You are here

Values and pillars of company ethics

  • GRI
    

The Enel Group’s activities are supported by a sound ethical foundation: its constantly evolving nature is aimed at incorporating best practices at the national and international levels. Everyone who works at Enel and for Enel must respect and apply them in their daily activities. This system is based on specific compliance programs, such as: the Code of Ethics, Human Rights Policy, Zero Tolerance of Corruption Plan (ZTC Plan), Enel Global Compliance Program (EGCP), Model pursuant to Italian Legislative Decree 231/01 and other national compliance models that may be adopted by Group companies in accordance with local regulations.

Code of ethics

In 2002, Enel adopted its Code of Ethics, which expresses the commitments and ethical responsibilities it follows in conducting business, by regulating and harmonizing corporate conduct according to standards based on the utmost transparency and fairness towards all stakeholders. The Code of Ethics is valid both in Italy and abroad, while taking into account the cultural, social and economic diversity of the various countries where Enel operates. Specifically, the document is divided into:

  • general principles for stakeholder relations; they define the values that the Group uses as inspiration in carrying out its various activities;
  • criteria of conduct towards each class of stakeholders; such criteria provide the guidelines and standards that Enel people are required to follow to ensure compliance with the general principles and to prevent the risk of unethical conduct;
  • implementation mechanisms that describe the control system designed to ensure compliance with the Code and its continuous improvement.

Enel also requires all affiliates and subsidiary companies, main suppliers and partners to adopt an ethical behavior in line with the general principles of the Code.

Reports by stakeholders

Any violation or suspected violation of Enel Compliance Programs can be reported, including anonymously, through a single platform at the Group level (“Ethics Point”) accessible at the following address: www.enel.ethicspoint.com.

Reports can also be sent by e-mail or regular mail. The Audit Function receives and analyzes these reports, performing the related checks and ensuring uniform treatment at the Group level, in compliance with company policies and local regulations.

The report management process is governed by the whistleblowing policy, “Management of anonymous and non-anonymous reports”, which reiterates the guarantee of anonymity and protection against any form of retaliation and also ensures adequate protection against groundless reports made in bad faith for the purpose of harming people and/or companies.

KPIUM2018201720162018-2017%
Reports received (1)n.144123852117,1
Violations related to incidents of (2)n.303121-1-3,2
Conflict of interest/corruption (3)n.1076342,9
Misappropriationn.7157-8-53,3
Labor practicesn.866233,3
Community and societyn.-1--1-100,0
Other reasonsn.5223-

(1) In 2018, there was an increase in the number of reports received due to the change in the scope of consolidation and internal communication as well as awarenessactivities regarding the use of the Code of Ethics channel.
(2) In 2018, the analysis of reports received in 2017 was completed, and for this reason, the number of confirmed violations for 2017 was restated from 27 to 31. Ofthe 4 confirmed violations, 2 concerned conflicts of interests/corruption and 2 misappropriation.
(3) Corruption consists of the abuse of power with the goal of private gain and can be instigated by individuals in the public or private sector. It is interpreted here asincluding corrupt practices such as bribes, extortion, collusion, conflicts of interest and money laundering.

In 2018, 144 reports concerning the Code of Ethics were received, up on 2017, mainly due to the change in the scope of consolidation in South America and the consequent communication campaigns. From the reports received, 10 episodes of violation were identified in cases of “conflict of interest” for which Enel adopted specific measures against the parties involved, in line with the relevant regulations, which involved 7 actions against employees and 6 actions against contractors. As far as cases related to labor practices are concerned, 38 reports were recorded, of which 8 were found to contain a violation:1 case attributable to bullying, 5 concerning the company climate and 2 concerning health and safety breaches.

Active and passive anti-corrupt management system

In compliance with the 10th Global Compact principle, according to which “companies are committed to combating corruption in all its forms, including extortion and bribery”, Enel intends to pursue its commitment to fighting corruption in all its forms, whether direct or indirect, by applying the principles expressed in the pillars of its anti-bribery management system.

