Strategy

Scenario and strategic pillars

In line with the company's mission and vision, the strategic decisions are based on an analysis of the MAIN TRENDS for 2030, determined by the achievement of the growth and sustainable development objectives established in the Strategic Plan:

  • Energy transition: Technological advances will require smarter grids, generating new business models, while the expansion of renewables will push for greater flexibility in thermoelectric plants. The electrification of some sectors will have a positive impact on future electricity demand, only partially offset by energy efficiency projects;
  • Sustainable development: the circular economy will be increasingly dominant, creating new scenarios in the waste treatment sector. The management of water resources will require technological innovation and high investments. The gap to be filled in energy efficiency will open new opportunities, also related to the extension of district heating and the development of new digital projects;
  • Technological revolution: digital sensors will make it possible to carry out preventive maintenance work on infrastructure, automatic learning algorithms will change the way operating costs and credit management are handled, while digitisation will create new ways of dealing with customers and suppliers;
  • Customer centrality: it will change the paradigm from a passive user to an active and fully digital prosumer, where the sale of commodities is an aspect of a wider range of value-added products and services. The diffusion of electric mobility will favour the development of public and private recharging tools.

Changes in the rate of acceleration for various trends, also following the recent health emergency, are reflected in the concrete objectives the Group has set for 2025, confirming the quality of its strategic structure, based on the following STRATEGIC PILLARS:

  • Organic growth: € 240 million, mainly generated by the increase in allowed revenues in the integrated water services, the development of waste treatment plants, the growth of the customer base on national scale and the expansion of district heating.
  • Sustainability:Iren's commitment to protect the environment and fight climate changes is made concrete through the circular economy, minimising resource consumption, decarbonisation and the creation of increasingly resilient cities, through the services it offers and products with lower environmental impact.
  • Clients: the path, undertaken in the past years, centralized on the citizen-client, through offers of products and new technological services (IrenPlus, e-mobility, digital payments) and the implementation of energy efficiency projects on residential properties, is confirmed with greater vigour.
    Digitalisation: the commitment to technological evolution and the digitisation of the Group's processes is achieved through the creation of transversal IT platforms aimed at building a company that is more dynamic, in order to face a constantly evolving market, and more oriented towards the optimal use of the data collected.
  • People: people management follows the Group's transformation, with a strong focus on skills development, through training and retraining programmes, professional growth and incentive tools. Generational change is expected to continue thanks to the inclusion of new resources to a greater extent than outgoing ones.
  • Technological evolution and efficiency: the positive trend of recent years is maintained (more than 200 million euros in synergies since 2010), albeit with a progressive reduction in the target compared to previous plans, highlighting the typical decreasing trend of post-merger synergies and also reflecting the early achievement of the objectives of recent years. The plan foresees a 2025 target of 55 million euros in synergies achieved mainly through the successful completion of performance improvement projects.


FOCUS ON NEWS AMBITIONS
In the Business Plan at 2025, Iren combines the strategic pillars with 3 NEW AMBITIONS that will characterise the coming years.

NATIONAL EXPANSION

Strengthened by the leadership acquired in the historical areas, the Group is ready to expand its horizons towards new territories, not only through commercial expansion, but also by exporting the excellence achieved in waste and energy efficiency. National expansion is based not only on the replicability of local models on a larger scale, but on the adaptability of the business model to new contexts, leveraging the experience gained in certain activities, in particular the door-to-door collection system, the development of supply chains in waste treatment, the commercial management of retail customers by taking advantage of the opportunities offered by digital channels and actions to improve the energy efficiency of our cities.

MULTICIRCLE ECONOMY

Multicircle economy is Iren's long-term industrial vision focused on the conscious and efficient use of resources. This growth strategy extends the concept of the circular economy, emphasizing the multi-business nature of the Group, directs investments and is one of the main growth drivers of the Industrial Plan at 2025. In fact, more than €2 billion are allocated to projects related to the multicircle economy and in particular to the focus area of sustainability of water resources, circular economy and resilient cities. This approach is guided, but not limited to the waste sector: Iren in this sense, pays constant attention to asset management and infrastructure optimization, to improve the use of resources also in the water cycle and heat distribution through district heating.

WASTE 
The responsible management and valorisation of waste are the pillars of Iren's industrial and sustainable strategy. The Group has always been oriented towards closing the entire waste cycle, pursuing the following approach:

  • More efficient collection systems allow a higher percentage of separate collection. Iren aims to expand the door-to-door and pay-as-you-throw collection system, fully implementing the digital system called Just Iren and, at the same time, is researching new technologies to improve the sorting and separation of collected waste. In 2025, the Group will have more than 70% of sorted waste collection in its territories.
  • The growth in sorted waste collection requires greater volumes of treatment plants capacity in order to valorise the waste collected and to seize the opportunities deriving from the vertical integration of the entire supply chain. Iren foresees the creation of 9 new treatment plants in the paper, plastic, organic fraction, wood and sludge supply chain over the next few years, as well as the repowering of a durable goods treatment plant. 
  • Finally, the increase in treatment plants capacity will reduce the volumes of waste disposed of and will improve the percentage of material recovery and re-use, as, for istance, is the case for the treatment of the organic fraction whose final products are biomethane and compost to be used as fertiliser for agricultural use or a special treatment of plasmix, which makes it possible to produce a polymer useful for civil use (asphalt) and a reducing agent used by steel companies to replace coal.

 

WATER CYCLE 
he commitment to sustainable use of water resources means progressively improving the efficiency and quality of the service with the aim of reducing network losses and water withdrawal from the environment, as well as increasing the quality of chemical/physical standards.

The group has started a process of networks division into small and equal areas, called “districts”, which will reach 80% of the network in 2025. Thanks to this management method, the Group is already well below the national average of water losses with a percentage of 33.4% in 2019 and with the objective of reaching 29% in 2025.

In addition, in the next few years Iren will build 7 new plants to increase purification capacity by 16% and reduce biological sludge, with the application of the most innovative technologies. On top of that, an important investment project is underway for the reuse of wastewater for agricultural and industrial uses.

DISTRICT HEATING
Iren has been recovering the heat produced by cogeneration plants for years, distributing it through the district heating network and replacing it with the use of domestic boilers. The effect is a reduction in emissions related to heating and an improvement in the air quality of the cities, in which the Group operates. Turin is the most district heated city in Italy and one of the most district heated metropolises in Europe, with over 57% district heating volume. The Group's objective is to increase the volume of district heating by 16% at 2025 and to develop heat storage capacity in order to better manage peak demand.

STRENGTHENING RESILIENCE

The pandemic that broke out in 2020 highlighted the resilience of the Group's business model even in the face of unexpected turbulence. The significant share of regulated and semi-regulated activities, integration between the business units, regulatory stability, strategic positioning on urban waste, flexibility of the generation plants and a predominantly retail client portfolio made it possible to effectively counteract the instability created by the health emergency. These characteristics will be further strengthened by the planned investments in support of the various businesses, confirming the current mix between regulated and non-regulated activities, approximately 70% of regulated or almost regulated activities.