SUSTAINABLE FINANCE FRAMEWORK - May 2021 - Amazon AWS
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SUSTAINABLE
FINANCE
FRAMEWORK
May 2021
Disclaimer
This document (the Sustainable Finance Framework) is intended to provide non-exhaustive, general in-
formation. This document may contain or make reference to public information not separately reviewed,
approved or endorsed by A2A S.p.A. (A2A) and accordingly, no representation, warranty or undertaking,
Index
express or implied, is made and no responsibility or liability is accepted by A2A as to the fairness, accu-
racy, reasonableness or completeness of such information.
This Sustainable Finance Framework may contain statements about future events and expectations that 01 A2A OVERVIEW 5
are forward-looking statements. None of the future projections, expectations, estimates or prospects in 1.1 A2A in brief 6
this document should be taken as forecasts or promises nor should they be taken as implying any indica- 1.2 A2A Plan to 2030 9
tion, assurance or guarantee that the assumptions on which such future projections, expectations, esti-
mates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully 02 APPROACH TO SUSTAINABILITY 13
stated in the document. Unless otherwise stated, A2A has and undertakes no obligation to update, mod- 2.1 Climate change governance: Roles, responsibilities and risk assessment 18
ify or amend this document or the statements contained herein to reflect actual changes in assumptions 2.2 Circular economy 18
or changes in factors affecting these statements or to otherwise notify any addressee if any information, 2.3 Energy transition 20
opinion, projection, forecast or estimate set forth herein changes or subsequently becomes inaccurate. 2.4 Digital & innovation and people & territory 20
It should be noted that all of the expected benefits of the Eligible Green Projects referred to in this Sus-
tainable Finance Framework might not be achieved. 03 SETTING UP A SUSTAINABLE FINANCE FRAMEWORK 21
This Sustainable Finance Framework is not intended to be and should not be construed as providing legal,
financial or technical advice. 04 GREEN & SUSTAINABILITY-LINKED FINANCING COMPONENTS 23
It does not constitute an offer or invitation to sell or any solicitation of any offer to subscribe for or pur- 4.1 The Green Financing Component 25
chase or a recommendation regarding any “green bond” or other securities of A2A or provide financing 4.2 Sustainability-Linked Component 32
to A2A, and nothing contained herein shall form the basis of any contract or commitment whatsoever
and it has not been approved by any security regulatory authority. 05 EXTERNAL REVIEW – SECOND PARTY OPINION 39
This document does not purport to contain all of the information that an addressee may desire before
making a decision about its investment. In all cases, addresses should conduct their own investigation and APPENDIX I – FURTHER DETAILS FOR STEP UP 41
analysis. In particular, it is recommended for addressees to seek the advice of professional advisors or
experts and to independently check legal, regulatory, tax or other consequences. The information in this APPENDIX II – SCIENCE BASED TARGET INITIATIVE LETTER 43
document has not been independently verified. To the fullest extent permitted by law, in no event will
A2A, or any of their managers or employees, be liable to any person for any damage of any kind, whether
in contract, tort or otherwise, including negligence, direct, indirect or consequential damages including
loss of revenue, loss of profit, loss of opportunity or other loss of arising from the use of the information
contained in this document. The addressees of this document are solely liable for any use of the informa-
tion contained and solely responsible for making their investments and other decision.
This material is not intended for distribution to, or use by, any person or entity in any jurisdiction or
country where such distribution or use would be contrary to law or regulation. Persons who might come
into possession of it must inquire as to the existence of such restrictions and comply with them.
2 3
01 A2A OVERVIEW
01 A2A OVERVIEW 1.1 A2A in brief
1.1 A2A in brief 01
A2A OVERVIEW
A2A in brief
Dealing with energy, water and environ- Plants and services of the A2A Group Trentino Alto Adige
ment, and courtesy of a circular use of A2A Plan to 2030
PLANTS
natural resources, A2A takes care of those 02
conditions that are necessary for life and its Energy Thermoelectric APPROACH TO
Veneto SUSTAINABILITY
quality: A2A is a “Life Company”. Piedmont
Hydroelectric
A2A is among the largest electricity gen- 03
SETTING UP
erators in Italy, with approximately 9 GW Photovoltaic
A SUSTAINABLE
of installed capacity and a production mix FINANCE
Wind Friuli Venezia Giulia FRAMEWORK
geared toward renewable sources. Hydro
production represents around a quarter Waste Waste-to-energy plant 04
of installed capacity, while waste-to-en- GREEN &
Waste treatment plant SUSTAINABILITY-
ergy (WtE) plants account for approxi- LINKED
mately 2.5 Mt, allowing A2A to be ranked Material recovery plant FINANCING
COMPONENTS
as the first Italian player by electricity and Landfill
heat productions through WtE plants. Emilia Romagna 05
SERVICES EXTERNAL
Furthermore, A2A has been continuously REVIEW
strengthening its presence in the photovol- Waste Waste collection SECOND PARTY
taic sector since 2017, reaching an existing Liguria OPINION
Distribution and transport Electricity distribution
generation capacity of approximately 100 APPENDIX I
MW as of 31 December 2020. Gas distribution
Marches FURTHER DETAILS
FOR STEP UP
In Italy, A2A has a leading position in (i)
Gas transport APPENDIX II
environmental services, where it operates SCIENCE
along the entire waste management cycle District heating District heating
Tuscany BASED TARGET
(i.e. recovery of materials and energy from INITIATIVE LETTER
Water Integrated water service
waste), and in (ii) the district heating sec- Abruzzo
tor (i.e. sale of heat, cogeneration, district Lighting Public lighting
heating networks and heat management Electric mobility Recharge stations e-Moving Molise
services).
The perimeter of the “Life Company”
fosters both A2A’s distinguishing values
Lazio
and the very definition of “multi-utility” to
take forward its most profound elements:
(i) closeness to people and knowledge
of its surroundings, (ii) a commitment Campania Puglia
toward essential services, (iii) long-term Lombardy
sustainability, (iv) transparency and (v)
innovation. A2A believes in the adoption Milan Brescia Sondrio
of new lifestyles, new sustainable forms
of production and consumption, promot-
ing a shared vision of the world. Circular
economy and energy transition are the Calabria
pillars of A2A Strategic Plan for a new ap-
proach to business to which all the areas Bergamo Pavia Va r e s e
of the Group – Energy, Waste and Net- Sardinia
works – will contribute.
A2A plays a key role in the energy tran-
sition process and implements the princi-
ples of circular economy in all its activities.
A2A is a well-diversified group, engaged Como Mantua Lodi
in generation, sale and distribution of
electricity and gas, waste collection and
recovery, district heating, e-mobility, inte- Sicily
grated water services and public lighting. Cremona Monza and Brianza Lecco
A2A operates throughout Italy, with a his-
toric geographical presence concentrated
in Northern Italy.
6 7
01 A2A OVERVIEW 1.2 A2A Plan to 2030
1. Accelerating since 2014 1.2 A2A Plan to 2030 01
A2A OVERVIEW
A2A in brief
In the recent years, A2A has shown a solid and fast growth in its core businesses strengthened by a sound A long-term strategy shaped by sustainability, with significant growth in terms of EBITDA, going from
financial performance. €16 bn of investments deployed for the develop- about €1.20 bn in 2020 to over €2.5 bn in 2030, with A2A Plan to 2030
ment of the circular economy and the energy tran- a 2020-2030 CAGR close to 8%. The development 02
sition: two fundamental fields in safeguarding the of margins is well balanced, not only between the APPROACH TO
SUSTAINABILITY
future. Substantial long-term investments in strategic various Business Units but also in terms of timescale.
