Ente Nazionale Idrocarburi (ENI): A Sustainable Example for the Energy Industry

Presentation written by:

Ciara Shorten, 115576953@umail.ucc.ie

Caoilinn Hickey, 115374151@umail.ucc.ie

Presentation supervised by: Assoc. Prof. Dr. Elena M. BARBU, elena.barbu@univ-grenoble-alpes.fr

Image result for eni logo

Introduction

Eni is an Italian multinational oil and gas company which was established in 1953. The name “ENI” originates from the Italian acronym of “Ente Nazionale Idrocarburi” which directly translates to National Hydrocarbons Authority. The company has operated in a large variety of sectors for example, contracting, nuclear power, energy and mining. Currently operating in 73 different countries in the world. Number of employees equating to 80,911 in 2015. It is among the main global competitors in the sector. The mission statement of the company highlights what the company aspires to achieve, basing on a steady growth while aiming towards objectives. Focus on reducing emissions, ensuring the best use of gas with the vision of generating electricity to allow accessibility to energy and development of renewable sources. Eni concentrates on the main challenges of the energy industry concerning the access to energy and the major issue of climate change.

Regarding the financial situation of the company, an operating profit of €2.32 billion in 2016. A decrease from 2015 by “€2.2 billion (or -48%) due to the commodity price environment with a negative effect of €3.3 billion, while the four and a half month shutdown of operations in Val d’Agri and lower non-recurring gains in G&P weighted for €0.6 billion.” In 2016, Eni ranked 65th place among the top 100 on Fortune Global 500 list for the largest companies by revenue. Share capitalisation was ranked sixth in contrast to their competitors Exxon, Shell and Chevron.

Eni activities are divided into Upstream, Mid-Downstream and New Energy Solutions. Upstream refers to their onshore and offshore projects including choosing oil exploration blocks and drilling wells through to their hydrocarbon production operations. Preparation of oil fields with surveying, subsoil analysis, expertise of geologists and engineers. Mid-downstream refers to activities associated with the oil refining, transportation, storage of hydrocarbons and distribution. New energy solutions such as decarbonisation, gas advocacy and renewables. Innovating and designing new solutions to correlate with the low carbon movement for the future and promotion of renewable energy.

On an international scale, Eni work towards providing an “energy solution” for the countries in which they operate, aiming towards improvement of access to energy. Awareness of environmental respect is important throughout all plants accessing the environmental, social, economic and cultural impact of their activities in each particular place. “Our system of corporate governance is a cornerstone of our activity and aims to support the relationship of trust we have with those who work with us and to contribute to the achievement of business success.”

Innovation is taken very seriously in Eni, advancements in technologies, science and skills are fundamental to the survival of the multinational. For instance, it is extremely important in the upstream sector of the company, because it helps the selection process of which location to target in the future.

  • Technologies for the environment “Clean Sea”- which was developed for marine environmental monitoring and offshore asset inspection. Analysis of the health of their seas will be determined in order to maintain gas and oil activities in a safe and respectful manner.
  • Renewable energies “Concentrated thermodynamic solar power” – Eni is investing in CSP facilities to allow them to convert solar energy into both electricity and thermal energy. Plus the provision of an economical way of storing heat the system can continuously operate even when the sun is not shining.” This light energy is used to produce either heat or electricity. One of the main advantages of concentrated thermodynamic solar power is that energy can be stored for when there is no sun.
  • “Eni Diesel” – use of ecofining technology to obtain diesel from the hydrogenation of vegetable oils, animal fats and waste oils. Eni Diesel helps reduce polluting emissions “up to 40% of unburned hydrocarbons and carbon monoxide”. “It helps to reduce CO2 emissions on average by 5%.” Eni Diesel + aims to keep the injectors clean, which prolongs the life of the engine, but ensures maximum power over time.

The organisational style is hierarchy based. Power distance, the head of the internal audit department reports hierarchically and functionally to the board and, on its behalf, to the chairman. Operating on a functional basis, each department has its own manager that employees must report to. Communication flows horizontally and vertically between managers on the different levels.

Environmental Protection

Eni conduct their activities in accordance to the international agreements and standards, national laws, regulations and policies. Due to the fact Eni operates in many different geographic contexts, it is necessary to carry out environmental assessments to minimise the impact of Eni activities. Sustainability and environment performance objectives are monitored and adjusted on a six-monthly basis. The introduction of the environmental award in 2017 to reward people and teams that devise ideas and concepts to protect the environment.

