Enel’s Digital Integrated Reporting: A Model for the Future

The transition to a zero-carbon world requires a new approach to corporate reporting, businesses must carefully benchmark their environmental commitments and show how they will help create value for stakeholders.

Enel, the world’s largest privately-owned renewable energy utility operator[1], recently unveiled its digital 2020 integrated reporting, which aims to achieve new levels of company disclosure and transparency, and contains all the statutory, financial and operating data investors expect. It also details Enel’s medium- and long-term strategy to decarbonize electricity generation and its guarantee for a just transition, “embracing all the opportunities, leaving no one behind,” while contributing to the United Nations Sustainable Development Goals.

By integrating sustainability data with financial numbers, the reporting adds transparency for investors and all stakeholders seeking clarity about the impact of Enel’s activities, and how the Italian multinational utility creates sustainable value for shareholders and the wider community.

Enel’s journey to integrated reporting began with its 2019 corporate reporting; the 2020 reporting goes further and deeper in making its environmental commitments transparent to a range of stakeholders.

“Integrated reporting is the new way in which Enel narrates its ability to generate sustainable value for all in the short, medium and long term,” says Alberto De Paoli, CFO of Enel Group. He says this has been enabled by the new concept of “stakeholder capitalism” that underpins Enel’s strategy, and has helped the company understand the expectations of stakeholders and forge an interactive and interconnected approach to communications.

“Sustainability is a driving force for Enel, which is applying sustainability-based thinking to all its business areas, including in the financial sphere of reporting,” explains Ernesto Ciorra, Enel’s Chief Innovability® Officer. Ciorra’s role combines innovation and sustainability, and the company has trademarked the term “innovability” to describe the growth accelerators needed to make the energy transition.

The report’s key performance indicators (KPIs) show how Enel is hitting both its financial and environmental targets alongside clear sustainability benchmarks, allowing stakeholders to monitor and measure the impact of company activities and goals’ progress.

The digital reporting explains Enel’s vision for the energy sector over the coming decade, and its plans to transition to clean energy by phasing out fossil fuels and boosting investment in renewables, and to triple renewable capacity to 145GW by 2030. Demonstrating its ambition to hit zero carbon by 2050, the report shows Enel’s carbon emissions fell by 28% in 2020 compared with 2019; Enel has targeted reducing CO2 emissions by 80% by 2030 from 2017 levels. To achieve these goals, the Group expects to directly invest €160 billion ($195 billion) by 2030 and mobilize a further €30 billion ($36 billion) from third parties. Enel has also moved its target of completely exiting coal-fired electricity generation, from 2030 to 2027.

Enel has pledged to help achieve UN Sustainable Development Goal 13, which commits participants to take urgent action against climate change and its impacts. This will be attempted through investments in decarbonization and electrification, while reaffirming Enel’s commitment to the Paris Agreement—limiting the rise in global temperatures to 1.5°C compared with pre-industrial levels—and to achieve net zero emissions by 2050, as validated by the Science Based Targets initiative (SBTi).

The KPIs are not simply presented as dry statistics; the report turns them into a narrative about the company’s commitment to a sustainable future, and shows how this is creating social and financial value.

“Through shared storytelling, we want to describe Enel’s strategy and its sustainable and integrated business model in an innovative way,” says Ciorra. “By doing this, we can illustrate Enel’s vision that combines sustainability and innovation, where the drive for change and our people’s creativity steer the Group’s constant commitment, in harmony and synergy with all our stakeholders. This includes the social context in which we operate, our industrial partners, the financial community and our colleagues. Only in this way can we truly create sustainable progress in line with the Sustainable Development Goals set by the United Nations.”

The 2020 report adopts Enel’s comprehensive “beyond reporting” approach, which explains the Group’s activities within the context of reaching as many people as possible, rather than aiming it at a select group of financially minded stakeholders. This broad effort improves the transparency of the annual report—typically a daunting document filled with financial and accounting information. The new report offers a 360-degree view of Enel, its impact on the environment and social aspects, the way it creates value, and puts climate change at the center of its corporate story.

Enel’s “core and more” approach is another key element confirmed and strengthened by the 2020 reporting, which sees the Integrated Annual Report as the “core” document, flanked by the in-depth and detailed “more” documents to meet the expectations of the various stakeholder categories. These documents include the Sustainability Report, the Financial Statements of Enel SpA, the Report on Corporate Governance and Ownership Structure and the Report on remuneration policy.

The digital reporting also analyzes context aspects associated with its medium- and long-term strategies, including exchange rates, inflation, commodity prices and electricity demand, as well as regulatory changes, weather and climate events, and scenarios connected with competition.

Enel views sustainability as an investment in the future, rather than a cost of doing business, and its integrated reporting lays out how the company will make a meaningful impact on the world and create significant shared value.

Integrated reporting is becoming a vital element in the corporate push for sustainability, and all major companies will need to reinvent their annual reports as integrated narratives about their environmental, social governance and financial progress. Enel’s reporting can serve as a crucial model for the future.

1. www.bloomberg.com/graphics/2020-renewable-energy-supermajors