Circular economy, our strategy

The linear production and consumption model, based on extract-produce-consume-dispose, has historically contributed to the development of countries. However, every year this model extracts resources at a higher rate than the Earth can regenerate, i.e., compromising resources of the next generations to sustain global consumption. In addition, it generates tons of waste since products are generally not designed to be reused. Given its severe environmental and societal consequences, this way of producing and consuming has proven unsustainable. The latter include the depletion of natural resources, soil, air, and water pollution, deforestation, and soil degradation, limiting the regeneration ability of the ecosystems that supply its services.

Efforts focus on reducing GHG emissions in the atmosphere by 2050 through decarbonizing the energy matrix. Although decarbonization is part of the solution, it only represents 55% of global emissions. We need decarbonization to combat the remaining 45% caused by the manufacture of cars, clothing, food, and other everyday products with a new paradigm that goes beyond the linear and allows us to create a sustainable economic model capable of generating economic, social, and environmental value.

The Circular economy is presented as a solution; this economic model represents a systemic change that seeks to decouple economic development from the extraction of natural resources, contributing to the regeneration of the biosphere and the closing of technical production cycles by maximizing the use and value of materials. This form of sustainable development invites us to rethink, from the design point of view, how products and services should be generated and which consumption habits we should modify.

It is based upon three main principles:

The elimination of waste and pollution starting from the design of the products and services.
For materials and products to remain in use over time.
The regeneration of the natural ecosystems.

In line with these principles, maintaining the value of materials over time should avoid waste generation from the initial phase, generating solutions that allow the recirculation of resources throughout the value chain (both inside and outside the company).

There are currently different circularity strategies to reduce the consumption of natural resources and materials and minimize waste generation. These strategies are ordered according to their contribution to circularity, prioritizing those with a higher level. The following pyramid represents the hierarchy of these strategies for asset valorization, from the optimal option to those implemented as a last resort.

Seven years ago, Enel began its transition to a sustainable business model with a decisive acceleration focused on decarbonization. In 2016, and line with this decision, the company broadened its approach to encompass all business lines, adopting, among other things, the Circular Economy model as a strategic accelerator within the Sustainability Strategy.

Subsequently, in line with Enel's organizational model, in 2019, we created the Circular Economy Chile area under Sustainability Management. In 2020, leaders were identified for each business line to create a community of experts to promote the culture of this new economic model.

Enel's Circular Economy strategy is based upon the following pillars:

Circular inputs: The incorporation of energy from renewable sources and the use of renewable raw materials, reuse or recycling in production processes, enabling the total or partial elimination of waste and pollution generation.

Product as a service: Business model by which companies maintain ownership over the product and sell its benefits under the form of a service. In order to take advantage of its benefits, they seek to maximize its utilization factor and to extend its life by means of good maintenance and treatment when done with its use.

New life cycles: The incorporation of new solutions such as reuse, upcycling, remanufacturing and recycling once the product has served its purpose or its life ends. Thus, maintaining the value of assets and materials over time when using them in new processes.

Product life extension: In order to extend the life of the product, a modular design^[1] is incorporated, preventive or predictive maintenance, repair, reconditioning, improvement activities take place, and their resale in secondary markets is carried out.

Sharing platforms: Sharing of an underutilized asset among multiple users through information technology. For example, platforms enabling users to sell, exchange or share products owned by them, which maximizes their use.

After laying the foundations and defining a Circular Economy Strategy, we designed an action plan in 2021 consisting of four axes, which you can click on to learn more about:

^[1]Design that facilitates disassembly, reorganization, and reuse of components, allowing repair or replacement to be done by component rather than of the entire asset or product.

Circular economy, our strategy

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