  • Water Protection; Eni tries to minimise the consumption of fresh water. For example instead using alternatives such as seawater (over 90%) for thermal cooling. “In 2016, only 5% of freshwater withdrawals were in water stressed areas.” The percentage of re-use of fresh water is on the rise in all sectors to 84%.
  • Air Quality; with nitrogen and sulphur oxides being some of the main atmospheric pollutants, in 2016, sulphur oxides fell by -16.5% as a result of the production trends in the downstream and chemical sectors, the use of different mix of fuels at the refineries. Nitrogen oxides was decreased by 18.8% due to lower consumption of gas at NAOC in Nigeria.
  • Oil Spillages; in the E&P sectors which accounts for 84% of spillage volumes declined number of events -10.8% compared to 2015 and in volumes -64.3%. Action taken in both prevention and response. Closely working with government bodies. Increase in the number of teams for aerial and land surveillance to ensure the early prevention of potential spills.

Employee protection:

Eni’s people are central to everything the company does. The company’s objectives can only be achieved with their dedication and professionalism. For them, people are an essential and fundamental element of all their activities. Due to their dedication alone the firm is able to achieve their business goals – and they are profoundly aware of how important they are in creating value over time. Eni is committed to ensuring respect for human rights, in line with the United Nations Guiding Principles on Business and Human Rights, applying a transversal approach focused on continuous improvement. The protection of individuals, the development of their abilities and skills, the realisation of their potential through their energy and creativity are aspects that the company cherishes carefully. Eni’s working environment offers everyone the same opportunities based on a system of merit, and without any form of discrimination.

  • ‘Our work is based on passion and innovation, on our unique strengths and skills, on the quality of our people and in recognising that diversity across all aspects of our operations and organisation is something to be cherished. We believe in the value of long term relationships’ –Eni

Relations with stakeholders

“The oil is theirs” is a mantra used frequently when describing the relationship between Eni and their stakeholders. This refers to the involvement of producer countries in the management of oil resources. The company communicates with their stakeholders by:

  • Ensuring involvement in all phases of Eni activities.
  • Promoting and sharing common principles
  • Communication is key and sharing information is fundamental to a good relationship with stakeholders.

Eni has special units for the management of different stakeholders in various departments of the company and adopts unique ways to involve them in subjects of common interest. Cooperation with stakeholders is at the core of Eni when creating new opportunities and value.

In relation to financial stakeholders, Eni holds quarterly presentations of results and an annual strategy report is given to shareholders. The use of one-to-one meetings and conference calls to illustrate the company’s overall performance and targets of the four year strategic plan.

Ethical Labour practices:

‘We work in an international context. Our people live all around the world as part of the communities in which they work. Consequently, the value of diversity for us is indispensable’.-Eni

Differences in personal and cultural orientation are considered both a resource and a source of mutual enrichment for Eni. These qualities that are an essential part of the sustainability of their business. Eni respects the dignity of each individual and offers equal opportunity regardless of race, colour, gender, religion, nationality, political opinion, sexual orientation, social status, age or any other condition unrelated to the requirements of the job. The firm supports and promotes mobility and international development because they consider them important for professional and personal growth and as a way to foster better communication right across the organisation.

Eni has been focused on improving many areas of work life for their valued employees. They have been targeting zero level of injuries and in 2015 they reduced the number of injuries in the workplace for the 11th consecutive year.

For three years, Eni has been organizing the “Safety Road Show” at industrial sites in Italy and abroad: it is a series of top managements’ meetings with employees and contractors, aimed at increasing awareness about safety. The meetings include the participation of different corporate departments, not only those directly affected by the issues, but also those related human resources. Eni CEO Claudio Descalzi attended some of the 2015 road show stops in Italy. Another event that promotes awareness of Eni employees about safety issues, is Safety Day. It is the day where safety results and objectives are presented by top management, celebrating best behaviours through awards and recognitions. In 2015, Eni instituted the Safety Competence Centre – a centre of expertise in the safety sector at the service of all Group’s operational units.

Eni promotes a culture guided by integrity, values and equal opportunity policy, promoting awareness and responsible behaviour and creating initiatives that enhance diversity and professional development pathways. With Eni’s strong belief in equality, they have taken many steps in introducing female employees over the years.

Attracting female employees:

Eni are responsible for the organization of events at universities, schools and job fairs dedicated to female students/graduates.

Equal treatment:

Eni effectively control the salary equity situation.

