Voluntary Consolidated Non-Financial Statement 2019

VOLUNTARY CONSOLIDATED NON-FINANCIAL STATEMENT 2019 2019 VOLUNTARY CONSOLIDATED NON-FINANCIAL STATEMENT 2019 1 2 3 4 5 CONTEXT CORPORATE ORGANISATION ENERGY EFFICIENCY MULTIPLYING THE USE DEVELOPING A CULTURE AND STRATEGY AND ETHICAL BUSINESS AND ENVIRONMENTAL OF MATERIALS: OF SAFETY P. 20 MANAGEMENT MANAGEMENT IN A COMMITMENT TO THE P. 78 P. 40 PRODUCTION PROCESSES CIRCULAR ECONOMY P. 54 P. 68 6 7 8 9 ENHANCING PEOPLE PROVIDING A QUALITY DEVELOPMENT AND PERFORMANCE P. 82 PRODUCT AND SERVICE - COMMUNITY INCLUSION P. 116 MANAGING SUPPLY P. 106 AND CUSTOMER RELATIONSHIPS P. 98 2019 | VOLUNTARY CONSOLIDATED NON-FINANCIAL STATEMENT | FERALPI GROUP 5 CONTENTS LETTER TO STAKEHOLDERS 8 FROM THE SUSTAINABILITY REPORT TO THE NON-FINANCIAL STATEMENT: TOOLS FOR COMPREHENSION 10 HIGHLIGHTS 11 THE FERALPI GROUP 12 CORPORATE ORGANISATION CONTEXT AND ETHICAL BUSINESS 1 AND STRATEGY 20 2 MANAGEMENT 40 1.1. The market and challenges 2.1. Governance structure: for the steel industry 21 roles and responsibilities 41 1.2. Business vision and strategy 23 2.2. Governance model and risk analysis 43 1.3. The role of research in Company strategy 26 2.3. Preventing and tackling acts 1.4. Sustainability for Feralpi 28 of corruption 49 1.5. Commitment to sustainability 29 2.4. Privacy 51 1.6. Stakeholder engagement 32 1.7. Materiality matrix 35 6 VOLUNTARY CONSOLIDATED NON-FINANCIAL STATEMENT | FERALPI GROUP | 2019 ENERGY EFFICIENCY MULTIPLYING AND ENVIRONMENTAL THE USE OF MATERIALS: MANAGEMENT IN A COMMITMENT TO THE 3 PRODUCTION PROCESSES 54 4 CIRCULAR ECONOMY 68 3.1. Management of environmental impacts 59 4.1. Management methods, policies 3.2. Energy efficiency 65 and procedures 73 4.2. Use of water and liquid emissions 76 4.3. Other materials 77 DEVELOPING 5 A SAFETY CULTURE 78 6 ENHANCING PEOPLE 82 6.1. Recruitment, training and development 87 6.2. Investing in health and well-being 93 6.3. Respecting human rights and providing equal opportunities 95 PROVIDING A QUALITY PRODUCT AND SERVICE - MANAGING SUPPLY DEVELOPMENT AND CUSTOMER AND COMMUNITY 7 RELATIONSHIPS 98 8 INCLUSION 106 7.1. Responsible management 8.1. Economic sustainability for a quality supply 102 and generated value 109 7.2. Relationships with customers 103 8.2. Community inclusion 112 9 PERFORMANCE 116 APPENDICES 134 9.1. Economic indicators 117 Methodology note 135 9.2. Environmental indicators 119 GRI Content Index 137 9.3. Social indicators 131 AUDIT REPORT 146 2019 | VOLUNTARY CONSOLIDATED NON-FINANCIAL STATEMENT | FERALPI GROUP 7 LETTER TO STAKEHOLDERS (102-14) DEAR STAKEHOLDERS, WE ARE DELIGHTED TO ISSUE THE FERALPI GROUP VOLUNTARY CONSOLIDATED NON-FINANCIAL STATEMENT (NFS) DETAILING THE RESULTS ACHIEVED IN 2019. THE NFS IS AN IMPORTANT STEP TOWARDS THE TARGETS, COMMITMENTS AND CONCRETE ACTIONS THAT AIM TO CREATE VALUE IN THE WIDEST MEANING OF CORPORATE SOCIAL RESPONSIBILITY. Feralpi has been operating in line with in- ternational standards on transparency for some time now, and objectively providing details on company performance for all of you - collaborators, customers, suppliers, government departments and the communities in the areas where we operate. In this document you will find the practices we have adopted, and the corporate actions we wanted to make even more inclusive and respectful with regard to humankind and the environment. 8 VOLUNTARY CONSOLIDATED NON-FINANCIAL STATEMENT | FERALPI GROUP | 2019 Our guidelines have been based on the United Nations Thanks to the NFS the Feralpi Group can provide you with Agenda which, with its Sustainable Development Goals, information on organisational development, outlining clearly indicates an ethical approach that industry is how in recent years the Group has completed various called upon to implement, making it an integral part of takeovers, diversifying and verticalising its businesses to company strategy to contribute to achieving increasingly meet market requirements more rapidly. Two different sustainable development. business units have also been set up, one for construction steel and the other for specialities. The new Governance This is our first Non-Financial Statement which we have Model was implemented at Group level and Feralpi's busi- decided to produce voluntarily, and it sets out another ness purpose continues, starting with ethical business step in our development as we move from a more narra- management and developing a quality offering, while tive style of reporting, as with the previous Sustainability reducing consumption and environmental impact in line Reports, to a more technical framework in line with the with a circular economy approach. This is our contribution search for competitiveness that has to set a business, to tackling climate change, an unavoidable target that irrespective of its