Enel S p A : Sustainability Report 2023 - Consolidated non-financial statement

SUSTAINABILITY REPORT

2023

Consolidated Non-Financial Statement prepared in accordance with Italian Legislative Decree 254/16_year 2023

The graphic design of the Enel Group's Corporate Reporting is a symbolic way of representing the Company, from electricity generation to electricity distribution and utilization.

Circular geometric shapes blend together to create a balanced system, emphasizing a focus on growth and on improving people's lives.

SUSTAINABILITY REPORT

2023

Consolidated Non-Financial Statement prepared in accordance with Italian Legislative Decree 254/16_year 2023

INDEX

Enel's Sustainability Report sets out the commitments and results achieved in ESG (Environmental, Social and Governance) issues, taking into account its stakeholders' expectations.

It begins with a message to stakeholders from the Chief Executive Officer and the Chairman, followed by the "Enel's commitment to sustainable development" section, which outlines the Company as a whole, its business model and main performance indicators, the ESG context in which it operates, the engagement

of stakeholders and material topics, the main objectives of the 2024-2026 Sustainability Plan and the outlook to 2030, sustainability governance, the role of Sustainability-Linked finance, its positioning in sustainability ratings, indices and benchmarks, as well as information on the European taxonomy.

A section is dedicated to stakeholder engagement and the results of the so-called"double materiality".

The "Performance 2023" section is divided by topic and outlines the results and objectives of the Sustainability Plan. Each topic is introduced by the "sustainability dashboard", which summarizes the key commitments, as well as their state of progress and contribution to the United Nations Sustainable Development Goals (SDGs).

The appendix sets out: (i) the criteria used in drafting the report; (ii) the main quantitative indicators relating to sustainability performance ("Performance indicators");

1. the Content Indexes which provide simplified keys to interpretation in relation to GRI, SASB, TCFD, and human rights (the latter is included in the dedicated chapter); (iv) reporting on the European taxonomy, the Green Bond Report and the Sustainability-Linked Financing Report.

• Integrated Annual Report 2023 
• Report and financial statements of Enel SpA at December 31, 2023 
• Report on corporate governance and ownership structure Financial year 2023 
• Report on the remuneration policy for 2024 and compensations paid in 2023 

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COMPANY VIEW

. LETTER TO STAKEHOLDERS

Enel from now on

6

	ENEL'S
	COMMITMENT
	TO SUSTAINABLE
	2. DEVELOPMENT
2.1	The sustainability context	10
2.2	The business model and
	value creation	14
2.3	Stakeholder engagement and
	materiality analysis	26
2.4	Sustainability Plan	28

STAKEHOLDER

. ENGAGEMENT AND MATERIALITY ANALYSIS

3.1	Framework	34
3.2	Stakeholder engagement	37
3.3	Double materiality	43

TOPIC VIEW

		PERFORMANCE
		. 2023
	4.1	Business drivers	68
E	4.2	Zero emissions ambition and
		just transition	78
	4.3	Roadmap towards natural
		capital conservation	130
	4.4	Circular economy	176
S	4.5	Enel people	186
	4.6	Sustainable supply chain	208
	4.7	Engaging communities	220
	4.8	Customer centricity	228
	4.9	Health and safety of people	242
G	4.10	Sound governance	258
	4.11	Managing human rights	286
	4.12	Tax transparency	310
C	4.13	Innovation	338
	4.14	Digitalization	350

	. APPENDIX
5.1	Methodological note	364
5.2	Performance indicators	372
5.3	Content Index
	• GRI and ESRS interoperability	410
	• SASB	424
	• TCFD	426
	• Sustainable finance
	disclosure regulation (PAI)	427
5.4	European Taxonomy	434

5.5 Sustainable Finance

• Green Bond Report

472

• Sustainability-Linked

Financing Report

486

Reference to the materiality analysis	Reference to the Sustainability Plan
E Environment	Zero emissions ambition	Human rights

1. Social

Nature

Growth accelerators

1. Governance

C Cross

Stakeholders

Paolo Scaroni	Flavio Cattaneo
Chairman	Chief Executive Officer
	and General Manager

ENEL FROM

NOW ON

2-6

Dear stakeholders,

The year 2023 marked an important change in the management of the Enel Group with the renewal of the entire Board of Directors and the appointment of the new Chairman, Paolo Scaroni. In turn, the Board of Directors has appointed Flavio Cattaneo as Chief Executive Officer.

