Responsible relationships with communities

G4-25 G4-26 G4-DMA EC G4-DMA HR

Involving stakeholders, sharing objectives and impact assessment

Strengthening the Group’s leadership necessarily involves forging a responsible relationship with the local communities and areas which host power plants and other activities, offering credibility in dealings with governments and authorities of the countries where Enel operates and, finally, creating a stable, ongoing and consolidated relationship with the various stakeholders, based on trust and respect for shared values.

The intrinsic nature of the electricity business, where power generation plants and distribution networks are built to last for a number decades and where the service supplied is an essential factor in social and economic development, implies the construction of a long-term relationship with the communities where the Group operates. Creating shared value means promoting constant and constructive dialogue in order to learn the needs and priorities of the local populations and combine them with the needs of the business.

In 2015 Enel adopted and extended the creating shared value model (CSV), which has been used in Enel Green Power since 2013. The integration of the CSV model was started with Conventional Generation and in particular with Business Development, the first stage of the value chain, to then continue in the subsequent stages of the realization and management of assets. A program was realized (CSV IN Program) which was focused on participation and saw the involvement and taking on of responsibility, through a joint 8-week ‘learning by doing’ program, of the Sustainability and Business Development teams from 11 countries. From the existing processes, the program led to the application of CSV instruments on 37 business projects, establishing an integrated and modular model where Sustainability interacts with Business, thus translating into a competitive advantage.

Through 14 context analysis tools, the mapping of stakeholders and the definition of priority matrices and action plans, the development of a business project is accompanied from the initial exploratory approaches to its final definition. These analyses, and in particular the materiality matrix of the site, enable the identification of short-, medium- and long-term actions which combine the corporate perspective with the needs of the local communities in an objective and measureable way. This is all done while guaranteeing particular attention to identifying and protecting ancestral communities which are affected by projects, in compliance not only with Convention 169 of the International Labor Organization and local laws, but above all the respective traditions and cultures, from Mexico to South Africa.

Integrating the CSV model with the business means acting proactively and enabling the adoption as early as the design stage of technical solutions which are the result not only of environmental, engineering and economic, but also social assessments, in order to limit possible impacts by proposing positive effects on the local economy. This is the approach which is driving the development of new projects, above all in Chile and in Peru. The thermoelectric power plant of Malacas in Peru is the first example of modernizing a plant which has been developed entirely following the CSV model. In the Business Development stage the knowledge of the local area and its needs, in particular the poverty of the population which is abandoning the area due to the lack of employment opportunities, led to the identification of an integrated action plan which promotes improvement of the environmental conditions, education, the culture of prevention on health issues, and support for local business through tourism. This plan was approved as an integral part of the business project.

The CSV model has also been applied to merger and acquisition projects where it has contributed to the overall assessment of the business opportunities thanks to the identification, during due diligence, of critical stakeholders and factors creating social tension.

In order to make the model more flexible and adaptable to the different geographical contexts by enhancing the range of possible CSV initiatives, an in-house competition was launched – the CSV IN World Cup – involving people in various countries, who discussed current ideas or projects with a view to the creation of shared value. Among the proposals which were rewarded was the possibility of using recycled bottles to make ecobricks by transferring the know-how to the communities of the poorest and most needy areas, or corporate voluntary initiatives to combat energy poverty.

In 2015 the CSV Business Challenge was launched and involved 9 countries in the challenge of applying the CSV model to existing businesses or businesses which are being developed. This culminated in the presentation of six Generation and three Distribution projects, from the promotion of local development to combating energy poverty. Among the aspects presented, in terms of their completeness and the innovative approach, the projects from Brazil and Italy stood out. Through preventative context analyses and active dialogue with stakeholders, both work groups were able to identify the main needs to be met in the areas affected by the business and to plan interventions aimed at creating shared value. In Brazil the assessment of a project, which was subsequently no longer needed, relating to the construction of a 400 MW hydroelectric plant in the area of Rondônia enabled the combination of infrastructure initiatives with interventions on the environment and technical-entrepreneurial training. Italy instead drew up initiatives linked to the redevelopment of the area of Porto Tolle, a plant which is being disposed of: also through quantitative measurement systems (SROI) of the impacts, initiatives were established aimed, among other things, at the recovery and reuse of materials, technical support to adapt the site to new businesses and to minimize the negative impact from the closure.

