The Enel Group’s activities are supported by a sound ethical foundation: its constantly evolving nature is aimed at incorporating best practices at the national and international levels. Everyone who works at Enel and for Enel must respect and apply them in their daily activities.
This system is based on specific compliance programs, such as: the Code of Ethics, Human Rights Policy, Zero Tolerance of Corruption Plan (ZTC Plan), Enel Global Compliance Program (EGCP), Model pursuant to Italian Legislative Decree 231/01 and other national compliance models that may be adopted by Group companies in accordance with local regulations.
Code of Ethics
In 2002, Enel adopted its Code of Ethics, which expresses the commitments and ethical responsibilities it follows in conducting business, by regulating and harmonizing corporate conduct according to standards based on the utmost transparency and fairness towards all stakeholders. The Code of Ethics is valid both in Italy and abroad, while taking into account the cultural, social and economic diversity of the various countries where Enel operates. Specifically, the document is divided into:
- general principles for stakeholder relations; they define the values that the Group uses as inspiration in carrying out its various activities;
- criteria of conduct towards each class of stakeholders; such criteria provide the guidelines and standards that Enel’s people are required to follow to ensure compliance with the general principles and to prevent the risk of unethical conduct;
- implementation mechanisms that describe the control system designed to ensure compliance with the Code and its continuous improvement.
Enel also requires all affiliates, subsidiary companies, main suppliers and partners to adopt a conduct in line with the general principles of the Code.
Active and passive anti-corruption management system
In compliance with the tenth Global Compact principle, according to which, “companies are committed to combating corruption in all its forms, including extortion and bribery”, Enel intends to pursue its commitment to fight corruption in all its forms, whether direct or indirect, by applying the principles expressed in the pillars of its “Anti-corruption Management System”
Enel’s Anti-corruption Management System (AMS) is based on the Group’s commitment to fight corruption by applying the criteria of transparency and conduct as detailed in the ZTC Plan, which constitutes Enel’s anti-corruption policy.
Together with the ZTC Plan, the pillars of the AMS are:
- the Code of Ethics;
- Models aimed at preventing the main crime risks (e.g. corrupt relations with public administrations and private individuals, environmental crimes, corporate offences and, for Italian companies, manslaughter, serious personal injury or grievous bodily harm committed in violation of the rules on the protection of occupational health and safety) as described by the applicable regulations on corporate responsibility (the Compliance Program) in the various countries in which the Group operates (e.g. Organizational Model 231 for Italian companies or the “Modelo de prevención de riesgos/Programa de Integridade” for Group companies in Spain and South America);
- the EGCP, a governance tool aimed at strengthening the Group’s ethical and professional commitment to preventing offences committed outside of Italy that might result in corporate criminal responsibility and risks to reputation. The EGCP applies to the Group’s non-Italian companies and supplements any Compliance Programs adopted by the same companies, in compliance with local regulations.
Without prejudice to the provisions of the aforementioned compliance programs and the specific regulatory provisions applicable to the crime of corruption in all its forms, the EGCP complies with the main relevant legislation and the best corporate governance practices, constituting the general conduct framework for Enel’s people in the fight against corruption.
The areas with the most potential exposure to corruption (active and/or passive), both in relations with public administrations and in the private sector, include: (i) the negotiation and execution of contracts with third parties (public authorities, associations, companies, etc.); (ii) participation in tenders (public and private); (iii) selection of partners/consultants; (iv) management of financial resources; (v) management of gifts and hospitality; (vi) personnel recruitment processes; (vii) incentive mechanisms in top managers’ compensation.
In relation to these risk areas, the aforementioned governance tools (ZTC Plan, Code of Ethics and the EGCP/Compliance Program) together with the current body of procedures outline an effective prevention system, which is an integral part of the Group’s Internal Control System.
The organization of the AMS along with the Internal Control and Risk Management System (SCIGR) guidelines approved by the Board of Directors of Enel SpA provides for the following figures:
- the Chief Executive Officer, as Director responsible for Enel’s SCIGR, represents the Company’s Senior top management and is responsible for ensuring that risks are correctly identified and mitigated; to this end, he/she relies on management structures, such as Audit and Legal/Compliance, that report to him/her directly, as well as the management as whole, who are called to contribute to the adoption and dissemination of the rules established in the pillars of the Anti-corruption Management System;
- the Legal/Compliance Function establishes guidelines on compliance and anti-corruption, providing support and advice for their interpretation and supervising the corresponding actions undertaken by the Group companies;
- by performing audits on company processes, the Audit Function assesses the adequacy of the SCIGR, reporting to the competent administrative and control bodies. Corruption risks are identified during the assessment performed by the Audit Function, which aims to guide the annual Audit Plan with a risk-based perspective. This risk assessment also provides for the mapping and assessment of active and passive fraud risk that could affect the organization.
