Letter to stakeholders

We are experiencing a profound process of technological and social transformation, whose effects cascade down and propagate in space and time, across generations and borders. A process that has changed and is changing not only countries’ economies and production structure, but also the whole society and the forms in which it expresses itself. The year 2021 witnessed the continuation of the Covid-19 pandemic, although mitigated by the progress of vaccination campaigns. The year also saw a sharp increase in raw material and energy prices. The scenario was complicated even further by the arrival of the dreadful events of the recent conflict in Ukraine, which we are monitoring carefully. The 26th UN Climate Change Conference (COP26) in Glasgow succeeded in further engaging the international community in the action taken to contain global warming and its corollaries.

The world faces a major challenge that requires an immediate and concrete commitment. Electricity is the most efficient, safe and competitive form of energy, and, thanks to renewable sources and storage, is the key to totally decarbonize our planet, in line with the Paris Agreement goals. The energy system is becoming less dependent on fossil fuels and their volatility and is therefore contributing to building a more sustainable future.

At Enel, 94% of the investments planned for the three-year period 2022-2024 are in line with the United Nations Sustainable Development Goals and over 85% are aligned with the European taxonomy.

We have brought forward the “Net-Zero” commitment both for direct and indirect emissions by 10 years, from 2050 to 2040. We will do so by gradually phasing out coalfired generation by 2027 and stopping the generation and sales of gas by 2040. For the second year in a row, 2021 set a record in terms of energy produced from renewable sources, 51% of the total generation^[1]. Specific CO₂ emissions decreased by 45% compared to the 2017 value, confirming the journey towards the SBTi-certified target of 82 gCO_2eq/kWh by 2030.

As part of the journey towards electrification, the grid plays a crucial role because it enables the integration into the system of distributed renewable plants. On a smaller scale, generation and flexible resources (such as photovoltaic panels on roofs and household batteries) can also be integrated. Moreover, the grid enables us to reach people who still do not have full access to energy.

A commitment that leaves no one behind, that takes into account the needs of all our stakeholders, with particular reference to the most vulnerable. The aim is also to promote sustainable use of resources, to thwart loss of biodiversity.

We wish to promote a transition that is transparent and orderly, avoiding the creation of inequalities, based on active listening, openness and creative solutions; a transition that is capable of unleashing talents and passions, of leveraging uniqueness, of strengthening the bond with communities, of engaging customers and suppliers. People are the true competitive factor, and we share, in the spirit of cohesion, internally and externally, the values that guide our daily commitment: trust, responsibility, innovation, proactivity.

We have made our business model sustainable throughout the entire value chain and we have ensured that sustainability covers varying geographical, economic and social contexts. We are working tirelessly, in line with recent international developments, on new metrics and new measurement concepts to represent the creation of value and the quality of relations with different stakeholders, in a more and more complete and transparent way.

We continue to integrate sustainability objectives into our financial instruments and management remuneration plan, and our leadership has once again been acknowledged on a global level in the main ratings, rankings and sustainability indices.

We continue to look ahead into the future, and we work together with our stakeholders to ensure that society makes sustainable progress.

Michele Crisostomo
Chairman

Francesco Starace
Chief Executive Officer and General Manager

_{[1] The figures include managed generation. Generation from the consolidated perimeter is 109 TWh produced from renewable energy and 114 TWh produced at thermoelectric plants, a total of 223 TWh.}