The re-evaluation of the business model according to the CSV approach does not concern only projects which are currently being developed, but also existing assets and those which are in the worksite set up stage. In particular, in 2015 the process was started to adopt the “Sustainable Worksite” model which is already used by Enel Green Power both on construction worksites and in the case of the revamping of conventional power plants, thus adapting and enhancing the range of possible CSV initiatives. The “Sustainable Worksite” promotes the adoption of conduct and action which go beyond complying with international environmental standards and also requires a similarly high standard from suppliers. By using ad hoc posters it develops transparent communication towards local communities on the results of the worksite, on the objectives of the construction and modernization work, and on the actions to create shared value which have been realized or are being realized, to the benefit of the local area, such as, for example, the donation of materials and built structures at the closure of the worksite (from generators to water purification systems). The adoption of innovative solutions at the worksite, both in terms of materials and in engineering and wireless infrastructure, as well as the increasingly marked orientation to the reuse of materials and equipment confirm that Enel is gradually migrating from a linear to a circular and more virtuous economy, which puts resources back into the production cycle instead of considering them as a discard.

THE FUTURE IS A SHARED COMMITMENT: dialogue with local communities and institutions, undertaken by Futur-E to give fresh life to the plants involved in the program, is taking numerous forms.

There are 22 power plants involved in the Futur-E project throughout Italy and they have helped write important chapters in Italian history, but the new energy scenario has made them obsolete or no longer competitive.

Enel is convinced that these power plants represent an industrial heritage that can be used in new ways to keep contributing to the growth and development of the territories where they are located. Therefore, an open dialogue has been started with institutions, companies and local communities to identify new uses appropriate to the needs and peculiarities of each particular context, with a view to innovation and Sustainability.

Campomarino Gualdo Cattaneo - Bastardo Bari Maddaloni Augusta Termini Imerese Giugliano Montalto di Castro Piombino Livorno La Spezia Genova Portoscuso Larino Porto Tolle - Polesine Camerini Camerata Picena (being sold) Carpi (being sold) Porto Marghera (sold) Trino - Leri Cavour Rossano Calabro Pietrafitta Alessandria Oil-gas Oil Gas Turbo gas Combined cycle Coal

Alessandria: the ideas contest

In July 2015 Alessandria hosted the first example of an open international competition to collect and valorize proposals from stakeholders on the future use of the Enel power plant. 200 participants were involved from 8 countries in Europe, Latin America and Asia. Private citizens, groups of businesses, architectural studios and associations sent their proposals which were selected by the jury consisting of representatives of Enel, the Municipality of Alessandria, Milan Polytechnic and the University of Piemonte Orientale. Three prizes were awarded, as envisaged by the competition rules, to which two special mentions were added.

Pietrafitta: ideas laboratory

Enel Idea Factory is the name of the first meeting of the ideas laboratory which took place on November 24, 2015. Around the table, to consider and discuss the future of the area where units 3 and 4 are located of the old turbogas plant which has now been closed, were representatives of Confindustria, CNA, Confartigianato, Legambiente, together with businesspeople and members of local associations and the mayors of Piegaro and Panicale, the Municipalities falling within the area of the power plant. With them were also the Enel managers directly involved in the project. LEGO bricks were the tool used to help all the participants in the laboratory give full rein to their creativity to arrive at ideas for new uses, whether industrial, multifunctional, in the field of research or tourism and leisure; all, however, were focused on creating value from the site in the specific local context with particular attention to Sustainability and the environment.

Rossano: the procedure for acquisition and redevelopment

Enel, in accordance with the Open Power philosophy and as part of the Futur-E project, intends in 2016 to start a process aimed at selecting proposals for the acquisition and redevelopment of its thermoelectric power plant located in Rossano (Cosenza) in the area of Cutura. The process is broken down into various stages: expression of interest, due diligence, site visit, design proposal and binding offer to purchase the site.
All the details on the project, awards and mentions presented are set out on the website dedicated to the project: www.futur-e.enel.it.