SUSTAINABILITY REPORT 2020
Consolidated Non-Financial Statement in accordance with Legislative Decree 254/2016
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Contents Chairman’s Letter to Stakeholders ...... 5 Deputy Chairman’s Introduction ...... 6 Methodological Note ...... 9 Reading Guide ...... 10 1. The FNM Group: identity ...... 13 1.1. Main Highlights ...... 13 1.2. The FNM Group and its history ...... 14 1.3. Mission, vision and values ...... 19 1.4. FNM Group stakeholders...... 20 2. Impacts of the pandemic on the transport market ...... 24 2.1. The COVID-19 pandemic...... 24 2.2. The impacts of COVID-19 on mobility in Italy and Europe ...... 25 2.3. The emerging trend ...... 26 3. Materiality analysis ...... 28 3.1. Stakeholder engagement ...... 28 3.2. Materiality matrix ...... 29 4. FNM Group strategy: an integrated approach and business model ...... 32 4.1. Sustainability as a lever for the country's development ...... 32 4.2. The Guidelines of the 2021-25 Strategic Plan ...... 33 4.3. The sustainability of the FNM Group ...... 36 4.4. Capital used to achieve the strategic objectives and SDGs ...... 39 4.5. Key performance indicators for inputs, business activities, outputs and outcomes ...... 41 5. Group governance model ...... 43 5.1. Corporate bodies ...... 43 5.2. Group policies ...... 45 5.3. Sustainability Governance ...... 46 6. The risk management system ...... 48 6.1. Risk governance model ...... 48 6.2. Risks and material issues ...... 51 6.3. Emerging risks ...... 56 6.4. Compliance, ethics and integrity ...... 57 7. The value shared by the FNM Group ...... 60 7.1. Financial capital ...... 60 Funding sources: Public Administration and shareholders ...... 60 Economic value generated and distributed ...... 62
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The main investments ...... 63 Sustainable procurement ...... 67 7.2. Production and intellectual capital...... 70 Railway infrastructure management ...... 70 Ro.S.Co. & Services ...... 75 Road passenger transport ...... 79 Rail transport (Trenord) ...... 86 Research and innovation ...... 87 7.3. Human capital ...... 91 Development of human capital within the Group ...... 91 Diversity and inclusion ...... 94 Employee training and development ...... 96 Employee welfare ...... 99 Health and safety ...... 100 7.4. Natural capital ...... 103 A business model to support the fight against climate change ...... 103 Environmental governance ...... 105 7.5. Social and relationship capital ...... 121 Customer satisfaction ...... 121 Community and value sharing: projects and initiatives in the territory ...... 124 8. Creating value for the country ...... 127 8.1. The value generated by the FNM Group ...... 127 Impacts generated by the FNM Group ...... 128 The True Value of the FNM Group in 2020 ...... 129 The economic impacts of the FNM Group in 2020 ...... 130 The environmental impacts of the FNM Group in 2020...... 131 The social impacts of the FNM Group in 2020 ...... 132 9. Outlook ...... 134 Fact sheets ...... 135 Financial capital ...... 135 Human capital ...... 136 Natural capital ...... 143 Calculation methodology for emissions ...... 144 Definition of material themes ...... 147 Correlation table between areas of the Decree, material themes and GRI indicators ...... 150 GRI content index ...... 152
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Report of the independent auditors on the Consolidated Non-Financial Statement pursuant to article 3, paragraph 10 of Legislative Decree 254/2016 and art. 5-quater of CONSOB Regulation no. 20267 ...... 160 Appendix ...... 161 True Value...... 161 Schedule of companies outside the perimeter ...... 164 DB Cargo Italia ...... 164 NordCom ...... 167 NordEnergia ...... 170
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Chairman’s Letter to Stakeholders GRI 102-14 The approval of the Guidelines of the Strategic Plan 2021-2025, which took place on 25 November, and the presentation, the following day, of the H2IseO project, which aims to create the first Italian Hydrogen Valley in Lombardy, came at the end of a 2020 that was almost entirely marked by the COVID-19 emergency but, at the same time, at the end of a period in which we never gave up casting a positive and proactive eye to the future. In order to deal with the emergency, the FNM Group has implemented various initiatives, starting with a new organisation of work, which has seen, on the one hand, the mass use of smart working and, on the other, the adoption of precise safety protocols for activities in the offices and for those who - I am thinking of maintenance workers and drivers for example - do not have the possibility of working from home. At the same time, everyone was guaranteed supplementary insurance, with the signing of an ad hoc policy for 1,318 employees to cover expenses and assistance in the event of illness from COVID-19. This is further proof of the strength and effectiveness of our comprehensive corporate welfare system. In this context, I do not want to forget the initiative of E-Vai, which has decided to make its cars available free of charge to municipalities, organisations and associations to provide practical help to all the people involved in essential services: doctors, nurses, Civil Protection, emergency management personnel, volunteers. We are well aware that, in the near future, the COVID-19 emergency will also have an impact on the way in which mobility services are used. The FNM Group wants to interpret this change that will affect people, cities and businesses, by proposing new models and offering the best solutions, based on the principles of environmental and economic sustainability, which will underpin every choice. We are convinced that mobility of the near future needs a change of scale, that is, it must be understood by reinterpreting the territory, which must no longer be classified with purely administrative paradigms. We believe that the concept of megacity should be introduced, according to the definition of the researcher Parag Khanna, i.e. large aggregation centres - in Lombardy I am thinking of the Milan, Bergamo, Brescia axis - which, with the right investments in terms of infrastructural and digital connectivity, can become a single large hub able to unite and relate to small and medium-sized centres, especially thanks to the possibility of moving around more quickly. An important step in this direction is the availability of new rolling stock: the 176 trains purchased thanks to the allocation of 1.6 billion from the Lombardy Region, augmenting the 45 new trains that entered service between 2015 and 2018, to which we must then add the 14 new hydrogen trains, for a total of 235. The total investment on all these items is well over two billion. Looking at the medium-term outlook and indicating the 2026 Winter Olympics as the deadline for Milan and Lombardy, the paradigm we want to introduce is what I call the “new anthropisation”. We need to look at the territory in terms of urban regeneration: our intention is to redesign the entire main course that goes from Cadorna to Malpensa airport, regenerating four railway hubs: Milan Cadorna,
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Milan Bovisa, Saronno and Busto Arsizio. Along this main course, through the Lombardy Foundation for the Environment, we have mapped about 900 hectares of land potentially eligible for natural reforestation and “synthetic” forestation. The latter is a highly innovative technology that we want to study and allows a CO2 absorption up to 200/300 times that of the natural plant. The “new anthropisation” is therefore the balance between what nature can do for us (which is fundamental) and what more man can do to repay a historical debt, born out of the industrial revolution, when the railway had left a significant mark on Lombardy in terms of infrastructure. The second action we plan to launch along this main course is the design of a “super cycle track”, i.e. a sort of motorway for bicycles, which runs without interfering with the vehicle traffic. It will be a mending, a “healing architecture”, to use the expression of urban planning researcher Michael Murphy, the redesign of an area to improve the quality of life. Andrea Gibelli Chairman, FNM S.p.A.
Deputy Chairman’s Introduction GRI 102-14
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Sustainability has now become a common focus for the entire FNM Group, from top management to service operators. Sustainability implies that everything is related to everything: there is no economic prosperity without social inclusion, growth must take into account the ecosystem and individual interest is always related to the common good, and this is the objective of FNM in strengthening its process of Sustainability. Concrete actions recounted in this Sustainability Report, the fourth Consolidated Non-Financial Statement (NFS), which is continuously updated towards the most advanced forms of reporting. The document is full of new features, starting with the new materiality matrix that unquestionably shows how the Group is aligned with emerging trends such as - first and foremost - energy consumption, atmospheric emissions and climate change, without neglecting intermodality and integration of services, dialogue with stakeholders and development of the territory, with a view to a crucial ecological transition. The matrix will then be updated next year in consideration of the new organisational structure of the FNM Group with the entry of the motorway infrastructure management sector of the company Milano Serravalle and considering the potential emerging risks deriving from the local and international context due to the impact of the COVID-19 pandemic. Challenges on a local, national and international level, also due to the COVID-19 pandemic, that force us to rethink our city times, the way we travel and new forms of work organisation. With regard to the latter, FNM undertook a process of smart working a year and a half ago and has managed the situation as best as possible with regard to the safety of its employees and associates, but also of company data. In the following pages you will find further news, for example, the introduction of the latest GRI indicators as per the regulations and a spectrum of new indicators to meet the main ESG requirements from the major sustainability rating agencies. Training and awareness-raising activities on sustainability issues continued for employees which, as pointed out, is permeating all levels. With the Framework Agreement of collaboration between FNM and the University of Milan Bicocca on the themes of Corporate Social Responsibility, reporting, social innovation and sustainable development, the relationship with the world of Universities has been further strengthened, also because of the activities already undertaken before the COVID-19 pandemic in involving the new generations through meetings and dialogue. And again, to reinforce its commitment to the achievement of the SDGs of the 2030 Agenda, FNM participates in the international debate as part of the Sustainable Development Committee of UITP, the International Association of Public Transport, which brings together operators, public authorities, scientific institutes and workers around the world, united in promoting a more efficient and sustainable model of public transport. The FNM Group confirms its leading role in sustainable development policies and with its Sustainability Report, included in the Future Respect 2020 Index, obtains the High Performer recognition from consumers.
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All this explains and confirms why we are increasingly appreciated by all our stakeholders and, at the same time, highlights our awareness of being ready to face the new challenges that the market and investors, but also European and national legislation itself, require of us.
Gianantonio Arnoldi Deputy Chairman, FNM S.p.A. Chairman, Committee for Social and Ethical Responsibility
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Methodological Note GRI 102-1, 102-10, 102-45, 102-46, 102-49, 102-50, 102-52, 102-53, 102-54 This document is the fourth Sustainability Report-Consolidated Non-Financial Statement (hereinafter also the “Sustainability Report-NFS”), in accordance with Legislative Decree 254 of 30 December 2016, which implemented Directive 2014/95/EU; the document concerns the companies in the FNM, comprising FNM S.p.A. and its subsidiaries (hereinafter also the “Group”), and refers to the period between 1 January and 31 December 2020.
Reporting perimeter The Sustainability Report-NFS has been produced on the scale necessary to provide an adequate illustration of the Group’s operations, performance, results and impacts, covering all issues deemed relevant and set out in Article 3 of Legislative Decree 254/2016. More specifically, the perimeter of economic data is the same as for the 2020 Consolidated Financial Statements of the Group, as is the perimeter of social and environmental information, excluding some limitations for companies that are not deemed to have recorded significant environmental and social impacts in the year1.
In addition, in order to ensure a broader understanding of the company's activities, its performance, its results and the impact produced by it (ref. Article 4 of Legislative Decree 254/2016), the social and environmental information of the company Trenord S.r.l. (hereinafter also referred to as “Trenord”) is presented separately and is always identifiable, and is valued using the equity method within the Group's consolidated financial statements. Any quantitative data representation methods different to the above are clearly indicated. The companies DB Cargo Italia, NordCom and NORDENERGIA, whose data and information are reported individually in the appendix, are not included in the scope of the Consolidated Non- Financial Statement as they are not fully consolidated subsidiaries.
Reporting methodology, principles and criteria The Sustainability Report-NFS has been produced in accordance with the GRI Sustainability Reporting Standards, published by the Global Reporting Initiative (GRI). The “Core” option has been selected. To assist the reader in locating information within the document, the GRI Content Index is provided on pages 123-132. The performance indicators used are those set out by the reporting standard adopted. They are representative of various fields and consistent with the activities carried out and the impacts produced as a result. More specifically, the performance indicator selection process considered the materiality analysis and matrix presented to the Committee for Social and Ethical Responsibility and the Committee for Control, Risk and Related Party Transactions for joint assessment and approval. This was later approved by the FNM S.p.A. Board of Directors on 09/03/2021. Where appropriate, the process also considered the European Commission’s “Guidelines on non-financial reporting2“. It should also be noted that the reporting process, in order to better meet the needs of external communication to stakeholders and investors, has included useful information for the more important requests from rating agencies in the list of indicators. With a view to increasing accountability towards its stakeholders, the Group has undertaken to strengthen its reporting activities by going beyond the current regulatory requirements and
1 In accordance with Article 4 of Legislative Decree 254/2016 the following companies are not included in the perimeter: La Linea 80 Scarl as it is not operational, Milano Serravalle - Milano Tangenziali S.p.A. in which a 13.6% interest was acquired in July 2020, FNMPAY S.p.A. incorporated on 7 October 2020, MALPENSA DISTRIPARK S.r.l., and Nuovo Trasporto Triveneto as they do not generate social and environmental impacts. 2 “Guidelines on non-financial reporting” document (2017/C 215/01), issued by the European Commission on 26 June 2017. 9 adopting a reporting system that promotes further alignment with the main international frameworks. In line with last year, the Group presents the second edition of the Sustainability Report-NFS inspired by the guiding principles of the International
This document is published annually, in accordance with Legislative Decree 254/2016. For more information on the Sustainability Report-NFS, please contact us at [email protected]. The document is also available on the FNM Group website: http://www.fnmgroup.it/. The Sustainability Report-NFS was approved by the Board of Directors of FNM S.p.A. together with the Consolidated Financial Statements on 18/03/2021. All activities relating to the reporting of the Sustainability Report-NFS are governed by a specific Operating Procedure approved on 31/01/2020. The organisation appointed to audit the Sustainability Report-NFS is PricewaterhouseCoopers S.p.A., which produces its own separate report to express an opinion on the compliance of the information provided with Article 3, Paragraph 10 of Legislative Decree 254/2016. The Sustainability Report-NFS illustrates, for the first time, the results of the True Value model. Both the model and the quantification of the economic, social and environmental impacts calculated through its application are not subject to limited examination by PricewaterhouseCoopers SpA.
Reading Guide GRI 102-46, 102-49 The FNM Group's Sustainability Report is an opportunity to recount, through concrete data, the main results achieved during the year and which have best characterised the Group's sustainability process. 10
The document has been structured according to the principles of the Integrated Report. A first part of the report illustrates how the strategy, governance, performance and prospects of the organisation enable us to create value in the short, medium and long term, in the context within which we operate. At this juncture, some elements set forth by the Framework for Integrated Reporting published by the International Integrated Reporting Council (IIRC) are reinforced in the document. An updated representation of the business is provided, where the main capital elements, picked up on later, are related to the achievement of the Sustainable Development Goals (SDGs). The capital elements, which are the outcomes of the activities, were then arranged in relation to the metrics for measuring them, in line with the GRI Standards. The second part is focussed on presenting the different types of capital, i.e. the material and immaterial resources that have been increased, decreased or transformed as a result of the organisation’s activities and outputs and that determine the creation of value. The main capital elements are: economic - financial capital production and intellectual capital human capital natural capital social and relationship capital By progressively analysing the various types of capital that influence and are influenced by the Group’s operations, FNM aims to provide a clear picture of the extent to which economic aspects are interlinked with social and environmental factors (ESG Environmental, Social and Governance) within the Group’s decision-making processes, strategy definition, governance and business model – and the extent to which this needs to improve. In this context it should be noted that, unlike last year, the results of the sustainability performance are presented broken down by business segment. Where the management of the material issue is the direct responsibility of the parent company (the values of supplies, the workforce by grade and age, the hours of training), the results are represented in an aggregate manner at FNM Group level, as are the results of financial performance. Data relating to Trenord (Rail Transport) are always separate from those of the FNM Group and duly reported. The main changes include a review of the material topics for the Group. The materiality analysis process, carried out some time ago by the FNM Group and aligned with the requirements of the IR Framework - to which reference is made in paragraph 3.2. Materiality Matrix - has made it possible to define the performance indicators presented within the capital elements. Furthermore, in relation to these issues, the section “Risks and material issues” contains the main risks identified and a summary of the relative methods of managing them, in compliance with the requirements of Legislative Decree no. 254/2016. Further changes concern the adaptation of reporting activities to the new GRI Standards relating to Tax (GRI 207), Water and effluents (GRI 303) and Occupational health and safety (GRI 403). Given the increasing relevance of rating agencies, the Sustainability Report-NFS also covers a number of indicators to meet the growing investor demands for information for the ESG assessment of companies (e.g. supply chain management; risk management; cyber security; human capital development; business and economic contribution to the community). In describing the main impacts generated by the Group, FNM has proceeded to identify and quantify the impacts that are generated through its activities, not only from an economic point of view, but
11 also from an environmental and social perspective, using the True Value methodology developed by KPMG to provide a complete representation of the value generated. Also forming part of this panorama of significant changes is the publication of the Guidelines of the 2021-25 Strategic Plan. On 25 November 2020, the Board of Directors of FNM S.p.A. approved the Guidelines of the FNM Group's 2021-2025 Strategic Plan, which will allow sustainability issues to be, to all intents and purposes, integrated into the planning of the Group's business activities.
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1. The FNM Group: identity 1.1. Main Highlights
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1.2. The FNM Group and its history The Group
GRI 102-2, 102-3, 102-4, 102-6, 102-7, 102-10, 102-45
Key - equity investments
Companies consolidated line by line
In this document, the “Rail Transport” sector includes the activities carried out by Trenord, a company that is jointly owned by the Group and therefore does not fall under the scope of consolidation of the FNM Group and does not represent a specific segment, but included in the scope of the NFS.
Companies measured with the Equity method
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The activities of the FNM Group, in line with its evolutionary history, propose an organisational structure within which there are distinct skills and activities focused on three different business segments: Ro.S.Co & Service, Railway Infrastructure Management and Road Passenger Transport.
Ro.S.Co & Service
FNM S.p.A. company is a joint-stock company based in Milan and has been listed on the Milan Stock Exchange since 1926. It manages and coordinates all its subsidiary companies and serves as a Rolling Stock Operating Company (Ro.S.Co.) for the management and leasing of rolling stock. Railway infrastructure management3 FERROVIENORD S.p.A. manages a 330 km railway network split between the Milan Branch (222 km) and the Iseo branch (108 km), along with 124 stations and stops (of which 115 serving passengers), based on a licensing agreement valid until 31/10/2060. It oversees ordinary and extraordinary maintenance operations on the railway network, development works and the launch of new systems, working in synergy with NORD_ING.
NORD_ING S.r.l. is an engineering firm which designs and coordinates infrastructural developments and modernisation works involving the rail network and FERROVIENORD systems. The company is wholly-owned by FERROVIENORD.
Malpensa Intermodale S.r.l. was set up by FNM in December 2018 to manage the Sacconago intermodal transport terminal, located in the industrial area of the Municipality of Busto Arsizio, which is leased to it by FERROVIENORD.
Malpensa Distripark S.r.l.4 was set up by FNM in October 2019 and focuses on the real-
estate development of the areas adjacent to the Sacconago terminal, which is key to the management of intermodal connections in the cargo sector.
Road passenger transport
FNM Autoservizi S.p.A., which is wholly-owned by FNM, runs Local Public Transport in the provinces of Varese, Brescia and Como. It also runs rail-replacement services for Trenord rail services.
La Linea S.p.A., controlled with a 51% share by FNM, is a company operating in the Local Public Road Transport sector in the Veneto Region. Through the wholly-owned subsidiary Martini Bus S.r.l., the company is also present in the bus and driver hire sector.
Azienda Trasporti Verona S.r.l. (ATV) runs urban and extra-urban public road transport in the Province of Verona. FNM owns 50% of the company, with the Municipality of Verona owning the other 50% through Azienda Mobilità Trasporti S.p.A. (AMT).
E-Vai S.r.l. offers car sharing services with electric or hybrid vehicles. The aim is to supplement public transport, in particular rail transport, with both traditional and innovative business models. E-Vai is a wholly-owned subsidiary company of FNM.
3 Given the start-up nature of Malpensa Intermodale and Distripark, the Freight Mobility business segment is currently represented in the financial statements as part of the "Railway infrastructure management" segment. 4 Company not consolidated in the perimeter of social and environmental data and information. 15
MAIN INVESTEE COMPANIES
Rail transport5
Trenord S.r.l. manages the regional and local passenger railway service. The company has a network of 1,900 km encompassing 40 routes and 61 lines, of which 13 suburban lines (S) and railway loops, 46 Regio and Regio Express lines, TILO (Ticino-Lombardy Regional Trains) and long-distance lines (in collaboration with Deutsche Bahn - DB and the Austrian Federal Railway - OBB) and 2 rail links with Malpensa. The Company, founded on 3 May 2011, is a joint venture between Trenitalia S.p.A. (Lombardy Regional Transport Division) and FNM S.p.A., both with a 50% stake.
Railway freight transport DB Cargo Italia S.r.l.6 is the company that oversees freight transport. It is 60% owned by German company DB CARGO AG, a division of Deutsche Bahn specialising in freight rail transport and a European market leader. FNM S.p.A. owns the other 40%. Energy NORD ENERGIA S.p.A.6 has constructed and runs a production centre and a power line for the import of electricity from the Canton of Ticino. FNM S.p.A. currently owns 60% of the company, with SPE Società per Partecipazioni Energetiche S.A owning the other 40%. ICT Systems NordCom S.p.A.6 operates in the ICT market as a system integrator and solution provider, targeting both transport companies and the public administration. The company is 58% owned by FNM S.p.A. and 42% owned by TIM S.p.A.
Company structure as of 31 December 2020
5 In this document, the "Rail Transport" sector includes the activities carried out by Trenord, a company that is jointly owned and therefore does not fall under the scope of consolidation of the FNM Group and does not represent a specific segment, but included in the scope of the NFS. 6 Company not consolidated in the perimeter of social and environmental data and information. 16
FNM is the leading integrated sustainable mobility Group in Lombardy. It represents the first hub in Italy to combine railway infrastructure management with road transport and motorway infrastructure management in order to offer an innovative model for managing mobility supply and demand that optimises flows and that is environmentally and economically sustainable. It is one of Italy’s leading non- state investors in the sector. FNM S.p.A. is a public company that has been listed on the Italian Stock Exchange since 1926. The majority shareholder is the Lombardy Region, which holds a 57.57% stake.
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3 Fully consolidated companies since 26.02.2021
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The history of the FNM Group
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1.3. Mission, vision and values
GRI 102-16
The FNM Group is, by nature, a company that is always evolving, always on the move, a company projected towards the continuous development of mobility in all its aspects. An integrated service inspired by the same values that have accompanied it in all its business activities from the outset, the Group in fact operates in full compliance with the principles of responsibility, integrity, transparency, efficiency, merit and sustainability. A vision and a mission faithful to those values that over time have been enriched with expertise.
Vision IMPROVING THE LIVES OF PEOPLE, OF CITIES AND BUSINESSES, BY DEVELOPING CONNECTIONS AND MEETING MOBILITY NEEDS
Developing an integrated platform of mobility services, built according to environmental and economic sustainability criteria, which incorporates in a system and connects (physically and digitally) attractions, urban hubs and transport networks, to create social value and promote the productivity of the territory.
Mission
The Guidelines of the 2021-2025 Strategic Plan identify the Group as an integrated sustainable mobility operator, ensuring that FNM is positioned as a Group guided by principles of environmental, social and governance (ESG) sustainability in defining the business processes and investment portfolio.
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1.4. FNM Group stakeholders GRI 102-13, 102-21, 102-40, 102-42, 102-43, 102-44 Constant and up-to-date communication with its stakeholders is fundamental if the Group is to be able to offer a fully integrated mobility service that can easily satisfy the demands of the consumer and all the stakeholders involved. By virtue of this awareness and the desire to conduct its business in an ethical, transparent and respectful manner, the Group is committed to continuous and constructive dialogue with its stakeholders.
Stakeholder categories Main methods of engagement Shareholders' meeting; annual and interim financial statements, corporate Shareholders and Investors governance report; financial press releases; periodic corporate presentations; institutional website; credit rating Communication campaigns to disseminate the safety measures adopted; periodic surveys to assess the travel experience; organisation of on-line Customers and Passengers events; FERROVIENORD ti ascolta (listens to you) - a channel reporting on company activities such as work in progress, accessibility and station services; social networks. Theme-based events on-site or in digital mode; membership of national and international associations with a strong ESG focus; round-table work groups Local communities and initiatives for discussion with associations belonging to the transport sector; sponsorship initiatives and activities Training activities, including e-learning; performance reviews; climate surveys; ad hoc communication and prevention campaigns; corporate intranet; tool for Employees handling reports of possible violations of the Code of Ethics, 231 and privacy; involvement of employees by sending the appropriate COVID-19 disclosure and providing personal protective equipment
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Institutional round-table work groups and initiatives; services conference; Public and regional bodies engagement activities for the purposes of assessing the relevance of material issues for the FNM Group and the issue of climate change Press conferences; training and awareness-raising activities at universities; Strategic partners engagement activities to assess the relevance of material topics for the FNM Group and the issue of climate change, also in digital mode Engagement activities for the purpose of assessing the relevance of the issue Suppliers of climate change; supplier register; e-procurement platform; tenders for works, services and supplies Conventions; engagement activities for the purpose of assessing the relevance of material issues for the FNM Group; project activities with the Environment Lombardy Region and Climate Department and the Infrastructure, Transport and Sustainable Mobility Department; authorisation measures for the purpose of impact analysis for the extension of the network Trade Unions Trade Union Discussion Groups
For the Group, directly involving its stakeholders means taking advantage of a unique opportunity to gather ideas and suggestions to understand the needs of the local area and respond to them effectively. Joining networks and associations on a national and international level also means becoming an active citizen and aware of the sustainable development of one's own country, but also a receptor of the most innovative trends in the sector and in sustainability.
The main associations to which the Group belongs
Associations Main objectives Association founded by Confindustria and Federmanager to promote 4MANAGER business culture, managerialism and entrepreneurship in Italy. AIAS Italian Professional Association committed to the development of a culture of safety in all Association for Environment and workplaces and living spaces and to effective prevention. Safety Private, independent non-profit association founded with the aim of deepening the discussion, the exchange of knowledge, information and Aspen Institute Italy values on the most topical problems and challenges of politics, economics, culture and society. Italian Association of Internal Italian association affiliated with the Institute of Internal Auditors for standards, certification and training for the profession of Internal Auditors Auditor. Assolombarda is the association of companies operating in the Metropolitan City of Milan and the provinces of Lodi, Monza and Assolombarda Brianza, Pavia. Its purpose is to protect the interests of member companies and offer specialist consultancy services. Association for Italian joint-stock companies that deals with the study ASSONIME and treatment of problems affecting the interests and development of the Italian economy. Association of local public transport companies in Italy. It aims to ASSTRA represent the needs and interests of public transport operators in the appropriate institutional, national and international forums. CEI Italian Electrotechnical Association of private law, non-profit, responsible for the national technical regulations in the field of electrical engineering, electronics Committee and telecommunications. CIFI Italian Railway Engineers Technical and professional association founded with the aim of College promoting the examination and study of scientific, technical, economic 21
and legislative issues related to land transport; enhancing the role of engineers and contributing to the improvement of technical culture and training and professional development of employees in the land transport industry. A consortium company that promotes the technical training of young people, encouraging their transition to work through training initiatives Consorzio ELIS (ELIS Consortium) that express the social responsibility of the entire consortium community. Alliance created in the context of the current European Presidency to accelerate the decarbonisation of the industry and consolidate ECH2A European Clean Hydrogen industrial leadership in Europe in the hydrogen sector. The FNM Group collaborates with the association in the field of activities related to Alliance “hydrogen mobility”, with the aim of monitoring the evolution of the European strategy on the subject and participating in discussions and working groups related to it. The Framework Agreement for scientific collaboration and support for innovation processes between FNM and the Milan Polytechnic Foundation is still in place; its goal is to develop joint training and Milan Polytechnic Foundation research initiatives in areas like: electric systems and energy efficiency; maintenance and advanced diagnostic activities; railway engineering; urban planning in relation to infrastructures and transport systems; rolling stock; innovative systems for station surveillance and security. Fondazione per lo Sviluppo Foundation of reference for the main sectors and key players of green Sostenibile [Foundation for economy, circular economy and sharing mobility. Sustainable Development] Research Centre founded for the purpose of the in-depth analysis of the themes of public procurement, international contact point for the IGI Large Infrastructure Institute debate on the evolution and impacts related to the legislation on public works. The European House - Group of professionals that offers management consulting, constant Ambrosetti refresher courses, research activities, workshops and forums. International Public Transport Association that brings together operators, public authorities, scientific institutes and workers with the UITP aim of promoting an efficient and sustainable model of Public Transport in the world. Webinars and e-learning professional development courses scheduled D value for 2021.
FNM's commitment for future generations The FNM Group’s ongoing engagement activities have allowed the Group to build and maintain constructive and solid relationships with the local community around sustainability issues. It is in this context that the listening activities launched during 2020 will be incorporated, consistent with the regulatory requirements in order to address health risks related to the pandemic. In line with private and voluntary initiatives at international level to combat climate change and on the basis of renewed awareness of the impacts that people generate by their movements, the Group decided to launch a specific stakeholder engagement activity on the subject of climate change, contextualising it within the sector in which it operates. In 2020, the Group organised three opportunities for meeting and dialogue at the Bicocca University with the involvement of 108 students. In addition to the students of the Level I Master “Sustainability in Law, Finance and Management SILFIM”, second year students on the three-year degree course “Marketing, Corporate Communication and Global Markets” were also involved. Also 22 with the Bicocca University of Milan, as part of the European Erasmus+ project, a multidisciplinary round-table work group was organised entitled “Round-table focusing on NFR Directive, ESG, Value Creation and COVID-19 “. At the end of each training event, FNM provided the students with an interactive questionnaire designed to gauge the perception of climate change among younger generations.
The emerging trend is clear. Future generations have a developed sensitivity to the impacts and economic and social costs that could result from the increased severity and frequency of extreme weather events related to climate change (e.g., changes in precipitation, extreme weather variability, ocean acidification, rise in sea level and average temperature). Aware of the risks, they believe it is crucial for today's companies to integrate their business strategy by considering climate risks as an input into strategic business decisions.
FNM's commitment to the territory: regional public bodies, local communities Given the territorial reach of the FNM Group and its relationship with public and regional bodies, the Group has always sought to stimulate dialogue with the bodies by organising one-to-one meetings or multi-stakeholder events, as in previous years with the municipalities of Laveno and Martinengo or the multi-stakeholder event in Saronno involving municipal administrations, associations, universities and organisations active in the area. By virtue of the regional institutional context that places FNM as the main player in the promotion of integrated mobility in Lombardy and, in general, in Northern Italy, the Group has always conducted stakeholder engagement with the Lombardy Region, with the two General Departments of Infrastructure, Transport and Sustainable Mobility and Environment and Climate of the Lombardy Region with the aim of sharing the main risks, opportunities and transformational processes that the Regions served by FNM Group transport system will be called upon to implement in order to cope with the scenarios posed by climate change. Unlike in previous years, it was not possible to conduct such a structured stakeholder engagement activity during 2020 due to the COVID-19 pandemic. FNM hopes to give greater continuity to this activity in order to share with stakeholders the main transformational trends affecting the transport system.
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2. Impacts of the pandemic on the transport market 2.1. The COVID-19 pandemic 2020 was influenced by the negative effects caused by the global COVID-19 pandemic. As a result of the declaration of a pandemic emergency by the World Health Organisation and the issuing of the first decree7 by the Council of Ministers, a domino effect followed, with economic repercussions on the regional and national production system, on mobility and specifically on Local Public Transport, also following the various regulatory provisions and the subsequent measures taken over the ensuing months by the competent authorities to contain the spread of the virus. All FNM Group companies promptly implemented the measures required by government decrees to curb the epidemic, intervening to protect the health of staff and passengers and attempting to contain the economic repercussions. In particular, with the goal of protecting workers’ health, the Group, in addition to having incentivised smart-working since the start of the health emergency, also put in place extraordinary insurance coverage for the management of the COVID-19 infection for all its employees, stipulating a supplementary policy able to cover the expenses tied to possible hospitalisation and to the subsequent recovery phase. After an initial lockdown phase, minor restrictions were introduced in the June-September period, which allowed a gradual recovery in the Group's activities with respect to the values recorded in the March-May period, especially in the Local Public Transport business. Then, as the health situation worsened again, decrees issued in October re-established restrictions on a number of activities. In particular, in the Lombardy Region, falling under the highest risk category as of 3 November, restrictions on mobility were again adopted to contain the spread of the virus. All these measures involved new economic repercussions on the regional and national production system, in particular on mobility and specifically on local public transport. The effects of the ongoing pandemic on the FNM Group, whose businesses relating to the leasing of rolling stock and to management of the railway infrastructure were not substantially impacted by the epidemiological emergency, pertain mainly to road transport and the investee Trenord. The bans on mobility and traffic, as well as the closure of school activities, set forth by government and regional regulations, generated a significant reduction in transport demand and consequently in traffic revenues during 2020. To offset this decline in revenues, the Law of 17 July 2020, no. 77 (article 200, paragraph 1, the Relaunch Decree), in order to support the local and regional public passenger transport service, set up a fund at the Ministry for Infrastructure and Transport, subsequently supplemented by the Law of 13 October 2020, no. 126 (article 44, “August Decree”), to partly offset the reduction of fee revenues from passengers in the period from 23 February 2020 to 31 January 2021, and the Law of 18 December 2020, no. 176 (article 22-ter, “Ristori Bis Decree”). In particular, staff costs, net of the benefit of lower costs of EUR 1 million, in relation to the reduction in the average workforce show an overall net decrease of EUR 11,004 thousand, primarily due to the use of residual leave, income support tools (Cassa integrazione Generale - General Wage Guarantee Fund and Public Transport Fund) and less use of temporary workers, in relation to the reduction in work as a result of the COVID-19 emergency.
7 Decree-Law no. 6 of 23 February 2020. Link 24
Consumption of traction fuel by companies operating in the road transport segment declined due to a reduction in services provided in connection with the restrictions adopted to contain the COVID- 19 pandemic. Costs for services show: - decrease in expenses for the maintenance of buses and rolling stock for EUR 1,512 thousand; - reduction in expenses for employees, in particular travel and lodging and preventive medical examinations, by EUR 1,226 thousand; - decrease by EUR 957 thousand for subcontracting of automotive services to third parties; - decrease in commercial expenses and commissions to third parties by EUR 635 thousand in relation to the lower sales of tickets carried out in the period; - Increase of EUR 159 thousand in cleaning and sanitisation expenses.
2.2. The impacts of COVID-19 on mobility in Italy and Europe GRI 102-15 The COVID-19 pandemic has led to a disruptive mutation in the urban mobility sector, starting with a radical reversal in the trend in the choice of methods of transport. According to ISFORT research8, following a positive 2017-2019 two-year period in terms of mobility demand (+8% trips, +14% passengers-km), 2020 saw a considerable slump: during the lockdown, daily trips fell by 67%, passenger-km by 84%. In the post-restriction phase, demand rebounded (+156% for trips, +352% for passengers-km between mid-May and mid-October) but did not return to pre-Covid 2019 levels, with respect to which there was a 15% difference in number of trips and a 25% difference in number of passengers-km. What emerges from the measurements conducted by the Ministry of Infrastructure and Transport9 is a considerable, but entirely predictable, increase in the use of cars for individual journeys, which was particularly significant in the two-month period March-April, even if volumes were contained. The sector that suffered the most during the health emergency period was public transport, as confirmed by the various analyses conducted. The decreases recorded even 90% exceeded during the first lockdown, partly recovered later in the second phase. There has also been a reduction in the choice of rail transport; in particular, there is a significant gap between the supply of services and demand from passengers. As confirm of this, according to Altroconsumo10, only 15% of Italians use public transport at least once a week, compared to 27% before the pandemic. In contrast to this, a marked active mobility (walking, cycling, micro-mobility) index developed, whose share remained above 30% throughout the year. The causes that have influenced the trends presented so far are briefly discussed below. Firstly, the restrictions have led to changes in travel habits. The causative factors have increased smart-working
8 17th Report on the Mobility of Italians. Between management of the present and strategies for the future. ISFORT (2020). Link 9 Observatory on mobility trends during COVID-19 health emergency. Ministry of Infrastructure and Transport (2020). Link 10 Covid and mobility: how the way we move has changed. Our investigation. Altroconsumo (2020). Link 25 compared to face-to-face working, resulting in the reduction of the need for workers to commute to work on a daily basis. Similarly, the reduction, if not outright banning, of certain categories of leisure activities has also affected the amount of travel itself. In addition, what emerged as one of the determining factors is the “fear of contagion”, which leads to a lack of “confidence” in the choice of crowded public transport and frequented by a high number of users. In fact, according to a survey by Altroconsumo10 80% of respondents consider public transport unsafe and high percentages of respondents favour shared modes. To sum up, those who no longer use public transport now make their journeys by car in 42.8% of cases and on foot or by bicycle in 29.5% of cases8. Nearly one in four trips are no longer made due to reduced demand for mobility. According to research by the National Sharing Mobility Observatory, only 42% of people who use public transport for work and/or study will not change their pre-Covid travel habits11. Finally, other aspects to be considered are the negative consequences that have affected the progress of the spread of innovative forms of mobility, such as sharing platforms. This aspect was a key factor in the path towards sustainable mobility, which was hampered by the fear that accompanied the pandemic, with the service considered unsafe, given the high number of users. In fact, collective mobility (including sharing mobility and intermodality) recorded, compared to 2019, a loss of almost 90% of passengers and 2/3 of the modal share (down to 4%) during the lockdown; by contrast, in the first month post-restrictions, a significant market recovery took hold, which however stopped at 50% of the pre-COVID-19 target and a modal share of 8%; figures that are also in line with other European countries. In this context, with respect to other cities, Milan has seen a greater increase in the number of average daily rentals (carsharing, scootersharing, bikesharing), however not recording the pre-covid volumes, except with reference to the use of electric scooter sharing. These data clearly show that the overall demand for mobility will decrease because many trips will not be made at all, although users of sharing mobility will continue to move, but making other mobility choices11. In support of the most widespread cause at national level for the decline in the use of collective transport, identified as the “fear of contagion”, it is interesting to note the study conducted by the World Economic Forum at global level, which highlights that the major risks in terms of impact is the social risk of infectious diseases, along with other environmental, technological and geopolitical risks12. 2.3. The emerging trend Given this evidence resulting from a change in habits and needs, it is important to think about how to deal with the recovery, by considering how to take on the new challenges thrown up by the external context.
11 The state of sharing mobility: propensities and behaviour analysis before, during and after lockdown. National Sharing Mobility Observatory - Sustainable Development Foundation (2020). 12 The global risk report 2021. World economic forum Link 26
In particular, a survey13 presented by the European Parliament, shows that citizens want to approach the recovery with sustainable solutions, favouring new forms of mobility (walking, cycling, public transport) over others. This finding is reassuring and to be best developed in post COVID-19 planning, by favouring ways that also take into account the environmental and social impact of strategic decisions. This aspect highlights that the tendency to prefer private means of transport for travel is not sustainable, inviting people to favour shared mobility platforms and public transport. This is supported by the study also reported by the European Parliament, according to which if all the preventive measures to safeguard the health of passengers are adopted efficiently, the risk of contagion is very low, underlining the importance, with a view to restoring pre-Covid habits, of offering users a safe and comfortable experience. In light of this new context, new city “timetables” must be rethought in order to promote the distribution of the flow of passengers over the entire day, recalibrating the peaks and troughs of Local Public Transport. In particular, at such a delicate time, safeguarding the health of passengers is the key aspect in order to be able to restore the relationship of trust between the two parties by implementing the necessary measures to ensure safe transport. In addition, the challenge will be to reorganise the service in an efficient and timely manner, considering the new travel needs of users. This will be possible with the support of technological tools that make it possible to map, with a special focus on the privacy of the users involved, the emerging needs and requirements. This will make it possible to limit the influx of passengers, avoiding possible gatherings, and to respond flexibly to new travel times. The aim is to offer a punctual service, satisfying the needs of passengers with an increasingly digital and efficient service.
13 COVID-19 and urban mobility: impacts and perspectives. European Parliament's Committee on Transport (2020). Link 27
3. Materiality analysis
FNM SUSTAINABILITY JOURNEY HIGHLIGHTS
DEFINITION OF 18 UPDATE OF THE MATERIALITY THEMES 2020 MATERIALITY MATRIX INTERNAL AND EXTERNAL STAKEHOLDER ENGAGEMENT RATE: 72%
3.1. Stakeholder engagement GRI 102-21, 102-43, 102-44 As part of the 2020 priorities analysis process, a review of material issues for the Group was undertaken. The FNM Group has involved representatives of the top management of the Parent Company and its subsidiaries, as well as Trenord, in a process of evaluation and updating of the materiality matrix. With respect to the activities carried out in 2018, several sources have been integrated, including the World Economic Forum, the new topics of the Sustainability Accounting Standard Board (SASB) standard referred to the transport sector ('Rail Transportation', 'Road Transportation', 'Engineering Construction Services', 'Car Rental Leasing') in addition to the usual areas of Legislative Decree 254/2016 and the topics identified as material in the last update of the materiality matrix. While some themes, already present in the 2018 materiality matrix, have been redefined in light of recent sustainability trends and the Group's organisational evolution, other themes have been reconfirmed, as in the case of 'Intermodality and service integration' and 'Health and safety in the workplace'. The 18 themes were then divided into 5 categories: 'Environmental Responsibility', 'Governance, Integrity and Economic Responsibility', 'Human Resources', 'Responsibility to Customers, Infrastructure and Transport Systems', 'Social Responsibility (Community) and Supply Chain'. It should be noted that aspects related to issues such as Business Strategies, Economic and Financial Performance and Contributions to the Public Administration and Corporate Governance, Compliance and Risk Management are considered in the materiality analysis as fundamental, material elements “in themselves” and, therefore, have not been subject to assessment and have not, subsequently, been included in the matrix. The process of prioritising these issues involved both internal and external stakeholders. With regard to internal stakeholder engagement, the evaluation took place during two workshops in which top management was able to express its judgement, both from the company's point of view and from the perspective of the stakeholder with whom it interacts most in its daily work. The survey
28 was also extended to an audience of external stakeholders including a selected panel from academia, NGOs, foundations, industry representatives. The survey recorded a high uptake rate, with an average of roughly 72% of the total number of invitees participating, 33 members of the top management for the internal stakeholder engagement and 24 strategic partners for the external one, respectively. Suggestions from stakeholders - Attention to biodiversity through the implementation of environmental protection projects; - Focus on emergency health care, improved service during peak hours; - Enhancement of intermodality through the use of low-impact vehicles (bicycles, scooters, electric cars) and the provision of adequate and safe facilities; - Increased communication activities in order to promote the dissemination of the culture of sustainability. 3.2. Materiality matrix GRI 102-46, 102-47, 102-49 The materiality matrix is created by entering into dialogue and exchanging opinions with stakeholders on the most relevant economic, environmental and social issues14. The results of internal and external stakeholder engagement activities and their processing are graphically expressed in the 2020 Materiality Matrix. It should be noted that identifying and assessing the importance of material issues is also one of the fundamental aspects of the IR Framework for the drafting of an integrated Report. Material issues are those that influence or can influence – more than any other type of issue – the organisation’s capacity to create value, with knock-on impacts on strategy, performance in governance and future strategies. The materiality matrix was presented to the Committee for Social and Ethical Responsibility and the Committee for Control, Risk and Related Party Transactions. It was later approved by the FNM Board of Directors on 9 March 2021.
The matrix will then be updated next year to take into account the Group's new organisational structure and potential emerging risks arising from the local and international context.
