Sustainability Repo 2021

Consolidated Non-Financial Statement prepared in accordance with Italian Legislative Decree 254/16_year 2021

Sustainability Report 2021

Consolidated Non-financial Statement prepared in accordance with Italian Legislative Decree 254/16_year 2021

COMPANY VIEW

1. Letter to stakeholders

Enel is Open Power

POSITIONING Open Power

VISION

Open Power to tackle some of the world's biggest challenges.

MISSION

• Open access to electricity for more people.
• Open the world of energy to new technology.
• Open up to new uses of energy.
• Open up to new ways of managing energy for people.
• Open up to new partnerships.

PRINCIPLES OF CONDUCT

• Make decisions in daily activities and take responsibility for them.
• Share information, being willing to collaborate and open to the contribution of others.
• Follow through with commitments, pursuing activities with determination and passion.
• Change priorities rapidly if the situation evolves.
• Get results by aiming for excellence.
• Adopt and promote safe behavior and move proactively to improve conditions for health, safety and well-being.
• Work for the integration of all, recognizing and leveraging individual diversity (culture, gender, age, disabilities, personality, etc.).
• Work focusing on satisfying customers and/or coworkers, acting effectively and rapidly.
• Propose new solution and do not give up when faced with obstacles or failure.
• Recognize merit in co-workers and give feedback that can improve their contribution.

VALUES

• Trust
• Proactivity
• Responsibility
• Innovation

Index

COMPANY VIEW

LETTER TO STAKEHOLDERS

A world in transition: we empower sustainable progress 10

OUR SUSTAINABLE PROGRESS

Who we are and the main results for 2021	15
Our governance of sustainability	19
What is material for us?	24
Our strategy for sustainable progress	40
Our commitment to continuous improvement	48

Enel's Sustainability Report sets out the commitments and results achieved in ESG (Environmental, Social and Governance) issues, in light also of its stakeholders' expectations

It starts with a message to stakeholders from the CEO and the Chairman, followed by the Our Sustainable Progress section, which outlines the Company as a whole, its business model and main performance indicators, the ESG context in which it operates, its priorities for action ("materiality analysis") and main objectives of the 2022-2024 Sustainability Plan, its governance and organization of sustainability, the role of sustainable finance, its positioning in ESG ratings and indices, as well as information on European taxonomy.

The Our performance section is divided by topic and outlines the results and objectives of the Sustainability Plan, the pillars of the sustainable strategy, the so-called growth accelerators, and foundations for sustainability. 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 final appendix sets out: (i) the criteria used in drafting the report; (ii) the main quantitative indicators relating to sustainability performance ("Sustainability Statement"); (iii) the Content Indexes which provide simplified keys to interpretation in relation to GRI, SASB, TCFD, WEF and human rights; (iv) the Disclosure of the proportion of activities considered environmentally sustainable.

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Sustainability Statement

TOPIC VIEW

OUR PERFORMANCE

The path to Net-Zero	61
The decade of electrification and customer centricity	130
Progress starts with people
Enel people	149
Local and global communities	171
Suppliers	194
Towards a "nature-based" model	208
Growth accelerators

Innovability®	245
Digitalization	258
Circular economy	271
ESG backbones
Occupational health and safety	284
Sound governance	298
Human Rights	323

Fiscal transparency 330

APPENDIX

Methodological note	356
Sustainability Statement	374
Content Index (GRI, SASB, TCFD, WEF, Human Rights)	418

Disclosure of the proportion of activities considered environmentally sustainable
(Article 8, EU Regulation 2020/852)	446
Green Bond Report	476
Sustainability-Linked Financing Report	492

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Dear Stakeholders,

We are experiencing a profound process of technological and social transformation, whose effects cascade down and propagate in space and time, across generations and borders. A process that has changed and is changing not only countries' economies and production structure, but also the whole society and the forms in which it expresses itself. The year 2021 witnessed the continuation of the Covid-19 pandemic, although mitigated by the progress of vaccination campaigns. The year also saw a sharp increase in raw material and energy prices. The scenario was complicated even further by the arrival of the dreadful events of the recent conflict in Ukraine, which we are monitoring carefully. The 26th UN Climate Change Conference (COP26) in Glasgow succeeded in further engaging the international community in the action taken to contain global warming and its corollaries.

The world faces a major challenge that requires an immediate and concrete commitment.

Electricity is the most efficient, safe and competitive form of energy, and, thanks to renewable sources and storage, is the key to totally decarbonize our planet, in line with the Paris Agreement goals. The energy system is becoming less dependent on fossil fuels and their volatility and is therefore contributing to building a more sustainable future.

At Enel, 94% of the investments planned for the three-year period 2022-2024 are in line with the United Nations Sustainable Development Goals and over 85% are aligned with the European taxonomy.

We have brought forward the "Net-Zero" commitment both for direct and indirect emissions by 10 years, from 2050 to 2040. We will do so by gradually phasing out coalfired generation by 2027 and stopping the generation and sales of gas by 2040. For the second year in a row, 2021 set a record in terms of energy produced from renewable sources, 51% of the total generation(1). Specific CO2 emissions decreased by 45% compared to the 2017 value, confirming the journey towards the

SBTi-certified target of 82 gCO2eq/kWh by 2030. As part of the journey towards electrification, the grid plays a crucial role because it enables the integration into the system of distributed renewable plants. On a smaller scale, generation and flexible resources (such as photovoltaic panels on roofs and household batteries) can also be integrated. Moreover, the grid enables us to reach people who still do not have full access to energy.

A commitment that leaves no one behind, that takes into account the needs of all our stakeholders, with particular reference to the most vulnerable. The aim is also to promote sustainable use of resources, to thwart loss of biodiversity.

