Sustainability Report 2018 –

Sustainability Report 2018 Consolidated Non-Financial Statement 2018 Sustainability Report 2018 Consolidated Non-Financial Statement 2018 TIM Sustainability Report 2018 [GRI 102-53] Contacts Sustainability Reporting Monitoring and Relationship TIM S.p.A. Corso Bramante 20 10134 Turin Italy Tel.: +39 02 8595 6979 www.telecomitalia.com Send your comments to: [email protected] 2 TIM Sustainability Report 2018 Letter from the Chief Executive Officer Every company with a long-term vision sees the pursuit of its own growth and the growth of the communities where it operates as integral parts of this vision. Growth always means “growing together”. In TIM we call this sustainability, a simple principle that underlies value creation. Our business strategy is aligned with the collective need for innovation. In keeping with our Ethical Principles, we strive to minimise the environmental impact of our work. With the great skill and professionalism that have driven the country’s communication evolution, we have always been at the forefront of digitalisation development, because the heart of our mission is to produce value that supports the well-being of current and future generations while being committed to following the principles of the UN Global Compact. With this strategic role in mind, those who work in TIM are constantly engaged in the innovation of infrastructure and technology, at the service of individuals and the country. As part of this work, our investment programme for ultrabroadband coverage has set significant targets to support our continuous progress towards a digital economy. This focus on innovation and investment in new infrastructure and technology is also the foundation of TIM’s activities in Brazil, a country where the Group has been operating for over 20 years and one which represents our second reference market. We put our infrastructure and technology at the service of all the countries in which we operate, promoting a true digital culture with access for everybody to services that improve the quality of life. Our commitment makes us a key player in the gigabit society with its increasingly innovative and complex services that represent a growth opportunity for the entire ICT sector. TIM has always paid close attention to the environmental impact of all its activities. In our work to protect the environment we are constantly looking at ways to improve our efficiency by lowering the consumption of natural resources and our use of energy. We achieve this through investment in modernising our plants and in the ongoing search for the most appropriate management solutions. Every year we set ourselves targets for reducing our emissions and our energy consumption, despite the continuous development of new generation networks. Our Group also contributes to the reduction of our customers’ energy consumption and emissions, by developing and offering digital products and solutions. It is TIM’s people that transform our ambitions into reality and because of this we have begun to use a model of continuous learning to support the digital transformation and ensure we have the skills required to achieve it. These measures are essential for the growth and strategic development of the entire sector. In this way, TIM has become a knowledge company: being market and technology leaders depends on the skills of those who work for TIM and through sharing our knowledge and valuing our diversity. This is also our added value that allows us to meet our business objectives. With courage, dedication and skill we will continue to work to secure TIM’s role as the cornerstone of the country’s development and digitalisation, because we are highly aware of our responsibility to those who look to us for a smarter, more inclusive and sustainable future. Luigi Gubitosi Chief Executive Officer [GRI 102-14] 3 TIM Sustainability Report 2018 CONTENTS Note on methodology 6 • THE TIM GROUP 9 Organisational model 10 Main shareholders 11 Economic value produced and distributed 12 Corporate Governance 14 Sustainability governance and management 17 Fight against corruption 19 Stakeholder engagement 22 Materiality matrix 24 Risk management 27 G ENVIRONMENT 37 Environmental protection approach 38 Fight against climate change: risks and opportunities for TIM 40 Electromagnetism and compliance with environmental legislation in force 41 TIM initiatives for the environment 43 Energy efficiency improvement work 43 Reducing staff travel 45 IoT and environmental research 45 Consumer Products: TIM eco-friendly 46 TIM’s environmental performance 47 Energy and natural resources consumption 47 Atmospheric emissions 50 Waste 53 o TIM PEOPLE 55 Commitment to our people 56 Concise figures 58 Gender balance 60 New skills and development 62 The skills model 62 