CDP Italy Report 2017 Written on behalf of 650 investors with $87 trillion in assets.

CDP Report | October 2018 With the kind support of Contents

04 Italian government foreword

05 CDP perspective

06 Why CDP?

07 Collaboration between the Italian government and CDP

08 Analysis: Italian corporates

12 Analysis: Italian cities, states and regions

16 Analysis: Water security - Italian perspective

17 CDP investor initiatives

02 03 Italian government foreword CDP perspective

At the United Nations Climate Change Conference in CDP’s story is based on one simple idea: environmental Paris, in December 2015, the Conference of the Parties action begins with transparency. (COP) reached an ambitious agreement - a turning point in

the transition to a lower emissions economy. When CDP started almost 20 years ago, few It’s not just corporates using these insights to take companies, investors or cities were concerned about the action. Local authorities are more under pressure impact of their operations or profits on the planet. than ever, facing unprecedented economic and social The Paris Agreement established a new paradigm within CDP substantially supports global efforts to challenges exacerbated by climate changes. To cope the climate governance regime by setting up a flexible, meet both the aims of the Paris Agreement and And few recognized that climate change, water with this, cities, states and regions are using CDP as a nationally driven, bottom-up approach. As such, its the SDGs. Critical to the implementation of the insecurity, and deforestation would impact them – tool, undertaking benchmarking progress and learning whether through the physical costs from disaster success will depend on how countries carry forward Agreement will be the ability to interrogate and best practice. damage, or the risks from not transitioning business their targets relating to mitigation and adaptation. For understand what individual emitters are doing to contribute to national targets. Likewise, models at the pace to keep up. some countries, this will mean putting significantly more Significantly, in Italy, 14 cities among the 21 responding implementing the SDGs will require a greater climate protection measures in place, such as investing understanding of how businesses are addressing CDP knew that the critical initial step for meaningful to the cities questionnaire and all regions disclosing in energy efficiency and renewable energy. deforestation and water security, which are also environmental action was getting the global economy’s through the states and regions program reported to The Italian Ministry essential to mitigating greenhouse gas emissions. There has never main actors to measure and understand their impact. have emissions reduction targets already established. for the Environment Facing the consequences of climate change, ensuring been a better time to is committed to the competitiveness of industry and granting secure and Working together, we want to drive awareness by increase our collective We’ve come a long way since then. Disclosure is now Commitments like these are important for delivering accessible energy to all citizens are key elements that Italian companies, cities, states and regions of their mainstream: more than 6300 companies around the the shifts we need in financial capital and policy at the promoting emissions ambition...more will characterize policy in Italy and Europe in the long environmental impact, and improve the quantity world – and 70% of the total market capitalization of reduction activities scale required, and demonstrate how CDP’s data is a and very long term (until 2050), and which will require and quality of disclosure on climate change, water insight on risks and Italy’s 100 biggest – now disclose through CDP. Along key tool enabling policymakers to track action towards on a voluntary basis a radical transformation of the energy system and of use and deforestation issues as we move towards opportunities means with over 570 cities and 100 states and regions – achieving their NDCs. by the private sector society in general. realizing the Paris Agreement’s goals. the real economy’s including 21 cities and 4 regions on the Italian peninsula. as well as cities, main players have CDP’s vision is of a sustainable economy that works There is a specific need to drive companies’ With more transparency comes bolder action as The Marrakech Partnership of Global Climate Action is a for people and planet in the long term. Achieving this states and regions adoption of science-based emissions reduction never been better companies and local governments recognize the mutually supportive process that co-exists alongside the and public institutions targets, which align corporate GHG emissions positioned to act. benefits of acting early to mitigate the risks of business will take concerted efforts. We need companies, cities, to foster an Italian intergovernmental negotiations, and which contributes to reductions with global emissions budgets and the as usual and take a leadership position as our economy states, regions, investors and national governments to sustaining political momentum and focus on international transition towards a below 2-degree goal, and to generate the innovation readies itself for a diffferent future. make decisions driven by insights on climate change, cooperation and sharing of concrete solutions by needed to transition to a low-carbon economy. deforestation and water security. low-carbon economy. all actors. In this context, non-state actors play an In 2017, almost 9 in 10 Italian companies reporting to We believe that a increasingly important role in shaping and implementing Within the framework of the Marrakech Partnership CDP on climate said they have emissions reduction And these insights must be on the table of boardrooms low-carbon economy parties’ nationally determined contributions (NDCs), of Global Climate Action – and beyond – we are targets in place, with 8 already aligning their targets and government offices around the world – as they can be a driver to and in building collective understanding of ways to looking to catalyze action by the Italian public and with climate science through the Science Based Targets already are for 98% of disclosing companies in Italy. initiative. economic growth. strengthen ambition. private sector to reduce GHG emissions, protect our natural resources and supply our economy with There has never been a better time to increase our This is not just responsible business, but a signal to In September 2017, the Italian Ministry for the sustainable growth. investors that they are well-positioned in the low-carbon collective ambition. The landmark Paris Agreement Environment, Land and Sea and CDP renewed their Francesco La Camera transition. However, more action is needed – particularly and the Sustainable Development Goals have put Memorandum of Understanding (MoU), aiming to drive Director General for Sustainable Development, for leading companies setting science-based targets environmental action to the top of the international action towards the achievement of the Paris Agreement Environmental Damage, European Union and and engaging their suppliers. agenda, while ever more insight on risks and and the Marrakech Partnership for Global Climate International Affairs at the Italian Ministry for opportunities means the real economy’s main players Action. The Italian government will support CDP’s Environment, Land & Sea As they look to increase water security, 6 Italian have never been better positioned to act. disclosure platform to promote sustainable development companies now disclose to CDP’s water security and protect the natural environment in both the public program. They are part of a surge in global corporate Our work with the Italian government will drive these and private sector. investment in more than 1000 projects to tackle water collective efforts onwards, and help more of this Stakeholders' call to action milestones in the risks. country’s most impactful companies, cities, states and Under our MoU, the Italian government aims to increase international framework regions to start measuring their impact and the journey the number of companies monitoring and actively towards low carbon, water-secure and deforestation managing their climate-related risks and impacts, 2015 Agenda 2030 United Nations 6,300+ 500+ free operations. by inviting Italy’s largest companies and major cities Paris Agreement (COP21) companies cities to disclose to CDP. Tracking this progress, aligned Over 6,300+ companies responded to our climate change, water, forests and Disclosed environmental information towards delivering on the Paris Agreement, our National 2016 The Marrakesh Partnership (COP22) supply chain questionnaire this year. through CDP this year. Determined Contributions (NDCs), and the Sustainable Steven Tebbe, Development Goals (SDGs), the government seeks to Managing Director, CDP Europe stimulate sustainable, low-carbon economic growth. 2018 Global Climate Action Summit $3tn+ $87tn 100+ purchasing power investor assets states and regions CDP's 99 supply chain members Over 650 investors with US$87 Over 100 of the world's states represent a combined purchasing trillion in assets request information and regions now measure their power of over $3 trillion. on climate change, water or forests. environmental impacts through CDP. 04 05 Why CDP? Driving greater transparency The collaboration between the Italian government and CDP