14 As part of the Group’s materiality assessment, the interaction with Trenord S.r.l. Was also considered. 29
The update of the 2020 materiality matrix highlighted seven top material themes, represented in the upper right hand corner marked by the darker colour. At the end of the interviews, the paradigm shift being observed in involving the business world and the rest of the stakeholders with regard to energy consumption, atmospheric emissions and climate change appeared to be indisputable. The significant importance attributed to this issue presents the Group with a major challenge: to encourage management of the environmental impact of its activities in order to reduce energy consumption, greenhouse gas emissions and atmospheric pollutants, through energy efficiency measures and the rational use of resources. An investment, therefore, that the Group is willing to support for greater sustainability of its business and the external context that surrounds it. The issue of service quality and customer safety in stations and on the move (Security and Safety), together with health and safety in the workplace, is now more important than ever for business continuity. Like two sides of the same coin, these issues represent the cornerstone: on the one hand, being able to guarantee a high quality service at stations, parking areas and bus stops and, on the other hand, encouraging and promoting an internal safety culture so that employees and external associates can access workplaces in complete safety. Ensuring accessibility of services and infrastructure in its most holistic concept is crucial. Being able to offer all customers access to its vehicles without any discrimination is an essential condition for FNM. The concept of intermodality and integration of services is incorporated in this approach, for an effective interchange network, capable of fostering a travel experience of daily action but also for tourism opportunities. The monitoring of the issue of dialogue with stakeholders and territorial development is important for FNM in consideration of its proximity and distribution throughout the territory. Promoting regular and transparent dialogue with national and local administrations and with all stakeholders means seeking shared solutions and transparent relations. 30
Business ethics and integrity, in terms of internal control systems, dissemination within the organisation of a corporate culture based on professional honesty and the active fight against corruption, is an important issue for a company like the FNM Group which operates in the market, but under a regulated regime in view of the majority shareholding of the Lombardy Region in the share capital. Although not highly valued within this matrix, the theme of systemic risk management and business resilience represents for the FNM Group, today more than ever, an issue that needs to be monitored through the correct preparation of an integrated plan to identify, prevent and minimise the effects of low probability events, but with high impact and potentially significant externalities, in order to always guarantee the operational continuity of the entire business.
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4. FNM Group strategy: an integrated approach and business model
FNM SUSTAINABILITY JOURNEY HIGHLIGHTS
Publication of the Guidelines of the 2021-25 Strategic Plan 10 SDGs to which the Group aims to contribute 7 national and international engagement initiatives in the field of Sustainability
4.1. Sustainability as a lever for the country's development The transport sector is dealing with a range of different challenges at local, national and international level. To a greater extent than last year, also as an indirect effect of the pandemic, attention to the environmental element, and consequently to climate change, has increased considerably. COVID-19 has not only been a health emergency for Italy and, in general, for European countries. The pandemic soon had more economic and consequently social repercussions. The European Union immediately intervened, trying to stem the crisis that the countries were experiencing, but it soon realised that a greater contribution was needed, the creation of a recovery fund. In July 2020, European leaders agree on a multi-year investment plan, adding an extra instrument to the package, the Next Generation EU, a EUR 750 billion recovery fund to support the post COVID-19 recovery, which the EU Commission will raise in the market through the issuance of European bonds. The Fund is in line with the Green Deal's growth strategy for a more equitable and prosperous society with a modern, digital and resilient economy, capable of helping countries achieve a carbon neutral Europe by 2050. To contribute to this latter objective, the European Year of Railways15, the European Commission's initiative, will highlight the benefits of rail transport as a sustainable, intelligent and safe mode of transport. During 2021, the rail sector will be in the spotlight across the continent, thanks to a series of activities that will encourage the use of this mode of transport by citizens and businesses. The European Commission's guidelines for making the best use of the Recovery Fund also arrived from Europe. The document aims to meet seven goals, half of which are environmental - from energy efficiency to renewable energy, from electric vehicle charging stations to increased public transport - to make countries more efficient, greener and more digital. Based on the importance of Member States, the large investments required and their potential to create jobs and growth and benefit from green and digital transitions, the European Commission encourages them to include in their plans investments and reforms such as introducing future-proof clean technologies, accelerating the development and use of renewable energy, improving the energy efficiency of public and private buildings and promoting clean technologies to accelerate the use of sustainable, accessible and smart transport, charging and refuelling stations and extending public transport. On the basis of these indications, the Italian Government is drafting the National
15 European Commission. The journey begins - 2021 is the European Year of rail. Link 32
Recovery and Resilience Plan (“PNRR”) containing a programme of investments to respond to the pandemic crisis caused by COVID-19. The same focus is maintained at national level via the National Sustainable Development Strategy (“SNSvS”), which was produced on the basis of the 2030 Agenda and which sets out a vision of future development based around sustainability as a shared, essential value in terms of tackling the universal challenges facing our country. The SNSvS is being reviewed during 2021 (see the section “FNM Group's sustainability”). The national strategy is supported by the 2030 Climate Energy Plan, which defines a series of national targets with a view to following up on the European Union's commitment to climate change through the decarbonisation of the sectors with the greatest impact. A revision has been requested by several parties in order to make it more in line with the principles established by the European Union. The Lombardy Region – partly through a collaboration agreement with the Ministry for the Environment – is in the process of creating a Regional Sustainable Development Strategy (Article 34 of Legislative Decree 152/2006). The Regional Development Programme of the XI Legislature16 selected sustainability as one of the five priority action areas for the regional government, as a distinguishing element of administrative action and as an opportunity to improve the quality of life of the people of Lombardy, by reconciling the need for growth in production and engaging with all local players: from companies to the general public, schools and public administration. The Regional Development Programme also proposes the signing of a Lombardy Protocol between public and private players which sets out mutual commitments in relation to the environment, local areas, transport systems and infrastructure in Lombardy. Also in 2020, FNM signed the Lombardy Protocol for Sustainable Development and assumed specific commitments in the field of CSR and sustainability. 4.2. The Guidelines of the 2021-25 Strategic Plan GRI 102-15 After the adoption of the Group's Sustainability Plan 2017-20 (the first in the transport sector), on 25 November the Board of Directors of FNM S.p.A. approved the Guidelines of the FNM Group's 2021-2025 Strategic Plan (the “Plan”). The Plan has been designed for the post-Covid context, reflecting significant changes in how mobility services will be used; in this context, the system of social relations and the ways in which mobility services are used, and individuals' use of time and quality of life, will be assessed differently. The task of the FNM group over the coming years will therefore be to grasp the reality, investigating the “why” and “how” people, cities and businesses move, to anticipate and offer the best solutions in terms of new mobility models. Based on this approach, sustainability will be an important driver to be considered for every action of the Group.
16Regional Development Programme of the XI Legislature, presented by the Council on 29 May 2018 as DGR XI/154 and approved by the Regional Council on 10 July 2018 via DCR XI/64. Link. 33
The Plan redefines the Group's vision - “Improving the lives of people, cities and businesses by developing connections and responding to mobility needs” - and the Group's mission - “Developing an integrated platform of mobility services, built to meet environmental and economic sustainability criteria, which incorporates in a system and connects (physically and digitally) attractions, urban hubs and transport networks, to create social value and promote the productivity of the territory”. The Plan establishes the Group as an integrated sustainable mobility operator, ensuring that FNM is positioned as a Group guided by principles of environmental, social and governance sustainability in defining the business processes and the investment portfolio of the Group. For the first time the Group's Plan offers an integrated strategic vision to run the business sustainably, designing the industrial and sustainability dimensions within this context. The Plan is constructed on the basis of four strategic pillars: mobility, infrastructure, fleets and people/community, enabled by four common elements across the board: innovation and data management, energy efficiency and reducing emissions, governance, ethics and a culture of sustainability, and worker attraction, development and well-being.
— MOBILITY - The plan makes provision for consolidation of the Group's core business, confirming its central role and strengthening the Group's position in LPT (local public transport) and collective mobility.
The Plan confirms the central role of rail-based LPT, the strengthening of the positioning in road-based LPT, and the development inn integrated multimodal and last mile mobility, with the positioning as the Mobility Partner of communities, companies, events and major projects, as well as the presence in the freight transport sector.
— INFRASTRUCTURE - The Plan envisages consolidating and strengthening the Group's core business through the development and management of the rail and motorway infrastructure, including the rail-road interchange hubs, also thanks to the recent acquisition of Milano Serravalle Milano Tangenziali S.p.A.
To this end, the Plan includes: the implementation of the Lombardy infrastructure network, developing new business areas, through the synergic integration of hubs and networks, promoting the resilience of infrastructure to extreme natural events and mitigating environmental impacts, and continuing to guarantee the highest levels of safety to all stakeholders, also by implementing innovative cybersecurity techniques and solutions; the definition of an infrastructure platform that enables and facilitates the development and implementation of new services; the development of industrial synergies with complementary infrastructure systems, in terms of innovation, engineering, procurement and construction, maintenance and joint traffic management.
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— FLEETS - The Plan makes provision for the consolidation of FNM’s role as an Asset Company, able to make available technical skills and financial resources for the renewal and qualitative improvement of fleets for passenger and freight transport, in line with sustainability principles and standards.
In fact, the Group plans to make green high-energy and environmentally efficient vehicles that are both modern and comfortable available for the transport services provided by Group companies.
The Plan therefore confirms RoSCo's central role in the passenger and freight rail market, and that lower environmental impact fleets will be developed for rail and road transport
PEOPLE AND COMMUNITIES - The Plan includes proposing innovative mobility models according to the logic of MaaS (Mobility as a Service) and MaaC (Mobility as a Community).
Services will be increasingly geared towards the needs of people and communities, starting with the introduction of inclusive solutions and tools.
To this end, the Plan develops digital solutions and tools that will allow the Group to integrate and enhance the services it offers and those offered by third parties, also providing real-time, integrated and personalised information, allowing access to all mobility services, optimising travel times and paying particular attention to people in vulnerable situations.
In this sense, the Group aims to develop supply and demand management platforms consistent with the MaaS/MaaC paradigms, which incorporates the development of the Group's payment system, an initiative already launched in the year with the incorporation of FNMPay S.p.A..
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The Plan also includes objectives for each of the enabling elements within the Group.
Innovation and data management. The Plan envisages a data-based approach as a guide and support for both the innovation of the services offered and improving customer relationship methods, and to enhance the quality and capacity of operations, increasing the effectiveness and efficiency of processes. — Energy efficiency, reduction of emissions, including the fight against climate change In addition to the plans for Fleets set out above, the Plan envisages investments in innovative energy projects and the reductions in consumption and emissions, also by introducing models for the management and use of the Group's spaces and areas, and through urban regeneration projects to improve environmental performances and the use of scarce land resources. — Governance, ethics and culture of sustainability. The Plan assigns a central role to the corporate culture of ethics, lawfulness, sustainability and efficiency, together with the management of tax risk and the definition of the Tax Control Framework. In addition, it plans to develop projects and initiatives in collaboration with external partners, in particular third sector companies, and to continue to implement the staff and management incentive system linked to sustainability objectives. — Attracting workers and their development and well-being The Plan promotes the development of employees' skills, and the efficiency of work processes and methods, as well as the continuous improvement of the health and safety management system, supporting the continuous development of welfare initiatives and smart working.
In order to pursue the objectives that the Group has set itself, the Plan provides for total investments initially estimated at up to EUR 1 billion. The investments will be better specified when the 2021-2025 Strategic Plan is finalised, also in relation to the related borrowing requirement.
The overall 2021-2025 Strategic Plan, which also includes economic and financial developments for the five-year period, will be finalised in 2021. 4.3. The sustainability of the FNM Group GRI 102-13, 102-15
The FNM Group’s commitment to sustainability traverses its business model, with the definition of medium- to long-term strategies and objectives, also through ongoing, active dialogue with stakeholders and supported by reporting activities and the promotion of a culture of sustainability, the latter fundamental pillars for the Group’s business model. With a view to developing and promoting the principles of sustainability, also externally, the FNM Group participates in local and international networks and associations. In order to strengthen the Group’s commitment to achieving the Sustainable Development Goals (SDGs), FNM has been part of the UITP Sustainable Development Commission since 2017.
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During 2020 FNM worked on promoting two specific strands of theme-based activities. The first is aimed at increasing awareness of corporate sustainability with a focus on the SDGs17. The second focused on knowledge and awareness of climate change and the decarbonisation process18. Overall, the two project lines have contributed to the following SDGs
This demonstrates that FNM, like other major industrial entities, is called upon to take an active role in achieving these common goals.
FNM organised the 27th Milan Commission (UITP Sustainable Development) at its headquarters in Piazza Cadorna. This was officially recognised by the United Nations Framework Convention on Climate Change (UNFCCC).
It participated in the subsequent editions in Rotterdam and Cape Town (2019) and the 2020 edition in Paris on-line due to the pandemic. The FNM Group is part of the ASSTRA Transport Association, which brings together 142 Local Public Transport companies in Italy and works to promote environmental, social and economic values as a core part of the country’s development. FNM coordinates the national sustainability work group, whose aim is to develop guidelines and provide training courses designed to engage LPT companies around CSR and sustainability issues. In collaboration with FNM, ASSTRA developed the document “Social and environmental responsibility for public transport companies – guidelines and instructions for writing a Sustainability Report”. For the first time, specific indicators for the transport sector were identified19.
FNM has supported the Fondazione per lo Sviluppo Sostenibile (Sustainable Development Foundation) since 2017 and is a member of the foundation’s scientific committee. Among other things, FNM is a signatory of the manifesto “Exiting the pandemic with a new Green Deal for Italy”. As part of the implementation of the National Strategy for Sustainable Development (SNSvS), FNM participates in the Sustainable Development Forum and the Prosperità [Prosperity] work group. The group focuses on the promotion of research and innovation in the field of sustainability, as well as striving for full employment, quality training and sustainable production and consumption models as part of a push to decarbonise the economy. Its aim is to provide operational guidelines and proposals designed to support international negotiations and plan the annual National Sustainable Development Conference, scheduled for 2021. During 2020, FNM, through its participation in the 'Prosperity’ Working Group, in the context of the process of revising the contents of the SNSvS, contributed to placing sustainable mobility among the priorities for intervention as an integral part of a new vision of cities, new times and ways of living, participating in the drafting of the Position Paper of the FORUM, available at the following link https://www.minambiente.it/pagina/i-position- paper-del-forum-lo-sviluppo-sostenibile. In addition, it contributed
17 The first strand of activity led to the production of four important documents: "Promoting Cities with Safe and Sustainable Public Transport", "Safe and Accessible Public Transport for All, Mobility" and "SDGs: A Safe, Affordable, Accessible and Sustainable Transport System for All", "EU Standard for Sustainable Financial Products: Green Bonds." Link 18 The second strand of activities resulted in a Case Study Report - UITP "Declaration on Climate Leadership": 2019 and 2020 implementation update, a guide on "Transit Avoided Carbon (TOC)" and the UNFCCC "Race to Zero & Decarbonisation Roadmap" document for Public Transport. Link 19 Indicator guidelines for drawing up the Sustainability Report. Link 37
to the drafting of a Sustainability Glossary to identify a common language, able to identify the key issues of sustainability in light of the needs of SMEs, as drivers of Italian economic development.
In 2020, the Framework Agreement for collaboration between FNM and the University of Milan Bicocca was signed with the aim of carrying out activities aimed at promoting and supporting research, carrying out informative educational activities, increasing scientific knowledge, creating new professional skills and expertise, developing partnerships with companies in the areas of Corporate Social Responsibility, reporting, social innovation and sustainable development. The Parties, each making their expertise and relationships available, intend to collaborate on projects, research, measurement activities, training, publications, conferences, conventions, study days and in-depth studies, aimed at raising awareness and disseminating good practices in the above areas. It is within this context that the training and awareness activities on sustainability issues carried out during the summer of 2020 at the Bicocca University - Summer School are incorporated. The agreement represents a solid basis for launching projects such as these.
In 2020, the FNM Group confirms its leading role in sustainable development policies. In fact, FNM's Sustainability Report, included in the Future Respect 2020 Index among the 44 leading companies in accessible sustainability that have best illustrated their sustainability performance, also received the “High Performer” award from Consumers. The initiative is part of the “Vota il Bilancio di Sostenibilità” project carried out by ConsumerLab. This recognition consolidates the role of the FNM Group as a “sustainable” leader in the transport and mobility sector.
The Group's participation in these areas, many of which are significantly internationally-oriented, allows it to promptly acknowledge the major trends in mobility and sustainability. It is within this framework that internal CSR activities are included in its two main areas of development: Sustainability Reporting Beginning with the 2019 Consolidated Non-Financial Statement, the Group has prepared its Sustainability Report using the principles of the International IR Framework. As a natural evolution, some elements have been reinforced in the document for the current financial year 2020, including the correlation between the forms of capital used and the achievement of sustainable development objectives and the integration of specific indicators required by the main international sustainability rating agencies, as well as a clearer representation of the impacts generated by the Group's main business activities. Sustainable mobility, energy efficiency and the environment During the year, an internal Group work team was set up to report on environmental performances, which led to the standardisation of energy and carbon intensity indicators for the FNM Group companies. The FNM Group believes that its commitment to sustainability must start from within, through activities to raise awareness and training, to the culture of sustainability. Both to encourage greater involvement of the departments and to promote sustainable action in the daily lives of FNM’s 38
people, training courses have been organised for group companies on CSR-Sustainability, sustainable mobility and the environment, with the creation of a handbook of good practices in the company. The Group's initiatives relating to education on intermodal transport in Lombardy have developed intensively, also participating as case studies of sustainability best practices in university master courses. 4.4. Capital used to achieve the strategic objectives and SDGs GRI 102-15 In the Plan Guidelines, the Group is established as an integrated sustainable mobility operator, ensuring that FNM is positioned as a Group guided by principles of environmental, social and governance sustainability in defining the business processes and the investment portfolio of the Group. For the first time the Group's Plan offers an integrated strategic vision to run the business sustainably, designing the industrial and sustainability dimensions within this context. The cornerstone of the value creation process is represented by the business model, built in line with the principles of the IR Framework. Resources are defined as types of capital, or value stocks that increase, reduce or transform as a result of the organisation’s activities and outputs. The FNM Group's business model takes into account the use of financial, production and intellectual, human, natural and social and relationship capital. These capital elements, together with an ESG risk management system and a sustainability governance system, enable the Group to offer a service (so-called output) and create environmental, social and economic impacts (so-called outcome) as a direct expression of the Group's contribution to the United Nations sustainable development goals. All Group companies falling under the reporting scope, as well as the Trenord Joint Venture, are involved across the board in the value creation process, albeit to different extents based on each case.
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In this representation, the various elements are described in qualitative terms. Each of the subsequent chapters contains quantitative reporting for each type of capital identified and the main associated indicators.
GOVERNANCE, INTEGRATED MAIN INPUTS STRATEGY, BUSINESS OUTCOMES SEGMENTS AND OUTPUTS
FINANCIALFINANCIAL CAPITAL CAPITAL FINANCIAL CAPITAL
Share capital Public financing Revenue PA contributions Management and lease of rolling stock Assets Investments in transportation services * EBITDA
PRODUCTION AND PRODUCTION AND INTELLECTUAL INTELLECTUAL CAPITAL CAPITAL Infrastructure Network and fleet security Accessibility and availability of Fleet Road passenger services R&D Projects mobility Intermodal public transport Road passenger transportation Railway infrastructure service management Station-based car- sharing service HUMAN HUMAN CAPITAL Network maintenance and CAPITAL development
Planning and coordination of Humanistic and managerial skills network development Specialised skills Integrity interventions Inclusive, safe and attractive Experience Intermodal transport terminal workplace management
In
NATURAL CAPITAL NATURAL CAPITAL
Environmental management systems Emissions Renewable and non-renewable Compensatory projects environmental resources Railway Noise and vibrations transportation
Passenger railway transportation service Compensating
SOCIAL AND SOCIAL AND RELATIONAL RELATIONAL CAPITAL CAPITAL Promotion and development of local Relations with institutions territories Relations with other stakeholders Collaborations and partnerships Benefits for passengers Relations with trade unions
Inputs key performance indicators Outputs key performance indicators
See table “Key performance indicators for inputs, See table “Key performance indicators for inputs, business activities, outputs and outcomes” business activities, outputs and outcomes”
*Internal control and risk management system
**Sustainability Governance system 40
4.5. Key performance indicators for inputs, business activities, outputs and outcomes FNM's business model is based on the integration and coordination of different business segments, each with its own unique features. Thanks to the representation of this model by capital, it is possible to highlight its performance indicators, also providing an indication of the dedicated paragraph.
Reference to paragraphs in Capital Description Measurement indicator the Financial Statements
INPUTS 7.1. Sources of financing: public GRI 201 Public finance at regional, national and administration and shareholders European level 7.1. Economic value generated GRI 203 Investment in transport services, and distributed infrastructure and new rolling stock 7.1. The main investments Economic resources used in GRI 207 Taxes Financial 7.1 Sustainable procurement production processes OUTPUTS /OUTCOMES 7.2. Railway infrastructure management GRI 102-9 Main suppliers and product categories 7.2. Ro.S.Co & Services GRI 201 Economic value generated, distributed and 7.1. The FNM Group's approach to retained taxation GRI 204 Downstream activities generated in the territory INPUTS GRI 102-12 External initiatives Installations managed for passenger service Km of the railway network Bus fleet and car sharing Bike stations and parking areas 7.2. Railway infrastructure Real estate, infrastructure Research & Development Projects management and physical assets used for OUTPUTS /OUTCOMES 7.2. Ro.S.Co & Services the services offered by the Production 7.2. Road passenger transport and company and intangible Service availability 7.2. Rail transport (Trenord) intellectual resources such as Line coverage by SSC (Driver Support System) and 7.5. Community and value organisational knowledge SCMT (Train Running Control System) sharing: projects and initiatives in and intellectual property Number of buses with AVM system (Automatic Vehicle Monitoring) the territory Number of video surveillance and security systems in stations Number of accessible stations Number of accidents on board and in the station Land use for stations, offices and infrastructure INPUTS GRI 102-8 Number of employees by contract type and gender GRI 401 Employee benefits GRI 404 Training and education GRI 405 Diversity and Equal Opportunities 7.3. Development of Human Number of employees participating in training Capital within the Group Skills, expertise and programmes for personnel career development 7.3. Employee training and Human experience of the people OUTPUTS /OUTCOMES development who work at the company 7.3. Employee welfare GRI 401 New hires and turnover 7.3. Health and safety
GRI 403-9 Occupational accidents GRI 403-10 Occupational diseases Employees trained on health and safety issues Benefits generated as a result of providing training courses Number of positions open and filled through internal selection
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INPUTS GRI 302 Energy GRI 303 Water and effluents GRI 304 Biodiversity 7.4. A business model to support Percentage of proceedings complying with the fight against climate change environmental criteria 7.4. Environmental governance 7.2. Railway infrastructure Environmental processes OUTPUTS /OUTCOMES Natural and resources for service management delivery GRI 305 Emissions 7.2. Ro.S.Co & Services GRI 306 Water discharges and waste 7.2. Road passenger transport Emissions avoided thanks to the use of LPT 7.2. Rail transport (Trenord) Compensatory works Fleet efficiency with impacts on the reduction of energy consumption and emissions Projects designed to reduce noise and vibrations Environmental litigation INPUTS GRI 402 Relations with trade unions GRI 413 Local communities Costs incurred by the Group during the year attributable to philanthropic activities 7.1. Economic value generated Relations with external Contributions (loans, membership fees, etc.) made by and distributed Social and stakeholders and sharing of the Group to trade associations/research centres to 7.5. Customer satisfaction relationship values for individual and which FNM belongs 7.5. Community and value collective well-being Initiatives to develop the local area sharing: projects and initiatives in OUTPUTS /OUTCOMES the territory Customer satisfaction Economic and employment benefits generated by passenger transport Economic savings generated for passengers
This symbol marks the output/outcome foreseen by the True Value model as an innovative element compared to the indicators collected to date by the NFS. It should be noted that these indicators are outside the NFS’ audit scope.
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5. Group governance model FNM SUSTAINABILITY JOURNEY HIGHLIGHTS
Sustainable governance: 5 meetings Proportion of women on the Board of Directors: 40% Conclusion of the Sustainability “Roadmap policy” project
5.1. Corporate bodies GRI 102-18, 102-22, 405-1 The Corporate Governance system represents the cornerstone of the FNM business model and contributes to the attainment of results alongside the business strategy and a specific system of governance for issues relating to sustainability. Over the years, the Group has paid particular attention to the continuous adaptation of its corporate model, drawing inspiration from best practices and basing the management of its business activities on the principles of ethics, integrity and transparency. The FNM S.p.A.’s Corporate Governance is structured according to the traditional Italian model and features a Board of Directors, appointed by the Shareholders’ Meeting, which is responsible for strategic management and the allocation of monitoring duties to the Board of Statutory Auditors. Currently, the Board of Directors consists of five directors elected by the Shareholders' Meeting, including one appointed to represent minority shareholders. The Board of Directors of the Company is aware that diversity and inclusion are two fundamental elements of the corporate culture of a group operating in different economic sectors, such as the group headed up by FNM. To ensure the right balance of skills and gender diversity within the Board of Directors, the Diversity Policy was reviewed and approved on 11 March 202020. In fact, this policy enhances diversity as a fundamental element of the medium/long-term sustainability of the company's business, for the integration of different managerial and professional profiles, with particular regard to (i) the transport and mobility sector in general, infrastructures, and relations with public administrations as well as (ii) economic, accounting, legal, financial, risk management, remuneration policy and social sustainability matters. Furthermore, on the basis of the self-assessment process conducted on the 2020 financial year, guidance has been prepared for FNM Shareholders also in relation to the qualitative criteria of candidates for the position of Director in the field of CSR and Sustainability; in particular, it is recommended that they have experience/knowledge of “green” technologies as well as acquired sensitivity and understanding for social responsibility and ESG factors.
20 On the occasion of the Shareholders' Meeting called to renew the administrative and control bodies, the FNM Shareholders will be asked to vote on the amendment to the Articles of Association aimed at implementing the aforementioned new rules in compliance with Law 160/2019, which amended Articles 147-ter and 148 of the Consolidated Law on Finance. 43
It should be noted that, in the current financial year, the new corporate bodies for the financial years 2021 - 2023 will be appointed at the Shareholders' Meeting scheduled for 30 April 2021.
The Board of Directors is supported in its decision-making by three committees with advisory and proposal-making functions: the Committee for Social and Ethical Responsibility, the Remuneration Committee and the Committee for Control, Risk and Related Party Transactions21. The Board of Statutory Auditors, which comprises three Statutory Auditors and two Alternate Auditors, completes the governance structure.
21 In line with the indications of the Corporate Governance Code and the Consob Regulation on related party transactions (Resolution no. 17221 of 12 March 2010). 44
Remuneration policies, in addition to being an issue of interest to shareholders, represent an issue of accountability. The remuneration policy of the FNM Group makes it possible to provide stakeholders with an adequate representation of each of the items that make up remuneration, highlighting their consistency with the company's strategy and with the results obtained during FY 2020. The policy has been amended in accordance with the provisions of the new Art. 123-ter of Legislative Decree no. 58 of 24 February 1998 as amended and supplemented, which has led to the need to make some changes to the FNM Remuneration Policy. The amendments to the Policy were submitted, with a favourable outcome, to a vote at the Shareholders' Meeting on 27 May 2020. Without prejudice to the above, the Policy was again subject to some revisions in order to take into account the provisions of the so-called Corporate Governance Code in the new edition effective as of 2021, promoted by the Corporate Governance Committee and applicable as of 1 January 2021, and (ii) the provisions implementing the aforementioned Article 123-ter of the TUF, amending the regulation adopted by CONSOB Resolution no. 11971 of 14 May 1999, as amended and supplemented, approved by CONSOB by Resolution no. 21623 of 10 December 2020.22 Sustainable finance Dematerialisation of Board meetings In order to reinforce its governance, in 2019 FNM set up After a positive initial phase, in 2020 the process of an Investor Relations Department, reporting directly to dematerialising the documentation of the Board of the Finance and Development Department, with the aim Directors' meetings also began for the other companies of planning and delivering Group communications to of the FNM Group through the operating platform shareholders, rating agencies, institutional investors (iMeetingRoom), accessible via smartphone and and other operators in the financial community23. computer, which allows for a streamlining in the organisation and management of the meetings. This process will be completed during 2021.
5.2. Group policies GRI 205-2 Defining clear company policies is fundamental for the Group so that all the company functions called upon to collaborate are aware of the principles that inspire behaviour and the guidelines adopted by the Group in its strategic decisions. In order to fully integrate sustainability within the company's regulatory system and to take a snapshot of the current situation of compliance of company documentation with the requirements of Legislative Decree 254/2016, the Group mapped the documents constituting, as of November 2020, the FNM Management System. The categories of documents reviewed include Governance, Guidelines, Regulations, Policies and Procedures. The Sustainability “Roadmap policy” project provides for a mapping of these policies at Group level, which has made it possible to identify the gaps between the requirements of the Decree and the existing documentation, enabling the Group to launch a greater formalisation of sustainability issues in 2021 to monitor them.
22 The January 2020 edition of the Corporate Governance Code promoted by the Corporate Governance Committee applicable as of 1 January 2021. 23 FNM has issued a “Regulation for internal management and public disclosure of documents and information regarding FNM S.p.A. and the establishment, management and maintenance of the register of people who have access to it” (recently amended on 13 May 2019) and an “Investor Relations Management” operational procedure. 45
The FNM management system documentation defines the operational processes and the functioning of the internal control system, for the correct processing of data and information as well as company choices. To date, the Group has formalised the following policies.
FNM Group policies Policy objectives FNM has adopted a Diversity Policy with regard to the composition of the Board of Directors24 and the Board of Statutory Auditors. The policy sets out the optimal composition for the administrative body to Diversity Policy effectively fulfil its duties, taking decision that benefit from the contribution of a range of qualified, diverse points of view, which enables it to examine issues for discussion from different perspectives. Through the Remuneration Policy25, the Group defines the guidelines that all corporate bodies must observe when determining the Remuneration Policy remuneration of members of the administrative body, of the General Manager and of Key Management Personnel. FNM’s Anti-Corruption Policy identifies the principles and guidelines to prohibit and prevent the engagement in any corrupt conduct, in Anti-Corruption Policy accordance with the principle of “zero tolerance” of corruption, ensuring compliance with the Anti-Corruption Laws and the culture of integrity. These guidelines define the measures for promoting the adoption of Guidelines for Sustainable environmental and social sustainability criteria within the purchase Purchasing process (Green Procurement) of companies belonging to the FNM Group. The procedure describes the procedures and behavioural principles to Taxation Operating procedure be followed to ensure the correct management of tax-related activities. Drafting of the Sustainability Operating procedure relating to the system for collecting data and Report-NFS information that go into the Sustainability Report-NFS.
5.3. Sustainability Governance GRI 102-18, 102-20 It has become necessary to integrate Environmental, Social and Governance (ESG) criteria with regard to the definition of strategic guidelines and policies and risk management, in order to enable the Group to share specific medium/long-term information with its stakeholders and satisfy the information requirements of financial markets. From this perspective, the FNM Group has reinforced a process of greater commitment to Corporate Social Responsibility issues by developing its own Governance system, in line with the new Code of Corporate Governance to ensure its compliance with relevant legislation26. COMMITTEE FOR SOCIAL AND ETHICAL RESPONSIBILITY
24 Recently confirmed by means of resolution of the FNM S.p.A. Board of Directors of 11 March 2020, in compliance with the content of Article 123-bis, paragraph 2, letter d-bis of Legislative Decree no. 58 of 24 February 1998 (“TUF”). In the wake of the fact that the Shareholders’ Meeting of 21 May 2018 appointed a new administrative body, the Group deemed it appropriate to ask the Board of Directors to confirm the Diversity Policy in relation to the composition of the administrative body and the Board of Statutory Auditors. 25 Examined and approved by the FNM S.p.A. Board of Directors on 11 March 2020. 26 For more information, please refer to the text of Directive 2014/95/EU, Legislative Decree 254/2016 and the new Code of Corporate Governance of listed companies prepared by Borsa Italiana S.p.A.. 46
Internal Board Committee tasked with promoting an ethical and environmental corporate policy, in line with the Group’s sustainability strategy and by monitoring the economic, environmental and social expectations of Group stakeholders. The Committee also has the task of overseeing the process of preparing the Sustainability Report-NFS with the assistance of the CSR-Sustainability Department, approving its materiality analysis and, in general, the contents before submission to the Board of Directors.
COMMITTEE FOR CONTROL, RISK AND RELATED PARTY TRANSACTIONS An internal Board Committee with advisory and proposal-making functions, which has the task of supporting, by means of an adequate preliminary activity, the assessments and decisions of the Board of Directors relating to the internal control and risk management system, as well as those relating to the approval of periodic financial reports.
REPORT STEERING COMMITTEE Launched at the end of 2015, the Committee is overseen by the CSR/Sustainability Department and comprises members of the Committee for Social and Ethical Responsibility and a representative from each of the main corporate areas of FNM S.p.A. and one representative from each of the companies included in the scope of the Sustainability Report-NFS. The Report Steering Committee is asked to participate in the process of stakeholder engagement and definition of risks related to sustainability issues, as well as to take part in the Sustainability Report-NFS project with regard to annual data collection.
CSR/SUSTAINABILITY DEPARTMENT Established in January 2017, it has the aim of overseeing and coordinating the FNM Group’s CSR and sustainability policies. The Department – which has been reporting directly to the Finance and Development Department since 2019 – undertakes management, planning and scheduling activities with the participation of all organisation units, as well as promoting the adopting of sustainability principles. It defines and manages the non-financial reporting process, promotes actions on sustainable mobility, environment and energy efficiency and shares FNM's best practices with local and international networks and associations, playing an active role in achieving the SDGs of the 2030 Agenda. Integrated Governance Index 2019 FNM has participated in ESG Governance Lab since 2019, promoted by Etica News, the top learning network focusing on integrated governance. In 2020, with a score of 54.2, the Group ranks 36th in the 2019 Integrated Governance Index. The survey highlights advanced integration of sustainability issues at board level. The presence of the Committee for Social and Ethical Responsibility and the involvement of external stakeholders in the materiality analysis were also appreciated.
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6. The risk management system
Number of people trained in ethical issues: 761 Group companies with ISO 37001 certification: 63% Establishment of a Crisis Committee and an Emergency Committee for the management of the pandemic
6.1. Risk governance model GRI 102-11, 102-15, 403-3, 416-2 The FNM Group has been carrying out risk assessment activities since 2007. During 2014, a consolidated Risk Management process was prepared and adopted as an integral part of its SCIGR (System of Internal Control and Risk Management), aimed at identifying and managing the different types of risk to which the Company and the Group are exposed. The Group is aware that a company's ability to effectively manage business risks contributes to ensuring long-term value for the company. The main purpose of FNM’s process is therefore to adopt a systematic approach to the identification of priority risks, to assess potential negative effects and to take the appropriate actions to mitigate them. To this end, the Group has issued a Risk Management Operating Procedure (RMSG PO 05) for the development of the Annual Risk Assessment. The procedure inspired by internal regulations (e.g. the Organisation, Management and Control Model pursuant to Legislative Decree no. 231/2001, the FNM Group Code of Ethics and Conduct, Internal Control and Risk Management System Guidelines) and international Guidelines (e.g. ISO 31000, ISO 9000 and ISO 37001) contributes to the achievement of corporate objectives, the effective use of resources and to greater efficiency of corporate processes, allowing company top management to always make an informed choice. The main figures involved in FNM's risk management system: Board of Directors: plays a role in guiding and assessing the adequacy of the SCIGR. It has the task of defining the adequacy of the nature and level of risk with the strategic objectives of the FNM, including in its evaluations all the risks that may be relevant in view of the medium/long-term sustainability of the activities of the Company and the Group. Committee for Control, Risks and Related Party Transactions: carries out a preliminary activity in support of the Board of Directors' assessments and decisions regarding the SCIGR. Risk Committee: takes part in the risk assessment process and monitors the risk management process. It has the task of sharing the results of the risk analysis activities carried out by the various corporate operational functions. Head of the Risk Management and Management Systems Department: coordinates and monitors the entire risk management process in accordance with the risk management procedure, reporting to the Internal Audit Department. Having completed the activity of updating the Risk Register in 2019, also with regard to the assessment of corruption risk scenarios, the Anti-Corruption Risk Assessment Procedure, complete with metrics, was defined in 2020. Among the various activities, we note the conclusion of the ERM
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2020 Risk Assessment activity, in particular the interviews with the relevant management of the companies (FNM, FERROVIENORD, FNM Autoservizi, E-Vai, NORD_ING, MALPENSA INTERMODALE, ATV and La Linea).
Faced with the COVID-19 health emergency, the Company, through the structures in charge (RSPP - Prevention and Protection Service Manager, Company Physician, Human Resources and Welfare Department, Internal Audit) has constantly adopted the appropriate and necessary actions, promptly informing the control bodies (Board of Statutory Auditors and Supervisory Body). A Crisis Committee and an Emergency Committee have been set up to deal effectively and promptly with the evolving situation, with the task of monitoring the development of the situation and identifying preventive and protective measures, in compliance with the provisions of the authorities in charge. In particular, from the first signs of the emergency, the Company adopted all the measures aimed at ensuring: i) the timely implementation of the provisions issued by the authorities in charge (Ministry of Health, Region, Civil Protection) and the national and supranational reference bodies (including ASSTRA and UITP), as well as compliance with the various Decrees of the President of the Council of Ministers issued by the Government and the orders of the Lombardy Region, ii) compliance with the regulations on workplace health and safety pursuant to Legislative Decree no. 81/2008, and iii) business continuity, to the extent possible and in compliance with all of the above standards. With a view to continuous improvement, the Group plans to develop an integrated risk assessment method, including the internal control and operational risk management system, as well as monitoring issues related to privacy and anti-corruption, with specific software to support these activities.
Bolstering the internal control system for the process of non-financial reporting
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In order to strengthen the system used for collecting the data and information used for the Sustainability Report-NFS, FNM continued and consolidated the process designed to improve the reporting system, make it more automated and limit the number of manual steps involved, thus increasing the reliability and robustness of the data provided. The solution implemented consists of the sharing of qualitative and quantitative information on-line via Google's G Suite, which can be accessed through company accounts in order to reduce human error. This activity is regulated by a specific operational procedure named “Producing the Sustainability Report-NFS”, which was approved on 31/01/2020.
Management systems and certifications In terms of management systems, the following certifications have been obtained:
SA ISO ISO ISO ISO UNI EN ISO ISO ISO/IEC 8000:2014 9001:2015 14001:2015 45001:2018 50001:2018 13816:2002 37001:2016 39001:2012 27001:2013
FNM FERROVIENORD * FNM Autoservizi * * E-Vai NORD_ING ATV ** *** La Linea * Martini Bus * Trenord
* Certification obtained in 2020 ** ATV is proceeding with the implementation of the ISO 14001 environmental management system at all sites in the municipality of Verona. *** In 2020 the process for the transition to ISO 45001 was completed, the certification body verified compliance with the requirements of the new standard. The practice will be completed in spring 2021.
KEY: CERTIFIED MANAGEMENT SYSTEMS SA 8000 Social Responsibility ISO 9001 Quality Management System ISO 14001 Environmental management system ISO 45001 Employee health and safety management system ISO 50001 Energy management system UNI EN 13816 Local public transport service quality management system ISO 37001 Anti-corruption management system ISO 39001 Road traffic safety management system ISO/IEC 27001 Information security management system
It should be noted that the FNM Group is constantly aligned with national and international best practices also in the field of “Health and Safety”, in particular by adopting management systems in compliance with and certified to the international standard OHSAS ISO 18001 first and, from July 2020, to the UNI ISO 45001 standard. Adoption and certification were carried out by FERROVIENORD, which manages service activities for some Group companies such as FNM, E-Vai and NORD_ING. ATV is also about to conclude the process for the transition to ISO 45001 and, in spring 2021, it is expected to complete the certification process with an audit in the field.
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MALPENSA INTERMODALE has set itself the objective of obtaining the relevant certifications for its activities (e.g. UNI ISO 9001, UNI ISO 14001 and specific freight certifications). For matters relating exclusively to rail, FERROVIENORD’s Integrated Management System (SGI) is certified for the maintenance for freight wagons (Regulation (EU) 445/2011) and of other railway vehicles (Guidelines from the National Agency for Railway Safety (ANSF), rev. 01 of 16/10/2015). The company has obtained Safety authorisation from ANSFISA for the lines in its network that interconnect with the national railway system, and included in Attachment A of Ministerial Decree of 05/08/2016 (Milan branch, excluding the Malnate Olona - Italian/Swiss border section). Work is under way to obtain the Certificate of Suitability to Operate from ANSFISA for functionally separate lines (Iseo branch). In the field of health and safety27, the companies FERROVIENORD and Trenord are equipped with specific management systems: the Workplace Health and Safety Management System (SGSSL) in the case of FERROVIENORD and the Integrated Management System on Safety of operations, Quality, Environment and Health and Safety in the Workplace (SGI) in the case of Trenord.
6.2. Risks and material issues GRI 102-15
In relation to the most relevant issues together with the other material issues explicitly required by Legislative Decree 254/2016 pertaining to personnel, environmental and social aspects, the main inherent risks identified and the related management methods are reported28, expressed briefly. A progress update was shared during the meeting of the Committee for Control, Risk and Related Party Transactions on 22 February 2021.
The analysis29 was carried out on the basis of:
• a risk register supplied by the FNM S.p.A. Risk Management and Management Systems Department; • qualitative information gathered via special forms filled out by representatives of the companies belonging to the Group.