Training 63 Group training figures 66 Remuneration policy 67 Industrial relations 69 Health and safety 72 Injuries and occupational illnesses 73 People Caring 75 Work-life balance 75 Working hours management 76 Inclusion Management 76 Other initiatives for employees 78 4 TIM Sustainability Report 2018 Chapter appendix 80 • THE VALUE CHAIN 93 The Community 94 Relations with local communities 95 Research and development 102 Digital inclusion 107 Customers 113 Customer satisfaction 113 Conciliation procedures 117 Child protection 120 Product responsibility 123 Safeguarding privacy and personal data 127 Smart services 130 The supply chain 133 Sustainability initiatives 134 Sustainability checks 135 Supplier involvement initiatives 137 Supply chain commitments 138 • HUMAN RIGHTS 139 TIM’s Commitments 140 (In)Formation and training on human rights 142 Complaints and incidents 143 APPENDIX 147 Economic-financial highlights 148 Initiatives with stakeholders – summary tables 151 2017 and 2018 Results 162 2019 and multi-annual targets 164 GRI Content Index 168 REPORT OF THE INDEPENDENT AUDITORS 176 5 TIM Sustainability Report 2018 NOTE ON METHODOLOGY [GRI 102-56] Scope and criteria The Consolidated Non-Financial Statement (hereinafter “Statement” or “Sustainability Report”) complies with the obligations laid down in Italian Legislative Decree 254/2016 on the disclosure of non-financial information. For TIM, this Statement, which coincides with the Sustainability Report, represents the result of the commitment to notify its stakeholders of the performances and results achieved in the sustainability area, already undertaken in previous years. [GRI 102-45] The Statement contains data and information referring to the Company TIM S.p.A. and its fully consolidated subsidiaries as at 31 December 2018 (hereinafter “the TIM Group” or “the Group”), as presented in the Annual Financial Report. The environmental performance data is detailed with some limitations with respect to the Group scope. These limitations are not important to understand the Company’s activities, performance, results or the impact produced by the Group. [GRI 102-50] [GRI 102-51] [GRI 102-52] The 2018 Sustainability Report, prepared annually over the calendar year, respects the same deadlines as the Group Annual Financial Report and meets the obligations envisaged by Legislative Decree 254/2016. The Report is based on a multi-stakeholder approach involving the joint analysis of actions taken in respect of the main stakeholders with whom the Company interacts. [GRI 102-10] [GRI 102-48] No significant changes were recorded in the consolidation area in 2018. Data relating to previous years is provided for comparative purposes only, in order to allow an assessment of the dynamic trend of the Group’s activities over the medium term. Note that information relating to “Fondazione TIM” and “TIM Institute”, entities not included within the Group’s consolidation scope, represents a qualitative element which is useful in order to understand the attention paid to the social context, even though this information is not part of the consolidation scope of the quantitative information contained in the document. [GRI 102-54] The Sustainability Report abides by the guidelines of the Global Reporting Initiative (GRI) Standards (comprehensive option) and the process suggested by the principles of the AA1000APS (inclusiveness, materiality, responsiveness). References to the GRI indicators are given to provide a greater understanding and highlighted in the text with the symbol [GRI N.]. The Sustainability Report is drawn up according to a system of indicators (KPI - Key Performance Indicators) which measure the company’s performance and the degree of achievement of objectives previously established for areas in which the Company has major impact. The KPIs are defined on the basis of: • the analysis of the GRI, an international organisation which develops universally applicable guidelines for the drafting of sustainability reports; • the demands received from stakeholders; • the questionnaires sent out by the leading rating agencies for the purpose of admission to the stock market sustainability indexes; • the experience the Company has gained in the sustainability field over more than 20 years. The KPIs are managed on a dedicated application system (BPC) that uses the same platform used for financial reporting and control. This document was approved by the Board of Directors of TIM S.p.A. on 21 February 2019. PricewaterhouseCoopers S.p.A., the independent auditor of the Group, was tasked with performing a limited examination (“limited assurance engagement”) of the Sustainability Report/Consolidated Non-Financial Statement; its Report is available on page 176 of this

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