Enel S p A : Sustainability Report 2020 - Consolidated non-financial statement

OPEN POWER FOR A BRIGHTER FUTURE.

WE EMPOWER SUSTAINABLE PROGRESS.

SUSTAINABILITY REPORT 2020

Consolidated Non-Financial Statement prepared in accordance with Italian Legislative Decree 254/16_year 2020

2020 PARTICIPANT

OPEN POWER FOR A BRIGHTER FUTURE.

FUTURE

SUSTAINABILITY

REPORT

2020

Consolidated Non-nancial Statement prepared in accordance with Italian Legislative Decree 254/16_year 2020

Michele	Francesco
Crisostomo	Starace
Chairman		Chief Executive OŒcer

WE EMPOWER

SUSTAINABLE

PROGRESS.

Le er

to stakeholders

Dear stakeholders,

102-14

A diŒcult year like 2020, dominated by a world health emergency, has catapulted our company into the future, acting as an accelerator of key energy transition related trends: decarbonization, electrication, and digitalization. The most sustainable companies showed the highest levels of •exibility and competitiveness, while maintaining a lower risk prole. It became clear that sustainable progress opens the way to more growth oppo-unities for companies and greater resilience in the face of sudden disruptions, with a lower risk prole for shareholders.

Within this context, at Enel we see innovation and sustainability as inseparable pa-s of the same motive force, while preserving the spirit of service and care for the society in which we operate as critical components of our DNA. We are pa- of the landscape and an essential element in the lives of people, businesses, and society at large. Our journey sta-ed out bringing light to homes and enabling development by making electricity available to businesses. We opened up to new technologies, new pa-nership models, new ways of using energy, thus fully engaging all our stakeholders to create a more sustainable future together.

This approach has allowed us to become the biggest private operator in the renewable energy sector as well as the largest private electricity distribution company with the most advanced level of network digitalization, and to manage the most extensive retail customer base, for energy and gas, of any private company in the world. We generate, distribute, and sell electricity in an ever more sustainable manner, ensuring no one gets left behind. We engage our stakeholders to keep them increasingly in touch with our business, making them an integral pa- of our sustainable business model.

In such a period of change, with all players involved moving at di˜erent speeds and many new variables to contend with, there must be a clear and far-reaching strategic vision as well as planning abilities in line with the UN Sustainable Development Goals. An enduringly sustainable company creates value because its actions and o˜ering are in line with the future demands of the intrinsically sustainable stakeholders of tomorrow. For this reason we decided to release, for the rst time, a 10-year plan clearly describing our long-term vision and the utility company we aim to become in the coming years.

The ongoing decarbonization process means that we will soon sta- using electricity even in all those sectors that currently rely heavily on fossil fuels, fu-her cementing our commitment to digitalization and the search for innovative solutions to electrify end uses. At the same time, our physical infrastructure will become increasingly exposed to climate change related phenomena including •ooding, drought, scorching heat and severe cold. We aim to take on these challenges by increasing the safety and resilience of our plants and networks so we can continue to guarantee high levels of service quality and reliability for our cu- stomers, who are more and more aware that electricity today is the simplest and most natural choice to make a direct personal contribution to a sustainable future.

Innovation and circular economy are emphasized throughout all activities across our value chain, introducing the concept of sustainability sta-ing from the design phase. We will reduce direct CO2 emissions by 80% within 2030 versus 2017 levels, as cer- tied by the Science Based Targets initiative, reaching carbon neutrality within 2050.

The primary actors in our strategy are people, with their innovative skills and digital mindset: they must be given a guarantee of sustainable growth and the adoption of circularity principles. Circularity means enhancing existing potential in new directions by way of reskilling and upskilling programs. A new modus operandi, enhancing relationships, trust, and respect for the talent of each individual, without relaxing our goal-centered focus.

The strategic pa-ners in Enel's growth process include our suppliers, who have displayed quick reactions and an exceptional ability to reorganize in order to meet demands arising during the year-long pandemic. We view our suppliers as fellow travelers as we set out on a path characterized by increasing levels of research into innovation and sustainability in every aspect of our future collaboration.

The result is that today we are applying sustainability-based thinking to all areas of our business, also in the nancial sphere. Our leadership in this area is recognized worldwide thanks also to the Group's presence in various prestigious ratings, indices, and sustainability rankings.

The key elements include sustainability measurement throughout the entire value chain using specic metrics, and the deni- tion of ever more ambitious goals, not merely to document results achieved, but above all to anticipate decisions and develop a proactive stance. An account of sustainability that not only po-rays past events but allows us to travel through time to glimpse the Enel of the future.

By making a joint commitment we can follow a sustainable path that will make our company and surrounding communities more prosperous, inclusive, sustainable, and resilient.

Sustainability Report 2020

ENEL IS OPEN POWER

VI	Open Power
to tackle some
SI	of the world's

ON biggest challenges.

POS

ITI

ON

ING

Open power

				PRI
				NCI
				PLES
				OFCO
				NDU
				CT
PUR	Open power
for a brighter
future.
	PO	We empower
SE	sustainable
progress.

• Make desitions in daily activities and take responsability for them.
• Share information, being willing to collaborate and open to the contribution of others.
• Follow trough with commitments, pursuing activities with determination and passion.
• Change priorities rapidly if the situation evolves.
• Get results by aiming for excellence.
• Adopt and promote safe behavior and move pro-actively to improve conditions for health, safety and well-being.
• Work for the integration of all, recognizing
  and leveraging individual diversity (culture, gender, age, disabilities, personality etc.).
• Work focusing on satisfying customers
  and/or co-workers, acting a˜ectively and rapidly.
• Propose new solution and do not give up when faced with obstacles or failure.
• Recognize merit in co-workers and give feedback that can improve their contribution.

MI

SSI ON

• Open access to electricity for more people.
• Open the world of energy to new tecnology.
• Open up to new uses of energy.
• Open up to new ways of managing energy for people.
• Open up to new pa-nerships.

VA LU ES

>

>

>

>

Trust

Proactivity

Responsibility

Innovation

Sustainability Report 2020

5

INDEX

COMPANY VIEW

AT

A GLANCE

Our sustainable business model	10
and value creation
Covid-19: our response	14
Sustainability governance and	16
our involvement in the leading
associations
Sustainable nance, sustainability	20
ratings and indices
Our priorities	25
and stakeholder
involvement
Our sustainability strategy	32
and contribution to sustainable
development goals

TOPIC VIEW

OUR ESG

PERFORMANCE

Energy transition
Net-zero ambition	38
Electrication,	86
digital and platforms
People centricity
Our people	104
Local and global communities 122
Growth accelerators
Innovation	144
Digital suppo-s	154
and cyber security
Circular economy	168
ESG backbones
Sustainable supply chain	182
Occupational health	194
and safety
Environmental	206
sustainability

TREND		APPENDIX
TOPIC
Tax transparency approach	264	Methodological note and	312
The European taxonomy	284	Independent auditors' repo-
Sustainability statement:	332
Green Bond Repo- 2020	294
pe¥ormance indicators
and suppo-ing notes
	GRI Content Index	374
		SASB Content Index	387
		WEF Content Index	392
		TCFD Content Index	393

Corporate repoing framework

REPORT

AND FINANCIAL

STATEMENTS

OF ENEL SPA

INTEGRATED

ANNUAL

REPORT

SUSTAINABILITY REPORT

Sound governance

234

REPORT	REPORT ON CORPORATE
ON REMUNERATION	GOVERNANCE AND THE
POLICY	OWNERSHIP STRUCTURE

Sustainability Report 2020