Relevant area in Legislative Decree 254/2016 - Social
27 FNM Autoservizi has implemented the road safety management system and completed the certification process. 28 For more details on the management systems adopted by the individual companies, please refer to the paragraph "Management systems and certifications". 29 According to Law no.145 of 30 December 2018 (Budget Law), Non-Financial Statements must – in describing the main risks generated and suffered as a result of non-financial matters – also illustrate the ways in which these are managed (Article 1, Paragraph 1073 of Law no.145 of 30 December 2018, published in the Official Journal on 31 December 2018 as a modification to Article 3 of Legislative Decree 254/2016). 51
Quality of service and customer safety at the station and in transit (Security and Safety)
Main risk factors Main management methods ‒ Where relevant, some Group companies have adopted FERROVIENORD's Railway Safety Management System (SMS), Train Running Control System (SCMT) and the Driver Support System (SSC) for FERROVIENORD's railway network ‒ Installation of video surveillance systems, geo-localisation of the road fleet, continuous monitoring of the car sharing Safety of railway infrastructure and service, stipulation of agreements and conventions with the road and rail vehicle traffic. Railway Police (POLFER) and signing of contracts with security firms. Committing of terrorist or illegal ‒ Monitoring of network anomalies and action planning: acts that damage the network or progressive elimination of level crossings and enhancement of the fleet. safety tools ‒ Investment in the modernisation of rolling stock and infrastructure ‒ Where relevant, some Group companies have adopted the UNI ISO 39001:2016 standard of the road traffic safety management system for the Road Passenger Transport business segment Accessibility of services and infrastructures Potential inability to adequately ‒ Where relevant, some Group companies have adopted a UNI meet customer expectations across ISO 9001 Quality Management System and a SA 8000 the various phases of use of the management system services provided, with a particular ‒ Where relevant, some Group companies hold the UNI EN ISO focus on the general state of 13816:02 certification for the quality of Public Transport infrastructure and the road and rail services fleet, in relation to punctuality, ‒ Delivery of customer satisfaction surveys comfort, institutional and service ‒ Performance of infrastructural works for the reduction of communications, physical and architectural barriers (e.g. escalators, lifts, ramps) and means economic accessibility to of transport designated for access by people with disabilities infrastructure and the services and assistance services managed ‒ Application of discounted fares
Intermodality and service integration Technological and digital innovation In the current phase of the FNM ‒ Development of intermodal transport infrastructure and Group’s strategic development, the platforms and of integrated mobility systems, including issue is seen as an opportunity for through investments in and the establishment of new business development both companies nationally and internationally ‒ Policy of monitoring global trends and promoting the Lack of IT security awareness among development of technological solutions internal staff ‒ Training courses on IT security issues (e.g. phishing) and simulation of phishing situations by sending e-mails to the corporate population
‒ Automatic protection systems ‒ Update of the information security regulation. To date, the regulation has been issued for almost all Group companies Violation of the ‒ Documents: Code of Ethics and Self-Regulation; Disciplinary confidentiality/availability/integrity System 52 of data and/or sensitive and ‒ IT security measures confidential information relating to ‒ Vulnerability Assessment and Penetration test as on going the Company and/or Customers activities on FERROVIENORD and FNM systems (strategies, databases, etc.) on the ‒ Strengthening of staff obligations in individual contracts computer systems it uses ‒ Adoption of ISO 27001 certification for the Group's main technology service provider Dialogue with stakeholders and development of the local area Low efficiency and adequacy of ‒ Adoption of a policy designed to promote stakeholder stakeholder engagement activities, engagement initiatives around sustainability, both internally in addition to insufficient and externally dissemination of the principles of ‒ Promotion of local events and initiatives and participation in economic, social and environmental work groups and seminars organised by industry associations, sustainability both within and the tertiary sector and administrations pm transport and outside the FNM Group sustainability, both nationally and internationally Incomplete or incorrect perceptions ‒ Sustainability governance through the CSR-Sustainability of the expectations and needs of Function and the Committee for Social and Ethical stakeholders in terms of business Responsibility and corporate sustainable ‒ Internal training courses on sustainable development
Sustainable procurement ‒ Company policies and supplier qualification and management processes based on environmental, social and governance Failure of suppliers to adhere to the topics principles and contractual terms ‒ Adoption of Guidelines for Sustainable Purchasing that the FNM Group asks them to ‒ Inclusion of environmental and social sustainability criteria in sign up to and pursue, in terms of calls for tender for the purchase of new rolling stock, and anti- both services and ethical conduct corruption and personal data protection clauses in contracts ‒ Due diligence activities in terms of compliance with regard to major business partners Sustainable infrastructure management Potential absence of new generation ‒ Progressive modernisation of the fleet and infrastructure in road and rail vehicles with a terms of comfort, safety and installed technology consequent increase in critical issues ‒ Qualification system for supplies of rail rolling stock and for (cancellations and delays) and the leasing of electric, hybrid and endothermic cars impacts on the local area (both ‒ Development of monitoring, maintenance and verification social and environmental) plans for vehicles and infrastructure Potential increase in need to seek ‒ Organisation of technical seminars with Lombardy Region to assistance and maintenance for monitor the management and development of infrastructure problems linked to infrastructure ‒ Where relevant, some Group companies have activated quality specific management models (e.g. UNI EN ISO 9001:2015, SA Potential inability to adequately 8000) designed to guarantee the quality of the service offered meet the needs of customers and and the correct management of the fleet and its modernisation the market ‒ According to the unique characteristics of the contract, the risk Potential increase in claims and related to non-compliance with the terms of the contract is injuries associated with improper managed through specific controls on the products or services management and maintenance of provided infrastructure
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Potential non-compliance with the environmental performance agreed in the tender
Relevant area in Legislative Decree 254/2016 - Fight against active and passive corruption Ethics and Integrity in Business
Main risk factors Main management methods ‒ Monitoring by the Committee for Control, Risk and Related Party Transactions and the Committee for Social and Ethical Potential violations of anti- Responsibility and the Compliance Department ‒ corruption and human rights laws Adoption of a Code of Ethics and Conduct and whistleblowing Failure to report irregularities and channel ‒ illegal behaviour Company Management, Organisation and Control Models in Failure to comply with ethical and accordance with Legislative Decree 231/2001 of the integrity principles within business Companies ‒ operations and in relationships with Where relevant, some Group companies have a UNI ISO stakeholders (including suppliers 37001:2016 certified Anti-Corruption Management System ‒ and other business partners) Monitoring of the Anti-Corruption System by the Compliance Department via the activities planned in the three-year Compliance Plan and the internal Audit Plan ‒ Anti-Corruption Policy and continuous training for all FNM personnel Systemic risk management and business resilience ‒ Completion of the first Business Continuity Management project, which involved the preparation of Business Impact Analyses for a number of Group companies (FNM, FERROVIENORD, NORD_ING, FNM Autoservizi, E-Vai) Missing/incomplete mapping of ‒ 6 projects identified to mitigate risk areas of critical processes critical systems in the 2021-2022 two-year period ‒ A project was launched for the “centro stella”, the headquarters of the company's interconnection hardware
devices (jointly with Trenord) ‒ Use of Personal Protective Equipment and sanitation of work environments Covid-19 Emergency Management ‒ Adequate staff management to ensure business continuity in the event of an outbreak (rostering and application of smart-
working where possible) ‒ Implementation and improvement of technological equipment Failure to renew public funding for for employees some Group companies (FNM ‒ Direct contacts with the public administration Autoservizi, FERROVIENORD, E-Vai) ‒ Constant monitoring of administrative and policy changes in the external environment ‒ Careful planning for future needs
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Relevant area in Legislative Decree 254/2016 - Issues relating to staff Talent attraction and human capital development Employee welfare Respect for diversity and inclusion Main risk factors Main management methods Difficulties in finding personnel with ‒ Planning for future needs and management of succession adequate training in the roles planning, including end-of-career guidance plans available ‒ Development and internal training of staff for the Loss of company know-how dissemination of company know-how, in particular for following departures of key staff continuous training in the technical-professional field Lack of training and development ‒ Introduction of welfare plans (smart working and opportunities and consequent supplementary pension) return on investment Non-compliance with laws and regulations around worker rights, diversity and equal opportunities Personnel departures as a result of an unstimulating working environment which isn’t sensitive to staff needs Health and safety in the workplace ‒ Analysis of main risk factors impacting on the health and safety of employees, by identifying different levels of risk (primary and secondary) to help with plans for appropriate action Potential failure to comply with the ‒ Adoption of a Health and Safety Policy via an Improvement policies and procedures set out in Plan which is monitored on a monthly basis the management systems adopted, ‒ Where relevant, some Group companies have adopted a UNI with subsequent increases in ISO 45001 certified Management System and Management, incidents and claims associated with Organisation and Control Models pursuant to Legislative the workplace Decree no. 231/2001 ‒ Investments aimed at improving safety conditions, including: development of educational and training courses, adoption of collective individual protection equipment, maintenance of plants and equipment in compliance with the law
Relevant area in Legislative Decree 254/2016 -Environmental Energy consumption, emissions into the atmosphere and climate change
Main risk factors Main management methods ‒ Some Group companies have adopted a UNI EN ISO 14001 and Potential inefficiencies in the UNI CEI EN 50001:2011 certified environmental management energy consumption management, system particularly as regards electricity ‒ Signing of a contract for the supply of electricity from consumption and related CO2 renewable sources for the cars in the car sharing fleet (E-Vai), emissions and emissions of other for train traction and for plants and offices (FERROVIENORD) greenhouse gases into the ‒ Monitoring of energy consumption by infrastructure and by the atmosphere services provided, through the performance of energy audits ‒ Promotion of energy efficiency initiatives ‒ Policy to develop integrated sustainable mobility services. 55
Potential inefficiencies in fleet ‒ Framework Agreement for 30 bi-directional hydrogen powered management linked to the trains deterioration in air quality ‒ The first new electric trains have been delivered and, while waiting for the ANSFISA authorisations to operate also on the FERROVIENORD network, have started to run on the national railway infrastructure
Protection of biodiversity. Managing noise and vibrations. Waste management. Management of water resources. Main risk factors Main management methods Potential impacts on local areas ‒ Some Group companies have adopted a UNI EN ISO 14001 and sanctions/operational issues certified environmental management system and some linked to non-compliance with departments have adopted formal policies that are subject to regulations around noise pollution, audits water discharge, waste ‒ Monitoring of infrastructure, water consumption, waste management and the protection of production and noise levels biodiversity ‒ Monitoring and remediation actions, where necessary, for the Potential stakeholder protection of the rolling stock dissatisfaction with the quality of ‒ Upgrading and maintenance of facilities used for the the service provided in terms of management of water consumption perceived noise and vibrations ‒ Assessment of risks relating to impacts on the landscape for Potential increase in claims and affected areas and the degree of incidence of future works injuries associated with improper ‒ Promotion of practical initiatives designed to safeguard management and maintenance of biodiversity (through compensatory works and protected infrastructure wildlife crossings)
6.3. Emerging risks GRI 102-15 Today, more than ever, it has become critical to understand the resilience of your business model to the consequences of exceptional events. The use of government support, increased or decreased demand for certain products or services, disruption of value chains and, more generally, the emergence of losses in value can have a significant impact on the business model. It therefore becomes critical to adopt a management system that allows the company to assess the evolution of the external context, taking into account all those new risks, of which little information is available today and which can potentially expose the company to a high risk. During 2020, a Business Continuity Management project was launched aimed at mapping the critical processes for business continuity of the FNM Group companies (FNM, FERROVIENORD, NORD_ING, FNM Autoservizi and E-Vai). After an initial phase of Risk Assessment and Business Impact Analysis, through workshops and interviews involving 257 managers of the companies involved, it was possible to identify scenarios characterised by very high risk. This activity has led to the definition of six projects that will be launched in the next two years as a result of the analysis conducted. Specifically, the projects cover in 2021: ‒ preparation of the Group Crisis & Communication Plan; ‒ the revision of NordCom's IT Disaster Recovery Plan; ‒ the revision of the IT Disaster Recovery Plan for FERROVIENORD; 56 and for the following year: ‒ a Group Supply Chain Risk Analysis; ‒ mapping of Group “key people” and coaching/backup programme; ‒ the drafting of a Pandemic Plan and related staff training. As part of these activities, the competent function has identified, in particular, two risks to which it will devote greater attention. 1. Risk associated with data management and security The year 2020 was characterised by a unique context which saw an increase in the activities carried out by employees in a new remote mode which, although adopted previously, saw an increase in the number of participants and the duration of connections. This situation required special attention to the technologies used to ensure safe business continuity. In this context, several initiatives have been implemented since March 2020 aimed at mitigating any risks introduced by the new forms of work. It is worth mentioning the new connection methods for accessing the company workstation via personal computer and the updating of the infrastructure that manages VPN connections to improve security and reliability while increasing the number of users managed simultaneously. With specific reference to FERROVIENORD, all activities related to the audit of data security processes and the management of risk analysis were managed, with the identification of possible areas on which to subsequently implement any IT security improvement activities. In this context, an insurance policy dedicated to cyber risk management has been activated for the entire Group.
2. Risk related to the loss of key people for the Group Especially in light of the emergency situation caused by the COVID-19 pandemic, this risk is significant. In most situations, having identified the lack of specialised personnel, both in the more operational and managerial areas, the functions have strategically prepared themselves to deal with the concrete possibility of finding themselves for prolonged periods with a scarce or minimal number of competent resources. In those specific cases, where the risk scenario materialised, the functions were able to concretely manage the ordinary management of activities. Provision is made for the performance of an analysis to identify critical skills and to define specific plans for the development of cross-company knowledge within or outside the functions, in order to make up for the lack of specialised resources should the risk scenario reoccur.
6.4. Compliance, ethics and integrity GRI 102-16, 102-17, 205-2 The Code of Ethics and Conduct The FNM Group’s Code of Ethics and Conduct (Code of Ethics30) sets out the behavioural principles and rules recognised and shared by all those who operate in the name of or on behalf of the FNM Group. The document promotes and encourages whistleblowing, i.e. the practice of workers reporting irregularities, fraud or breaches of regulations. Whistleblowing is handled via a special
30 Document available for consultation at http://www.fnmgroup.it/it/codice-etico. 57 procedure31 and each company's Model 231. Next year, the Group will start implementing an integrated document system of all the 1st - 2nd and 3rd level control activities provided for by the Internal Control System in order to optimise an integrated compliance system capable of guaranteeing greater control. Model 231 and anti-corruption While in 2019 FNM and its Subsidiaries updated their Model 231, in order to align it with the organisational changes that took place during the year and the ongoing update of Model 231 with tax offences, it should be noted that in 2020 a further update has been initiated due to the introduction of the cybersecurity offence which amends article 24-bis of Legislative Decree no. 231/2001. With regard to relations with third parties, the FNM Group is keen to directly apply the principles contained in the Code of Ethics and Conduct; this is why due diligence activities continued in 2020 for third parties and at least ten categories assessed as high or medium risk32. In this context, however, it should be noted that any purchase made by the Purchasing department is validated by the Compliance department before proceeding with the awarding of the contract. Reporting channels Reports of alleged breaches of the Code of Ethics, the Model pursuant to Legislative Decree 231/2001 and the Anti-Corruption Policy can be forwarded to the Supervisory Body of each company in the Group via email or post. Alternatively, reports can be made via the whistleblowing33 portal on the company intranet. In this context, it should be noted that the FNM Group is finalising the implementation of the new electronic whistleblowing tool for the management of reports relating to the violation of Models 231, the Code of Ethics and Conduct of the FNM Group and the Anti-Corruption Policy. Also during the year, e-learning training courses continued, through the Successfactors portal, on “anti-corruption” and “privacy” issues available to all FNM Group employees, which involved the entire company population in 2020. In 2020, FNM managed and resolved reports received from its companies regarding alleged breaches of the Code of Ethics and Conduct of the FNM Group and Legislative Decree 231 and the Anti-Corruption Policy. Privacy and regulatory adjustments In terms of privacy, personal data processing registers were produced in accordance with EU Regulation 679/2016, while a process was initiated to update relevant documentation. The Boards of Directors of the Companies have conferred on the Chairman or another member of the Board of Directors, with a specific resolution, the power to oversee the privacy obligations as per Regulation (EU) 2016/679 (GDPR) and Legislative Decree no. 196/2003.
31 IA PO 04 Procedure for reporting to the Supervisory Body. 32 On the basis of the document "Document of analysis, evaluation and definition of the architecture of the Anti-corruption System of the FNM Group" . 33 La Linea has also implemented the whistleblowing policy – 2 July 2019 edition – as part of its management system. 58
In the privacy domain, the Compliance Function for FNM, and in service for the Group Companies, confirms the identification of a Privacy Officer, to support the privacy management system. The Head of each FNM Department/Function has designated an internal Privacy Representative, whom the Privacy Officer uses in managing and monitoring privacy risks in the various activities carried out by the Company, including the activities carried out in service for the other FNM Group Companies. The Privacy Officer carries out continuous updating in the field of privacy through participation in theme-based training courses, consultation of the site and the newsletter of the Italian data protection authority, and subscription to the site and its newsletter Federprivacy. For each report, the dedicated channel is active: [email protected], in accordance with article 13 of the GDPR on the processing of personal data.
ATV introduced the role of the Data Protection Officer, in La Linea has obtained 3 stars for obtaining the Legality Rating compliance with Article 37 of the GDPR (EU Regulation and has successfully followed the specific training provided in 679/2016). The internal DPO is UNI 11697:2017 Cepas certified. the previous year. This certification is also maintained for 2020. It should be noted that in July 2020 La Linea SpA, following an Again in 2020, the regulation on purchasing and consultancy was application submitted during 2019, was included in the White updated. This includes compliance with the integrity pact and List of the Prefecture of Venice. specific clauses in the contracts. For the coming year, the company will once again propose The company also initiated a training course on Model 231, GDPR updated training and an increase in the number of and whistleblowing aimed at operational personnel (drivers and participants to spread awareness of business ethics and maintenance engineers). This will conclude in 2020. integrity and risk management. With regard to anti-corruption legislation, the Company has decided not to maintain the internal figure of the Head of Corruption Prevention and Transparency, but only that of the Head of Data Publication, i.e. the General Manager assisted by the Head of the internal Legal Department. In any case, all existing good practices in this area are maintained.
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7. The value shared by the FNM Group 7.1. Financial capital
FNM SUSTAINABILITY JOURNEY HIGHLIGHTS Distributed economic value: EUR 254.9 million Public funding received: EUR 179.0 million Tender proceedings initiated and subject to compliance with ESG criteria: 70% Funding sources: Public Administration and shareholders GRI 102-5, 102-7, 201-4 The representation of the relationship between FNM and the Public Administration makes it possible to faithfully portray the Group's identity and unique characteristics. Below are the main contributions received from Public Administration (PA) between 2018 and 2020.
EUR mln 2020 2019 2018 Public funding received EUR 179 EUR 177.8 EUR 159.5
FNM is a joint-stock company listed on the Stock Exchange. It has fully paid-up share capital of EUR 230,000,000, divided into 434,902,568 ordinary no-par value shares. The graph shows the composition of shareholders who own stakes of over 5% of the total share capital and who have voting powers. The remaining stake (27,69%) is listed on the Standard Class 1 market of the Milan Stock Exchange.
Group shareholders, as of 31 December 2020
27,69 RegioneRegione LombardiaLombardia FerrovieFerrovie dello dello Stato 57,57 Altri Azionisti Other shareholders 14,74
Credit Ratings
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Moody’s Long term Baa3 Outlook Stable Issue date 25 January 2021 Fitch Long Term BBB- Outlook Stable Issue date 10 November 2020
— Fitch Ratings assigns an issuer default rating of BBB- with stable outlook 10 November 2020: Fitch Ratings assigned FNM an Investment Grade BBB- rating with a stable outlook. During the analysis, the agency underlined the stability of revenues and the resilience of the business model, to which the motorway component will contribute with the recent acquisition of Milano Serravalle Milano Tangenziali, currently being finalised. The agency also considered the service and programme contracts in place between the Group's companies and the granting bodies (including the Lombardy Region) to be significant and stressed the central role of the FNM Group in the Lombardy regional transport system. The assignment of the rating will allow FNM to optimise its financial structure, also by diversifying the sources of funding, with inter alia possible access to the capital market. — Moody's assigns an issuer rating of Baa3 with stable outlook 25 January 2021: FNM obtains a Baa3 Long-Term Issuer Rating from Moody’s, which takes into account the company’s business prospects following the Milano Serravalle – Milano Tangenziali (MISE) acquisition and its balanced financial policy. FNM’s Baa3 rating incorporates the increase of one notch to reflect the strong ties with the Lombardy Region, its majority shareholder. FNM has obtained investment grade ratings from Fitch Ratings (BBB- with stable outlook) and Moody’s (Baa3 with stable outlook), which offers the company the possibility of defining its medium/long-term financial structure in the most efficient way to support future strategic development, also through access to the capital market. The FNM Group's approach to taxation GRI 207-1, 207-2, 207-3, 207-4 The definition of the methods and principles of conduct to be respected to ensure the correct management of activities relating to taxation is fundamental for the FNM Group, even though it operates in a regulated regime. In order to better organise all activities for the Parent Company and, through administrative service contracts, for the other Group companies, an operating procedure dedicated to taxation has been defined internally.34 The Finance, Tax and Insurance function reports to the Finance and Development Department. The FNM Group applies the principles of correctness, transparency, honesty and integrity which, in the fiscal domain, are implemented in the correct fulfilment of tax obligations and in compliance with regulatory provisions. Specifically, the Group complies, in form and substance, with all the
34 AMM PO 04 - Rev. 05 61 provisions contained in laws, regulations and best practices. It is not only a matter of ensuring that all taxes due are paid and all tax obligations are fulfilled in a timely and complete manner, but also that any favourable tax provisions are applied in full compliance with all regulations in the jurisdictions involved. Overall, all activities in the tax area are aimed at pursuing industrial and commercial objectives, avoiding the use of transactions, as well as the establishment of commercial relationships or the implementation of corporate structures that are devoid of economic substance, determining prices in intercompany transactions in accordance with the OECD Guidelines on transfer pricing and rejecting any use of so-called “aggressive tax planning” schemes35. Tax risk control mechanisms are integrated into the corporate risk management and control system, with specific controls, in order to guarantee the correct calculation of taxes and ensure transparent and accurate compliance, also through the timely involvement of the Group's internal Tax Office in assessing the tax impact of activities identified as sensitive, including extraordinary transactions.
Tax Control Framework The FNM Group launched the “Tax Control Framework” project during 2020. This project, which is part of a broader “compliance programme” designed to strengthen the current internal control system, aims to create a system for the detection, management and control of tax risk. After an initial analysis and mapping of the fiscal processes related to the companies in scope, an attempt was made to quantify them on the basis of their fiscal, economic and financial impact. These two steps allowed the work team to propose the so-called tax risk universe and, consequently, the tax controls to monitor the defined tax risks. To complete this activity, the specific owners of the tax processes were identified and the Tax Risk Control Matrix was shared internally. Being able, therefore, to identify the governance tools in place and the governance tools defined by the reference best practices in order to formulate its own tax governance, in line with 231 compliance, will give the Group the possibility of adhering to the “cooperative compliance” system. The main results of the project were shared in late 2020. The entire project, which is in preparation for the Group's adherence to the collaborative compliance scheme, will allow the establishment of a relationship of trust between the administration and the taxpayer that aims to increase the level of certainty in tax matters.
Reporting of taxes paid 2020 2019 2018 FNM Group Property, plant and equipment other than cash and cash equivalents € 892,367.00 € 856,890.00 € 795,542.00 Corporate income taxes paid on a cash basis € 14,037.00 € 3,147.00 € 6,794.00 Corporate income taxes accrued on profits/losses € 3,673.00 € 4,975.00 € 7,815.00 TOTAL € 910,077 € 860,037 € 802,336
Economic value generated and distributed GRI 102-7, 201-1 The creation of economic value is extremely important for the Group, as it enables it to guarantee long-term sustainability and the possibility to invest regularly with a view to continuous improvement. In 2020, economic value generated was equal to EUR 321.3 million. This total represents the sum of the main results achieved on the back of the resources used and enables us to assess the economic and employment impacts produced among various stakeholder groups: Employees via remuneration provided in return for work completed;
35 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. Link 62
Public administration via the payment of various taxes; Financial backers via the collection of financial expenses; Shareholders via the distribution of dividends. Finally, the item “Reclassified Operating Costs” includes the value of costs incurred for raw materials, consumables, other reclassified operating costs and services and financed investments.
Economic value retained by the Group;
EUR 66.4 million (20.7%)
Economic value distributed by the Group;
EUR 254.9 million (79.3%)
Aware of its role in the local area, in 2020 FNM invested a total of EUR 158,000 in activities to involve the local communities through initiatives of various kinds: donations and sponsorship of sports, cultural, scientific and social events. Of the total donations (EUR 70 thousand), it is worth mentioning the contribution allocated to the Campaign against COVID-19 promoted by the Lombardy Region, while EUR 88 thousand was allocated for sponsorship of sports, cultural, scientific and social events. The Group has encouraged the development and growth of the trade associations to which it belongs through its membership fees totalling EUR 466 thousand.
The main investments GRI 203-1 The purchase of rolling stock is carried out both by FNM, as Ro.S.Co., with its own funds, and by FERROVIENORD, designated by the Lombardy Region as the entity in charge of the purchase of rolling stock with the latter's funds. Thanks to funding of EUR 1.6 billion36 guaranteed by Lombardy Region, in 2017 the FNM Group was able to organise three different tenders to initiate the process of overhauling its fleet of trains for the regional rail service. The initial plan provided for the purchase of 161 new trains (100 high-capacity, 31 medium-capacity and 30 diesel/electric) by 2025. Thanks to the savings involved in the first two tenders awarded by FNM, additional resources were made available which meant it was possible to fund the purchases
36 Attachment A, Part 1 of Resolution X/6932 of 24 July 2017 sets out the framework of resources, amounting to a total of EUR 1,607,000,000, available subject to the approval of the budget-balancing law for 2017-2019 (see PDL 358/2017), on the 2017-2019 Budget and on Budgets from 2020 to 2032. 63
of a further 15 trains (five high-capacity Hitachi Rail trains and 10 medium-capacity Alstom trains). These will gradually enter into service from 2020. As a result, the fleet set forth in the upgrade programme increased from 161 to 176 trains. In 2019, the Framework Agreement with Alstom for 61 medium capacity trains was signed and also the first Application Contract for 31 trains.
The operation is one of the biggest investments ever made by Lombardy Region in the transport sector and will ensure the complete renewal of the rolling stock currently in circulation.
The investments made by FNM as Ro.S.Co instead involve 9 TILO interoperable dual-voltage trains financed by FNM. It should also be noted that in December 2020 FNM signed the Framework Agreement with Alstom for 30 hydrogen-powered trains and the first Application Contract for 6 hydrogen-powered trains.
In order to enact the mandate bestowed upon them by the Lombardy Region, FNM and FERROVIENORD worked in synergy to organise the tenders for the supply of the new trains, as shown in the table below.
Summary table - purchasing process for new trains by FERROVIENORD, appointed by Lombardy Region, and FNM in its capacity as a Ro.S.Co. 2017 + 2032
Lombardy Region Resolution37 Tender procedure Implementing contracts Batch 1: Framework Agreement for the supply of a maximum of 61 trains [31 FERROVIENORD and Alstom 31 Medium Capacity minimum guaranteed with the first trains application contract and 30 optional 31 Medium Capacity trains (*) 1st Tender (with 4 train bodies)] Medium- Batch 2: Framework Agreement for the usage lines supply of up to 9 dual-voltage, FNM and Stadler Bussnang AG interoperable trains [5 minimum (**) guaranteed with the first application 9 TILO trains for an investment of contract and 4 optional] for cross- EUR 95,085,200 border services (TILO) Framework Agreement for the supply FERROVIENORD and Hitachi Rail Italy of up to 120 trains 2nd tender 60 + 40 High Capacity [50 minimum guaranteed with the first 30 4-body trains for an investment of High-usage trains application contract and second EUR 237,510,000 lines application contract (30 4-body trains + 20 5-body trains for an investment of 20 5-body trains) and 70 optional] EUR 186,340,000
37 Resolution X/1619 of 15 May 2019 - Purchasing programme for rolling stock for regional railway services for the period 2017-2032 - addendum to the purchasing mandate bestowed via Regional Government Decree X/6932 of 24 July 2017 and subsequent amendments and addenda, and approval of a new model implementing contract between Lombardy Region and FERROVIENORD. 64
FERROVIENORD and Framework Agreement for the supply 3rd tender Stadler Bussnang AG of a maximum of 50 trains [30 Non- 30 diesel/electric minimum guaranteed with the first electrified trains 30 diesel/electric trains for an application contract and 20 optional lines investment of (***)(with 3 bodies)] EUR 191,850,000 One application contract for 10 Alstom 15 trains (5 High Transfer of two application contracts POP EMUs (7 4-body trains and 3 3- Capacity and 10 from Trenitalia for the supply of 15 body trains) and 1 application contract Medium Capacity) trains for 5 Hitachi Rock EMUs (5 bodies) TOTAL 176 trains (**) 255 trains ordered 135 115 new trains incoming
(*) A competitor's appeal was resolved favourably for FNM as the Council of State issued a favourable ruling at its meeting on 25 June 2020, which was published on 10 August 2020. It is therefore possible to exercise further application contracts under the Medium Capacity Trains
Framework Agreement. FNM acquired the nine TILO trains with its own funds and this does not fall under the programme set out in the Regional Resolution. (***) In early 2019, FNM undertook Ro.S.Co. activities externally to the Group, transferring to Ente Autonomo Volturno (EAV) an implementing contract for the supply of five diesel/electric trains out of the 20 covered by the Framework Agreement signed with Stadler.
Hydrogen trains In November, a press conference was organised and streamed from the Milano Cadorna headquarters during which the H2iseO project was presented. FNM and Trenord will promote the first Italian “Hydrogen Valley” in Sebino and Valcamonica. The main points of the project, called H2iseO, are: the purchase of new hydrogen-powered trains, which will serve the non-electrified Brescia-Iseo-Edolo line – managed by FERROVIENORD – from 2023, to replace the current diesel engines; the construction of hydrogen production plants, initially intended for new clean energy trains. As part of this project, FNM contracted a Framework Agreement with Alstom in December 2020 for 30 bi-directional hydrogen-powered trains for a total value of EUR 334.8 million. The first Application Contract provides for the supply of 6 trains with delivery of the first train by December 2023. This is the first Italian project for a fleet of zero emission trains that will replace diesel-electric trains for the non-electrified Brescia-Iseo-Edolo line. At the same time, FNM analysed the feasibility of the hydrogen production plants necessary to activate the railway service. The first hydrogen production, storage and distribution plant will be built by FNM in Iseo between 2021 and 2023. It will be built in the Trenord Depot area where the refuelling of diesel trains is currently carried out, as well as the maintenance of the trains. The feasibility plan, currently being finalised, envisages the initial use of the Steam Methane Reforming (SMR) technology, from methane/biomethane, with the capture and storage of the CO2 produced, for the production of “blue hydrogen”. By 2025, one or two further plants for the production and distribution of hydrogen from electrolysis (so-called green hydrogen) will be built along the railway line. The agreement signed between FNM and A2A is fundamental, as is the Memorandum of Understanding signed in 2021 with EGP, for the study and identification of the best way to produce and supply green hydrogen, deriving from renewable sources and the recovery of materials. The hydrogen solution is expected to be extended by 2025 to local public transport, starting from around 40 vehicles managed in Valcamonica by FNM Autoservizi, with the possibility of opening up to use by goods and/or private logistics.
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Ro.S.Co. In 2020, following the tender procedures carried out in 2019 for the modernisation and updating of its fleet, FNM initiated the following contracts in order to ensure the compliance of rolling stock with the regulatory framework38: Fire prevention retrofitting and revamping of 25 trains of FNM's TAF fleet for a total of EUR 49.6 million39; Fire prevention and parking brake retrofitting of FNM's 14 DE520 diesel locomotives. This investment, including the redemption of 6 locomotives, amounts to approximately EUR 5.9 million. It should be noted that during 2020 the six DE520 locomotives became FNM's property and that since the beginning of the year the fourth 3kVcc E494 locomotive leased to DB Cargo Italia S.r.l. entered service. At the end of the year, four dual-voltage trains were delivered to Trenord for cross- border services between Ticino and Lombardy (TILO) and two diesel-electric locomotives (Effishunter 1000), equipped with new-generation thermal engines that guarantee emission limits in line with European standards. All orders during 2020 experienced delays of one to two months attributed by manufacturers to the effects of the pandemic. In spite of the restrictive measures imposed by the health authorities, Ro.S.CO managed to continue the control and testing activities of the orders and in collaboration with Trenord managed to carry out the transfers from the foreign factories respecting 80% of the scheduled deliveries for the TILO trains and 50% of the Effishunter 1000 locomotives. Investments in the network The investments made in the railway network are the product of shared planning between Lombardy Region and FERROVIENORD as part of the Programme Contract40 which sets out initiatives for the upgrading, expansion and modernisation of infrastructure and technological installations, as well as extraordinary maintenance works.
Since 2016, three updates (Regional Government Decree 7645 of 28 December 2017, Regional Government Decree 383 of 23 July 2018 and Regional Government Decree XI/2054 of 31 July 2019) have confirmed the plans for infrastructural development, which are necessary to guarantee the development of the service.
Total investments in the network in the 2020 financial year amounted to EUR 35.445 million and mainly related to the following activities: 1. Equipment renewal on the Saronno - Malnate and Bovisa - Seveso - Mariano Comense sections;
38 DM of 28.10.2005 - Railway Tunnel Safety and ANSF Decree 1/2016) and an increase in useful life of 12 years (for TAFs) and 5 years (for DE 520s). 39 The consideration for the TAF Contract is set at EUR 49,666,000, broken down as follows: a) EUR 37,700,000 for the execution of the revamping and fire prevention service on 25 trains; b) EUR 11,466,000 to carry out the ERTMS/ETCS System Installation Service on a maximum of 25 trains; c) EUR 500,000 for the execution of the supply of Materials. 40 The development of railway infrastructure is provided for by the “Planning Agreement for investments and extraordinary maintenance on the regional rail network under concession to FERROVIENORD S.p.A. between the Lombardy Region and FERROVIENORD S.p.A. for the period 28/07/2016 - 31/12/2022” (signed on 28 July 2016) The document is available on the Lombardy Region website www.regione.lombardia.it. 66
2. Equipment renewal on the Saronno - Como sections 3. Enhancement of the Milano Affori - Varedo railway section. 4. Substations extraordinary maintenance; 5. Requalification of the Brescia Iseo - Edolo; 6. Equipment renewal on the Saronno - Malnate sections 7. Creation of a network driver support system; 8. Construction of the Malpensa T2 - Linea RFI Sempione railway connection.
Sustainable procurement GRI 102-9, 102-10 204-1, 308-1, 414-1 Procurement activities within the FNM Group are considered of strategic importance in that they contribute to guaranteeing elevated service quality and mitigating impacts. The graph, which follows, shows the 637 tender processes managed by FNM in 2020 broken down by the main categories of supply.
3% 1% 4% 3%
31% 22%
3% 2%
2% 29%
Rolling stock (rail and road) Network modernisation and expansion Materiale rotabile (gomma e ferro) Ammodernamento e ampliamento rete Buildings operation and maintenance Esercizio e manutenzione dei fabbricati EsercizioOperation e andmanutenzione maintenance del of rollingmateriale stock rotabile EsercizioNetwork e operation manutenzione and maintenance della rete SicurezzaSafety and e surveillancesorveglianza
PuliziaNetwork e rispristino and stations rete cleaning e stazioni and restoration CorseBus replacement sostitutive ridesautobus
ConsulenzeConsulting Altro*Other*
It should be noted that the “Other” category includes supplies relating to other internal activities including, by way of example, translation, supply of water bottles and plastic jugs and new IT equipment. The FNM Group and Trenord carefully select their suppliers via open procedures, classification systems, market research announcements and consultation of the Supplier Register41. For suppliers selected from the Supplier Register, the Group rotates suppliers based on the number of invitations received in previous tender processes. As regards tender procedures for particularly significant works, services and suppliers, pre-qualification criteria may be required. These could include references, professional experience in similar tender and certifications. In addition to economic award criteria, “offer technical prestige” assessment criteria are also applied in relation to the
41 The FNM Group’s Supplier Register was set up via Regulation 11 on the Establishment and Management of the Register of Economic Operators for the Allocation of Contracts for the Supply of Goods and Services of 16/05/2019. 67 product/service forming the object of the tender process: (score composed as follows: 70 points for the technical part and 30 for the economic part). In 2018, FNM began customising its e-procurement platform and completed the process of integration with the SAP HANA management system. The development of the e-procurement platform, which also involved Trenord and ATV at the same time (and separately), made it possible in 2020 to formalise KPIs for measuring the purchasing process and annual objectives, the integration of private tenders42 and active (sales) in the same platform, and the implementation of electronic signatures. To consolidate the vendor list, the company plans to adopt a Vendor Rating system by 2022, as well as further development of the platform available to the Purchasing Department for monitoring the entities for each supplier. The platform will therefore allow a more effective management not only of the type of suppliers, but will also assist in the management of practices related to tender procedures and the resulting contracts issued (requests for extensions, subcontracting - with the relevant authorisations, definition of new prices, takeovers and certification of good performance). Environmental and social sustainability criteria integrated into the supply chain Within the evaluation process for technical offers regarding trains, significant importance was attached to issues relating to sustainability, with higher scores awarded to offers demonstrating consideration for environmental issues such as noise pollution, energy efficiency, emissions, recycling of materials and the biodegradability of liquids, in addition to matters relating to accessibility and services, such as mobile platforms and the presence of dedicated seats for people 43 Procedures subject to environmental and social with reduced mobility . criteria After the approval of the Sustainable Purchasing 2020 2019 2018 Guidelines for the adoption of environmental and social sustainability criteria in the purchasing process Supplies 66% 0% 0% (Green Procurement), FNM can boast of further Interventions 100% 87% 0% development thanks to the definition of the new Services 8% 16% 0% suppliers' list within the e-procurement platform. In Total 70% 18% 0% 2020 there were 410 suppliers registered in the register for a total of 1,049 entries. The FNM Group, for selected categories reserved for the purchase of goods (such as lamps and services such as the supply and maintenance of tyres for vehicles and the collection, transport and disposal of waste on railway premises) requires the supplier to meet environmental requirements. In such cases, the supplier shall produce a list of documents proving that these requirements have been met. In most cases, the FNM Group requires the supplier to be UNI EN ISO 14001 certified or, in other cases, to be enrolled in the Register of Manufacturers of Electrical and Electronic Equipment
42 In accordance with Regulation 16 on the Allocation of Private Contracts for Services, Supplies, Works and Consultancy of 19/12/2019. 43 Criteria in line with the content of the Ministerial Decree 408 on Infrastructure and Transport (2017), Attachment 2. 68
(“RAEE”). Considering the type of market and the corporate nature of the Group, 8% of the suppliers registered in the register meet the environmental requirements of the Group44. In 2020, 70% of the tenders launched complied with environmental and social criteria, with a total economic value of approximately EUR 663 million. It should be noted that the figure for services, compared to 2020, is down as more tendering procedures were carried out in 2019, for contracts that were expiring and which, by their nature, could incorporate environmental and social criteria. As regards tenders above the EU threshold, the Group prioritises suppliers who are in possession of the ISO 14001 Environmental Management System and SA 8000 Social Responsibility certifications, where applicable. SA 8000 certification is required for labour-intensive tenders, while social clauses are implemented in order to promote employment continuity in the event that there is a new winner. During the year, the FNM Group managed supplier relationships with 1,144 suppliers, with total supplies purchased valued at EUR 358.1 million, a significant increase compared to 201945.
Number of active suppliers for FNM Group companies, 2020
FERROVIENORD 483
FNM 245
FNM AUTOSERVIZI 201
E-VAI 88
NORD_ING 66
MALPENSA INTERMODALE 61
98.5% of procurement involves suppliers which operate in Italy (34.7% in Lombardy and 65.3% in the rest of Italy).
Amount spent by FNM Group companies in Italy and abroad (EUR) Nation 2020 2019 2018 Italy 352,668,977 133,042,045 100,376,688 Other countries 5,383,014 320,905 79,289 TOTAL 358,051,990 133,362,950 100,455,977
44 Examples include products for which failure to comply with protocols during production could pollute the environment, waste disposal services owned by the Customer, services requiring proper use of products and waste disposal, environmental services such as geo-technical testing. 45 The following companies are excluded: La Linea (including Martini Bus) and ATV 69
7.2. Production and intellectual capital
FNM SUSTAINABILITY JOURNEY HIGHLIGHTS Facilities (stations) managed by FERROVIENORD 124 Accessible stations on the Milan and Iseo branch: +3% Investment for fleet upgrading: EUR 32.5 million LPT bus fleet: 711 Electrical car sharing: 229 Bicycle parking stations: 26
Railway infrastructure management GRI 102-12, 416-2 The Group uses its economic and intellectual resources to develop transport infrastructure and solutions which reflect the needs of the local area and are capable of supplying customer with a wide range of services. Drawing on its consolidated sector experience and ongoing research into new solutions and technology, the Group aims to guarantee that communities have access to modes of transport that are sustainable, intermodal, integrated, accessible, safe and of high quality. Through FERROVIENORD, the FNM Group manages a railway network measuring 330 km, split between the Milan Branch (222 km) and the Iseo branch (108 km), plus 124 facilities (stations and stop), of which 115 serving passengers46.
Extension of railway line (km) Network Entire network Milan branch Iseo branch Network extension 330 222 108 Electrified network 215 215 N/A Circulation tracks 533 418 115 Single track lines 198 90 108 Double track lines 110 110 0 Three or more track lines 23 23 0 Parks, depots and terminal tracks 42 33 9
Installations for railway service (No.) Plants Entire network Milan branch Iseo branch Facilities managed by 124 87 37 FERROVIENORD Stations with travellers service 115 81 34 Moving facilities 59 39 20 Stops 65 48 17
46 Attachment 1 of the Service Agreement of 31/12/2020 70
Warehouses and factories 4 3 1 Active interconnections with RFI 4 4 0 Stations equipped with car-sharing 14 14 0 facilities Stations equipped with bike-sharing 16 10 6 facilities Stations with bus interchange 92 66 26 Stations with lake transport links 5 2 3
Malpensa T1-T2 rail link and “Global Project” FERROVIENORD, NORD_ING and SEA teamed up to plan and deliver the rail link between Terminal 1 and Terminal 2 at Malpensa airport. The project, aimed at completing rail accessibility from the north to the intercontinental airport, is designed for a long-range passenger service, with connections to Switzerland as well. In the future, it is expected that the infrastructure will also be suitable for freight and logistics services. The project, which started in 2016 with the activation of the T1-T2 connection infrastructure at Malpensa, took several steps forward in 2020. In fact, the European Commission has positively assessed the request for funding by FERROVIENORD and SEA - as indicated by the Lombardy Region - for the executive design and implementation of the project of EU interest called “Malpensa Terminal T2 rail link - Sempione Line” (second phase of the overall project “Malpensa rail accessibility from the north”). For the companies, this is an important recognition as it will guarantee financing equal to 30% of the total funding (EUR 211,340,000), in addition to EUR 11 million funded by the Lombardy Region (Programme of initiatives for economic recovery) and approximately EUR 56 million allocated by the Ministry of Infrastructure and Transport. At the end of 2020, the call for tenders was then published for the integrated contract for the executive design and construction of the project Linking Terminal T2 of Malpensa - Sempione Line. Works will begin in 2021, enabling the airport to become an interchange hub for short- and medium-haul, high-speed and cross-border rail services.
Work to develop bike stations continued in 2020. These free, secure bike stores – monitored by CCTV – are located at train stations and aim to promote forms of sustainable mobility. The activities of 2020, due to the pandemic that affected the whole country, were basically concentrated on the design of new installations, including Mozzate, Malnate and Cislago. As of the end of 2020, 26 bike stations were active, for a total of 2,092 bike spaces.
Supercycle track FERROVIENORD's redevelopment project for the main connection centres includes not just a simple cycle path, but a real infrastructure axis of 72 km connecting Cadorna station and Malpensa airport. The supercycle track is focused on sustainable mobility, integrated by different service systems, addressing mobility such as tourism and the public space aspect, with different users and designed to interchange with other public transport networks and to act as a real environmental device. Some of the fundamental characteristics are: to have routes of at least 5 km, width of more than 3 m if one-way and more than 4 m if two-way, without interference with motorised and pedestrian traffic, with only slight slopes, equipped with maintenance services, lighting and service/assistance stations (e.g. wheel inflation and bike maintenance).
Among the main infrastructural resources, in order to guarantee the intermodal road-rail exchange for public transport customers, there are 77 parking areas at stations, 65 of which are entrusted to
71 municipalities on a free loan for use, for an overall total of over 125 thousand square metres and for a total of about 3,600 parking spaces offered47. In 2020, five contracts were signed with the administrations of Laveno Mombello, Vanzaghello, Ponte Lambro, Edolo and Pian Camuno for the free loan of premises within the stations. To date, more than 11,600 square metres of station premises have been leased under 79 loan agreements. The station of Brescia - Borgo San Giovanni On 12 December, the press conference for the inauguration of the Brescia - Borgo San Giovanni station was held on site in compliance with COVID-19 regulations; the station has been made completely accessible by eliminating architectural barriers, building an underpass served by pedestrian and bicycle ramps and lifts, the first on the Brescia- Iseo-Edolo line, and new raised platforms covered by shelters. Accessibility is a key focus of our approach to infrastructure management. As of 31 December 2020, 90 FERROVIENORD stations were classed as “easy to access”, a constant increase with respect to In 2020, 17 stations are 2018. Four lifts will be activated in 2021 in the districts of Brescia Borgo San Giovanni and Fino Mornasco. As proof of implementing the LOGES the importance that the company places on the possibility of project (Line Guidance and offering a service that is accessible to everyone without any Safety) discrimination, in July 2020 an interactive map was created on the FERROVIENORD website for the operation of elevator systems, allowing those in need to easily obtain information on accessible stations. To accompany this activity, again in 2020, an internal discussion was started to define new criteria for accessibility, and thus make the infrastructure more accessible to travellers with reduced mobility, and work also began on standardising the vertical and horizontal signage on the entire network.