The new management has defined the Group's strategy, based on three pillars: (i) Profitability, flexibility and resilience through selective capital allocation aiming at maximizing the Group's return while minimizing risk;

1. Efficiency and effectiveness through the simplification of activities and processes, a leaner organization with clear accountability and a focus on core geographies
   in which the Group has an integrated position (Italy, Spain, Brazil, Chile, Colombia, and the United States) in order to maximize cash generation and compensate for inflationary dynamics and rising cost of capital;
2. Financial and environmental sustainability to pursue value creation strengthening the financial structure, while addressing the challenges of climate change.

In 2023, Enel is confirmed as the world's largest private operator in the renewable energy sector, with 63 GW of managed capacity (including BESS), and in the energy distribution sector, with over 70 million end users connected to the grids. Furthermore, it is the private company with the largest customer base, amounting to over 61 million people, to whom it supplies energy and related services.

The Group continues to pursue the decarbonization roadmap in line with limiting global warming to below

1. °C: in 2023, absolute direct and indirect greenhouse gas emissions along the entire value chain, amounting to

1. MtCO2eq, were reduced by 26.3% compared to 2022, in line with the decarbonization targets for 2030 and 2040, as certified by the Science Based Targets initiative (SBTi).
   In 2023, Enel also confirmed the technological leadership in generation from renewable sources, storage systems, and distribution networks. In the energy distribution sector, Enel continues to modernize and digitalize electricity grids, both to enhance their resilience to increasingly extreme weather events and to prepare them

6 Sustainability Report 2023

1 Letter to stakeholders	2 Enel's commitment	3 Stakeholder engagement and	4 Performance 2023	5 Appendix
	to sustainable development	materiality analysis

to play the role of enablers of the energy transition. The push for innovation will continue to be a strategic driver. The Group will continue to monitor the evolution of new technologies that will mature in the medium-long term, such as hydrogen and the new small and modular fission or fusion nuclear reactors.

Enel is also leading the path of energy transition and electrification of consumption through the development of a portfolio of products and services dedicated to residential consumers, businesses, and municipalities.

In the countries where it operates, Enel recognizes the importance of building strong and positive relationships with all stakeholders, from local communities to governments. Continuous dialogue with these stakeholders makes it possible to carry out projects that respond to common priorities and needs and allow the creation of sustainable and shared value.

People and human capital play a central role in leading the change and the achievement of strategic objectives. More than 61,000 people (about 23% are women),

79 different nationalities in 38 countries, 4 generations working together, all demonstrate how diversity and

inclusion are a fundamental prerequisite for a sustainable company. Enel pays constant attention to people's training and to the enhancing of talents, promoting growth paths based on merit.

Another key element is the more than 8,300 qualified suppliers, with whom the Group shares the goal of creating sustainable processes, capable of maximizing economic, social, and environmental benefits, in the knowledge that it is necessary to minimize the need for critical raw materials through innovation and circular economy.

Enel also maintains vigilant and constant attention to safety in the workplaces: safety is not only a corporate objective but a commitment to mutual responsibility between the Company, workers, and suppliers. In order to promote a shared and acted culture, Enel has launched a global communication campaign on safety issues.

To conclude, the Group is determined to create value for all stakeholders, contributing to the energy transition, the electrification of consumption, and the fight against climate change.

Enel from now on

7

8 Sustainability Report 2023

1 Letter to stakeholders	2 Enel's commitment	3 Stakeholder engagement and	4 Performance 2023	5 Appendix
	to sustainable development	materiality analysis

COMPANY VIEW

2.