We wish to promote a transition that is transparent and orderly, avoiding the creation of inequalities, based on active listening, openness and creative solutions; a transition that is capable of unleashing talents and passions, of leveraging uniqueness, of strengthening the bond with communities, of engaging customers and suppliers. People are the true competitive factor, and we share, in the spirit of cohesion, internally and externally, the values that guide our daily commitment: trust, responsibility, innovation, proactivity. We have made our business model sustainable throughout the entire value chain and we have ensured that sustainability covers varying geographical, economic and social contexts. We are working tirelessly, in line with recent international developments, on new metrics and new measurement concepts to represent the creation of value and the quality of relations with different stakeholders, in a more and more complete and transparent way. We continue to integrate sustainability objectives into our financial instruments and management remuneration plan, and our leadership has once again been acknowledged on a global level in the main ratings, rankings and sustainability indices.

We continue to look ahead into the future, and we work together with our stakeholders to ensure that society makes sustainable progress.

⁽¹⁾ The figures include managed generation. Generation from the consolidated perimeter is 109 TWh produced from renewable energy and 114 TWh produced at thermoelectric plants, a total of 223 TWh.

COMPANY VIEW

2. Our sustainable progress

We are a leading energy group with a sustainable business model that creates long-term value for all stakeholders

We set the priorities that underpin our strategy, commitment and reporting through a single and double materiality analysis process and the continuous and direct involvement of all our stakeholders

Our strategy makes sustainability and innovation the focus, contributing to the achievement of all 17 of the UN's 2030 Agenda Sustainable Development Goals

Sustainable finance plays a crucial role in supporting the growth of the Group and we are committed to reporting on the implementation of the EU taxonomy regulation

Our sustainable progress

2021 saw a continuously evolving scenario characterized by a focus on fighting climate change and its social impacts, the continuing Covid-19 pandemic and a sharp increase in the prices of raw materials and energy. The outlook for the world economy nevertheless improved during 2021, thanks to the progress achieved in vaccinations and support measures from various countries, although the pandemic continues to weigh on the world economy and there is uncertainty about it being definitively overcome.

The world scenario was then deeply shaken in February 2022 by the Russian military intervention in Ukraine. A dramatic conflict

due to the consequences on the civilian population, which redefines the world's geopolitical, economic and energy balances in a way that is as yet unpredictable, with significant repercussions in particular on the energy security of the countries of the European Union.

At Enel, we carefully monitor the international context, promptly assessing its developments and interacting openly and constructively with all our stakeholders, in order to create value together, even in a constantly changing context, questioning traditional business models to support a just transition that leaves no one behind.

Who we are and the main results for 2021

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401-1	404-1	405-1	EU1	EU2	EU3	EU4

We are a leading group in the energy sector, with a presence in over 40 countries on five continents, vertically integrated along the entire value chain.

Trends, risks and opportunities are the context in which the organization operates. The purpose, mission, vision and values concern the entire organization and define the aim of the Company in clear and concise terms. The governance principles are intended to create a solid guidance and supervision structure.

Our strategy combines economic, financial, environmental and social sustainability and contributes to achieving the United Nations Sustainable Development Goal (SDGs), taking into consideration the needs and expectations of all our stakeholders.

Stakeholder involvement that leverages the Open Power approach, explained both in our Code of Ethics and in the Human Rights Policy, and which translates into the numerous concrete initiatives reported in this Sustainability Report.

In particular, every year we carry out a materiality analysis, which allows us to identify the priorities of our stakeholders and their relationship with those of the company and with the SDGs. A constant dialogue with individual stakeholders and with the organizations that represent them.

With customers: we analyse their needs to ensure reliable responses and establish lasting relationships, committing ourselves to offering sustainable solutions and services that are convenient, innovative, flexible and attentive to the most vulnerable to ensure equal access to energy (see "The decade of electrification and customer centricity" chapter).

With people in the Company: we are committed to having a close relationship with them, particularly by paying greater attention to caring activities and active listening, while promoting internally a culture of inclusion, enhancement of diversity, innovation and business entrepreneurship to face the challenges posed by a constantly changing context (see the "Enel people" chapter).

With communities: we work together to draw up specific action plans and projects intended to promote access to energy, fighting energy poverty, supporting quality education and socio-economic development, starting from a proactive analysis of their needs through a shared value creation model (see the "Local and global communities" chapter).

With suppliers: we face the challenges of transition and support their path of change and growth, sharing ideas and innovations (see the "Suppliers" chapter).

With the financial community: we maintain a constant and open relationship, based on principles of integrity and transparency, in compliance with the rules and best practices, in order to increase the level of understanding of the activities carried out by the Group (see the "Sound governance" chapter).

Through openinnovability.com, a crowdsourcing platform, the different areas of the Group can interact with start-ups, industrial partners, small and medium-sized enterprises ("SMEs"), research centers, universities and entrepreneurs, to deal jointly with the challenges of the future and guarantee sustainable progress for all.

The growth engine is our business model, which leverages the various input resources, divided into three macro categories (people, planet and prosperity) and, through the various company activities and exploiting synergies, converts them into outputs to create value in the short, medium and long term for the various stakeholders. We operate all along the value chain through Business Lines with a specific focus (Enel Green Power and Thermal Generation, Global Infrastructure and Networks, Enel X Global Retail, Global Energy & Commodity Management and Global E-Mobility), assisted by Global Service Functions (Procurement, Digital Solutions and Global Customer Operations) and Staff Functions (Administration, Finance and Control, Innovation and Sustainability, People and Organization, Communication, Legal and Corporate Affairs, Audit) with every country combining the business models with specific local requirements.

|GOVERNANCE

CUSTOM

GROUP STRATEGY AND RISK MANAGEMENT

|OUTLOOK

Value creation and the business model

(1) The data does not include 111 million euros with reference to the scope classified as "held for sale" in 2021.