ACCESSIBILITY OF THE STATIONS STATIONS (no.) 2020 2019 2018 “Easy to access” stations48 9049 87 83 of which in the Milan branch 77 77 73 of which in the Iseo branch 13 10 10
47 Stations actively serving passengers were used to calculate the parking areas. The situation has remained unchanged since 2019. 48 Stations are split into three categories based on the level of accessibility they guarantee for passengers with disabilities or reduced mobility through existing facilities and the possibility for FERROVIENORD staff to provide assistance: a) stations equipped for autonomous access (absence of architectural barriers); b) stations equipped for assisted access (presence of architectural barriers that can only be overcome with the help of service personnel); c) stations with no accessible access (presence of architectural barriers that cannot be overcome or other movement limitations). 49 The number of stations equipped for autonomous access increased by three units in 2020 on the Iseo branch 72
ACCESSIBILITY OF THE STATIONS STATIONS (no.) 2020 2019 2018 90 87 82 Stations with raised platforms across the whole (of which 6 (of which 13 (of which 7 network concerned by concerned by concerned by raising works) raising works) raising works) 45 45 42 Stations with lifts across the entire FERROVIENORD (for a total of 129 (for a total of 127 (for a total of network lifts) lifts) 120 lifts)
COVID-19 has also had repercussions on the issue of accessibility, causing a decrease in the number of trips related to people with reduced mobility and a consequent decrease in requests for assistance. Actions to combat the spread of the virus, based on the protocols established by the Authorities, mainly involved, between the months of May and December, the installation of hand sanitising gel dispensers in 48 network facilities, preventive communication through various methods such as: audio announcements and split-flap display messages, video messages, signs to separate passenger flows (also through the use of curtain rails) both on the platform and in the underpasses, and distance signs. A genuine awareness campaign, associated with a more frequent cleaning of the facilities and closure of the toilets, given places of very high level of potential Surveillance and security contamination, as required by the Lombardy Region. systems along the railway Service quality and customer safety at the station and while line and in other buildings travelling (Security & Safety) owned by the Group, 2020. One of the key objectives of the Group is to guarantee the security and safety of its passengers and employees against 187 Digital Video Recorders (DVRs) of all possible threats, regardless of whether they are on trains, which: on buses, in stations, in the street or in bike and car parking ‒ 166 DVRs for the Milan branch areas. ‒ 21 DVRs for the Iseo branch
All stations are constantly monitored by a fixed and itinerant 2,471 Closed circuit cameras (CCTVs) of surveillance system (Security), coordinated by a central hub which: which is manned 24 hours a day. Any criminal events are ‒ 2,247 CCTVs for the Milan branch logged in a special database. In support of this activity in the ‒ 224 CCTVs for the Iseo branch Milan branch, 19 guards are present in the stations. In addition, 9 stations are subject to anti-writers initiatives. 427 Help Points (HPs) of which: ‒ 378 HPs for the Milan branch As a result of the new framework agreement for Security and ‒ 49 HPs for the Iseo branch Porter Services, from June 2020 the number of fixed security posts at Milano Cadorna and Busto Arsizio Nord stations has increased. As a result of the emergence of the COVID-19 pandemic, Milano Cadorna station has been equipped with a system to monitor the temperature of travellers, thanks to the installation of eight thermal imaging cameras, managed by software that will be active from January 2021.
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In order to monitor the stations with a view to prevention rather than reaction, in July 2020 the new Risk Analysis procedure was activated, which will provide a more realistic picture of the type of events that occurred, from which potential risks can be assessed, thus reducing the occurrence of negative events. Circulation safety In 2020, activities continued for the complete adaptation to the new requirements introduced by the European Union with the so-called “IV Railway Package”. These obligations were met under the supervision of ANSFISA (the new Italian agency that replaced ANSF in 2020) for railway operating safety and ART for aspects relating to free market competition. Despite the COVID-19 emergency, rail operations continued at all times, all regulatory deadlines were duly met according to the normal times defined by the applicable regulatory framework. The activities of the construction sites opened for the expansion of the railway infrastructure were suspended due to the emergency for only a few weeks. Among the most important works Level crossings in 2020 completed in 2020 is the completion of the fitting out of the entire Milan branch with 223 113 110 entire Milan Iseo the Train Running Control System (SCMT) networ branch branch and the elimination of 3 level crossings (2 k on the Milan branch lines and 1 on the Iseo branch lines).
Audits of the Safety Management System for railway operations As part of the continuous monitoring of the Safety Management System and of the preparatory activities for the renewal of the Safety Authorisation, for the lines of the FERROVIENORD network interconnected to the national railway infrastructure included in Annex A of Ministerial Decree 05/08/2016 (entire Milan branch with the exception of the Malnate Olona - Italian/Swiss border section), expiring in June 2021, ANSFISA carried out a follow up audit aimed at verifying the effective overcoming of all the issues detected during the previous audit performed in October 2018. The planned activities, which were carried out remotely, allowed the entity to verify the documentation transmitted to incorporate the resolution of the Non-Compliance reported in the previous audit. Therefore, the report updated to 2020 acknowledges the rectification of the non-conformities detected during the audit, pointing out, however, residual points relating to the scheduling and planning of maintenance activities, with particular reference to the criteria used for the management of human resources in maintenance activities. The company has already drawn up a specific plan containing the actions, persons responsible and time-frames for removing these Non-Compliances. The conclusion of the activities is planned for June 2021.
Railway freight transport MALPENSA INTERMODALE, incorporated in December 2018 and operating at the Sacconago terminal in the municipality of Busto Arsizio (VA), provides terminal services in the intermodal transport sector. The Group’s move into the freight sector represents the start of a journey with ample margin for growth, in terms of quality, innovative and sustainability, for the benefit of the economy.
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The company receives complete trains which it manages by means of self-propelled cranes, positioning the ITUs (intermodal transport units) in the storage locations, or it provides direct delivery to the customer. Container handling, i.e. intermodal trains (combined traffic), began in January 2020. The demand served by MALPENSA INTERMODAL in the last year has increased significantly, reaching 10 train pairs per week. In 2020, thanks to the purchase of a new crane, in addition to the 2 taken the previous year and the rental of a locotractor for Reach stacker cranes handling inside the terminal, the The three cranes from Malpensa Intermodale are equipped company is able to handle over 900 with the most innovative technologies for terminal containers per week. Compared to the management: they use an internet connection system that can first experimental start-up phase with be directly accessed via PC, tablet and smartphone. They are all the Volvo project for the distribution of vehicles included in the 4.0 industry programme. The cars in the Italian market from Belgium management software adopted makes it possible to obtain the (Ghent), now the truck-train traffic is GPS coordinates for each ITU allocated on the terminal in order balanced on the Sacconago-Genk route, to provide the exact position of the units at any time, speeding up terminal operations and guaranteeing the highest safety always guaranteeing a traffic load so as standards. to reduce consumption both on the outward and return journey. In 2019, the company Malpensa Distripark was incorporated, dedicated to the real estate development of the areas adjacent to the Sacconago Terminal, providing support and similar activities to MALPENSA INTERMODALE. In this context, the expansion of a logistics and services hub for transport companies is expected, with a significant impact on employment and in quantitative and qualitative terms.
Ro.S.Co. & Services GRI 203-1, 302-4 This segment refers to business sectors in which FNM operates directly. It includes the leasing of rolling stock to investee companies operating in the collective transport and freight transport sectors, as well as the supply of centralised services to companies belonging to the FNM Group.50 At 31 December 2020, FNM's fleet consisted of 95 trains, divided by type and user (Trenord, DB Cargo Italia):
50 On 10 March 2020, FNM S.p.A. signed the agreements for the sale of the equity investments held in Locoitalia S.r.l. (51%) – a company consolidated line by line, active in the lease of rolling stock for cargo transport – and in Fuorimuro Servizi Portuali e Ferroviari S.r.l. (49%), a company consolidated with the equity method, active in the railway freight rolling stock and concession- holder for railway operations within the Genoa harbour. Consequently, the number of trains has decreased. 75
ERTMS technology terminates at Milano Cadorna FNM, engaged in 2019 in technical round-table work groups to evaluate the installation of the new technological on-board system ERTMS/ETCS on the current fleet, obtained a grant of EUR 7.15 million in 2020 from the European CEF Blending funds. The funding concerns the equipping, by the year 2023, of the ERTMS safety systems on the new fleet being purchased by FNM and FERROVIENORD. These will be the first regional trains to be equipped with ERTMS, the most advanced railway safety technology in Europe.
Number of rolling Fleet Type Fuel type User stock TAF 26 Passengers Electric Trenord TSR 19 Passengers Electric Trenord Coradia and CSA 18 Passengers Electric Trenord TILO ETR 4 Passengers Electric Trenord DE520 6 Rescue/Manoeuvre Diesel Trenord EFFISHUNTER 2 Rescue/Manoeuvre Diesel Trenord E474 1 Freight Electric DB Cargo Italia E483 8 Freight Electric DB Cargo Italia Electric and Last E494 (TRAXX DC3) 4 (leased by Railpool) Freight DB Cargo Italia Mile DE520 8 Freight/Shunting Diesel DB Cargo Italia
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During 2020, the Group continued to expand and renew its fleet by investing around EUR 32.5 million51 over the course of the financial year.
CHARACTERISTICS OF NEW RAIL ROLLING STOCK Company FERROVIENORD FERROVIENORD FERROVIENORD FERROVIENORD FNM FNM Electric Interoperable Type of power supply Electric Electric Electric Diesel/electric Dual-voltage Italy - Hydrogen Switzerland (TILO) Capacity High capacity (short train) High capacity (long train) Medium capacity Medium capacity Medium capacity Medium capacity Constructor Hitachi Rail Italy Hitachi Rail Italy (*) Alstom (**) Stadler Stadler Alstom Number of new trains 40 Caravaggio 60 Caravaggio 30 trains 9 trains 14 trains 31 Donizetti + 10 Pop + 5 Rock delivered - 4 - 4 5 Rock 10 Pop 26 by 2021 6 in 2023 60 Caravaggio by 2024 being delivered 30 from 2022 5 in 2021 31 Donizetti from 2022 10 in 2022-2023 8 by 2025
Length (m) 109.6 136.8 84.20 66.80 104.9 96.7
No. of train bodies 4 5 4 (31 Donizetti + 7 Pop) 3 6 4 + 3 (3 Pop) Seats 466 598 263 168 244 >240
Standing 449 575 255 160 411 N/A
Doors per side 8 10 4 3 12 4
Maximum speed (km/h) 160 160 160 140 160 140
Toilets 2 2 2 1 2 2
LED lighting, Wi-Fi, 220V and USB plugs, passenger information systems, energy measuring, people Key technology counters, cameras, remote diagnostics system, smart video surveillance, ERTMS/ETCS safety system.
Accessibility Retractable platforms at ground level to facilitate access.
• LED lighting, WiFi, bike stations and electric e-bike outlets; Environmental benefits • mobile platforms to ensure accessibility for people with reduced mobility;
51 Value referred to the capitalisation of assets 77
• circulation safety system (ERTMS/ETCS);
• 30% reduction in electricity consumption;
• noise reduction, regenerative braking to recovery electricity;
• elevated rates of reusability (96%) and biodegradability (95%) of materials (***).
More specifically, the diesel/electric trains are powered by a PowerPack equipped with two hi-tech, low- emissions diesel engines (Stage V with SCR catalyst) which can also use biodiesel to reduce emissions and battery packs. While the trains are travelling to storage and stations, the batteries enable the diesel engines to be turned off, with zero environmental impact.
(*) the Hitachi Rock and Hitachi Caravaggio trains have the same technical characteristics.
(**) the Alstom POP and Alstom Donizetti trains have the same technical characteristics.
(***) These figures do not include hydrogen trains
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Road passenger transport GRI 302-4 The local public transport (LPT) sector, from large cities to small municipalities, has been severely affected by the COVID-19 emergency. Due to the state of emergency caused by the COVID-19 pandemic, companies have had to reduce and reorganise the public transport service provided. FNM Autoservizi has, for example, employed bus drivers, who were surplus to requirements, to carry out vehicle cleaning services. After implementing all the requirements imposed by the competent authorities, hand sanitiser dispensers have been installed on board the buses and the area near the driver's seat has been fitted with screens for driver/user separation. The vehicles are also periodically sanitised using an ozone generator and specific alcohol or chlorine-based products. Informing the driving staff during this period was essential to manage the evolving situation as best as possible. The supply of personal protective equipment (CE surgical masks, FFP2 filters, hand sanitisers, disposable gloves, and protective overalls and goggles for cleaning vehicles) to all personnel was accompanied by widespread information, both by e-mail and by posting on notice boards in depots and special information signs on board vehicles. FNM Autoservizi FNM Autoservizi is working to strengthen the network of bus/train links at stations, as well as to promote transport in order to boost tourism in local areas. For the company, accessibility represents a guiding value, constant in the evaluation of the quality and 94% of the fleet is agility of the service offered. This is the context in which the equipped with overall investment of more than EUR 2.3 million for the creation of the single integrated ticketing system for the areas of Varese, facilitated access Brescia and Como was made. Confirming the commitment to systems. The goal is achieve 100% of bus service covered by Electronic Ticketing Devices (E-Ticketing). At the end of 2019, the installation of the to get to of single integrated ticketing system on buses in the Varese basin 99% was completed, while in 2020 the installation on all FNMA TPL the fleet. buses was completed. Testing of the system began in the second half of 2020, at the same time as work on setting up the structure needed to print tickets at depots. The current state of emergency has had an impact on these activities, in particular, with regard to the management of safety at construction sites during the installation of these instruments on board vehicles.
FNM Autoservizi service characteristics 2020 2019 2018 LPT network extension (km) 630.4 634.5 632.7 LPTt network extension Provinces of Varese, Provinces of Varese, Provinces of Varese, (geographical extension) Como and Brescia Como and Brescia Como and Brescia Number of Local Public Transport 19 19 20 routes Catchment area (passengers approx. 1.35 million over 4.3 million over 4.5 million transported) *
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Km travelled by the fleet 4.3 million approx. 5.6 million approx. 5.5 million * Estimate figures based on season tickets and journey tickets sold in 2020
Confirming the strong impact of the restrictive measures adopted during the emergency phase, rides in the Lombardy Region fell by a maximum of around 45%, mainly due to the closure of schools. The drop in passengers was in fact about 70% (FNM Autoservizi). The issue of health and safety continues to take on such importance for FNM Autoservizi that it requires a structured and comprehensive approach. In 2020, the company completed the installation of the Automatic Vehicle Monitoring (AVM) system on its entire fleet. This makes it possible to monitor information such as the location, route, speed, diagnostics of mechanical parts, relating to moving vehicles and, subsequently, when testing has been initiated.
THE FLEET OF FNM AUTOSERVIZI
No. of vehicles 2020 2019 2018 Bus fleet 157 156 157 of which EURO II 58 6052 with FAP 61 with FAP of which EURO III 17 18 18 of which EURO IV 6 6 6 of which EURO V 31 (of which 4 EEV) 32 (of which 4 EEV) 32 (of which 4 EEV) of which EURO VI 45 40 40 of which new buses 6 vehicles 0 vehicles 10 vehicles Number of buses placed out 3 12 22 of service
The bus fleet has an average age of around 12 years. In terms of fleet efficiency, 6 new buses have been purchased between 2019 and 2020. Azienda Trasporti Verona (ATV) Azienda Trasporti Verona (ATV) manages the Local Public Transport service by road in Verona and its province (with some lines also reaching the provinces of Trento, Vicenza, Rovigo and Mantua). It also operates in the rental and commercial services sector.
Urban Urban Suburban Airport School Touristic service service services services
52 Two Euro II buses, which were used in service provision during part of 2019, were placed out of service during the year and are no longer operative as of 31/12/2019 80
The intermodal "Verona Air Link" service linking the Porta Nuova station with the Catullo airport is in operation, in collaboration with Trenitalia. The train + bus service has also been extended to cover the Verona hospitals and exhibition area, while there are plans to further expand it to cover more Municipalities and places of interest.
Regarding the service, it should be noted that in June 2020 the sale of LPT tickets through the new App “Ticket Bus Verona” was activated. The launch of the App has made it possible, at a time of great uncertainty, to guarantee a new sales channel that has partly made up for the lack of on- board sales (suspended due to the COVID-19 health emergency), integrating perfectly with the sales network present in the territory. The aim is to progressively increase sales through the App in support of traditional channels (such as ticket offices, tobacconists, etc.). Also, in 2020, service remodeling due to the pandemic resulted in a 24.5% decrease in miles travelled compared to 2019. Passengers, on the other hand, fell by 40% compared with the previous year.
Features of the Azienda Trasporti Verona service 2020 2019 2018 Urban routes on workdays (no.) 19 19 19 Urban routes on evenings and holidays (no.) 9 9 9 Routes managed in the Province of Verona 77 77 77 (no.) Urban service user catchment 336,500 inhabitants 336,500 inhabitants 336,500 inhabitants 1,250,000 1,250,000 Non-urban service user catchment 336,500 inhabitants inhabitants inhabitants 260 weekday; 273 weekday; 273 weekday; Urban network extension (km) 151 evenings and 166 holiday 166 holiday holidays Non-urban network extension (km) 3,705 3,705 3,705 Km travelled by the urban fleet 8,342,476 8,079,832 8,386,983 Km travelled by the non-urban fleet 12,035,358 11,656,451 13,238,868 * km as per Veneto Region service contract
ATV-Azienda Trasporti Verona adopts different solutions to guarantee reliability and safety. The priority given to these issues underlines the need for constant attention to the quality and safety of the service offered. The various activities implemented include, by way of example, an automatic fire extinguishing system, safety-edge anti-crush systems, the ECE R66 rollover crashworthiness certification, the installation of Electronic Braking Systems (EBS) and Electronic Stability System (ESP). Following on from action undertaken in recent years, the Body-cam service continues to be used as part of ticket checks and an internal quick-response team is ready to provide maximum support and assistance to operating staff in the event of aggression or dangerous situations while on board. The human component is a decisive factor in guaranteeing quality service. In addition to maintaining ISO 39001, it should be noted that refresher courses for the Driver Qualification Card were
81 provided during the year. Thanks to ATV's in-house instructors, the course offered to employees had a higher participation level, resulting in practical and personalised adaptation also on the subject of safe driving.
THE ATV FLEET
No. of vehicles 2020 2019 2018 Bus fleet 529 529 533 of which EURO II 69 75 80 of which EURO III 201 201 202 of which EURO IV 4 4 4 of which EURO V 120 120 120 of which EURO VI 135 129 109 of which new buses 6 20 67 Number of buses placed out 7 16 70 of service
ATV-Azienda Trasporti Verona is among the first companies in the FNM Group to have invested in the purchase of vehicles powered by alternative fuels, such as methane. After 40 new urban Euro 6 methane buses were purchased in 2018 and a further five were brought into service in 2020, the company evaluated the introduction of an urban electric sub-fleet and the use of methane in non- urban areas for the first time. In 2021, a first supply of electric buses is indeed on the way. La Linea and Martini Bus La Linea provides Local Public Transport (LPT) services in the Provinces of Venice, Padua, Belluno and Verona for a total network coverage of 5,641,762 km.
La Linea service characteristics Venice (AVM-ACTV) Urban and non-urban network of 1,604,035 km Padua (Italia Veneto Bus ) 1,237,704 km of non-urban network Belluno (Dolomiti Bus) Urban and non-urban network of 1,165,839 km Verona (ATV) 1,246,550 km of urban network Municipality of Schio and neighbouring 207,634 km of urban network municipalities
Through Martini Bus, the company also offers non-scheduled services equating to annual coverage of around 1,390,000 km represented by: — rail-replacement bus services (managed on behalf of Trenitalia); — airport transfer services (Treviso-Venice); — tourist hire services by reservation; — transport for Municipal administrations; Both services have undergone a sharp reduction this year, by about 30% for La Linea and roughly 70% for Martini Bus, with a total distance covered of 3,965,339 km (also including the kilometres covered by CONAM) and 434,000 km respectively. La Linea solely uses vehicles loaned for use by clients that are public bodies (AVM in Venice, ATV in Verona, Dolomiti Bus in Belluno and Busitalia Veneto in Padua). It does not use its own buses. The
82 vehicles used can vary over the course of the year, depending on the number of routes planned. Therefore, fleet management is linked exclusively to the management of the maintenance contract for the vehicles loaned for use. Driving safety The company La Linea has entered into an agreement with an authorised entity, which will allow its employees to renew the Driver Qualification Card in an easier and less impactful way at organisational level through the administration of a training module of 35 hours. Martini Bus also provides first-aid training courses for its drivers and distributes pamphlets on best practices designed to ensure successful journeys. As of 31 December 2020, the Martini Bus fleet featured 25 of its own buses, of which 9 EURO V and 7 EURO VI.
LA LINEA FLEET
No. of vehicles 2020 2019 Bus fleet 25 26 of which EURO II 2 2 of which EURO III 5 5 of which EURO IV 2 3 of which EURO V and EEV 9 9 of which EURO VI 7 7 of which new buses 1 3 Number of buses placed out 1 2 of service E-Vai The road transport offering is supplemented by E-Vai car sharing, which is integrated with the rail service and the main airports in Lombardy. The service offering currently includes four models: - E-VAI REGIONAL ELECTRIC: Regional electric car sharing to move around freely between airports, stations and cities. - E-VAI PUBLIC: Integrated use between Municipalities during working times and the general public at other times and during weekends - E-VAI CORPORATE: Integrated use between companies and their employees during working times and for private use - E-VAI EASY STATION: Integrated use between private and public organisations located near to train stations and commuters. It should be noted that, during 2020, 6,720 new customers were activated, +11% compared to 2019 for a total of 60,291 users. With a view to integrating the services offered, for each new Public customer, the company has often activated a new Regional electric car park in order to expand the pool of users and their trips. To date, there are 79 municipalities served, a 25% increase over 2019. This increase is accompanied by a 21% increase in E-Vai point stations, totalling 142.
The numbers of car sharing 2020 2019 2018 Car sharing hires 56,944 29,367 18,690
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Average daily hired hours 4.24 3.99 2.93 Annual rental hours* 62,290 69,394 38,830 Average Km per rental 27.83 42.34 45 Average Km for electric vehicle rental 28.65 43.12 45 * The rental hours refer only to the Regional electric model
The basis of E-Vai's service is the clear CarE-Service preponderance of electric vehicles. At 31 During 2020, E-Vai continued to carry out the December 2020 the fleet consisted of a total of activities of ordinary management, monitoring 242 vehicles53, of which 229 were electric. and economic reporting of the CarE-Service During 2020, E-Vai's car fleet was extensively project (EU Programme Horizon 2020), focusing overhauled, including new latest generation cars its efforts on the promotion of the business model and proceeding with the sale of cars (which will (Easy-station plus), designed and developed take place in 2021) that now had a limiting within the project, in the main digital channels autonomy for the service. Specifically, 75 new (website, social networks and newsletters). cars (Renault Zoe) with a range of up to 400 km have been added, compared to 35 cars dating back to 2011. Also during the year, a tender was issued for the procurement of a further 10 hybrid cars and 60 electric cars to be introduced over the next year. The growing popularity of the Public model has led to a significant increase in rentals (albeit with a reduced average mileage) even in an emergency situation such as that generated by the pandemic in 2020. At the same time, rentals of the Regional model were inevitably reduced due to various lockdowns and traffic restrictions. Ensuring the safety of the driver, whether at the wheel or at a recharging station, is an essential condition for E-Vai, and this is one of the most important criteria in the specifications for the purchase of new vehicles. New GPS/GPRS trackers are installed in all vehicles in the fleet of cars, providing more information on vehicles in use. Also with this in mind, a new tender has been called in 2020 to replace, during the first 6 months of 2021, all the recharging infrastructures that have been active on the territory since 2010. The new infrastructure will have state-of-the-art, latest- generation security systems. In conjunction with the first lockdown there was a reduction in demand for mobility on the Regional model of approximately 70% and overall over the full year of 30% compared to 2019. As a result of the evolution of the pandemic, the company reacted actively by launching a solidarity project to support the mobility of medical personnel, which was accompanied by the preparation of a whole series of procedures aimed at decontaminating car interiors. By way of example, the purchase of sanitising canisters for sanitising the inside of the car and the air conditioning system and alcohol- based products for cleaning the contact parts of cars (handles, gearbox, steering wheel). During the month of April, vehicle cleaning was further intensified, with large-scale on-site sanitation and the distribution of anti-Covid kits to customers. This activity was accompanied by an intensive information campaign through the production and application of COVID-19 stickers on board cars, to invite people to limit the number of passengers
53 The car fleet is composed as follows: E-Vai Regional Electric (99), Public (51), Easy Station (11), Corporate (81). 84 on board and to respect all the provisions for the protection of the person in order to reduce the spread of the virus.
Supportive car sharing E-Vai experienced a sharp drop in rentals during the full lockdown period The initiative resulted in from March to May caused by the nationwide shutdown of non-essential the use of 30 vehicles activities. The event resulted in the non-use of almost the entire fleet of cars for a total of 23,952 dedicated to the Regional service, except for a few rare exceptions. Based kilometres travelled. on the reasoning over the possible users of the Service during the lockdown period and, at the same time, in order to avoid the consumption of batteries due to non-use, E-Vai devised a way to meet the needs of doctors and nurses with a pressing need to move around the health facilities and organisations engaged in the fight against the pandemic. The company has therefore decided to offer local authorities some cars on loan for free use for the following purposes: — mobility service of the Municipality for controls and activities on the territory; — distribution of meals and home delivery of medicines; — social services for assistance; — mask distribution and service. In order to provide better visibility on local and national newspapers, the press office organised three media launches (Ansa, Giornale and Italia1). The offer of this service has been welcomed by local authorities, Red Cross, Civil Protection and voluntary associations, proving to be a winning choice in all respects.
I-SharE LIFE Project AI at the service of E-Vai The European I-sharE LIFE project, for which FNM In 2020, a project was carried out with Milan received European Community funding of EUR 3.4 Polytechnic University aimed at enhancing the million, aims to innovate E-Vai’s traditional electric management platform of the E-Vai car sharing car sharing model by bringing it to new service, by exploiting artificial intelligence (AI) Municipalities and integrating it with transport systems. services already present at railway hubs. Specifically, a new computer algorithm was In 2020, E-Vai launched the new back-end service developed, created as source code in python management platform and the new front-end App, format, to be integrated into the current back-end as envisaged by the project actions within the management platform of the car sharing service “Technology Implementation” category. In addition, offered by E-Vai through the configuration of E-Vai focused closely on the activity of commercial specific Work Flows. This has enabled the creation replicability of services, tested within the four demo- of a single integrated digital tool for operational E2E sites, throughout the Lombardy Region. (“End to End”) management of the service.
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Rail transport (Trenord) Trenord is dedicated to public rail transport in Lombardy, the region with the highest demand for mobility in the country where, every day, before the COVID-19 health emergency, over 800,000 people travelled by train. Due to the restrictive measures imposed by the 34.7 Authority to limit the spread of the virus and therefore movements, the numbers of train service and passengers using the train have decreased million significantly, with a total reduction of 17% in train-km delivered (34.67 million in 2020, 41.94 million in 2019) and 57% in journeys (92,577,313 in train-km 2020, 214,521,326 in 2019). This decrease is even more evident when analysing the average number of passengers carried on weekdays; in fact, in 2020 there were 75% less than last year.
In order to ensure a modulation of the service according to the actual demand, as well as to carry out precise monitoring of the passengers and guarantee social distancing on board the train, Trenord makes use, on some trains, of an automatic system of passenger counting sensors called Automatic People Counter. In 2020, Trenord began testing “Beacon” technology, a chip system installed on some trains that detects the transit of travellers in stations using the Bluetooth frequencies of smartphones. Integrated Fare System In July 2019, the new Integrated Fare System for the Milan and Monza Brianza mobility area (STIBM) came into effect. The new fare system extends to all Municipalities that make up the Metropolitan City of Milan, the Province of Milan and the Province of Monza and Brianza, as well as some Municipalities outside the provinces that were already part of the Milan Area Integrated Fare System (SITAM). The start-up of the new system (STIBM) recorded a positive sales trend until the pandemic phase took hold, which in March 2020 generated a collapse in demand for mobility in all areas of Lombardy. As long as there is no return to normality, it will not be possible to take stock of developments. However, despite the health emergency, Trenord has continued to work to expand the range of fares of the new integrated system of the catchment area, in agreement with the Basin Agency and the Region, to introduce subsidised season tickets for under 26 and over 65. The various initiatives introduced include the sale of carnets, i.e. multi-ride tickets (10 tickets) from the Trenord App and the refund of subscriptions not used during the lockdown, even those loaded onto electronic cards of other operators without any additional costs for customers. During 2020, despite the obvious criticalities, Trenord actively participated in the SMISTO (Sviluppo della Mobilità Integrata e Sostenibile tra Ticino e Lombardia) project, coordinated by the Lombardy Region, with the aim of analysing and studying a new integrated tariff model for cross-border mobility (Lombardy - Canton Ticino). The lengthening of the definition of the integrated tariff system of the Varese-Lecco and Como basin has not allowed a complete definition, however the Entities and Companies involved in the round-table work group have conducted an in-depth analysis that will be an integral part of the definition of the new system, as soon as the enabling projects (STIBM of Varese-Lecco-Como and the new Arcobaleno system in Canton Ticino) are completed.
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The company looks at the all-round travel experience, trying to make it possible for all segments. Disabled travellers and travellers with reduced mobility who have used the assistance service for boarding and alighting in 2020 totalled 11,596, of which 7,261 travelled on the RFI network and 4,335 on the FERROVIENORD network. Trenord accommodates the needs of people with disabilities or reduced mobility with dedicated information services and guidance for those who wish to travel by train. With regard to safety during the journey, in addition to the monitoring activities both on board the train and in the station, Trenord, thanks to the coordination of the Control Room Security and the video surveillance system, Trenord is able to monitor what happens Trenord is committed to on its trains in real time. ensuring the sanitisation of In 2020, given the entry into service of new rolling stock equipped rolling stock, the removal of with internal video surveillance systems, there will be a significant external graffiti, the efficient running of toilet increase in requests for data extraction from videos of video facilities and the surveillance systems, for events/facts/crimes, particularly on board replacement of all trains. In all of Trenord's areas of operational interest, evaluations vandalised objects. are under way regarding technological projects to intensify the surveillance of rolling stock parked in railway stations, such as
projects oriented towards the installation of sensors and the use of over 153,000 square drones to delimit areas reserved for authorised personnel, which metres of outdoor will facilitate the work of the sworn special guards. graffiti removed The relationship with the Authorities and the stakeholders appears fundamental for the success of Trenord's mission. During the year, the process of exchanging information with the Police Forces in the area and the periodic joint operational activities continued positively. Due to the COVID-19 emergency, collaboration with the Prefectures of the Provinces of the Lombardy Region has also been intensified in order to acquire and provide useful data on Railway Operations, cancellations, journeys and any cases of positive COVID-19 results documented on board trains. During the year, inspections were carried out at railway facilities and internal points of sale. In addition, the reorganisation of the management of anti-intrusion, anti-robbery and video- surveillance alarms at the internal points of sale is at the design phase, with the possibility of accessing the data flow remotely; fixed evening and night surveillance has been increased to protect the rolling stock parked at the Milan San Rocco, Lecco, Luino and Como structures. Personnel training plays a crucial role in these activities. For the year 2021, the organisation of training courses for on-board personnel at the Compartimento Polfer Lombardia is being defined. The course will include several modules including the illustration of the operating methods of the Polfer operators established by the Central Service of the Railway Police and the procedures for requesting Police intervention. Research and innovation As part of the Framework Agreements for scientific collaboration and support for innovation processes signed with the Polytechnic University of Milan, various studies have been initiated in several different business sectors.
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The aim is to establish a collaborative relationship and a sense of synergy between the research, development and innovation activities of the Polytechnic and the activities of the FNM Group in the following areas: sustainable mobility, railway infrastructure and logistics.
FILI, new anthropisation project FILI, promoted by FNM, with FERROVIENORD and Trenord, is an innovative project for the redevelopment of FERROVIENORD's main connection centres. On the Milan-Malpensa axis, the largest urban and suburban regeneration project in Europe is planned: a corridor for the Milan-Cortina 2026 Olympics, with new green, modern and high visibility urban scenarios, connecting Milan Cadorna, Milan Bovisa, Saronno, Busto Arsizio and Malpensa with an unprecedented technological and environmental journey. For the urban part, the creation of a “synthetic forest”, 72,000 square metres from Milano Cadorna station to Domodossola station, will be of fundamental importance. The suspended forest will produce oxygen for the city of Milan through the use of advanced biotechnology that some start-ups employ in the production of panels consisting of anti-pollution filters such as plants, mosses and lichens that absorb nitrogen dioxide and release oxygen (a single panel of 12 square meters produces the effect of 275 trees). An entire high-tech forest, an “Oxygen Factory” with comparable technologies already adopted in London's “City Trees”. FERROVIENORD is a partner of the Municipality of Milan for the redevelopment of the Bovisa Hub through the Reinventing Cities call for tenders, an initiative of the cities of the C40 group to pursue policies to contain carbon emissions. Bovisa is a strategic hub characterised by high accessibility and will, in fact, be the subject of infrastructural enhancement and urban regeneration. The FNM Group Headquarters will be built in the area. FERROVIENORD also intends to implement a project with a major urban impact in the city of Saronno, around one of the most important hubs on the network. The aim is to achieve high standards of functionality and safety and to improve accessibility and viability through an urban redesign including the relocation of the Museum of Industry and Labour in Saronno, the restyling of the station passenger building and its underpass, and the creation of cycle and pedestrian paths. A programme of urban and environmental redevelopment in Busto Arsizio will involve the relocation of car parks to a multi-storey building, allowing large areas of green space to be used for collective activities, thus connecting the north and south of the city. For the extra-urban area, collaboration has been initiated with the Fondazione Lombardia per l'Ambiente (Lombardy Foundation for the Environment) for the mapping of railway and other pertinences, for a reforestation project for the entire area of the Lombardy industrial triangle between Milan, Varese and Como. The project, which involves FNM, FERROVIENORD and Trenord, will not only focus on forestation work or the creation of tree and shrub belts in uncultivated areas, but will also involve nature-based work to be carried out in stations (pertinence and proximity areas) aimed at improving the comfort of railway service users, as well as more general environmental resilience, without reducing the function of modal interchange. Finally, as described on page 70, FERROVIENORD's project to upgrade the main connection centres includes a 72.7 km super cycle track from Cadorna station to Malpensa airport.
Some of the Group companies’ main Research and Development Projects in the delivery and internal assessment phases as of 31 December 2020:
Project name Description Objectives/future prospects RAILWAY INFRASTRUCTURE MANAGEMENT – FERROVIENORD (Control Room Maintenance) Implementation of the corrective maintenance process Installation of software on handheld across the Milan and Iseo branches, starting with the Digitalisation of working devices to eliminate paper forms used in signalling sector. Key benefits: setting up working teams, carrying out - digitalisation of procedures, elimination of back-office processes operational checks and reporting on the work associated with converting information into functional parameters of facilities, working electronic form; directly via SAP. - lower costs associated with running spaces used for physical archives.
Installation of complete system of sensors Control Room Maintenance Rationalisation and reduction of maintenance costs. in the railway infrastructure to be
– predictive diagnostics monitored. In the phase of
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implementation of specifications and evaluation of market choices.
Control Room Maintenance Remote control (at 40% for Saronno-Milano, Saronno- – remote command and Acquisition by the Central Post of Seregno and Saronno Malpensa) and remote control for complete capacity remote diagnostics and equipment for remote control (ACS remote operability for all signalling apparatus - Rationalisation and reduction of maintenance costs. control and ITT-TE-SSE functionality. - Less time taken for interventions/reactivation. remote control) - Reduced operational personnel requirement Improve the reliability of the network. Identification of a technology designed to
automatically recognise obstacles on level Radar and infrared solutions on the market are not yet PAI-PL crossings, thus eliminating the need for “mature” enough The company is assessing the possibility checks. of experimenting with cameras and video analysis. Introduction of tablets that identify, through augmented reality, the components of the electrical panels of SSE Experimentation with 5G In the process of defining experimental remote assistance (MI Pagano) and associate the related methods to rationalise and reduce maintenance costs. maintenance wiring diagrams for immediate consultation and intervention in case of anomaly/failure. Including: - Calmoon rail – Sekisui – device to be placed around the rail to reduce noise, Development of other vibrations and temperature. Launch of experimentation with anti-trespassing barriers. - Self-rearming switches. Market scouting is currently under way for other innovative materials - Vertical load measuring system (for technologies. Benefits and extension to other stations will Sacconago). be assessed. - Crushed stone covered with rubber to reduce tamping. - Anti-trespassing barriers (Thermit - Teco). Identification of useful technology in terms Prevention of attacks on tech systems that support the Cybersecurity of reducing cyber risks management and control of railway circulation
Installation of video analysis algorithms on Video analysis on-board train cameras in order to Currently being explored further. increase levels of safety and security
Under review and evaluation for: Implementation of a remote diagnostics - Prevention of breakages during operation and system and a ground-level platform for Rolling stock diagnostics optimisation of maintenance processes rolling stock maintenance - Real-time fleet monitoring. The new trolley for surveying track
geometries is now in production. In the process of scouting the market for manufacturers of Diagnostic Trolley Evaluation for a system to collect all ultrasound systems. diagnostic data is under way. Acquisition of the necessary hardware and software equipment for the application of The project will allow for project modelling and a reduction BIM development the BIM methodology capable of managing in the emergence of unforeseen events during the integrated processes with maintenance in executive implementation of the work. the SAP environment and staff training. RAILWAY INFRASTRUCTURE MANAGEMENT – FERROVIENORD (stations) Phase one: launch of a “primary” platform post with Development of a Physical Security “complete” management by the Central Supervision Post. Information Management (PIS) platform Subsequent phases: creation of “secondary” posts with Station Control Room / for the coordinated management of in- “profiled” management (Infopax, DCO Iseo, security station security systems (including remote PSIM companies, etc). The signing of a multi-year Framework control and command systems and Agreement is recommended (initial four years). security apparatus). In the process of awarding the tender.
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With a view to implementation and accessibility, for a Lift and escalator Provide real-time information on the continuous improvement of the elevator systems on the condition of the elevators and escalators entire network, a report on the accessibility of elevators accessibility report to users via the FERROVIENORD website. and escalators has been created and can be used in real time by the user. Tackling the COVID-19 pandemic through traveller Passenger temperature The development of a system to control monitoring. To be of assistance to the relevant authorities. the body temperature of travellers in detection system at An initial three-month phase is planned (January-March transit at Milano Cadorna. Milano Cadorna 2021). PASSENGER ROAD TRANSPORT – E-Vai - Enhance the use of the functionalities offered by the car sharing platform, managing and moving the vehicles of the Data Analysis / Artificial Development of a car sharing service fleet within the operational perimeter according to the management platform using artificial ordinary requests made by customers. Intelligence intelligence systems - Create a network between different car sharing models in order to optimise use of vehicles, cut costs and increase the level of service. OTHER BUSINESS SEGMENTS – NORD ENERGIA Use of biofuel deriving from production processes based on the use of micro-algae. Biofuel Development of a new photobioreactor Selection of a concept for the creation of a prototype in concept, starting with the application of 2021. the best techniques available. Architectural definition of a “Green Filling Station” and Design of service areas named Green subsequent market scouting. In the context of the 2026 Electromobility Filling Stations for electrical vehicle Winter Olympics, a project partnership is being set up. charging.
Innovation at Trenord Trenord, continuing with the process initiated in the previous year, also invested strategically in innovation in 2020 as a way of further boosting the sustainability of its operations. In addition to overhauling part of the fleet, Trenord has also continued with the project to replace the current diesel trains running on non-electrified lines with bi-modal pantograph-battery trains. Having successfully completed the feasibility study, the company has now reached the final approval stage for the purchase of the first 7 trains The year 2020 also saw the continuation of the development of tele-diagnostic tools with the aim of installing them on trains that are not already equipped with them and that will remain in service beyond 2023. The project will allow train drivers to receive even more comprehensive real-time assistance from the Trenord Help Desk, thanks to the possibility of consulting the parameters of the train, including remotely. To complete the commitment of the FNM Group and Trenord to the sustainable and resilient development of the Lombardy region, the feasibility analysis of the “One, none or 800,000 more trees” project was completed during the year, in collaboration with the Lombardy for the Environment foundation. The goal is to: 1. to enhance the railway network as a territorial network of high environmental value; 2. to create green areas in the station sites to improve environmental standards; 3. to contribute to the resilience of Lombardy's LPT.
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7.3. Human capital
FNM SUSTAINABILITY JOURNEY HIGHLIGHTS Total staff: 2,265 Training hours provided: 35,424 Group company with ISO 45001 Occupational Health and Safety Management System: 40%
Development of human capital within the Group GRI 102-7, 102-8, 102-12, 401-1, 405-1 The current human resources set-up is the result of the progressive reorganisation of the pre- existing structures that took place following the extraordinary transactions completed in the three- year period 2018-2020, necessary for ensuring continuity and uniformity in the management of people.
Company headcount at 31/12/2020 by business segment
Ro.S.CO 70 113
GestioneRailway infrastructure infrastruttura management ferroviaria 700 107
TrasportoRoad passengers passeggeri transportation su gomma 1.177 98
TrasportoRailway transportferroviario (Trenord) 3.437,0 824,0
UominiMen DonneWomen n The FNM Group has 2,265 employees and 44 external associates54. Personnel was in line with the previous year (-0.53%). It should also be noted that in 2020, 17% of female staff held the position of manager or middle manager, representing 32% of total managerial or middle managerial employees. Despite a complex year, Trenord's workforce remained largely stable compared to 2019 for a total of 4,261 employees. In addition, there has been an increase in the percentage of women in positions of responsibility within the company with respect to the total (with reference to executive and managerial positions).
PEBY CLASSIFICATION AND GENDER Men Women Total FNM Group 1,947 318 2,265 Executives 29 10 39 Middle managers 84 45 129 Office workers 310 208 518 Blue collar workers 1,524 55 1,579 Trenord 3,437 824 4,261 Executives 20 2 22 Middle managers 137 45 182
54 External associates refer to staff hired directly by the FNM Group in various capacities (interim staff, interns, freelancers and project-based associates). 91
Office workers 2,664 767 3,431 Blue collar workers 616 10 626
Both the FNM Group and Trenord have high numbers of staff in the 30-50 age group.
FNM Group >50 39% Trenord FNM GROUP AND >50 23% TRENORD WORKFORCE BY AGE RANGE AS OF 31/12/2020 <30 5% 30-50 56% <30 10% 30-50 67%
<30 30-50 >50 <30 30-50 >50 With regard to employee management, the FNM Group promotes a 98% of FNM Group and company culture designed to contribute to professional and personal Trenord staff are hired on satisfaction. This includes promoting job stability. In order to implement permanent contracts. these principles, the FNM Group almost exclusively hires staff on permanent contracts. During 2020, the recruitment 55process for professional figures specialising in the various business segments continued. The Group offers a wide range of different employment opportunities: drivers, train conductors, on-board staff and operators (Trenord, FNM Autoservizi, ATV and La Linea), designers (NORD_ING), movement directors, facility and maintenance operators (FERROVIENORD) and employees, specialists and management staff (FNM). The FNM Group continues to increase its team in 2020, in which the Group56 opened a total of 41 job positions, 2 of which were filled through internal selection. Thanks to close partnerships with universities and professional technical institutes, the Group is able to pass on its industry expertise and know-how via placement opportunities and work experience. Despite the ongoing global pandemic, the FNM Group did not suspend selection activities, opting for interviews and written tests organised by video conference. This mode has been shown to be effective and deliver good results. For this reason, the Group has chosen to continue in this manner until the conclusion of the health emergency.