CDP provides the detailed insights and analysis to drive Main goals and pillars of the agreement: the urgent action needed for a climate-safe, water-secure, deforestatation-free world. Engage companies and municipalities on their carbon footprint and forward- 1 looking environmental targets, through analysis and disclosure, to contribute to achieving the Paris Agreement´s goals.

Improve the quantity and quality of forward-looking disclosure by Italian 2 companies, cities, states and regions on climate change, water security and deforestation.

Catalyze action by Italian non-state actors to reduce their emissions and protect Disclosers CDP Decision-makers 3 natural resources, within the framework of the Marrakech partnership of Global We ask companies, cities, states We transform that data into detailed Investors, businesses and policy Climate Action and beyond. and regions for data on their analysis on critical environmental makers use our data and insights to environmental performance. risks, opportunities and impacts. make better decisions, manage risk and capitalize on opportunities.

Through its programs, CDP offers companies, cities, states and regions an integrated system to better measure and Our collaboration to increase environmental action manage their environmental performance. Impactful companies, cities, states and regions are requested annually to disclose environmental data in terms of governance, risks and opportunities, emissions, water management, and Signed in September 2017, the Memorandum impacts on deforestation. of Understanding between CDP and the Italian Ministry of the Environment is driving greater transparency and deeper engagement with CDP programs: CDP tools: CDP benefits: Italian companies, cities and regions.

Climate change (for corporates) Individual feedback Understand your impact Voluntary activities by non-state actors play a crucial role in global efforts to reduce GHG Water security (for corporates) Technical support Deliver better action emissions. With this agreement, the Italian goverment works to increase public and private Forests (for corporates) Open Data Portal Benchmark progresses against peers sector disclosure to CDP and, in line with Supply chain Reporter services Enhanced visibility the objetive of the Marrakech Partnership for Global Climate Action, promote sustainable Cities Training initiatives and events Leadership development and align its strategies towards achieving the Paris Agreement, its Nationally States and regions Research and analysis Join international initiatives Determined Contributions (NDCs), and the Investors Matchmaker Find investment opportunities Sustainable Development Goals (SDGs).

06 07 Italian corporates Key figures

Analysis of 48 of Italy’s biggest companies finds very high A List Italian companies awareness of climate-related risks and opportunities, 2017 by sector widespread emissions reduction target-setting, and responsibility for climate strategy at the highest level in Companies on CDP's Climate A List almost all businesses. But greater ambition is now needed have shown a thorough understanding – particularly on science-based targets and engagement of the risks and opportunities related to Climate change Water with water security and deforestation risks. climate change and have formulated and implemented strategies to mitigate or capitalize on these risks and opportunities. Those on CDP's Water A List have robust Brembo SpA Fiat Chrysler procedures to assess water-related risks Automobiles NV and the impact on the company's growth SpA strategy. They have integrated water management into their business strategy Climate change Water Forests with clear company/wide targets and SpA goals. Iren SpA Responding companies in 2017 44 6 3 SpA

