It comes out better than any other company on the Ibex in the sustainability photo: Endesa is the leader of the ESG Ranking of elEconomista , a classification created based on an algorithm that combines the marks given by S&P Global, Sustainalytics (Morningstar), ISS, CDP and Bloomberg , which earned him an award in the VII Edition of the ‘Fund Investment Awards’ .
The power company led by José Bogas has accelerated its decarbonization process in recent years and is fully focused on renewables, something that has long attracted the attention of investors with a sustainable bias.
The Spanish company has been a member of the DJSI World for 20 consecutive years, and is also a member of the Ftse 4Good indices, as well as the selective Euronext Vigeo-Eiris World 120. More news about sustainability in theEconomista Sustainable investment and ESG .
The electricity company has been anticipating its decarbonisation objectives, initially set for 2050. Of its gross profit for 2020, 5.3%, 210 million euros, came from renewable energies (mainly, wind and photovoltaic, although the group also has a presence in hydrogen).
And the growth in renewables is going to be powerful in the coming years. Between 2021 and 2023, according to its strategic plan, its capacity will increase by 50%, from 8,000 to 11,600 megawatts. Its investment in clean energy amounts to 3,300 million in three years.
As explained in a recent interview with the Economist Ángel Fraile, director of Sustainability Planning and stakeholder management, and Adolfo García Nombela, Endesa’s corporate financial director, the coal will already be residual in 2021 and will be closed in 2027 (the initial terms placed that closure in 2030). Currently, coal still accounts for around 13% of installed capacity.
All growth, in green
The decarbonisation will mark the growth of the company in the next decade, since it plans to invest 25,000 million euros, of which 40% (10,000 million) would go to renewables. It would thus reach 18,000 megawatts, and 80% of the park would not emit CO2.
Foreign investors with a sustainable bias already account for half of the company’s ‘free float’
The company has seen how investors with a sustainable bias were gaining weight within its capital over the last few years, and particularly as a result of the sustainable investment fever, notably notable as of 2018 (in March of that year). year, the European Commission presented its Action Plan on Sustainable Finance).
Endesa currently has at least 212 socially responsible foreign institutional investors, almost double the number it had in 2015, representing 14.9% of the share capital. Or, what is the same, they agglutinate half of the free float, since 70% of the company is in the hands of the Italian Enel.
As explained to the Economist Adolfo García Nombela, the group has set the objective that 60% of the debt has a sustainability clause already in 2023; they are currently on their way to 50%. Compared to a traditional loan, a sustainable one can lower financing costs by up to 10 basis points. Endesa’s average cost of financing, 1.7%, is the lowest of all European utilities , and the average life of its debt is around 4 and a half years, in line with its sector.
Endesa has not yet issued any green bonds, something that its parent company, Enel (which, in fact, was one of the first to do so) has done. But a bond of this type from the Spanish company cannot be ruled out. In Nombela’s words, such placement could occur if the company identifies “the need” to do so. “Our debt volume will be around 10 billion euros in 2023; perhaps then we will have to rethink which financing alternatives are more efficient,” he told this newspaper.
Beyond ESG (environmental, social and good governance) aspects, Endesa has seen a very striking improvement in the recommendation given by analysts of the market consensus that FactSet collects: yes, in March 2020 It was a sell, today it is a buy. In his favor has played, especially in a year like last, the defensive character of value.