Business indicators infrastructures for Italy, and a rebalancing of A2A’s Growth is expected starting from the first years 03
SETTING UP
portfolio, are two crucial elements for sustainable with EBITDA expected to increase, between 2020 A SUSTAINABLE
transition acceleration. The Strategic Plan foresees and 2022, by approximately 7.5% (CAGR). FINANCE
FRAMEWORK
04
-74% -88% GREEN &
SUSTAINABILITY-
LINKED
FINANCING
279 COMPONENTS
3,321
05
EXTERNAL
REVIEW
869 SECOND PARTY
34
Circular Economy, OPINION
€6 bn in investments 2021-2030 APPENDIX I
2014 2020 2014 2020 FURTHER DETAILS
CIRCULAR FOR STEP UP
-2,452 GWh production from -245 Kton of waste landfilled
coal & oil-fired plants ECONOMY APPENDIX II
SCIENCE
BASED TARGET
INITIATIVE LETTER
Energy Transition,
>4x 15x €10 bn in investments 2021-2030
ENERGY
TRANSITION
1,691 1,663
320
105
2014 2020 2014 2020
+1,371 K customers (EE and Gas free +1,558 MWh delivered by A2A public charging
market customer base) points to EVs
Financial indicators
bn€
-12% +20%
3.3x 1.2
2.9x 1.0
2014 2020 2014 2020
-12% reduction of NFP/EBITDA +20% growth of EBITDA
8 9
01 A2A OVERVIEW 1.2 A2A Plan to 2030
01
1. Circular Economy, €6 bn in investments 2021-2030 2. Energy Transition, €10 bn in investments 2021-2030 A2A OVERVIEW
A2A in brief
A2A plays a crucial role in the Circular Economy, Under its Strategic Plan, by 2030 A2A is ex- The challenging targets - from both a national and
focusing on water cycle, district heating and waste pected to: more than double material recovery to a European perspective - linked to decarboni- A2A Plan to 2030
management activities. 2.2 million tons from sorted collection treated, sation and the reduction of GHG emissions, 02
Throughout an investment plan of €6 bn, the Group ramp-up energy recovery to 5.4 million tons, as well as technological and market evolution, APPROACH TO
SUSTAINABILITY
will pursue strategic actions aimed at increasing the increase the percentage of sorted collection to require an acceleration of the energy transition
recovery of materials and energy from waste, and 76%, strengthen the recycling cycle of plastics and from fossil fuels to renewable resources. 03
SETTING UP
reducing wastages (e.g. water losses, waste heat). paper. A2A has substantially increased its long-term A SUSTAINABLE
The balance between recycling and energy recovery In compliance with European law, on the selection capex plan to speed up the energy transition FINANCE
is an essential prerequisite for reducing the use of and treatment of urban wastewater¹, A2A plans process allocating a total amount of €10 bn of FRAMEWORK
landfills until such use is completely phased out. to increase the investments in water cycle with investment in support of decarbonisation and 04
A2A will become a strong European player in the aim to reduce pipeline water losses by 20% by electrification throughout the 10 years Busi- GREEN &
SUSTAINABILITY-
waste management. Such evolution is supported by 2030 (m³ / km / day) and develop new purification ness Plan. LINKED
(i) external growth transactions, (ii) strong presence in capacities (1.9 million inhabitants served by 2030). FINANCING
COMPONENTS
growing market segments (such as organic waste), (iii) On district heating, the focus will be on (i) net- The Energy Transition pillar envisages:
strengthening of the industrial waste segment and (iv) work development and (ii) the recovery of heat • The phase out of coal by 2022, anticipating 05
EXTERNAL
enhancement of know-how on specific and significant sources from production activities otherwise dis- the national target scheduled for 2025; REVIEW
issues (such as sludge treatment and water purification). persed into the atmosphere. • The development of new RES (renewable As for investments planned under the SECOND PARTY
OPINION
energy sources) which will contribute to 58% 2021-2030 period A2A aims to:
of the Group’s energy production by 2030, • Foster generation capacity from renewable APPENDIX I
FURTHER DETAILS
well above the target of 55%2 of renewables sources, solar and wind, up to 5.7 GW; FOR STEP UP
in the Italian electricity mix by 2030; • Develop a new hydrogen-blending-ready com-
APPENDIX II
• Various interventions aimed at improving the bined cycle plant and a “gas peaker”; SCIENCE
flexibility, the resilience and the adequacy of • Invest in innovative technologies such as bat- BASED TARGET
the electric system. teries for solar system, thermal storage for INITIATIVE LETTER
district heating and green hydrogen (synchro-
Investments in the Electricity Generation will be nous compensators and electrolysers for 0.3
deployed mainly towards two technologies, so- GW);
lar and wind. • Develop new electrical substations, of which
During the front end of the Strategic Plan, M&A 13 primary, 1,000 secondary, and 2,000 km of
will contribute to create a development platform new lines;
fueling an international and diversified growth. • Install and operate over 6,000 charging points
The organic growth of our portfolio will never- for electric vehicles;
theless remain the key driver of our renewable • Serve 6 million electricity and gas customers
energy generation capacity throughout the dura- nationwide.
tion of our Strategic Plan.
RES installed capacity | GW
CAGR +11%
Energy recovery | TWhe
5.7
CAGR +8%
3.6
0.9 5.0 2.1 2.2
1.5 0.3
2.3
2020 2022 2026 2030
Total production
31% 58%
15 20
2020 Power Heat Biomethane 2030 TWh TWh
from waste from waste from waste
RES Thermal
1 In its regular package of infringement decisions, the European Commission pursues legal action against Member 2 “INTEGRATED NATIONAL ENERGY AND CLIMATE PLAN” December 2019 - https://www.mise.gov.it/images/
States for failing to comply with their obligations under EU law. One of these decisions was against Italy, due to the stories/documenti/it_final_necp_main_en.pdf
failure to comply with the requirements of the Urban Waste-water Treatment Directive on collection, treatment
and monitoring in normal and sensitive areas. For further information, see INFR(2017)2181.
