Opportunity offered by “ESG” investments

Published on Monday, 17 August 2020

At the end of 2007, a Swedish pension fund requested the collaboration of the World Bank in finding environmentally-friendly projects, in order to invest in them. Nobody had ever made this type of request. The following year, the World bank issued the first green bond in history, originating a new type of instrument that, as of this date, has mobilized more than US$ 500 billion in projects focused mainly upon renewable energies and public transportation.


The continent of energy and urbanization

Migration to large cities is a global trend. According to United Nations projections, the world average concentration of the population in urban areas will rise from 55% in 2018 to 68% in 2050. However, in Latin America and the Caribbean that figure is already much higher, urban population reaching 81%, according to the same UN report.

This scenario presents a challenge for the energy market. The growth of renewable power generation projects has been only one first step towards a new paradigm that is already underway: cities based upon the efficient use of energy by means of digitalization and automation processes, in new uses for energy –such as electric transportation or electric air-conditioning systems -, and in the universal access to energy, for example, through the development of distributed generation systems.

In this context, Enel Americas presents a comprehensive business strategy, which is able to achieve all of these objectives: to bring the energy transition to a region with challenges and opportunities, offering development solutions in balance with the environment and communities and, therefore, sustainable in time.

What does our sustainable strategy consist of?

Enel Americas' sustainability strategy, as well as that of all of the Enel Group companies, consists of integrating environmental, social, and corporate governance issues into the same business strategy. As Rafael de la Haza, Head of Investor Relations, says: “The strategy that we have adopted at Enel Americas from the beginning, is one in which we only have room to act and develop our businesses according to the highest standards in terms of ESG. We believe that a well-managed company that cares about its people, its customers, the communities in which it operates, the environment, and its investors, has increased probabilities of business success with respect to its competitors."

For this reason, we are actively accompanying the most relevant changes taking place in business activity for the benefit of the environment, society, and the financial community. Enel Americas made its choice and began to advance along this path years ago where more than 90% of its solid EBITDA comes from activities producing zero direct emissions to the environment. In this sense, the strong investment in digitalization of the networks allows the development of electrification in the cities in which we are present, promoting electric mobility and customer services oriented to energy efficiency, in an ever more important perspective of decontamination of the cities. Enel Americas, through its subsidiaries present in Argentina, Brazil, Colombia, and Peru, operates in accordance with this strategy, taking the stakeholders with whom we interact, such as the local communities, along the same path of sustainability.

“Our SRI investors portfolio is increasing every year. We are obliged to respond to those investors seeking long-term sustainable returns and this may only be guaranteed by those companies that detect and quantify ESG risks and opportunities at the right moment. A higher sustainable financial return must inevitably be accompanied by a lower risk profile and this is the way we are working at Enel Americas," states Rafael de la Haza.

Within the current context, the world faces great challenges and the electric power sector has to be a fundamental actor in order to favor this transition period. Enel Americas is the leading power generating company in Latin America and part of one of the world's largest groups in the energy sector. "We are prepared and we have the instruments necessary to lead a correct energy transition in one of the regions with the greatest growth potential in the world," says Rafael de la Haza.

With this view, in which sustainability is an inherent part of our company's business activity, we feel greatly motivated to continue growing in transparency and acknowledging the relevance and value that sustainability management brings to the company’s performance. Enel Americas is part of the permanent evaluation processes of the main sustainable investment analysts, whose results are a key instrument in making decisions for responsible investment, including:


  • MSCI: an important provider of services and support to the financial community for an improved understanding of key risk and return factors, facilitating financial decision-making. Enel Americas received an AA rating in the last review as part of the various stock indexes offered by MSCI, highlighting Enel Americas' participation in the SRI index, which includes the highest performing companies in sustainability with demonstrated ability to manage risks and opportunities related to sustainability.


  • VIGEO EIRIS: assesses the integration in the organizations of social, environmental, and Corporate Governance factors in their strategies, operations, and management, with a focus upon promoting economic performance, responsible investment, and the creation of sustainable value. The selected companies are the Top 100 with the highest ratings out of a universe of 843 companies from 31 emerging countries in 32 sectors. In its 2020 version, Enel Americas was confirmed within the Best Emerging Markets Performers ranking in the utilities sector. It should be noted that Vigeo Eiris does not have a stock index for Latin American markets.


  • FTSE4Good Index Series: was created in 2001 by the global index company FTSE Russell, part of the London Stock Exchange Group, to support investment in sustainable companies. The FTSE4Good includes more than 300 indicators in 14 different matters that are reviewed every six months, grouped into three pillars: environmental, social, and corporate governance. The FTSE Russell methodology is based exclusively on public information, which requires high transparency on the part of the companies. Enel Americas has been confirmed in the categories "Emerging Markets Index" and "Latin America Index."


  • The Sustainability Yearbook: is a publication prepared starting from the annual sustainability performance evaluation of the SAM Corporate Sustainability Assessment (CSA) (ex RobecoSAM now part of the S&P Global group), which includes companies with scores within the top 15% of their industry. On February 2019, Enel Americas was confirmed as the company with the largest increase in its score in its industry, a reflection of its excellent performance in terms of sustainability, being acknowledged through the Industry Mover Award, also entering the Sustainability Yearbook for the first time. In 2020 it was included for the second time in this select publication and also recognized within the bronze category, which includes companies in the top 5 to 10% range of the ranking.


  •  Dow Jones Sustainability Index (DJSI): stock index made up of the best companies in terms of sustainability performance (“Best in Class”), which is measured by means of an exhaustive yearly evaluation, carried out by the specialist in sustainable investments, SAM Corporate Sustainability Assessment (CSA) (ex RobecoSAM now part of the S&P Global group), who evaluates more than 7,300 large companies listed in the most relevant world stock exchanges, in which the best performing ones are included in the different indices (“Best in Class”). Currently, Enel Americas is part of the DJSI Chile, DJSI MILA Pacific Alliance, and DJSI Emerging Markets and stands out for being -along with Enel Chile- the only Chilean companies in the electricity sector present in the three indices.


 Other tools towards decision-making

In addition to the above indices, there are other measurements and certifications that demonstrate the existence of robust and the permanent policies of a company which ensure a responsible and sustainable business plan over time, with a focus on transparency and trust:

  • ISO 37001 Certification: it is a standard for Anti-Bribery Management Systems published by the International Organization for Standardization. The objective of the system is to prevent, detect, and combat bribery, as well as to promote an ethical, transparent, and compliance culture among its employees and all of its stakeholders. Enel Americas is the first multinational company in South America to obtain this certification.


  • III version of the Business Generation Award - Financial Newspaper "For the commitment towards Integrity": it is a measurement carried out by the Business Generation Foundation (FGE), which highlights companies committed to the systematic promotion of ethics and the best corporate practices at the internal and foreign levels. In its third version (2019, it acknowledged the implementation of measurable policies by Enel Chile and Enel Americas, awarding these companies as among the most outstanding in the ranking.



At Enel Americas, sustainability is fundamental to the business model; check on the 2019 Sustainability Report here.