macroeconomic and energy trends, technologies and key players can potentially support and disintermediate the traditional business model of utilities, in particular the combination of factors linked to digitalization and decentralization and changes in customer needs. Enel’s strategy and the “Open Power” vision are the reference framework to respond to the challenge of the transition towards becoming the utility of the future.

The main trends, the emerging risks, the stakeholder engagement, and Enel’s strategy all enable the preparation of Enel’s priority matrix (the so-called materiality analysis). The matrix, which has been prepared in accordance with the guidelines of the most common international standards, such as the Global Reporting Initiative (GRI), represents the priorities among the issues of interest to stakeholders, cross-checking them with the industrial strategy and with the Group’s priority actions (see the chapter “Defining priorities”).

In order to respond in a sustainable and flexible way to this context, Enel’s business model is based on a Strategic Plan broken down into four main pillars from the industrial and the Environmental, Social and Governance (ESG) viewpoints. These pillars are flanked by digitalization and customer focus as levers to promote further growth and efficiency.

The overall Investment Plan for 2017-2019 is 20.9 billion euro, of which 60% is investment for growth. In mature markets, which are characterized by the increasing presence of renewable sources and distributed generation, a key element will be the development of a modern distribution network open to multiple uses and services. In emerging markets, the challenge is to satisfy electricity demand in economies where economic growth, an increasing population and urbanization are driving their development. Our presence in over 30 countries enables us to offer technologically more advanced solutions, promoting social development and guaranteeing high safety standards.

In addition, the commitment will continue to achieve the targets for the four United Nations Sustainable Development Goals (SDG 4, 7, 8 and 13) which were taken on in September 2015.

The people who work in Enel are at the heart of the process to adapt to the context and are the key to achieving Enel’s objectives. The process of cultural change will be at the centre of the human resource strategy in coming years, together with both the promotion of policies and actions on diversity and inclusion and instruments to measure the company climate and valorize performance.

Additional capacity using renewables of 6.7 GW is planned for the next three years, including both managed and consolidated assets. The addition of a “Build, Sell and Operate” (BSO) model with low capital impact will enable a reduction in risks and an acceleration in the creation of value, enabling Enel to capitalize its backlog of renewable projects more quickly. This, in addition to a plan to reduce thermal capacity, will take Enel further down the path in its move towards total decarbonization of the mix by 2050.

The Plan envisages significant digitalization of assets in the networks and retail sectors, as well as of customers and people who work in the company. In this context, the key are smart meters, remote control and system connectivity.

In particular, on the networks it is planned to install 18 million new meters, 12 million of which will be replacements, which will bring the number of smart meters installed globally to over 48 million in 2019. This growth in digitalization will be accompanied by precise assessments of the cyber security risks and definition of the related actions globally.

The offer of new services, the growth in the number of customers on the free market following the planned end of the regulated market in Italy and further liberalization expected in Latin America, and the increasing customer focus are further elements for growth. The new value added services and digitalization will enable the promotion of economic, environmental and social sustainability, through more aware consumption, attention to the vulnerable segments of society, access to energy, by promoting smarter use of resources and greater attention to the environment.

REFERENCE SDGSMAIN ACTIONSTARGETS

Engaging the local communities

 

Access to energy

3 million beneficiaries, mainly in Africa, Asia and Latin America by 2020

Social and economic development

1.5 million beneficiaries* by 2020

Quality education

0.4 million beneficiaries by 2020

*Target updated compared to 500 thousand initial beneficiaries

REFERENCE SDGSMAIN ACTIONSTARGETS

Engaging the people we work with

 

Performance appraisal for employees who have been working in the company for at least 3 months

100% of people* involved in 2020
99% of people* assessed in 2020
94% of people* interviewed (for feedback) in 2020

Climate survey

100% involvement of people* in 2020
84% participation of people* in 2020

Implementation of diversity and inclusion policy

The selection process must guarantee a fair gender representation in the pool of candidates (50% by 2020)