10 11
02 APPROACH TO SUSTAINABILITY
02 APPROACH TO SUSTAINABILITY Approach to sustainability
Approach to sustainability 01
A2A OVERVIEW
02
Since its inception, A2A has made sustainability such as: customers, suppliers, associations and Our sustainability approach timetable APPROACH TO
one of its founding values and a business par- institutions. In light of these elements, A2A’s ap- SUSTAINABILITY
adigm. For A2A, being sustainable means gen- proach to sustainability is both holistic and cir- Approach
erating and distributing value in a lasting and cular, based on four steps: Strategy, Implemen- to sustainability
autonomous way, being careful to reconcile the tation, Monitoring and Reporting, Stakeholder Climate change
needs of those with whom it interacts every day, engagement. governance: Roles,
responsibilities and
risk assessment
Circular economy
● 10y business plan based
Energy transition
on sustainability and 2030 Agenda
with two pillars, circular economy Digital & innovation
ESG and energy transition and people
Rating Score ● A new Sustainable Finance 2021 & territory
Agency Framework covering both use of 03
proceeds and Sustainability-Linked SETTING UP
financial instruments A SUSTAINABLE
FINANCE
● A2A’s CO2 emission reduction FRAMEWORK
Average objectives approved by SBTi
Score: ● Leadership in the Carbon Disclosure 04
3.9/5 GREEN &
Project SUSTAINABILITY-
2020 ● ESG KPIs added to EMTN LINKED
Programme for potential FINANCING
COMPONENTS
sustainable issuances
Climate ● ESG evaluation integrated within 05
Change: ● First NFD pursuant to A2A supply chain process EXTERNAL
A-/A Legislative Decree 254/16 (2018) REVIEW
SECOND PARTY
● First in Italy, signed 5-years ESG
OPINION
Linked revolving credit line (2018)
● Inclusion in the FTSE4GOOD APPENDIX I
FURTHER DETAILS
Index (2018) 2018-2019 FOR STEP UP
● Green Financing Framework
21.0/40+
and Green Bond (2019) APPENDIX II
● Adhesion to “Circular Economy SCIENCE
BASED TARGET
100” of EFM (2019) INITIATIVE LETTER
● First local MULTI-STAKEHOLDER
● Member of the corporate forum
on sustainable finance (2019) FORUM in Brescia (2015)
● Sustainability Policy according to
Advanced SDGs (2016)
● Inclusion in the EURONEXT Vigeo
2015-2017 Index (2016)
● First integrated report according to
International IR Framework (2017)
B- ● ESG Goals in the Management
Status: MbO (2017)
Prime
● Adhesion to UN Global Compact
(2012)
● New Quality, Environment and
Safety (QES) Policy (2013) 2012-2014
● Inclusion in the FTSE ECPI Italia
A/AAA
SRI benchmark index (2014)
● FIRST SUSTAINABILITY REPORT
EE/EEE according to Global Reporting
Outlook: Initiative (2009)
Positive 2009-2011 ● FIRST SUSTAINABILITY REPORT
externally audited (2010)
● First 3-years sustainability planning
cycle (2011)
Average
Score:
69/100
14 15
02 APPROACH TO SUSTAINABILITY Approach to sustainability
01
A2A was among the first Italian companies3, in April activities and a solid culture of sustainability. The The Sustainability Plan, contains the A2A’s sustain- To facilitate the implementation of the initiatives A2A OVERVIEW
2016, to redesign its own sustainability strategy in Policy was the result of a joint and integrated pro- ability objectives quantified over a time horizon of the Sustainability Plan, a structured model of
02
light of the priorities of the UN Agenda, defining cess, involving the top management as a whole. It consistent with its Strategic Plan. sustainability objectives was developed within the APPROACH TO
a Sustainability Plan and a Sustainability Policy. The started from comparing the 17 UN SDGs with the Any actions included in the Sustainability Plan con- management incentive system, which provided for SUSTAINABILITY
Sustainability Policy of A2A aims at helping the com- core business and objectives of A2A: eleven SDGs sists of various indicators aimed at monitoring the the inclusion of at least one sustainability objective Approach
munities in which it operates to be more sustain- were selected, contributing in setting the priorities progress made in achieving the challenging goals set in management’s MbO. to sustainability
able, through a responsible management of their and commitments to 2030. by 2030. Climate change
governance: Roles,
responsibilities and
risk assessment
CLIMATE LIFE Circular economy
ACTION ON LAND
Energy transition
Digital & innovation
and people
& territory
03
CLEAN WATER INDUSTRY, SUSTAINABLE CITIES SETTING UP
AND SANITATION INNOVATION AND AND COMMUNITIES A SUSTAINABLE
INFRASTRUCTURE
FINANCE
FRAMEWORK
AFFORDABLE AND capture and conversion
CLEAN ENERGY to drinking water 04
GREEN &
SUSTAINABILITY-
LINKED
FINANCING
COMPONENTS
collection
IBUTION
DI S TR and purification 05
hydroelectric EXTERNAL
smart city REVIEW
SECOND PARTY
photovoltaic energy OPINION
energy efficiency sale
N OT
U T IO HE initiatives APPENDIX I
RIB RS
ST FURTHER DETAILS
EXTRACTION DI ER
VIC public
FOR STEP UP
ES lighting
OF RESOURCES
APPENDIX II
INSTITUTIONAL SCIENCE
G
thermoelectric municipal waste
DISTRICT HEATIN
BASED TARGET
INITIATIVE LETTER
QUALITY
EDUCATION
COMMUNITY INDUSTRIAL
PRIVATE separate non-separate
cogeneration INDIVIDUALS waste collection waste collection
COMMERCIAL
DIS T transport
RIB
UT
IO
N
I NG special
AR KE T waste
RE M
DISTRICT HEATING
GENDER material
EQUALITY recovery
natural gas network
DECENT WORK
AND ECONOMIC
Waste-to-energy plant GROWTH
PARTNERSHIPS
FOR THE GOALS
RESPONSIBLE
CONSUMPTION
AND PRODUCTION
3 https://www.globalcompactnetwork.org/files/pubblicazioni_stampa/pubblicazioni_network_italia/Report-
Italian-Businesses-Practices-Towards-Sustainable-Development.pdf
16 17
02 APPROACH TO SUSTAINABILITY 2.2 Circular economy
2.1 Climate change governance: This strategy puts A2A in line with the best European countries.
01
A2A OVERVIEW
Roles, responsibilities and risk assessment 02
APPROACH TO
PRODUCT SUSTAINABILITY
Since 2015, A2A has put in place, as part of the climate change on the Group broader strategy. Approach
Board of Directors, a dedicated Sustainability and A2A Group has a system in place for identifying, to sustainability
Territory Committee, tasked with playing an eval- assessing and managing risks and opportunities Climate change
uative, advisory and propositional role in assisting connected with climate change, in accordance governance: Roles,
responsibilities and
the Board of Directors, Chairman and Chief Ex- with the guidelines developed by the Task Force risk assessment
ecutive Officer of the Group in defining guidelines on Climate-Related Financial Disclosures. This sys-
and initiatives relating to the promotion of a sus- tem has been integrated into the Group’s Enter- Circular economy
tainability strategy and tools that integrate sustain- prise Risk Management methodology and process. WASTE PRODUCTION Energy transition
SECONDARY
ability into the business process. It is estimated that physical climate risks will affect RAW MATERIALS Digital & innovation
The interaction between this committee, the the Group’s overall EBITDA as forecast in the Busi- SORTED and people
Sustainable Finance Committee, the Investment ness Plan by between -1% and +0.2%. & territory
WASTE
Committee and the heads of the Business Units Regarding the transition risks and opportunities, 03
ensures that all investments are fully aligned with the impact on the Group’s overall EBITDA fore- SETTING UP
A SUSTAINABLE
the Group’s commitment to promote a low-car- cast in the Business Plan is estimated to vary be- TREATMENT FINANCE
bon business model. tween -0.5% and +0.4%. PLANTS FRAMEWORK
In 2020, following the inputs of the Sustainabil- 2021-2030 Sustainability Plan is focused on the HEAT AND POWER
04
PRODUCTION
ity and Territory Committee and the Control same two pillars of the Strategic Plan: Circular RECYCLABLE
GREEN &
SUSTAINABILITY-
and Risk Committee, the Group Risk Manage- Economy and Energy Transition, supported by FRACTION LINKED
ment Organizational Structure has deepened the two dimensions, Digital & Innovation and People & FINANCING
COMPONENTS
methods of analysis of the potential impacts of Territory.
05
EXTERNAL
REVIEW
SECOND PARTY
OPINION
2.2 Circular economy
APPENDIX I
FURTHER DETAILS
e.g.: ~50% plastic from sorted waste FOR STEP UP
The transition to a more circular economy is APPENDIX II
SCIENCE
an essential contribution to the EU’s efforts to BASED TARGET
develop a sustainable, low carbon, resource ef- INITIATIVE LETTER
Energy recovery and recycling mix in main European countries | 2018
ficient and competitive economy. For a circular
economy it is essential to recycle materials from
waste in order 'to close the loop'.