In 2017, Enel SpA’s AMS was certified, as previously described, according to the international ISO 37001:2016 standard governing anti-corruption management systems (the “Certification”). Again in 2017, similar activities were launched in order for the Group’s main foreign and Italian subsidiaries (Enel Italia, Enel Produzione, Enel Energia, Enel Sole, Enel Green Power, e-distribuzione, Enel Trade) to obtain ISO 37001 certification. To date, the Spanish subsidiary Endesa SA and all its subsidiaries have already obtained certification (October 2017). Furthermore, the certification process has been successfully completed for Enel Green Power. The anti-corruption certification process for the main companies of the Enel Group is scheduled to be completed during the 2018-2019 period.
Respect for human rights is one of Enel’s guiding principles. It is a constant focus in all the countries where the Group operates and in every company that belongs to it.
Human Rights Policy
On February 5, 2013, Enel decided to accept the United Nations’ “Protect, Respect, Remedy” framework through the approval by the Board of Directors’ of a policy dedicated to the issue of human rights that strengthens and deepens the commitments already established by the Compliance Programs.
The policy identifies eight principles that the people working in Enel SpA and in its subsidiaries must observe in carrying out all their activities. They concern two overarching issues: work practices and relations with communities and companies.
- Rejection of forced or compulsory labor and child labor;
- Respect for diversity and non-discrimination;
- Freedom of association and collective bargaining;
- Health and safety;
- Fair and favorable working conditions.
Relations with communities and society:
- Respect for community rights;
- Integrity: zero tolerance of corruption;
- Privacy and communication.
The policy is available online at www.enel.com.
The identification of the principles is inspired by the Universal Declaration of Human Rights and several International Labour Organization (ILO) Conventions on human and social rights, the freedom of association and the right to organize, prohibition of forced and child labor and occupational health and safety. The policy assigns the following tasks to the Sustainability unit: planning and coordinating the adoption of the due diligence4 process jointly with the other relevant Functions, as far as their respective competence is concerned; reporting to the Control and Risks Committee on the adoption of the due diligence process; and annually reporting on Enel’s performance and its commitments within its Sustainability Report.
The due diligence process
As required by UN guidelines and in accordance with the policy, Enel performed a specific human rights due diligence process on the entire value chain in the various countries in which it operates.
Specifically, the process was redefined in 2016 in line with best international practices and includes four phases:
- risk assessment as perceived by key stakeholders at the individual country level regarding labor, local community and environmental rights;
- impact assessment aimed at identifying and analyzing the organizational and risk control systems;
- development of action plans in order to address any areas of improvement that emerged in the previous phase;
- monitoring of action plans and remedies.
In 2017, the first three phases were completed. In contrast, in 2018 the action plans will be implemented and the monitoring activities will be launched.
Perceived risk analysis at the country level
To become familiar with the context in which Enel operates in the field of human rights and identify the most relevant issues in terms of risk, numerous experts from different sectors, such as civil society, academic institutions, citizens, customers and suppliers, were consulted in the various countries where Enel operates.
This consultation allowed the Company to classify each of the issues included in the Human Rights Policy according to the level of perceived risk resulting from the combination of the severity and probability of an actual violation.
The risks were then catalogued according to a defined scale of values: acceptable risk (minimum level), risk to be monitored, high priority risk, high risk (maximum level). The analysis showed that:
- the issues related to corruption and environmental impacts present a “high priority risk” assessment that requires companies to equip themselves with advanced safeguard and monitoring mechanisms;
- diversity, child labor, the impacts on local communities and best practices in terms of health and safety had an assessment of “risk to be monitored”. The issue of diversity is particularly important in Italy, while in terms of impact on local communities, a greater focus is demanded by South American countries. The issue of health and safety is instead perceived across the board as a fundamental issue in all the countries of the Group.
The second phase of the due diligence process was aimed at assessing Enel’s practices and policies safeguarding human rights through the use of a standard tool across all the Group’s countries.
The process makes it possible to identify possible areas for improvement and recommendations for defining action plans.
Specifically, interviews were conducted with senior management at both the Holding and individual country levels in order to analyze the level of integration of respect for human rights in the daily management of the Company, by identifying potential risks and opportunities. At the same time an assessment of the Company’s policies, procedures, systems and practices was carried out in each of the areas of the value chain by analyzing over 100 indicators.
