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Our commitment to continuous improvement

Sustainability represents a fundamental lever for creating economic and financial value. For this reason a consistent number of investors have integrated ESG issues in their investment portfolio over the past years in order to minimize financial risk and guarantee higher returns. Thanks to international development and growing profitability, together with a strong sustainability policy and strategy targeted toward energy transition, as well as the adoption of best practices regarding transparency and corporate governance, Enel shareholders include national and international investment funds, insurance companies, pension and ethical funds. Since 2014, ESG investment funds (active and passive) have more than doubled their share of Enel’s share capital, reaching 14.9% at the end of 2022, up as compared to December 31, 2021 (14.6%). Their share of total institutional investors is also increasing, reaching 26.2% at the end of 2022, compared to 24.6% of the previous year. In absolute terms, 245 (vs 252 at the end of 2021) investors with investment funds consider not only the Group’s financial performance but also the environmental, social and governance practices that Enel is integrating into its business strategy and all activities along the entire value chain. Furthermore, again at the end of 2022, 42.1% of Enel’s capital was held by investors who were signatories of the United Nations Principles for Responsible Investment (UN PRI).

Growth in ESG investors 
Our commitment to continuous improvement - ESG investor performance
Growth in ESG investors
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In Enel, sustainable finance plays a crucial role in supporting Group growth, representing approximately 63% of gross debt at the end of 2022. In particular, structured transactions amounting to more than 23 billion euros equivalent were carried out.

Sustainable finance means synergy between private and public finance. Private finance conveys private capital towards sustainable investments, i.e. for the benefit of companies whose strategic action is intended to achieve certain sustainability objectives, reflecting the economic and financial value of sustainability in a lower cost of debt. Public finance, on the other hand, stimulates the creation of sustainable investments, through grants and loans at subsidized interest rates. In 2020, Enel was the first company in the world to set up a “Sustainability-Linked Financing Framework”, an all-encompassing document that extends the sustainability-linked approach to all financial debt instruments. Indicators, targets and principles have been defined that govern the development of sustainable finance throughout the Group with ambition and transparency, linking the financial strategy to the sustainability objectives. The “Sustainability-Linked Financing Framework” was updated in January 2021, January 2022 and subsequently in February 2023, in line with the annual updates of the Group’s Strategic Plan. In the last updated in February 2023, three new KPIs (“Scope 1 and 3 GHG emissions intensity relating to Integrated Power (gCO2eq/kWh)”, “Absolute Scope 3 GHG emissions relating to gas retail (MtCO2eq)” and “Proportion of Capex aligned to the EU Taxonomy (%)”) were included in the framework, which contribute toward reaching SDG 7 and SDG 13 and the European Environmental Objective of Climate Change Mitigation.
The Group’s financial instruments and operations can therefore have an interest rate or other financial or structural terms linked to reaching the goals associated with the reduction in direct and indirect greenhouse gas emissions (SDG 13 “Climate action”), the increase in installed capacity powered by renewable sources (SDG 7 “Affordable and clean energy”) and the percentage of total Capex, carried out during a certain period, in activities that are qualified as sustainable from an environmental point of view according to the criteria specified in article 3 of the regulation on EU Taxonomy (2020/852). The KPIs and targets included in the latest update of Enel’s Sustainability-Linked Financing Framework, published in February 2023, are listed below.

Our commitment to continuous improvement - sustainability-linked finance according to Enel

(1) Excluded from the calculation are 531.1 MW of acquired capacity, deriving from power plants acquired by the Group, according to what is indicated by the contractual documentation of the individual instruments.

Sustainability-linked finance
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Having achieved a percentage of renewable installed capacity of 63.1% of total installed capacity as of 2022, Enel has reached the target set in all those financial instruments in which the interest rate, or other financial or structural terms of the transaction, are linked to the achievement of a percentage of renewable installed capacity of 60% or more. Particularly noteworthy is the achievement of the targets set by the first sustainability-linked bonds issued by Enel Finance International NV (EFI) in 2020 in Pound Sterling. The trend of the five above-mentioned KPI, at the relative date of reference, will be verified by an external verifier. Furthermore, Enel will report every year on its performance regarding the five KPI, as appropriate, in its Annual Financial Statements and/or Sustainability Report – Non-Financial Statement and/or on its website.

In 2022 the Group, through its financial subsidiaries, EFI and, for the first time EFA (Enel Finance America, LLC), issued approximately 12 billion euros in sustainability-linked bonds in various markets and currencies. 

For this reason, it is worth recalling that in June 2022 EFI launched a multi-tranche bond emission on the market in US dollars and linked one of the trances to the Group’s goal of reaching zero emissions of “Scope 1 GHG emissions intensity relating to power generation (gCO2eq/kWh)” by 2040. This was the first time ever for an energy multinational.
In May 2022, Enel and EFI increased the amount of the current Sustainability-Linked Revolving Credit Facility from 10 billion euros to 13,5 billion euros, the world’s largest sustainable credit line linked to SDG 13.
With regard to commercial papers, in April 2022 EFI renewed and increased its commercial paper program from 6 to 8 billion euros, which is linked to KPI “Scope 1 GHG emissions intensity relating to power generation (gCO2eq/ kWh)” of less than or equal to 148 gCO2eq/kWh by 2023 and less than or equal to 140 gCO2eq/kWh by 2024.
Furthermore, Enel has signed agreements with different financial counterparties for derivative instruments and sustainable guarantees, both linked to the Group’s ability to reach its sustainability goals over the next years.
In February 2023, EFI launched a sustainability-linked bond in two tranches for a total of 1,5 billion euros: the new issue combined for the first time world-wide a KPI linked to the taxonomy of EU with a KPI linked to the United Nations sustainable development goals (“SDG”), also providing for goals of complete decarbonization.

In the field of public finance, the Group supports the economic recovery plan and aims to become a strategic partner for the adoption of the Green Deal and the Recovery Plan at both the national and European level. The objective is to drive a sustainable, rapid and effective recovery, through a wide pipeline of construction projects focused on decarbonization, electricity grids and electrification, allowing the green and digital transition of the European economy to be accelerated, with a significant impact in terms of GDP, employment and reduction of CO2 emissions and in full alignment with the European Taxonomy. To this end, the Group has identified potential investments of approximately 4,3 billion euros for the period 2023-2030, with a direct impact on the Group through the ownership and the stewardship model. These initiatives are focused on green hydrogen, renewables and storage, revitalization of the photovoltaic manufacturing industry, smart grids, network resilience and charging infrastructure for electric mobility. The Group has also promoted partnerships with both public and private entities, with a view to achieving the decarbonization and electrification of consumption through the spread of electric bus fleets, the transition towards green ports and the promotion of energy efficiency in public buildings.
Furthermore, in the context of subsidized loans from international and national financial institutions, the Group is leading an innovation process intended to accelerate the mobilization of capital to support sustainable growth, through the use of sustainability-linked financial instruments.
More specifically, in 2022 the Group signed subsidized loans for a total of 1,8 billion euros, which, as in the case of private financing, provide for the inclusion of sustainability-linked mechanisms linked to SDG 13. Among the main operations, a special mention must be made of the sustainability-linked borrowings for a total of 800 million dollars by EFA, a Group company, and EKF (Danish export-credit agency), the first sustainability-linked borrowings agreement for the latter.
In the coming years, Enel will continue to make use of sustainable finance tools, with the aim of achieving a sustainable debt share of the Group’s total debt of approximately 70% by 2025. 

Participation in international round tables to promote sustainable finance

The focus on sustainable finance is being confirmed, strengthening Enel’s commitment to key global stakeholders, through the co-chairmanship of the United Nations Global Compact’s CFO Coalition for the SDGs and involvement in the UN Global Investors for Sustainable Development (GISD) Alliance.
After the launch of “Principles on Integrated SDG Investments and Finance”, the CFO Coalition focused its work on analyzing the targets defined by companies for the SDGs and the relative KPIs, business cases for the adoption of an SDG finance & investment strategy, and development of profiles by macro sector. In this context, the CFOs therefore invested more than 110 billion dollars in support of the SDGs achieving an increase of 55% in SDG finance as compared to the previous year. Furthermore, an Advisory Board was established, which includes Enel, which will provide sector-specific and geographical skills, help coordinate exchanges between CFOs and the largest community of sustainable finance on specific issues, and will provide information and contacts for the recruitment of new Coalition members.
Equally important are the results obtained from the collaboration with the GISD Alliance, such as the update of the Model Mandate, which is a guide for asset owners to guarantee that the management and sustainability goals are fully reflected in the agreements and contracts with the managers of these assets. Furthermore, as Enel is a member of the GISD Alliance, contribution was given to the joint statement of the Alliance as a response to the public consultation launched by the International Sustainability Standard Board (ISSB) in terms of sustainability reporting. Also the work performed on a European level through our stakeholder of reference, CSR Europe, was considerable. In fact, on occasion of the European SDG Summit 2022, Enel participated in the roundtables: ”The Role of Double Materiality in Sustainability Reporting“ regarding how double materiality is integrated in the CSRD and how companies can approach it, and ”The Challenge of Circularity in the Green Transition“ regarding the circular economy and the energy transition.
Also worth mentioning is Enel’s involvement in the series of interviews on sustainable finance organized by the UN Sustainable Stock Exchanges Initiative.