Waste management plays a central role in the
circular economy: it determines how the waste
hierarchy is put into practice. The waste hierar-
chy establishes a priority order from prevention,
reuse, recycling, energy recovery, while disposal
shall be avoided.
A2A has a key role in the recycling of material
and it is committed to increasing material recov-
ery as much as possible from a technical point of
view. For the material which cannot be recov-
ered in any way, Waste-to-Energy remains the means managing all resources, not just waste, in
most efficient solution to avoid waste disposal. a sustainable manner paying attention as much
A2A adopted a business model oriented to the to the reuse of resources as to the reduction in
maximum recovery of resources: from the re- waste production up to the maximum exploita-
covery of material and energy from waste to tion and protection of each resource, starting 4
the recirculation of water for self-consumption from water.
of thermoelectric power plants and the recov- In the last 3 years, almost 100% of the waste
ery of energy from sludge downstream of puri- collected in the performance of urban sanitation
fication processes. For A2A, circular economy services was recovered as material or energy.
Municipal waste collected sent to landfill (%)
5
2018 2019 2020
0.3% 0.1% 0.2%
4 Destination of urban waste collected by the Group.
5 Includes composting.
18 1902 APPROACH TO SUSTAINABILITY A2A Nome Pubblicazione al gg mese aaaa
2.3 Energy transition
Aware of the impact of GHG emissions, A2A In 2019, A2A revised its GHG reduction target by
has always been committed to putting into 2030 as part of its Sustainability Policy. The new
practice the guidelines of international target was submitted to the Science-Based Targets
agreements on climate and the National initiative (SBTi)6 to verify its alignment with the indica-
Energy Strategy: it focuses on and invests in tions of the Paris Agreement (COP21). On March 2,
renewable sources and innovation to reduce emis- 2020, SBTi declared A2A’s direct and indirect GHG
sions and the use of fossil fuels. A2A develops its emission reduction targets (Scope 1-2) to be aligned
electricity, gas and district heating networks to be with the reductions required to limit the increase of
efficient and resilient, favoring the distributed gen- global warming to 2°C. In addition, A2A’s objective of
eration, the recovery of waste heat from industrial reducing indirect emissions, linked to its value chain
processes, and the use of biomethane. (Scope 3), is also in line with SBTi criteria and in line
In the last 3 years, A2A reduced its Scope 1 emis- with international best practice. The Group is the
sions, thanks to lower use of fossil fuels in energy first Italian multi-utility with GHG emission
production. targets certified by SBTi.
Scope 1 Greenhouse gas emissions trend (Mt CO2eq)
03
2018 2019 2020
7.5 7.0 5.8
2.4 Digital & innovation and people & territory
SETTING UP
In order to support the development of cities as tories in which it operates, guaranteeing maximum
places to live and work well, respecting both the ter- transparency on its activities and performance, un-
ritory and the natural resources, A2A offers custom- dertaking a strong stakeholder engagement, and
ers, institutions and communities "intelligent" services implementing awareness through training activities
that optimize the use of resources thanks to new in schools.
A SUSTAINABLE
smart and digital technologies. Sensors, advanced All this is supported by the main commitment to pro-
analytics, artificial intelligence, home automation are viding its employees with high standards of health and
some of the key words that will shape the future. safety, training, benefits and welfare programs.
Innovation, developed in partnership with Universi- The Sustainability Plan is published, with the trend
ties, Research Centres and Start-ups, becomes cru- of each Key Performance Indicator (KPI), on the
FINANCE
cial to continuously develop new services that are A2A Integrated Report, that represents the Group’s
useful and functional to improve the quality of life. Consolidated Non-Financial Disclosure (NFD), in
In the same way, A2A is committed to the terri- accordance with Legislative Decree 254/16.
FRAMEWORK
6 The Science-Based Targets initiative is an initiative that stems from the collaboration between the Carbon Disclo-
sure Project (CDP), the United Global Compact (UNGC), the World Resources Institute (WRI) and the World
Wide Fund for Nature (WWF).
20 2103 SETTING UP A SUSTAINABLE FINANCE FRAMEWORK A2A Nome Pubblicazione al gg mese aaaa
Setting up a Sustainable Finance Framework
A2A’s Sustainable Finance Framework (the “Frame- The documentation for each individual financing in-
work”) is a valuable tool for the integrated imple- strument issued by A2A will designate the selected
mentation of A2A’s sustainability plan. format.
After the inaugural Green Bond of €400 mn is- The Framework gives investors:
sued in July 2019, this Framework represents the • The transparency to better allocate their funds
financing cornerstone of the 2021-2030 Strategic and measure their contribution to sustainability,
Plan reinforcing the A2A’s commitment to achieve with the green use of proceeds format;
its sustainability targets aligned to the UN SDGs • The strong engagement of A2A in ESG manage-
and the current draft of the EU Taxonomy, to the ment and continuous improvement at corpo-
extent feasible7. rate level with the sustainability-linked format.
This Framework has been developed to show how
A2A intends to continue supporting its sustainabil- A2A’s ambition towards sustainability goes beyond
ity strategy and vision via the utilization of various the direct business and reach of the Group. A2A
Green & Sustainability-Linked financing instru- wishes also to inspire its suppliers and partners to
ments. Under this Framework A2A will be able to improve their ESG efforts, thus integrating the ESG
04
issue use of proceeds or KPI-linked instruments, evaluation in its supply chain process.
such as bonds, loans, project financings and/or any In this regard, when selecting partnering financial
other financing instruments in various formats and institutions for their future visit to the broader fi-
currencies. nancial market, A2A will start incorporating ESG
Through this integrated Sustainable Finance Frame- parameters in the evaluation process.
work, A2A can combine the use of proceeds and
sustainability-linked formats or use each of these The company retains the option to occasionally
formats independently on a case by case basis, re- update this Framework. In that instance, the com-
taining full flexibility in terms of issuance based on pany commits to a level of transparency and re-
the specific sustainability objectives and projects porting aligned to the current one in any future
that the company intends to support. version of the Framework.
GREEN &
SUSTAINABILITY-LINKED
CLEAN WATER CLEAN WATER AFFORDABLE ANDAFFORDABLE ANDINDUSTRY, INDUSTRY,
AND SANITATION AND SANITATIONCLEAN ENERGY CLEAN ENERGY INNOVATION AND INNOVATION AND
INFRASTRUCTURE INFRASTRUCTURE
AND COMMUNITIESAND COMMUNITIES
RESPONSIBLE RESPONSIBLE CLIMATE
SUSTAINABLE CITIESSUSTAINABLE CITIES
CONSUMPTION CONSUMPTION ACTION
AND PRODUCTIONAND PRODUCTION
FINANCING
COMPONENTS
7 In the period of time when the Taxonomy is still not in force, the company will apply a selection criteria based on the most
relevant and updated information, for instance EU Commission’s Technical Expert Group reports or drafted regulation.