TRADING

||EXTERNAL ENVIRONMENT

•

R•

|GROUP PERFORMANCE

KS A ND O PPORTUNITIES |

ERATION

DISTRIBUTION

⁽²⁾ Only location-based Scope 2 was considered for Scope 2. (3) Cumulative data from 2015.

2021 was the year in which we strongly accelerated towards the decarbonization of our business model based on customer focus, with investments of around 13 billion euros, 85% of which is related to eligible activity aligned to the European taxonomy.

The financial results confirm how we carried on growing by continuing to generate value. Specifically, ordinary EBITDA in 2021 is 19.2 billion euros, with an increase of 6.7% compared to 2020. The ordinary net profit, on which the dividend is calculated, reached 5.6 billion euros, up 8% compared to the previous year. The dividend for 2021 amounts to 38 euro cents per share, up 6.1% on 2020. The net debt is 52.0 billion euros, lower than the forecasts previously issued to the market. The ratio of sustainable funding sources to the Group's total gross debt was approximately 55% at the end of 2021. 46.6% of Enel's capital was held by investors who were signatories of the United Nations Principles for Responsible Investment (UN PRI). Finally, also in 2021, Enel confirmed its position as the first European utility by market capitalization and the second in the world(1).

We are the largest private operator in the renewable energy sector worldwide with 53.4 GW of managed capacity(2). For the second year running, to confirm our constant attention to the planet, we have achieved a record in terms of energy generated from renewable sources with approximately 118 TWh, equivalent to 51% of the total generation in the perimeter we manage(3). With regard to the consolidated perimeter, specific CO2 emissions amounted to 227 gCO2eq/kWh(4), 45% down on the 2017 value, confirming the path towards the SBTi (Science Based Target initiative)-certified target of 82 gCO2eq/kWh by 2030. By reducing our consumption of materials and energy and paying increasing attention to the circularity of resources, we are reducing our overall footprint in environmental terms. The fuel and materials consumption of our power plants over their entire life cycle fell by 62% compared to 2015 and in the last year more than 9,000 hectares of habitat were recovered.

We are the largest private electricity distribution company in the world, with more than 75 million end users connected to our networks, including 45 million with active smart meters. The SAIDI, (System Average Interruption Duration Index) indicator is constantly improving, and in 2021 we connected approximately 390,000 beneficiaries in rural areas. We also manage the largest customer base of any private company, with more than 69 million customers. In order to increasingly promote usage electrification, the spread of new services and products continued, including recharging points for electric mobility, of which there are now over 300,000(5), including more than 52,000 for public and private charging installed in 2021.

The fundamental lever for achieving these important results is of course the 66,279 people who work at the Company, who benefit from many development and training programs focused on upskilling and reskilling, in order to better manage and support the transition to a decarbonized economy (further information regarding Enel for the Just Transition is available in "The path to Net-Zero" chapter). Women in the company represent 22.5% of the total, a considerable increase on the 21.5% recorded in the previous year. Thanks to the specific attention paid to the issue of diversity, which aims to enhance resources even before they enter the Company and throughout all people management processes, the percentage of women managers rose to 23.6% in 2021 (vs 21.6% in 2020). As a confirmation of Enel's constant commitment to safety, in 2021, the combined Total Recordable Injury Frequency Rate for Enel and contractor companies fell by 11.7% compared to 2020. 99% of our suppliers have been assessed based on their commitment to health and safety, environment and human rights, and 59% of contracts are covered by Carbon Footprint certification. In the last year, a training course has also been launched in Italy to support suppliers in managing the energy transition. As regards projects with local communities, the activity focused on providing access to energy (SDG 7.1), quality education (SDG 4) and socio-economic development (SDG 8) has continued, reaching approximately 20 million beneficiaries since 2015. To accelerate sustainable progress, we work on innovation and promote open collaboration with start-ups, SMEs, large companies, academia, internal and external experts, and investors. In 2021, 10 innovation hubs were in place; since 2015 we have activated 465 collaborations with start-ups, and since 2017 we have launched over 170 challenges on the openinnovability.com website.

Our leadership in sustainability is therefore recognized worldwide, partly thanks to our presence in various prestigious ratings, indices, and sustainability rankings.

⁽¹⁾ Data as at December 31, 2021. Source: Bloomberg.

⁽²⁾ 50.1 GW of consolidated capacity.

⁽³⁾ In the consolidated perimeter: 109 TWh produced from renewable energy and 114 TWh produced at thermoelectric and nuclear plants, a total of 223 TWh.

⁽⁴⁾ Specific emissions taking into account the managed perimeter are equal to 217 gCO2eq/kWh.

⁽⁵⁾ Public and private. Includes interoperability points. There are 157 thousand charging points installed.

Our governance of sustainability

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Our governance structure is inspired by international best practices and permeates the various business, decision-making and operational processes along the entire value chain, in order to create long-term sustainable value for the Company and for all our stakeholders.

Integrating ESG factors in the Company's operation

The integration of environmental, social and governance factors is guaranteed by structured processes throughout the Group which include: analysis of the sustainability context, identification of priorities for the Company and stakeholders, sustainability planning, implementation of specific actions in support of sustainability objectives, reporting and management of ESG ratings and sustainability indices. Every stage of the process relies on respect for human rights as a fundamental element for pursuing sustainable success.

