The determination of the Group’s strategy is based on multiple factors, beginning with an evaluation of the external environment and its evolution. In particular, the following analyses are performed:
- an analysis of macroeconomic, energy and climate scenarios: assessments and projections at the global and local levels to identify the main macroeconomic, energy and climate drivers in the short, medium and long term;
- competitive landscape analysis: a comparison of the economic, financial, industrial, ESG (Environmental, Social & Governance) performance of companies in the utilities sector and other industries (for example, automotive, technology, oil & gas) in order to monitor, shape and support the Group’s competitive advantage and leadership position;
- industrial vision: an overview of the macro-trends in new technologies affecting the company’s business, with an assessment of the potential impacts on the Group’s business based on a broad internal and external collaborative effort to identify actions to prevent, adapt to and manage disruption and changes in our business.
The analysis of what is happening and what could happen in the external environment underpins the phase of designing our strategic options and consequent positioning and planning, which is structured into the following main activities:
- strategic dialogue: the definition of the Group’s strategy is based on a continuous process of active dialogue throughout the year, through which the issues relevant for the evolution and growth of the Group are identified, analyzed, discussed and addressed. This dialogue is part of a strategic design phase, where communication between executives in different businesses makes a valuable contribution to developing new strategic options, with an emphasis on the need for cultural or organizational change and synergies between businesses. This process, which is coordinated at the Group level, first involves the identification of topics through consensus among top managers and approval by the CEO. The next phase of the strategic dialogue process involves the structuring of working groups with all the professional expertise necessary for the proper analysis of each topic. They prepare dedicated workshops or strategic options to be discussed. This process enables the correct definition of the opportunities associated with each specific topic (including any operational, economic or financial impacts) and the eventual roadmap for implementing the necessary initiatives. These outputs are then discussed by top management in dedicated meetings. These meetings include one special event, called Top Team Offsite, usually scheduled in June, where the most relevant topics are discussed by all top management. Following this meeting, some of the conclusions are incorporated in the Group’s long-term planning, then become part of the storytelling and are presented to the Board of Directors at the Strategic Summit, usually organized in October in order to agree the annual update of the Strategic Plan. This type of framework enables adequate governance of the treatment of strategic issues, while at the same time ensuring swift identification of emerging trends and the necessary cross-business involvement for a complete analysis of complex and interdependent issues in the presence of an organizational structure based on the Country/Business Line/staff matrix;
- strategic planning process: this process, which is driven on an ongoing basis by feedback from the strategic dialogue, transforms the information to be processed into quantitative models in order to obtain an overview of the industrial, economic and financial evolution of the Group, supplemented by possible extraordinary transactions and active portfolio management operations. The evaluation of strategic options over a time horizon extends beyond that used in industrial planning, with (i) the definition and the quantitative and qualitative development of alternative macroeconomic, energy and climate scenarios against which overall strategy can be assessed, and (ii) analysis based on stress testing for various factors, including the evolution of the industrial sector, technology, competitive structure and policies;
- long-term positioning: the analyses and decisions described in the previous points generate information for long-term positioning on multiple topics and the assessment of ambitions and targets for the Group;
- analysis of ESG factors and assessment of materiality in the field of sustainability: the method Enel uses to perform ESG and materiality analysis was developed on the basis of the guidelines set out in numerous international standards (for example, the Global Reporting Initiative, UN Global Compact, SDG Compass, etc.), with the aim of identifying and evaluating priorities for stakeholders and correlating them with Group strategy (for more information, please see the materiality analysis in the “Basis of Presentation” chapter).
The strategy of the Enel Group has proven its ability to create sustainable long-term value, integrating the themes of sustainability and close attention to climate change issues while simultaneously ensuring a steady increase in profitability.
The Group is among the leaders guiding the energy transition through the decarbonization of electricity generation and the electrification of energy consumption, which represent opportunities both to increase value creation and to contribute positively to more rapid achievement of the Sustainable Development Goals set by the United National (SDGs) in the 2030 Agenda.