22 2304 GREEN & SUSTAINABILITY-LINKED FINANCING COMPONENTS 4.1 The Green Financing Component
Green & Sustainability-Linked financing components 4.1 The Green Financing Component 01
A2A OVERVIEW
02
For each green and/or Sustainability-Linked financing Sustainability-Linked format, aligned with the Green Bonds are any type of bond instrument intends to prioritize, where possible, newer APPROACH TO
set-up, A2A asserts that it will select or combine the Sustainability-Linked Bond Principles (SLBPs) where the proceeds will be exclusively applied over older assets. SUSTAINABILITY
following ESG formats set out in this Framework: published by the International Capital Market As- to finance or re-finance, in part or in full, new A2A will use its best effort to replace any assets 03
Use of proceeds format, aligned with the Green sociation (ICMA) - 2020 version and the Sustain- and/or existing eligible Green Projects and that are no longer eligible, and/or if any mate- SETTING UP
A SUSTAINABLE
Bond Principles (GBPs), published by the Interna- ability-Linked Loan Principles (SLLPs) of the Loan which are aligned with the following four core rial and critical controversies emerge, as soon FINANCE
tional Capital Market Association (ICMA) – 2018 Market Association (LMA) - 2020 version. components: as practical once an appropriate replacement FRAMEWORK
version and the Green Loan Principles (GLPs) When selecting the preferred ESG format for a • Use of proceeds has been identified giving evidence in the allo- 04
published by the Loan Market Association (LMA) financing instrument (i.e. use of proceeds format • Process for Project Evaluation and Selection cation report. Moreover, all potential projects, GREEN &
– 2021 version, and, to the extent feasible, with only or Sustainability-Linked format only), A2A • Management of Proceeds throughout their life-cycle, will be evaluated SUSTAINABILITY-
LINKED
the draft European Green Bond Standard and the shall not be bound by the terms and commitments • Reporting and monitored also considering ESG factors. FINANCING
European Commission’s recommendations. applying for the other format. COMPONENTS
Exclusion criteria: A2A will exclude any Sustainable
1. Use of proceeds project that does not meet the internationally Finance
Committee
acknowledged sustainable best practices such
An amount equal to the net proceeds from the as, for example, Global Compact or Interna- The Green
Sustainable Finance Committee issuance of the Green Financing Instruments will tional Labour Organization.
Financing
Component
be used to finance or refinance, in part or in full, Any project, asset, expenditure or investment
Sustainability-
In 2019 A2A set up a dedicated cross-departmen- • Finance new or existing, Eligible Green Projects. (included unallocated proceeds) related to the Linked
tal Green Financing Committee (GFC) aimed at • Sustainability Projects and Reporting following activities will be excluded: Component
identifying and selecting Eligible Green Projects • Strategy EU Taxonomy alignment: a dedicated as- • Fossil energy generation 05
from a pool of investments. In 2021 the Commit- • Planning & Control sessment of the allocated Eligible Green Pro- • Nuclear energy generation EXTERNAL
REVIEW
tee, now called Sustainable Finance Committee • Subsidiaries/Business Units involved, relating to jects alignment with the EU Taxonomy will be • Development of new gas distribution pipe- SECOND PARTY
(SFC), has further developed his role to include specific project(s) and KPI(s) performed within the annual allocation report. lines/networks. OPINION
Sustainability-Linked Instruments. Eligible Green Projects may include capital ex- APPENDIX I
The SFC, chaired by Finance, includes members The Committee meeting takes place on a semi-an- penditures, operating expenditures related to Since 2019, A2A conducted analyses of the po- FURTHER DETAILS
from the following departments: nual basis and as and when the situation requires. improvement and maintenance of Eligible Green tential interference of the A2A Group’s activities FOR STEP UP
Projects, research and development, materials with the system of protected areas, namely with APPENDIX II
purchase costs, and acquisitions of renewable sites belonging to the Natura 2000 Network, SCIENCE
BASED TARGET
energy (solar and wind) assets. Where feasible, IBA (Important Bird and Biodiversity Area) areas. INITIATIVE LETTER
A2A will disclose in its annual reporting the These analyses will be adopted in the Do Not Sig-
KEY RESPONSIBILITIES year of operation of the acquired asset. A2A nificant Harm (DNSH) assessment.
Review, select, validate and monitor the pool of Eligible Green Projects,
based on A2A’s sustainability strategy, enterprise risk valuation
and the Sustainable Finance Framework
Monitoring ESG controversies associated
to the projects and replacing
Select and propose eligible sustainable financing KPIs and review
and monitor the related SPTs
Identify the proper impact metric that best describes
the environmental benefits
Draft, verify and validate annual reporting
for investors
Monitoring the on-going evolution related to the Sustainable Capital Markets
in terms of disclosure/reporting to be in-line with market best practices
Review and update the Framework, including expansions to the list
of Eligible Categories and KPIs, to reflect any changes about
the Company’s sustainability strategies and initiatives
24 2504 GREEN & SUSTAINABILITY-LINKED FINANCING COMPONENTS 4.1 The Green Financing Component
01
1. Use of proceeds A2A OVERVIEW
02
APPROACH TO
SUSTAINABILITY
03
SETTING UP
A SUSTAINABLE
Transmission Sustainable water Pollution
Renewable Energy Clean FINANCE
and distribution and wastewater prevention FRAMEWORK
energy Efficiency transportation
networks management and control
04
GREEN &
SUSTAINABILITY-
LINKED
FINANCING
Increasing production of renewable energy, Reducing energy consumption or mitigate Connecting renewable Construction, development, Construction, development, Construction, development, COMPONENTS
through acquisitions, construction or greenhouse gas emissions, including: sources, enhancing distributed operation and maintenance operation and maintenance of operation, acquisition and
Sustainable
maintenance project, including: • Waste-to-Energy efficiency revamping/ energy, improving smart grids of facilities, systems or facilities, systems or equipment maintenance of infrastructure Finance
• PV / Wind plants upgrade (energy production and district (efficiency and reliability), equipment used for sustainable used to reduce GHG emissions for sustainable mobility and Committee
• New plants of biomethane production heating) (R1 ≥ 0.60) decreasing electricity losses infrastructure for clean and/ and waste disposal and reducing cleaner vehicles with a lower
The Green
(through biogas recovery) • Services to improve energy efficiency of and gas leakages of the existing or drinking water, wastewater the environmental impact of the environmental impact, for Financing
• Bioenergy plants public lighting from traditional lighting to networks, including: treatment and sustainable urban cities, including: communities and for the Component