A key element of the approach described is the adoption of the ESG (Environmental, Social and Governance) indicators throughout the entire value chain, not only to report the results achieved, but above all to anticipate decisions and guide our actions. We are constantly committed to managing and measuring our performance on all relevant aspects, considering economic, business and ESG issues in reporting on activities and defining the objectives underlying the strategy. This model is fully in line with the requirements of the United Nations' Global Compact, of which Enel has been an active member since 2004, which stress the importance of ever-increasing integration of sustainability throughout all corporate strategies. Since 2020, Enel has been part of the Global Sustainability Standards Board, the independent body that has the exclusive responsibility for developing and issuing the Global Reporting Initiative (GRI) Standards. Furthermore, Enel has been a member of several European Financial Reporting Advisory Group (EFRAG) task forces on sustainability issues, and in 2021 it participated in the "Project Task Force on European Sustainability Reporting Standards". The task force responds to an official request for technical advice from the European Commission for the development of future reporting standards for sustainability reporting, as part of the review of the European directive on sustainability reporting (Corporate Sustainability Reporting Directive - CSRD).

The Enel organizational and corporate governance model for sustainability

The organizational and corporate governance model ensures that sustainability issues are appropriately taken into consideration in all relevant corporate decision-making processes, by defining specific tasks and responsibilities for the main corporate governance bodies.

The Board of Directors plays a central role in corporate governance as the body vested with powers related to the strategic, organizational and control policies of the Company and Group. In this context, the Board of Directors takes into account the need to pursue sustainable success particularly when: (i) establishing the strategies of the Company and the Group; (ii) determining the remuneration policy for the Chief Executive Officer/General Manager and Key Management Personnel; as well as (iii) the Company's Internal Control and Risk Management System (SCIGR). The Board of Directors has also established internal board committees with the power to investigate, propose and advise, in order to ensure an adequate internal division of its functions, as well as a related parties committee. The following committees have been established in particular:

• Corporate Governance and Sustainability Committee, which among other things assists the Board of Directors on sustainability issues, including issues relating to climate change and the dynamics of the Company's inter-

action with all stakeholders;

Control and Risks Committee, which is tasked, among other things, with supporting the assessments and decisions of the Board of Directors relating to the SCIGR and to the approval of periodic financial and non-financial reports;
Nomination and Compensation Committee, which is tasked, among other things, with supporting the Board of Directors in its assessments and decisions relating to the size and optimal composition of the Board itself and its Committees, as well as the remuneration of Directors and Key management personnel;
Related Parties Committee, which performs the tasks required by the relevant Consob regulations and by the specific Enel procedure governing transactions with related parties.

Furthermore, in line with the power structure currently in force within the Company:

the Chairman of the Board of Directors acts as a link between the executive and non-executive directors and is responsible for ensuring the effective operation of the board;
the Chief Executive Officer is the main person responsible for the management of the Company and is the director in charge of establishing and maintaining the SCIGR;
the Innovability® Function (Innovation and Sustainability), which reports directly to the Chief Executive Officer, manages all activities relating to sustainability and innovation. The Holding units responsible for Enel SpA's operations, particularly the sustainability, circular economy, and community relations processes, play a guidance and coordination role for the Sustainability and Innovation

units located in the various countries and Business Lines. In particular, the Holding's Sustainability Planning and Performance Management and Human Rights unit, responsible for the management of sustainability planning, monitoring and reporting processes, including compliance with the European taxonomy, as well as the management of ESG ratings, sustainability indices and the Human Rights Policy, also reports to the Group Chief Financial Officer (CFO), in order to ensure the ever-greater integration of these issues into corporate strategies and corporate reporting;

• the Global Business Lines, Countries, Global Service Functions and Holding Functions integrate ESG factors into their decision-making and operating processes, to create long-term sustainable value, thanks to the presence of dedicated Sustainability structures in all countries, Business Lines and Global Service Functions. At the local level, the expectations of the various stakeholders are identified, and specific sustainability plans defined, in line with the Group strategy.

With specific reference to governance for the management of climate change, please refer to the "Net-Zero ambition" chapter of this document.

Furthermore, the Group CEO chairs the Cyber Security Committee, which consists of the Chief Information Security Officer (CISO), the Cyber Security Risk Managers and the Group's front line and which aims to approve the IT security strategy and periodically check the progress of its implementation.

Further information on the activities carried out by the corporate bodies and the related information and training activities can be found in the corporate governance report available on the www.enel.com website.

Enel's presence in the main energy and sustainability associations

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United Nations Global Compact (UN Global Compact)

Enel has been a "Participant" member of the UN Global Compact since 2004 and, in 2021, it was reconfirmed as a LEAD company, thanks to its commitment to organization and adherence to its ten founding principles relating to human rights, labor standards, environmental protection and the fight against corruption. In 2021, in the context of Sustainable Finance, Enel was involved in the "CFO Taskforce for the SDGs", which it co-chairs, and the "Climate Ambition" and "Peace, Justice & Strong Institution" platforms, also confirming its advanced level in the annual Communication on Progress (CoP) reporting.

The Group is also a member of the Expert Network, while Enel's CEO completed his second term as member of the organization's Board in May 2021.

Sustainable Energy for All (SEforALL)

Since 2011, Enel has been a partner of Sustainable Energy for All, an international organization that collaborates with the United Nations and global leaders in the public and private sector for the advancement of SDG 7. Since 2020, the Group CEO has been Chairman of the Administrative Board of the organization, a position he will hold until 2023. During 2021, Enel was involved in preparations for the High-Level Dialogue on Energy (HLDE), the first global energy summit, held on the occasion of the 76th General Assembly of the United Nations, which was co-chaired by SEforALL. During the HLDE, the Company presented the Enel Energy Compact, with renewed commitments to speed up actions to achieve SDG 7 and reduce emissions to zero, and the Multistakeholder Energy Compact on electrification for Sardinia, developed in collaboration with Roma Tre University. On that occasion, the CEO of Enel was among the speakers at the opening session of the Summit with the UN Secretary General, António Guterres. Also in 2021, Enel supported the BeBold Campaign created with the aim of strengthening the global movement for SDG 7, and participated in the SEforALL Youth Summit.

