The 1980s and the birth of the concept of sustainable development
The 1980s and the birth of the concept of sustainable development
A decade that began with a new oil crisis and subsequently saw the international community reach an agreement for combating the environmental emergency. “Sustainable development” became the key phrase. Our journey through Enel’s 60-year history continues.
The 1980s was an intense decade that was full of contradictions, with one foot in the old world and another in the new. The decade began at the height of the Cold War but concluded with the fall of the Berlin Wall. It started with a major recession, which, like that of the mid-1970s, was triggered by an oil crisis. The second crisis began in 1979 following the Iranian Revolution. However, the decade went on to experience an economic recovery which in Italy was to lead to the longest ever period of prolonged growth in the country’s history. It lasted 26 consecutive financial quarters, from April 1984 to September 1990, with an overall increase in GDP of 21.4%.
The decade of modern environmentalism
It is often forgotten that the 1980s was also a decisive decade for the consolidation of modern environmental awareness, sustainability policies and a new perception of relationships between industry, society and the land. For Enel, this was the decade in which sustainability became rooted in its corporate strategy. The trialing of alternative energy sources was no longer, or not only, a consequence of strategic national concerns or international tensions, but rather it belonged to a longer-term vision of the energy system and its place in the world.
There was not yet, at least outside of the scientific community, full awareness of climate change. But other crises, which today have almost been forgotten, led to important agreements for reducing polluting emissions from industrial facilities: these concerned phenomena like acid rain and the so-called hole in the ozone layer (which was actually a thinning of the ozone layer above the Antarctic). The former, in particular, was tackled through the 1987 Montreal Protocol which succeeded in capping emissions of sulfur dioxide from industrial plants. Ten years later it would provide the model for the Kyoto Protocol concerning emissions of CO2: this agreement was proof that international cooperation and dialogue between industry and society could reconcile production with environmental protection.
The revival of hydroelectric power
It was no coincidence that Italy’s National Energy Plan in 1985 contained an entire section dedicated to environmental protection and reducing pollution. It also included objectives (which were set out by the European Community, as the European Union was known at the time) to reduce emissions of sulfur dioxide (SO2) in the production of electricity. Furthermore, the Plan continued the push towards renewables, giving Enel a mandate to build 4,000 MW of new hydroelectric plants and 900 MW of geothermal. The plan also included the construction of 12,000 MW of nuclear power, but this never came to fruition because Italian voters rejected nuclear power in a referendum in 1987.
Attention to the environment and sustainability was also expressed explicitly, and for the first time, in Enel’s Industrial Plan in 1985. Meanwhile the company was creating futuristic facilities to produce electricity from renewable energy. These facilities included Eurelios, the world’s first solar concentration plant, which was built in Catania in the early 1980s; the photovoltaic plants on the island of Vulcano, which were installed in 1984 and renovated numerous times in the following years; as well as the wind farm in Alta Nurra in Sardinia.
Independently of the sources used, the construction of the new production plants or grids was conducted with increasing attention to the impact on the local area and communities, while research and innovation also focused on reducing emissions in conventional power plants.
The birth of “sustainable growth”
In the second half of the decade sustainability became part of the vocabulary of international politics. In 1987, after almost three years of work by the United Nations Commission on the Environment and Development, the report “Our Common Future” was published. It is also known as the Brundtland Report, in honor of the former prime minister of Norway, Gro Harlem Brundtland, who played a central role in drafting it. It offered a third way between the unconditional optimism of the 1960s and the pessimism prevalent in the 1970s. It recognized the Limits to Growth, which had been presented in a famous report by MIT and the Club of Rome more than ten years earlier, but it saw research and international cooperation as the key to using these limits without renouncing growth. It introduced the concept of “sustainable development” to ensure wellbeing for present generations without compromising that of future generations. With farsightedness, it indicated renewable energy as an as yet unexploited resource that would have to play a central role. This work laid the foundations for the global climate crisis conferences, the IPCC, leading all the way to the Sustainable Development Goals of the United Nations 2030 Agenda.
Sustainability becomes strategy
Enel fully embraced this new direction and sustainability became part of the Group’s DNA, driving its transformation from a national operator to the world’s largest private electricity utility.
In the 1990s and then in the new millennium the Group introduced environmental and sustainability reporting. Today it cultivates principles such as green procurement, to ensure the sustainability of all company processes and those of all our suppliers. It conducts regular studies of the impact of its own power plants on biodiversity. Enel has made precise commitments so that the construction of new power plants does not result in deforestation. It also endeavors to incorporate the principles of the circular economy into all of its activities. This entails launching projects to repurpose decommissioned power plants, adopting the “sustainable construction site” model at all new facilities and supporting (together with Enel X) industrial clients and local government authorities in their conversion to the circular economy.
The industrial installation of wind and solar power has accelerated on a global scale, making the Group the world’s largest private operator in the renewable energy sector: industrial development is always flanked by innovative experimentation.
One such example is the photovoltaic “Diamond” which was inaugurated in Rome in 2013. Here technological experimentation is combined with pioneering architecture to ensure respect for the local area.
Over the course of the last decade, the goals for reducing emissions have become increasingly ambitious. This is also because it is becoming more and more evident that global warming is a genuine threat and time is running out if we are to avoid catastrophes linked to the climate crisis. Today Enel is committed to making an 80% reduction to its greenhouse gas emissions by 2030, based on 2017 levels. It will be achieved through a complete revolution in its energy mix with the addition of 96 GW of renewables in 10 years and a 20% reduction in production using fossil fuels. The Group has brought forward to 2040 its goal of achieving Net Zero, which involves the end of thermal generation from fossil fuels and the sale of natural gas to final customers.
Enel is firmly convinced that sustainability must also serve as a valuable lever in the financial sector, and that finance can, and must, play a role as a driver of sustainable development. It recently underscored its own commitments through the introduction of innovative financial tools linked to the achievement of the Sustainable Development Goals (targets, for example, for reducing emissions and the installation of new renewable capacity). The first ever sustainability-linked bond was issued in September 2019 and was greeted with enormous enthusiasm by the markets. Since then, tools of this type have been spreading rapidly and gaining a growing share of the market in sustainable finance worldwide.