• Battery and thermal storage systems LEDs technology • Investments in smart grid drainage systems, including: • Waste-to-Energy Projects Group’s fleet, including:
Sustainability-
development • New product and services related to • Smart meters installation • Wastewater treatment and with materials recovery • Low environmental impact Linked
energy efficiency for end customers (energy and gas) purification plants, networks and recycling prior to waste- collection vehicles Component
• Ensure maximum efficiency throughout • Reduction of gas leakages of and appliances; incineration, anaerobic (Electric and biomethane
05
BAT (best available technologies) for the existing networks making • Reduction of water losses digestion, and acceptable powered) EXTERNAL
the Group assets (new and refurbished “hydrogen ready” on A2A’s projects (automatic systems levels of thermal efficiency8 • Low impact cars (Electric REVIEW
Eligible green SECOND PARTY
buildings) infrastructure to find leakages, new (energy production and and biomethane powered)
projects aimed at: OPINION
• Improved grid efficiency (New pipelines, water smart district heating) used for operations in the
primary electric stations, meters): target to reduce (R1 ≥ 0.65) and a minimum DSO activities; APPENDIX I
electrolyzers and synchronous water leakage of 20% by energy efficiency of 25% • Electric car charging hub FURTHER DETAILS
FOR STEP UP
condensers, replacement 2030 (2020 base year) • Waste collection services for • Biomethane filling station
of network joints on the municipalities for vehicles (with emissions APPENDIX II
electricity grid) • Plants to recover organic below 50g CO2eq/km until SCIENCE
BASED TARGET
• Infrastructure development fraction9 2025) INITIATIVE LETTER
and improvement projects of • Material recovery and • Development of hydrogen
IT platforms and application selection plants use for sustainable local
• Development & maintenance transport purposes
of district heating (pipelines,
heat pumps/exchangers)
• Recovery of heat sources
from production activities
Climate change mitigation Climate change mitigation
Environmental Climate change Climate change Natural Resource Climate change
& Natural Resource & Pollution prevention
benefits mitigationCLEAN WATER AFFORDABLE AND mitigationCLEAN WATER
INDUSTRY, AFFORDABLE AND INDUSTRY, Conservation CLEAN WATER AFFORDABLE AND mitigation
INDUSTRY,
AND SANITATION CLEAN ENERGY INNOVATION AND AND SANITATION CLEAN ENERGY INNOVATION AND Conservation andANDcontrol
SANITATION CLEAN ENERGY INNOVATION AND
INFRASTRUCTURE INFRASTRUCTURE INFRASTRUCTURE
CLEAN WATER AFFORDABLE AND INDUSTRY,
CLEAN WATER AFFORDABLE AND INDUSTRY, CLEAN WATER AFFORDABLE AND INDUSTRY,
CLEAN WATER INDUSTRY,
AND SANITATION CLEAN ENERGY INNOVATION
AND AND
SANITATION CLEAN ENERGY INNOVATION AND AND SANITATION CLEAN ENERGY INNOVATION AND
CLEAN WATER AFFORDABLE AND INDUSTRY,
SUSTAINABLE CITIES CLEAN WATER
RESPONSIBLE AFFORDABLE AND INDUSTRY,
SUSTAINABLE CITIES RESPONSIBLE AFFORDABLE AND CLEAN WATER AFFORDABLE AND
INFRASTRUCTURE INDUSTRY, CLEAN
SUSTAINABLE WATER
CITIESCLEAN WATER INFRASTRUCTURE
RESPONSIBLEAFFORDABLE AND AND
AFFORDABLE INDUSTRY,
INDUSTRY, INFRASTRUCTURE
AND SANITATION CLEAN ENERGY AND INNOVATION
COMMUNITIESAND AND SANITATION
CONSUMPTION CLEAN ENERGY AND INNOVATION
COMMUNITIESAND AND SANITATION
CONSUMPTION CLEAN ENERGY INNOVATION AND AND SANITATION CLEAN ENERGY INNOVATION
AND AND
ANDSANITATION
COMMUNITIES AND SANITATION CONSUMPTION
CLEANCLEAN
ENERGY
ENERGY INNOVATION AND AND
INNOVATION
INFRASTRUCTURE AND PRODUCTION INFRASTRUCTURE AND PRODUCTION INFRASTRUCTURE INFRASTRUCTURE AND PRODUCTION INFRASTRUCTURE
INFRASTRUCTURE
SDG
Contribution
CLIMATE CLIMATE SUSTAINABLE CITIES RESPONSIBLE SUSTAINABLE CITIES RESPONSIBLE SUSTAINABLE CITIES CLIMATE
RESPONSIBLE
ACTION ACTION AND COMMUNITIES CONSUMPTION AND COMMUNITIES CONSUMPTION AND COMMUNITIES ACTION
CONSUMPTION
SUSTAINABLE CITIES RESPONSIBLE SUSTAINABLE CITIES RESPONSIBLE SUSTAINABLE CITIES RESPONSIBLE SUSTAINABLE CITIES RESPONSIBLE SUSTAINABLE CITIESCITIES
SUSTAINABLE RESPONSIBLE
RESPONSIBLE AND PRODUCTION
AND PRODUCTION AND PRODUCTION
AND COMMUNITIES CONSUMPTION AND COMMUNITIES CONSUMPTION AND COMMUNITIES CONSUMPTION AND COMMUNITIES CONSUMPTION AND COMMUNITIES
AND COMMUNITIES CONSUMPTION
CONSUMPTION
AND PRODUCTION AND PRODUCTION AND PRODUCTION AND PRODUCTION AND PRODUCTION
AND PRODUCTION
8 Assessed by reference to gross efficiency benchmarks published in the European Union Best Available Techniques (BAT)
Reference Document for Waste Incineration, 2019
9 OFMSW (https://eippcb.jrc.ec.europa.eu/sites/default/files/2020-01/JRC118637_WI_Bref_2019_published_0.pdf)
26 2704 GREEN & SUSTAINABILITY-LINKED FINANCING COMPONENTS 4.1 The Green Financing Component
01
2. Process for project 3. Management of proceeds 4. Reporting & Verification A2A OVERVIEW
evaluation and selection 02
The net proceeds from A2A’s Green Financing In- Reporting Verification APPROACH TO
Project evaluation and selection is a key pro- struments will be earmarked for allocation to the On an annual basis, at least until full allocation or External verifiers appointed by A2A will verify on SUSTAINABILITY
cess in ensuring that the projects financed and/ Eligible Green Projects as selected by the SFC. The in case of material changes, A2A will provide the an annual basis and until the full allocation, the allo- 03
or refinanced through the Green Financing pro- process will be in accordance with A2A’s Sustain- following reporting on its Green Financing instru- cated proceeds to Eligible Green Projects and the SETTING UP
A SUSTAINABLE
ceeds meet the Eligibility Criteria reported in able Finance Framework. Net proceeds will refi- ment(s): remaining balance of unallocated proceeds, within FINANCE
this Sustainable Finance Framework. nance Eligible Green projects disbursed, delivered Allocation reporting: detailing the financ- the annual report review. FRAMEWORK
A revision of the Investment Valuation Function or acquired up to 24 months before the issuance ing instrument proceeds allocation by category External verifiers will also verify the compliance 04
(VIG) procedure is going to be developed in or- of a Green Financing instrument. of Eligible Green Projects; the proportion of net of the allocated proceeds with the Eligible Project GREEN &
der to include also the estimation and monitor- A2A’s Treasury will allocate the financing in- proceeds used for financing versus refinancing; categories. The external verifiers’ report will be SUSTAINABILITY-
LINKED
ing of sustainability KPIs in the scope of capex strument proceeds to the corporate entities in the percentage of EU Taxonomy aligned Eligible made available on A2A’s website. FINANCING
analysis. charge of the projects via intercompany loans or project financed with each Green Bond; if feasible, COMPONENTS
The selection process for Eligible Green Pro- equity capital, with the purpose to finance the the co-financing share; and, the balance of any un- Sustainable
jects is performed and coordinated by the disbursements in connection with the Eligible allocated proceeds. The Allocation report will be Finance
Committee
Sustainable Finance Committee previously de- Green Projects carried out by A2A’s subsidiaries. available on A2A’s website.
