A new framework for even more sustainable finance
A new framework for even more sustainable finance
We have added important new updates to our Sustainability-Linked Financing Framework, the Group document that contains guidelines and targets to ensure that financial operations can be linked to our sustainability strategy. The newly introduced key performance indicators (KPIs) take into account not only our direct greenhouse emissions, but also the indirect emissions associated with all the stages of sales of our product to end customers. In addition, we have linked the use of financial instruments used by Enel to the criteria of the EU Taxonomy, as well as to the United Nations Sustainable Development Goals already present in previous versions of the Framework.
In 2019, we became the first company in the world to issue a Sustainability-Linked Bond (SLB), a type of bond that reflects our strategy based on the United Nations 2030 Agenda SDGs.
Sustainability-linked instruments link the interest rate to the achievement of year-on-year measurable targets related to two SDGs: SDG 7 (Clean and Affordable Energy), and SDG 13 (Climate Action). In practice, if we fall short of the target, the bond underwriter will be granted an increase in the interest rate; if we meet the target, not only will it be a win-win for everyone and for the climate, but the Group will also be more efficient and will have a lower risk profile.
This innovative approach to sustainable finance has garnered widespread interest from markets and investors, and our example has been followed in recent years by other major corporations, financial institutions and governments.
A single framework for all our sustainable finance operations
In 2020, we published the first Sustainability-Linked Financing Framework, which explained how all our financial transactions – not only bonds, but also loans and commercial papers – were linked to the Group's sustainability strategy and associated performance indicators, following the principles of the ICMA (International Capital Market Association), the self-regulatory organization for companies participating in capital markets.
The key performance indicators (KPIs) we set within the Framework were: the reduction of direct greenhouse gas (GHG) emissions related to electricity production, and the increase in the percentage of renewable capacity out of the Group's total installed capacity, confirming our commitment to accelerate our path toward Zero Emissions.
Increasingly ambitious goals
We have now updated the Framework to take into account the 2023-2025 strategic plan and to include new KPIs. New features in the latest update include:
- the intensity of direct and indirect GHG emissions related to the process of selling energy to the end customer (Scope 1 and Scope 3, integrated energy)
- the absolute indirect GHG emissions related to the use of gas sold to our end customers (Scope 3)
- the proportion of capital expenditures (investments) aligned with the European Union Taxonomy, i.e. the EU classification system that establishes a list of economic activities deemed to be environmentally sustainable in order to promote investor and business involvement in achieving the environmental and climate goals set by the 2030 Agenda and the European Green Deal.
Confirmation that the recent important changes to the updated Framework had been applied was provided when, on February 14, Enel issued a new sustainability-linked bond, launched in two tranches on the Eurobond market and aimed at institutional investors for a total of 1.5 billion euros.
For the first time in the public placement of a bond, one tranche of the offering combined a KPI linked to the EU taxonomy with a KPI linked to the UN Sustainable Development Goals (SDGs). Meanwhile, the other tranche of the bond was linked to two KPIs associated with the Group's trajectory of complete decarbonization through the reduction of direct and indirect greenhouse gas emissions.
Thus, not only are we focusing on the decarbonization of the entire value chain, but for the first time we are reinforcing the achievement of the UN Sustainable Development Goals with our commitment to pursue the Group's sustainability strategy through the European Taxonomy.
In this way – in addition to confirming the use of clear performance indicators, independent verification and timely reports on our progress in meeting our targets – we are once again reaffirming our genuine commitment to sustainability and to taking action against the climate crisis.