Enel welcomes the development of the European Union (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 fully committed to reporting on the implementation of the European Taxonomy Regulation pursuant to its Article 8 thereof and the Delegated Act which further specifies the content, methodology and presentation of information to be disclosed by companies of both a financial and non-financial nature.
As regards the Climate Delegated Act, which establishes criteria for verifying the contribution to climate mitigation and adaptation, we welcome the different thresholds defined in the Taxonomy based on climate and environmental sciences, such as the specific emission limit of 100 gCO2eq/kWh (taking into account the whole life cycle) to measure the substantial contribution to the climate change mitigation target set for most energy production technologies, as it is derived from a robust, science-based process.
However, there are some activities that, although not covered under the EU Taxonomy Regulation, are critical to promoting the well-being of the public, especially in the short and medium term, while contributing to the sustainable development in 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 issues include energy security, grid reliability or energy transition, which are crucial for Europe’s well-being and 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 waters and marine resources; transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and of 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 significantly damage it. 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.

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Investment and European taxonomy

Enel has not only linked its investments to SDGs (Sustainable Development Goals) but also to the European taxonomy. What is the European taxonomy?
Our implementation process and eligible activities

In 2020 we defined a structured process for implementing the European Taxonomy based on 5 phases:

(1) The operation of our nuclear generation portfolio is not included among the eligible activities considered by the Complementary Delegated Act in the generation of electricity from nuclear power plants.
(2) Includes both fuel-oil and gas (OCGT) as it is not possible to divide the two types of fuel. Fuel-oil was considered to be the prevalent fossil fuel and is therefore not eligible under the EU Taxonomy Regulation. 

Our implementation process and eligible activities
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The high level of alignment of our economic activities with the EU Taxonomy Regulation in 2022, made possible by their substantial contribution to the climate change mitigation objective while respecting the principle of doing no significant harm (DNSH) to other environmental objective and observing the minimum social safeguards, is shown below:

% 2022 alignment of business activities to the European Taxonomy


56.7%


of ordinary gross operating profit (EBITDA)
The EBITDA percentage of Taxonomy eligible and aligned businesses decreased in 2022 compared to 2021(10) (63.9%) primarily due to changes in revenue (see details below).

21.4%

of turnover
In 2022, there is a strong increase in absolute terms in turnover compared to 2021(10)(33.9%). This increase was most pronounced in non-aligned activities, such as power generation from gaseous fuels, and non-eligible activities, such as trading and marketing of electricity and gas and power generation from coal, mainly due to the market situation with high prices and higher thermal generation. The aligned turnover therefore decreases by 12%.

81.9%

of capital expenditure (Capex)
The actual 2022 Capex for eligible aligned activities is 4.5% higher than the Capex planned for 2022 in the Strategic Plan 2022-2024 for the same activities. This change is mainly due to higher investments in absolute terms in eligible and aligned activities than planned (over €0.5 billion) and also to adjustments made in the EU taxonomy accounting process, such as the integration of costs accounted for under IFRS 16 Leases, paragraph 53 (h), which had not been taken into consideration in the Strategic Plan 2022-2024.


66.9%

of operating expenditure (Opex)
The percentage of Opex of Taxonomy eligible and aligned activities increased in 2022 compared to 2021 (60.8% in 2021(10)), mainly due to higher maintenance costs incurred in renewable energy production and Taxonomy-aligned distribution activities.

(10) The 2021 figure has been restated based on methodological changes mentioned in the section “Process for calculating the financial metrics”

% 2022 alignment of business activities to the European Taxonomy
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Details of the steps related to the implementation process and results for each KPI (EBITDA, turnover, Capex and Opex) and specific tables on nuclear and fossil gas activities as required by Commission Delegated Regulation (EU) 2022/1214 of 9 March 2022 amending Delegated Regulation (EU) 2021/2139 concerning economic activities in certain energy sectors and Delegated Regulation (EU) 2021/2178 concerning specific public disclosures for these economic activities are provided in the appendix to the Sustainability Report in the chapter “Our position on and commitment to the European Taxonomy”.

ESG analysts and rating agencies continuously monitor Enel’s sustainability performance, by different methods, in relation to environmental, social and governance issues. ESG ratings are a strategic tool to support investors in assessing sustainable business models and identifying risks and opportunities linked to the sustainability in their investment portfolio, aiding the development of active and passive sustainable investment strategies.

Enel is constantly committed to managing and reporting all ESG aspects, considering the assessments of the rating agencies as an important opportunity to improve its performance in terms of sustainability and devising specific action plans with the involvement of the various company units and Business Lines. The main actions implemented also thanks to these plans have concerned: increasing the transparency of performance related to ESG issues, reinforcing the process of due diligence of human rights, the complete mapping and assessment of the climatic associations with respect to the Paris objectives, defining and reporting the biodiversity “No Net Loss” target, improving the reporting of Scope 3 emissions, in particular those related to the supply chain.

In 2022, Enel maintained its positioning in the main ESG indices and rankings, reaching leadership positions in most cases. Enel was also the first company to fully align its company reporting to the Net-Zero Company CA100+ Benchmark and was included in the Just Transition Assessment of the World Benchmarking Alliance.

Key milestones 2022:
Our Commitment to Continuous Improvement - Key Milestones 2022
Key milestones 2022:
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Main ESG Indices & Rankings
Our commitment to continuous improvement -Main ESG indices and rankings
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Main ESG ratings

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Our commitment to continuous improvement - photovoltaic panels

This year too, we have involved a group of external experts (advisory panel) to strengthen our sustainability reporting. The panel helps to assess and improve the quality and credibility of our Sustainability Report and to increase our level of ambition.
In particular, for the 2022 Sustainability Report, two sustainability experts were involved, with specific reference to issues related to corporate strategy and sustainable finance.

Our commitment to continuous improvement -involving external experts to strengthen sustainability reporting
Advisory panel
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The experts provided input on our process of determining the structure of the document and the contents relating to the chapter “Our sustainable progress”, which gives an overall view of the management of sustainability in the Enel Group. Panel members are unpaid.

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Glossary

ACT

Word
ACT
Definition
Actual – when associated with one or more items of data, the term describe results that have been achieved, as opposed to estimated or forecast results. In a full reporting system, “actual” data are generally compared with “budget” data (see “BDG”).

AIFIRM

Word
AIFIRM
Definition
Associazione Italiana Financial Industry Risk Managers - an association representing Italian-based risk managers from the financial, banking and insurance sectors.

AM

Word
AM
Definition
Adjustment Market - a trading venue where producers, wholesalers and end-customers can change the input/withdrawal programs established on the Day-Ahead Market (DAM): it was superseded by the Intra-Day Market (IDM) on November 1 2009.

APA

Word
APA
Definition
Advanced Pricing Agreement - a type of agreement widely used in OECD countries, under which one or more tax-paying entities and one or more tax authorities establish, in advance, the criteria and technical procedures for applying the principle of free competition to intercompany transactions (Transfer Pricing), so as to prevent disputes over transfer pricing. An APA can be unilateral, bilateral or multilateral, depending on how many financial administrations are involved in the agreement.

API indices

Word
API indices
Definition
All Publications Index - a price index for hard coal. API 2: A price index for hard coal with a calorific value of approximately 6,000 kcal/kg imported into North-West Europe (Amsterdam-Rotterdam-Antwerp). The financial quotation is shown including CIF (Cost, Insurance and Freight) and NAR (Net As Received) in US$ per tonne. API4 - An FOB (Free On-Board) price index for hard coal deliveries to the Richards Bay hub (South Africa) API6 - An FOB price index for Australian hard coal.

