Environmental and climate risks: in-depth analysis and disclosure

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Climate change is one of the biggest environmental and social chal- lenges of our times. Whilst the Covid-19 pandemic has been an emergency priority for the last two years, climate change continues to have grave impacts at a local and global level.

The United Nations Climate Change Conference held in Glasgow in November 2021 ended after two weeks of negotiations between the Parties to the United Nations Convention on Climate Change with significant progress made (see info. box for details). Never- theless, the commitments made in Glasgow leave scope for further progress to be defined in the coming years, in order to reach the goal of containing the temperature increase to within 1.5°C.


On 4 October 2021, shortly before COP26 in Glasgow, held from 31 October to 12 November, religious leaders representing lead- ing world faiths united to request that the international community strengthen their ambition and intensify climate action. At the meeting Faith and Science: Towards COP26, promoted by the Holy See and the British and Italian Embassies to the Holy See, around 40 religious leaders signed a joint appeal, presented by Pope Francesco to the COP26 President-Designate, Alok Sharma, and the Italian Minister for Foreign Aairs, Luigi Di Maio, calling for the world to reach zero net carbon emissions as swiftly as possible and to limit the increase in average global temperature to 1.5°C above pre-industrial levels. At the Pre-COP26 event, organised in Milan from 30 September to 2 October, Italian Prime Minister Mario Draghi made a speech stressing the importance of taking swift action to attempt to overt the climate crisis and avoid paying “a higher price for the climatic disaster that will occur”. The Prime Minister also reiterated the need for more ambitious targets and identified the pandemic as an opportunity to drive countries towards the right measures to fight climate change and support families in difficulty. At the end of the event, a document was presented by young environmental activists from all around the world containing proposals to invert current climate trends, including halting funding for the fossil-fuel industry, a transparent financial system for the climate and strengthening of adaptation measures.

COP26 ended with ratification of numerous agreements, one of the most important being the Glasgow Climate Pact, with which countries undertake to maintain the global temperature increase within 1.5°C compared to pre-industrial levels. Other important agreements include:

  • the agreement against deforestation, signed by the leaders of more than 100 countries, who promise to halt it by 2030. The significance of this agreements lies in the fact that the signatory countries host 85% of the world's forests
  • renewed cooperation between the United States and China in the climate battle. Both states declared that they would cooper- ate to achieve the goal of limiting global warming to below 1.5°C, as established in the Paris Agreement, by “taking more decisive and ambitious climate action in the next decade”
  • the Global Methane Pledge officially launched by the European Union, this is an EU and USA joint initiative that has mobilised over 100 countries to reduce their collective emissions of methane by at least 30% by 2030, compared to 2020 levels

In this context, Acea has continued its climate-change mitigation and adaptation strategy i) with an increase in the energy efficiency of Companies and, regarding water, with the reuse of purified wastewater in agriculture ii) implementing actions aimed at increasing the resilience of infrastructure, and iii) adopting a plan to significantly increase generation from renewables114, and with the dual objective of achieving a high level of efficiency for final domestic usage and usage in energy processes, and reducing carbon intensity (gCO2/kWh produced). The results obtained to date are shown in Table no. 62 on energy intensity indices and in Table no. 68 on emission intensity indices.

Acea assesses climate risks, classifying them into physical and transition risks, in accordance with the CDP Questionnaire (see Corporate identity info. box in the chapter Strategy and sustainability). As noted, at the end of 2021, in synergy with the main Group companies, it completed the first project for alignment with the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which will also continue in 2022, broadening the analysis of the different types of potential impacts generated by climate change on the businesses managed (see info. box for details).


The 11 Recommendations of the Task Force of the Financial Stability Board (Task Force on Climate-related Financial Disclosures – TCFD) on Climate-Related Financial Disclosures currently represent the benchmark model at international and EU level. They are applicable to all organisations, are focused on risks and opportunities connected to climate change and increasing the capacity for a panorama based on precise analyses of scenarios. In June 2019, the European Commission issued a Communication entitled “Guidelines on non-financial reporting: Supplement on reporting climate-related information”, which, whilst not binding, “encourages companies” to adopt the recommendations of the TCFD. Facing the global challenge of the fight against climate change, and on the basis of the experience it has gained in the CDP field, Acea decided to launch a project between 2020 and 2021 to improve management in this area, according to the TCFD approach, strengthening its expertise in the application of international climate scenarios.

Specifically, the project involved Acea Ato 2, the main Group Company operating in the water sector, Acea Ambiente, which runs plants for WtE, composting, treatment and recovery of waste, Acea Produzione, which manages power plants, Areti, the distributor of electricity, and certain key functions of the Parent Company. For this initial process of alignment, the Companies identified priority physical and transition risks for assessment, linking parameters related to these risks with scenario analyses.

Specifically, in terms of physical risks Acea Ato 2 verified the risk of drought and water stress, Acea Ambiente and Acea Produzione assessed the risk of lightning strikes, and Areti assessed the risk of flooding, while the most significant transition risk was that of carbon pricing.

The project was completed at the end of 2021, with results that will be presented in an independent Climate Report to be published in 2022. Continuation of analyses is planned, focused on further risk types.

114 More specifically, in 2021 Acea Produzione purchased/installed some photovoltaic systems for 20 MW of power, reaching a total of 72.5 MW.