size. the collective conscience of a civilised society demands, with a voice that is getting louder and louder. THE NON-FINANCIAL THIS DOCUMENT CLARIFIES STATEMENT IS A RIGOROUS OUR PROACTIVE AND CONCRETE TOOL THAT ALLOWS THE CONTRIBUTION, WHICH WE COMPANY TO PROVIDE MAKE ALONGSIDE ALL OF OUR STAKEHOLDERS WITH COLLABORATORS. WITH THEM, WE INFORMATION THAT CAN TURN VISIONS INTO PROJECTS GOES FAR BEYOND THE AND PROJECTS INTO RESULTS. MERE ECONOMIC AND FINANCIAL FIGURES. A strong work ethic, the development of talent and the en- hancement of skills are the assets that underpin progress, not only in the business, but also in the area and community where the Group operates. This is what we have always believed in, and never more so than in these difficult times with the global COVID-19 pandemic, which is putting the economic fabric of business, countries and even entire continents under considerable strain. Let's face the coming challenges with an even greater sense of responsibility, by contributing to lasting, sustainable development. THANK YOU. Giuseppe Pasini Feralpi Group Chairman 2019 | VOLUNTARY CONSOLIDATED NON-FINANCIAL STATEMENT | FERALPI GROUP 9 FROM THE SUSTAINABILITY REPORT TO THE NON-FINANCIAL STATEMENT: TOOLS FOR COMPREHENSION IL 2019 DI This document has been prepared in accord- As the Decree requires qualitative informa- ance with Legislative Decree no. 254/2016 on tion to be accompanied by the correspond- a voluntary basis and is Feralpi Group’s first ing quantitative information, the Feralpi Non-Financial Statement. It follows nine Group has taken the decision to continue sustainability reports that have been issued following the Sustainability Reporting since 2004 and its reporting scope is broader Standards published in 2016 by the Global than that of previous years (refer to the Meth- Reporting Initiative (GRI), adopting the odology Note at the end of this document). "in accordance -Core" option. FERALPI Even though the Group is not one of the The Group therefore selected the topics to organisations required to draw up a Non-Fi- report in line with the principle of material- nancial Statement, it was felt necessary to ity, focusing on what is deemed important anticipate alignment with Legislative Decree by internal and external stakeholders. The no. 254 of 30th December 2016 to provide topics the Company are required to report on stakeholders with comparable elements, pertain to a typical manufacturing industry, and encourage increasing transparency in and include environmental, social, employ- relation to corporate, environmental and ees matters, respect for human rights and economic aspects. This also supports the anti-corruption aspects. belief that there is a responsibility to share the quantitative and qualitative results that After presenting the Group and the key facts underpin the value generated by Company of 2019, this NFS illustrates the context in actions throughout the year with the full which the Company operates and its sustain- spectrum of stakeholders. ability strategy, as well as considering future development by sharing the commitments Consequently, although it is aimed at or- made. Last but not least, the statement con- ganisations of public interest and large cludes with quantitative information. companies, the Company is implementing The Feralpi Group 2019 Non-Financial State- the Decree by providing information on the ment is separate from and complementary Company's Governance Model, the policies to the Consolidated Financial Statement, applied, the main risks resulting from busi- and is supplementary to enable a compre- ness operations, and the results achieved. hensive view of the Group's performance. Methodology Note [P. 135] 10 VOLUNTARY CONSOLIDATED NON-FINANCIAL STATEMENT | FERALPI GROUP | 2019 IL 2019HIGHLIGHTS DI PRODUCTS INNOVATION THE GROUP AND PROCESSES AND QUALITY 6 COUNTRIES 509,496 Shareholders’ equity (€/000) 2,496 Steel produced (t 000) 54,521 Technical investments (€/000) Profit/loss for the year Production sites certified Circular processes in progress 33,831 (€/000) 6 11 ISO 9001 1,302,752 Total Turnover (€/000) 93% Minimum recycled content 13 Research projects proposed Italian scrap suppliers involved Turnover abroad > Project partner FERALPI63% 350 in the TENP process 40 HUMAN THE LOCAL ENVIRONMENT RESOURCES COMMUNITIES Scope 1 and Scope 2 End-of-period workforce Charitable donations -3% emissions on 2018 1,570 (+1.4% on 2018) to local communities (€/000) 6,542 (+39% on 2018) Indirect emissions (Scope 2) Training hours -4% on 2018 23,217 Net overall 166,085 value added (€/000) Funded by the BNL - BNP Personnel turnover rate Paribas Group for Feralpi’s -1.4% on 2018 Turnover invoiced by € 20 m commitment to reduce local suppliers (Brescia area) greenhouse

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