ARA

Word
ARA
Definition
Amsterdam-Rotterdam-Antwerp – refers to the ports of Amsterdam, Rotterdam and Antwerp, where transactions for refined products are used as indicators for the North-West Europe market.

ARS

Word
ARS
Definition
Argentine peso.

B2B

Word
B2B
Definition
Business to Business - commercial transactions between companies, as opposed to commercial transactions between companies and other categories of customer. It represents the relationships that a company has with its suppliers for the purposes of procurement, production planning and monitoring, or product development, or the relationships that the company has with professional customers, i.e. other companies at different points in the production chain.

B2C

Word
B2C
Definition
Business to Consumer - describes the relationships that a commercial company has with its customers for the purposes of sales and/or support.

B2G

Word
B2G
Definition
Business to Government - describes commercial transactions between businesses and government bodies. Also known as Business to Administration (B2A).

BDG

Word
BDG
Definition
Budget - a management and accounting tool for planning and controlling operational, economic and financial activities in a company's first year of planning.

BESS

Word
BESS
Definition
Battery Energy Storage System - a battery-based system for storing energy. BESS systems are used to store energy and release it at times of peak energy demand or when renewable energy sources are unavailable. BESS systems can also provide frequency and voltage regulation services in the power grid.

BEV

Word
BEV
Definition
Battery Electric Vehicle. A type of vehicle powered by a battery-operated electric motor. Unlike internal combustion vehicles, which burn fuel to produce energy, BEVs do not emit pollutants into the environment.

BRL

Word
BRL
Definition
Brazilian real.

BSO

Word
BSO
Definition
Build, Sell and Operate. In the renewable energy industry, this means selling assets in order to generate revenue, while remaining responsible for their operation and operational management.

Brent

Word
Brent
Definition
“Brent” is the term used to describe crude oil extracted from the North Sea. The name derives from the Brent oil field, off the coast of Scotland, which was one of the first oil fields discovered in the region. Brent crude has become a major benchmark for global oil prices and is seen as a high-quality oil with a low sulfur content and a relatively high density.

Business Line

Word
Business Line
Definition
An umbrella term referring to a more specific area in which a company performs its services.

Business model

Word
Business model
Definition
A business model defines the logic of how companies create, convey and acquire value in economic, social, cultural or other contexts. Each company has its own specific business model that, in the course of work organization, can undergo major transformations due to both innovation and change.

CAGR

Word
CAGR
Definition
“CAGR” stands for “Compound Annual Growth Rate” and indicates the growth in value of an investment or business asset over a specific period of time.

CBAM

Word
CBAM
Definition
Carbon Border Adjustment Mechanism – forming part of the framework of the European Green deal, the Carbon Border Adjustment Mechanism is a European Union Regulation, proposed by the European Commission in 2021 and provisionally agreed by European legislators in December 2022, concerning environmental customs duties on the importation of products with high greenhouse gas emissions into the European Union. EU importers will purchase carbon certificates corresponding to the carbon price that would have been paid if the goods had been produced under EU carbon pricing rules. Conversely, where a non-EU producer can show that they have already paid a price for the carbon used in the production of the imported goods in a third country, that cost can be fully deducted for the EU importer. The CBAM will help reduce the risk of carbon leakage (i.e. the transfer of production to countries with laxer emissions constraints) by encouraging producers in non-EU countries to green their production processes.

CCGT

Word
CCGT
Definition
Combined Cycle Gas Turbine – a gas-fired combined cycle power plant, in which two thermodynamic cycles (a gas cycle and steam cycle) take place in series, thus increasing thermodynamic efficiency compared to a scenario where both cycles take place independently, and making more effective use of the fuel.

CCIRS

Word
CCIRS
Definition
Cross Currency Interest Rate Swap - a swap contract in which the parties exchange payments at two different rates and in two different currencies.

CCS

Word
CCS
Definition
Carbon Capture and Storage – a technology used to prevent the release of large amounts of carbon dioxide into the atmosphere, by separating the carbon dioxide from the emissions and injecting it into geological formations.

CDM

Word
CDM
Definition
Clean Development Mechanism – defined in article 12 of the Protocol, the CDM allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol (Annex B Party) to implement an emission-reduction project in developing countries. Such projects can earn saleable certified emission reduction (CER) credits, each equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets.

CDP Climate

Word
CDP Climate
Definition
Carbon Disclosure Project - the CDP is an international non-profit organization that provides companies, local authorities, governments and investors with a global system of environmental measurement and reporting. The CDP provides a system for measuring, recording, managing and sharing global climate-change information.

CDS

Word
CDS
Definition
Clean Dark Spread - the CDS is the difference between the wholesale price of electricity and the cost of the coal and carbon needed to produce 1 MWh of electricity. It refers to the power (earnings side) and coal/CO2 (cost side) exposure arising from generating energy with a coal-fired power plant.

CER

Word
CER
Definition
Certified Emission Reduction - A tradable emissions unit issued under the UN’s Clean Development mechanism (see CDM).

CF@R

Word
CF@R
Definition
Cash Flow at Risk - a risk metric for measuring the maximum potential decrease in expected cash flows resulting from market volatility and correlation, with a given confidence level, over a given period of time (holding period).

CFC

Word
CFC
Definition
Controlled Foreign Companies - a concept used by EU tax systems to prevent tax avoidance. It is part of a tax regime designed to counter the fictitious allocation of significant earnings to controlled foreign companies registered in low-tax countries, especially for companies that do not systematically distribute dividends.

CFD

Word
CFD
Definition
Contract For Difference - CFDs are a financial instrument whose price derives from the value of other types of investment instruments. Instead of involving the physical trading or exchange of a financial asset, a CFD is a transaction in which two parties – a seller and a buyer – agree to exchange money based on the change in the value of the underlying asset between the time the transaction is opened and the time it is closed. If the value of the underlying asset increases, the buyer makes a profit and the seller makes a loss. Conversely if its value decreases, the seller makes a profit and the buyer makes a loss.

CGE

Word
CGE
Definition
Computable General Equilibrium - a macroeconomic theory that attempts to explain how demand, supply and prices for different products are interrelated and simultaneously determined by market forces according to a mechanism known as "general equilibrium".

CLP

Word
CLP
Definition
Chilean peso.

CME

Word
CME
Definition
Chicago Mercantile Exchange - a global derivatives market based in Chicago. The CME is currently the largest open-interest options and futures exchange in the world (by number of contracts in place). The CME trades various types of financial instruments, including interest rates, shares, currencies and commodities. In 2008, its shareholders approved a merger with the New York Mercantile Exchange (NYMEX).

CO2

Word
CO2
Definition
Carbon dioxide - a colorless, odorless gas, produced naturally by animals during respiration and through the decay of biomass, and used by plants during photosynthesis. Although it accounts for only 0.04% of the atmosphere, it is one of the most important greenhouse gases. The burning of fossil fuels is increasing the concentrations of carbon dioxide in the atmosphere, which is believed to contribute to global warming.

CO2 equivalent

Word
CO2 equivalent
Definition
A standardized unit of measurement of greenhouse gases other than CO2, determined by converting amounts of these other gases to the equivalent amount of carbon dioxide with the same global warming potential, where CO2 equals 1. Under the Kyoto Protocol, the following greenhouse gases must be taken into consideration: carbon dioxide (CO2, hence the term “carbon footprint”), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6). This parameter can be used to determine the environmental impacts of emissions on anthropogenic climate change.

COP

Word
COP
Definition
Colombian peso.

CPI

Word
CPI
Definition
Consumer Price Index - a statistical measurement calculated by averaging the weighted prices of a specific basket of goods and services. This basket is based on the purchasing patterns of an average consumer. The most widely used consumer price index is the index number that measures the change over time in the weighted average of prices paid in transactions relating to consumer goods and services traded between economic operators and private end-consumers (free-of-charge transactions, intermediate transactions and transactions involving public bodies are not taken into account when determining the index). This type of index therefore measures the increase in the general level of prices, i.e. consumer inflation for the period concerned (measurement of the cost of living for the specific period).

CSR

Word
CSR
Definition
Corporate Social Responsibility - corporate policies and practices designed to harmonize economic goals with the social and environmental goals of the geographical area concerned, with a view to promoting sustainability. It is a voluntary form of responsibility that companies tend to assume in relation to their main stakeholders.

CSS

Word
CSS
Definition
Clean Spark Spread – the CSS is the difference between the wholesale price of electricity and the cost of the coal and carbon needed to produce 1 MWh of electricity. It refers to the power (earnings side) and gas/CO2 (cost side) exposure arising from generating energy with a gas-fired power plant.