CSR Europe

Since 2005 Enel has been a member of CSR Europe and from 2016 to 2020 it held the vice-chairmanship of the Board, of which it is currently a member. In 2021, Enel promoted the "Inclusion Think Tank" project, a multi-stakeholder group that involved companies, NGOs and institutions, and which led to the launch of the "Companies and the Inclusive Society" Blueprint on the main challenges for the future of work. The Group also participated in the "Upskill4Future" initiative, focused on upskilling and reskilling workers in Italy and Spain, and joined the Biodiversity & Industry platform. Enel was also among the protagonists of the European SDG Summit, during which the CEO and the Chairman of Enel spoke and were involved in organizing four roundtables on: Taxonomy, Sustainable Tax, Decarbonization of the supply chain and Biodiversity.

World Business Council for Sustainable Development (WBCSD)

Since 2016, Enel has been a member of the World Business Council for Sustainable Development and is represented both on the Board, of which the CEO is a member, and at Liaison Delegate level. In 2021, the Group maintained its commitment to numerous programs and projects, including SOS 1.5 and Energy Solutions, in which it is also a member of the Steering Committee, and in the context of these two programs, it contributed to developing the "SDG Roadmap for Electric Utilities" report, a guide to maximizing the electricity sector's contribution to the SDGs. Enel was also actively involved in the following projects: "Transforming Urban Mobility", "Mobility Decarbonization", "Cities Business Collaboration", "Climate Policy" e "Business & Human Rights".

Global Reporting Initiative (GRI)

As a member since 2006, since 2016 the Enel Group has been part of the Global Reporting Initiative Community. In 2021, Enel maintained its commitment to the Global Sustainability Standards Board and to the Corporate Leadership Group on Digital Reporting. Enel was also involved in the "Business Leadership Forum on the SDGs" confirming its commitment to achieving the SDGs and at the same time demonstrating commitment, responsibility and transparency through corporate reporting.

Value Reporting Foundation

Since its creation, Enel has been involved in the International Integrated Reporting Council (IIRC) and in 2021, as a member of the Business Network, it again took part in several working groups, including the Special Interest Group Integrated Thinking: A Virtuous Loop. Following the merger between the IIRC and SASB into the Value Reporting Foundation, Enel also maintained its commitment to the new organization.

Sustainable Business Roundtable (SBRT)

In 2016, Enel signed up to the Sustainable Business Roundtable and in 2021 it took part in two annual meetings focused on "Sustainable Finance & Investment" and the "Just Energy Transition".

Global Investors for Sustainable Development (GISD) Alliance

In 2021, Enel continued its commitment to the Global Investors for Sustainable Development Alliance, an integral part of the UN Strategy for Financing the 2030 Agenda for Sustainable Development, of which the Group CEO is a member. Enel actively contributed to the Alliance debates on mobilizing investments to support sustainable development. In particular, for the definition of specific sector metrics relating to the SDGs and their integration into existing reporting frameworks.

Taskforce on Climate-Related Financial Disclosures (TCFD)

Enel has supported the Taskforce since the publication of the first recommendations in June 2017, promoting transparent and reliable information on the climate. In 2020, Enel was also a member of the TCFD Advisory Group which puts together recommendations on scenario analyses.

Taskforce on Nature-related Financial Disclosures (TNFD) Forum

In 2021, Enel became a member of the TNFD Forum, a multidisciplinary advisory group supporting the new Taskforce on Nature-related Financial Disclosure (TNFD), which, by 2023, aims to provide a global framework for companies and financial institutions for the assessment and reporting of risks and opportunities related to the impact of their operations on nature and biodiversity.

Science Based Target initiative (SBTi)

Enel has certified its Scope 1 emission reduction target by 2030 through SBTi as in line with the 1.5 °C target. The Group undertakes to define its short, medium and long term targets in line with the criteria and recommendations of SBTi and related standards.

Science Based Target Network (SBTN) for Nature

Since 2021, Enel is an SBTN Corporate Engagement Program participant, pledging alignment with SBTN's goals and vision and contributing advice and end-user insights to the development of SBTN methods and tools. SBTN – a unique collaboration of leading global non profits and mission driven organizations – is equipping companies with the guidance to set science-based targets for nature including freshwater, ocean, land and biodiversity.

What is material for us?

Sustainability context

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As part of the broader materiality analysis process, we have identified and analyzed the main current and future ESG megatrends, to identify their risks, limit their impacts and take full advantage of their opportunities.

The digital revolution, definition of new governance models, climate and demographic change, resources preservation are the main megatrends that are currently influencing and will continue to influence the economic, social and environmental dimensions of sustainable development.

These identified megatrends were brought to the attention of a group of national and international stakeholders that are strategic for Enel, through a specific questionnaire. The analysis confirmed that the main ESG megatrends are climate change, the digital revolution and resources preservation, and highlighted increasing inequalities as a further priority area to be taken into consideration.

These phenomena often influence each other and act in combination with each other, reinforcing their individual impact. The technological revolution and digitalization have in several cases accentuated income inequality and the consequent increase in inequalities. Climate change is contributing to displacement from rural to urban areas, and therefore to demographic changes in countries. Resources preservation entails the need to use and adopt technologies with a lower environmental impact.

The Covid-19 pandemic has made this scenario more complex, accentuating the existing inequalities between and within Countries, with a greater impact on the most fragile social groups that are less able to protect themselves.

Addressing these challenges required global coordination and joint efforts, underlining the vital importance of multilateral consensus and collaboration.