55 FNM Group companies and Trenord have a staff recruitment and management operational procedure that sets out roles, responsibilities and operational process (Procedure SRU PO 01). 56 The figure refers to Group companies: FNM, FERROVIENORD, FNMA Autoservizi, NORD_ING and Malpensa Intermodale (0.05%). 92
INCOMING TURNOVER RATES BY GENDER AND AGE57 Women Men <30 30-50 >50 FNM Group 9.12% 7.45% 24.76% 8.14% 5.03% Ro. S. Co. 4.42% 1.43% 14.29% 4.50% 0.00% Railway infrastructure management 5.61% 2.43% 25.40% 1.46% 0.00% Road passenger transport 18.37% 10.79% 25.71% 13.46% 7.98% Rail transport (Trenord) 6.80% 3.96% 17.94% 3.66% 1.43%
EXIT TURNOVER RATES BY GENDER AND AGE57 Women Men <30 30-50 >50 FNM Group 5.66% 8.99% 6.67% 5.77% 12.64% Ro. S. Co. 7.08% 10.00% 14.29% 3.60% 15.38% Railway infrastructure management 5.61% 5.14% 3.17% 1.67% 12.08% Road passenger transport 4.08% 11.21% 11.43% 9.02% 12.59% Rail transport (Trenord) 2.79% 6.49% 2.21% 0.91% 21.49%
The smart working experience in the FNM Group Smart working began as part of the Framework Agreement on Corporate Welfare signed at the end of 2017. The following year, experimentation began in FNM, bringing - as of 1 May 2019 - smart working to the company on a permanent and consolidated basis. At the same time, the experimental phase - which ended on 31 March 2020 - was launched for FERROVIENORD and NORD_ING clerical staff, with the same rules and limitations as for FNM staff. Smart working in the FNM Group has had a strong impetus also due to the COVID-19 health emergency, which has necessarily and drastically changed the organisation of work. Having started smart working a year and a half ago, the FNM Group has been able to manage an undoubtedly unprecedented and complicated situation with fewer difficulties. Thanks to the technological equipment, the experience gained during this period, and compatibly with the activities carried out, many Since September 2019, employees were able to continue working from home or from employees adhering to another location other than the company in complete safety. In smart working has addition, towards the end of the year, employees were given the increased by 71% option of working up to two days a week remotely, also in view of (FNM, FERROVIENORD, the excellent results achieved during the pandemic. This new way NORD_ING) of working is very much appreciated by employees who can better balance work with personal and family needs. Overall, greater empowerment and autonomy on the part of employees was verified. In this context, several initiatives related to data security have been implemented. Specifically, new Information Security Regulations are being adopted to protect and regulate the use of information technology by Group users, with special emphasis on cloud-based communication, sharing and storage tools, which are used extensively during smart working. In order to protect against these risks, a training platform on IT security has been identified, which is expected to be implemented with a pilot project in FNM in 2021, and possibly extended to other Group companies during 2022. This initiative will help increase the level of awareness about cyber security. It will teach how to correctly assess behaviour during the performance of work activities, so that each user engages in the conduct that guarantees the greatest safety.
57 The difference in the balance of hires and outgoings in 2020 and the number of employees on the payroll in 2019 and 2020 may depend on any intercompany transfers. 93
For greater protection of the data stored on the laptops assigned to users, in view of the fact that they are not kept inside the offices, but are found increasingly more frequently outside the company, therefore in less protected places, a process of hard disk encryption has been initiated. While all newly installed PCs are equipped with this feature, a device management process is in place for the remainder. This feature ensures the security of the data stored on the devices (it prevents it from being read by users other than the assignee in the event that the storage device is stolen and forced by malicious users). Spazio FNM Group A new platform, “Spazio FNM Group”, has been active in FNM since the beginning of the year. A simple, intuitive and always up-to-date tool, thanks to which it is possible to stay informed about Group news, view documents, directly use company resources, actively participate in various topics of interest and share them thanks to an open and constantly evolving community, to compare opinions and information and ask for support. Following a brief survey, organised by the Human Resources Development Unit, initial feedback and suggestions were gathered to improve the appearance and use of this digital space. Most employees give a positive assessment of the functionalities offered: almost 90% of respondents say they use the new intranet; most users (57%) access it more than once a day, mainly to use: address book, company documents, company welfare, employee self-service, news.
Diversity and inclusion GRI 405-1 Based on a belief that the unique characteristics of each employee can serve as a source of innovation and inspiration for new ways of achieving company objectives, the FNM Group and Trenord are investing in the development of initiatives designed to support inclusion and diversity, including: training linked to skills built up through motherhood/fatherhood; care activities; introduction of smart working and flexible working hours; broad, structured welfare system. Partly as a result of these initiatives, the FNM Group has 263 female employees while Trenord has 814, equal to 38% and 22% of their respective workforces (not including technical, maintenance and operational staff).58 As regards the compulsory recruitment of personnel belonging to protected categories, the FNM Group and Trenord are in full compliance with the applicable regulations. As of 31 December 2020, the following are recorded in the workforce: 65 (of which 20 women) disabled pursuant to Law 68/99 for the FNM Group and 29 staff for Trenord. Women in Transport – EU Platform for change The European Commission launched Women in Transport – EU Platform for change with the aim of boosting female employment and promoting equal opportunities in the transport sector. FNM has endorsed the statement and participates in activities to promote diversity and encourage and raise awareness of the industry. Due to the ongoing pandemic, no committees were promoted in 2020.
58 The “blue collar” category linked to technical, maintenance and operational staff has been excluded from the figures and percentages shown. 94
The FNM Group supports its employees through life’s most important moments. In the case of maternity, the FNM Group and Trenord top up the 80% maternity pay guaranteed by the National Social Security Institute (INPS) to full pay for the obligatory five-month leave period and for all at-risk pregnancies. With regard to optional abstention for the first 6 months * FNM S.p.A. 51% of and for children under the age of 6, the FNM Group guarantees a professional figures supplement of up to 50% of salary (compared to the 30% provided by are women (senior and INPS). In addition, Trenord also provides for a supplement in favour of middle management) the employee in relation to the optional abstention provided for by INPS. In 2020, 18 FNM Group employees and 74 Trenord employees * Data refers to the company population (senior and middle management) of FNM S.p.A. as of 31 used the parental leave scheme. December 2020. It should be noted that from January 2021, membership of Valore D will be operative, thanks to which there will be the possibility of participating in training and in-depth analysis courses on Diversity&Inclusion issues. The association organises and promotes courses and meetings for young women to encourage continuous learning and entrepreneurial spirit in the company; middle managers to accelerate women's careers towards greater responsibilities and senior managers to support men and women to develop strategic thinking and “cross-company” team management tools. Life Based Value Programme - Maternity as a Master (MaaM) The FNM Group and Trenord are the first rail transport companies in Italy to have signed up to the Life Based Value projects, which place the central focus on parenthood and care for the person within companies. The aim is to transform these life experiences into valuable skills for companies and to help employees to develop. More specifically, three educational programmes were launched. One focused on new mothers and fathers (the MaaM Master’s programme, which saw 32 employees sign up from FNM), another was dedicated to employees who also provide care and assistance for a family member or on a volunteer basis (Master Care, with 14 employees from FNM signed up) and the Reach Webinars (496 registrations by FNM) and, finally, a training course dedicated to managers (Maximize on-line course with seven people currently signed up).
Remuneration system The process whereby staff remuneration is decided is based on the National Collective Bargaining Agreement and the second-level company contract. Furthermore, the FNM Group and Trenord have an internal operational procedure which decides the allocation of promotions, raises and performance-related bonuses. In 2020, the MBO (Management by Objectives) programme involved 383 employees, including 254 FNM and FERROVIENORD employees with corporate indicators and function and team objectives and 129 people, including managers and middle managers, with corporate objectives and individual objectives. The entire definition, mid-term review and evaluation process is carried out through the SuccessFactors platform. With the aim of raising awareness of the Group’s CSR-sustainability objectives and contributing to the attainment of these, at least one CSR objective has been added to the assessment system for senior management in the parent company. In 2020, ATV set up a performance management system, based on simple and quantifiable indicators. However, given the exceptional conditions, it was not possible to pay a Performance Bonus linked to the achievement of measurable parameters. It should be noted, however, that an agreement was signed with the trade unions that provides for Fringe Benefits in the form of “Gift Vouchers” in addition to financial compensation. With regard to a more widespread dissemination
95 of welfare to all employees, negotiations have begun to convert the 2021 performance bonus, in part or in full, into welfare. During 2020, Trenord prepared the Remuneration Policy for indirect personnel. The objectives of the new policy are to support the recognition of the roles and individuals who bring greater added value, reflecting actual responsibility and results, to regulate the management of fixed remuneration and remuneration measures for Trenord personnel and to define criteria and methods for managing the Remuneration Policy process.
Employee training and development GRI 404-1, 403-5, 404-3 The FNM Group and Trenord are committed to offering training and development courses designed to guarantee professionalism and a high level of innovation. During 2020, due to the Covid emergency, most of the courses were provided on-line, except for those that had to be held in person, as per mandatory requirements. Giving your employees the opportunity to reach their full professional potential through training activities on the one hand strengthens company know-how, and on the other grows the personal sphere of the individual59. In 2020, the average cost per person in training was EUR 26160. In line with the previous years, for companies in the FNM Group, training focused on technical and professional areas necessary for the attainment and maintenance of certifications and technical qualifications. These were also augmented by the English language course, which involved 21 people, including managers and middle managers, from the companies FNM, FERROVIENORD, FNM Autoservizi and E-Vai, for a total of 924 hours provided. Thanks to the support of some external partners, including Maam-Lifeed, it was possible to deal with issues related to remote work, emotional intelligence, communication and listening.
For the company ATV, two important changes are coming. The 2021 training plan will, in fact, In 2020, ATV provided include training on the Integrated Management System, aimed at promoting the approach to certification in an organic manner and 756 hours in foreign with a shared logic, and a training module dedicated to the conduct languages to be observed on board buses in the event of critical situations and/or aggression. Entitled “ATV training, the driver, the users, safety”, the course will involve around 120 drivers.
59 The percentage of employees (FNM, FERROVIENORD, FNMA Autoservizi, NORD_ING and Malpensa Intermodale) who participate in training programmes for career development within the company is on average 4.14%. 60 The figure refers to Group companies: FNM, FERROVIENORD, FNMA Autoservizi, NORD_ING and Malpensa Intermodale. 96
TRAINING PROVIDED BY TYPE OF CONTENT (% OF TOTAL HOURS)
FNM Group
Trenord
97
Summary data on training courses provided, year 2020 FNM GROUP TRENORD 35,424 hours of training delivered 212,347 hours of training delivered 15.6 hours per capita 49.6 hours per capita 1,680 hours of English language training with native 84% qualification-based technical/professional speakers for the FNM Group training
CSR-Sustainability training Following the successful outcome of the training course on “Tools and strategies for the development of environmental and social responsibility in the company” delivered in 2019 to all the Parent Company's middle managers, together with the creation of a Handbook on good practices and sustainable behaviour in the company, the training on CSR and Sustainability was replicated to Group companies. In 2020, the course was delivered at NordCom S.p.A, at the end of which participants were given a questionnaire on the Mentimeter platform on the topic of Sustainability and Climate Change.
Digitalisation of human resource management Following the launch of the new intranet for the FNM Group, a new section was added for FERROVIENORD with the aim of sharing company documents through Google tools, also accessible from mobile devices. Thanks to the company intranet, the ServiceNow portal was made accessible for NordCom ticket management and the provision of user manuals (e.g. SAP manuals). This portal was subsequently enriched with content, also in relation to the needs that emerged with the COVID- 19 emergency. In fact, the company plans to optimise and automate certain processes relating to the Personnel Service, thanks to the provision of digital functions to employees. This activity is part of the digitalisation process undertaken by FNM, which aims to optimise and automate daily activities through the use of innovative technologies within the company. In this context, a series of activities has been launched to verify the potential and benefits deriving from the introduction of RPA - Robotic Process Automation - technology in the area of Finance, Administration and Control. The use of this technology is also being evaluated in other corporate areas (e.g., management control). Among other projects, it is worth mentioning the “Signature Book Project” with the aim of digitalising the process of signing documents that today pass through signature books and reducing a series of critical issues related to the “paper” signing process. Through the “GoSign” platform provided by INFOCERT, it will be possible to allow managers to digitally sign documents with “qualified signature” through web client and/or mobile device. In an initial “experimental” phase, this system shall be used for the entire management of the FERROVIENORD purchasing process (technical documentation, internal notes, intra-procedural documentation, tender commission reports, etc.) and, if successful, shall subsequently be extended to all Group companies and all corporate processes.
98
Employee welfare GRI 401-2, 403-6 Internal welfare initiatives have been developed over the years to ensure a stimulating working environment and ensure an adequate level of social security coverage. Three corporate bodies have been set up as a result of agreements with Trade Union Organisations:
FNM PENSION FUND MUTUAL BENEFIT COMPANY Set up in 1992 to provide FUND RECREATIONAL supplementary pension benefits. Mutual benefit association providing CLUB (CRA) subsidies for the National Health Social club managing recreational, Service and benefits for the families of cultural, tourist and sports activities. members. Four new CRAs have been opened in Cremona, Mantua, Lecco and Fiorenza since 2017.
MEMBERS OF FNM GROUP AND TRENORD CORPORATE BODIES AS OF 31 DECEMBER 2020
FNM Group61 Trenord62 Open positions/Retirees
Number of members Open positions63 Retirees64 2020 2019 2018 2020 2019 2018 2020 2019 2018 Pension fund 1,165 1,193 1,217 3,059 3,630 3,463 413 300 198 Mutual benefit fund 1,143 1,152 1,192 3,529 3,443 3,207 482 436 485 Company recreational club (CRA) 1,183 1,217 1,248 3,753 3,702 3,473 439 485 471
The various initiatives promoted by CRA during the COVID-19 emergency period include “The Children's Tale” and “On-line with the Psychologist”. In the first one, the CRA has designed a competition especially for children. They were asked to describe the work of their railway parents, through drawings, texts, poems and songs. The second initiative, on the other hand, was created as a result of the COVID-19 emergency which, with its rapid spread throughout the local and national territory, required the prompt activation of listening and psychological and emotional support initiatives. The institution, aware of the need to provide an answer to this growing need, has searched for structures and services for the activation and coordination of spaces for listening, reception, dialogue and support for the regional social and health services in the local area. This has led to the creation of a service of “free listening and psychological support by telephone”, initiated by some of the psychologists who work at the accredited private family advice centres managed by the Fondazione Fare Famiglia Onlus of Assago, in collaboration with and at the request of ATS Città Metropolitana di Milano. The health promotion programme, also for risks not related to work, is applied to corporate welfare, thanks to which all employees of FNM Group companies have the opportunity to take advantage of optional preventive medical examinations (e.g. flu vaccination). In addition to these, there are
61 FNM Group data refers to the following companies: FNM, FERROVIENORD, FNM Autoservizi, NORD_ING and E-Vai. 62 Pension Fund data refers to all those registered with all funds offered by Trenord. 63 The data refers to both the FNM Group and Trenord. 64 Retirees of the Mutual benefit fund are people who were registered as employees for a minimum period of 10 years. CRA retirees have no registration limitations. 99 also the compulsory ones for the prevention of occupational diseases and for the verification of the absence of drug addiction or the consumption of narcotic substances for all those workers who carry out activities that expose them to risks for which health surveillance by the competent doctors is prescribed.
Health and safety GRI 403-1, 403-2, 403-3, 403-4, 403-5, 403-6, 403-7, 403-8, 403-9 Since 2011, FERROVIENORD has implemented an Occupational Health and Safety Management System, which was certified in 2012 in accordance with the OHSAS 18001 standard. The migration to the new UNI ISO 45001 standard took place in 2020. FERROVIENORD's Prevention and Protection Service is responsible for the health and safety activities of FNM, NORD_ING and E-Vai workers. FNM Autoservizi also implements the same management system, covering all workers and company depots, with the exception of the Solbiate depot which will fall within the scope of certification in 2021. In the case of La Linea and Martini Bus, the Occupational Health and Safety Management System has been supplemented by the procedures envisaged in the Memorandum of Understanding between the State and the Regions dated 14/03/2020 and subsequent amendments.
Migration to new UNI ISO 45001:2018 management system Following the launch, in 2019, by FERROVIENORD of the activities for migration to the new international standard UNI ISO 45001, it was necessary to update the system documents, organise periodic coordination meetings and training courses. During 2020, the migration to the new standard was therefore finalised through specific audits by the certifying body and, at the same time, the updating of the risk assessment related to exposure to radon and asbestos was initiated. In addition, the assessment of risk from work-related stress was carried out jointly with the company physicians in the workplaces where they were present.
In accordance with the requirements of the Management System, performance in the field of health and safety protection was assessed over the course of the year through regular meetings, audits, selection of indicators and, where appropriate, corrective action and improvement objectives were identified, particularly with regard to staff training, the acquisition of new machinery, facilities and tools, improvements to working environments and resource reallocation. In order to make the health and safety management system more effective, FERROVIENORD is extremely active in planning health and safety courses, with hundreds of employees taking part. In 2020, there was a sharp decline as all training could not be conducted in person. Typically, the course makes provision for the involvement of employees in at least four months of training. The activities carried out in 2020 enabled the alignment of training programmes with the update and development needs of employees. Thanks to the education and training course catalogue, managed through the SAP platform, it was possible to keep track of all the training activities offered.
Number of training hours in the area of health and safety (FERROVIENORD) 5.489 5.435 6.000 3.876 4.000 2.000
0 2018 2019 2020 100
Health emergency management To ensure the health of employees, customers and suppliers, several activities were implemented during the COVID-19 emergency. At the outset of the epidemiological emergency, two ad hoc committees were immediately set up, a crisis committee (FERROVIENORD) and an emergency committee (composed of the Manager of Human Resources and the trade union organisations), to monitor the course of events and, if necessary, take appropriate preventive and protective measures to manage the COVID-19 risk. La Linea and Martini Bus have also set up a Company Safety Committee to verify the rules of the regulatory protocol, with the participation of company trade union representatives and the RLS (Workers’ Safety Representative). As early as 23 February, the first information was published explaining what COVID-19 was and how to behave in the workplace to manage it. This was then followed by a series of notices and orders to limit gatherings: anti-virus protocol, relocation of Traffic Service staff from Saronno to 15 peripheral locations, identification of fixed teams with staggered access to the common areas for Maintenance Service personnel, progressive plan for site closure, distribution of specific PPE as well as sanitising gel, provision of more means of transport for the movement of workers, smart working calibrated to emergency scenarios, social distancing also during lunch breaks and coffee breaks, daily sanitation of workplaces and of vehicles on a monthly basis, temperature measurement on entry by thermo-scanner and/or thermal imaging cameras. Since April 2020, a weekly epidemiological report has been prepared with the trend of positive, suspected and quarantined cases. Consultations with Top Management on roles, responsibilities and information flows to contain the virus and ensure business continuity took place during remote meetings, which were always minuted and signed, as well as specific meetings with Supervisory Bodies, Boards of Statutory Auditors, the Risk Control Committee and the Board of Directors. All these activities have allowed staff health to be monitored and controlled. Although there were many suspected positive cases, there were few close contacts identified and no COVID-19 injury reports. The management of the pandemic, in implementing the regulatory provisions issued by the authorities, did not modify the information flows towards the Supervisory Body, but required the Protocols issued be attached to the Risk Assessment Document of the individual companies. At the same time, the Company sent the contractors the specific disclosure for external workers. In the second phase of the emergency, in order to ensure a gradual return to safety, various measures were taken, such as: regulating the flows of people (both workers and office staff, providing for longer entry and exit times, as well as a maximum number of people based on the number of workstations), sanitising the workplaces on a daily basis, ensuring the presence of specific PPE, checking the temperature of anyone accessing the workplaces. These provisions were
101 then accompanied by specific disclosures and a handbook explaining to workers how to handle any positive cases, suspected positives and quarantines. In 2020, an Audit Plan was defined and implemented on FERROVIENORD's activities and workplaces, to which a specific audit on the verification of the anti-COVID-19 Protocol was added. This verification was also carried out during the other audits, where an inspection of the workplaces was requested. The accident trend over the last 15 years shows that the preventive and protective measures introduced have made it possible to halve the number of accidents. However, this is a “fluctuating” trend, with values fluctuating between highs and lows from year to year, but leading, after a long period of time, to a clear reduction in the number of accidents.
RATE OF RECORDABLE ACCIDENTS AND EMPLOYEE FATALITIES (AT WORK AND EN ROUTE) BY GENDER Men Women Total FNM Group Recordable accident rate 15.3 6.5 14.1 Accidental death rate 0.0 0.0 0.0 Rate of accidents with serious consequences (excluding deaths) 0.3 0.0 0.3 Ro.S.CO Recordable accident rate 8.0 0.0 3.3 Accidental death rate 0.0 0.0 0.0 Rate of accidents with serious consequences (excluding deaths) 0.0 0.0 0.0 Railway infrastructure management Recordable accident rate 9.7 5.7 9.2 Accidental death rate 0.0 0.0 0.0 Rate of accidents with serious consequences (excluding deaths) 0.8 0.0 0.7 Road passenger transport Recordable accident rate 20.3 17.8 20.1 Accidental death rate 0.0 0.0 0.0 Rate of accidents with serious consequences (excluding deaths) 0.0 0.0 0.0 Rail transport (Trenord)* Recordable accident rate 30.5 37.4 31.7 Accidental death rate 0.0 0.0 0.0 Rate of accidents with serious consequences (excluding deaths) 0.4 0.0 0.3 * Rail transport (Trenord) accident rates include COVID-19 cases
FNM Autoservizi adopts an integrated policy which is structured into in a plan of improvement objectives and a programme of initiatives, monitored over time. The company pays constant attention to the health and safety of all people: between 2019 and 2020, maintenance work on the electrical and lighting systems in the Tradate and Solbiate depots was completed, while work is still in progress to improve the signage in the depots. Also with a view to all-round safety, the company plans to develop a more in-depth risk assessment campaign for significant natural events. A specific assessment related to seismic risk was carried out in 2020 .
102
7.4. Natural capital
FNM SUSTAINABILITY JOURNEY HIGHLIGHTS Component of Electricity from renewable sources: roughly 16% in 2020 30% at full capacity from 2021 LED lighting in the waiting areas: + 31 % from 2017 Reduction in SCOPE 1 emissions: - 27% * Reduction in SCOPE 2 emissions: - 37% * Waste produced by FERROVIENORD (ferrous material) for recovery: 80% Total expenditure for compensatory maintenance works for the protection of biodiversity: EUR 168 thousand
* For a contextualisation of the trend also with respect to COVID-19 impacts, see the rest of the chapter
A business model to support the fight against climate change
GRI 302-3 The Intergovernmental Panel on Climate Change (IPCC) report released in the autumn of 2018 alerted the world that we have only twelve years to prevent irreversible damage from arising and reaching a point of no return. A 45% reduction in emissions from 2010 levels by 2030 is needed to keep the temperature increase below 1.5°C.
103
FNM Group energy intensity The challenge that the world of transport is called to indicators face is related to the need to move from emergency management to the management of new times. 0.51 (Kj/mgl pkm) Indeed, it will be necessary not only to adopt short- term temporary solutions, but also to plan structured Energy intensity per approaches to cope with day-to-day challenges. In this traction/passenger kilometre(*) (**) - context of significant uncertainty, climate change Passenger transport by road requires companies to think about how it will impact the business in terms of risks, opportunities and financial implications, in order to show resilience and GJ/M€ 1,833.64 create value in the long term. Energy intensity per million euros of The Task Force on Climate-related Disclosure (TCFD), revenues - FNM Group established in 2015 by the Financial Stability Board (FSB) to develop recommendations on climate change (*) The data concerning the intensity per passenger-kilometre concern the companies belonging to road passenger transport FNM risk reporting, has recognised climate change as a Autoservizi and ATV threat to the stability of the global financial system (**) The figure for passengers transported is the official one that ATV communicates in its financial statements and in all the reports and is working to improve the disclosure of climate- required by the Provincial LPT Government Authority and the Veneto Region. Passengers transported are calculated by means of usage related financial risks by companies to their investors, multipliers agreed over the years with the Veneto Region and the Municipality of Verona (for urban transport). lenders and insurers. In order to contribute to the European strategy - zero emissions target by 2050 and to meet the commitments incorporated in the Paris Agreement, measures have also been taken in Italy in the energy and climate field, which have an impact on companies’ strategies. The National Integrated Energy and Climate Plan sets challenging targets, such as reducing GHG emissions by 34.6% in the tertiary and transport sectors by 2030. In its path towards decarbonisation, the FNM Group has strengthened fleet modernisation, integrated, intermodal and sustainable mobility services, projects to contain consumption and improve efficiency, staff training to reduce energy consumption, as well as careful use of resources and protection of biodiversity. Moreover, the Group, fully aware of the importance and complexity of the issue of climate change and how it can represent a potential strategic risk, has launched an analysis of its business model with the aim of recognising the impact that the climate has on company performance in each of its business segments. As part of this journey, understanding physical and transitional risks and assessing their impact will be the first step in better refining how these risks are addressed and managed. ENERGY CONSUMPTION (GJ) 2020 2019 2018 Electricity 2,023,534 2,015,790 2,166,087 Railway infrastructure management 58,005 73,759 87,777 of which from renewable sources 10,146 57 - Road passenger transport 10,087 11,729 9,571 of which from renewable sources 680 568 433 Rail transport (Trenord) 1,955,442 1,930,301 2,068,739 for Traction 1,894,211 1,865,505 1,998,966 for facilities and offices 61,231 64,796 69,773 District Heating 417 550 613 Railway infrastructure management 417 550 613 Road passenger transport - - - Rail transport (Trenord) - - - Diesel 520,552 663,414 712,572 Railway infrastructure management 14,210 11,313 11,299 104
for Traction 12,668 10,054 9,562 for facilities and offices 1,542 1,259 1,737 Road passenger transport 240,705 355,937 370,712 for Traction 240,705 355,937 370,712 Rail transport (Trenord) 265,638 296,164 330,561 for Traction 262,495 293,474 326,476 for facilities and offices 3,143 2,690 4,085 Petrol 299.08 46.11 48.93 Railway infrastructure management - - - Road passenger transport 299.08 46.11 48.93 Methane Gas 340,823 361,861 346,578 Railway infrastructure management 13,339 14,611 14,323 for facilities and offices 13,339 14,611 14,323 Road passenger transport 178,743 224,383 205,880 for Bus traction 160,656 209,520 189,868 for facilities and offices 18,087 14,863 16,012 Rail transport (Trenord) 148,741 122,867 126,375
TOTAL ENERGY CONSUMPTION Railway infrastructure management 85,970 100,233 114,012 Road passenger transport 429,833 592,095 586,212 Rail transport (Trenord) 2,369,821 2,349,332 2,525,675
The conversion factors set out in the UK Department for Business, Energy & Industrial Strategy’s standard parameters – which are updated every year – were used to convert energy consumption data into GJ.
ENERGY CONSUMPTION CONVERSION FACTORS 2020 2019 2018 kWh 0.004 0.004 0.004 tonne/GJ (diesel) 45.321 45.414 45.503 tonne/cm (methane) 0.001 0.001 0.001 GJ/tonne (methane) 49.595 49.776 53.751 tonne/l (diesel) 0.001 0.001 0.001 GJ/tonne (petrol) 0.001 0.001 0.001 tonne/l (petrol) 46.211 46.094 46.162
Environmental governance Energy
GRI 302-1, 302-1, 302-4 Electricity consumption associated with running the FERROVIENORD network, stations and offices refers to medium- and low-voltage electricity. More specifically, this energy is used for station lighting and air conditioning, for technological equipment used as part of the running of the railway network, for heating railway switches in winter and for lifts and escalators. At the end of 2019, the energy audit pursuant to Legislative Decree 102/2014 was drawn up with in-depth analysis of the consumption of electric traction, stations and the car fleet. During 2020, consumption is not significant as, although there has been a large reduction, this is in fact attributable to the consequences of the restrictions owing to the COVID-19 pandemic. 105
FERROVIENORD's main consumption is electricity. By virtue of this, the reduction of emissions can be effectively achieved by stipulating contracts with a so-called “Guarantee of Origin”. When fully operational, the new tender for the supply of electricity envisages a quota of at least 30% of consumption with a Guarantee of Origin65. In 2020, about 16% of the total electricity consumed between rail infrastructure management and road passenger transport will come from renewables, also thanks to the significant contribution of FERROVIENORD.
ELECTRICAL ENERGY (kWh) - Railway infrastructure management 2020 2019 2018 Medium-/low-voltage electricity purchased 15,826,730 20,472,853 24,382,541 Medium-/low-voltage electricity self-produced 16,000 15,857 N/A and consumed
LED lighting in FERROVIENORD stations Improvement actions continued, particularly with regard to the replacement of LED type fluorescent lamps. In accordance with the target of equipping all FERROVIENORD stations66 with LED technology in the coming years, work continued to upgrade lighting systems at stations with the progressive replacement of lamps with lower levels of performance. At the end of 2020, the situation, with reference to the number of lamps, is as follows:
*
* Reference year for the Sustainability Plan 2017-2020
65 Renewable electricity has been purchased by FERROVIENORD since November 2020. 66 Objective refers to the installation of at least one LED system in each FERROVIENORD station 106
Consumption of electricity at the Cadorna facility (kWh millions)
1,08 0,98 0,87 0,79 0,83 0,65
0,19 0,21 0,19
2018 2019 2020
Trenord Gruppo FNM Totale
In 2020, due to the changed needs related to the COVID-19 pandemic, no tender was issued for the refurbishment of the lighting in the Milano Cadorna office. With respect to the objective, the lighting of the station platforms was replaced and the Cadorna atrium was renovated, using the maintenance contracts already in place. The replacement of lamps on the platforms was completed in December, while work on the atrium will be completed in early 2021. The tender scheduled for next year will be limited to the technological and energy renovation of the building. Electricity consumption linked to FNM Group companies offering road mobility services is mainly associated with offices and facilities. In FNM Autoservizi, the variations in electrical energy consumption are compatible with the company's trend in recent years, which has seen a gradual reduction in consumption due to the upgrading of existing systems and awareness campaigns targeted at employees (office workers, operational staff and maintenance personnel). In fact, staff are made aware of the rational use of energy through a dedicated campaign of courses given to both clerical staff and operational staff and maintenance personnel. The company expects that, by 2021, all employees will have received specific training on the rational use of energy. This activity will then be accompanied by the installation of presence sensors to turn lights on and off in common areas.
ELECTRICAL ENERGY (kWh) - Passenger transport by road67 2020 2019 2018 Electricity purchased 2,613,081 3,100,299 2,849,819 Self-generated electricity used 29,432 20,251 0 3,303 14,185 Self-generated electricity sold 0
Training also plays a crucial role in ATV 's electricity consumption. During the summer, the training module “Reducing environmental impact” was completed, an integral part of the company course dedicated to the renewal of the Driver Qualification Card. During regular maintenance, the company has also started the gradual installation of lighting fixtures that use LED lamps. In addition, there are
67 Electricity total does not include E-Vai's share 107 two consumption monitoring activities that should be completed by early 2021. The first concerns the external lighting of the Legnago bus depot, where a complete replacement of the lighting fixtures is planned in agreement with the owner, while the other relates to air leaks in the company's compressed air systems. The latter, in particular, will allow considerable savings in electricity. In this context, it should be noted that La Linea and Martini Bus continue to maintain two photovoltaic plants with a capacity of 19.78 kW and 10.08 kW respectively. Also for 2020, these plants produced electricity, the surplus of which was put back into the market. E-Vai's electricity consumption is overwhelming linked to power for cars used as part of the sustainable mobility service. In 2020, due to the COVID-19 pandemic, there was a reduction in electricity consumption related to car mobility restrictions. This reduction was then offset by the growth of the mobility service offered under the Public model.
ELECTRICAL ENERGY (kWh) - E-Vai 2020 2019 2018 Electricity for recharging electric vehicles68 159,346 151,742 120,221
Rail transport is one of the most energy-efficient modes of transport. In fact, even if accounting for 9% of global motorised passenger movements and 7% of global freight movements, it accounts for just 3% of the transport sector's energy consumption69. Trenord manages activities that may have an impact on the environment via its Integrated Management System, which is certified according to ISO 9001:2015 and ISO 14001:2015 standards. The company is committed to reducing its direct impact and strives to hone processes to make them more effective and efficient. Thanks to close links with train constructors, infrastructure management companies and railway companies, effective tools can be adopted to keep facility and train consumption down. High-voltage electricity consumption associated with train transport is predominantly linked with powering rolling stock. Trenord trains travel on the FERROVIENORD and RFI networks. As regards the consumption of the FERROVIENORD network, in the Milan branch trains are powered by the supply – by FERROVIENORD – of high-voltage electricity into the electrical traction conductors. Energy is transferred to the railway companies operating on the line, specifically Trenord and DB Cargo Italia, in order to power propulsion engines and all auxiliary systems on board trains.
Consumption of high-voltage electricity (kWh millions) 600,00 555,27 518,20 526,17
400,00 426,37 446,64 413,06 200,00 108,63 105,14 99,80 - 2018 2019 2020
RFI FERROVIENORD TOTALE
* Data relating to electricity demand includes electricity consumption associated with the functioning of trains ravelling on the FERROVIENORD network and the Italian Railway Network (RFI).
68 Electricity consumption by offices is shown in the “Network Management” section of this chapter. 69 International Energy Agency – Tracking Report – May 2020 (Link) 108
It should be noted that the higher consumption of electricity for traction on the RFI network compared to that of 2019 is due to the different source used to determine it,70 while the lower consumption of electricity for traction on the FERROVIENORD network is due to a reduction in services during the first half of 2020 due to the COVID-19 pandemic.
Electricity for plants and offices fell slightly as a result of lower consumption. It should also be noted that, in 2020, the Trenord car fleet was renewed with electric cars. The 32 electric vehicles that have come on stream, replacing vehicles with internal combustion engines, have led to a slight increase in the consumption of medium/low voltage electricity for the company fleet.
ELECTRICAL ENERGY (kWh) - Rail transport (Trenord) 2020 2019 2018 Medium-/low-voltage electricity purchased (for facilities 17,008,734 17,998,952 19,381,372 and offices)
FERROVIENORD uses methane gas and diesel to heat its offices and railway stations. In line with its activities to reduce consumption, during the year the company continued with its boiler replacement plan. In fact, five methane boilers were installed on the Milan branch and one methane boiler on the Iseo branch, while, as regards air conditioning systems, three were replaced on the Milan branch and one on the Iseo branch. At the same time, the replacement of diesel boilers also continued. The last oil-fired boiler will also be decommissioned by the end of next year. In general, the trend in consumption of diesel shows an upward trend as the outdoor temperature remained lower than last year.
CONSUMPTION OF METHANE GAS AND DIESEL FOR HEATING - Railway infrastructure management 2020 2019 2018 Methane gas for heating (m3) 336,615 367,379 357,621 Diesel for heating (litres) 40,500 33,000 45,500
This year, the calculation of traction diesel also takes into account the consumption generated by the handling of the cranes and the locomotive of MALPENSA INTERMODALE. However, the trend in consumption of diesel fuel for the traction of service vehicles is down compared to the previous year due to the shutdown of some work activities due to the health emergency. Monitoring of consumption on-board trains In 2019, Trenord ran a campaign to monitor consumption on board trains already equipped with energy meters. The aim of the campaign was, among other things, to produce an information document for train drivers focussed on the conduct to adopt to ensure more environmentally friendly driving techniques. During 2020 - in order to comply with the COVID-19 containment measures and thus avoid the presence in the train drivers' cabs of staff not involved in driving and support activities - it was not possible to carry out “field” tests under the various operating conditions of traffic (peak and off-peak times). In general, all design and construction activities required for the installation of on- board energy meters have been delayed. However, it should be noted that the arrival of the first new trains (ROCK/Caravaggio and POP/Donizetti), which are already equipped with energy meters, will make it possible to expand the test runs and consumption monitoring, which will resume in the course of 2021. This will be followed by the preparation of a specific training programme aimed at making train drivers aware of energy consumption and consequently sensitising them to driving styles designed to reduce it, while respecting the regularity of the service.
70 Since 2020, RFI has introduced a new method of reporting electricity consumption for traction using a virtual meter, which makes it possible to estimate the energy consumed for each journey according to the plane-altimetric characteristics of the line travelled, the characteristics of the assigned path (number of stops and maximum line speed) and the type of train used. As a result of this change, the decision was taken to abandon the previous estimation method used by Trenord, based on specific energy consumption per passenger-km. 109
DIESEL CONSUMPTION FOR TRACTION - Railway infrastructure management 2020 2019 2018 Diesel for the traction of service rolling stock and directly 332,755 263,518 250,538 controlled vehicles (litres) For the traction of service vehicles 107,560 131,594 115,399 For directly controlled vehicle traction 225,195 131,924 135,139
Within the FNM Group, the companies FNM Autoservizi, ATV, La Linea and Martini Bus contribute the most in terms of consumption of diesel and methane gas for bus traction.
METHANE AND DIESEL FUEL CONSUMPTION FOR TRACTION - Passenger transport by road 2020 2019 2018 Diesel for bus traction (litres) 6,286,314 9,271,733 9,652,653 Methane gas for bus traction (m3) 4,049,972 5,263,269 4,734,383
Overall, the significant reduction in consumption is due to the lower mileage travelled in 2020 as a result of the COVID-19 state of emergency (see section 7.2 for more details). Aside from the health emergency, it is worth underlining that all road passenger transport companies are continuing, albeit with varying structures, with fleet modernisation and staff training activities, with the aim of efficiently reducing energy consumption generated by the service offered. FNM Autoservizi has launched several targeted projects simultaneously: an information campaign on sustainable driving called “EcoDriving”, the purchase of new, more efficient buses and strategic management of the fleet, making greater use of more efficient buses compared to the less efficient ones that are gradually being decommissioned by the company. As a result of these initiatives, the company expects to reduce consumption by 1% annually. Moreover, thanks to the effective actions taken, from 2019 to 2020 FNM Autoservizi reduced diesel consumption by 1.3%, as efficiency l/km. FNM Autoservizi's rolling stock has been supplemented by 6 new Euro VI buses, registered between 2019 and 2020, while the car fleet now has 3 electric cars to reduce diesel consumption and contain emissions. At the same time, Martini Bus has purchased new, more efficient diesel vehicles classified as Euro VI which will be registered in 2021.
OTHER CONSUMPTION ITEMS - Passenger transport by road 2020 2019 2018 Diesel for directly controlled vehicle traction (litres) 36,428 57,231 60,068 Petrol for directly controlled vehicle traction (litres) 8,746 1,357 1,444 Methane gas for heating (m3) 456,432 373,724 399,802 Methane gas for directly controlled vehicles (m3) 4,305 4,876 6,388
In line with previous companies, ATV will include an initial supply of electric buses in its fleet starting in 2021. Following the purchase, in 2018, of 40 new Euro VI urban CNG vehicles and a further 5 entering service in 2020, the company remains committed to the regular maintenance and overhaul of injection systems aimed at optimising fuel consumption. In particular, significant investment has been made in methane-powered buses to replace the injectors with the advantage of making the combustion process more efficient. Trenord primarily uses diesel for the traction of its fleet of railcars, used on non-electrified lines and for the traction its rail-replacement buses. In particular, the consumption of diesel fuel related to customer mobility has fallen sharply, largely due to the sharp decrease in consumption for train traction as a result of the pandemic.
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DIESEL FUEL CONSUMPTION FOR TRACTION AND HEATING (litres) - Rail transport (Trenord) 2020 2019 2018 Diesel for train traction 6,163,656 6,740,974 8,110,527 Diesel for replacement bus traction 698,931 919,124 443,198 Diesel for directly controlled vehicle traction 27,125 31,729 30,529 Diesel for heating 82,500 70,500 76,500 Total 6,972,212 7,762,327 8,660,753
As regards the consumption of natural gas, used by the company only for heating and sanitary services, there has been an increase of about 17%. In the Milan Fiorenza facility alone (the main user of natural gas) the centralised boiler has been supplemented by a subsidiary boiler as the thermal power output for the three maintenance workshops was insufficient.
METHANE GAS CONSUMPTION FOR HEATING (m3) - Rail transport 2020 2019 2018 Methane gas for heating 3,753,571 3,089,362 3,155,437 Emissions
GRI 305-1, 305-2, 305-4, 305-7 During 2019, a joint working group was set up across the FNM Group (specifically FNM and its subsidiary companies FERROVIENORD, FNM Autoservizi, E-Vai, La Linea, ATV and Trenord), coordinated by FNM’s CSR and Sustainability Department. The aim was to analyse the energy consumption data of each company in order to standardise the calculation methods used for climate-altering emissions into the atmosphere for their reporting as part of the Sustainability Report-NFS. The result of the round-table work group led to the selection of a methodology for the standardisation of emissions contributions and the finalisation of a shared emissions calculation procedure between FNM Group companies, also used for 2020 reporting. The table below shows the trend in direct and indirect greenhouse gas emissions over the last three years, in line with GRI standards.
GREENHOUSE GAS EMISSIONS PER SCOPE (t CO2 eq) 2020 2019 2018 Scope 1 FNM Group 27,625 37,785 37,824 Traction (natural gas, road and rail diesel, petrol) 25,943 36,224 36,116 Heating (methane gas and diesel) 1,681 1,561 1,708 Railway infrastructure management 1,693 1,556 - Traction (Road and Rail Diesel) 917 738 - Heating (methane gas and diesel) 776 818 - Road passenger transport 25,932 36,229 - Traction (natural gas, road diesel, petrol) 25,026 35,486 - Heating (methane gas) 905 743 - Rail transport (Trenord) 27,579 28,605 29,367 Traction (methane gas and diesel) 19,913 22,276 22,470 Heating (methane gas and diesel) 7,666 6,329 6,897 Scope 2 FNM Group 4,766 7,532 8,839 Railway infrastructure management 3,988 6,548 - Road passenger transport 777 984 - Rail transport (Trenord) 161,557 170,225 185,363
TABLE KEY
The calculation methodology and the emission factors used are specified in a dedicated paragraph at the end of the Appendix.
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For both Scope 1 and Scope 2, the emissions factors used were those proposed by the Italian Institute for Environmental Protection and Research (ISPRA).
Key definitions:
• Scope 1: direct emissions due to the consumption of diesel, methane gas and petrol used to power rolling stock (rail and road) and to heat network infrastructure and offices [Scope 1 of the Greenhouse Gas Protocol (GHGP)].
• Scope 2: indirect emissions deriving from the consumption of electricity and district heating purchased from the grid [Scope 2 of the Greenhouse Gas Protocol (GHGP)]. • Market based: the market-based methodology calculates emissions while taking into account procurement policies and specific contractual agreements signed with the electricity supplier, such as – in the case of the FNM Group – Guarantees of Origin of the electricity (exclusively renewable sources) provided for charging points for E-Vai vehicles.
For the quota of energy not purchased on the basis of specific contractual agreements between Group companies and the electricity supplier, the average emissions factor was used based on total gross national electricity production (296 gCO2/kWh - Source: Annex 2 of NIR 2020), as this was deemed to be the most representative and coherent measure.