CSV

Word
CSV
Definition
Creating Shared Value - the CSV approach involves reconciling the company perspective with the social, economic and environmental needs of the community in which a company operates, with a view to identifying choices that generate value for both parties.

CapEx

Word
CapEx
Definition
CAPital EXpenditure. In business economics, “CapEx” denotes capital outlays on investments in non-current assets for operational purposes. In practice, this means funds used by a company to acquire, maintain and implement physical assets such as buildings, land, plants or equipment.

Carbon Footprint

Word
Carbon Footprint
Definition
“Carbon Footprint” is a parameter used to estimate greenhouse gas emissions from a product, service, organization, event or individual, generally expressed in CO2 equivalent (i.e. by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming potential, where CO2 equals 1).

Carbon Neutral

Word
Carbon Neutral
Definition
The term “carbon neutral” describes a situation where an entity’s CO2 emissions are fully offset by its carbon removal processes.

Circular economy

Word
Circular economy
Definition
A concept linked to the definition of business models aimed at decoupling economic and industrial activities from resource consumption (although, in public opinion, it has been mainly and improperly associated with the issue of waste recycling). Leveraging a major institutional recognition, which occurred with the EU’s 2015 Circular Economy Package, it subsequently became one of the cornerstones of the European strategy in 2020 with the Green New Deal (Circular Economy Action Plan).

Climate Neutral

Word
Climate Neutral
Definition
The term “climate neutral” describes a state of equilibrium between greenhouse gas emissions and the absorption of greenhouse gases from the atmosphere.

Consolidated income statement

Word
Consolidated income statement
Definition
A document that is part of the Consolidated Financial Statements and consists of a classification of costs according to their nature, with a separate presentation of the net profit (loss) from continuing operations and discontinued operations attributable to shareholders of the Parent Company and to third parties.

D&A

Word
D&A
Definition
Depreciation & Amortization – a component part of the cash flow calculation intended to exclude from EBITDA the share of costs incurred in a given year but attributable to subsequent years, and the share of future charges attributable to a given year but which have not yet been paid.

DAM

Word
DAM
Definition
Day-Ahead Market - the venue where electricity sales and purchases are negotiated on the Italian free market. It enables eligible producers, wholesalers and end-customers to sell or buy electricity for the next day.

DPS

Word
DPS
Definition
Dividend Per Share - the sum of the declared dividends issued by a company for each ordinary share in circulation.

DSM

Word
DSM
Definition
Dispatching Services Market - the market on which Terna S.p.A. (Italy’s TSO) procures the necessary resources for managing and controlling the system (resolving intra-zone congestion, creating an energy reserve and real-time balancing). On the DSM, Terna acts as a central counterparty and pays for accepted offers at the price quoted by the bidder (pay-as-bid).

DSR

Word
DSR
Definition
Demand-Side Response - in the energy market, the term “DSR” describes active participation in the market by demand-side entities, i.e. major industrial consumers and aggregated – and duly regulated – groupings of consumers (industrial, commercial). These consumers can modulate their energy consumption, upwards or downwards, in response to market signals, in exchange for an economic benefit. This service helps modulate peaks in supply or demand, thus enhancing the flexibility and stability of the grid.

Direct Emissions

Word
Direct Emissions
Definition
Direct greenhouse gas emissions are emissions from sources owned or controlled by the reporting entity. These emissions can also be referred to as scope 1 emissions.

E2E

Word
E2E
Definition
End-to-End - under the end-to-end principle, where two applications communicate over a network, all the specific functions and operations required by those applications, such as error checking, must be fully implemented and executed at the end nodes (or end points) and not at the intermediate nodes of the network.

EA

Word
EA
Definition
Equivalent Asset – a functional unit, specific to a Business Line, assumed to represent organizational complexity from an environmental point of view and the related business volumes: For GPG: 500 MW of installed capacity. For GIN and ENEL X: million hours worked.

EBIT

Word
EBIT
Definition
Earnings Before Interest and Taxes - represents operating income before the deduction of financial expense and taxes. Also known as Operating Income Before Taxes.

EBITDA

Word
EBITDA
Definition
Earnings Before Interest, Taxes, Depreciation and Amortization - represents gross operating margin and is an indicator of operational performance. It is the sum of “operating income” and “depreciation, amortization and impairment losses”.

EBT

Word
EBT
Definition
Earnings Before Taxes - represents income before the deduction of taxes.

ECB

Word
ECB
Definition
European Central Bank - The European Central Bank (ECB) is the central bank of the European Union and is responsible for Euro Zone monetary policy.

ECB

Word
ECB
Definition
European Central Bank - The European Central Bank (ECB) is the central bank of the European Union and is responsible for Euro Zone monetary policy.

EDF

Word
EDF
Definition
Électricité de France.

EDP

Word
EDP
Definition
Energia de Portugal.

EGM

Word
EGM
Definition
Extraordinary General Meeting - a general meeting of all company members, held to discuss important matters that cannot be deferred until the next annual general meeting.

EIA

Word
EIA
Definition
Energy Information Administration - the statistical and analytical agency of the United States Department of Energy. The EIA collects, analyzes and disseminates independent, impartial energy information to promote rational policy-making, efficient markets and public understanding of energy and its interaction with the economy and the environment. EIA programs cover data on coal, oil, natural gas, electricity, renewable energy and nuclear energy.

EM

Word
EM
Definition
Emerging Markets - an emerging market (or an emerging country or an emerging economy) is a market that has some of the characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or have been developed markets in the past. The term "frontier market" is used to describe developing countries whose capital markets are smaller, riskier or less liquid than those of "emerging" countries. Since 2006, the Chinese and Indian economies have been considered the largest emerging markets. The nine largest emerging and developing economies by nominal GDP or PPP-adjusted GDP are the BRICS countries (Brazil, Russia, India, China and South Africa), along with Indonesia, South Korea, Mexico, Saudi Arabia and Turkey.

EMIR

Word
EMIR
Definition
European Market Infrastructure Regulation - EU Regulation no. 648/2012 concerning OTC derivatives, central counterparties and trade repositories.

EPS

Word
EPS
Definition
Earnings Per Share - the earnings a company has generated, divided by the number of shares it has issued.

ERU

Word
ERU
Definition
Emission Reduction Unit - a tradable emissions unit issued under the UN’s Joint Implementation (JI) process.

ESG

Word
ESG
Definition
Environmental, Social, Governance - denotes the three key criteria for measuring the environmental, social and governance impact of companies with a view to maintaining sustainable business practices. In economics and finance, these criteria are used to denote all activities relating to responsible investment that pursue the typical goals of financial management, while taking account of environmental, social and governance aspects.

ESMA

Word
ESMA
Definition
European Securities and Markets Authority - the aim of the ESMA is to improve investor protection and promote stable and orderly financial markets.

ETR

Word
ETR
Definition
Effective Tax Rate - the total tax burden on pre-tax profit in percentage terms (taxes/pre-tax profit). For calculation purposes, account is only taken of the income taxes that apply to the total amount allocated to the income statement (current taxes, deferred taxes, withholding taxes, etc.).

EU

Word
EU
Definition
European Union - a supranational political and economic organization, comprising 27 Member States.

EU ETS

Word
EU ETS
Definition
European Union Emissions Trading System - a system for greenhouse gas emissions allowance trading aimed at reducing emissions in the most energy-intensive sectors (electricity, cement, steel, aluminum, brick and ceramic, glass, chemicals, aviation, etc.) in the European Union.

EUA

Word
EUA
Definition
European Union Allowances - CO2 emissions allowances under the European Union Emissions Trading System.

EV

Word
EV
Definition
Electric Vehicle - a means of transport propelled by an electric motor, which is normally powered by rechargeable batteries, but which can also be connected to overhead power lines, conductive rails or power strips for lateral sliding contacts. Depending on design needs or characteristics, electric vehicles can be equipped with 1, 2, 3, 4 or more wheels. Electric vehicles include road and rail vehicles, surface and underwater vessels, electric aircraft and electric spacecraft.

European Union taxonomy

Word
European Union taxonomy
Definition
The European taxonomy (adopted by the European Union in Regulation (EU) 2020/852) defines six environmental objectives for identifying sustainable economic activities from an environmental perspective: climate change mitigation; climate change adaptation; sustainable use and protection of waters and marine resources; transition to a circular economy; prevention and reduction of pollution; protection and restoration of biodiversity and ecosystems.