Main types of risk

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Due to the nature of its business and its geographical distribution, the Enel Group is exposed to various types of ESG risk, identified within the reference framework relating to the risk categories adopted by Enel, which provides for six categories: strategic, financial, operational, governance & culture, digital technology, and compliance. The main ESG risks identified are listed below:

The identified risks are in line with the context described by the ESG megatrends analysis and consistent with what is reported by the World Economic Forum (Global Risks Report 2022), according to which the risk of climate and extreme events and the loss of biodiversity are considered as the 3 most significant risks for the next decade, followed by the social risks associated with the loss of social cohesion, the depletion of livelihoods and the risk of infectious diseases.

For further details and a description of the actions intended to mitigate their effects and ensure their correct management, please refer to "The path to Net-zero" chapter of this document, and for the risks associated with climate change to the "Sound governance" chapter of this document. Furthermore, a more detailed analysis of the additional strategic and financial risks is contained in the Annual Report for 2021, which is available to the public at the registered office and on the Company's website (www.enel.com).

The materiality analysis process and the results for 2021

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The materiality analysis identifies aspects of the sustainable business model that are most relevant to the Company and its stakeholders, highlighting the interconnections with the 17 Sustainable Development Goals of the 2030 Agenda.

Continuous monitoring of stakeholder expectations ("dynamic materiality(6)") allows the evolution of material issues to be tracked over time, identifying ESG objectives aimed at creating long-term sustainable value and defining the contents to be included in Corporate Reporting documents.

Within this dynamic framework, the materiality process is conducted according to:

a "single materiality" view, which allows you to identify and evaluate the priority issues for the Company (Y axis) and its main stakeholders (X axis), leading to the representation of the Group's materiality matrix (see the "Priorities' Matrix (single materiality)" paragraph in this chapter);
^a"double materiality" view, i.e. the union of two perspectives of equal importance:
- potential and actual impacts suffered by the Company (financial materiality). The material issues are those that generate risks or opportunities for the Company, influencing its future cash flows and therefore the enterprise value in the short, medium or long term;
- potential and actual impacts generated by the Company (impact materiality). The material issues are those for which the Company generates significant actual or potential impacts on society and the surrounding environment in the short, medium or long term (see the "Assessment of impacts generated and suffered" paragraph in this chapter).

The Holding's Sustainability Planning and Performance Management and Human Rights unit, as part of the Innovability® Function, is responsible for analyzing materiality at Group level and plays a guidance and coordination role, providing guidelines and methodological support for the country, company and site level analysis conducted by local managers, with the involvement of stakeholders and

the main key figures at company level.

The materiality analysis is subject to specific examination by the Corporate Governance and Sustainability Committee, set up within the Board of Directors, when examining the guidelines of the Sustainability Plan. Furthermore, the Corporate Governance and Sustainability Committee and the Control and Risks Committee issue prior opinions on the Sustainability Report, which includes the materiality analysis, and submit them to the Board of Directors' meeting called to approve the Report.

The materiality analysis has been developed in accordance with the guidelines of the most recent publications issued by international standards, including the GRI, EFRAG, and the AccountAbility AA1000 Stakeholder Engagement Standard (AA1000SES), regarding the principles of inclusiveness, materiality, responsiveness and impact(7). The Value Reporting Foundation - SASB and Compass SDG, which supports companies in adapting their strategies to

⁽⁶⁾ The concept of dynamic materiality, announced in 2020 by the World Economic Forum in the document entitled "Embracing the new age of materiality" represents materiality as a dynamic process according to which what may be financially immaterial today can become material tomorrow.

⁽⁷⁾ As part of the AccountAbility AA1000AP (2018) standard, according to the AA1000SES standard, the principle of:

^- inclusiveness means that people should have a say in the decisions that affect them;

^- materiality means that decision makers should identify and be clear about the main sustainability issues;

^- responsiveness means that organizations must act transparently with regard to the relevant sustainability areas and their impact;

^- impact means that organizations must monitor, measure and take responsibility for their actions that affect wider ecosystems.

the United Nations SDGs, were also considered as a reference for the analysis.

In particular, eight main stages are envisaged, summarized

in the diagram below and described in the following paragraphs of this chapter.

The collection, aggregation and processing of data and information are managed through a dedicated computer system ("E-mia: Engagement – materiality & impact analysis"), which also allows the best practices of engagement to be shared within the Group and stakeholders to be monitored in line with the corporate organizational model. The results, which are updated annually, are presented at both Group and individual company, Business Line/Corporate Function and site (intended as potential or actual operating site) level, as well as for the different categories of stakeholders.

Every two years, an analysis is carried out aimed at potentially reviewing the issues and categories of stakeholders, in order to take into account any significant changes in the internal and external context of the Company.

In 2021, the scope of the materiality analysis included 21 countries, covering all continents where the Group is present. In particular, over the past year, 3 new countries (India, Panama and Costa Rica) were added along with sites in Iberia, India and Chile, with an ever-greater integration of the results deriving from the application of the Creating Shared Value (CSV) tools on the Group's assets.

1. Identification of the issues

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The issues subject to the 2021 analysis are classified into three categories: business and governance issues, social issues and environmental issues, divided into three levels to cover all the different cases (see the Methodological note "List of 1st and 2nd Level issues" in the annex).

The identification of the issues took into consideration company policies and principles of conduct, stakeholder engagement initiatives, the issues of greatest interest to sustainability rating agencies, sector benchmarking studies, the strategic direction of the Company, as well as the indications of experts both internal and external to the organization.

In according with the methodology, in 2021 the issues were reviewed and updated to take into consideration the reference context; in particular, the reviews carried out on the first level are shown below.

