Enel: An integrative approach to biodiversity impact reporting with GRI, SBTN and TNFD

Context

Enel Group operates in the Energy Sector, with a presence in 28 countries on five continents. It is the world’s largest private operator in the renewable energy sector and the energy distribution sector, connecting over 69 million end users to the grids.

Biodiversity protection is one of the strategic objectives of Enel’s Environmental Policy.  The organization published in 2015 a specific Biodiversity policy that renewed in 2023 following the Kunming-Montreal Global Biodiversity Framework. Furthermore, Enel has adopted a Commitment on Biodiversity protection aiming to achieve No Net Loss of Biodiversity and No Net Deforestation for new infrastructure by 2030, commencing its adoption on selected projects in areas of high biodiversity importance in 2025. Enel has also adopted a No-Go commitment, with no new generation infrastructure built in areas designated as UNESCO Natural World Heritage Sites. 

Enel measures and report its biodiversity performance since 2020 through a set of KPIs developed in alignment with GRI 304: Biodiversity 2016, which are systematically applied across all generation sites and grid infrastructures. These KPIs are an essential tool for identifying priority species and habitats, enabling Enel to take the necessary actions to advance its commitments and strategic objectives. The company’s reporting follows GRI 304: Biodiversity 2016 requirements, encompassing the reporting of sites located in areas of high biodiversity and potentially affecting IUCN Red list species, and nature actions such as remediation and restoration projects. 

Adopting an integrative approach

Enel has been a member of TNFD since 2021, and participated in the TNFD Pilot Program to test the new  Framework during 2023. That same year the company refined its biodiversity assessment approach, transitioning  from a sector analysis to a site-specific analysis. The company carried out a nature-focused DIRO (dependencies, impacts, risks) analysis across its different technologies in its main countries of operations. 

Figure 1: Environmental Relevance Matrix (including both construction and operation activities) based on ENCORE Tool for preliminary data (ref. Sustainability Report 2023)

Along with existing biodiversity performance indicators based on GRI 304: Biodiversity 2016, Enel followed the evaluation approach proposed by SBTN and the TNFD frameworks, aligned with the ESRS (European Sustainability Reporting Standards) indications, to identify and prioritize the location with the most significant impacts on biodiversity.  The ranking of assets was carried out based on the estimated corresponding level of potential impact exerted, which was evaluated starting from the local natural conditions and the site-specific value of one or more impact indicators specific to the plant technology. Enel assessed local natural conditions by leveraging its established biodiversity indicators, specifically those covered by Disclosure 304-1 to 304-4 in GRI 304: Biodiversity 2016 and disclosure 101-7 in GRI 101: Biodiversity 2024. The evaluation focused on indicators and metrics related to habitat transformation, biodiversity significance (presence of protected areas, threatened species, and critical habitats), and ecological sensitivity (asset's location within water-stressed areas). The assesment of the significance of impact drivers was carried out by adopting threshold values for the main impact KPIs for each technology. The site selection process extended beyond sites with significant impact KPIs, incorporating additional sites identified through the comprehensive operational analysis and monitoring tools adopted by the company.  

This approach enabled the identification of priority locations (hotspots), i.e., operational sites or areas with the highest potential level of impact and risk, due to the simultaneous presence of ecological conditions and significant impact drivers. In 2024, Enel performed an in-depth investigation of part of the identified hotspots, according to the TNFD’s LEAP methodology. This IRO (Impacts-Risks-Opportunities) analysis examines the interaction of each technological asset with the local natural and biodiversity characteristics. Through this work, Enel seeks to develop a nuanced understanding of how its operational assets interface with local environmental contexts. 

Figure 2: Enel’s Prioritization Methodology

Lessons learned

Enel identified some challenges in implementing the TNFD LEAP approach and GRI 101: Biodiversity 2024, including: 

• Limited access to publicly available data and databases covering habitats and ecosystem services, constraining in-depth environmental assessments. 

• Greater granularity of data spanning local to regional scales would enable more sophisticated DIRO analyses and support the development of standardized global metrics. Such metrics would enable better evaluations of a company’s nature performance and provide investors with  robust guidelines.  

• The commodity and industrial components of supply chain analyses have  significant gaps in available data and metrics. The localized nature of biodiversity further complicates comprehensive supply chain analysis. 

Enel found that the combined adoption of the GRI requirements and the TNFD guidelines and metrics allows companies to approach the biodiversity assessment at local and global levels:  

• GRI allows measurement of impacts at a global level, through standardized KPIs, which are key elements for assessing the state of nature, as required by the TNFD guidelines. 

• TNFD uses a holistic approach in assessing priority locations, considering the impact drivers as well as the state of nature; this analysis provides valuable support for identifying the biodiversity impacts as required by Disclosure 101-4 in GRI 101: Biodiversity 2024. 

• Both GRI and the TNFD emphasize prioritizing the locations with the most significant impacts for action to halt biodiversity loss.