Promotion of "safe travel" culture

100% of countries where present by 2020

*Eligible and reachable: those who are part of the workforce and have been working for at least 3 months in the year of assessment and those who can access the online or printed questionnaire

REFERENCE SDGSMAIN ACTIONSTARGETS

Aiming at operating efficency and innovation

 

Innovation in infrastructure on broad scale: storage, electric cars, smart grids and smart meters

+18 million smart meters rolled out in the 2017-2019
period

Ultra-broad band deployment in Italy

250 municipalities and 9.5 million homes by 2020

Promoting global partnerships and supporting high potential start-ups

Selection of 40 new innovative start-ups for development projects by 2020

Promoting actions in line with the UN "Making Cities Resilient" campaign

400 municipalities by 2020

REFERENCE SDGSMAIN ACTIONSTARGETS

Decarbonization of the energy mix

 

Development of renewable capacity

~+8 GW of additional renewable capacity in the 2017-2019 period

Reduction of thermal capacity

-10.3 GW in the 2017-2019 period

Specific CO2 emissions reduction

<350 g CO2/kWheq by 2020 (-25% base year 2007)

Environmental retrofitting of selected plants

~500 million euro of investment in the 2017-2020 period

REFERENCE SDGSMAIN ACTIONSTARGETS

Customer focus

 

Acquisition of new customers on free market

+15.7 million customers in the 2017-2019 period

New energy efficiency solutions and dissemination of new products and services

-

Initiatives for the promotion of responsible consumption

-

REFERENCE SDGSMAIN ACTIONSTARGETS

Digitalization

 


Investments in digitalization (assets, customers, people)

4.7 billion euro in the 2017-2019 period

Cover of web applications exposed to Internet with advanced cyber security application solutions

100% of web applications protected through advanced cyber security solutions by 2019

Establishment of Enel CERT* and accreditation with national CERTs

Accreditation in 8** countries by 2018

Dissemination of the culture of IT security and change in people's conduct in order to reduce risks15 cyber security knowledge sharing events on average each year

*Computer Emergency Readiness Team
**Italy, Spain, Romania, Argentina, Brazil, Peru, Colombia, Chile

REFERENCE SDGSMAIN ACTIONSTARGETS

Occupational health and safety

 

Global awareness-raising programs on prevention and health promotion

17 in the 2017-2020 period

Continuous improvement in controls on safety and on site inspections

120 Extra Checking on Site (ECoS) planned in 2020

REFERENCE SDGSMAIN ACTIONSTARGETS

Sound governance

 

Issue of Board of Directors' diversity policy

In 2017

Attaining ISO 37001 certification "Anti- bribery Management System" for Enel SpA and extension to the main Italian companies

In 2017

Due diligence on Human Rights

Risk assessment and remedy (in 2017)

REFERENCE SDGSMAIN ACTIONSTARGETS

Environmental sustainability

 

Reduction of SO2 specific emissions

-30% by 2020 (vs. 2010)

Reduction of NOx specific emissions

-30% by 2020 (vs. 2010)

Reduction of particulates

-70% by 2020 (vs. 2010)

Reduction of water specific consumption

-30% by 2020 (vs. 2010)

Reduction of waste produced

-20% by 2020 (vs. 2015)

REFERENCE SDGSMAIN ACTIONSTARGETS

Sustainable supply chain

 

% of approved suppliers evaluated for safety aspects: introduction of evaluation criteria for health and safety aspects for the main product groups

100% by 2019

% of approved suppliers evaluated for environmental aspects: introduction of evaluation criteria for environmental aspects for the main product groups

100% by 2019

% of approved suppliers evaluated for human rights or business ethics aspects for the main product groups

100% by 2019

REFERENCE SDGSMAIN ACTIONSTARGETS

Economic and financial value creation

 

Reduction of cash cost

~7% in the 2017-2019 period

Growth EBITDA

4 billion euro in the 2017-2019 period

Growth investments

12.4 billion euro in the 2017-2019 period