Enel’s Anti-bribery Management System (AMS) is based on the Group’s commitment to fight corruption by applying the criteria of transparency and conduct as detailed in the ZTC Plan, which constitutes

Enel’s anti-corruption policy. Together with the ZTC Plan, the pillars of the AMS are:

  • the Code of Ethics;
  • Models aimed at preventing the main crime risks (e.g. corrupt relationswith public administrations and private individuals, environmental crimes, corporate offenses and, for Italian companies, manslaughter, serious personal injury or grievous bodily harm committed in violation of the rules on the protection of occupational health and safety) as described by the applicable regulations on corporate responsibility (the “Compliance Program”) in the various countries in which the Group operates (e.g. Organizational Model 231 for Italian companies or the “Risk Prevention Model/Integrity Program” for Group companies in Spain and South America);
  • the Enel Global Compliance Program (“EGCP”), a governance tool aimed at strengthening the Group’s ethical and professional commitment to preventing offenses committed outside of Italy that might result in corporate criminal responsibility and risks to reputation. The EGCP applies to the Group’s non-Italian companies and supplements any Compliance Programs adopted by the same companies, in compliance with local regulations.

Without prejudice to the provisions of the aforementioned Compliance Programs and the specific regulatory provisions applicable to the crime of corruption in all its forms, the Enel Global Compliance Program complies with the main relevant legislation and the best corporate governance practices, constituting the general conduct framework for Enel people in the fight against corruption.

The areas with the most potential exposure to corruption (active and/or passive), both in relations with public administrations and in the private sector, include: (i) the negotiation and execution of contracts with third parties (public authorities, associations, companies, etc.); (ii) participation in tenders (public and private); (iii) selection of partners/consultants; (iv) management of financial resources; (v) management of gifts and hospitality; (vi) personnel recruitment processes; (vii) incentive mechanisms in top managers’ compensation.

In relation to these risk areas, the aforementioned governance tools (ZTC Plan, Code of Ethics and the EGCP/Compliance Program) together with the current body of procedures outline an effective prevention system, which is an integral part of the Group’s Internal Control System.

The organization of the AMS, along with the Internal Control and Risk Management System (SCIGR) guidelines approved by the Board of Directors of Enel SpA, establishes that the Chief Executive Officer, as Director responsible for Enel’s SCIGR, represents – together with the first-line managers for relevant areas of responsibility – the Company’s top management. The latter is responsible for ensuring that risks are correctly identified and mitigated.

In particular, directly reporting Management structures (mainly Audit and Legal/Compliance), and consequently management as a whole contribute to the adoption and dissemination of the rules established in the pillars of the Anti-corruption Management System.

In particular:

  • the Legal/Compliance Function establishes guidelines on compliance and anti-corruption, providing support and advice for their interpretation and supervising the corresponding actions undertaken by the Group companies;
  • by performing audits on company processes, the Audit Function assesses the adequacy of the SCIGR, reporting to the competent administrative and control bodies. Corruption risks are identified during the assessment performed by the Audit Function, which aims to guide the annual Audit Plan with a risk-based perspective. This risk assessment also provides for the mapping and assessment of active and passive fraud risk that could affect the organization;
  • the People and Organization Function (Quality unit) supports the adoption and maintenance of the AMS in compliance with requirements of ISO 37001:2016, ensuring consistency of processes and adopting best-in-class methodologies.

On May 8, 2017, Enel SpA’s AMS was certified as conforming to ISO 37001:2016 (international certification of anti-bribery management systems). The certification was confirmed in 2018 with a maintenance audit, another of which is being planned for 2019.

After Enel SpA obtained ISO 37001 certification for its anti-bribery management system, Enel gradually extended the ISO 37001 certification plan to the Group’s main Italian and foreign subsidiaries, in keeping with what was defined in the last Sustainability Report. At present, the certification progress has been successfully completed, specifically for Enel Green Power SpA (also covering some foreign subsidiaries of the latter), Enel Global Trading SpA, Enel Produzione SpA, E-Distribuzione SpA, Enel Italia Srl, Enel Sole Srl, Enel.si Srl, Enel Energia SpA, and for the Group’s foreign companies, Endesa SA, Enel Américas SA, Enel Generación Chile SA, Enel Chile SA, Edesur SA, Codensa SA and Emgesa SA.