FCF

Word
FCF
Definition
Free Cash Flow - the cash flow available to a company, i.e. the difference between cash flow from operating assets and cash flow for capital expenditure.

FCT

Word
FCT
Definition
Forecast - a tool for monthly re-forecasting of economic and financial targets for the current financial year.

FFO

Word
FFO
Definition
Funds From Operations - the figure used by Real Estate Investment Trusts (REITs) to calculate the cash flow from their operations. More specifically, FFO is intended to describe trends in monetary revenues and expenses arising from the management of the fund in question. FFO is calculated on the basis of pre-tax profit (profit for the period), plus current taxes, changes in depreciation and amortization, the net change in the market value of property and any write-downs. The ratio of FFO/Revenues is frequently used as an indicator in this sector because it provides the percentage of fund revenues that actually turn into cash flows for holders of shares in the fund.

FS

Word
FS
Definition
Fuel Switching – the practice of replacing one energy source with another to meet the needs of heat, power and/or electricity generation.

FTE

Word
FTE
Definition
Full-Time Equivalent - the number of full-time resources needed to carry out a given activity, or employed by a company, in relation to the total number of resources used or employed, where some resources are employed on a part-time basis.

FWD

Word
FWD
Definition
Forward - a trading contract, on the over-the-counter (OTC) market, relating to an underlying physical or financial asset (energy, commodities, etc.). It is a symmetrical derivative contract because both parties to the contract are obliged to perform a service on maturity. The long party undertakes to purchase the underlying asset on the agreed date at the agreed price, whereas the short party undertakes to sell the underlying asset on the same date and at the same price.

FX

Word
FX
Definition
Forex or FOReign EXchange - the exchange rate can be defined as the number of units of a foreign currency that can be purchased with one unit of national currency.

FX HR

Word
FX HR
Definition
Foreign Exchange Hedge Ratio - the portion of gross debt not exposed to exchange rate variations, taking account of hedging derivatives and the natural hedging arising from Funds From Operations (FFOs), to provide a measurement of the impact of exchange rate fluctuations on financial expense (interest payments and capital repayments).

FY

Word
FY
Definition
Fiscal Year - the fiscal year is a designated twelve-month period used for the purposes of budgeting, accounting and all other financial reports for businesses.

Financial Report

Word
Financial Report
Definition
The document that reports the items on the Income Statement and those on the Balance Sheet, explaining where the company’s liquidity is generated and where it is absorbed. The Consolidated Statement of Cash Flow is prepared by using the indirect method, with separate presentation of cash flow from operating assets, investment activities and financing activities associated with discontinued operations.

GCC

Word
GCC
Definition
Gas Combined Cycle - technology for gas-fired thermoelectric power plants.

GDP

Word
GDP
Definition
Gross Domestic Product - GDP is a macroeconomic metric for measuring the aggregate value, at market prices, of all finished goods and services (i.e. excluding intermediate products) produced in a given country over a given period of time (normally the calendar year, but other time-frames are also used).

GHG

Word
GHG
Definition
Greenhouse Gases - gases in the earth’s atmosphere that trap heat and are the main contributors to climate change. They are emitted into the atmosphere by human activity, especially combustion processes (but there are others). The main greenhouse gases are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6). Greenhouse gases do not include water vapor, the main contributor to the natural greenhouse effect, which is essential for life on Earth (see also CO2 equivalent).

GME

Word
GME
Definition
Gestore dei Mercati Energetici - the company responsible organizing and managing the electricity market in Italy, as well as providing the economic management of an adequate reserve of power.

GNI

Word
GNI
Definition
Gross National Income - GNI is calculated by adding or subtracting, depending on the type of flow, various cross-border income streams to or from gross domestic product (GDP). Or Group Net Income - the net income of the Enel Group.

GPP

Word
GPP
Definition
Green Public Procurement - the integration of environmental considerations into the purchasing procedures of government bodies, in other words, a means of choosing "goods and services with a lower or reduced impact on human health and the environment than other goods and services used for the same purpose". (U.S. EPA 1995). 'Green procurement' therefore means buying a good/service partly on the basis of the environmental impacts it may have throughout its life-cycle, from extraction of the raw material to the disposal of waste (i.e. "from cradle to grave"). Green Public Procurement practices involve setting environmental qualification criteria in the specifications that public bodies issue when purchasing goods and services, with a view to reducing their environmental impact, while also nudging the market as a whole towards more environmentally-friendly products. Public procurement accounts for about 17% of Gross Domestic Product (GDP) in Italy and about 14% across the rest of the European Union.

GRI Content Index

Word
GRI Content Index
Definition
The GRI Content Index sets out the references and reporting tools used to prepare the report in accordance with the relevant GRI Industry Standards and Electric Utilities Sector Disclosure.

Green Bond

Word
Green Bond
Definition
The term “green bonds” refers to any type of bond from which the proceeds are to be used exclusively to finance or refinance eligible new and/or existing green projects, either partially or in full.

Green Deal

Word
Green Deal
Definition
An integrated European action plan that leverages digital technology and innovation to promote efficient use of resources, restore biodiversity and reduce pollution.

Green Loan

Word
Green Loan
Definition
Any type of loan made available for the sole purpose of financing or refinancing eligible new and/or existing green projects, either partially or in full. The crucial distinguishing feature of a Green Loan is that its proceeds must be used for “green projects”.

Group ordinary net income

Word
Group ordinary net income
Definition
Defined as the “Group net income” attributable exclusively to ordinary operations, it is equal to the “Group net income”, net of any tax effects and effects on third-party interests, of the items previously discussed in “Ordinary operating income”.

HDD

Word
HDD
Definition
Heating Degree Day - a measurement used to quantify demand for heating energy.

HEV

Word
HEV
Definition
Hybrid Electric Vehicles – an HEV is a vehicle equipped with a drive system based on two or more components, such as an electric motor with a combustion engine, that work in synergy with each other.

HH

Word
HH
Definition
Henry Hub - a natural gas distribution hub in Earth, Louisiana, owned by Sabine Pipe Line LLC, a subsidiary of EnLink Midstream Partners LP. Because of its importance, it has given its name to the price point of forward contracts on natural gas traded on the New York Mercantile Exchange (NYMEX) and OTC swaps traded on the InterContinental Exchange (ICE).

HR

Word
HR
Definition
Human Rights - the fundamental human rights recognized by the United Nations Universal Declaration of Human Rights.

HR DD

Word
HR DD
Definition
Human Rights Due Diligence - a process for monitoring the implementation of human rights policy and adherence to the guiding principles of the United Nations and the OECD Guidelines on Responsible Business Conduct.

ICE

Word
ICE
Definition
InterContinental Exchange - a US-based financial company founded in 2000, which operates in Internet-based markets and trades futures and energy, commodities and financial derivatives in over-the-counter markets. Initially the company focused mainly on energy products (crude and refined oil, natural gas, etc.) but has since extended its activities to commodities, such as sugar, cotton and coffee, and foreign exchange. Or International Currency Exchange - a global currency exchange company based in London. The ICE is one of the largest retail exchange operators in the world.

ICE Vehicles

Word
ICE Vehicles
Definition
Internal Combustion Engine - conventional vehicles powered by internal combustion engines.

ICMA

Word
ICMA
Definition
International Capital Markets Association - a self-regulatory organization for capital market participants. Although the name suggests that its remit is global, its focus is in fact European. The stated objectives of the ICMA are to promote high standards of market practice, appropriate regulation, commercial support, education and communication. It produces standard documentation for transactions such as share and debt issuance and repurchase agreements.

IDM

Word
IDM
Definition
Intra-Day Market - the IDM provides 7 sessions (IDM 1, 2, 3, 4, 5, 6 and 7) in which producers and wholesalers can change the input programs established on the DAM (the IDM superseded the Adjustment Market [AM] in 2010).

IEA

Word
IEA
Definition
International Energy Agency - An intergovernmental organization of the Organization for Economic Cooperation and Development (OECD) based in Paris and established as an international research institute on energy policy and the environmental impact of energy sources.

IFRS

Word
IFRS
Definition
International Financial Reporting Standards - a set of international standards, used in the EU, for the preparation of annual and consolidated financial statements. Their purpose is to increase transparency for the benefit of investors.

IMF

Word
IMF
Definition
International Monetary Fund - the IMF is a public international organization of a universal nature, composed of the national governments of 190 countries. Together with the World Bank Group, it forms part of the Bretton Woods system, which is named after the place where the conference that endorsed its creation was held.