This analysis made it possible to verify that Enel has a set of sound mechanisms and management systems that ensure respect for human rights and adequately manage existing risks.
Areas for improvement and action plans
The due diligence process used to assess the compliance of Enel’s practices with Human Rights Policy and its alignment with the UN Guiding Principles identified opportunities for improvement to strengthen the Company’s commitment to respect human rights when carrying out its industrial and commercial activities.
Specific action plans have been developed for each country where Enel operates, together with an improvement plan to be managed at a central level aimed at harmonizing and integrating processes and policies defined at the global level and applied at the local level.
Below is a summary table of the issues covered by the policy, showing an assessment of their perceived risk and their level of protection.
|ISSUES||AVERAGE PERCEIVED RISK||ASSESSMENT OF POLICIES AND PROCEDURES TO PROTECT HUMAN RIGHTS||MAIN POLICIES AND PROCEDURES TO PROTECT HUMAN RIGHTS|
|Freedom of association and collective bargaining||Acceptable risk||Strong||Enel commits to respect the freedom of association and collective bargaining of with all people. In particular, Enel recognizes their right to form or take part in organizations aimed at defending and promoting their interests; that they are represented by trade unions or other forms of representation; and the value of collective bargaining as a privileged tool for determining contractual conditions and governing relations between company management and trade unions.|
|Forced labor||Acceptable risk||Strong||The contracts govern working conditions in their entirety and clearly show all the terms included in the contracts that provide details on the rights of workers (working hours, salary, overtime, compensations, benefits).
The terms are translated into workers’ mother tongues and are supported with information contained in documents shared with all people.
Human resources management systems and procedures ensure the absence of minors in the workforce. Internships and school-to-work programs are also available.
|Fair and favorable working conditions||Acceptable risk||Strong|
|Child labor||Risk to be monitored||Strong|
|Diversity and inclusion||Risk to be monitored||Strong||For details, see the “Our people and their value” chapter.|
|Health and safety||Risk to be monitored||Strong||For details, see the “Occupational health and safety” chapter|
|COMMUNITY AND SOCIETY|
|Relations with the communities||Risk to be monitored||Strong||For details, see the “Communities and value sharing” chapter.|
|Environmental impacts||High priority risk||Strong||For details, see the “Environmental sustainability” chapter.|
|Corruption||High priority risk||Strong||For details, see the paragraph entitled “Active and passive anti-corruption management system”.|
Average perceived risk: average of perceived risk levels identified in the countries being analyzed.
Risk reference scale: 1. High risk; 2. High priority risk; 3. Risk to be monitored; 4. Acceptable risk.
Performance value reference scale: Strong (75%-100%); Good (50%-75%); Sufficient (25%-50%); Needs improvement (0%-25%).
During the process, the conditions relating to the supply chain, the relationship with customers and the training of Enel’s people were also analyzed.
Supplier management is divided into three basic phases: qualification system, general contract conditions and vendor rating. These processes are also needed to integrate environmental, social and governance aspects into assessments.
The global supplier qualification system enables a thorough assessment of companies wishing to participate in procurement procedures, while the vendor rating system is aimed at monitoring supplier performance in terms of quality, timeliness and sustainability in the execution of contracts. In particular, as set in current regulations, the qualification system requires the submission of specific documents (self-certification regarding the fulfilment of general requirements, financial statements, certifications, etc.) as well as compliance with Enel’s Compliance Programs and the ten principles of the Global Compact. Furthermore, this system provides for an assessment of technical, economic/financial, legal, environmental, safety, human rights, ethical and integrity requirements. In relation to merchandise groups at high health and safety risk, further checks are carried out on specific aspects, such as injury rate trends, policies adopted, compliance with health and hygiene regulations, etc. Through this system, all suppliers5 considered critical in terms of categories of purchased merchandise at higher environmental and occupational safety risk are evaluated. A risk analysis is performed on 100% of merchandise categories. In 2017, 100% of new qualified suppliers were assessed according to social criteria6.
Supplier relations are governed by specific contractual conditions consisting of a general part, applicable to all contracts regardless of the country in which the activities take place, and specific annexes for each country.
Thanks to company monitoring procedures, continuous dialogue is in place between Enel and its suppliers, which, in the event of problems or oversight, leads to the definition of improvement measures. In particularly severe cases, the contract is terminated and/or the qualification is suspended.
In all the countries where Enel operates, customers have access to various contact channels (mail, website, tollfree numbers). Enel constantly monitors feedback in order to understand the customer’s perception and any ongoing critical issues, and implement the appropriate corrective actions. In Italy, for example, commercial quality control for all contact channels is ensured by carrying out systematic monitoring on sales and management processes. The goal is to ensure compliance with current legislation, privacy and regulations protecting workers’ freedom and dignity.