scribed. Pending the allocation or reallocation, as the case may Impact/Performance reporting: A2A will The Green
Financing
Key responsibilities: the Committee is re- be, of the net proceeds, A2A will invest the balance report, where feasible, on a number of impact Component
sponsible for the review, selection, validation of the net proceeds, at its own discretion, in cash and/ metrics by category of Eligible Green Projects
Sustainability-
and monitoring of the pool of Eligible Green or cash equivalents and/or other liquid marketable for projects funded with the net proceeds of the Linked
Projects, based on Group sustainability strat- instruments which will not include GHG intensive Green Financing instrument. Impacts, methodolo- Component
egy, enterprise risk valuation and this Sustaina- activities as per the company’s financial policy. The gies and assumptions of indicators are disclosed in 05
ble Finance Framework. payment of principal and interests on any financing the annual Non-Financial Disclosure Report that is EXTERNAL
REVIEW
After the approval by the Committee, the list of instrument issued by A2A under the Framework will available on A2A’s website. SECOND PARTY
selected potential eligible projects is recorded be made from its general funds and will not be linked OPINION
in the Green Financing Register. to the performance of any Eligible Green Project. APPENDIX I
FURTHER DETAILS
FOR STEP UP
APPENDIX II
SCIENCE
BASED TARGET
Liquid INITIATIVE LETTER
marketable
instruments
Intercompany
loans or
equity capital
Entity 1 Entity 2 Entity 3
Projects
28 2904 GREEN & SUSTAINABILITY-LINKED FINANCING COMPONENTS 4.1 The Green Financing Component
01
Examples of relevant metrics could include A2A OVERVIEW
02
APPROACH TO
CLEANCLEAN
WATERWATER AFFORDABLE
AFFORDABLE
AND AND INDUSTRY,
INDUSTRY, SUSTAINABILITY
AND SANITATION
AND SANITATION CLEANCLEAN
ENERGY
ENERGY INNOVATION
INNOVATION
AND AND
Type of project UN SDGs support INFRASTRUCTURE
INFRASTRUCTURE Metrics 03
SETTING UP
A SUSTAINABLE
FINANCE
• Waste treatment capacity (municipal + special waste) aimed at recovering material and energy (kt/year) FRAMEWORK
• CO2 avoided thanks to WtE energy production (tons) 04
SUSTAINABLE
SUSTAINABLE
CITIESCITIES RESPONSIBLE
RESPONSIBLE
AND COMMUNITIES
AND COMMUNITIES CONSUMPTION
CONSUMPTION • Increase of recycling capacity (tons) GREEN &
Pollution prevention AND PRODUCTION
AND PRODUCTION • Increase of collection capacity (tons) SUSTAINABILITY-
LINKED
and control CLEAN WATER
• Percentage of thermal energy produced from renewable sources and process recovery with respect to total thermal FINANCING
AFFORDABLE AND INDUSTRY,
AND SANITATION CLEAN ENERGY INNOVATION AND energy collected into the district heating network COMPONENTS
INFRASTRUCTURE
• CO2 avoided thanks to district-heating (tons)
Sustainable
• NOx avoided thanks to district-heating (tons) Finance
Committee
The Green
Financing
CLEAN WATER
SUSTAINABLE CITIES AFFORDABLE AND
RESPONSIBLE INDUSTRY, Component
AND SANITATION
AND COMMUNITIES CLEAN ENERGY
CONSUMPTION INNOVATION AND • Reduction in linear water losses (m3/km/days)
INFRASTRUCTURE
Sustainable water CLEAN WATERAND PRODUCTION AFFORDABLE AND INDUSTRY, • Improvement in BOD (tons) Sustainability-
and wastewater management AND SANITATION CLEAN ENERGY INNOVATION AND • Improvement in COD (tons)
INFRASTRUCTURE Linked
• Water saving (m3) Component
05
EXTERNAL
SUSTAINABLE CITIES RESPONSIBLE REVIEW
AND COMMUNITIES CONSUMPTION SECOND PARTY
AND PRODUCTION OPINION
CLEAN WATER AFFORDABLE AND INDUSTRY,
SUSTAINABLE CITIES CLIMATE
RESPONSIBLE
AND SANITATION CLEAN ENERGY INNOVATION AND
AND COMMUNITIES ACTION
CONSUMPTION
INFRASTRUCTURE AND PRODUCTION
• RES installed capacity (MW) APPENDIX I
CLEAN WATER AFFORDABLE AND INDUSTRY,
Renewable energy AND SANITATION CLEAN ENERGY INNOVATION AND • Energy production from RES (MWh/year) FURTHER DETAILS
INFRASTRUCTURE • CO2 emission avoided (tCO2eq) FOR STEP UP
APPENDIX II
SCIENCE
BASED TARGET
SUSTAINABLE CITIES RESPONSIBLE INITIATIVE LETTER
AND COMMUNITIES CONSUMPTION
AND PRODUCTION
CLEAN WATER AFFORDABLE AND INDUSTRY,
SUSTAINABLE CITIES CLIMATE
RESPONSIBLE
AND SANITATION CLEAN ENERGY INNOVATION AND
AND COMMUNITIES ACTION
CONSUMPTION • Number of new LED light points installed on public lighting
INFRASTRUCTURE AND PRODUCTION • Energy saving thanks to LED light points installation (MWh/year)
CLEAN WATER AFFORDABLE AND INDUSTRY,
Energy efficiency AND SANITATION CLEAN ENERGY INNOVATION AND
INFRASTRUCTURE
• CO2 avoided thanks to interventions to promote energy efficiency in end uses (tons)
• Improvement in energy efficiency (kWh)
SUSTAINABLE CITIES RESPONSIBLE
AND COMMUNITIES CONSUMPTION
AND PRODUCTION
CLEANCLEAN
WATERWATER AFFORDABLE
AFFORDABLE
AND AND INDUSTRY,
INDUSTRY, SUSTAINABLE CITIES RESPONSIBLE
AND SANITATION
AND SANITATION CLEANCLEAN
ENERGYENERGY INNOVATION
INNOVATION
AND AND AND COMMUNITIES CONSUMPTION
INFRASTRUCTURE
INFRASTRUCTURE AND PRODUCTION
• Number of new low environmental impact Group’s vehicles (by category)
• Number of electric vehicle charging stations installed
• Km travelled at zero emissions thanks to the electricity supplied by the charging points with 100% renewable energy
Clean transportation
CLIMATE supplied
ACTION • CO2 emissions per Km
SUSTAINABLE
SUSTAINABLE
CITIES CITIES RESPONSIBLE
RESPONSIBLE
AND COMMUNITIES
AND COMMUNITIES CONSUMPTION
CONSUMPTION • NOx emissions avoided per Km (tons)
AND PRODUCTION
AND PRODUCTION
CLEAN WATER AFFORDABLE AND INDUSTRY,
AND SANITATION CLEAN ENERGY INNOVATION AND
INFRASTRUCTURE • Number of Smart Grid projects
Transmission and
• CO2 avoided thanks to the reduction of methane leakages from existent distribution networks (tCO2eq)
distribution networks
• Total energy savings (MWh)
SUSTAINABLE CITIES RESPONSIBLE
AND COMMUNITIES CONSUMPTION
AND PRODUCTION
30 3104 GREEN & SUSTAINABILITY-LINKED FINANCING COMPONENTS 4.2 Sustainability-Linked Component
4.2 Sustainability-Linked Component 1. Selection of Key Performance Indicators 01
A2A OVERVIEW
02
Sustainability-Linked Bonds are any type of for general purposes; hence, the use of proceeds A2A has selected the following three KPIs, 7 (Affordable and Clean Energy), 11 (Sustain- APPROACH TO
bond instrument for which the financial and/or is not a determinant in their categorization. which are core, relevant and material to its able Cities and Communities), 12 (Responsible SUSTAINABILITY
structural characteristics can vary depending on In accordance with SLBPs and SLLPs the basis of business and measure the sustainability im- Consumption and Production) and 13 (Climate 03
whether the issuer achieves predefined SPTs. In A2A’s Sustainable Financing Component are the provements of the Group as a whole. These Action) related to climate change or environ- SETTING UP
A SUSTAINABLE
that sense, issuers are thereby committing explic- following five core elements: KPIs contribute to the United Nations SDGs mental degradation. FINANCE
CLEAN WATER AFFORDABLE AND INDUSTRY,
itly (through the bond documentation) to future • Selection of Key Performance Indicators (KPIs) AND SANITATION CLEAN ENERGY INNOVATION AND FRAMEWORK
INFRASTRUCTURE
improvements in sustainability outcome(s) that • Calibration of Sustainability Performance Tar- 04
are relevant, core and material to their over- gets (SPTs) GREEN &
all business within a predefined timeline. SLBs • Financial characteristics KPI #1: Scope 1 CO2 Emission Intensity SUSTAINABILITY-
LINKED
are forward-looking performance-based instru- • Reporting Scope 1 greenhouse gas (GHG) emissions (expressed in grams of CO2 per kWh). FINANCING
ments. The proceeds are intended to be used • Verification COMPONENTS
CLEAN WATER AFFORDABLE AND INDUSTRY,
SUSTAINABLE CITIES CLIMATE
RESPONSIBLE
AND SANITATION CLEAN ENERGY INNOVATION AND
AND COMMUNITIES ACTION
CONSUMPTION Sustainable
INFRASTRUCTURE AND PRODUCTION Finance
Committee
The Green
Financing
Component
SUSTAINABLE CITIES RESPONSIBLE
AND COMMUNITIES CONSUMPTION Sustainability-
AND PRODUCTION Linked
KPI #2: Renewable Energy Capacity Installation Component
Amount of renewable energy installed capacity (expressed in MW) 05
as of a given date. EXTERNAL
REVIEW
CLEAN WATER AFFORDABLE AND INDUSTRY,
CLIMATE
SECOND PARTY
AND SANITATION CLEAN ENERGY INNOVATION AND
ACTION OPINION
INFRASTRUCTURE
APPENDIX I
FURTHER DETAILS
FOR STEP UP
APPENDIX II
CLEANCLEAN
WATERWATER AFFORDABLE
AFFORDABLE
AND AND INDUSTRY,
INDUSTRY, SCIENCE
AND SANITATION
AND SANITATION
RESPONSIBLE CLEANCLEAN
ENERGY
ENERGY INNOVATION
INNOVATION
AND AND
SUSTAINABLE CITIES
INFRASTRUCTURE
INFRASTRUCTURE
BASED TARGET
AND COMMUNITIES CONSUMPTION INITIATIVE LETTER
AND PRODUCTION
KPI #3: Waste Treated In Group’s Material Recovery Plants
Total amount of waste treated (municipal + special), including preparation prior to recovery,
aimed at recovering material at the Group’s plants (expressed in Mt).