INECP

Word
INECP
Definition
Integrated National Energy and Climate Plan – a plan drawn up jointly by Italy’s Environment Ministry and Infrastructure and Transport Ministry and submitted to the European Commission pursuant to Regulation (EU) 2018/1999 (December 2018). It sets out the national targets for 2030 for energy efficiency, renewables and CO2 emission reductions, as well as targets for energy security, interconnections, the single energy market and competitiveness, and sustainable development and mobility. For each field, it outlines the measures that will be taken to achieve the target concerned.

IPCC

Word
IPCC
Definition
Intergovernmental Panel on Climate Change - the leading international body for evaluating climate change. The IPCC was established in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Program (UNEP) in order to provide the world with a clear and scientifically founded view of the current state of knowledge on climate change and its potential environmental and socio-economic impacts.

IR HR

Word
IR HR
Definition
Interest Rate Hedge Ratio - the portion of gross debt not exposed to interest rate variations, taking account of hedging derivatives, to provide a measurement of the impact of interest rate fluctuations on interest payable.

IRR

Word
IRR
Definition
Internal Rate of Return – a metric used in financial analysis to determine how attractive a particular project or investment may be, and to help choose between possible projects or investment options under consideration. In general, an investment project is attractive if the IRR is higher than the opportunity cost of the capital (or other reference rate, chosen on the basis of considerations relating to the specific investment and/or on the basis of the WACC).

Incentives system

Word
Incentives system
Definition
Systems that, within the broader Total Reward management framework, link the recognition of a variable proportion of remuneration to the achievement of certain results, in line with the remuneration policy defined by the company. The purpose of this policy is to: (i) promote corporate performance and sustainable success, which is based on the creation of long-term value to the benefit of its shareholders, taking into due consideration the interests of other relevant stakeholders, so as to encourage the achievement of strategic goals; (ii) attract, retain and motivate people with the skills and professionalism required for the delicate managerial tasks assigned to them, taking into account the compensation and working conditions of the company’s employees; (iii) promote the company’s mission and values.

Indirect Emissions

Word
Indirect Emissions
Definition
Indirect GHG emissions are a consequence of the activities of the reporting entity, but occur at sources owned or controlled by a different entity. For example, emissions from the consumption of purchased electricity, heat or steam (scope 2) and emissions from the extraction and production of purchased materials and fuels; activities relating to transport by vehicles not owned or controlled by the reporting entity; activities relating to electricity (e.g. T&D losses), outsourced activities, waste disposal, etc.

Industrial Plan

Word
Industrial Plan
Definition
A multi-year planning tool used to translate objectives for future financial years into economic and financial terms.

JCC

Word
JCC
Definition
Japan Crude Cocktail - the informal nickname given to the crude oil price index used in most East Asian countries. Published by the Petroleum Association of Japan, the JCC represents the average price of customs-cleared crude oil imports into Japan. Historically, the JCC was the main index for pricing Liquefied Natural Gas (LNG) contracts, as there was no global benchmark. However, as the JCC is based on oil prices as opposed to gas, there have been growing objections to its use. In Europe and most North American countries, LNG pricing has shifted away from the JCC to gas-based indexes (e.g. Henry Hub).

JKM

Word
JKM
Definition
Japan Korean Marker - a virtual market in which natural gas is traded in Japan, South Korea, China and Taiwan. As an index, it is a benchmark price for liquefied natural gas (LNG).

JV

Word
JV
Definition
Joint Venture - an agreement between companies, whether of the same or different nationalities, to undertake a given project, within a limited time-frame, while sharing the risks and profits.

KPI

Word
KPI
Definition
Key Performance Indicator - an index of the performance of a business process.

KRI

Word
KRI
Definition
Key Risk Indicator - a risk indicator that measures the probability or foreseeable (and unforeseeable) impacts of the risk, by means of a quantitative approach (“what if” and scenario analysis or probabilistic approaches).

LCOE

Word
LCOE
Definition
Levelized Cost of Energy - the LCOE is an indicator of the competitiveness of different electricity generation technologies, diversified by type of energy source and average plant life. It provides an economic estimate of the average cost of financing and maintaining a power plant over its useful life, in relation to the total amount of energy generated over the same time period. The Levelized Cost of Energy is therefore a benchmark value for setting the per-unit price at which the generated energy must be sold, in order to achieve an adequate economic return on the costs of financing and maintaining the plant throughout its life cycle.

LME

Word
LME
Definition
London Metal Exchange - the world’s largest metal exchange, based in London. The average maturity of the futures traded on a daily basis is 3 months, although longer-term contracts and spot contracts are also established. It is currently seen as the global benchmark in the metals market.

LNG

Word
LNG
Definition
Liquefied Natural Gas - LNG is obtained by cooling and then condensing natural gas (NG), after first purifying and dehydrating it. It should not be confused with GTL, the acronym for Gas to Liquid, which refers to processes for obtaining liquid hydrocarbons from NG. The resulting product is an odorless, transparent liquid consisting mainly of methane, mixed with smaller quantities of ethane, propane, butane and nitrogen, with a boiling point of approximately -160°C at atmospheric pressure.

MAR

Word
MAR
Definition
Market Abuse Regulation - EU Regulation no. 596/2014 on market abuse.

MBO

Word
MBO
Definition
Management By Objectives - a method for evaluating personnel on the basis of the results they achieve in relation to the targets set.

MFF

Word
MFF
Definition
Multiannual Financial Framework - a seven-year reference framework governing the EU’s annual budget. It is established by a unanimously adopted European Council Regulation with the approval of the European Parliament. The financial framework establishes the maximum amount of expenditure from the EU budget each year for broad investment areas (known as "headings") and sets an overall annual ceiling for allocations and payments. The MFF for the period 2021-2027 has a budget of 1,074.3 billion euros to address the EU’s long-term priorities. It complements the Next Generation EU recovery package (NGEU), worth 750 billion euros in grants and loans for the period 2021-2024, to address the socio-economic challenge posed by the COVID-19 pandemic. A total of 30% of overall MFF and NGEU expenditure is earmarked for climate-related initiatives.

Management and Corporate Governance

Word
Management and Corporate Governance
Definition
Rules constitute an essential instrument to ensure an efficient and successful management and a reliable control tool of the activities carried out by the company, aiming at the creation of value for shareholders.

Mark-to-Market

Word
Mark-to-Market
Definition
A method used for measuring items in forward contracts at current market prices.

MiFID II

Word
MiFID II
Definition
Markets in Financial Instruments Directive - EU Directive no. 2014/65 on financial instruments markets.

NBP

Word
NBP
Definition
National Balancing Point - a virtual market for trading natural gas in the UK.

NCC

Word
NCC
Definition
Net Connect Gas - a virtual market for trading natural gas in Germany.

NES

Word
NES
Definition
National Energy Strategy - Italian legislation establishes various planning/guidance tools relating to energy, which are also aligned with European directives and regulations. Art. 7 of decree-law 112/2008, converted by law 133/2008 (Chamber Act 1386), assigned the Government the task of establishing a “National Energy Strategy” (NES) as a general framework to help guide and plan national energy policy, to be issued following a National Energy and Environment Conference. The aim was to set out short- and long-term priorities aimed at using market mechanisms and other levers to achieve the goals of diversifying energy sources and procurement areas, upgrading infrastructure, promoting renewable sources and energy efficiency, building nuclear power plants in Italy and enhancing research in the field of energy and environmentally sustainable energy generation and use. The strategy was last updated in 2017 with a view to attracting additional total investments of 175 billion euros by 2030, including 30 billion for gas and electricity grids and infrastructure; 35 billion for renewable sources.

NYMEX

Word
NYMEX
Definition
New York Mercantile Exchange - the world’s leading market for futures and options on energy products, such as oil and natural gas; precious metals, such as silver, gold, palladium and platinum; and industrial metals, such as aluminum and copper.

Net-Zero

Word
Net-Zero
Definition
Net-Zero involves reducing greenhouse gas emissions in line with the latest climate science and the 1.5°C trajectory, with the remaining emissions offset by carbon removal credits. .

OECD

Word
OECD
Definition
Organization for Economic Co-operation and Development - an international organization whose purpose is to conduct economic studies for its member states, all of which are developed countries with market economies. The organization acts primarily as a consultative assembly that provides the opportunity to exchange political experiences, with a view to solving shared problems, identifying commercial practices and coordinating the local and international policies of its member states. It is based in Paris.

