Enel welcomes the development of the EU Taxonomy Regulation, as it provides a standardized, science-based classification system to identify environmentally sustainable economic activities. The EU Taxonomy Regulation acts as an important enabler to promote sustainable investments and accelerate the decarbonization of the European economy, while at the same time creating reliability and transparency for investors and supporting companies in planning the Net-Zero transition.
We are committed to reporting on the implementation of Article 8 of the European Taxonomy Regulation 852/2020 and of the Delegated Act which further specifies the content, methodology and presentation of information to be dis-closed by both financial and non-financial companies.
Concerning the Climate Delegated Act, which lays out the criteria for verifying the contribution to climate mitigation and adaptation, we welcome the different thresholds defined in the EU Taxonomy Regulation on the basis of climate and environmental sciences, such as the specific emission limit of 100 gCO>sub>2eq/kWh (taking the whole life cycle into consideration) to measure the substantial contribution to achieving the climate change mitigation objectives established for most power generation technologies, in that it stems from a solid process based on a robust scientific foundation.
However, there are some activities that, although not covered under the EU Taxonomy Regulation, are critical to promoting the well-being of citizens, especially in the short and medium term, while contributing to the sustainable development the long term.
As regards the energy industry, there are some important sustainability-related issues that the European Commission did not consider when developing the technical screening criteria, as they were outside the main scope of the EU Taxonomy Regulation. These included energy security, grid reliability and the energy transition, all of which are critical to Europe’s well-being but which are appropriately addressed by other policies, funds and regulations at EU and Member State level.
The EU Taxonomy Regulation is still in a developmental stage, and a number of important Delegated Acts are still being finalized at the time of publication of this Sustainability Report. These include acts that will detail the criteria for the remaining four objectives (sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control and protection and restoration of biodiversity and ecosystems), as well as those that will identify economic activities that do not have a significant harmful impact on environmental sustainability and those that do. Completion of the entire regulatory process should ensure that all globally recognized economic activities are considered, thereby reducing current uncertainties regarding implementation of the process itself.
Going beyond the disclosure requirements of the Taxonomy, Enel has included the Capex alignment percentage as one of the key performance indicators of the Sustainability-Linked Financing Framework used to define the Company’s sustainable financial instruments. With this important move forward, Enel reinforces the role of the Taxonomy as a driver to promote sustainable investment decisions and show how sustainability can be fully integrated into the financial landscape.
Enel holds its annual Capital Markets Day to align its capital allocation with the EU Taxonomy set out in its Business Plan. In particular, in 2022 Enel announced a target in excess of 80% Capex alignment for the period 2023-2025 as part of its contribution to climate mitigation.