Enel

Enel has set multiple targets covering all of its emissions, including both its own electricity generation and purchased electricity for resale. The company has increased the ambition of its targets since the last benchmark assessment, bringing its net-zero year forward to 2040 (from 2050). Enel aims to reach an emissions intensity of 73 grams of CO2 per kilowatt-hour (gCO2e/kWh) from generated and sold power by 2030, equivalent to an almost 80% reduction compared to 2017 levels. All of the company’s targets are sufficiently ambitious to align with a 1.5°C pathway.

Enel is developing multiple business models which will allow it to be profitable in a low-carbon future. The company already has a significant renewables capacity of 54 gigawatts (GW) with plans to add 17 GW by 2025 and around 40 GW between 2025 and 2030. These goals are supported by a mature renewables pipeline of 129 GW. Enel is also investing in energy storage and demand response services to improve flexibility and support a greater proportion of renewable generation on the grid. It plans to increase its battery storage from around 300 megawatts (MW) currently to 4 GW by 2025 and increase behind the meter storage (storage systems on the customer side of the meter) by over 400%.

Enel has reduced its emissions intensity from 2017 to 2022 at a rate sufficient to align with its 1.5°C pathway. It achieved this through an expansion of its renewables capacity, alongside a reduction in its coal capacity. However, based on projections of the company’s current and future assets, it is expected to narrowly exceed its 1.5°C carbon budget for the period 2022-2037. The company is projected to reduce its emissions intensity between 2022 and 2027; however, it will need to exceed this level of emissions reduction in order to remain within its carbon budget and stay on course to achieve its ambitious targets.

Enel has created a transition plan in which it details its intention to increase its renewables capacity, phase out fossil fuels and achieve 100% renewable electricity sales by 2040. The company’s plan is informed by a detailed scenario analysis, including a 1.5°C scenario with results quantified in financial terms as the potential effects on earnings. Enel includes emissions reductions in the long-term incentives for its CEO, accounting for 15% of the total package. However, the company can improve transparency on the planned phase-out of its gas assets and how this decarbonisation lever will contribute to its transition over time.

Enel has committed to achieving net-zero scope 1, 2 and 3 emissions by 2040. By this date, the company intends to have 100% renewable electricity sales and to have entirely phased out its gas sales business. The company also has interim targets to reduce the emissions intensity of its produced and purchased electricity aligned with its 1.5°C pathway. Enel will phase out all coal-fired capacity by 2027.

Enel’s primary decarbonisation lever is significantly growing its renewables capacity while phasing out its fossil fuel capacity. Renewables currently account for around 60% of Enel’s installed energy capacity and the company plans to almost double this to 85% renewable energy capacity by 2030. Enel is also planning to increase its share of purchased electricity from low-carbon sources. Further, it plans to invest in expanding its grid infrastructure and improve grid reliability alongside expanding its battery storage and demand reduction services to ensure flexibility.

Enel’s capital expenditure (CapEx) on low-carbon technologies constituted 82% of its total CapEx in 2022 and the company plans to keep this proportion at a minimum of 80% over the next three years. Enel has a renewables pipeline (including battery storage) with a gross capacity of around 462 GW. The largest share of the company’s new capacity will come from solar energy followed by wind energy. The company engages with its suppliers to stimulate emissions reduction in its supply chain by encouraging innovation and incentivising emissions reductions.

Enel has successfully reduced its emissions intensity from both its own and purchased electricity generation from 2017 to 2022 at a rate sufficient to align with its 1.5°C pathway. The company has established Enel X, which provides energy efficiency and decarbonisation services to clients, including electrification services and the provision of electric vehicle (EV) charging.

Enel has set targets that are aligned with its 1.5°C pathway and has created a detailed transition plan including financial commitments and quantified targets, which outline how the company will achieve its transition. The company has made significant progress in reducing its emissions intensity; however, the rate of decrease has slowed over the last two years. Enel has plans to significantly grow its renewables capacity with a large, mature pipeline and is investing in storage and flexibility technologies to facilitate this increased renewables capacity on the grid. With these investments, the company is in a good position to put its emissions trends back on track.

The company commits to engaging in social dialogue with workers and unions. It also discloses the categories of stakeholders it engages with on a just transition, including workers, communities, suppliers, partners, institutions, government, corporate partners and consumers. However, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. The company incorporates social dialogue and stakeholder engagement in its just transition planning. The company also has time-bound indicators to mitigate the social impacts of the transition on workers. However, no evidence was found that the company has a set of time-bound, measurable indicators to mitigate the social impacts of the low-carbon transition on affected stakeholders and its business relationships.

The company has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. Furthermore, it discloses the actions it takes to create 1,300 jobs with the progressive transition of coal-fired plants. The company also discloses the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups. However, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company has a commitment to re- and up-skill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. Furthermore, the company discloses the measures it takes to embed equality of opportunity for women and vulnerable groups in these actions. It does this through providing upskilling and reskilling practices to enhance the employability of vulnerable workers. However, no relevant disclosure was found of a process for identifying skills gaps for workers and affected stakeholders in the context of the transition.

While the company discloses its contribution to existing social protection systems for workers and affected stakeholders, no evidence that it identifies the impacts of the low-carbon transition on social protection for them. The company contributes to the social protection of workers by providing wage guarantees and health insurance package. However, no evidence that the company contributes to the social protection of affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights. The company also commits to respecting the ILO fundamental rights at work, however, it does not expect its business relationships to respect the same commitment. The company discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks, such as risks connected to bribery practices and to impact on the environment. While the company takes action to mitigate these risks in its own operations and supply chain, no evidence and examples found that it engages with affected stakeholders. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. Moreover, the company has achieved paying all workers a living wage and describes how it works to support the payment of a living wage by its business relationships. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity, including the age and gender of its workforce by employee category. Furthermore, the company commits to gender equality and women’s empowerment.

While the company commits to protecting personal data, no evidence was found of a privacy statement regarding the collection, sharing and access to personal data. The company discloses its global tax strategy and the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. While the company specifies that it does not make political contributions, no evidence was found of the lobbying and political engagement policy. The company discloses its expenditure on lobbying activities.