Offsetting emissions

Word
Offsetting emissions
Definition
The process of removing GHG emissions by means of compensatory instruments (CCS, forestation) or by purchasing “certificates” (emission allowances) on the ETS or voluntary markets.

Opex

Word
Opex
Definition
OPerating EXpense - the cost of managing a product, business, or system, also known as operating costs.

Ordinary gross operating margin

Word
Ordinary gross operating margin
Definition
This is the “gross operating margin” minus all items relating to extraordinary transactions such as company acquisitions or disposals (e.g. capital gains and losses).

Ordinary operating income

Word
Ordinary operating income
Definition
This is “Operating income” minus the effects of extraordinary transactions, such as company acquisitions or disposals (e.g. capital gains and losses), as well as any significant impairment losses recognized on assets as a result of impairment tests or classification as “Assets held for sale”.

PEC

Word
PEC
Definition
Primary Energy Consumption - gross domestic energy consumption, excluding all non-energy uses of energy carriers (e.g. natural gas used to produce chemicals, rather than for combustion). This parameter is an important instrument for measuring actual energy consumption and comparing it with Europe 2020 targets. The “percentage saved” is calculated using these 2005 values and its forecast for the 2020 targets set out in Directive 2012/27/EU; the Europe 2020 target is achieved when this value reaches 20%.

PEN

Word
PEN
Definition
Peruvian sol.

PHEV

Word
PHEV
Definition
Plug-in Hybrid Electric Vehicle – a type of vehicle whose batteries can be charged by connecting them to an external power source, even without the aid of the vehicle’s internal combustion engine. These vehicles share the characteristics of conventional Hybrid Electric Vehicles (HEVs). PHEVs differ from HEVs because they have a battery charger, which charges the battery with the aid of the Battery Management System (BMS).

PPA

Word
PPA
Definition
Power Purchase Agreement - a long-term electricity supply agreement between two parties, usually an electricity producer (seller) and an electricity consumer or distributor (buyer). PPAs set down full details of the terms and conditions for the sale and purchase of electricity, including the volume of electricity to be supplied, the prices agreed, the balance between production and consumption and the penalties applicable in the event of non-fulfillment of the contract. As PPAs are bilateral agreements, they can take various forms and be tailored to the needs of the parties. Electricity supplies can either be physical or take place through balancing groups.

PV

Word
PV
Definition
PhotoVoltaic – the term used to describe the conversion of light into electricity, using semiconductor materials. The photovoltaic effect is put to commercial use for the generation of electricity by means of photovoltaic plants. The term can also refer to a photovoltaic plant or the solar modules (panels) of which it consists.

PaR

Word
PaR
Definition
Profit at Risk - a risk metric that measures the maximum potential loss of profit that could be caused by a change in the price or volume of raw materials over a given period and for a pre-determined level of probability.

RAB

Word
RAB
Definition
Regulatory Asset Base - a primary benchmark value for determining the annual revenues, i.e. attributable to the income statement, of multiple companies operating in regulated sectors. The RAB is therefore the value of the net capital employed, calculated on the basis of the rules laid down for service providers subject to the regulation of ARERA (Autorità di Regolazione per Energia Reti e Ambiente) for the purpose of determining the revenues concerned.

RAF

Word
RAF
Definition
Risk Appetite Framework - an integrated, formalized set of elements designed to provide a structured, consistent approach to managing, measuring and controlling key risks.

RAS

Word
RAS
Definition
Risk Appetite Statement - within the Risk Appetite Framework (RAF), the Risk Appetite Statement, which is updated periodically and reviewed at least once a year, presents key tools for managing and controlling risk, mainly by setting out the risk strategy and identifying key performance indicators (KPIs), key risk indicators (KRIs) and trends in them at the single risk level.

RCP

Word
RCP
Definition
Representative Concentration Pathway (RCP) – a greenhouse gas concentration (not emissions) trajectory adopted by the IPCC. Four pathways were used for climate modeling and research for the IPCC's Fifth Assessment Report (AR5) in 2014. The pathways describe different climate futures, all of which are considered possible depending on the volume of greenhouse gases (GHG) emitted in the years to come. The RCPs – originally RCP2.6, RCP4.5, RCP6.0, and RCP8.5 – are labeled after a possible range of radiative forcing values in the year 2100 (2.6, 4.5, 6.0 and 8.5 W/m2 respectively). Radiative forcing describes the increase in energy content in the system with resulting rise in temperature. With the sixth update of the report (AR6), published between 2021 and 2023, the IPCC produced an updated set of five future climate projection scenarios, obtained by associating the RCPS to the Shared Socio-economic Pathways (SSP). These scenarios model climate response from 2015 to 2100 on the basis of a series of future emission scenarios that depend also on socio-economic hypotheses and climate mitigation levels. These five scenarios replace the previous Representative Concentration Pathways used in AR5 and are the following: • SSP1-1.9 and SSP2-2.6: scenarios associated with very low and low greenhouse gas emissions, respectively, in which CO2 emissions decrease to net zero around or after 2050. Mean global surface temperature is likely to be higher by 1.0°C-1.8°C in SSP1-1.9 and by 1.3°C-2.4°C in SSP2-2.6 by 2100 with respect to pre-industrial levels (1850-1900). • SSP2-4.5: scenario with a slower reduction of GHG emissions, in which carbon emissions remain more or less the same as today until about 2050. In this scenario, the increase in global surface temperature is in the range of 2.1°C to 3.5°C. • SSP3-7.0 and SSP5-8.5: scenarios associated with high and very high GHG emissions, respectively. In SSP3-7.0, CO2 emissions approximately double by 2100 with respect to current levels and global surface temperature is likely to increase by 2.8°C-4.6°C by the end of the century with respect to the pre-industrial period. In SSP5-8.5, instead, carbon emissions approximately double by 2050 and the increase in temperature is in the range of 3.3°C to 5.7°C.

REMIT

Word
REMIT
Definition
Regulation on Wholesale Energy Market Integrity and Transparency - EU Regulation no. 1227/2011 concerning the integrity and transparency of the wholesale energy market.

RES

Word
RES
Definition
Renewable Energy Sources.

ROIC

Word
ROIC
Definition
Return On Invested Capital - an indicator of how effectively, or otherwise, a company is using its money. The following formula is one of the ways of calculating ROIC: (Net Income – Dividends) / Total Capital. Comparing a company’s return on invested capital with its weighted average cost of capital (WACC), shows whether the capital employed is being used effectively. This metric is also known simply as "return on capital".

RPA

Word
RPA
Definition
Robotic Process Automation – a “Robot Software” that, when suitably trained, is capable of interacting autonomously with applications in the same way as a human.

RUB

Word
RUB
Definition
Russian ruble.

SAIDI

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SAIDI
Definition
System Average Interruption Duration Index - an indicator commonly used by electricity companies as a metric of reliability. The SAIDI represents the average duration of interruptions for each customer served.

SAIFI

Word
SAIFI
Definition
System Average Interruption Frequency Index - an indicator commonly used by electricity companies as a metric of reliability. The SAIFI is the average number of interruptions that a customer experiences.

SAM

Word
SAM
Definition
Social Accounting Matrix - an economic analysis tool derived from the better-known Leontief Input-Output Matrix ("I-O Matrix"). The SAM can be used as a starting point for building models of general economic equilibrium, which, unlike others, include the distribution of income within the economic process, while at the same time making it possible to view this distribution as the cause and effect of income-forming processes.

SASB

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SASB
Definition
SASB standards enable organizations to provide industry-based sustainability information about risks and opportunities that can affect business value.

SBTi

Word
SBTi
Definition
Science Based Targets Initiative - a joint initiative between the CDP, the United Nations Global Compact (UNGC), the World Resources Institute (WRI) and the World Wildlife Fund (WWF) aimed at increasing companies' ambitions for climate action by enlisting companies to set GHG emission reduction targets consistent with the level of decarbonization required by science to limit warming to less than 1.5ºC / 2°C compared to pre-industrial temperatures. Launched in 2015, the initiative defines and promotes best practices in setting science-based targets, provides resources and guidance to reduce barriers to adoption, and independently assesses and approves business targets. SBT is developing industry-specific methods and is currently working on developing a reference framework and a guide for the financial sector, with a focus on scope 3 emissions.

