The challenge facing the energy sector is twofold: ensuring access to affordable and sustainable energy for ever more people, while at the same time combating climate change with the aim of limiting the average global temperature well below two degrees Celsius by the end of the century. Eni acknowledges the scientific evidence on climate change given by the Intergovernmental Panel on Climate Change (IPCC) and is one of the signatories of the Paris Pledge for Action, supporting the objectives of the Paris Agreement.
The roadmap for our strategy
Eni intends to play a leading role in the energy transition process and has integrated its own decarbonization strategy into its business model. This strategy will be developed and implemented in our scientific and technological research over the short, medium and long terms. It will allow us to achieve maximum efficiency in the decarbonization process and find innovative solutions to promote energy transition.
A resilient low-carbon portfolio with natural gas as a bridge solution
Natural gas is the ideal choice when it comes to renewable energy. The combination of natural gas and renewables will allow us to reduce global carbon consumption, which is responsible for more than 70 per cent of the electricity sector’s CO2 emissions worldwide, despite accounting for only 40 per cent of its electricity generation. For this reason, and in line with our sustainability objectives and gradual process of decarbonization, Eni intends to maximise the use of natural gas as a ‘bridge fuel’, particularly for electricity generation, and to promote its use in the transport sectorAt the end of 2018, natural gas accounted for more than 50 per cent of our equity assets. LNG has also played a crucial role in the growth of natural gas and Eni is developing a new model that will support our leading position in the market.
The resilience of our portfolio is ensured by a regular review of our assets and new investments. This allows us to identify and assess potential emerging risks relating to regulatory changes regarding emissions and the physical conditions in which we conduct our operations. The profitability of our main investment projects is tested with a sensitivity analysis on carbon pricing, both in the Final Investment Decision (FID) and subsequently in the biannual monitoring of projects, on the basis of the following assumptions: Eni’s hydrocarbon pricing and CO2 cost scenario, and the International Energy Agency’s Sustainable Development Scenario (IEA SDS) hydrocarbon pricing and CO2 cost low-carbon scenario.
Risks and opportunities of climate change
Climate change is analysed, evaluated and managed in consideration of five key drivers relating to energy transition (market scenario, regulatory and technological evolution, and reputational issues) and physical aspects (extreme/chronic weather phenomena). The analysis is carried out taking an integrated, cross-cutting approach involving specialist departments and business lines. This enables an assessment of the risks and opportunities relating to climate change.
The Board of Directors (BoD) plays a central role in managing the main issues relating to climate change. The Sustainability and Scenarios Committee, the Control and Risk Committee and the Remuneration Committee all offer specialist skills to support the BoD’s work in pursuing Eni’s objectives in the fight against climate change. The Sustainability and Scenarios Committee addresses the integration of strategy, evolution scenarios and business sustainability over the medium to long term, and assesses scenarios for the Strategic Plan. In recent years it has paid particular attention to issues relating to climate change. The Control and Risk Committee supports the BoD in the quarterly review of the main risks, including those relating to climate change. The Remuneration Committee also plays an important role in this regard, proposing general criteria for the annual incentives of the CEO and managers when it comes to strategic responsibilities. This includes specific objectives regarding the reduction of GHG emissions. The BoD has also set up an Advisory Board to analyse key geopolitical, technolgical and economic trends, including those relating to the decarbonization process.
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