Enel launches Sustainability-Linked financing framework

Published on Monday, 19 October 2020

“This framework represents a significant milestone for Enel along its path towards fully-integrating sustainability in its corporate financing strategy. By setting out clear targets and KPIs in the use of sustainability-linked finance instruments, the framework will help to ensure the implementation of a coherent financing strategy that supports the company’s commitments towards the achievement of the UN Sustainable Development Goals.”

– Alberto De Paoli, Enel CFO

The Framework has been established in accordance with the 2020 Sustainability-Linked Bond Principles (SLBP) as administered by the International Capital Market Association (ICMA) and the 2020 Sustainability-Linked Loan Principles published by Loan Market Association (LMA) related to sustainability-linked loans.

Specifically, the SLF Framework covers the following financing instruments: Sustainability-Linked Bonds, Sustainability-Linked Loans and the Sustainable Development Goal (“SDG”) 7 (Affordable and Clean Energy) Target Guaranteed Euro-Commercial Paper Programme.

The following five components form the basis of Enel’s SLF framework

  1. Selection of the Key performance Indicators (KPIs), the selected KPIs are considered as core and relevant to Enel’s business:

    - KPI 1: Direct Greenhouse Gas Emissions Amount (Scope 1)
    - KPI 2: Renewable Installed Capacity Percentage;

  2. Calibration of Sustainability Performance Targets (SPTs) with thresholds applied to the abovementioned KPIs to demonstrate an advanced level of ambition;
  3. Financial characteristics, bonds and loans issued under this Framework will be subject to variations in their financial characteristics depending on the achievement of the SPTs;
  4. Reporting on the commitment to report at least on an annual basis on both KPIs; and
  5. Verification by independent third-parties of Enel’s performance of the KPIs.

Enel places sustainability at the core of its business model including in its financial strategy. The Group has been a leading player in sustainable finance, being an early issuer of green bonds, and among the largest corporate issuers of these instruments. In 2019, Enel marked the beginning of the Sustainability-Linked Bond Market, by issuing on the Euro and US dollar markets the world’s first general purpose bonds linked to the achievement of the SDGs. Enel then expanded the range of its Sustainability-Linked Financing instruments in 2020 with SDG-Linked Loans and Revolving Credit Facilities, as well as a SDG 7 Target Guaranteed Euro-Commercial Paper Programme, showcasing how sustainability can be integrated across all of the Company’s financing tools.

As highlighted in Enel’s 2020-2022 Strategic Plan, the Group aims to increase the share of sustainable finance sources on its gross debt to 43% in 2022 and to around 77% in 2030 from approx. 22% in 2019.

The Group’s commitment towards sustainable finance is further highlighted by Enel CFO Alberto De Paoli’s participation as co-chair of the UN Global Compact’s CFO Taskforce, which recently launched the CFO Principles for Integrated SDG Investments and Finance. These principles outlined a set of four values aimed at indicating how companies can align their corporate finance strategies to sustainability commitments in order to create a real-world impact towards the SDGs.

In addition, the Group is a member of the Advisory Council on ICMA Principles, the Corporate Forum on Sustainable Finance and the Sustainable Bond Market Advisory Group of the London Stock Exchange.

Enel’s Sustainability-Linked Financing Framework is available at the following link: https://www.enel.com/investors/investing/sustainable-finance/sustainability-linked-finance