SDG-linked bonds

Word
SDG-linked bonds
Definition
Bonds launched by Enel on October 10 2019 for the European market, linked with achieving the United Nations Sustainable Development Goals (SDGs). More specifically, the SDG-Linked Bond, which is the first of its kind in the world, is tied to pursuing two of the 17 Sustainable Development Goals (SDGs) set by the UN in 2015: affordable and clean energy and combating climate change. A distinctive feature of the SDG-Linked bond launched by Enel is that the interest rate will remain unchanged until maturity, but could be stepped up year by year if Enel is unable to meet its sustainable economic goals by 2021. The interest rate will increase by 25 bps starting from the first interest period subsequent to the publication of the assurance report of the auditor. The “sustainable” bond reflects Enel’s commitment to contributing to the achievement of SDG 7.2, i.e. “Increase substantially the share of renewable energy in the global energy mix by 2030”. Following the launch of this bond by Enel, the ICMA included this type of instrument in its definitions under the name Sustainability-Linked Bond, which includes SDG-Linked Bonds.

SDGs

Word
SDGs
Definition
Sustainable Development Goals - a series of 17 interconnected goals, set by the United Nations as a strategy designed "to achieve a better and more sustainable future for everyone". They are set out in the document entitled “Transforming our world: the 2030 Agenda for Sustainable Development” (known as Agenda 2030), launched in 2015, which acknowledges the inextricable link between human well-being, the health of natural systems and the existence of common challenges for all countries. The sustainable development goals are intended to address a wide range of issues relating to economic and social development, including poverty, hunger, the right to health and education, access to water and energy, employment, inclusive and sustainable economic growth, climate change and environmental protection, urbanization, models of production and consumption, social and gender equality, justice and peace.

SHFE

Word
SHFE
Definition
Shanghai Futures Exchange - currently the largest metal futures exchange in China and the third largest of its kind in the world, the SHFE specializes in metals, energy, and chemicals. Based in the city of Shanghai, its geographical location bridges the time gap between the London Metal Exchange and the New York Mercantile Exchange, thus giving operators throughout the world round-the-clock access to non-ferrous metal futures contracts.

SMEs

Word
SMEs
Definition
Small and Medium Enterprise - companies whose size falls within certain employment and financial limits.

SNP

Word
SNP
Definition
Single National price – the benchmark price of electricity in Italy purchased on the stock exchange and published by the Gestore dei Mercati Energetici.

SRI

Word
SRI
Definition
Sustainable and Responsible Investment - the aim of SRI is to generate value for the investor and society as a whole by means of a medium/long-term investment strategy that combines financial analysis with environmental, social and good governance analysis in the evaluation of companies and institutions.

SSP

Word
SSP
Definition
Shared Socio-economic Pathways are scenarios of global socio-economic changes forecast up to 2100. They are used to determine greenhouse gas emission scenarios under different climate policies. SSPs provide descriptions of alternative socio-economic developments and qualitatively represent the logic that interconnects the factors involved in the various scenarios. In quantitative terms, they provide data to accompany the scenarios, in relation to national population, urbanization and GDP (per capita).

Scope 1 emissions

Word
Scope 1 emissions
Definition
Direct greenhouse gas (GHG) emissions deriving directly from the activities of an organization or activities under its control. These include on-site fuel combustion, such as in gas boilers; fleet vehicles and air conditioning leaks. For Enel, they mainly represent the sum of emissions from burning fossil fuels for generating electricity from conventional sources, and emissions from the “operational” activity of Enel and its employees (e.g. emissions from the company vehicle fleet).

Scope 2 emissions

Word
Scope 2 emissions
Definition
Indirect emissions deriving from the purchase and use of electricity by the organization for its business. For the reporting purposes of electricity distribution companies, this category also includes emissions from energy dissipation due to technical losses along their distribution network.

Scope 3 emissions

Word
Scope 3 emissions
Definition
All other indirect emissions arising from significant activities upstream and downstream of the organization, emitted from sources that are neither owned by nor under the direct control of the organization. This category includes emissions associated with an organization’s supply chain (such as extraction and transport of fossil fuels), as well as emissions associated with business travel or employees commuting between home and work. For Enel, the significant share originates from emissions caused by final customers using the electricity and gas it sells.

Sustainability bonds

Word
Sustainability bonds
Definition
Bonds from which the proceeds are to be used exclusively to finance or refinance a combination of green and social projects.

Sustainability indicators

Word
Sustainability indicators
Definition
A tool to measure company performance and report on the achievement of the goals defined within the corporate sustainability plan.

Sustainability-linked bonds

Word
Sustainability-linked bonds
Definition
Bonds whose financial and/or structural characteristics are indexed to the achievement of predefined sustainability targets.

Sustainability-linked loans

Word
Sustainability-linked loans
Definition
All types of lending instruments that give the borrower an incentive to meet ambitious, predetermined sustainability targets.

Sustainable Finance Disclosure Regulation (PAI) Content Index

Word
Sustainable Finance Disclosure Regulation (PAI) Content Index
Definition
Table linking the issues and information required by the European Regulation that governs disclosures in the field of sustainable finance (SFDR, Sustainable Finance Disclosure Regulation) with content provided in the Sustainability Report, indicating the specific chapter of reference in the document.

Sustainable finance

Word
Sustainable finance
Definition
Sustainable finance raises public and private capital, by channelling it into sustainable investments to accelerate the achievement of the related development goals.

Swap

Word
Swap
Definition
An agreement between two parties for the exchange of future payment flows. The transaction is strictly financial; there is no physical exchange of material. The agreement defines how payments will be charged and when they will be made.

TCFD

Word
TCFD
Definition
Task Force on Climate-related Financial Disclosure - the TCFD was established in December 2015 by the Financial Stability Board (FSB) – the international body responsible for monitoring and promoting financial market stability. It consists of 32 members from financial institutions, insurance companies, major corporations, consulting companies and ratings agencies from all over the world. The recommendations are designed to provide financial actors with a comprehensive and effective framework of information with which to make appropriate investment decisions and, more generally, to measure the exposure of financial markets to climate-change risks.

TCO

Word
TCO
Definition
Total Cost of Ownership – the total cost of owning an asset. TCO not only consists of the fixed costs (purchase, interest, rental, residual value, etc.), but also all the variable costs (maintenance, user training, etc.) involved in using the asset concerned.

TSI

Word
TSI
Definition
Total Societal Impact - a business strategy development method that measures the Enel Group’s commitment to promoting the value of the economic, social and environmental system, as an inclusive actor in the economy, capable of meeting the fundamental needs of all stakeholders.

TSO

Word
TSO
Definition
Transmission System Operator - an entity responsible for the transmission of energy in the form of natural gas or electricity, using appropriate infrastructure, at national or regional level. This is the definition used in Europe, but a similar definition applies in the United States, where the terms "Independent System Operator" (ISO) and "Regional Transmission Organization" (RTO) are used.

TSR

Word
TSR
Definition
Total Shareholder Return - an indicator of the return yielded by a security over the period for which it is held. The return includes the appreciation of the capital of the security and the dividend earned on the security. The TSR for one year is calculated by adding the change in share price to the dividend received, dividing the sum of the two by the share purchase price and expressing the result as a percentage.

TTC

Word
TTC
Definition
Total Tax Contribution - a model for measuring a company’s total tax contribution to the public finances, on the basis of the payments made over the course of the year. The model classifies the different taxes into categories and draws a distinction between taxes that constitute an expense for the company (taxes borne) and those that the company pays due to rebate mechanisms, substitution etc. (taxes collected). Enel has been publishing this data since 2018 in the form of a Total Tax Contribution Report for Italy and the other main countries in which it operates. The purpose of the report is to expand the concept of Corporate Social Responsibility, while at the same time highlighting the value of the social function associated with the tax contribution.

TTF

Word
TTF
Definition
Title Transfer Facility - the virtual market for trading natural gas in the Netherlands; it is one of the largest markets of its kind in continental Europe. It is also the benchmark for gas pricing in northern Europe.

Tax Shield

Word
Tax Shield
Definition
A tax saving arising from the existence of a tax-deductible cost, calculated on the basis of the specified rate of deductibility applicable in the taxpayer’s country of residence.

UNGC

Word
UNGC
Definition
United Nations Global Compact - a United Nations initiative established in 1999 to encourage companies around the world to adopt policies that embrace sustainability and corporate social responsibility and to publish the results of their actions. It is a framework incorporating ten principles in the areas of human rights, employment, environmental sustainability and measures to combat corruption. Under the Global Compact, companies work with United Nations agencies, trade union groups and civil society.

USD

Word
USD
Definition
United States dollar.

VBP