The Circular Economy

A new model for creating value

Rethinking the production cycle

The circular economy is a new paradigm for clean and sustainable industrial production, that aims to reduce its impact on the environment while enhancing its ability to create shared value for businesses, communities, and all stakeholders. Moving from a linear economy to a circular one means moving away from a production model where products are built directly from raw materials derived from nature, then sold to users, used for a relatively short period of time, and then disposed of. A circular economy model, on the contrary, exploits every opportunity to extend the use life of products, to allow more users access to the same product, to re-use components and materials from old products to make new ones, also ensuring that the energy and materials that go in the process come from sustainable and clean sources. At Enel X Global Retail we see the Circular Economy as a key evolution that reduces pressure on the environment while also generating jobs and economic growth. To boost our evolution towards this new production paradigm, we have incorporated the five pillars of the Circular Economy at the heart of our strategy.

The use of renewable energy or renewable, recycled, or recyclable materials in more production cycles.

A model where producers keep ownership of the products and provide them to clients, favoring durability and reusability.

New technologies allow users and owners to increase efficiency by sharing, renting, and exchanging products that are not in constant use.

Design and production solutions that allow companies to repair, update, refurbish and resell their own products saving materials and energy.

The introduction of new production cycles in which waste is not eliminated but recovered, recycled, remanufactured, or reused.

Circularity Economy Score & Metrics

A key step to sustainability

Scoring is the first step in our Sustainability Boosting Program®, that aims to embed sustainability in the activities of organizations. This approach allows the design and implementation of sustainable solutions tailored to a region’s market scenario, socio-environmental framework, community interests. The initial Circularity’s degree of a solution is measured through a specific assessment method. This phase is followed by Boosting, Implementing, Re-scoring and Reporting.

How the Score works

The Circular Economy Score adopts and expands Enel’s CirculAbility Model and is based on three components:
1. Circular Flow of material and energy
2. Circular Use of the product
3. Circular Sales in the implemented business models
For each of the 5 pillars – sustainable inputs, product-as-a-service, sharing platforms, product life cycle extension and recovery and recycling – the CE Score considers several parameters, and the final outcome is a value between 0 and 100.

Level 1: Range 0-20

The solution involves elements with limited relevance for the purposes of the Circular Economy.

Level 2: Range 20-40

The solution features partial use of renewable materials and basic integration of Circular Economy principles in the provision of the service.

Level 3: Range 40-60

The solution guarantees a more sustainable approach even in the consumption and end-of-life stages; Circular Economy principles dictate, albeit partially, the ways the service is provided.

Level 4: Range 60-80

The solution guarantees that the raw materials used in the production process are almost completely sustainable. Circular Economy principles are integrated into the provision of the service.

Level 5: Range 80-100

The solutions meet high standards of circularity in relation to the majority of business model benchmarks.

Illustration summarizing the concepts of the circular economy

Measurement tool

The importance of this measurement tool is such that we also applied it to our products and services. Here are the results achieved by Enel X based on the scoring:
∙ Photovoltaic: 8
∙ Storage: 3
∙ Public lighting: 4
∙ Solar thermal: 3
∙ District heating: 4
∙ Demand Response: 5
∙ Homix: 3
∙ Air conditioning: 3

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For the circular economy to become a reality, clearly defined metrics are needed that allow to identify whether a solution is circular or not. Enel X Global Retail has developed the Circular Economy Product Score, that it applies to its product portfolio, and the Circular Economy Report, that measures the degree of circularity of its clients. The underlying metrics have been revised over the years in partnership with independent and highly regarded certification specialists such as ICMQ, CESI and Accredia, to turn them into certification schemes that can be widely adopted by the market.

Circular Certification Corporate

The Circular Certification Corporate scheme is used to assess the level of maturity and diffusion of the circular economy principles in the corporate sector. The analysis is conducted along the whole value chain, covering design, energy consumption, sales, supply chains, production waste, post-consumption management, production inputs, logistics and distribution, as well as the company’s approach to circularity.

Circular Certification Energy Site

The Circular Certification Energy Site is a detailed quantitative analysis conducted on a specific site chosen by the client. The assessment focusses on generation and consumption of heat and energy, efficiency in energy use, energy management practices and circularity-enabling strategies. The tool has been validated by Accredia in 2022.

Circular Certification Product

The Circular Certification Product tool was developed by Enel X Global Retail and ICMQ S.p.A., and measures the circularity level of a product. It includes a new Circularity Index, based on the ISO 14040 e ISO 14044 standards that describe the application of LCA (Life Cycle Assessment) to products and services. The index is calculated by measuring what share of the materials and energy input that go into the product derive from recovered or recycled materials and from renewable energy. The final result includes the four components of circularity: materials, energy, water and waste.

Circular Evolution

In order to test the effectiveness of the Circularity Index, we selected some providers of the Enel Group and some of their products, and we applied our model to them. After the test we closed the pilot phase and developed the certification scheme, which is now being validated by Accredia to ensure its robustness, independence and impartiality.

The CircularEvolution group was created in December 2021 by Enel X GR, ICMQ and CESI to maximise the awareness of these certification tools and to facilitate their diffusion and use on the market. Its aim is to support virtuous organizations in increasing their awareness about the integrated, efficient use of resources, while reducing the environmental impact of their activities.

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