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Governance

  • GRI
    

Enel is playing a leading role in the energy transition and has adopted a business model that focuses on reducing the impact of climate change. Within this view, Enel is committed to promoting a sustainable energy model aimed at achieving full decarbonization and digitalization while enhancing the electrification of energy demand in order to promote the growth of a low-carbon economy. Enel’s organizational model and corporate governance establishes specific roles and responsibilities for the main governance bodies within the Company, thereby ensuring that cli mate-related risks and opportunities are given due consideration in all relevant decision-making processes.

Enel’s governance model to tackle climate change

governance cambiamento climatico

Climate-related responsibilities of the corporate governance bodies

Board of Directors – The Board of Directors of Enel SpA is responsible for analyzing and approving company strategy, including the Group’s annual budget and Business Plan, which include the primary objectives and actions that the Company intends to pursue in order to guide the energy transition and deal with climate change.

The Board of Directors also guides and evaluates the Internal Control and Risk Management System (“SCIGR”) while also determining the level and nature of risk that is compatible with the strategic objectives of the Company and of the Group.

The SCIGR is the set of rules, procedures, and organizational structures aimed at identifying, measuring, monitoring and managing the main risks of the Company and its subsidiaries. These risks include those that could have an impact on the organization’s sustainability of the medium to long term, including climate-related risks. In 2018, the Board of Directors dealt with issues related to climate change and sustainability, as reflected in Company strategies and operations, during 8 of its 18 meetings held.

The board is supported mainly by two internal committees with regard to climate-related issues:

  • Corporate Governance and Sustainability Committee - This committee is responsible for assisting the Board of Directors in evaluation and decision-making processes related to sustainability issues, including climate-related issues connected with the Company’s business, as well as the Company’s interactions with stakeholders. The committee examines the guidelines of the Sustainability Plan including the climate-related targets of the plan, and also examines the general layout of the Sustainability Report and the Non-financial Statement, including the approach to climate-related disclosures adopted for these documents, and provides opinions to the Board of Directors. The majority of the committee is composed of independent directors, and, in 2018, it comprised the Company Chairman and two independent directors. In 2018, the committee dealt with issues related to climate change and sustainability, as reflected in company strategies and operations, during 4 of its 6 meetings held;
  • Control and Risks Committee - This committee supports the board in carrying out its duties with regard to internal control and risk management. It also examines the Consolidated Financial Statements, the Sustainability Report, and the Non-financial Report within the scope of their relevance to the SCIGR, all of which include climate-related disclosures, and issues related opinions to the Board of Directors for the purposes of approval of these documents. The committee is composed of non-executive directors, the majority of which (including the chairman) are independent. In 2018, the committee was made up of four independent directors.

 In 2018, the committee dealt with issues related to climate change and sustainability, as reflected in company strategies and operations, during 8 of its 13 meetings held.

Again in 2018, the Company organized a specific induction program aimed at providing the Directors with a sufficient understanding of the fields in which the Group operates, including climate-related issues and their impact on business strategy and company operations.

Chairman - Within the role of guiding and coordinating the efforts of the Board of Directors, as well as overseeing implementation of the board’s resolutions, the Chairman plays a proactive role in the approval and monitoring of business and sustainability strategies, of which growth by way of low-carbon technologies and services is one of the pillars. In 2018, the Chairman also led the Corporate Governance and Sustainability Committee.

CEO and General Manager - This person is vested with broad powers of company management, with the exception of those powers reserved to the Board of Directors, and, in execution of these powers, has established a sustainable business model by defining strategies aimed at guiding the transition to a low-carbon energy model. This position reports to the Board of Directors regarding the execution of these powers, including business-related activities in line with Enel’s commitment to dealing with climate change.

The CEO is also the appointed senior officer responsible for the SCIGR. Finally, the CEO represents Enel in various initiatives related to climate change and holds important positions in institutions of global renown, such as the United Nations’ Global Compact, the United Nations’ Sustainable Energy for All, and the multi-stakeholder platform of the European Commission regarding the Sustainable Development Goals.

Enel's organizational model for climate-related issues

Enel has a management team in which climate-related responsibilities have been assigned to specific Functions that help guide Enel’s leadership in the energy transition. Each area is responsible for managing the climate-related risks and opportunities of relevance to that area:

  • the Holding Functions (Administration, Finance and Control; Audit; Innovability; and Health, Safety, Environment and Quality) are responsible for consolidating analyses of the scenarios and for managing the strategy and financial planning process aimed at promoting renewable energy, the decarbonization of the energy mix, asset digitalization, and the electrification of energy demand;
  • the Global Service Functions (Procurement and Digital Solutions) are responsible for implementing sustainability and climate-related criteria in supply chain management and fostering development of digital solutions to support the implementation of climate friendly technologies, respectively;
  • the Global Business Lines (Enel Green Power; Thermal Power Generation Generation; Trading; Infrastructure and Networks; and Enel X) are responsible for developing activities related to the promotion of renewable energy generation, the optimization of thermal capacity, the digitalization of the electric grid, and the development of enabling solutions in the energy transition and the combat against climate change (e.g. electric mobility, energy efficiency, efficient lighting and heating systems);
  • the Regions and Countries (Italy, Iberia, Europe and Euro-Mediterranean Affairs, South America, North and Central America, Africa, Asia and Oceania) are responsible for promoting decarbonization and guiding the energy transition towards a low-carbon business model within their areas of responsibility. Furthermore, the Europe and Euro-Mediterranean Affairs Function is responsible for defining the Group’s position on climate change, for low-carbon policies, and for the regulation of international carbon markets within Europe.
  • In addition, Enel has established the following two management committees chaired by the CEO, the responsibilities of which include climate-related issues:
  • the Group Investment Committee: this committee approves investments related to business development. The committee is also responsible for ensuring that all investments are fully in line with the Group’s commitment to promoting a low-carbon business model and achieving full decarbonization by 2050. The committee is made up of the heads of Administration, Finance and Control; Innovability; Legal and Corporate Affairs, and Procurement, as well as the regional heads and the heads of the various Business Lines;
  • the Group Risks Committee: the objective of this committee is to ensure that the organizational structures involved in managing operating risks are in line with business strategies and objectives, while engaging management in strategic decisions concerning risk policy, management and control.

Incentive system related to climate change

The Company’s remuneration policy includes various mechanisms aimed at making progress towards the energy transition, and specifically:

  • a short-term variable remuneration (or MBO) that may include objectives related to the specific function of each manager involved. This may, for example, include objectives tied to the development of renewable energy for managers within the Enel Green Power Global Business Line, or related to products and/or services for the energy transition within the Enel X Global Business Line;
  • a long-term variable remuneration that, beginning in 2018, includes a climate- related target for the reduction of CO2 emissions per kWheq for the Enel Group over the next three years, which accounts for 10% of total longterm variable remuneration.