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In the fight against climate change, although on the one hand, the upgrade of the fleet appears to be central for road passenger transport FNM Group carbon intensity indicators companies, on the other hand, training their employees on the correct behaviour to prevent 0.032 gCO2e/mgl pkm atmospheric pollution is equally important. Carbon intensity per traction/passenger In 2020, FNM Autoservizi focused on kilometre (*) (**) - Passenger transport by road maintaining the efficiency of the vehicles in circulation and supplemented its rolling stock 115.15 tCO2e/M€ with 6 new Euro VI buses. During the period of Carbon intensity per million euros of service reduction due to the health emergency, revenues - FNM Group which is still in progress, the use of the most (*) The data concerning the intensity per passenger-kilometre concern the recent vehicles was generally favoured and, companies belonging to road passenger transport FNM Autoservizi and ATV consequently, performing well from the point (**) The figure for passengers transported is the official one that ATV communicates in its financial statements and in all the reports required by the of view of environmental impact, in terms of Provincial LPT Government Authority and the Veneto Region. Passengers transported are calculated by means of usage multipliers agreed over the years consumption and relative emissions into the with the Veneto Region and the Municipality of Verona (for urban transport). atmosphere.
In this regard, FNM Autoservizi has defined a specific target for emissions produced: - 2% by 2021. Other companies, such as ATV, have decided to implement the Environmental Management System at all of the company's sites, thus extending certification to all of Verona's sites. The case of E-Vai is different. As stated in the past, E-Vai’s
100% of energy for charging 0 CO2 Scope 2 emissions – points comes from certified market based for E-Vai renewable sources sustainable mobility
71 services are zero CO2 emissions , given that 100% of energy used to recharge the cars comes from certified, renewable sources. From the launch of the service up to the end of 2020, E-Vai’s electric cars have travelled a total of 6,342,615 kilometres, thus avoiding the emission of approximately 72 782.92 tCO2 , which would otherwise have been generated as a result of fuel combustion. In 2020, for a total of 1,288,294 km, approximately 161 tCO2 was avoided. In particular, two tenders were carried out in 2020 regarding the procurement of new latest-generation electric cars (with relative greater efficiency in the use and consumption of KW) and the assignment of a large part of the car recharging service in 33 different locations in Lombardy (also in this case, latest-generation columns).
In 2020, Trenord completed the process of renewing the service fleet with 32 electric cars, replacing the previous endothermic fleet, allowing zero impact staff mobility. In addition to this, in recent years Trenord has started the planting of about 900 trees of 70 different species, distributed on the
71 Scope 2 emissions – market-based emissions linked to E-Vai’s sustainable mobility service. 72 “Guide to saving fuel and emissions of CO2” (2015) from the Ministry for Economic Development, the Ministry for the Environment and the Ministry for Infrastructure and Transport. [3,797,599 km travelled as of December 2018, 132 gCO2 /km = 501.28 tCO2 + 1,256,722 km travelled in 2019, 125 gCO2 / km = 157.09 tCO2 = 658.37 tCO2 saved since the launch of the service]. 113 various maintenance sites and depots of the company, allowing a significant offsetting of the impacts related to CO2 emissions into the atmosphere. In 2020, Trenord's energy intensity index with respect to passenger-km transported was 0.66 kJ/mgl pkm, while the emission index was 0.054 gCO2e/mgl pkm. At the same time, Trenord's energy intensity index with respect to revenues was 3,371 GJ/MEUR, while the emission index was 269 tCO2e/M€. Indirect greenhouse gas emissions In 2020, the FNM Group, in order to move closer to reporting on emissions that are not under direct control of the company, but indirectly due to its activity, and to partially meet the requirement of GRI 305-3 has mapped CO2 equivalent emissions from business travel. Specifically, the kilometres travelled by cars owned by Group employees for business trips and kilometres travelled by train and air were taken into consideration.1
INDIRECT GHG EMISSIONS FROM BUSINESS TRIPS (t CO2 eq) 2020 Business trips by car 2.31 Business trips by train 1.22 Business trips by air travel 3.29 Total 6.82
Other polluting emissions into the atmosphere At the network's facilities operated by FERROVIENORD, ozone-depleting substances can only be found in air-conditioning systems using R22 refrigerant gas, which are found in four facilities on the Milan branch and one on the Iseo branch. Companies operating in the road transport sector (FNM Autoservizi and ATV) are committed to reducing other emissions of gases linked to exhaust fumes through fleet overhaul and regular vehicle maintenance. The data shown in the table differ from those published in the previous Sustainability Report-NFS 2019, as a new and more representative methodology for calculating emissions has been used in 2020, which uses conversion coefficients, published on Ispra's SINAnet portal, based on estimates of average emission factors related to national road transport. These emission factors are calculated with respect to both the kilometres travelled and consumption, with reference to both the detail of the technologies and the aggregation by sector and fuel, processed at a total level and separately for the urban, suburban and motorway areas. Instead, the previous calculation methodology used generic average coefficients.
OTHER POLLUTANT EMISSIONS (t) - Road passenger transport 2020 2019 2018 CO 32.52 46.07 52.25 NOx 117.66 166.22 188.98 VOC 9.88 13.12 14.21 CH4 6.76 8.54 8.16 N2O 0.22 0.37 0.34 PT 9.62 13.78 16.14 SO2 0.07 0.10 0.10
CO: carbon monoxide, produced where not enough air is present during combustion; NOx: 98% NO and 2% NO2, deriving from combustion processes; VOC: “Volatile Organic Compounds”, includes several chemical compounds whose molecules exhibit high volatility; CH4: methane N2O: nitrous oxide, long-lived greenhouse gas PT: particulates, substances dispersed in the air which represent the form of pollution with the biggest impact in urban areas. SO2: sulphur dioxide, formed in the combustion process by oxidation of the sulphur present in solid and liquid fuels (coal, fuel oil, diesel oil).
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It is noted that all pollution parameters produced in 2020 have decreased compared to 2019, in part due to the reduction in service with the associated decrease in kilometres travelled due to the COVID-19 health emergency. FNM Autoservizi and ATV, through the purchase of increasingly modern vehicles and the disposal of the most polluting vehicles, are committed to reducing these types of emissions year after year.
Water
GRI 303-1, 303-2, 303-3, 303-4, 306-1 The FNM Group mainly use water resources for hygiene/sanitary purposes, for cleaning stations and vehicles and for maintenance activities. The majority of the water resources used are guaranteed by the connection to the public water system. The Group complies with the standards and regulations in force on the subject.
WATER WITHDRAWALS BY SOURCE (m3) 2020 2019 2018 FNM Group 226,003 270,133 324,039 Railway infrastructure management 200,737 233,902 287,266 Road passenger transport 25,266 36,231 36,773 Rail transport (Trenord) 298,246 328,092 432,876
In order to reduce the water consumption of all the company's users and to monitor them more precisely, two indicators have been identified as part of the Integrated Management System, one for the Milan branch and one for the Iseo branch. FNM Group and Trenord waste therefore falls into two categories: domestic waste deriving from water consumption linked to hygiene; industrial waste deriving from maintenance activities and the cleaning of vehicles and facilities. 100% of water used for hygiene/sanitary purposes is discharged into the sewer system, while water used for washing yards is treated using oil-water separation systems (and discharged into dry wells). FNM Autoservizi carries out annual sampling and analysis of the wastewater produced at its depots. Between 2019 and 2020, environmental emergency tests were carried out at the FNMA depots in Saronno, Edolo and Tradate. For ATV, the modernisation of the water treatment plants at the Garda, Badia Calavena and San Giovanni Ilarione depots has been agreed with the owner of the buildings. For these buildings, plans are in place for the installation of flow meters in the sewage treatment plants by 2022 in order to more accurately quantify the amount of recirculated water. A total of 70% of water used in cleaning and office activities at La Linea depot is channelled into a treatment plant and subjected to sand-blasting pre-treatment and oil-water separation in underground tanks. In 2019, the washing plant was replaced and compared to the previous plant, the amount of reusable water after treatment has decreased slightly, but there has been a greater reduction in overall consumption of electricity and water from the public waster system.
The consumption of water related to rail transport is linked both to the maintenance and washing of rolling stock carried out at the various sites, and to hygiene and sanitary use by plant personnel. The reduction in overall consumption recorded in 2020 is mainly attributable to the onset of the
115 emergency context, which since March 2020 has led to a contraction in both production and civil uses, following the partial adoption of remote work, as well as the optimisation of withdrawal monitoring activities at the various sites and a more effective identification of leaks in the water supply networks. At the Novate Milanese maintenance site, furthermore, in 2020, the wastewater treatment plant allowed for greater recycling of part of the treated water (approximately +15% compared to 2019). Again with a view to reducing consumption, the design of measures to manage uncontaminated rainwater at the Novate Milanese site was approved in 2020.
Waste
GRI 306-2 The FNM Group companies produce waste similar to urban waste from their office activities. Other wastes derive from specific activities, such as, for example, used batteries from electric cars, materials deriving from the maintenance of railway infrastructure and depots, and waste from the maintenance and cleaning of both rail and rubber rolling stock. The quantity of waste disposed of varies significantly from year to year due to the fact that it derives from extraordinary processes linked to multi-year network maintenance plans. During the year 2020, there was an increase in the generation of waste related to the management of railway infrastructure. On the one hand, the pandemic and the consequent shutdown of the network made it possible to carry out extraordinary maintenance activities on the infrastructure of the Milan branch, on the other, there was a delay in the disposal of the waste produced in the previous year.
WASTE PRODUCTION (kg) 2020 2019 2018 FNM Group 10,510,391 8,431,950 5,568,389 Railway infrastructure management 6,007,082 3,344,344 644,446 Non-hazardous waste 5,748,120 3,228,220 349,729 Hazardous waste 258,962 116,124 294,717 Road passenger transport 252,036 609,255 927,108 Non-hazardous waste 78,864 152,684 104,290 Hazardous waste 173,172 456,571 822,818
Disposal activities are entrusted to specialised external companies, and although it is not possible to determine how the waste produced by the management of the infrastructure is disposed of, it should be noted that approximately 80% of the waste produced by FERROVIENORD consists of ferrous material (ferrous waste and other metals, scrap, rails, copper and aluminium) that is recovered through its sale to third parties. In order to better report the breakdown by disposal method of the waste produced, in compliance with the requirements of GRI Standard 306-2 “Waste by type and disposal method”, the CSR- Sustainability department launched a working group with FERROVIENORD's Infrastructure Development and Worksite Safety departments, which led to the identification of two sample sites. The data collection and analysis carried out in order to meet the GRI Standard requirement also revealed important indications that will need to be implemented and will make it possible, in 2021, to draw up technical specifications to be included in contracts with third-party collection and disposal companies and to define a procedure for this purpose.
Waste Pilot Project
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FERROVIENORD's waste production, which in 2020 will account for 95% of that produced by the entire FNM Group, consists of a portion produced directly by the company (FERROVIENORD) and a portion produced indirectly by contractors. Currently, most of the waste is sent for recovery (R13), but there is no information on the quantity recovered (reuse or recycling) because the contracts in place with the company responsible for disposal do not provide for this. In order to meet the requirements of Legislative Decree 254/2016 and the GRI Standards with reference to waste issues, a working group was set up involving the FERROVIENORD Departments coordinated by the CSR-Sustainability Function of FNM. With particular reference to waste produced indirectly (by contractors), as part of the working group that has been set up, the decision was taken to proceed with the sample selection of two contracts for which all the information on the quantities produced and the related disposal method was fully recovered during the year. In view of the declared priorities of the Lombardy Region for the implementation of replacement works, aimed at eliminating level crossings and, in general, improving accessibility through the creation of cycle paths and plant engineering works (such as public lighting, hydraulic system for disposing of rainwater and related electrical system) and complementary works (signage, safety barriers, green works), data collection has been launched for the Gerenzano contract73, completed in 2020, and the Rovellasca Manera contract74, which will conclude next year. While the first contract only highlighted non-hazardous waste, all of which was to be disposed of in landfills, the second will ensure the reuse of approximately 5.5 million kilograms of excavated earth and rocks present on the site. A total of 1,649 tonnes of land was reused during 2020.
Disposal of asbestos All objects containing asbestos are registered and regularly monitored to ensure that they are in an adequate condition and to avoid deterioration that could result in the release of dangerous fibres into the environment. FERROVIENORD took a sample of airborne fibres in all sites where asbestos or Man-made Vitreous Fibres (MMVF) are present and initiated a project designed to investigate the potential existence of asbestos in other parts of buildings and roofs. The company has set a goal to clear the only remaining roof where asbestos fibres are present by the end of the year 2021.
In the companies belonging to the road passenger transport sector, there are similar initiatives for better waste management within the individual depots. One example is FNM Autoservizi, whose special waste is stored in temporary collection points at the warehouse and/or workshop and then picked up and transported to the final disposal firm by the supplier. All maintenance operations are carried out at the workshop of the FNM Autoservizi depot in Saronno and any uncontrolled spills are managed by the water treatment plant (oil skimmers) at the same depot. FNM Autoservizi's attention goes even further, in fact it plans to increase the total amount of waste recovered instead of sent to landfill by 5% by 2021. At ATV, temporary waste depots are being reorganised, which will allow waste to be separated in a more targeted manner and, at the same time, identify suitable areas for its storage, with the aim of safeguarding the underlying land. In addition, the Group offered its employees a training module entitled “Reducing Environmental Impact,” which also covered issues related to how to behave in the event of accidental spills of fuel or working fluids during service.
The production of waste in rail transport, as well as in infrastructure management, varies according to the maintenance cycles and the cleaning of rolling stock carried out, as well as on the basis of the maintenance activities of the sewage and wastewater treatment plants. In the case of Trenord, the effective implementation of improvements in wastewater management and the reduced volumes
73 The final project was approved by the Lombardy Region (General Directorate for Infrastructure and Mobility) pursuant to Regional Regulation no. 11 of 26 November 2002 - "Regulation for the technical and financial management of interventions on the regional railway network under concession pursuant to art. 23 of Regional Law no. 22 of 22 October 1998, as amended and supplemented" by Decree no. 9046 of 29 October 2015 74 Lombardy Region approved 'the project’s technical and economic aspects under Decree no. 17078 of 22/11/2018. The initiative has also been approved by the Municipal Administrations concerned. 117 of service provided due to the health emergency have led to a reduction of around one third in non- hazardous waste.
WASTE PRODUCTION (kg) - Rail transport (Trenord) 2020 2019 2018 Rail transport (Trenord) 4,251,273 4,478,351 3,996,835 Non-hazardous waste 1,678,416 2,494,053 2,393,163 Hazardous waste 2,572,857 1,984,298 1,603,672
On the contrary, the increase of about one third in hazardous waste produced is essentially due to the corresponding 30% increase in the demolition of obsolete rolling stock carried out in 2020 at the Novate Milanese site.
Biodiversity
GRI 304-1, 304-2, 304-3, 413-2 Rail infrastructure and transport is the FNM Group’s sector of activity with the greatest impact on landscapes and biodiversity. While from one perspective the enhancement and opening of routes bring benefits for local areas, on the other hand it is important that works are accompanied by measures designed to mitigate effects on the landscape. As such, FERROVIENORD, in collaboration with NORD_ING, always assesses risks relating to the impact on the landscape of the sites involved, as well as the level of incidence of any future works. As a result of this policy, a series of necessary supplementary post-works were identified. The main ones in progress include: The rail link between Malpensa Terminals 1 and 2 falls within the Ticino Natural Park, which is recognised as a UNESCO heritage site. In 2017, environmental compensation and mitigation works were carried out, with the aim of recreating the lost environments while minimising the aesthetic impact. The works involved the grassing over of more than 170,000 square metres, the planting of native species and woodland areas for a total of 86,000 square metres and the restoration of wildlife underpasses. In 2020, NORD_ING carried out maintenance on green areas by pruning, grassing and planting over 250,000 m2 of mitigated areas. Environmental monitoring activities were carried out, with a particular focus on underground water resources. At the same time, over the next year, the company intends to develop environmental compensation and biodiversity projects for the T2 Malpensa-RFI Sempione rail link project. The extension of the MXP T2-RFI Sempione railway link. Pre-work monitoring of fauna and flora was carried out in the forest areas affected by the project. All aspects of the design were finalised and detailed. Castano –Turbigo environmental and landscape projects Following compensation and mitigation work involving forest areas and ecological connections undertaken in recent years, a number of ecological corridors were created and in 2020 maintenance was carried out on forest areas along the Castano – Turbigo route. Agreements are also in place with the Ticino Park for the transfer of wooded areas and ecological connections. Ticino bridge strengthening works are in progress. During preparatory work in advance of the start of strengthening works, careful attention was paid to soil and subsoil movement during the site phase.
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It is also reported that the monitoring related to the use of wildlife underpasses after the first year since the implementation of the works 2015-2016 has been concluded with excellent results. Overall, between 2016 and 2019, the greatest number of passages through underpasses can be attributed to murines (Murinae) and domestic cats (Felis catus) but Total expenditure for wildlife underpasses have also been used intensively by species compensatory maintenance work such as red fox (Vulpes vulpes), badgers (Meles meles), common hedgehogs (Erinaceus europaeus) and leporids (Leporidae). The use EUR 168 of underpasses by the whitethroat (Hierophis viridiflavus) is also interesting. As could be observed through both the footprint survey thousand (2020) and the use of camera traps, from 2016 to 2019 the number of taxa using underpasses increased while taxa already using underpasses in 2016 used them more in 2019 and were also detected in underpasses they had previously ignored. From 2016 to 2019, the underpasses thus increased their ecological value and contributed to the improvement of the landscape and environmental context where they were placed and in which they became an important functional element.
Noise and vibrations
GRI 413-2 The noise impact of FNM Group and Trenord activities stems largely from train transit and is particularly significant in built-up urban areas. Within this context, FERROVIENORD has installed noise minimisers and lubrication systems on tracks and is undertaking emissions analyses and monitoring in collaboration with NORD_ING. The company indeed produces a five-year noise map of tracks used by over 30,000 trains per year and creates action plans designed to manage environmental noise in terms of estimates of the reduction in the number of people exposed. Projects completed during the year include: acoustic study and subsequent implementation of mitigation measures and forestry report following the upcoming construction of the doubling of Seveso – Meda and Seveso – Camnago and PM Baruccana; a study on the Novara – Sacconago section and the Bovisa hub. In addition, the acoustic, atmospheric and traffic study for the replacement of some level crossings in Locate Varesino was carried out. On the other hand, environmental monitoring is under way, with particular regard to underground water, noise and vibrations of flora and fauna following the construction of the T1 - T2 railway link; the vibrational acoustic study of the doubling of the Inverigo - Arosio section and the vibrational acoustic study of the upgrading to standard of the Castagneto, Borgonato, Bornato plant and the New Brescia Violino Stop and the Bovisa hub. The projects completed also include experimentation in the municipality of Vanzaghello of a module device for isolating low-frequency, broad-spectrum vibrations, with Phononic Vibes (a start-up company set up at the Milan Polytechnic), which, by burying these modules, makes it possible to reduce vibrations from trains. FERROVIENORD is currently experimenting with the installation Under Sleeper Pads (USPs) under 1,000 railway sleepers on the Bovisa - Seveso Meda section. The activity – which began in 2019, when vibrations were measured before work began – were concluded with post-work vibration measurements. However, the new, high-performance trains set to enter into service from 2020 will
119 reduce acoustic emissions, thus limiting the need to install new noise barriers, which are currently present along 12.4 km of the railway network. FNM Autoservizi manages the issue of noise and vibration mitigation through an integrated risk assessment and management system, measurement campaigns and the continuous renewal of the fleet through the purchase of new generation buses and the decommissioning of older vehicles. In 2019, the company updated its risk assessment for its noise impact following measurements taken by an external supplier. In 2021, a new campaign will be carried out to assess the noise produced by the transit of buses entering and leaving the company's depots. ATV periodically reiterates the organisational rules which define the correct behaviour for the protection of the local community and the surrounding environment. As scheduled, the acoustic impact assessment is being carried out at the San Bonifacio depot.
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7.5. Social and relationship capital
FNM SUSTAINABILITY JOURNEY HIGHLIGHTS Awareness campaign in stations to prevent the spread of COVID-19 3 partnerships to contribute to the SDGs Events dedicated to Sustainable Mobility and LPT: 11 Customer satisfaction GRI 413-1 Guaranteeing the highest levels of service quality and customer satisfaction is one of the primary objectives of the FNM Group. The Group pays particular attention to ensuring compliance with contracts signed75 with Lombardy Region, to constantly monitoring its services and to maintaining ongoing dialogue with stakeholders as part of efforts to develop its social and relationship capital. As the party responsible for managing services in stations, and fully aware that the quality of these services is directly linked to customer well-being, FERROVIENORD strives to ensure that services progressively improve both in terms of security and structure and as regards the surrounding areas, as part of the objective of transforming simple stations into places for all customers to enjoy. In said context, complaints regarding FERROVIENORD services and activities represent a precious source of information on the needs, dissatisfaction and preferences of the public. This information is combined with other data to aid in the definition of action plans designed to resolve critical issues and ensure constant service improvement. The “FERROVIENORD TI ASCOLTA” service was also active in 2020. Thanks to the website www.ferrovienord.it, 468 traveller applications were registered and 565 cases were managed.
Alongside the Italian Railway Network and ANCI Lombardy, FERROVIENORD takes part in the “Stazioni in Comune” [Municipal Stations] project, which aims to restore and renovate over 400 railway stations in Lombardy, improving passenger services and strengthening relationships with towns and cities. In line with this commitment, FERROVIENORD is continuing contractual negotiations with municipal administrations to improve station accessibility, also in terms of expanding parking spaces, and is also working to enter into an agreement for a new car park at
Inpost Lockers 13 stations where the service is active 4 stations in which the Amazon Locker is active 52 commercial spaces in stations
Prontolo service active in three stations (Milan Cadorna, Milan Affori, Busto Arsizio)
Milan's Affori station.
75 Reference to the Service Agreement signed by FERROVIENORD in 2014 and to the “Planning Agreement for investments and extraordinary maintenance on the regional rail network under concession to FERROVIENORD between the Lombardy Region and FERROVIENORD for the period 28/07/2016 - 31/12/2022”. 121
With regard to the issue of health protection in stations, in view of the ongoing pandemic, in addition to guaranteeing the public access to a clean and sanitised station more frequently, an awareness campaign was carried out that included the dissemination of text and audio messages on a continuous basis on the monitors present in the stations. Inside the latter, precise signage has been set up dedicated to the management of passenger flows, with appropriate information signs. Due to the health emergency, there were no new business openings during 2020. Despite the difficulties and limitations arising from the emergency regulations, the existing businesses remained active. In order to meet the needs of businesses in the stations, they have been able to benefit from a significant reduction in rent, obtained through measures financed by companies and the so-called “transfer of credit”. At the beginning of 2020, three additional Amazon pick-up points were activated at the Milan Domodossola, Milan Bovisa and Milan Affori stations, for a total of 13 lockers. The activation of 100 Amazon Hub Lockers in FERROVIENORD stations is planned for the next few years, as well as an increase in commercial spaces in stations and bookcrossing. Despite the unique year, FNM Autoservizi regularly conducted a customer satisfaction survey via the “Sessantasecondi” [Sixtyseconds] questionnaire to monitor the quality of the service provided. The questionnaire gathered information regarding the type and dynamics of customer journeys, with customers asked to give a rating of between 1 (not good enough) and 5 (excellent) on a series of aspects relating to the service. Considering that the bus lines76 surveyed change cyclically every year, the analysis showed an overall satisfaction index of over 90%. The main elements being assessed include cleanliness, availability of information, availability of tickets and guidance77.
76 During 2020 the bus routes assessed were: C69, H203, C66, C76, F23B, H632. 77 123 people were questioned as part of the survey. 122
For Local Public Transport companies, offering a positive customer experience is of utmost importance. Understanding what customers' opinions and needs are is essential to structuring targeted offers and communications. For ATV, understanding what the real strengths and weaknesses of its offering are is also crucial. In fact, the company regularly carries out both a customer satisfaction survey on the main service quality criteria, through interviews at the stops, and a further ad hoc survey on the customers who use the services on Lake Garda. The 2020 customer satisfaction survey has been slightly delayed due to current circumstances; it will be carried out from early March 2021. In order to enhance the focus on the end customer, E-Vai has created the new mobile app platform so that the customer can access the service more easily. In addition, with a view to continuous improvement, a new registration form is scheduled to be released in 2021, which will enable customers to register more quickly and easily for the service. This will be accompanied by other activities, including the replacement of some of the recharging stations to make the rental procedure easier and faster, and the creation of new stations to give greater visibility to the service and ensure more extensive coverage in the local area.
As part of its focus on passenger needs, Trenord’s Customer Centricity Task Force measures customer satisfaction twice a year, through the Customer Satisfaction analysis. In 2020, due to the health emergency from COVID-19, the survey that is usually carried out in May was not carried out, while only the November survey was carried out, albeit in an on-line mode, through a
123 questionnaire sent by e-mail. However, the big difference in the way the survey was carried out (which in previous years consisted of a more in-depth evaluation of the service, also thanks to the possibility of physical interaction with the staff on board the train) did not allow for results comparable to those of the “traditional” Customer Satisfaction survey of previous years. Listening to customers in the digital age Trenord is attentive to the needs of its customers. Another important factor for the company is the ability to access all information during the planning phase, while travelling and in stations. Circumstances that have seen a sharp decrease in travel have also translated into a decrease in interactions on digital channels. It went from 230 thousand unique monthly customers to 120 thousand with 32 thousand downloads per month. A way to shorten the distance with its customers and to get in touch with them, Trenord's Instagram channel which saw, in 2020, 322 posts published (+134 compared to last year) and about 6,900 followers. In addition to this channel, there is the social network LinkedIn, with about 13,874 followers, and the sending of the newsletter for commercial (7), informative (5) and engagement (4) purposes to about 260 thousand subscribed customers.
Community and value sharing: projects and initiatives in the territory GRI 102-12, 102-13, 413-1 The reference values already addressed in 2019 (which included “industrial efficiency”, “quality of service”, “ethics and transparency”, “sustainability and enhancement of human resources as a driver of the Group's growth”), are augmented by themes that, during 2020, have gradually assumed greater importance, namely innovation, urban redevelopment and the sustainable rethinking of city spaces. In this context, the concept of sustainability represents an intrinsic corporate value, which is also communicated at public-oriented events as an integral part of the company. The objective, in fact, has always been to raise stakeholder awareness of sustainability and/or sustainable mobility. The contribution to the SDGs also involves building important relationships with local organisations and associations: three partnerships were concluded during the year, one with Banco Alimentare, for the promotion of food collections, one with Pallacanestro Varese - “Basket: a school of life” and one with Valore D, in support of gender balance and an inclusive culture in organisations and in our country. During the year, 11 events were held for the external public. The theme that ran through most of these events was sustainable mobility and the impacts that Covid had on mobility. With the introduction of restrictive regulations nationwide to deal with the Covid pandemic in March 2020, some events were held in digital or phygital (physical and digital) mode. Also worth mentioning is the round-table group on Sustainable Mobility and Local Public Transport, organised in collaboration with Ambrosetti, which discussed the challenges and the synergies that can be established for companies operating in the mobility sector and the role of institutions in encouraging the adoption of more sustainable solutions. The current emergency has forced an open and careful dialogue with regard to the future evolution of mobility. Among the most relevant events:
Italy that invests: infrastructure, mobility and work that will change (April 2020), digital event. Organised in collaboration with Il Corriere della Sera and streamed live on Corriere.it, the event focused on a debate on the future of the transport system and the world of work after the COVID-19 emergency. 124
The mobility of the future: smart, innovative, sustainable (June 2020), digital event. Organised in collaboration with Aspen Institute. During the meeting, the economic and infrastructural repercussions caused by the COVID-19 epidemic were discussed, as well as the new management models and regulatory investments that will be necessary to enjoy more sustainable mobility. Morning Talks. A series of three digital events organised by L'Economia del Corriere della Sera together with FNM, moderated by Corriere della Sera journalists and streamed live on Corriere.it from Sala Buzzati: “The architecture of new cities” (21 September 2020), “Economy, industry and innovation: the challenge of a new mobility” (20 October 2020), “Mobility and the role of institutions” (16 November 2020).
The intense activity contributed to a twofold objective: while on the one hand it was important to rethink the traditional concept of mobility, on the other hand it was essential to communicate in a timely manner to all users the new regulatory provisions to tackle the spread of the COVID-19 pandemic. FNM has therefore launched an intensive communication campaign for signage related to COVID-19 standards during the so-called “Phase 2” and “Phase 3” for FERROVIENORD, FNM Autoservizi and E-Vai. The communication focused on the measures taken in the stations of the network by FERROVIENORD to allow access to the service under safe conditions. Il bosco delle sette querce (Seven Oaks Wood). A story of friendship, trees and adventure
FNM has contributed to the creation of a comic book on sustainable mobility for primary and secondary school children, entitled “Il bosco delle sette querce. A story of friendship, trees and adventure.” The contents of the publication will be conveyed through the meetings “Basketball: a school of life”, organised by Pallacanestro Varese with the schools in the province of Varese. Students who attend will be given a copy of the book. Meetings will be held between January and May 2021.
As part of support for social and sporting activities in 2020, the following events should be noted:
— Milan Art and Music Festival; — 41st Rimini Meeting “Deprived of wonder, we remain deaf to the sublime”; — Promoting the round-table discussion “Human Regeneration”; — Varese Basketball. Initiative “Basketball: a school of life”; — Mobility Conference MCE 4x4; — “Skyscraper Stories. The 60 years of the Pirellone between industrial culture and the institutional activities of the Lombardy Region”; — Great Trittico Lombardo (Coppa Agostoni, Coppa Bernocchi and Tre Valli Varesine); — E-Mob 4th edition of the National Conference on Electric Mobility; — Valtellina Eco Green.
During 2020, a charitable donation was managed by FNM in favour of the initiative “Your help is precious: support the COVID-19 emergency”, in March 2020, promoted by Lombardy Region in support of the healthcare facilities, doctors and nurses and medical staff, who have fought to treat the citizens of Lombardy against the COVID-19. Promotion of local areas and resources
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The spread of the COVID-19 pandemic has had a major impact on the 2020 prospects and objectives for consolidation in the Lombardy tourism market. One of the biggest consequences was certainly felt in the events sector in the local area, both of an economic nature such as fairs and conventions, and of a more tourist and recreational nature (e.g. Formula 1,999 tickets sold for the 1 Grand Prix, concerts, events...). Despite the reduced Lake Trains number of travellers, particularly foreigners, also in 2020 Trenord activated the main offers “Discovery Train”, “Train&Bike”, “Train&Trek” and “Treno dei Sapori” in the 2,508 tickets sold to travel local areas reached by the company's rail service. to Gardaland with Trenord In view of the changed context, this year there has been a special focus on the phenomenon of proximity tourism as a model for “Vacation 2020”, by enhancing Lombardy's tourist destinations “within train reach”. The digital communication of the offers was also strengthened, replacing the traditional paper brochures, focusing on digital channels such as the Trenord website and app, the company's social channels and the new collaboration with Google Adwords. Also with this in mind, in 2020, the Lecco Open Rail offer was also launched, a territorial pass with daily validity that allows a return trip from any station in Lombardy to Lecco or Colico and free travel between Lecco and Colico, guaranteeing pass holders discounts on entry to various tourist sites in the area. The evolution of the general scenario will continue to be carefully monitored so that the company can respond to the rebound in demand, working closely with the local areas, but also with a view to identifying new mobility needs and trends. The recovery of the events sector, as well as the resumption of international tourist mobility towards Lombardy, are certainly two focus areas for future activities, if conditions allow this.
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8. Creating value for the country 8.1. The value generated by the FNM Group78 The recent COVID-19 pandemic and the climate crisis have confirmed that there is a close connection between the economic system, the environment and society as a whole. Recent events have, in fact, raised awareness that long-term economic growth is not sustainable if it is not accompanied by the protection and enhancement of the environment, natural resources, people and local communities. In light of this, economic actors, the market and institutions are increasingly aware that the traditional representation of the value of a company through its ability to generate profits is no longer sufficient and adequate to measure the overall value generated on the different systems in which the organisation is incorporated. FNM, fully aware of these ongoing changes, has long been committed to a path of sustainability aimed at increasingly improving its impact on the environment and society. In particular, in order to provide its stakeholders with a global representation of its activities also from an environmental and social point of view, FNM has been reporting its sustainability performance for years in the Consolidated Non-Financial Statement, in accordance with the “GRI Sustainability Reporting Standards”. In addition, starting from 2020 and in continuity with the path undertaken, FNM has decided to identify and quantify the impacts that are generated through its activities not only from an economic point of view, but also from an environmental and social one. In fact, the Group is convinced that its services have an important value in these respects as well: through the transport services provided, for example, it is not only possible to offer a valid alternative to travelling by private car with consequent impacts from an environmental point of view, but people and local communities can also be offered a service thanks to the availability of the transport service, guaranteed even during the most critical moments of the pandemic. Therefore, in order to provide a complete representation of the value generated, FNM has decided to use KPMG's True Value methodology. The aim of this methodology is to identify the economic, environmental and social impacts generated by an organisation and subsequently quantify them in order to measure the
78 The True Value model and the quantification of the economic, social and environmental impacts calculated through its application are not subject to limited examination by PricewaterhouseCoopers S.p.A.. 127
“true value” that the company gives back to the community. Impacts are expressed on a monetary level in order to express the benefit or cost that each impact generates on the community and the environment. Impacts generated by the FNM Group The mapping of the impacts generated by the FNM Group79 has made it possible to identify various impacts from an economic, social and environmental point of view. In particular, this mapping was carried out by examining all the Group's activities and considering not only the direct impacts generated, but also the indirect impacts, i.e. those impacts that are generated “upstream” (e.g. added value generated along the supply chain) and “downstream” (e.g. the costs for operating a private car that passengers were able to avoid by using FNM's transport services) with respect to the Group's activities. In addition, in order to provide a complete and balanced view of the activity carried out, both the positive and the negative impacts were identified. The impacts identified in this manner - for a detailed description of which see the table in the appendix - have been given a monetary value in terms of benefits and costs in order to provide an overall representation of the value generated by the FNM.
Impacts of the FNM Group considered in the True Value model
As outlined, the model not only considers the impacts generated directly by the Group's operating activities and its employees, but also assesses the impacts generated along FNM's value chain. In
79 For further details on the specific impacts generated by Trenord, please refer to the company's Sustainability Report. 128 particular, the impacts generated along the supply chain are assessed both in terms of value added enabled and emissions generated. Impacts generated indirectly by the passengers transported are also assessed, such as the added value enabled in tourist resorts reached by bus and train. Finally, the model assesses the negative and positive impacts generated by the commercial enterprises present in FNM stations and RFI railway stations served through the rail service. The impacts of the FNM Group along the value chain
The
True Value of the FNM Group in 2020 During 2020, the value generated by the FNM Group amounted to roughly EUR 2 billion, of which approximately 65% is attributable to direct and indirect economic impacts. As far as environmental impacts are concerned, it is possible to note that the overall impact generated was negative. This result is mainly due to the reduction in passenger journeys in 202080. The entire public transport system has, in fact, been severely affected by the COVID-19 pandemic due to a decrease in movements and a bucking of the trend in the choice of means of transport, which has seen a reduction in the use of public and/or shared transport in the mobility sector. However, despite the decrease in journeys, FNM has continued to make its transport services available, allowing its passengers to travel, even in a difficult period, thus generating a benefit of around EUR 784 million for the community.
54 %
80 For an in-depth description of the impacts of the pandemic on the transport market, please refer to Chapter 2 of this document. 129 46% True Value Bridge of the FNM Group
Value Chain Operations EUR 1,066 million
Suppliers EUR 630 million
Commercial enterprises and other DIRECT IMPACTS DIRECT stations -EUR 7 million
Employees
EUR 57 million
Passengers EUR 258 million
AND INDIRECT IMPACTS INDUCED Breakdown of True Value by Business Segment*
Railway Road Rail transport Ro.s.co. 5.6% 14.3% 8.3% 71.8% infrastructure mobility (Trenord)
* In this document, the "Rail Transport" sector includes the activities carried out by Trenord, a company that is jointly owned and therefore does not fall under the scope of consolidation of the FNM Group and does not represent a specific segment, but is included in the scope of the NFS. The economic impacts of the FNM Group in 2020 From the point of view of economic impacts, the value generated by the FNM Group is characterised by three components: direct, indirect and induced added value. Specifically, direct value added, equal to EUR 572 million in 2020, represents the value generated by the Group's operating activities. Indirect value added, which amounts to approximately EUR 588 million in 2020, represents the value generated along FNM's supply chain thanks to the Group's expenditure on goods and services during the year. This expenditure has also allowed around 9,000 jobs to be created along the supply chain. Finally, the induced added value, which amounts to approximately EUR 136 million, quantifies the value generated by consumer spending that is realised thanks to the income earned by workers employed directly and indirectly by the FNM Group. The economic impacts of the FNM Group
588
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The environmental impacts of the FNM Group in 2020 The environmental impacts generated by the FNM Group can be divided into two types: impacts strictly related to the operation of trains, buses and the car sharing service and “avoided” impacts”. These impacts are enabled thanks to the fact that FNM passengers choose to travel by public transport as an alternative to private transport, thus avoiding an additional load on the environment. During 2020, the reader can see that there was a negative trend in value creation from an environmental perspective. This result is mainly due to the fact that, despite the fact that there has been a drop in journeys resulting from the COVID-19 outbreak, the transport services offered by FNM have remained active and available. If, on the one hand, FNM has guaranteed continuity of service with consequent energy consumption of vehicles and related negative environmental impacts, on the other hand, the impacts “avoided” have decreased considerably due to the lower use of public transport by passengers in 2020. More specifically, the overall environmental impact was quantified at -EUR 76 million. One of the main negative impact factors is the CO2 emissions generated, which include both direct and indirect emissions, i.e. emissions linked to the supply chain and commercial enterprises at railway stations81. These emissions, amounting to more than 380 thousand tons of CO2 eq, generated a negative impact of -EUR 40 million on the environment in 2020. CO2 eq emissions avoided, on the other hand, quantify the lower emissions that occurred due to the use of the public transport service by FNM passengers as an alternative to the car. It can be seen that they had a positive impact of EUR 19 million, which however, is quantitatively lower than the negative impact of the emissions generated. Similar considerations apply to emissions of atmospheric pollutants (NMVOCs, NH3, SO2, NOx, PM10, PM2.5) which can be quantified at -EUR 29 million overall, i.e. considering both those generated directly and indirectly by FNM and those avoided. This negative impact translates locally into health and quality consequences. Another factor considered in the enhancement of the environmental sphere of True Value model is the noise pollution generated by vehicle traffic, which generated a negative impact of -EUR 17 million in 2020. Also in this case, the noise pollution avoided thanks to passengers who preferred to use FNM services as an alternative to their cars was lower than expected in normal situations and amounted to EUR 17 million, offsetting the negative impact. Finally, the reader can observe that the use of land by the Group through the railway network, facilities and stations has resulted in an environmental cost of -EUR 33 million.
81 Direct CO2 emissions, which amount to approximately 221 thousand tonnes CO2 eq, are associated with the energy consumption of: facilities, company car fleet, bus traction, car sharing, trains and replacement buses. They correspond to the Scope 1 and Scope 2 emissions reported in this document (see paragraph 7.4 for further details). Indirect CO2 emissions, which amount to approximately 162 thousand tonnes CO2 eq, are generated by the energy consumption of: the supply chain, commercial enterprises located in FNM railway stations, RFI stations served by Trenord (including commercial enterprises within them). 131
The environmental impacts of the FNM Group
2
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2
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emissions emissions
absorbed
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Soil converted converted Soil
Environmental Environmental
Noise pollutionNoise Emissions of air of Emissions pollutionNoise The social impacts of the FNM Group in 2020 The social impacts of FNM are quantifiable at a total of EUR 784 million, benefiting employees, suppliers, passengers and the local community in general. In particular, the factor of greatest importance in determining this positive result is the availability of FNM's service, which can be quantified at EUR 356 million. This impact, which represents one of the main components of the overall value generated by the Group, measures the value generated for the community thanks to the possibility that FNM offers to travel along the routes covered by the service to satisfy work, study, tourism, or leisure needs. Even in a period of difficulty, in fact, FNM offered its passengers the possibility to travel equating to roughly 2.4 billion kilometres. 132
Some of the most significant impacts avoided include avoided road congestion and avoided traffic accidents. In particular, passengers who have chosen FNM transport services as an alternative to personal vehicles have avoided both inconvenience to the local community in terms of time lost in traffic (for a total value of EUR 63 million) and the avoidance of road accidents (the avoided cost of which can be estimated at approximately EUR 81 million). Another significant benefit that FNM has returned to the community and, in particular, to its passengers, corresponds with the avoided car operating costs. In particular, passengers who, despite having the possibility to travel by car, chose to use FNM's transport services, benefited from cost savings (such as fuel costs, maintenance, etc.) quantified at approximately EUR 166 million. Lost travel time, on the other hand, represents the most important social category of negative impact and can be quantified at -EUR 69 million. This value quantifies the damage generated for the local community due to delays and cancellations of trains and buses and the travel time spent in crowded trains, i.e. trains where there is no guaranteed seat.
The social impacts of the FNM Group
133
9. Outlook Recent developments in the COVID-19 pandemic, the spread of new variants and uncertainty surrounding the timing of vaccinations limit visibility over the coming months and require a continued cautious approach for 2021, especially with regard to the local public transport sector. In particular, it is expected that traffic revenues in the road passenger transport segment will continue to be penalised by weak demand due to travel restrictions resulting from lock-downs, which may be envisaged from time to time depending on the evolution of the epidemiological emergency. On the other hand, it is assumed that production will be reduced less than in the first half of 2020 with, therefore, an accordingly lesser reduction in direct operating costs. Based on the government support measures known to date, the segment's revenues and margins are therefore expected to contract compared to a pre-pandemic scenario and to 2020, a year that has benefited from important compensatory measures by the government. The introduction of additional relief would mitigate the negative effects on revenues and margins resulting from the pandemic. By contrast, rolling stock rental and rail infrastructure management activities will continue to be less exposed to the effects of the epidemic; however, even in 2021, advertising revenues and revenues related to commercial real estate leases could be reduced compared to a pre-pandemic scenario. Again for 2021, all companies will continue to implement actions to contain the negative impacts of the emergency, by reducing the main cost items. In light of these considerations, on a like-for-like basis with 2020, it is reasonable to expect that the Group's revenues will be in line with 2020, while, on the other hand, EBITDA is expected to fall by an estimated 20% (approximately) with respect to 2020, in the absence of additional government support measures. However, 2021 will be a turning point for the FNM Group: the acquisition of 96% of MISE sanctions the Group’s transformation into an integrated mobility operator through rail transport, local public transport by road and motorway infrastructure. The full consolidation of MISE, starting 26 February 2021, will result in a significant increase in the FNM Group's equity and economic performance, which will benefit from more diversified revenues and an improved earnings profile, with the simultaneous diversification of regulatory risk. Therefore, including MISE in the FNM Group’s scope of consolidation from 26 February 2021, it is expected that, compared to 2020, in 2021 revenues will increase by approximately 70% while Adjusted EBITDA is expected to double, with a positive effect on the Adjusted EBITDA/Revenues ratio which should increase by roughly 7%. Also in the case of motorway infrastructure management, the current epidemiological situation calls for conservative forecasts of motorway demand, which is nevertheless expected to grow slightly in 2021 compared to 2020, also in consideration of the greater resilience of freight transport and the faster recovery of car traffic during periods of relaxation of anti-virus measures, as demonstrated in 2020. On the other hand, it should be noted that, at present, as in 2020, there are no government measures planned in 2021 to support the contraction of revenues due to lower motorway traffic compared to the pre-COVID-19 period.