2020 Materiality analysis	2021 Materiality analysis	Objective of the update
"Ecosystems and platforms"	"Products and services for electrification and digitalization"	Emphasize the presence of new technologies within electrification services
"Innovation and digital transformation"	"Innovation, circular economy and digital transformation"	Highlight the key role of the circular economy in the business model
"Energy distribution"	"Infrastructure and Networks"	Attribute appropriate visibility to the topic of network management
"Environmental management"	"Conservation of ecosystems and environmental management"	Highlight the importance of ecosystem conservation and biodiversity
"Engaging local communities"	"Engaging local and global communities"	Highlight the importance of ecosystem conservation and biodiversity

2. Identification of the stakeholders

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The stakeholders involved in the 2021 materiality analysis process are grouped into categories, classified on three levels, in line with the structure of the issues analyzed. The first level stakeholder categories are the following:

Businesses and trade associations
Customers
Financial community
Institutions
Civil society and local and global communities
Media
Employees
Suppliers and contractors

(see the table in the "Assessment of priorities and satisfaction assigned by the stakeholders to the issues" paragraph, which shows the first level stakeholder categories with their respective degree of relevance)

The various units responsible for stakeholder relations, which are involved in the analysis process every year, are tasked with identifying and updating the list of relevant stakeholder categories every two years, in order to define a complete list of current and potential stakeholders and to always be aligned with the sustainability context in which Enel operates.

In accordance with the methodology, in 2021 the list of stakeholders was updated to take into account the changes in the reference context. The revision carried out at the first level is shown below.

2020 Materiality analysis	2021 Materiality analysis	Objective of the update
Civil society and local	Civil society and local and global	Include the global view in which the communities of the local
communities	communities	context operate

3. Assignment of relevance to stakeholders

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The process provides for the continuous and direct involvement of the stakeholders, both external and internal to the Company, by the different company units, whose methods of involvement (interviews, questionnaires, etc.) and frequency (daily, monthly, weekly, etc.) are defined based on their individual relevance, as required by the reference standards.

In 2021, activities at Group level saw the involvement of the Top Management of all the Business Lines, who assessed, through a specific questionnaire, the relevance of the categories based on the following parameters.

Dependence	Importance of the relationship for the stakeholder, indicating groups or individuals who directly or indirectly depend on the activities, products or services and associated services, or on which the organization depends in order to operate
Influence	Importance of the relationship for the Company, indicating groups or individuals that may have an impact on the organization or on a stakeholder for strategic or operational decision-making
Tension	Temporal dimension of the relationship, indicating groups or individuals who require the immediate attention of the organization on broader financial, economic, social or environmental issues

(see the table in the "Assessment of priorities and satisfaction assigned by the stakeholders to the issues" paragraph, which shows the stakeholder categories with their respective degree of significance)

In particular, the analysis carried out at Group level, shows that the relevance of the "Customers" stakeholder has grown over the last year, particularly given the awareness of their key role in managing the "electrification decade". However, the importance of the "Employees" stakeholder remains constant, particularly given the persistence of the Covid-19 pandemic.

4. Assessment of priorities and satisfaction assigned by the stakeholders to the issues

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Once the issues and stakeholder categories have been identified, weighted according to their respective relevance, the materiality analysis process proceeds with an assessment of the priorities assigned to the issues by stakeholders, i.e. the relative relevance of each issue for the stakeholders (horizontal axis of the materiality and expectations matrix) (see the "2021 Priorities' Matrix" and "Expectations Matrix 2021" graphs).

In 2021, the priorities attributed to the issues were identified thanks to the implementation of approximately 480 engagement initiatives with stakeholders relevant to the Group. Only 2% of the assessments were carried out indirectly, through interviews with the business units responsible for the relationship with the reference stakeholder ("self-assessment"), demonstrating the ever-greater objectivity of the analyses carried out. The engagement initiatives are part of the various listening initiatives carried out during the year by the various units of the Group, including customer satisfaction surveys, the "Open Listening - Future Way of Working" survey, intended to gather the perceptions and expectations of Enel people regarding the future post-Covid working model, questionnaires from sustainability rating agencies, customer complaints, relations with analysts and investors, representative and trade associations, institutional relations at national and local level, as well as with trade unions, media monitoring and opinion polls. In some cases, where necessary, ad hoc materiality analysis initiatives were implemented, including an online questionnaire for suppliers or focus groups aimed at specific categories of stakeholders.

The following table shows, for each first-level stakeholder category identified, the respective degree of relevance, the channels of involvement used, the material topics and the Company's response methods.

Relevance

Businesses and trade associations

Customers

Financial community

PARAMETERS:

Dependence importance of the relationship for the stakeholder

Influence importance of the relationship for the Company Tension temporal dimension of the relationship

	Channels and type of communication and engagement(1)	Average frequency of engagement per channel/type	Main high/very high priority issues for stakeholders	Our response to stakeholders in the CHAPTERS/paragraphs of the Report
	Direct contact Forums	daily monthly	• Occupational health and safety • Decarbonization of the	• ESG BACKBONES - Occupational health and safety
	Working groups 3,11 Dedicated meetings	monthly weekly	energy mix • Infrastructure and Networks	• THE PATH TO NET-ZERO • THE DECADE OF ELECTRIFICATION AND CUSTOMER CENTRICITY
4,1	3,11 Agents Mobile app	daily continuous	• Health and safety • Customer engagement	• ESG BACKBONES - Occupational health and safety • THE DECADE OF
	Web channel 3,11 Forums	continuous monthly	• Decarbonization of the energy mix	ELECTRIFICATION AND CUSTOMER CENTRICITY • THE PATH TO NET-ZERO
4,1	Working groups Official stores and sales offices	monthly daily
4,1	3,94 Social media Survey	continuous twice a year
	3,94 Web channel Direct contact	continuous daily	• Decarbonization of the energy mix • Infrastructure and	• THE PATH TO NET-ZERO • THE DECADE OF
	3,69 Investor Day 3,94 Roadshow 3,69	once a year 4 times a year	Networks • Occupational health and safety	ELECTRIFICATION AND CUSTOMER CENTRICITY • ESG BACKBONES - Occupational health and safety

3,2 (1) Due to the Covid-19 emergency, communication and involvement that normally take place face-to-face (such as "direct contact" or "dedicated contact") took place remotely (meetings via Teams, Skype, etc.).

