Prysmian Group’s $107 Million Investment Is Already Enhancing Sustainability

(Photo: Ørsted’s Race Bank offshore wind farm. Credit: Ørsted)

The Prysmian Group is based in Milan, Italy, specializing in producing electrical cable used in the energy and telecom industries. Last year, its sales were $12.3 billion — produced by 29,000 employees worldwide. It has 48 plants in Europe, 23 in North America, and 13 in Latin America. 

The company emphasizes its commitment to the Paris climate agreement. It is using science-based targets to reach net-zero by 2035 for emissions tied to its operations and by 2050 for emissions associated with its supply chain. It aims to reduce its carbon footprint by 80% and use 100% renewable energy for electricity. 

But it has become an international leader in aligning its value chain with its climate goals. In its 2019 Sustainability Report, the Prysmian Group listed several goals. Among them was its commitment to combating climate change and to increasing its recycling rates. Running its operations on renewable energy is critical. 

The company will invest $107 million in this initiative over the next 10 years. “Now and in the future, this model expresses a further ambition: to be a leading technological player in the transition towards the use of renewable energy sources and a decarbonized economy,” says the Valerio Battista CEO Prysmian Group, in the company’s sustainability report. 

“Our investors are increasingly focused on the social aspect of ESG sustainability,” Chief Sustainability Officer Maria Cristina Bifulco adds. The company recognizes that its commitment to climate change and the associated business opportunities go hand-in-hand. For example, the growth of cable is linked to the energy transition. 

To that end, 48% of Prysmian’s sales are already attributable to business segments and products that contribute to the emergence of a low-carbon economy, she says. She emphasized that the group has been increasing its investment in underwater cables used for offshore wind. $482 million as of this year. 

Why the Emphasis On Stakeholders? 

If the world community is to achieve the goals of Paris, all hands must be on deck. The company’s Climate Change Ambition seeks to position it as one of the main technological players transitioning to low-carbon energy. Moreover, it is procuring raw materials from suppliers. And the company wants to ensure that its suppliers are both ethical and sustainable. It is attuned to its reputation in the communities where it operates. 

Prysmian says the strategy is smart — not just environmentally but commercially. Consider that its stock price rose almost 14% between 2020 and 2021. 

The Proof the Strategy is Working?

In 2016, the company created a ‘ sustainability scorecard. It had 16 objectives that had to be met by 2020. The Sustainability Steering Committee monitors the progress. Some results:

— greenhouse gas emissions have fallen by 678,000 tons — in line with the company’s goal of decreasing them by 2%-3% a year through 2022. 

— 69% of its waste is being recycled as of 2020; 

— 68% of its suppliers have been subjected to environmental, social, and governance assessments. That’s an increase of 5% between 2020 and 2021, and 

— $16 million invested so far in environmental investments and reducing CO2 footprint. 

“Our vision and our ambition lead us into a world of cleaner energy that is more intelligent and efficient,” the report says. “Our technology enables us to play a key role in accelerating the energy transition, digitalization, and electrification.”

Prysmian says that stakeholder involvement is at the cornerstone of its strategy. That includes those inside and outside the borders of the company’s four walls: investors, community members, and suppliers.

Investors are pushing the company to be environmental stewards. Indeed, their participation has increased substantially over the past 3 years, rising from about 13% in 2019 to 35% in 2020 and over 44% now, the company says. According to data compiled by Nasdaq, this is well above average for both the industrial sector and the Italian market, with around 30% of all institutional investors.

But the primary challenge now is to enlist its suppliers into its climate mission. The results?  In 2014 Prysmian assessed 62 suppliers covering 50% of the total spend.  In 2021 it reached 501 suppliers with a 68% coverage of the total spend. In 2017, the company introduced sustainability audits. Since then, it says that 27 audits have been performed. A sustainability partner does them, looking closely at each supplier’s environmental, social, and governance strategies.

Your Role in the Broader Economy?

The Prysmian Group makes money selling energy technologies and energy solutions. The company’s commitment to the climate cause aligns with its business model. Consider that 40% of the world’s CO2 emissions are generated by energy production. Reducing that means more renewables. The good news is that the cost of wind turbines and solar panels is falling. 

But those resources have to move from where they are produced to where they are consumed. Enter Prysmian, which makes the cables. “Power grids are the skeleton of an energy system dominated by renewables and, therefore, must be extended and strengthened in response to a net-zero world founded largely on renewable electricity, the demand for which is sure to increase with the progressive decarbonization currently in progress. 

“Prysmian supports the development of greener and more intelligent power grids, with innovative technologies that cover long distances and the ocean depths while assuring high performance, reliability and sustainability,” the company says.