In 2017, Enel’s people received a total of approximately 517,000 hours of training on sustainability issues, among which human rights play a fundamental role, for an average of 8.2 hours per capita. This is a decrease compared to the previous year (9.9 in 2016). Specific training activities on human rights are being planned and will involve the entire Enel population.
One of the main challenges of the digital age is the protection of personal data. Today, personal data are an expression of an individual’s personality and identity. They therefore must be processed with due caution and guarantees. Enel considers personal data to be both shared and company assets.
In order to respond to this challenge and in line with the new General Data Protection Regulation (GDPR) (EU) 2016/679, the Enel Group has adopted a structure to guarantee that the privacy of all the natural persons with whom it interacts is fully respected by appointing Data Protection Officers (“DPOs”). DPOs are appointed on the basis of their professional qualities, knowledge of the subject and by virtue of their ability to perform their duties in accordance with the principles of independence and impartiality. The DPO structure is integrated into the Group’s legal area and reflects the matrix-based model of Enel’s organization. Among other things, the DPOs support the business areas in adopting a “privacy by design” approach, thanks to which the protection of personal data is a building block in the design of any business initiative or business process.
The DPOs provide advice to Enel’s Data Controllers and Data Supervisors through risk-based methodologies such as the privacy impact assessment, a tool required by EU Regulation that allows the riskiest processing operations to be evaluated and the appropriate security measures to reduce these risks to be adopted. Enel’s priority is to go beyond compliance. Data subjects’ rights are better protected if the quality, quantity, speed and accuracy of the data, fundamental features of Enel’s information assets, are guaranteed. Data quality is a prerequisite for technological innovation and sustainability. The use of highly sophisticated technologies, such as cloud computing, Big Data, AI, Data Analytics and the Internet of Things, allows us to offer more and more customer-tailored products and services, while at the same time requiring great responsibility in terms of privacy protection.
Reports made by stakeholders
ny violation or suspected violation of the Enel Compliance Programs can be reported, even anonymously, through a single platform at the Group level (“Ethics Point”) accessible from the following address: www.enel.ethicspoint.com.
Reports can also be sent by email or regular mail. The Audit Function receives and analyses these reports, performing the related checks and ensuring uniform treatment at the Group level, in compliance with company policies and local regulations.
The report management process is governed by the whistleblowing policy, “Management of anonymous and non-anonymous reports”, which reiterates the guarantee of anonymity and protection against any form of retaliation and also ensures adequate protection against groundless reports made in bad faith for the purpose of harming people and/or companies.
In 2017, 123 reports were received concerning the Code of Ethics, an increase over 2016, mainly due to an awareness campaign on the whistleblowing channels in Argentina and the entry of Enel Distribuição Goiás in Brazil.
Violations of the Code of Ethics1
During 2017, there were 5 confirmed cases of “conflict of interests” (4) and “corruption” (1). The only case of corruption involved an employee-managed contractual relationship, where the aim was to obtain personal advantages to the detriment of the Company. As soon as the company concerned became aware of it, the case was promptly reported to the legal authorities. In relation to all these incidents, Enel has taken specific measures against the parties involved, in line with the relevant legislation. Such measures entailed four lawsuits against employees and two against contractors. In addition, 22 reports related to labor practices and 1 relating to community and society were received. Of the reports related to labor practices2, in 6 cases a violation was found: 1 case of harassment and 5 related to the company climate. A violation was also found due to a community and society report that pertained to environmental protection issues. In relation of all violations Enel has taken specific measures.
(1) Reports received in 2016 were analyzed in 2017; for this reason, the number of confirmed violations in 2016 was reclassified from 18 to 21. The 2017 violations concern the reports received in 2017. The data provided were last updated on February 8, 2018, in line with the data provided by the CCR (Control and Risk Committee).
(2) They include any discrimination reports: in 2017 no such violations were found, while in 2016 two violations were detected, for which the related remedial actions were implemented.
4 In the context of the Guiding Principles on Business and Human Rights (Principles 17-21), this term refers to a continuous management system that a company implements in consideration of the sector in which it operates, its operating contexts, the size of the company and more, to ensure respect for human rights or to avoid being party to their abuse. This implies “identifying, preventing, mitigating and reporting” potentially negative effects caused by the company.
5 First-level suppliers with whom Enel has a direct active contract with a value of > 25,000 euro are considered in this assessment.
6 New suppliers for 2017 with an active direct contract with a value of > 25,000 euro amounted to over 5,800, around 30% of which are qualified.