3,25

4,49

3,2

3,25

3,2

3,69

3,11

4,1

3,11

3,25

SDIR
CERTIFIED

Reporting channel 4,1 Institutions Web channel Press releases weekly 3,69 Direct contact daily	continuous continuous continuous continuous	• Infrastructure and Networks • Decarbonization of the energy mix • Occupational health and safety	• THE DECADE OF ELECTRIFICATION AND CUSTOMER CENTRICITY • THE PATH TO NET-ZERO • ESG BACKBONES - Occupational health and safety


4,1 Social media
3,94 Reporting channel Civil society and		• Infrastructure and Networks	• THE DECADE OF ELECTRIFICATION AND
local and global 3,11 Web channel 3,2 communities	continuous	• Occupational health	CUSTOMER CENTRICITY
Press releases weekly 3,94		and safety	• ESG BACKBONES - Occupational health
3,11 Direct contact daily		• Sustainable supply chain	and safety • PROGRESS STARTS WITH
3,69 Social media	continuous		PEOPLE - Suppliers
4,1 Press releases weekly 4,49		• Decarbonization of the energy mix	• THE PATH TO NET-ZERO
Media Direct contact daily 3,69		• Economic and financial	• ESG BACKBONES -
4,1 Dedicated weekly meetings 3,2		value creation • Sound governance and	Sound governance
Roadshow	4 times a year	fair corporate conduct
3,94 Social media 3,25	continuous
3,2 Reporting channel 3,94	continuous	• Conservation of ecosystems and	• TOWARDS A "NATURE BASED" MODEL
Forums monthly 4,49		environmental management	• THE PATH TO
Working groups monthly Employees		• Decarbonization of the	NET-ZERO • THE DECADE OF
3,69 Fact-finding weekly interviews		energy mix • Customer engagement	ELECTRIFICATION AND CUSTOMER CENTRICITY
4,49 Intranet	continuous
3,69 Newsletter 3,25	every 2 weeks
Company magazine	every 2-3 months
Survey 3,2	twice a year
3,25 Web channel	continuous	• Sound governance and fair corporate conduct	• ESG BACKBONES - Sound governance
3,2 Suppliers Direct contact daily and contractors		• Occupational health	• ESG BACKBONES -
Forums monthly		and safety	Occupational health and safety
4,49 Working groups monthly		• Conservation of ecosystems and	• TOWARDS A "NATURE
Dedicated weekly meetings 4,49		environmental management	BASED" MODEL

What is material for us? 31

Since 2016, Enel has combined the assessment of priorities by stakeholders with an analysis of their satisfaction with the identified issues (vertical axis of the expectations matrix), in order to identify more precisely the issues on which the Company needs to focus.

The 2021 results, as represented in the "Expectations Matrix",

show a substantial alignment between the priority assigned by the stakeholders and their level of satisfaction ("Maintain" quadrant). It is worth noting, however, that there has been an increase in satisfaction regarding the "Customer engagement" issue compared to 2020, in line with the actions taken by the Company.

2021 Expectations Matrix

Business and governance issues

A Infrastructure and Networks
B Decarbonization of the energy mix
C Customer engagement
D Products and services for electrification and digitalization
E Sound governance and fair corporate conduct
F Economic and financial value creation
N Innovation, circular economy and digital transformation

Social issues

G Engaging the local and global communities

H Employees management, development & motivation
I Occupational health and safety
L Sustainable supply chain

Environmental issues

B Decarbonization of the energy mix
M Ecosystems preservation and environmental management

5. Assessment of priorities in corporate strategies to the issues

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For the purposes of drawing up the 2021 materiality matrix, Enel evaluates the priority of the issues in its strategies (vertical axis of the Priorities' Matrix), taking into account the guidelines set by the Strategic Plan, the objectives of the Departments/Business Lines and the commitments made by the Group through its own policies and conduct criteria. This analysis involves the Company's various departments and top management (Chief Executive Officer and Chairman) through ad hoc interviews and specific questionnaires.

6. Priorities' Matrix (single materiality)

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The dimensions investigated in the previous paragraphs, i.e. the priority of issues for stakeholders and in corporate strategies, contribute to the developing the matrix of priorities ("single materiality").

The priorities' matrix, which gives a comprehensive view of all the Company's stakeholders, provides a complete sustainability disclosure, as well as an integrated representation of the Company's contribution to sustainable development. Furthermore, applying the so-called "primary user" filter to the overall materiality analysis, corresponding to the "financial community"(8), highlights the issues that have a greater direct impact on the value of the company.

The result of the analysis therefore supports the identification and definition of the objectives to be included in the Strategic Plan and the Sustainability Plan, to the achievement of which the various Departments and Business Lines of the Group contribute, and of the issues covered by the Sustainability Report and other Corporate Reporting documents.

The process allows the priorities for the Group as a whole and for each country, down to the individual Business Line/ Corporate Function and individual assets (understood as a potential or effective operating site), to be identified.

In 2021, the analysis covered 21 countries, 67 companies and 31 sites and considered 479 engagement initiatives involving stakeholders relevant to the Group. Shown below are:

the 2021 priorities' matrix of the Enel Group, which considers the contributions of the main companies involved in the process, weighted according to their relevance in relation to the type of business in which they operate;
the main 2021 priorities of some of the main companies participating in the materiality analysis process.

⁽⁸⁾ It includes: financial institutions and related governance bodies; investors and shareholders; rating agencies and analysts in the fields of finance and sustainability.