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At present, the comparison on a like-for-like basis (i.e. considering MISE consolidated in FNM for the whole of 2020 and the whole of 2021), shows, for 2021, revenues in line with 2020 and slight growth in EBITDA (low single digit). The Adjusted EBITDA/Revenues ratio is expected to remain constant. From a financial point of view, the payment of the purchase price (a total of EUR 604 million - of which EUR 78.3 million paid in 2020), combined with the consolidation of MISE’s net financial position and the investments planned for the renewal of the fleets will result in an increase in the Group’s debt, which in turn will result in an increase in the Adjusted NFP/Adjusted EBITDA ratio, compatible with the parameters set for the current rating levels (Baa3 by Moody’s and BBB- by Fitch, both with positive outlook) and the financial covenants provided for in the existing loan agreements. To date, the Group has liquidity headroom of around EUR 90 million in uncommitted lines, thereby offering sufficient financial flexibility. During the course of the year, the Company reserves the right to potentially define its medium/long- term financial structure as it sees fit, to increase efficiency in offering support to future strategic development, including through access to the capital market. At present, for Trenord - valued using the equity method - 2021 looks very much like 2020. The persistence of the current situation of continuous variability of the overall conditions, however complex and difficult, leads to the hypothesis of a progressive recovery of volumes over a period of a few years. The investee company continues to constantly monitor all the main KPIs, regarding the performance of the service, attendance, receipts and the cost-revenue ratio.
Fact sheets Financial capital 201-4 Main public funding received
TYPE OF CONTRIBUTION SOURCE BENEFICIARY 2020 (€/000) 2019 (€/000) 2018 (€/000) Grants for funded investments Lombardy Region FERROVIENORD € 35,445 € 39,141 € 22,667 Infrastructure management service Lombardy Region FERROVIENORD € 91,456 € 91,717 € 92,833 agreement Lombardy Region Company with CCNL (National Renewal of the National Collective Collective € 1,612 € 1,644 € 1,673 Bargaining Agreement coverage Bargaining Agreement ) Railway workers Capital grants Lombardy Region FNM Autoservizi € 4,603 € 4,603 € 4,603 Asset depreciation (TAF-Bus purchase - Lombardy Region FNM Group € 1,846 € 1,822 € 1,771 Station renovation Milano Cadorna) 135
Province of Como FNM Autoservizi € 2,667 € 2,678 € 2,656 Service agreement Municipality and Transport Company for motor vehicle sector Province € 37,299 € 36,229 € 33,321 Verona (ATV) of Verona Municipality and Transport Company Compensatory measures - Rilancio € 3,422 - - (relaunch), Agosto (August) and Ristori Bis Province of Verona Verona (ATV) Decrees Lombardy Region FNMA € 689 - -
Total € 179,039 € 177,834 € 159,524
102-22 Composition of the highest governing body
405-1 Diversity and Equal Opportunities The FNM Group, in compliance with the provisions of its articles of association adapted to Law no. 120/2011 and the subsequent implementing regulation adopted with Presidential Decree no. 251/2012, on the subject of “gender quotas” or “female quotas”, ensures that its management and control bodies are composed of persons belonging to both genders.
Participation in Executive (E) Number of other Role Members TUF independence Gender Year of birth internal Non-executive (NE) roles committees Chairman Andrea Gibelli E - M 1967 - - Deputy Gianantonio Battista NE X M 1958 CRS&E, CR, CCR - Chairman Arnoldi Advisor Giuseppe Bonomi E - M 1958 - 1*
Advisor Tiziana Bortot NE X F 1965 CRS&E, CR, CCR -
Advisor Mirja Cartia D’Asero NE X F 1969 CRS&E, CR, CCR 3**
Number of meetings held during the reporting year: 16 * Chief Executive Officer of MILANOSESTO S.p.A. ** Independent director in ITALMOBILIARE S.p.A.; Independent director in ZURICH INVESTMENTS LIFE S.p.A.; Independent director in IL SOLE 24 ORE S.p.A.
Internal Board of Directors committees: CRS&E: Committee for Social and Ethical Responsibility CR: Remuneration Committee CCR: Committee for Control, Risk and Related Party Transactions
Human capital 102-7 (a) Workforce
2020 2019 2018 No. of people Men Women Total Men Women Total Men Women Total FNM Group 1,947 318 2,265 1,972 305 2,277 1,988 306 2,294 Ro.S.CO 70 113 183 77 116 193 86 114 200 Railway infrastructure management 700 107 807 717 107 824 724 108 832 Road passenger transport 1,177 98 1,275 1,178 82 1,260 1,178 84 1,262 Rail transport (Trenord) 3,437 824 4,261 3,524 791 4,315 3,496 757 4,253 102-8 (a) Composition of workforce
2020 2019 2018 No. of people Men Women Total Men Women Total Men Women Total FNM Group 1,947 318 2,265 1,972 305 2,277 1,988 306 2,294 Fixed-term 42 2 44 70 7 77 129 5 134 Permanent 1,905 316 2,221 1,902 298 2,200 1,859 301 2,160 Ro.S.CO 70 113 183 77 116 193 86 114 200 Fixed-term - - - 2 3 5 4 2 6 Permanent 70 113 183 75 113 188 82 112 194 Railway infrastructure management 700 107 807 717 107 824 724 108 832 Fixed-term 2 - 2 2 - 2 3 - 3 Permanent 698 107 805 715 107 822 721 108 829 Road passenger transport 1,177 98 1,275 1,178 82 1,260 1,178 84 1,262 Fixed-term 40 2 42 66 4 70 122 3 125 Permanent 1,137 96 1,233 1,112 78 1,190 1,056 81 1,137 Rail transport (Trenord) 3,437 824 4,261 3,524 791 4,315 3,496 757 4,253 Fixed-term 66 24 90 106 28 134 62 13 75 136
Permanent 3,371 800 4,171 3,418 763 4,181 3,434 744 4,178
2020 2019 2018 No. of people Men Women Total Men Women Total Men Women Total FNM Group 1,947 318 2,265 1,972 305 2,277 1,988 306 2,294 Executives 29 10 39 33 8 41 35 7 42 Middle managers 84 45 129 87 39 126 87 39 126 Office workers 310 208 518 315 213 528 322 210 532 Blue collar workers 1,524 55 1,579 1,537 45 1,582 1,544 50 1,594 Ro.S.CO 70 113 183 77 116 193 86 114 200 Executives 11 7 18 12 6 18 14 5 19 Middle managers 22 28 50 23 25 48 23 25 48 Office workers 32 78 110 35 85 120 41 84 125 Blue collar workers 5 - 5 7 - 7 8 - 8 Railway infrastructure management 700 107 807 717 107 824 724 108 832 Executives 11 1 12 12 1 13 13 1 14 Middle managers 47 12 59 50 11 61 52 11 63 Office workers 228 76 304 223 70 293 221 67 288 Blue collar workers 414 18 432 432 25 457 438 29 467 Road passenger transport 1,177 98 1,275 1,178 82 1,260 1,178 84 1,262 Executives 7 2 9 9 1 10 8 1 9 Middle managers 15 5 20 14 3 17 12 3 15 Office workers 50 54 104 57 58 115 60 59 119 Blue collar workers 1,105 37 1,142 1,098 20 1,118 1,098 21 1,119 Rail transport (Trenord) 3,437 824 4,261 3,524 791 4,315 3,496 757 4,253 Executives 20 2 22 17 2 19 18 3 21 Middle managers 137 45 182 159 46 205 173 44 217 Office workers 2,664 767 3,431 2,717 735 3,452 2,678 699 3,377 Blue collar workers 616 10 626 631 8 639 627 11 638 102-8 (c) Composition of workforce
2020 2019 2018 No. of people Men Women Total Men Women Total Men Women Total FNM Group 1,947 318 2,265 1,972 305 2,277 1,988 306 2,294 Full-time employees 1,884 252 2,136 1,943 252 2,195 1,958 253 2,211 Part-time employees 63 66 129 29 53 82 30 53 83 Ro.S.CO 70 113 183 77 116 193 86 114 200 Full-time employees 69 88 157 76 88 164 85 84 169 Part-time employees 1 25 26 1 28 29 1 30 31 Railway infrastructure management 700 107 807 717 107 824 724 108 832 Full-time employees 698 100 798 715 99 814 722 99 821 Part-time employees 2 7 9 2 8 10 2 9 11 Road passenger transport 1,177 98 1,275 1,178 82 1,260 1,178 84 1,262 Full-time employees 1,117 64 1,181 1,152 65 1,217 1,151 70 1,221 Part-time employees 60 34 94 26 17 43 27 14 41 Rail transport (Trenord) 3,437 824 4,261 3,524 791 4,315 3,496 757 4,253 Full-time employees 3,420 778 4,198 3,512 740 4,252 3,487 711 4,198 Part-time employees 17 46 63 12 51 63 9 46 55 102-8 (d) External collaborators
2020 2019 2018 No. of people Men Women Total Men Women Total Men Women Total FNM Group 34 10 44 27 7 34 20 6 26 Interns 14 8 22 10 5 15 0 2 2 Temporary workers 5 1 6 3 0 3 5 1 6 Project-based collaborators 6 1 7 7 1 8 6 1 7 Professionals (with VAT no.) 0 0 0 0 0 0 0 0 0 Other 9 0 9 7 1 8 9 2 11 Ro.S.CO 5 2 7 4 1 5 4 3 7 Interns 1 1 2 0 0 0 0 2 2 Temporary workers 0 0 0 0 0 0 0 0 0 Project-based collaborators 4 1 5 4 1 5 4 1 5 Professionals (with VAT no.) 0 0 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 0 Railway infrastructure management 18 7 25 12 5 17 1 0 1 Interns 13 7 20 10 5 15 0 0 0 Temporary workers 4 0 4 0 0 0 0 0 0 Project-based collaborators 1 0 1 2 0 2 1 0 1 Professionals (with VAT no.) 0 0 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 0 Road passenger transport 11 1 12 11 1 12 15 3 18 Interns 0 0 0 0 0 0 0 0 0 Temporary workers 1 1 2 3 0 3 5 1 6 Project-based collaborators 1 0 1 1 0 1 1 0 1 Professionals (with VAT no.) 0 0 0 0 0 0 0 0 0 137
Other 9 0 9 7 1 8 9 2 11 Rail transport (Trenord) 65 8 73 45 3 48 60 2 62 Interns 59 4 63 41 3 44 57 2 59 Temporary workers 2 4 6 0 0 0 0 0 0 Project-based collaborators 4 0 4 4 0 4 3 0 3 Professionals (with VAT no.) 0 0 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 0
405-1 Diversity and Equal Opportunities
EMPLOYEES BY AGE GROUP AND GENDER - 2020 Men Women Total No. of people <30 30-50 >50 <30 30-50 >50 <30 30-50 >50 FNM Group 96 1,087 764 9 179 130 105 1,266 894 Executives - 11 18 - 4 6 - 15 24 Middle managers 1 43 40 1 30 14 2 73 54 Office workers 15 186 109 6 113 89 21 299 198 Blue collar workers 80 847 597 2 32 21 82 879 618 Ro.S.CO 3 50 17 4 61 48 7 111 65 Executives - 7 4 - 3 4 - 10 8 Middle managers - 16 6 1 19 8 1 35 14 Office workers 3 25 4 3 39 36 6 64 40 Blue collar workers - 2 3 - - - - 2 3 Railway infrastructure management 58 426 216 5 53 49 63 479 265 Executives - 3 8 - - 1 - 3 9 Middle managers - 18 29 - 9 3 - 27 32 Office workers 10 139 79 3 38 35 13 177 114 Blue collar workers 48 266 100 2 6 10 50 272 110 Road passenger transport 35 611 531 - 65 33 35 676 564 Executives - 1 6 - 1 1 - 2 7 Middle managers 1 9 5 - 2 3 1 11 8 Office workers 2 22 26 - 36 18 2 58 44 Blue collar workers 32 579 494 - 26 11 32 605 505 Rail transport (Trenord) 329 2,267 841 78 605 141 407 2,872 982 Executives - 7 13 - 2 - - 9 13 Middle managers - 47 90 - 26 19 - 73 109 Office workers 252 1,795 617 76 573 118 328 2,368 735 Blue collar workers 77 418 121 2 4 4 79 422 125
EMPLOYEES BY AGE GROUP AND GENDER - 2019 Men Women Total No. of people <30 30-50 >50 <30 30-50 >50 <30 30-50 >50 FNM Group 95 1,126 751 11 174 120 106 1,300 871 Executives - 14 19 - 2 6 - 16 25 Middle managers - 39 48 - 25 14 - 64 62 Office workers 11 196 108 9 122 82 20 318 190 Blue collar workers 84 877 576 2 25 18 86 902 594 Ro.S.CO 3 52 22 5 63 48 8 115 70 Executives - 7 5 - 2 4 - 9 9 Middle managers - 15 8 - 15 10 - 30 18 Office workers 3 27 5 5 46 34 8 73 39 Blue collar workers - 3 4 - - - - 3 4 Railway infrastructure management 57 438 222 2 58 47 59 496 269 Executives - 5 7 - - 1 - 5 8 Middle managers - 17 33 - 8 3 - 25 36 Office workers 6 142 75 2 40 28 8 182 103 Blue collar workers 51 274 107 - 10 15 51 284 122 Road passenger transport 35 636 507 4 53 25 39 689 532 Executives - 2 7 - - 1 - 2 8 Middle managers - 7 7 - 2 1 - 9 8 Office workers 2 27 28 2 36 20 4 63 48 Blue collar workers 33 600 465 2 15 3 35 615 468 Rail transport (Trenord) 373 2,179 972 84 563 144 457 2,742 1,116 Executives - 5 12 - 2 - - 7 12 Middle managers - 49 110 - 26 20 - 75 130 Office workers 272 1,719 726 84 532 119 356 2,251 845 Blue collar workers 101 406 124 - 3 5 101 409 129
EMPLOYEES BY AGE GROUP AND GENDER - 2018 Men Women Total No. of people <30 30-50 >50 <30 30-50 >50 <30 30-50 >50 FNM Group 104 1,165 719 12 171 123 116 1,336 842 Executives - 14 21 - 1 6 - 15 27 Middle managers - 40 47 - 25 14 - 65 61 Office workers 15 198 108 10 116 84 25 314 192 138
Blue collar workers 89 913 543 2 29 19 91 942 562 Ro.S.CO 6 56 24 4 60 50 10 116 74 Executives - 8 6 - 1 4 - 9 10 Middle managers - 17 6 - 15 10 - 32 16 Office workers 6 27 8 4 44 36 10 71 44 Blue collar workers - 4 4 - - - - 4 4 Railway infrastructure management 56 439 229 2 59 47 58 498 276 Executives - 5 8 - - 1 - 5 9 Middle managers - 18 34 - 8 3 - 26 37 Office workers 7 139 75 2 37 28 9 176 103 Blue collar workers 49 277 112 - 14 15 49 291 127 Road passenger transport 42 670 466 6 52 26 48 722 492 Executives - 1 7 - - 1 - 1 8 Middle managers - 5 7 - 2 1 - 7 8 Office workers 2 32 25 4 35 20 6 67 45 Blue collar workers 40 632 427 2 15 4 42 647 431 Rail transport (Trenord) 363 2,042 1,091 83 534 140 446 2,576 1,231 Executives - 6 12 - 3 - - 9 12 Middle managers - 50 123 - 25 19 - 75 142 Office workers 249 1,601 828 83 503 113 332 2,104 941 Blue collar workers 114 385 128 - 3 8 114 388 136 401-1 Turnover
NEW STAFF HIRED BY AGE AND GENDER 2020 2019 2018 Incoming Incoming No. of people Turnover Men Women Total turnover Men Women Total Men Women Total turnover rate rate rate FNM Group 145 29 174 7.68% 154 14 168 7.38% 210 20 230 10.03% <30 21 5 26 24.76% 27 3 30 28.30% 35 4 39 33.62% 30-50 85 18 103 8.14% 86 10 96 7.38% 117 13 130 9.73% >50 39 6 45 5.03% 41 1 42 4.82% 58 3 61 15.44% Incoming turnover 7.45% 9.12% 7.68% 7.81% 3.50% 7.74% 10.56% 6.54% 10.03% Ro.S.CO 1 5 6 3.28% 2 7 9 4.66% 7 4 11 5.50% <30 0 1 1 14.29% 0 3 3 37.50% 3 0 3 30.00% 30-50 1 4 5 4.50% 2 3 5 4.35% 3 3 6 5.17% >50 0 0 0 0.00% 0 1 1 1.43% 1 1 2 8.11% Incoming turnover 1.43% 4.42% 3.28% 2.60% 5.88% 4.86% 8.14% 3.51% 5.50% Railway infrastructure management 17 6 23 2.85% 27 1 28 3.40% 28 6 34 4.09% <30 12 4 16 25.40% 12 0 12 20.34% 18 2 20 34.48% 30-50 5 2 7 1.46% 14 1 15 3.02% 10 3 13 2.61% >50 0 0 0 0.00% 1 0 1 0.37% 0 1 1 4.71% Incoming turnover 2.43% 5.61% 2.85% 3.77% 0.61% 3.66% 3.87% 5.56% 4.09% Road passenger transport 127 18 145 11.37% 125 6 131 10.40% 175 10 185 14.66% <30 9 0 9 25.71% 15 0 15 38.46% 14 2 16 33.33% 30-50 79 12 91 13.46% 70 6 76 11.03% 104 7 111 15.37% >50 39 6 45 7.98% 40 0 40 7.52% 57 1 58 22.56% Incoming turnover 10.79% 18.37% 11.37% 10.61% 5.13% 10.73% 14.86% 11.90% 14.66% Rail transport (Trenord) 136 56 192 4.51% 226 51 277 6.42% 282 39 321 7.55% <30 54 19 73 17.94% 121 27 148 32.39% 141 20 161 36.10% 30-50 73 32 105 3.66% 100 24 124 4.52% 133 19 152 5.90% >50 9 5 14 1.43% 5 0 5 0.45% 8 0 8 12.35% Incoming turnover 3.96% 6.80% 4.51% 6.41% 4.38% 7.18% 8.07% 5.15% 7.55%
STAFF WHO INTERRUPTED/ENDED THEIR EMPLOYMENT BY AGE AND GENDER 2020 2019 2018 Outgoing Outgoing Outgoing No. of people Men Women Total turnover Men Women Total turnover Men Women Total turnover rate rate rate FNM Group 175 18 193 8.52% 135 10 145 6.37% 188 4 192 8.37% <30 6 1 7 6.67% 10 0 10 9.43% 3 0 3 2.59% 30-50 67 6 73 5.77% 49 3 52 4.00% 63 0 63 4.72% >50 102 11 113 12.64% 76 7 83 1.15% 122 4 126 14.96% Outgoing turnover 8.99% 5.66% 8.52% 6.85% 3.28% 6.37% 9.46% 1.31% 8.37% Ro.S.CO 7 8 15 8.20% 8 4 12 6.22% 1 3 4 2.00% <30 0 1 1 14.29% 0 0 0 0.00% 1 0 1 10.00% 30-50 1 3 4 3.60% 6 2 8 6.96% 0 0 0 0.00% >50 6 4 10 15.38% 2 2 4 0.00% 0 3 3 4.05% Outgoing turnover 10.00% 7.08% 8.20% 10.39% 3.45% 6.22% 1.16% 2.63% 2.00% Railway infrastructure management 36 6 42 5.20% 12 0 12 1.46% 19 1 20 2.40% <30 2 0 2 3.17% 0 0 0 0.00% 0 0 0 0.00% 30-50 6 2 8 1.67% 2 0 2 0.40% 1 0 1 0.20% >50 28 4 32 12.08% 10 0 10 0.00% 18 1 19 6.88% Outgoing turnover 5.14% 5.61% 5.20% 1.67% 0.00% 1.46% 2.62% 0.93% 2.40% Road passenger transport 132 4 136 10.67% 115 6 121 9.60% 168 0 168 13.31% <30 4 0 4 11.43% 10 0 10 25.64% 2 0 2 4.17% 30-50 60 1 61 9.02% 41 1 42 6.10% 62 0 62 8.59% 139
>50 68 3 71 12.59% 64 5 69 1.88% 104 0 104 21.14% Outgoing turnover 11.21% 4.08% 10.67% 9.76% 7.32% 9.60% 14.26% 0.00% 13.31% Rail transport (Trenord) 223 23 246 5.77% 201 18 219 5.08% 180 10 190 4.47% <30 7 2 9 2.21% 10 2 12 2.63% 6 0 6 1.35% 30-50 24 2 26 0.91% 15 7 22 0.80% 10 3 13 0.50% >50 192 19 211 21.49% 176 9 185 1.08% 164 7 171 13.89% Outgoing turnover 6.49% 2.79% 5.77% 5.70% 2.28% 5.08% 5.15% 1.32% 4.47%
EMPLOYEES REGISTERED WITH TRADE UNIONS 2020 2019 2018 No. of people Men Women Total Men Women Total Men Women Total FNM Group 1,181 122 1,303 1,160 112 1,272 1,230 110 1,340 Ro.S.CO 18 27 45 22 29 51 29 30 59 Railway infrastructure management 417 48 465 418 49 467 436 49 485 Road passenger transport 746 47 793 720 34 754 765 31 796 Rail transport (Trenord) 3,437 824 4,261 2,344 515 2,859 2,231 473 2,704
140
403-9 Injuries
EMPLOYEE INJURIES 2020 2019 2018 No. of injuries Men Women Total Men Women Total Men Women Total FNM Group Number of accidents recorded 45 3 48 72 5 77 70 1 71 of which in the workplace 39 2 41 50 3 53 50 0 50 of which while travelling 6 1 7 22 2 24 20 1 21 Number of deaths as a result of accidents 0 0 0 0 0 0 0 0 0 of which in the workplace 0 0 0 0 0 0 0 0 0 of which while travelling 0 0 0 0 0 0 0 0 0 Number of accidents with serious 1 0 1 0 0 0 0 0 0 consequences (excluding deaths)82 of which in the workplace 0 0 0 0 0 0 0 0 0 of which while travelling 1 0 1 0 0 0 0 0 0 Number of hours worked 2,938,275 461,315 3,399,590 3,445,332 495,237 3,940,569 3,526,892 493,138 4,020,030
Recordable accident rate 15.3 6.5 14.1 23.3 10.2 21.5 19.8 2.0 17.7 Accidental death rate 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rate of accidents with serious 0.3 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 consequences (excluding deaths)83 Ro.S.Co Number of accidents recorded 1 0 1 2 1 3 1 1 2 of which in the workplace 1 0 1 0 0 0 0 0 0 of which while travelling 0 0 0 2 1 3 1 1 2 Number of deaths as a result of accidents 0 0 0 0 0 0 0 0 0 of which in the workplace 0 0 0 0 0 0 0 0 0 of which while travelling 0 0 0 0 0 0 0 0 0 Number of accidents with serious 0 0 0 0 0 0 0 0 0 consequences (excluding deaths)83 of which in the workplace 0 0 0 0 0 0 0 0 0 of which while travelling 0 0 0 0 0 0 0 0 0 Number of hours worked 124,741 174,849 299,590 140,368 172,952 313,320 148,559 180,726 329,285
Recordable accident rate 8.0 0.0 3.3 14.2 5.8 9.6 6.7 5.5 6.1 Accidental death rate 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rate of accidents with serious 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 consequences (excluding deaths)83 Railway infrastructure management Number of accidents recorded 12 1 13 21 2 23 20 0 20 of which in the workplace 11 1 12 15 1 0 20 0 0 of which while travelling 1 0 1 6 1 7 0 0 0 Number of deaths as a result of accidents 0 0 0 0 0 0 0 0 0 of which in the workplace 0 0 0 0 0 0 0 0 0 of which while travelling 0 0 0 0 0 0 0 0 0 Number of accidents with serious 1 0 1 0 0 0 0 0 0 consequences (excluding deaths)83 of which in the workplace 0 0 0 0 0 0 0 0 0 of which while travelling 1 0 1 0 0 0 0 0 0 Number of hours worked 1,233,770 173,979 1,407,749 1,272,692 184,913 1,457,605 1,283,397 178,848 1,462,244
Recordable accident rate 9.7 5.7 9.2 16.5 10.8 15.8 15.6 0.0 13.7 Accidental death rate 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rate of accidents with serious 0.8 0.0 0.7 0.0 0.0 0.0 0.0 0.0 0.0 consequences (excluding deaths)83 Road passenger transport Number of accidents recorded 32 2 34 49 2 51 49 0 49 of which in the workplace 27 1 28 35 2 37 30 0 30 of which while travelling 5 1 6 14 0 14 19 0 19 Number of deaths as a result of accidents 0 0 0 0 0 0 0 0 0 of which in the workplace 0 0 0 0 0 0 0 0 0 of which while travelling 0 0 0 0 0 0 0 0 0 Number of accidents with serious 0 0 0 0 0 0 0 0 0 consequences (excluding deaths)83 of which in the workplace 0 0 0 0 0 0 0 0 0 of which while travelling 0 0 0 0 0 0 0 0 0 Number of hours worked 1,579,764 112,487 1,692,251 2,032,272 137,372 2,169,644 2,094,936 133,565 2,228,501
Recordable accident rate 20.3 17.8 20.1 24.1 14.6 23.5 23.4 0.0 22.0 Accidental death rate 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rate of accidents with serious 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 consequences (excluding deaths)83
82 Serious injury is defined as an accident at work that results in death or injury from which the worker cannot recover, does not recover, or it is unrealistic to expect them to recover fully by returning to their pre-accident state of health within 6 months. 141
Rail transport (Trenord) Number of accidents recorded 161 41 202 159 40 199 200 50 250 of which in the workplace 143 40 183 137 33 170 0 0 0 of which while travelling 18 1 19 22 7 29 0 0 0 Number of deaths as a result of accidents 0 0 0 0 0 0 0 0 0 of which in the workplace 0 0 0 0 0 0 0 0 0 of which while travelling 0 0 0 0 0 0 0 0 0 Number of accidents with serious 2 0 2 0 0 0 0 0 0 consequences (excluding deaths)83 of which in the workplace 2 0 2 0 0 0 0 0 0 of which while travelling 0 0 0 0 0 0 0 0 0 Number of hours worked 5,271,977 1,097,325 6,369,302 5,852,240 1,143,112 6,995,352 5,793,849 1,043,174 6,837,023 Number of total accidents excluding 120 29 149 159 40 199 200 50 250 COVID-19 cases Number of accidents with serious consequences excluding cases of COVID- 1 0 1 0 0 0 0 0 0 1983 Recordable accident rate 30.5 37.4 31.7 27.2 35.0 28.4 34.5 47.9 36.6 Accidental death rate 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rate of accidents with serious 0.4 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 consequences (excluding deaths)83
Calculation methodologies: - Accident frequency index: (no. of recordable accidents at work/no. of hours worked) x 1,000,000. - Accident frequency index for accidents with serious consequences (no. of recordable occupational accidents with serious consequences/no. of hours worked) x 1,000,000. - Death frequency index (no. of deaths resulting from accidents at work/no. of hours worked) x 1,000,000. 404-1 Training
TRAINING PROVIDED BY PROFESSIONAL CATEGORY 2020 2019 2018 No. of hours Men Women Total Men Women Total Men Women Total FNM Group 31,403 4,022 35,424 43,383 4,840 48,224 38,209 6,152 44,361 Executives 311 105 416 280 54 334 714 194 908 Middle managers 1,677 866 2,543 2,038 638 2,676 2,432 1,531 3,963 Office workers 5,914 2,449 8,363 10,466 3,416 13,881 7,794 3,766 11,561 Blue collar workers 23,501 602 24,103 30,600 733 31,332 27,269 660 27,929 Ro.S.CO 782 1,276 2,058 735 715 1,450 2,364 2,065 4,429 Executives 100 90 190 17 38 55 341 89 430 Middle managers 383 358 741 289 316 605 894 755 1,649 Office workers 265 828 1,093 429 361 790 1,130 1,220 2,350 Blue collar workers 35 - 35 ------Railway infrastructure management 15,799 2,090 17,889 31,172 2,992 34,165 28,634 2,715 31,349 Executives 130 7 137 221 8 229 232 89 321 Middle managers 1,170 479 1,648 1,497 255 1,752 1,125 592 1,717 Office workers 5,381 1,416 6,797 8,932 2,172 11,103 5,794 1,499 7,293 Blue collar workers 9,119 188 9,307 20,523 558 21,080 21,484 535 22,019 Road passenger transport 14,822 657 15,478 11,476 1,133 12,609 7,210 1,372 8,582 Executives 81 8 89 42 8 50 141 16 157 Middle managers 125 29 154 252 67 319 413 184 597 Office workers 268 206 474 1,105 883 1,988 871 1,047 1,918 Blue collar workers 14,348 414 14,762 10,077 175 10,252 5,785 125 5,910 Rail transport (Trenord) 178,515 33,833 212,347 287,977 34,646 322,623 278,174 31,715 309,889 Executives 113 4 117 361 36 397 99 89 188 Middle managers 1640 376 2,016 2,066 594 2,660 3,568 615 4,183 Office workers 168,656 32,931 201,587 255,277 34,016 289,293 248,505 30,944 279,449 Blue collar workers 8,122 506 8,628 30,273 0 30,273 26,003 68 26,070
TRAINING PROVIDED BY SUBJECT AREA 2020 2019 2018 No. of hours Men Women Total Men Women Total Men Women Total FNM Group 31,402 4,022 35,424 43,383 4,840 48,224 38,209 6,152 44,361 Ongoing (e.g. managerial) 1,849 627 2,476 3,832 1,368 5,200 6,573 2,366 8,939 Technical 19,060 1,122 20,182 29,115 2,018 31,133 18,367 748 19,115 IT 429 242 671 774 331 1,105 1,769 1,576 3,345 Health and Safety 9,107 1,810 10,917 9,399 1,048 10,446 10,802 1,030 11,832 Anti-corruption (231) 637 123 760 264 76 340 697 432 1,129 GDPR 321 99 419 ------Ro.S.CO 782 1,276 2,058 735 715 1,450 2,364 2,065 4,429 Ongoing (e.g. managerial) 181 164 345 361 366 727 1,284 757 2,041 Technical ------IT 90 145 235 68 138 206 657 956 1,613 Health and Safety 455 866 1,321 266 141 407 313 152 465 Anti-corruption (231) 29 51 80 40 70 110 110 200 310 GDPR 28 50 77 ------Railway infrastructure management 15,799 2,090 17,889 31,172 2,992 34,165 28,634 2,715 31,349 Ongoing (e.g. managerial) 1,399 368 1,767 2,180 466 2,646 3,371 728 4,099 142
Technical 10,024 928 10,952 23,460 1,876 25,336 18,367 748 19,115 IT 288 97 385 281 72 353 1,024 580 1,604 Health and Safety 3,586 606 4,192 5,252 579 5,830 5,558 555 6,113 Anti-corruption (231) 253 46 299 - - - 314 104 418 GDPR 249 46 295 ------Road passenger transport 14,821 657 15,478 11,476 1,133 12,609 7,210 1,372 8,582 Ongoing (e.g. managerial) 269 95 364 1,291 536 1,827 1,918 881 2,799 Technical 9,036 194 9,230 5,655 142 5,797 - - - IT 51 - 51 425 121 546 88 40 128 Health and Safety 5,066 338 5,404 3,881 328 4,209 4,931 323 5,254 Anti-corruption (231) 355 26 381 224 6 230 273 128 401 GDPR 44 4 48 ------Rail transport (Trenord) 177,719 34,628 212,347 1,253,731 103,899 1,357,630 - - - Qualification-based technical- 156,423 22,365 178,787 3,778 1,220 4,998 - - - professional Non-qualification based 2,059 959 3,018 1,536 938 2,474 - - - technical-professional Cross-company and behavioural 836 1,648 2,484 27,524 4,521 32,045 - - - Health and Safety 10,463 4,066 14,529 1,214,357 92,645 1,307,002 - - - Anti-corruption 12 20 32 6,536 4,575 11,111 - - - Commercial 7,927 5,571 13,498 ------404-3 Performance assessment
FNM GROUP STAFF INVOLVED IN THE ASSESSMENT PROCESS 2020* 2019** 2018** No. of people Men Women Total Men Women Total Men Women Total FNM Group 210 169 379 215 166 381 234 174 408 Executives 22 7 29 24 5 29 26 5 31 Middle managers 63 33 96 62 30 92 69 32 101 Staff in professional areas 2 and 3 125 129 254 129 131 260 139 137 276 Ro.S.CO 63 111 174 64 110 174 73 116 189 Executives 7 6 13 8 4 12 11 4 15 Middle managers 21 24 45 21 25 46 21 25 46 Staff in professional areas 2 and 3 35 81 116 35 81 116 41 87 128 Railway infrastructure management 139 56 195 143 56 199 158 58 216 Executives 11 1 12 12 1 13 12 1 13 Middle managers 38 7 45 37 5 42 48 7 55 Staff in professional areas 2 and 3 90 48 138 94 50 144 98 50 148 Road passenger transport 8 2 10 8 0 8 3 0 3 Executives 4 0 4 4 0 4 3 0 3 Middle managers 4 2 6 4 0 4 0 0 0 Staff in professional areas 2 and 3 0 0 0 0 0 0 0 0 0 * The data refers to staff of FNM, FERROVIENORD, FNM Autoservizi, NORD_ING, E-Vai and MALPENSA INTERMODALE. The other companies in the FNM Group and Trenord have a valid assessment system based around different procedures and rules. ** The data refers to staff of FNM, FERROVIENORD, FNM Autoservizi, NORD_ING and E-Vai. The other companies of the FNM Group and Trenord have a valid assessment system with different methods and rules.
Natural capital 303-3 Water withdrawn
WATER WITHDRAWALS BY SOURCE m3 2020 2019 2018 FNM Group 226,003 270,133 324,039 Groundwater (well) 8,322 15,435 11,786 Third-party water resources (public water 217,681 254,698 312,253 system) Railway infrastructure management 200,737 233,902 287,266 Groundwater (well) - - - Third-party water resources (public water 200,737 233,902 287,266 system) Road passenger transport 25,266 36,231 36,773 Groundwater (well) 8,322 15,435 11,786 Third-party water resources (public water 16,944 20,796 24,987 system) Rail transport (Trenord) 298,246 328,092 432,876 Groundwater (well) 59,910 66,058 61,867 Third-party water resources (public water 238,336 262,034 371,009 system)
143
303-4 Water discharge
WASTEWATER BY DESTINATION m3 2020 2019 2018 FNM Group 224,051 268,808 324,087 Third-party water resources (sewage) 224,051 268,225 324,087 of which sent to other organisations - - - Groundwater - 583 - Railway infrastructure management 200,737 233,902 287,266 Third-party water resources (sewage) 200,737 233,902 287,266 of which sent to other organisations - - - Groundwater - - - Road passenger transport 23,314 34,906 36,821 Third-party water resources (sewage) 23,314 34,323 36,821 of which sent to other organisations - - - Groundwater - 583 - Rail transport (Trenord) 165,335 205,016 195,320 Third-party water resources (sewage) 165,335 205,016 195,320 of which sent to other organisations - - - Groundwater - - -
306-2 Waste by type and method of disposal
WASTE PRODUCTION kg 2020 2019 2018 FNM Group Non-hazardous waste 7,505,400 5,874,957 2,847,182 Hazardous waste 3,004,991 2,556,993 2,721,207 Total 10,510,391 8,431,950 5,568,389 Railway infrastructure management Non-hazardous waste 5,748,120 3,228,220 349,729 Hazardous waste 258,962 116,124 294,717 Total 6,007,082 3,344,344 644,446 Road passenger transport Non-hazardous waste 78,864 152,684 104,290 Hazardous waste 173,172 456,571 822,818 Total 252,036 609,255 927,108 Rail transport (Trenord) Non-hazardous waste 1,678,416 2,494,053 2,393,163 Hazardous waste 2,572,857 1,984,298 1,603,672 Total 4,251,273 4,478,351 3,996,835
Calculation methodology for emissions The following formula was used to calculate total direct (Scope 1) and indirect (Scope 2) emissions, expressing in equivalent tonnes of CO2:
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Tonnes of CO2eq = Tonnes of CO2 + 28 x Tonnes of CH4 + 265 x Tonnes of N2O
CO2 equivalent is calculated as the sum of emissions of the three greenhouse gases: CO2, CH4 and N2O (as suggested by the GRI Standard indicators - 305-1 Direct (Scope 1) GHG emissions and 305- 2 Indirect (Scope 2) GHG emissions). In order to obtain the equivalent quantity of CO2 for CH4 and N2O gas, these are multiplied by their Global Warming Potential over 100 years (28 for CH4 and 265 for N2O), as set out by the Intergovernmental Panel on Climate Change (IPCC). In order to ensure greater precision and more representative data, the emissions factors used to calculate Scope 1 emissions are different for emissions deriving from static combustion (heating) and traction combustion (road or rail). As regards Scope 2 emissions, the decision was taken to apply the “market-based” calculation method. This meant it was possible to take into account E-Vai's decision to acquire electricity certified as deriving from 100% renewable sources, with no associated greenhouse gas emissions. For electricity purchased from the grid (non-certified), the emissions factor used was the average factor associated with total national gross electricity production (i.e. a mix of renewable and non- renewable sources). For both Scope 1 and Scope 2, the emissions factors used were those proposed by the Italian Institute for Environmental Protection and Research (ISPRA)83. In the sections that follow, we set out details of energy consumption for each business segment (2018-2020), as shown in the following table:
Corresponding paragraph Key data reported Corresponding company Consumption of medium- and low-voltage FERROVIENORD, MALPENSA electricity by the railway network and stations INTERMODALE FNM Consumption of electricity by the Milano FERROVIENORD Cadorna facility (*) NORD_ING Trenord Consumption of methane gas and diesel for FERROVIENORD, MALPENSA RAILWAY INFRASTRUCTURE heating and the traction of rolling stock and INTERMODALE MANAGEMENT vehicles Scope 1 FERROVIENORD
Scope 1 and Scope 2 emissions into the Scope 2 atmosphere FNM FERROVIENORD NORD_ING Trenord Consumption of electricity by the Milano Ro.S.Co. and SERVICES FNM Cadorna facility (*)
83 CO2: Annex 6 and Annex 2 of the National Inventory Report (the most recent – 2020 – edition was used). CH4 and N2O: "Common Reporting Format" tables (the most recent – 2020 – edition was used) attached to the National Inventory Report specified above, as well as – in some cases – historical ISPRA emissions data updated to 2018.
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Consumption of medium- and low-voltage electricity for facilities and offices Consumption of electricity for recharging electric vehicles (E-Vai) Consumption of diesel and methane for the ROAD PASSENGER traction of buses FNM Autoservizi ATV TRANSPORT Other consumption (diesel, petrol, methane La Linea (including Martini Bus) gas) for vehicles E-Vai Consumption of methane gas for heating Scope 1 and Scope 2 emissions into the atmosphere Emissions avoided through the electric car sharing service Consumption of high voltage electricity for train traction Consumption of medium and low voltage electricity for facilities and offices RAIL TRANSPORT (Trenord) Consumption of diesel for the traction of Trenord rolling stock (trains, buses and vehicles) and for heating Consumption of methane gas for heating Scope 1 and Scope 2 emissions into the atmosphere
(*) Energy consumption data for the Cadorna site also include a FNM S.p.A. quota. Data for FNM only is not representative of the impact of the Ro.S.Co. and Services segment. Data on leased locomotives is not available and is therefore not included in the environmental data parameter used for reporting.
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Definition of material themes
Material issues What it means for the FNM Group
Encouraging management of the environmental impact of the Group's activities in Energy consumption, terms of reducing energy consumption, greenhouse gas emissions and atmospheric pollutants, achieved through energy efficiency measures and the rational use of emissions into the resources. Planning strategies increasingly oriented towards controlling the risks atmosphere and connected with climate change and reducing the impact on air quality (for example, climate change by overhauling the fleet in favour of modern motor vehicles that allow a significant reduction in emissions that are harmful to the environment and to human health).
Containing noise pollution and the noise impact of the Group's activities, mainly Managing noise and due to the transit of trains and road vehicles and the operation of construction vibrations sites, especially in highly urbanised areas. Defining appropriate operational guidelines to limit noise and vibration levels, e.g. through noise reduction devices.
Encouraging an essential use of the water resource, used both in the activities Management of related to the operation of the offices and the washing of the means of transport, water resources carrying out a monitoring through intensity indicators and promoting initiatives of recycling/reuse of the water resource, including rainwater.
Promoting responsible management of the waste produced by the Group and its impact on the environment, through the use of disposal methods, recycling policies and practices and mechanisms for reusing the materials and products used. Monitoring both waste deriving from specific business activities (e.g., used Waste management batteries of electric cars; materials deriving from the maintenance of railway infrastructure and depots; materials deriving from activities related to the operation of vehicles, such as trains and buses) and waste deriving from activities related to the operation of offices.
Compensating for the effects of rail and road upgrades by mitigating impacts on the land and landscape in general. Moderating the effects of the Group on ecosystems to protect against loss of biodiversity, destruction of natural habitats, Safeguarding landscape impacts on affected sites and the degree of impact of future work. biodiversity Planning the implementation of compensatory works, and preparing policies aimed at minimising the impacts of construction sites, in terms of both the creation of temporary criticalities in areas adjacent to the works in progress, and the consumption of soil and subsoil.
Preparing adequate internal control systems and spread within the organisation a corporate culture based on integrity, professional ethics and honesty in order to build relationships of trust with its stakeholders and properly conducting its Ethics and Integrity business with transparency in every single operation, particularly in the fight in Business against active and passive corruption and in respect of competitive behaviour. Ensuring respect for the human rights of all stakeholders inside and outside the organisation.
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Setting up a system to manage the company's systemic risks arising from unprecedented large-scale external shocks and events that have social, political Systemic risk and economic implications (e.g. COVID-19). Outlining, therefore, strategic plans management and that identify, prevent and minimise the effects of low probability but high impact business resilience events with potentially significant externalities, in order to ensure business continuity.
Offering tangible opportunities for personal and professional development, developing and maintaining over time the ability to attract and retain talent. Talent attraction and Ensuring competent, motivated and satisfied people for the Group. Providing the human capital workforce with continuous development of cross-company knowledge and development business-specific know-how in line with the needs expressed by them and by the market, in order to better manage any organisational changes in response to changed scenarios.
Offering employees modern and flexible tools and working models that meet specific personal needs and ensure a work-life balance (e.g. company benefits, maternity, paternity). Ensuring, moreover, that the welfare offer for employees Employee welfare responds to the needs arising from an unprecedented time, guaranteeing business continuity for the company through the promotion of the extension of smart- working, organisation of webinars, preparation of activities that promote inclusion and remote interaction.
Ensuring the protection of the rights of all employees and equal opportunities, Respect for diversity managing and valuing diversity, promoting inclusive dynamics by eliminating forms and inclusion of discrimination, including related to remuneration.
Protecting people’s health, safety and psychophysical integrity, also with reference to the quality of the workplace, encouraging the development of a solid internal culture and adhering to the highest national and international standards on the Health and safety in subject. Evaluating, therefore, the performance in terms of health and safety the workplace protection through periodic meetings, preparing, where appropriate, corrective actions and improvement objectives (e.g. staff training, acquisition of new machinery, plant and equipment, improvements to the work environment).
Guaranteeing physical accessibility to services and infrastructures (e.g. stations, Accessibility of trains, buses) to all customers without any discrimination (e.g. standardisation of signs, presence of dedicated stations for people with reduced mobility, extension services and of dedicated parking spaces). infrastructures Collaborating with trade associations so that the Group can take appropriate action to ensure full accessibility to services and infrastructure.
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Providing products, services and infrastructures that meet high quality standards, and that guarantee the security of travellers in stations, at bicycle or car parking Service quality and areas, at bus stops, and on transport vehicles, thanks to the provision of constant customer safety at controls by the security services. the station and while Also ensuring safety of traffic, by preparing, for example, automatic train protection systems that ensure compliance with signals, in accordance with the travelling (Security & highest rail safety standards. Safety) Providing a top-quality service through periodic fleet modernisation initiatives in order to guarantee the safety and satisfaction of the final customer.
