SRI funds continued to grow in 2018, with an upwards trend compared to the last 5 years. Enel’s share capital includes 169 Socially Responsible Investors (5.6% more compared to 2017), who hold about 10.5% of total Enel shares outstanding (8.6% in 2017), equal to 13.7% of the free float (11.3% in 2017).
SRI FUNDS EVOLUTION ON ENEL’S SHARE CAPITAL
Analysts and international ESG rating agencies continually monitor Enel’s sustainability performance, selecting the Group and main companies in the most important international sustainability indexes. By applying different methodologies, analysts assess Group performance regarding environmental, social and governance topics that may be significant for the financial community. For this reason, ESG assessments are considered a strategic tool to support investors and identify the risks and opportunities of their investment portfolio, in terms of sustainability, contributing to the development of active and passive sustainable investment strategies.
In the past year, Enel maintained or improved its score and ranking in most ESG ratings and sustainability indexes, achieving some important results, infloat cluding:
- its ranking in the top 10% of leading electric utilities in the Dow Jones Sustainability Index (DJSI) for the fifteenth straight year, reaching sixth position. Moreover, four companies in the Group were included in at least one of the DJSI indexes (Enel SpA, Endesa, Enel Américas, Enel Chile) for the first time – a result never achieved by any other company in the world;
- second position in the conventional electrical sector of the FTSE4Good index, achieved by the Spanish company of the Group, Endesa, and fourth position in the Vigeo Euronext index, in the utilities sector;
- positioning in the seventh percentile of the utilities sector for the new ESG risk assessment methodology developed by Sustainalytics.
In 2018, these ratings acknowledged Enel’s strong commitment to lead transition towards a low-carbon energy model, thanks to the development of renewables, a reduction in conventional thermal capacity and the launch of innovative, sustainable solutions anticipating customers’ expectations. Enel also excels in other fields focused on responsible business management, such as ethical business, human rights, labor relations, non-discrimination, transparent disclosure, engagement with local communities, environmental strategy and biodiversity.
Nevertheless, according to these ESG raters and their assessment methodologies, Enel should continue to advance on the implementation of specific market leading practices, some of which regard issues related to corporate governance and human capital development.
Moreover, most rating agencies conduct stakeholder media analysis to identify business activities with a potential operational or reputational risk associated with relative environmental and social impacts. Although Enel’s performance is better than that of the industrial sector in which it is active, some rating agencies pinpointed a few specific activities concerning the Company’s business that could be potentially critical. However, some of these activities at risk refer to projects already abandoned by the Group, such as the HidroAysén and Neltume projects, even though they will remain in the ratings for the next 2/3 years. Other activities refer to projects to develop new operating assets or new business activities, such as the hydroelectric plant at Bocamina or the consortium between Enel Green Power and Nareva to develop wind plants. For further information and details on activities engaging local communities with regard to these two projects, see the chapter “Communities and value sharing”.