Work life balance:

Eni have taken initiatives to support employees with children (summer camps, study abroad, etc.) There is also a feasibility study underway for the creation of a second company nursery.

Female presence in the Board:

31.7% presence of women in the Boards of Directors of subsidiaries has been reached (Eni designated).

Philanthropy

Social development projects such as health, education, access to water and energy, the development of agriculture, the enhancement of the role of women, capacity-building and social participation are some of the main activities in host territories. In Ghana, with the development of the oil & gas field of Sankofa which involved the acquisition of 12 hectares near the village of Sanzule required for installation of the facilities. There was a recovery plan implemented to allow families affected to develop new livelihoods in agriculture, livestock, fishing and micro-entrepreneurship.

Carbon Disclosure Project considered a benchmark for capital markets for climate change related risk management and opportunities.” In 2016 Eni was recognised by CDP Global Leader for its Climate Change Response Strategy and included in the “A list”.”

Eni were recognised by IPIECA, an association involving oil companies for the improvement of the industry’s environmental and social performance.

Eni were also involved in global health projects aim to improve the health of the populations in the affected areas, and provide access to healthcare for employees and the creation of good conditions to maintain health improvements.

Activities against poverty:

Fondazione Eni Enrico Mattei (FEEM) and Fondazione Giangiacomo Feltrinelli (FGF) in collaboration with Eni, within the LabExpo Project, organised, on July, 10, 2014 a workshop on ‘Energy Poverty and Energy Access: The Global Challenges and Goals’, in order to promote a dialogue between academia, industry and public sector which aimed to outline concrete solutions that promote access to sustainable energy for all.

Energy access – the so-called ‘Missed Millennium Development Goal’, is considered a fundamental driver of economic and social development. It is a key condition to guarantee access to clean water, sanitation, schooling and business in developing countries. In the words of UN Secretary General, Ban Ki Moon, ‘Universal energy access is a key priority on the global development agenda. It is a foundation for all the Millennium Development Goals’.
The international community is committed to solve the problem of energy poverty: ‘Sustainable Energy for All’ (SEFA) is the program launched by the United Nations in 2012 aimed to assure universal access to modern and sustainable energy by 2030. Eni has taken an active role in aiding the achievement of this outstanding goal.

Other Corporate Social Responsibility Actions

The Environment Day in Eni

The event is to showcase the company’s vision, performance and environmental sustainability goals. The event is sponsored by the CEO aims to increase involvement of top management in environmental issues, rewarding positive environmental corporate behaviour and actions of employees. Awards for projects in conservation of ecosystems. “Best performing”, “ideas, initiatives and projects”. The theme of world environment day 2017 “connecting people with nature”. The objective is to include people from all sectors of the organisation and encourage them to be proactive and to allow a platform for sharing new creative ways the company can change in a positive way towards the environment.

Negative aspects:

However there are certain potential risks associated with Eni’s input, such as political and social instability in areas of presence, the fear of blow outs and other accidents in extraction plants, the potential negative impact on corporate image in matters of compliance and anti-corruption, the issue of disputes in environmental and health matters, if the company is having an impact on climate change, and the possible negative perception by local and international stakeholders.

The main issues with Eni are their environmental performance, their management of social impacts, if they are fully transparent and give full disclosure on all of their activities and whether or not they create and disperse value.

Eni is mostly a high quality firm, who pay attention to detail in order to be responsible socially and environmentally and it is difficult to find any major faults with a company who do so much to improve today’s environment and corporate world.

Bibliography:

Website author. (Year published/Last updated) Title of Internet Site. Available at: URL [Accessed Day Month Year].

Eni (2016) ‘eni.com’ Available at: https://www.eni.com/en_IT/company/company-profile/people.page [Accessed 27/02/18]

Eni Group (2015) ‘Sustainability Report’ Available at: https://www.eni.com/docs/en_IT/enicom/sustainability/eni_for_2015_report_eng_.pdf [Accessed 28/02/18]

Enipedia (2014) ‘Workshop on “Energy Poverty and Energy Access: Global Challenges and Goals”’ Available at: https://www.eni.com/enipedia/en_IT/news-archive/sustainability/workshop-on-energy-poverty-and-energy-access-global-challenges-and-goals-presented-by-fondazione-eni-enrico-mattei-feem-and-fondazione-giangiacomo-feltrinelli-fgf-in-collaboration-with-eni.page [Accessed 28/02/18]