ISO 37001 certification has been planned for the Group’s main Italian and foreign companies for the 2019-2020 period, with a further expansion also in view of the current company perimeter and recent corporate acquisitions.

Since 2018, Enel SpA has also assigned the role of “Anti-bribery compliance function”, established pursuant to ISO 37001:2016, to an internal committee. This committee comprises a representative from the Legal and Corporate Affairs, Audit, People and Organization (Quality unit) Functions, tasked – among others – with supervising the design and adoption by the Company of its own anti-corruption management system.

Human rights

In recent years, a wide range of business and human rights policies and rules have been developed, including the adoption of the United Nations Guiding Principles on Business and Human Rights (UNGPs). These have recognized the key role of rights set out in the International Bill of Human Rights3, for companies as well, entrusting the latter with a specific responsibility in this area. In particular, Principle 11 of the UNGPs states that “business enterprises should respect human rights.

This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved”4. On February 5, 2013, Enel decided to accept the United Nations’ “Protect, Respect, Remedy” framework through the approval by the Board of Directors of a policy dedicated to human rights that strengthens and deepens the commitments already established by company Compliance Programs.

The policy, defined through a consultation process that involved the Enel people and relevant international experts, identifes eight principles that the people working in Enel SpA and in its subsidiaries must observe in carrying out all their activities; furthermore, Enel promotes respect of all principles within its business relationships and adherence to the same standards by its contractors, suppliers and business partners, paying particular attention to conflict-affected and high-risk contexts.

The policy concerns two overarching issues: work practices and relations with communities and society. The policy is available online at www.enel.com.

Labor practices:

  1. Rejection of forced or compulsory labor and child labor;
  2. Respect for diversity and non-discrimination;
  3. Freedom of association and collective bargaining;
  4. Health and safety;
  5. Fair and favorable working conditions; 

Relations with communities and society:

  1. Respect for community rights;
  2. Integrity: zero tolerance of corruption;
  3. Privacy and communication.

The identification of the principles is inspired by the Universal Declaration of Human Rights, the European Convention on Human Rights and several International Labour Organization (ILO) conventions on human and social rights, freedom of association and the right to organize, prohibition of forced and child labor, and occupational health and safety.

The policy entrusts the Innovability Function with planning and coordinating the adoption of the due diligence process5 jointly with the other relevant Functions, as far as their respective competence is concerned; reporting to the Control and Risks Committee on the adoption of the due diligence process; annually reporting on Enel’s performance regarding its commitments in the Group’s Sustainability Report. The policy represents a fundamental document for the management of business processes; each Business Line manager, in fact, must integrate the principles expressed in the policy so that the fundamental rights of all interested parties are not violated or impacted.

During the execution of the due diligence process on the management system, described in the following paragraphs, the top management of the Group was interviewed, both at Holding and local level, to verify the level of knowledge and implementation of the policy. Finally, as part of the Sustainability Plan, there are specific human rights targets that are supervised and reported to the relevant committee.

3 United Nations General Assembly Resolution 217.
4 Original text of Principle 11 of the UNGPs: “Business enterprises should respect human rights. This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved”
5 In the context of the Guiding Principles on Business and Human Rights (Principals 17-21) these terms refer to a system of continuous management that a company implements in consideration of the sector in which it operates, its operating contexts, the size of the company and more, to ensure respect for human rights or to avoid being party to their abuse. This entails “identifying, preventing, mitigating and reporting” potential negative effects caused by the company.

The due intelligence process

As required by UN guidelines and in accordance with the policy, Enel performed a specific human rights due diligence process on the entire value chain in the various countries in which it operates. Specifically, the process was redefined in 2016 in line with best international practices and includes four phases:

  1. risk assessment as perceived by key stakeholders at the country level regarding labor, local community and environmental rights;
  2. impact assessment aimed at identifying and analyzing the organizational and risk control systems; 
  3. development of action plans in order to address any areas of improvement that emerged in the previous phase;
  4. monitoring of action plans and remedies.