Encouraging the modernisation and digital technological evolution through the development of new services and the adoption of digital technologies to be integrated into business processes, infrastructures and services (e.g. MaaS - Mobility as a Service and MaaC - Mobility as a Community). Collaborating with the Technological and various relevant stakeholders to initiate analysis, development and innovation digital innovation activities to best respond to the changing scenario and new habits of FNM's customers. Seizing the opportunities of the digital evolution to set up safeguards to protect the privacy of customers and the security of company data, ensuring high standards of information security.
Encouraging the provision of intermodal and integrated services, which strengthen Intermodality and the bus-train interchange network at stations, promoting transport to enhance tourism in the area and encouraging the implementation of a single integrated integration of ticketing system. Achieving an intermodality of the Group's transport capable of services facilitating the use of the service by customers and making the travel experience pleasant and at the same time functional for the needs of the individual.
Promoting regular dialogue with the Group's stakeholders, in particular with regional and local administrations and public bodies, aimed at finding shared Dialogue with solutions and transparent relations. Creating a relationship that is functional to the stakeholders and analysis and understanding by FNM of the needs of the community and the unique development of the characteristics of the social fabric of the local areas affected by the services offered, local area whether they are related to the network or to passenger transport by rail and road, providing the Group with the opportunity to respond promptly to the needs of its stakeholders.
Basing its purchasing processes, relating both to the company's core activities and to those linked to the operations of the offices, on behaviour oriented towards full respect for legality, transparency and anti-corruption. Adopting criteria for Sustainable selecting, evaluating and monitoring suppliers that also measure their social and procurement environmental performance, in order to guarantee high levels of functionality and, therefore, procurement capable of integrating ESG criteria throughout the supply chain.
Considering environmental, social and governance impacts in the design, Sustainable implementation and use phases of infrastructure, in order to ensure efficient use infrastructure of the resources required to implement infrastructure projects (e.g. iron, steel, management cement, concrete) and minimise the impact on the surrounding area during the infrastructure's life cycle.
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Correlation table between areas of the Decree, material themes and GRI indicators
Role of Legislative Decree Category Material issues GRI Reference standards Perimeter of impacts the FNM 254/2016 Group
Environmental Energy consumption, Environmental 302: Energy (2016) FNM Group, Direct responsibility emissions into the 305: Emissions (2016) Trenord atmosphere and climate change
Managing noise and Environmental - FNM Group, Direct vibrations Trenord
Management of water Environmental 303: Water and Water Discharge (2018) FNM Group, Direct resources Trenord (operating sites, maintenance sites and depots)
Waste management Environmental 306: Water Discharges and Waste (2016) FNM Group, Direct Trenord (operating sites, maintenance sites and depots)
Safeguarding biodiversity Environmental 304: Biodiversity (2016) FNM Group, Direct Trenord, Local administrations (Municipalities, Provinces and Lombardy Region)
Governance, Ethics and Integrity in Anti-Corruption, 205: Anti-Corruption (2016) FNM Group Direct integrity and Business Respect for human 207: Taxes (2019) economic rights 307: Environmental Compliance (2016) responsibility 419: Socio-economic compliance (2016) 412: Assessment of respect for human rights (2016)
Systemic risk management Anti-corruption, - FNM Group Grant and business resilience Respect for human rights, Environmental, Social, Personnel- related
Human resources Talent attraction and human Relating to staff 401: Employment (2016) FNM Group, Direct capital development 402: Worker-Management Relations Trenord (2016) 404 Training and education (2016)
Employee welfare Relating to staff 401: Employment FNM Group, Direct (2016) Trenord
Respect for diversity and Personnel-related, 405: Diversity and Equal Opportunities FNM Group, Direct inclusion Respect for human (2016) Trenord rights
Health and safety in the Relating to staff 403: Health and safety in the workplace FNM Group, Direct workplace (2018) Trenord
Responsibility Accessibility of services and Social 203: Indirect economic impacts (2016) FNM Group, Direct towards infrastructures Trenord
150 customers, Service quality and customer Social 416: Customer health and safety (2016) FNM Group, Direct infrastructure and safety at the station and on Trenord, Public safety transport systems the move (Security & Safety) authorities
Technological and digital Social - FNM Group, Direct innovation Trenord
Intermodality and integration Environmental, - FNM Group, Grant of services Social Trenord, Local administrations, Customers and travellers
Social Dialogue with stakeholders Anti-corruption, 201: Economic performance (2016) FNM Group, Grant responsibility and development of the local Social 413: Local Communities (2016) Trenord, Local (Community) and area administrations Supply chain Sustainable procurement Environmental, 204: Procurement practices (2016) FNM Group Direct Social, Anti- 308: Supplier Environmental Assessment corruption, Respect (2016) for human rights 414: Social rating of suppliers (2016)
Sustainable infrastructure Environmental, - FNM Group, Direct management Social Trenord, Lombardy Indirect Region (funding from Lombardy Region)
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GRI content index GRI content index “in compliance” - core option
Omissions and GRI ID Disclosure Paragraph disclosure Organisation profile 102-1 Name of organisation Methodological Note 102-2 Activities, brands, products and services 1.2. The FNM Group and its history 102-3 Location of head office 1.2. The FNM Group and its history 102-4 Location of activities 1.2. The FNM Group and its history 7.1. Sources of financing: public 102-5 Ownership and legal form administration and shareholders 102-6 Markets served 1.2. The FNM Group and its history 1.2. The FNM Group and its history For more details on the 7.1. Sources of financing: public operating results of the administration and shareholders FNM Group, please refer 7.1. Economic value generated and 102-7 Size of the organisation to the Consolidated distributed Financial Statements 7.3. Development of human capital within downloadable from the Group www.fnmgroup.it Human capital (Fact sheets) As regards the calculation of 7.3. Development of human capital within quantitative indicators Information on employees and other 102-8 the Group on staff and their various workers Human capital (Fact sheets) breakdowns, the head- count method was chosen 102-9 Supply chain 7.1. Sustainable procurement The subsidiary company Locoitalia is included in the scope of Methodological Note consolidation up to 31 Significant changes to the organisation 102-10 1.2. The FNM Group and its history December 2020 and was and its supply chain 7.1. Sustainable procurement sold on 10 March 2020, along with the associated company Fuorimuro. 102-11 Precautionary principle 6.1. Risk governance model 7.2. Production and intellectual capital 7.3. Human capital 102-12 External initiatives 7.5. Community and value sharing: projects and initiatives in the territory 1.4. FNM Group stakeholders 4.3. The sustainability of the FNM Group 102-13 Membership of associations 7.5. Community and value sharing: projects and initiatives in the territory Strategy 102-14 Statement from a senior executive Chairman’s Letter to Stakeholders 4.2. Guidelines of the 2021-25 Integrated Strategic Plan 102-15 Key impacts, risks and opportunities 4.3. The sustainability of the FNM Group 4.4.The capital used to achieve the strategic objectives and the SDGs 152
2.2. The impacts of COVID-19 on mobility in Italy and Europe 6.1. Risk governance model 6.2. Risks and material issues 6.3. Emerging risks Ethics and integrity Values, principles, standards and rules of 1.3. Missions, vision and values 102-16 conduct 6.4. Compliance, ethics and integrity Mechanisms for seeking advice and 102-17 6.4. Compliance, ethics and integrity raising concerns about ethical issues Governance 5.1. Corporate bodies 102-18 Governance structure 5.2. Group policies 5.3. Sustainable governance Executive level responsibility for 102-20 economic, environmental and social 5.3. Sustainable governance issues Stakeholder engagement activities are conducted by the CSR- Sustainability Function. The results of the comparison are Stakeholder consultation on economic, 1.4. FNM Group stakeholders presented in the 102-21 3.1. Stakeholder engagement environmental and social issues Committee for Social and Ethical Responsibility extended to the Steering Committee Sustainability Report- NFS Composition of the highest governing 5.1. Corporate bodies 102-22 body and its committees Financial capital (Fact sheets) Stakeholder involvement 102-40 List of stakeholder groups 1.4. FNM Group stakeholders 100% of employees of the FNM Group and 102-41 Collective bargaining agreements - Trenord is covered by collective bargaining agreements Identification and selection of 102-42 1.4. FNM Group stakeholders stakeholders 1.4. FNM Group stakeholders 102-43 Stakeholder engagement methods 3.1. Stakeholder engagement 1.4. FNM Group stakeholders 102-44 Key issues and criticalities raised 3.1. Stakeholder engagement Reporting practices Parties included in the consolidated Methodological Note 102-45 financial statements 1.2. The FNM Group and its history Definition of report content and topic Methodological Note 102-46 Reading Guide perimeters 3.2. Materiality matrix 3.2. Materiality matrix 102-47 List of material topics Definition of material themes Any changes to the information included in 102-48 Review of information - the previous documents are appropriately identified in the text by 153
means of explanatory notes Methodological Note 102-49 Changes in reporting Reading Guide 3.2. Materiality matrix 102-50 Reporting period Methodological Note 102-51 Date of most recent report - May 2020 102-52 Reporting frequency Methodological Note Contacts for requesting information Methodological Note 102-53 about the report Statement on reporting in accordance Methodological Note 102-54 with GRI Standards 102-55 GRI content index GRI content index 102-56 External Assurance Independent auditing firm report SPECIFIC STANDARDS Material aspect: Energy consumption, emissions into the atmosphere and climate change 3.2. Materiality matrix 6.2. Risks and material issues 103-1, 103-2, Management mode 7.4. A business model to support the fight 103-3 against climate change 7.4. Environmental governance 302-1 Energy consumed within the organisation 7.4. Environmental governance - Energy 7.4. A business model to support the fight 302-3 Energy intensity against climate change 7.2. Ro.S.Co 302-4 Reduction in energy consumption 7.2. Road passenger transport 7.4. Environmental governance - Energy 305-1 Direct GHG emissions – Scope 1 7.4. Environmental governance - Emissions Indirect GHG emissions from energy 7.4. Environmental governance - Emissions 305-2 consumption (Scope 2) 305-4 GHG emission intensity 7.4. Environmental governance - Emissions Nitrogen oxides (NOX), sulphur oxides 7.4. Environmental governance - Emissions 305-7 (SOX) and other significant emissions Material aspect: Management of water resources 3.2. Materiality matrix 103-1, 103-2, Management mode 6.2. Risks and material issues 103-3 7.4. Environmental governance - Water Interaction with water as a shared 303-1 7.4. Environmental governance - Water resource Management of impacts related to water 303-2 7.4. Environmental governance - Water discharge The FNM Group does not operate in areas of high water stress. 7.4. Environmental governance - Water Detailed parameters for 303-3 Water withdrawal Natural capital - appendix the categories 'freshwater' and 'other types of water' are not monitored. 7.4. Environmental governance - Water 303-4 Water discharge See above Natural capital - appendix Material aspect: Waste management 103-1, 103-2, 3.2. Materiality matrix Management mode 103-3 6.2. Risks and material issues 154
7.4. Environmental governance - Waste Water discharges by quality and 306-1 The natural capital (Fact sheets) destination A breakdown of hazardous and non- hazardous waste by disposal method (reuse) is not available; 7.4. Environmental governance - Waste recycling; composting; 306-2 Waste by type and method of disposal The natural capital (Fact sheets) energy recovery, landfill, other) for FERROVIENORD. The activity is entrusted to specialised external companies Material aspect: Safeguarding biodiversity 3.2. Materiality matrix 103-1, 103-2, 6.2. Risks and material issues Management mode 103-3 7.4. Environmental governance - Biodiversity Operational sites owned, leased, managed in (or adjacent to) protected 7.4. Environmental governance - 304-1 areas and areas of high biodiversity value Biodiversity outside protected areas Significant impacts of activities, products 7.4. Environmental governance - 304-2 and services on biodiversity Biodiversity 7.4. Environmental governance - 304-3 Protected or restored habitats Biodiversity Material aspect: Ethics and Integrity in Business 3.2. Materiality matrix 5.2. Group policies 103-1, 103-2, Management mode 6.2. Risks and material issues 103-3 6.4. Compliance, ethics and integrity 7.1. The FNM Group's approach to taxation Communication and training on anti- 5.2. Group policies 205-2 corruption policies and procedures 6.4. Compliance, ethics and integrity There have been no incidents or unlawful Established incidents of corruption and acts attributable to 205-3 - actions taken corruption, nor violations of the Code of Ethics 5.2. Group policies 207-1 Approach to taxation 7.1. The FNM Group's approach to taxation Tax governance, control and risk 207-2 7.1. The FNM Group's approach to taxation management Stakeholder engagement and 207-3 7.1. The FNM Group's approach to taxation management of tax concerns 7.1. The FNM Group's approach to taxation Reference should be made to the 207-4 Country-by-country reporting Consolidated Financial Statements for more detailed information on taxes In 2020, there were no instances of non- compliance with Non-compliance with environmental laws 307-1 - environmental laws and and regulations regulations nor did the Group receive significant penalties or fines for
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environmental or ecological matters. The number of complaints related to noise pollution (railway network and construction sites) is small, less than ten, and even fewer complaints have led to litigation over three years In 2020, there were no instances of non- compliance with laws Incidents of non-compliance in the area and regulations relating 417-2 of product and service information and - to communication and labelling marketing activities including advertising, promotions and sponsorships There were no Proven complaints regarding breaches of complaints in 2020 418-1 customer privacy and loss of customer - regarding privacy data breaches and loss of customer data In 2020, no cases of non- Non-compliance with social and compliance with socio- 419-1 - economic laws and regulations economic regulations and laws were recorded. Material aspect: Talent attraction and human capital development 3.2. Materiality matrix 6.2. Risks and material issues 103-1, 103-2, Management mode 7.3. Development of human capital within 103-3 the Group 7.3. Diversity and inclusion 7.3. Development of human capital within 401-1 New hires and turnover the Group Human capital (Fact sheets) The companies of the FNM Group and Trenord apply the provisions of the National Collective Minimum notice period for operational Bargaining Agreement 402-1 - changes (CCNL) for Railway Activities and Commerce, which includes the following references Average hours of training per year per 7.3. Employee training and development 404-1 employee Human capital (Fact sheets) The data relating to the MBO assessment system refer to personnel of FNM, FERROVIENORD, Percentage of employees who receive FNM Autoservizi, 7.3. Employee training and development NORD_ING and E-Vai. 404-3 periodic performance and professional Human capital (Fact sheets) The other companies in development reviews the FNM Group and Trenord have an assessment system based around different procedures and rules. 156
Material aspect: Employee welfare 3.2. Materiality matrix 103-1, 103-2, Management mode 6.2. Risks and material issues 103-3 7.3. Employee welfare The welfare plan is provided in equal Benefits provided for full-time measure to all 401-2 employees, but not for part-time or fixed- 7.3. Employee welfare employees, part-time term employees and full-time, of the companies of the FNM Group and Trenord Material aspect: Respect for diversity and inclusion 3.2. Materiality matrix 103-1, 103-2, Management mode 6.2. Risks and material issues 103-3 5.1. Corporate bodies The Board of Directors of 5.2. Group policies FNM S.p.A. is made up of 7.3. Development of human capital within Diversity in governing bodies and among 40% women and 60% 405-1 the Group men in the age bracket employees 7.3. Diversity and inclusion 30-50 (20%) and >50 Financial capital (Fact sheets) (80%) Human capital (Fact sheets) Material aspect: Health and safety in the workplace 3.2. Materiality matrix 103-1, 103-2, 6.2. Risks and material issues Management mode 103-3 7.3. Health and safety
Workplace health and safety 7.3. Health and safety 403-1 management system Hazard identification, risk assessment 7.3. Health and safety 403-2 and accident investigation 6.1 Risk governance model 403-3 Occupational health services 7.3. Health and safety Worker participation and consultation 7.3. Health and safety 403-4 and communication on health and safety at work Worker training on health and safety at 7.3. Employee training and development 403-5 work 7.3. Health and safety 7.3. Health and safety 403-6 Workers' health promotion 7.3. Employee welfare Prevention and mitigation of 7.3. Health and safety 403-7 occupational health and safety impacts within business relationships Workers covered by an occupational 7.3. Health and safety 403-8 health and safety management system 7.3. Health and safety The data refer only to Human capital (Fact sheets) internal personnel of the FNM Group and Trenord. The figure for non- 403-9 Accidents at work employees is not currently monitored. The definition of “accident en route” is in line with Italian law - No cases of occupational 403-10 Occupational diseases diseases occurred in 2020 Material aspect: Accessibility of services and infrastructures
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3.2. Materiality matrix 6.2. Risks and material issues 103-1, 103-2, Management mode 7.1. The main investments 103-3 7.2. Railway infrastructure management 7.2. Ro.S.Co & Services 7.1. The main investments Infrastructure investments and funded 203-1 7.2. Ro.S.Co & Services services Financial capital (Fact sheets) Material aspect: Service quality and customer safety at the station and while travelling (Security & Safety) 3.2. Materiality matrix 6.1. Risk governance model 6.2. Risks and material issues 103-1, 103-2, Management mode 7.2. Railway infrastructure management 103-3 7.2. Ro.S.Co & Services 7.2. Road passenger transport 7.2. Rail transport (Trenord) In 2020, no cases of non- compliance with laws Incidents of non-conformity concerning and regulations relating 6.1. Risk governance model 416-2 impacts on the health and safety of to the impacts of 7.2. Railway infrastructure management products and services products and services on health and safety were verified Material aspect: Dialogue with stakeholders and development of the local area 1.4. Group stakeholders 3.2. Materiality matrix 3.1. Stakeholder engagement 103-1, 103-2, 6.2. Risks and material issues Management mode 103-3 7.3. Employee training and development 7.5. Customer satisfaction 7.5. Community and value sharing: projects and initiatives in the territory Activities involving community 7.5. Customer satisfaction 413-1 involvement, impact assessments and 7.5. Community and value sharing: projects development programmes and initiatives in the territory Activities with significant potential and 7.4. Environmental governance - Biodiversity 413-2 current negative impacts on local 7.4. Environmental governance - Noise and communities vibration Economic value directly generated and 7.1. Economic value generated and 201-1 distributed distributed
Financial assistance received from the 7.1. Sources of financing: public 201-4 administration and shareholders government Financial capital (Fact sheets) Material aspect: Sustainable procurement 3.2. Materiality matrix 103-1, 103-2, 5.2. Group policies Management mode 103-3 6.2. Risks and material issues 7.1. Sustainable procurement 204-1 Proportion of spending on local suppliers 7.1. Sustainable procurement In the calls for tenders, in line with the contents of the Procurement Code, provision is made New suppliers that have been evaluated for environmental and 308-1 7.1. Sustainable procurement using environmental criteria social sustainability requirements. In 2019, the supplier register was implemented and tender 158
processes are monitored for the main supply categories identified according to ESG criteria New suppliers that have been evaluated 414-1 7.1. Sustainable procurement See above using social criteria MATERIAL THEMES NOT COVERED BY GRI INDICATORS Material aspect: Managing noise and vibrations 3.2. Materiality matrix 103-1, 103-2, 6.2. Risks and material issues Management mode 103-3 7.4. Environmental governance - Noise and vibration Material aspect: Systemic risk management and business resilience 103-1, 103-2, 3.2. Materiality matrix Management mode 6.2. Risks and material issues 103-3 6.3. Emerging risks Material aspect: Technological and digital innovation 3.2. Materiality matrix 6.2. Risks and material issues 103-1, 103-2, 7.2. Railway infrastructure management Management mode 103-3 7.2. Research and innovation 7.3. Digitalisation of human resource management Material aspect: Intermodality and integration of services 3.2. Materiality matrix 6.2. Risks and material issues 103-1, 103-2, 7.2. Railway infrastructure management Management mode 103-3 7.2. Ro.S.Co & Services 7.2. Road passenger transport 7.2. Rail transport (Trenord) Material aspect: Sustainable infrastructure management 3.2. Materiality matrix 103-1, 103-2, 6.2. Risks and material issues Management mode 103-3 7.1. The main investments 7.2. Ro.S.Co & Services
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Report of the independent auditors on the Consolidated Non-Financial Statement pursuant to article 3, paragraph 10 of Legislative Decree 254/2016 and art. 5-quater of CONSOB Regulation no. 20267
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Appendix True Value Below is a description of the impacts quantified in the True Value model84.
Economic impacts Impact Description Value Direct added It represents the added value generated by the operating Direct value activities carried out by FNM. +572 mln € +588 mln € Indirect added It represents the added value generated by the expenditure for value Indirect around 9,000 jobs goods and services that FNM makes to its suppliers. created along the supply chain +136 mln € Induced It represents the value added generated by consumer spending added value Indirect enabled by income earned by workers employed directly and about 2,200 jobs indirectly by FNM. generated in the Country System
Environmental impacts Impact Description Value It quantifies the negative impact that the emissions generated by FNM's direct energy consumption have on the climate and, consequently, on health, the environment and production activities. This includes the energy consumption of the -20.3 mln € facilities, the traction of the company car fleet, the traction of 380 thousand tonnes Direct buses, car sharing, trains and replacement buses. In addition, CO2eq emissions the impact quantifies the benefits of emissions avoided generated directly through the use of buses, trains and car sharing by passengers and indirectly by FNM
CO2 emissions and those avoided through the use of electric/hybrid vehicles 185 thousand tonnes in the corporate fleet. Finally, it quantifies the positive impact CO2eq emissions of CO2 absorption through tree planting. avoided thanks to the Quantifies the negative impact that emissions generated by use of FNM transport services indirect energy consumption have on the climate and, 1.5 thousand tonnes consequently, on health, the environment and production CO2eq emissions Indirect activities. This includes the energy consumption of the supply absorbed chain, of the commercial enterprises located in the FNM railway stations, of the RFI stations85 served by Trenord and of the commercial enterprises within them Quantifies the negative impact at local level, with consequences on health and air quality, created by the -28.4 mln € emissions of air contaminants (NOx, SO2, PM2.5, PM10, NH3, Emissions of 1,370 tonnes of air NMVOC) generated by the energy consumption of: facilities, air contaminants Direct contaminants company car fleet, bus traction, car sharing, trains and emissions generated replacement buses. It also quantifies the emissions avoided directly and indirectly and the resulting positive benefits generated through the use by FNM's activities of buses, trains and car sharing by passengers and through the use of electric/hybrid vehicles in the company car fleet.
84 The True Value model and the quantification of the economic, social and environmental impacts calculated through its application are not subject to limited examination by PricewaterhouseCoopers S.p.A. 85 For RFI stations, the most significant railway stations in terms of passenger flow have been considered 161
Quantifies the negative impact at local level, with 475 tonnes of consequences on health and air quality, generated by the atmospheric emissions of air contaminants (NOx, SO2, PM2.5, PM10, NH3, contaminants Indirect NMVOC) generated by the energy consumption of the supply emissions avoided chain, of the commercial enterprises located in the FNM thanks to the use of FNM transport railway stations of the RFI stations served by Trenord and services commercial enterprises within them. Quantifies the negative impact that waste produced by FNM's Direct activities generates during the incineration and landfill -0.05 mln € degradation phases, harming the environment and health. Waste Quantifies the negative impact that waste produced by 3.1 thousand tonnes produced commercial enterprises located in FNM stations, RFI railway of waste Indirect stations served by the Trenord service and the commercial destined for enterprises located within them generate during the incineration or landfill incineration and landfill phase. Quantifies the negative impact due to the depletion of the Direct water resource in the territory where the company operates, -2.54 mln € although not to a considerable extent. Water 2,250 thousand m3 of consumption Quantifies the negative impact due to water consumption water consumed attributable to commercial enterprises located in FNM Indirect directly and indirectly stations, RFI railway stations served by Trenord service and commercial enterprises located within them. Quantifies the negative impact of noise pollution from trains -0.48 mln € and buses on people living near railways and roads, affecting Noise over 290 thousand Direct their health and well-being. It also quantifies the noise pollution people pollution avoided by the use of trains and buses as an potentially impacted alternative to the car by FNM passengers. by train and bus noise Quantifies the negative impact generated on the ecosystem by the land use of the facilities (including railway stations) and -24.2 mln € the FNM railway network. It also quantifies the benefits 4.9 million m2 of land Direct generated by the use of trains and buses as an alternative to occupied by facilities Land use the car that reduce the land area devoted to road construction. The benefits of the grassing activities carried out 350 thousand m2 of by the Group are also taken into account. surface area for Quantifies the negative impact generated on the ecosystem by environmental mitigation and Indirect the use of land for the RFI rail network covered by rail service compensation works and for RFI stations served by Trenord.
Social impacts Impact Description Value +356 mln € It quantifies the value generated by FNM's transport services - Service Direct through trains, buses and car sharing - which offer passengers 2.4 billion passenger availability the opportunity to move around and satisfy their needs. km
Quantifies the negative impact due to travel time lost due to -69 mln € train and bus delays and cancellations, and due to crowded 4.9 million hours lost Travel time trains that prevent passengers from carrying out their desired due to train and bus Direct activities. It also quantifies the benefits generated by “useful” delays or travel time in uncrowded trains that can be used by cancellations passengers to carry out profitable activities, such as working. Quantifies the negative impact on the community in terms of +60.4 mln € Road time lost in traffic caused by road congestion generated by the Direct 1.8 billion passenger- congestion transit of buses and car sharing cars. In addition, it quantifies kilometres that could the benefits to the community due to the avoided road have used the car as 162
congestion that results from the use of LPT as an alternative an alternative to train to the car. and bus Quantifies the negative impact due to passenger injuries while +75 mln € travelling on board the Group's fleet of vehicles (both as a result of rail and/or road accidents occurring, and as a result 47 injuries to bus, train and car sharing of accidental falls on board the vehicles) and injuries at the Passenger passengers Direct station in terms of human, medical and administrative costs, accidents as well as loss of productivity for the people impacted. 1.8 billion passenger- Moreover, it quantifies the benefit to the community due to kilometres that could have used the car as an road accidents avoided thanks to the use of FNM vehicles as alternative to train and an alternative to the private car. bus It quantifies the negative impact generated by occupational Direct injuries and illnesses of employees in the workplace that result in costs to employees, the company and the community. Employee -12.7 mln € It quantifies the negative impact generated by accidents in health and 250 accidents safety transit for FNM employees, contract workers, accidents Indirect affecting employees of commercial enterprises located in involving employees FNM stations and employees of commercial enterprises located in RFI stations served by Trenord. It quantifies the benefits generated by the training provided to +112 mln € FNM employees, which contributes to improving their skills Training About 250 thousand Direct and productivity, enabling them to cover roles at the same or provided hours of training higher level, should they decide to change employer (so-called provided employability). +0.19 mln € Advantages Quantifies the benefits generated by the offers, discounts, and benefits Direct advantages and conventions proposed by FNM to its Value of the offers for passengers customers. and discounts proposed by FNM It quantifies the benefits in terms of avoided car operating Avoided car +166 mln € costs (e.g. fuel, maintenance, motorway tolls, etc.) for those operating Indirect Avoided car operating costs passengers who, despite being able to travel by private car, decide to use rail, bus and car sharing services. costs +21 mln € It quantifies the benefits generated for commuters who use 7,980 commuters Additional FNM's transport services on a daily basis to reach large urban salary who travel to Milan Indirect centres where it is possible to obtain remuneration that is received in by train or to a large cities more competitive than that obtainable in their place of provincial capital by residence. bus and who do not own a car +55 mln € Passenger expenditure in Quantifies the LPT passenger expenditure generated in tourist 3.5 million Indirect tourist resorts locations reached by train or bus. passengers who used FNM services to reach tourist destinations Added value Quantifies the added value generated in the commercial generated by enterprises present in the FNM railway stations and the added commercial Indirect value generated thanks to the spending by FNM passengers in +20 mln € enterprises in the commercial enterprises present in the RFI stations served stations by Trenord.
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Schedule of companies outside the perimeter DB Cargo Italia
Business sector Railway freight transport Freight segments: Iron and steel, paper, chemicals, oil and car industries, various goods Registered Office Milan Widespread coverage of the network 7 shunting hubs; 11 railports; more than 70 junctions and loading/unloading points Employees 448 (+3%) compared to 2019 Core business 41 locomotives of which 16 with diesel traction and 25 with electric traction
Profile of the organisation DB Cargo Italia (DBCI) offers logistics and freight movement services, mainly in Italy using the infrastructure network managed by the Italian Railway Network (RFI). It uses electric and diesel locomotives.
Services offered by DB Cargo Italia Single wagon or less-than-trainload Full train transport Additional services transport
This service provides clients with an Services on top of railway transport This service is recommended for entire train, guaranteeing high which may include shunting services, clients who need to transport a capacity and efficient freight railway logistics consultancy and load lower quantity of goods. transport times. safety. Healthy results were achieved in both economic and production terms in 2020, confirming the company's growth trend. Certifications ‒ Railway licence issued by MIT (Ministry of Infrastructure and Transport) which allows the performance of railway transport services within one or more Member States of the European Union. ‒ Single Safety Certificate issued by ANSFISA (National Agency for the Safety of Railways and Road and Motorway Infrastructures) to operate within one or more Member States of the European Union. ‒ Safety Certificate for circulation on cross-border lines issued by the UFT (Federal Transport Office) for Switzerland. ‒ Authorised Economic Operator Certificate. ‒ SQAS (Safety and Quality Assessment Sustainability) certification for the Novate Milanese, Brescia Scalo and Domo II facilities, regarding performance as a logistics service provider in the chemical sector. ‒ ISO 9001 (Quality), 14001 (Environment) and 45001 (Occupational Health and Safety) certifications issued by Dekra. The company business In terms of “less-than-trainload” rail transport, DBCI operates mainly in Northern Italy but has a growing presence in Central and Southern Italy too.
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The “less-than-trainload” rail transport network includes 7 shunting hubs, 11 railports and over 70 private connections or loading and unloading points across Italy, of which 16 districts are served by full train traffic. The DBCI fleet is composed of 41 locomotives, 16 of which run on diesel and 25 are electric. The entire fleet of electric locomotives is composed of locomotives no more than 15 years old. In 2020, 4 brand-new Bombardier E-494 locomotives entered into service. The new trains are equipped with Last Mile Diesel Modules which guarantee additional production and environmental efficiencies. In order to ensure railway safety, all traction trains are equipped with On-board Subsystems (SSB) and Train Control Systems (TCS), except for 4 diesel locomotives used for shunting. Furthermore, the company has continued its process of digitalisation with the aim of increasing the efficiency and safety of operative staff management, locomotive fleet management and pulled wagon management.
Railport system for intermodality management DBCI oversees road-based last-mile logistics for clients who do not have a railway connection using its railport system. Railports are multi-functional connected centres designed to ensure the efficient transhipment of freight between road and rail transport. This allows clients to reduce the size of their warehouses and replace road transport with a hybrid solution in which the majority of transport is handled via rail.
Responsibility to people As part of the target set by parent company Deutsche Bahn AG (DB AG) for the company to become one of the top ten employers for 2020, every two years DB Cargo Italia runs a survey on the environment within the company for all staff. Participation in the survey in 2020 was 77%, thus confirming the same participation rate recorded in Data refers to staff as of 31/12/2020 Men Women Total 2018, at the same time showing an improvement in Executives 3 2 5 the overall satisfaction index, which went from a Middle managers 17 1 18 score of 3.9 to 4.0 out of a maximum of 5. The next Office workers 46 16 62 survey will take place in 2022. Blue collar workers 359 4 363 Total 425 23 448 Code of Conduct DBCI has adopted the Code of Conduct of its parent company DB AG. In accordance with Global Compact principles, the document sets out the ethical standards that must be adhered to both internally and externally. The document represents an essential criteria for collaborations with other companies, strategic partners and suppliers, who must commit to respecting the content. Furthermore, all suppliers engaging in significant activities related to safety are subject to audits.
Welfare initiatives: — Welfare Platform In 2018, DBCI provided all employees with the right to performance bonuses with access to a virtual goods and services platform, enabling them to independently choose whether to receive a bonus in monetary form or exchange it for goods and welfare services.
— People Exchange Program (PEP) In 2019, DBCI signed up to DB Cargo AG’s People Exchange Program (PEP), a technical/training programme involving placements of up three months at DB Cargo’s European offices. Two DBCI employees took part in the scheme. However, this programme was cancelled during 2020 due to 165
the health crisis and the blocking of mobility to other Group subsidiaries, in addition to almost all remote and non on-site work. The aim of the programme was actually to boost collaboration between company departments located across the various European offices, enabling teams to acquire best practices in terms of processes and operational procedures on the ground. — Lifeed Programme During 2020, the Lifeed programme was extended to all staff, both in offices and production departments; the programme includes a cycle of training and information webinars with the aim of: • deepen cross-company skills also for those working in production departments; • encourage dialogue between the youngest and the most experienced in the company; • allow each person to develop a sense of responsibility within their role; • to create new awareness of the work-life relationship. — Maternity as a Master (MAAM) programme DB Cargo Italia has been taking part in FNM's “Life Based Value - Maternity as a Master (MaaM)” scheme since October 2019. This means it can offer its employees the chance to access a training course comprising 3 modules centred around the value of parenthood and caring for others applied to the work context. Responsibility towards the environment and the local area The company has reduced its energy consumption by modernising its fleet of electric and diesel locomotives. A study is being carried out to replace the fleet of diesel locomotives with vehicles equipped with technology for the recovery of electrical energy during braking for the operation of auxiliary services.
Data regarding energy consumption86 In Unit of 2020 2019 Type 2018 measurement Electric locomotives kWh 28,900,000 28,604,000 27,000,000 Office running kWh 34,000 30,000 35,000 Diesel locomotives litres 600,000 762,000 771,000 Company cars litres 20,000 17,000 16,000 accordance with Legislative Decree no. 115/2008, in 2019, an Energy Audit was carried out on 2017- 18 energy consumption to reveal possible areas where action can be taken to reduce consumption and the associated running costs that will be recorded over the coming years. Finally, the DB AG Group – to which DBCI belongs – has launched a programme to reduce noise pollution generated by rail transport. This aims to cut noise pollution by 50% by 2020, compared with 2000 levels. As part of this programme, DB Cargo AG equipped 100% of the wagons in its fleet with silent brake blocks during 2020.
86 Data obtained via processes which required the use of estimates. 166
NordCom
Business sector ICT - System Integrator and Solution Provider
Registered Office Milan
Employees 82
Core business Projects implemented: - activation of digital work order in mobility for the FERROVIENORD company; - SAP PO upgrade and activation on Google cloud infrastructure and high reliability; - activation of e-procurement procedures on SAP for the company Trenord; - strengthening of VPN platforms and remote desktop connection to facilitate remote work.
Organisation profile
NordCom is a digital company providing customised solutions. It has over 17 years’ experience helping transport companies and public administration to overcome challenges associated with digitalisation. Its main areas of operation are Public Transport, Digital Payments, Fibre Optic and Services for Public Administration.
Certifications — UNI EN ISO 9001:2015 – Quality certification — UNI CEI ISO 27001:2017 – Information Security Management System. — ISO 37001:2016 – Anti-Corruption Management system. Certification initially issued to the FNM Group for the following activities: planning and delivery of railway circulation services, maintenance and development of railway infrastructure. Delivery of IT engineering services for the design of infrastructure and rail and road transport services. Delivery, implementation, integration and management of technological platforms and IT applications.
The company business ICT infrastructure NordCom predominantly offers digital solutions for public transport and mobility. 96% of the value of Following the migration of SAP systems to the cloud with the upgrade to the supplies deriving Hana version, 2020 saw the emergence of projects related to updating the from suppliers platform with new features such as: operating in Italy ‒ Linear Asset Management (LAM) ‒ Management of georeferencing and visualisation of SAP objects on maps (GEP) ‒ Management of tools for collaboration and introduction of predictive maintenance (AIN) ‒ Maintenance planning management (MRS) ‒ Project Management (PPM) ‒ ACDAT normative management (BIM)
The SAP PO was also migrated to redundant business continuity infrastructure in GCP. 167
Among many other projects, the project for the digital distribution of regulations for FERROVIENORD was also completed in 2020, making it possible to eliminate the transmission of operating regulations in paper format. The “Libro Firma” project, which allows documents to be digitally signed using an APP and a PC, has also been put into production with regard to this dematerialisation issue. For the same company, FERROVIENORD, a project has been launched for the creation of an APP for the management of staff PPE, which allows the equipment in the employee’s possession to be displayed, the relative expiry date, and the assignment of new PPE according to the risk profile. With regard to new projects requiring new hardware, the policy of not using on-premises machines continued in favour of Cloud usage87. For example, where possible, printer management continued in 2020 via the substitution of personal devices with a “multi-functional configuration” and company badges, thus guaranteeing privacy and flexibility for users in terms of managing their printing, as well as reducing the number of copies made without being picked up. With reference to the company Trenord, the year 2020 was characterised by the management of the following main activities: — the remaking of the fault reporting APP, currently managed with RAMOS, with a new APP created in SCP with implementation of off-line management mechanisms; — the migration of the implemented SAP PO 7.4 integration tool to the new SAP PO 7.5 release with the inclusion of important architectural innovations such as infrastructure management on GCP and high reliability management; — the high reliability management of the infrastructure related to railway provisions for the OpenText document component both for the Content server and Archive server components.
Responsibility to people In March 2020, the Company Committee for the application and verification of the rules of the Shared Protocol for the regulation of measures to combat and contain the spread of the COVID-19 virus in the workplace of 14 March 2020, updated on 24 April 2020, was formed. The Committee defined the Company Protocol, which is periodically updated, and the set of procedures and provisions aimed at counteracting the risks associated with COVID-19. The Company has also updated its Risk Assessment Document (“DVR”). The Company's employees operated in 2020 mainly in agile work mode (smart working). Employees working on-site at the company have been equipped with all the necessary personal protective equipment and installations have been set up inside the company premises to contain the virus (plexiglass separators, signs, sanitising columns, etc.). As a result of the various measures and obligations put in place, there were no cases of transmission of COVID-19 related to the business environment in 2020. New trade union agreements
87 The term “on-premises machines” refers to the supply of IT programs that are installed and managed via local computers. The concept is the opposite of the supply of software services via Cloud computing. The term “Cloud” refers to a collection of technology and ways of accessing IT services which facilitate the use and provision of software, as well as making it possible to store and process large quantities of information via the internet. This system offers the transfer of conversations or data and information processing from user computers to external supplier systems. 168
In 2020, new agreements were signed with the trade unions relating to (i) the regulation of smart working and (ii) the regulation of on-call time (i.e. the complementary arrangement to normal working hours whereby the employee is available to the Company to ensure, according to a programme prepared by the Company, the continuity of services, the functionality of the facilities and the coverage of the reference market).
Data refers to staff as of 31/12/2020 During 2020, 17 workers were hired leading to the Men Women Total following business framework. Incoming employees
Executives 2 1 3 were trained in Health and Safety, following a
Middle managers 15 1 16 course of 4 hours of basic training and 4 hours of specific training, via virtual classroom or in e- Office workers 48 15 63 learning mode. In addition, during their induction Total 65 17 82 training, new hires have completed the COVID-19 part of the Disclosure. All current staff, including interns and temporary staff, have also received specific training on COVID-19. 6 new Supervisors were trained, 7 new employees for the Fire Prevention Team and 2 new employees for the First Aid Team. The employees already on the first aid teams have been trained in specific refresher courses and the Workers' Safety Representative has also received specific annual refresher training. Through the SAP Success Factor platform, all company staff took courses on GDPR, 231 and the FNM Group's Anti-Corruption Policy. Furthermore, 58 employees were involved in the MBO assessment system, as a form of incentivisation tied to the attainment of individual objectives. During 2020, reporting activities were concluded on the training carried out with Fondimpresa in 2019 through which specific, targeted courses were provided for employees at the request of management personnel. In addition, the Company participated in the Fondimpresa System Account notices, through which English language and soft-skill courses were provided. Project activities continued with Fondirigenti in 2020, and a Training Plan for 2021 was presented.
New Ways of Working The Company has also launched a project aimed at redefining working methods, called “New Ways of Working”. As part of this project, attention has been paid to changing work arrangements, including a post COVID-19 emergency vision, tools aimed at increasing productivity within the new work arrangements, employee well-being and satisfaction, and increasing the use of digital tools.
Responsibility towards the environment and the local area
In 2020, the Company continued what it had started in the previous year by adopting good practices, actions in favour of the environment and an increasingly concrete path towards sustainability, in accordance with the general reference context and the choices of the FNM Group. In September, the company's CSR (Corporate Social Responsibility) and Sustainability Policy Department was established. A training seminar was held on the knowledge tools for a new and dynamic approach to the issues of environmental and social responsibility in companies. In November 2020, the “Practical guide to sustainability in the company” was produced in collaboration with FNM, containing guidelines for spreading good practices and sustainable
169 behaviour, while during 2021 a specific study will be drawn up to analyse NordCom's sustainability strategies in preparation for the creation of the company's 2021 Sustainability Report.
NordEnergia
Business sector Energy
170
Registered Office Milan
Employees 2
Core business Services and products for the operational management and maintenance of the Merchant Line account for 95% of purchases
Organisation profile
Nord Energia’s business is represented by the sale of capacity rights to the interconnection line (known as the Merchant Line) to third parties. The Merchant Line is used by national network operators to move electricity from Switzerland to Italy and vice versa. The Merchant Line came into commercial use on 9 July 2009. Throughout the 13-year period since the line launched, the company has achieved exemption from third party access for the use of the nominal transportation capacity for the entire Net Transfer Capacity increment.
The company is responsible for the commercial operation of the Merchant Line through the sale of capacity rights, in accordance with the content of regulations issued by Italian and Swiss bodies and authorities and with contractual agreements with Italian and Swiss network operators. The company sells interconnection capacity to qualified entities and allocates its customers with capacity user rights to the Mendrisio-Cagno interconnection line that connects Italy with Switzerland. The Merchant Line therefore connects up two markets: the Swiss and Italian electricity markets. These markets tend to present spreads of the cost of energy, due to the different technology used in electricity production. The company business Infrastructure and transport systems In terms of production infrastructure, the company has a cross-border high-voltage 380 kV electricity power line. The line comprises: • an underground cable duct measuring approximately 9 km to house and protect the cabling itself; • 3 very high-voltage cables of varying lengths (the longest is around 700 metres);
• an electrical power station featuring an innovative Phase Shifting Transformer. The services and products linked to the “operational management and maintenance of the Merchant Line” account for around 95% of the total purchases (core business). The main contractors are the affiliate companies CMC and AET. The latter operates in accordance with UNI ISO 9001:2008, UNI ISO 14001:2004 and OHSAS 18001:2007 standards. The other types of non-core purchases (professional services designed to support technical/administrative, commercial, legal and fiscal activities) account for around 5%. The company predominantly operates based on contracts and agreements negotiated by the parent company FNM.
Responsibility to people
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With regard to employment contracts, NORD Data refers to staff as of 31/12/2020 ENERGIA applies the rules of the Contract for the Men Women Total Commerce and Tertiary Sector. With regard to Executives 0 0 0 safety, employees appointed their Safety Middle managers 0 1 1 representative (RLS), who takes part in regular Office workers 0 1 1 meetings with the employer and the Prevention Total 0 2 2 and Protection Service Manager (RSPP).
Responsibility towards the environment and the local area
The decision – during the design phase – to bury the very high-voltage cables showed the company's elevated environmental sustainability, in terms of protecting nature and the healthiness of the areas affected by the line itself.
The underground solution not only delivered notable improvements in terms of visual impact, but also ensured a reduction in the electromagnetic field in the ground.
Given that the project involved a 380 kV power line, the issue of optimising the line itself and the cabling was addressed during the initial planning stage, but no further measures were applicable. During 2020, the company continued working on two research and development projects in the field of sustainable mobility. In particular, the projects focused on:
• Electric and fuel cell vehicles: construction of charging stations for high efficiency electric vehicles and hydrogen refuelling from renewable sources • Biofuel: creation of an innovative photobioreactor for the production of fuel from micro- algae. The Politecnico di Milano (Milan Polytechnic) Department of Aerospace Science and Technology Engineering is active on this project.
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