Enel is the first company in the world to launch a circularity KPI to measure the Group’s performance with the aim of doubling it by 2030.
The Economic CirculAbility©® is an important milestone that comes at a time when the need to reduce the consumption of raw materials and tackle the global climate crisis is more urgent than ever. The transition to a circular economy is a vital component to this mission and this is why brave initiatives like Enel’s are fundamental and can play a significant role.
According to the European Environment Agency, the extraction and processing of raw materials contribute to approximately half of greenhouse gas emissions globally, while in the European Union, they account for an estimated 18% of the total consumption based GHG. It is therefore fundamental to secure sustainable access to raw material and encourage the re-use of materials for future production cycles, and the circular economy is at the core of this approach.
Enel’s ‘Economic CirculAbility©®’ KPI
The ‘Economic CirculAbility©®’ key performance indicator (KPI), which Enel presented at the World Economic Forum in Davos earlier in January, measures Enel’s circularity by comparing its economic performance in terms of EBITDA with its overall resource consumption, raw material and fuel.
According to Luca Meini, Enel Group’s Head of Sustainability Initiatives and Circular Economy, “metrics has been a key focus since 2015, when the Group started its journey into the circular economy”. Today, the Group has upgraded the KPI to include the whole group’s activities, an important step for Enel’s Open Innovability® business line which supports and encourages innovative ways to foster a sustainable business model.
“Our vision of a circular economy was to redesign business activities starting from resource and design, considering the whole value chain: for this reason, KPIs were a fundamental precondition to develop any strategy,” Meini stated.
Leaders of the sector through energy transition
Economic CirculAbility©® measures Enel’s overall EBITDA (in euros) and compares it with the total amount of resources, including fuels and raw materials consumed throughout the value chain. By committing to its objective, the Group pledges to consume 50% less resources in relation to generated EBITDA.
“We are the first to commit to this and are proud to do so, since those at the forefront will gain a competitive advantage from circularity, while those who come last will risk dealing with increasingly scarce material availability,” Ernesto Ciorra, Chief Innovability® Officer at Enel, declared.
With this in mind, Enel wants to not only be a thought-leader of the energy transition, but also be able to be a sustainable referent in this transition. In order to achieve this in a sustainable way, Enel is committing to reducing their consumption of raw materials and re-using them for future production cycles, so that freedom and independence about supplies and geopolitical developments can be reached.
KPIs like Enel’s Economic CirculAbility©® KPI are crucial to drive the circular transition, build cohesion as well as monitor progress and evaluate the impact by sharing best practices, Enel hopes to inspire and recruit more businesses to adopt circular economy KPIs.
Innovability® for a circular economy
Initiatives to encourage sustainable and circular business models throughout the whole value chain are at the core of Enel Open Innovability®, where we are continuously launching challenges to bring innovation to the energy sector. For example, we recently launched the Open Innovability® challenge to Change the future of Energy in which startups can submit their innovative solutions for sustainable progress and get the opportunity to work with us.
Are you looking to be part of sustainable progress? Join our open challenges today!