Enel promotes transparency in its climate-change disclosures and works to demonstrate to its stakeholders that it is tackling climate change with diligence and determination. Enel has therefore publicly committed itself to adopting the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) of the Financial Stability Board, which in June 2017 published specific recommendations for the voluntary reporting of the financial impact of climate risks. The Group is also taking on board the “Guidelines on reporting climate-related information” published by the European Commission in June 2019, which, together with the TCFD recommendations and the GRI Standard, constituted the main framework for the Group’s reporting on climate change issues in 2020.
The Enel Group is committed to implementing a business model that is consistent with the objectives of the Paris Agreement (COP21) to contain the average increase in global temperature by 2100 below 2 °C compared with pre-industrial levels and to continue to limit this rise to 1.5 °C.
Furthermore, Enel, as a signatory of the “Business Ambition for 1.5 °C” campaign promoted by the United Nations and other institutions, is committed to setting a long-term goal to achieve net zero emissions along the entire value chain by 2050 and to pursue evidence-based targets in all relevant areas consistent with the criteria and recommendations of the Science Based Targets initiative (SBTi).
In 2020, Enel’s decarbonization roadmap was updated to capture the acceleration in the spread of renewables and the reduction in thermal generation capacity envisaged in the new 2021-2023 Strategic Plan and in the 2030 ambitions presented on the 2020 Capital Markets Day, setting the following objectives in line with the Paris Agreement:
|Greenhouse gas (GHG) reduction target|
This acceleration in the reduction of greenhouse gas emissions is also a response to the appeal of the Intergovernmental Panel on Climate Change (IPCC) as part of its effort to strengthen the global response to the climate change threat. Included in the IPCC special report, the appeal warns of the impacts of global warming of 1.5 °C above pre-industrial levels and the related global greenhouse gas emission pathways.
From scenario to strategic decisions
The Group develops short-, medium- and long-term scenarios for the energy industry and for macroeconomic and financial conditions in order to support its strategic and industrial planning and the evaluation of investments and extraordinary corporate transactions. The role of climate change in these scenarios is increasingly important in terms of:
- acute phenomena (heat waves, flooding, hurricanes, etc.) and their potential impact on industrial assets;
- chronic phenomena related to structural changes in the climate, such as the rising trend in temperatures, rising sea levels, etc., which can bring about changes, for example, in the output of generation plants and in electricity consumption profiles in the residential and commercial sectors;
- transition of the various industrial and business sectors towards a green economy characterized by ever lower emission levels for climate changing gases.
The issues connected with future trends in climate variables (in terms of acute and chronic phenomena) define the so-called “physical scenario”, while the issues associated with the industrial and economic transition towards solutions to reduce atmospheric concentrations of CO2 are the characteristic elements of the “transition scenario”. The scenarios are constructed within an overall framework that ensures consistency between climate projections and transition assumptions and can be used to evaluate the phenomena identified in the short, medium and long term.
The adoption of these scenarios and their integration into corporate processes takes account of the guidelines of the TCFD and enables the assessment of the risks and opportunities connected with climate change. For this reason, the Group has established an ongoing dialogue and collaborative relationship with experts in the field of climate change, such as the International Centre for Theoretical Physics (ICTP) in Trieste. In addition, the Group has equipped itself to manage high resolution post-downscaling climate scenarios and has activated dedicated projects to develop the skills necessary to translate the complexity of climate modeling into useful information for understanding its local effects on the business and supporting strategic decisions.
The acquisition and processing of the large volume of data underlying the scenarios, and the identification of the methodologies and metrics necessary to interpret complex phenomena at very high resolution, require a continuous dialogue with both external and internal sources. To this end, the Group works with a platform approach, deploying tools that guarantee sound and accessible information. The process that translates scenario phenomena into useful information for industrial and strategic decisions can be summarized in five steps: