Search this website. You can use fund codes to locate specific funds

SDG Engagement High Yield Credit Commentary: Enel

The SDG Engagement High Yield Credit Fund focuses on delivering two, co-linear objectives: strong financial performance for investors and positive social and environmental impacts that contribute to the delivery of the Sustainable Development Goals (SDGs). Here we demonstrate how we are engaging with current holding Enel to generate positive outcomes for both society and investors.

Within the SDG Engagement High Yield Credit Fund, we seek two self-reinforcing objectives: performance and impact. In practice, this means we invest in issuers that have the willingness and ability to effect change that supports their credit profile. This is exemplified by our exposure to Enel, an Italian utilities company that generates more than half of its energy from zero-emission sources.

The investment case for Enel is strong. Although the firm has a lower credit rating than its main competitors, it has the strongest balance sheet among its peer group of investment-grade European utility companies. The firm’s bonds remain vulnerable to macroeconomic volatility in Italy, and we seek to benefit from the premium this offers – which we believe does not reflect the company’s positive fundamentals – while also actively supporting electricity decarbonisation through investing in the firm.

In addition, we think that Enel is particularly well placed to align its operations with the delivery of the SDGs through:

  • Expanding its highly competitive renewables portfolio
  • Clarifying its capital allocation plans
  • Making its workforce diversity a source of competitive strength

To find out more about the potential for Enel to deliver SDG-aligned impact and our engagement progress to date, read the full engagement commentary.

Risk profile
  • Nothing in this document constitutes a solicitation or offer to any person to buy or sell any related securities or financial instruments.

  • Past performance is not a reliable indicator of future results and targets are not guaranteed.

More Insights

The geometry of net zero: an accounting conundrum waiting to happen
Emissions accounting is often inconsistent, inaccurate and imply that climate change can be reduced to a book-balancing process.
2020 TCFD report: our climate-related financial disclosures
This report details our approach to identifying and managing climate risks.
Your Questions Answered by Unconstrained Credit
A quarterly series featuring the top 10 questions that clients and prospective clients ask our investment teams.
Sustainable oceans in focus in EOS’s Q2 Public Engagement Report
EOS takes a deep dive into our oceans, examining threats from overfishing, pollution and global heating.
Dark matters in finance: why climate change is bending bank disclosure standards
Climate change is pushing the boundaries of financial risk disclosure into unknown territory.
Credit Pulse: market update – 16 July 2021
In our latest Credit Pulse, we look at bankruptcies and recovery rates, and present a case study on an energy fallen angel.