ENEL'S COMMITMENT

TO SUSTAINABLE

DEVELOPMENT

• The Enel Group strategy It is based on three pillars:
• • Profitability, flexibility, and resilience through selective capital allocation
  • Efficiency and effectiveness
  • Financial and environmental sustainability.
• Zero emissions ambition and just transition
  A decarbonization roadmap for both direct and indirect emissions throughout the value chain.
  A commitment to a just energy transition, managing the environmental and social components in an integrated way to ensure that no one is left behind.
• Toward continuous improvement
  A daily individual and collective commitment, which involves people, communities, companies, industries and institutions, leveraging innovation, digitalization, circular economy and Sustainability-Linked finance.

9

THE SUSTAINABILITY CONTEXT

The global context in which the Group operates has been characterized over the past 12 months by interlocking events that have caused turmoil at all levels. In addition to the post-pandemic geopolitical events, there was a significant rise in interest rates and inflation with a corresponding downward revision of GDP growth in many countries. Moreover, the prolonged military conflict between Russia and Ukraine, the more recent conflict in the Middle East, the unstable relationship between the US and China, and the resulting uncertainty on a global scale continued to exacerbate energy, raw materials and food markets, slowing the process of normalizing inflationary pressures on a global scale. At the same time, the state of the art of the Paris Agreement targets calls for an acceleration of the energy transition to limit the increase in average global warming to within 1.5 °C compared to pre-industrial levels. At the recent COP 28 on climate change held in Dubai, a target was set to transition away gradually from fossil fuels by 2050 and to triple renewable capacity by 2030 (11 TW vs 3.6 TW in 2022).

The path towards achieving the UN Sustainable Development Goals is significantly behind, with only 15% currently on track, due to various interconnected crises and tensions. In response, the UN Global Compact launched the "Forward Faster" campaign in September 2023, urging companies to accelerate their efforts, particularly in Climate action, Finance and investment, Water resilience, Gender equality and Living wage.

Governments and regulators have well understood the need to pursue ever greater energy independence through energy generated from renewable sources. This is a context in which the role of distribution networks will be crucial in meeting demand and accommodating new capacity from renewables, along with that of energy storage systems, which in turn will be crucial in ensuring not only the penetration of renewables, but also a stable and reliable supply.

Climate, human rights and just transition are global priorities for action. Tackling the climate crisis has significant social impacts, and the imperatives of a just transition and respect for human rights must be taken into account in business practices, as reaffirmed by the Paris Agreement and COP 28, putting people at the center to ensure support and engagement.

For further details see the chapters "Zero emissions

ambition and just transition" and "Managing human rights"

of this Report.

There is also a growing focus on issues related to nature and in particular biodiversity. The recently announced commitment at the World Economic Forum to start making nature-relateddisclosures, building on the Recommendations of the Taskforce on Nature-relatedFinancial Disclosures (TNFD) published in September 2023, underlines the crucial turning point on this topic for the private sector and reiterates the importance of considering the synergies between people, nature and climate. In line with this trend, even leading ESG ratings demand commitments from companies on biodiversity conservation.

Digitalization driven by artificial intelligence offers opportunities and challenges, eliciting responses from regula- tors, but also raises concerns about the ethics of artificial intelligence and its implications for the workforce. Considering the growing need to ensure that artificial intelligence is used responsibly and safely, the European Union has approved a draft law on the subject that would regulate the use of large language models and generative artificial intelligence.

Finally, mandatory sustainability reporting, spearheaded by the European CSRD (Corporate Social Responsibility Directive) and the International Sustainability Standard Board, is progressively imposing itself globally, requiring increasing cooperation and collaboration between the various institutions and regulators in different countries. The various regulations and mandatory requirements are, however, faced with the growing risk of anti-ESGsenti- ment, which may delay their adoption in some regional contexts.

The sustainability landscape is constantly evolving and, in order to meet challenges and seize opportunities, constant monitoring of trends is required along with joint action by the different stakeholders to weigh up needs while aiming at sustainable progress. Companies can play a crucial role by promoting a fair and sustainable transition through concrete and credible commitments in line with the context.

10 Sustainability Report 2023