Perceived risk assessment at the country level

To become familiar with the context in which Enel operates in the field of human rights and identify the most relevant issues in terms of risk, numerous experts from different sectors, such as civil society, academic institutions, citizens, customers and suppliers, were consulted in the various countries where Enel operates.

This consultation allowed the Company to classify each of the issues included in the Human Rights Policy according to the level of perceived risk resulting from the combination of the severity and likelihood of an actual violation. The risks were then cataloged according to a defined scale of values: acceptable risk (minimum level), risk to be monitored, high priority risk, high risk (maximum level).

The analysis showed that:

  • the topics related to corruption and environmental impacts present a “high priority risk” assessment that requires companies to equip themselves with advanced safeguard and monitoring mechanisms; 
  • diversity, child labor, the impacts on local communities and best practices in terms of health and safety had an assessment of “risk to be monitored”. The topic of diversity is particularly important in Italy, while in terms of impact on local communities, a greater focus is demanded by South American countries. 

The topic of health and safety is instead perceived across the board as a fundamental topic in all the countries of the Group.

The second phase of the due diligence process aimed to evaluate Enel’s human rights practices and policies and identified possible areas of improvement and

recommendations in order to comply with the provisions of UNGPs and the relevant Enel policy. Practical examples to support the implementation of due diligence have also been defined as part of this activity.

The process involved top company managers both to strengthen the level of awareness of respect for human rights and to integrate the principles of the policy in the main strategic choices.

A standard self-assessment tool has also been developed for all countries, divided into two main sections:

  • self-assessment of general human rights management procedures, to assess compliance with UNGPs;
  • self-assessment of human rights performance management, to assess Enel’s processes and procedures against its policy.

This phase of the process has been developed with the support of Business for Social Responsibility (BSR), a leading global non-profit organization in the development of sustainable business strategies and solutions that works with a network of over 250 member companies and other partners.

bsr

   



The analysis focused in particular on the evaluation of the Company’s existing human rights management practices with respect to best practices regarding due diligence processes in accordance with the requirements of the United Nations principles.

The policies, procedures, systems and practices in place within the Group in each of the areas of the value chain were evaluated through the analysis of more than 100 indicators. The results showed that Enel has a robust set of mechanisms and management systems to ensure that human rights are respected and that existing risks are properly managed.

Below is a summary table of the topics covered by the policy, showing an assessment of their perceived risk and their level of protection.

TopicsAverage percieved riskSystem to protect human rightsMain policies and procedures to protect human rights
Labor practices
Freedom of association and collective bergainingAccetable riskRobust

Enel commits to respecting freedom of association and collective bargaining for all its workers. In particular, Enel recognizes their right to form or take part in organizations aimed at defending and promoting their interests; that they are represented by trade unions or other forms of representation; and the value of collective bargaining as a privileged tool for determining contractual conditions and governing relations between company management and trade unions.

Fair and favorable working conditionsAccetable riskRobust

The contracts govern working conditions in their entirety and clearly show all the terms included in the contracts that provide details on the rights of workers (working hours, salary, overtime, compensations, benefits).
The terms are translated into workers’ native languages and are supported with information contained in documents shared with the people. Human resources management systems and procedures ensure there are no minors in the workforce. Internships and school-to-work programs are also available.

Rejection of child laborAccetable riskRobust
Diversity and inclusionRisk to be monitoredRobustFor details, see the chapter “Our people and theirvalue”.
Health and safetyRisk to be monitoredRobustFor details, see the chapter “Occupational health andsafety”.
Community and society
Community relationsRisk to be monitoredRobustFor details, see the chapter “Communities and valuesharing”.
Environmental impactsHigh priority riskRobustFor details, see the chapter “Environmentalsustainability”.
CorruptionHigh priority riskRobustFor details, see the paragraph “Active and passive anticorruptionmanagement system”.

Average perceived risk: average of perceived risk levels identified in the countries being analyzed.
Risk reference scale: 1. High risk; 2. High priority risk; 3. Risk to be monitored; 4. Acceptable risk.
Performance value reference scale of the system (processes, policies and procedures) to protect human rights: Robust (R) (75%-100%); Good (B) (50%-75%); Suffi-
cient (S) (25%-50%); Needs improvement (M) (0%-25%).