SUSTAINABLE
SUSTAINABLE
CITIES CITIES RESPONSIBLE
RESPONSIBLE CLIMATE
AND COMMUNITIES
AND COMMUNITIES CONSUMPTION
CONSUMPTION ACTION
AND PRODUCTION
AND PRODUCTION
A2A’s intention is to issue Sustainability-Linked Bonds
with coupon structures linked to certain sustainability
performance targets and eligible as collateral for Eurosystem
credit operations and for outright purchases in Eurosystem
monetary policy operations under the relevant eligibility
criteria10 available at the time of each issuance.
10 https://www.ecb.europa.eu/paym/coll/standards/marketable/html/ecb.slb-qa.en.html
32 3304 GREEN & SUSTAINABILITY-LINKED FINANCING COMPONENTS 4.2 Sustainability-Linked Component
01
KPI #1: Scope 1 CO2 Emission Intensity KPI #2: Renewable Energy Capacity Installation A2A OVERVIEW
02
Scope 1 greenhouse gas (GHG) emissions (expressed in grams of CO2 per kWh), Amount of renewable energy installed capacity (expressed in MW) as of a given date, APPROACH TO
contributing to SDG 7, 11 and 13 contributing to SDG 7 and 13 SUSTAINABILITY
03
Rationale: The centrality of the issue of climate scenario modelled on the Intergovernmental Panel Rationale: Energy Transition is one of the two which is above the Italian target set at 55%11. A2A SETTING UP
A SUSTAINABLE
change is broadly recognized and shared throughout on Climate Change (IPCC) Fifth Assessment Report pillars of A2A’s sustainability strategy. Renewable has planned to reach the 2030 target through or- FINANCE
society and by governments. A2A has increased its which gives the highest likelihood of staying within a Energy Capacity Installation supports A2A’s tar- ganic growth (52% of the target installed capacity) FRAMEWORK
focus on reducing the impact on climate change by global target temperature rise of or less than 2°C in gets to phase out from coal, decarbonize its en- and M&A (12%). 04
strengthening its commitments to greenhouse gas the year 2100. The emission reduction target is also ergy mix and reduce CO2 emissions in line with the A2A foresees to generate about 60% of the to- GREEN &
emissions reduction across its businesses. The com- aligned with the current Italian Integrated National Paris Agreement. tal energy production from renewable sources SUSTAINABILITY-
LINKED
pany’s decarbonisation path is based primarily on Plan for Energy and Climate. The A2A Scope 1 as The Renewable Energy Installed Capacity by 2030 (hydro, solar and wind) in 2030 (about 30% as of FINANCING
the development of new renewable capacity of at well as the Scope 2 targets are certified by the Science accounts for 58% of A2A's Renewable Energy mix, 2020). COMPONENTS
least 3.8 GW by 2030, the optimization of gas-fired Based Target Initiative to be consistent with reduc- Sustainable
combined cycle plants and the decommissioning and tions required to keep warming to 2°C. Finance
Committee
conversion of conventional coal and oil-fired power A2A historical performance shows a recent im-
plants. In particular, the company has set Scope 1 provement, with the company further revising its Historical Performance The Green
Financing
CO2 Emission Intensity targets (expressed in grams of CO2 reduction target to 2030 as part of its Sustaina- Renewable Energy Installed Capacity (GW) Component
CO2 per kWh) aligned with the trajectory of the 2°C bility Policy in 2019.
Sustainability-
Linked
2,5 Component
Historical Performance (SBTi scope) 2.0 2.1 2.1 2.1
2,0 05
EXTERNAL
1,5 REVIEW
SECOND PARTY
1,0 OPINION
0,5 APPENDIX I
FURTHER DETAILS
0,0 FOR STEP UP
2017 2018 2019 2020 APPENDIX II
SCIENCE
BASED TARGET
Hydro Solar INITIATIVE LETTER
GHG emissions (gCo2/kWh)
Goal Achievement Plan
Renewable Energy Installed Capacity (GW)
Goal achievement plan: A2A has planned an am- Moreover, A2A will develop at least a new high-effi-
bitious path to greenhouse gas emission reduction. ciency hydrogen-ready H-class CCGT. These invest- 5.7
First of all, A2A is planning an upgrade of its existing ments represent the main contributors to the first 6.0
CCGTs plants with investments aimed at increasing drop of the curve from 2020F to 2025. Soon after, fol-
output, efficiency, and availability, while reducing fuel lowing the continuous efforts in developing and consol- 5.0 1.6
consumption. At the same time, A2A will phase-out idating its green capacity, A2A production mix is going
3.6
its existing coal (by 2022) and oil plants, while con- to be composed of 58% RES. The energy mix of A2A 4.0
verting them into innovative and circular economy portfolio tilted in favour of RES is reflected in the sec-
0.7
projects (e.g. hydrogen, batteries). ond and largest drop of the curve from 2025 to 2030. 3.0 2.2
2.1 2.2
1.0
2.0
0.1 0.2
1.0 1.9 1.9 1.9 1.9
0.0
2020 2022 2026 2030
Hydro Solar Wind
GHG emissions (gCo2/kWh) SBTi 2030 230
scope 1 target gCo2/kWh
Notes:
(1) includes energy recovery from waste, except for BU Networks and Ergosud; (2) -30% between 2020 and 2030; (3) 11 “INTEGRATED NATIONAL ENERGY AND CLIMATE PLAN” December 2019 - https://www.mise.gov.it/images/stories/
decarbonization target well in line with the Paris Agreement goal to limiting global temperature rise below 2°C. documenti/it_final_necp_main_en.pdf
34 35You can also read