Responding companies in continental Europe in 2017 573 106 33 Board governance data Disclosure summary Climate change related financial and 98% This statistic refers to operation risks are increasingly recognized as central to overall business staying 98% 86% companies formally requested Total market capitalization of companies responding by investors or part of CDP power and therefore under the purview of of responders of responders of responders samples. For climate change, to the climate change program: Boards. to the climate reporting Board with incentives for the sample is made up of the change program or other senior the management 100 major listed companies reporting that management of climate change by market capitalization, while climate change responsibility for issues for the water security and Italy Europe is integrated into climate change forest programs the samples their business take into consideration strategy multiple factors, such as companies’ impact. This table includes companies 70% 82% part of the above mentioned Emission data verification samples who responded by referencing a parent or holding company’s response; however 76% the remaining statistics of CDP sample´s market capitalization of the Italian companies who responded to the questionnaire presented do not include within the climate change sample in 2017 declared at least 70% these responses. For a full list of companies responding to of their direct (Scope 1) and indirect (Scope 2) GHG emissions CDP programs in 2017, see data was independently verified. the table in the next page.

08 09 Forests: much Protecting our forests is crucial to limiting biodiversity loss, ensuring water security and more to be done preventing soil erosion and flood impacts, to the benefits of businesses, local community livelihoods and the climate. While 15% of greenhouse gas emissions are caused directly by deforestation, companies remain strongly dependent on soft commodities (cattle products, palm oil, timber products, and soy), heavily impacting on deforestation and forest degradation from their direct operations and supply chains. Commitments like zero-net deforestation are vital to mitigating these risks. Through its forest program, CDP offers companies a tool to benefit from better management practices related to the production or sourcing of non-sustainable commodities.

Public commitments Emissions targets CDP’s vision is for a thriving economy that works for people and planet in the SDG 6 Clean Water and Sanitation Italian businesses have an important role to play long term. SDG 7 Affordable and Clean Energy in the coming years as Italy works to achieve SDG 12 Responsible Consumption and Production the goals set forth in the Paris Agreement. As 86% Our questionnaires on water security and forests are closely interlinked and they are increasingly looking to demostrate their address the following targets, making the CDP platform a useful tool to help SDG 13 Climate Action responding companies had active emissions reduction companies map their operations against the SDGs. commitment to building a low-carbon economy targets in 2017 - keeping the percentage unchanged SDG 15 Life on Land through bold initiatives on the Take Action Platform, compared to the last reporting cycle. Moreover, all wich brings together leadership iniciatives led by responders stated that they active emissions reduction initiatives in the reporting year the We Mean Business coalition partners, more List of responding companies in Italy in 2017: actions are needed. For more info visit www.cdp. net/commit or www.wemeanbusinesscoalition.org companies with absolute emissions reduction targets 74% Company Climate Water Forests Company Climate Water Forests companies are committed to adopting a science-based X X Immobiliare Grande Distribuzione SpA X 8 emissions reduction target, 60% ACEA SpA X Intesa Sanpaolo SpA X and 1 succeeded in doing so companies have intensity emissions Ansaldo STS X Iren SpA X companies have already reduction targets SpA X Italcementi SA established an internal price Astaldi SpA X X 24 on carbon or have planned to X Leonardo SpA X do so. SpA SA Maire Tecnimont SpA X Barilla Holding SpA X MARR SpA X companies are committed 2 to 100% renewable power Beni Stabili SpA SIIQ X Piaggio & C SpA X X through the RE100 initiative Brembo SpA X X X X Cementir Holding SpA X Prada X X CIR SpA X Prysmian SpA X X CNH Industrial NV X X REPLY SpA X Credito Valtellinese X X Risks and opportunities arising Danieli & C Officine Meccaniche SpA X Salini Impregilo SpA X from climate change Diasorin SpA X Salvatore Ferragamo SpA X ENEL SpA X X Snam SpA X X Enel Green Power SpA SA SA Sofidel SpA X X 95% 95% 86% 76% SpA X X STMicroelectronics International NV X X ERG SpA X Telecom Italia X Fiat Chrysler Automobiles NV X X Terna X Fincantieri X UBI Banca X Finecobank SA X Hera X YOOX Net-A-Porter Group X IMA SpA X Zignago Vetro SpA X

% of responders % of responders % of responders % of responders seeing regulatory seeing regulatory seeing physical seeing physical The list above includes not requested companies which responded voluntarily to one or more of our programs, as well as companies part of the Italy sample for risks opportunities risks opportunities climate change but headquartered abroad. SA stands for companies responding by referencing a parent or holding company’s response.

10 11 Italian cities, states and regions Key figures

In 2017, 25 Italian cities and regions reported their Most commonly reported environmental data through CDP – showing that they climate hazards by Italian Adaptation measures undertaken include: actively and increasingly look to measure and manage cities and regions Extreme temperature the risks and opportunities that climate change presents Policy, mapping and modelling, biodiversity, engagement to their operations. Responding cities and regions are (mainly heat) Policy, infrastructure, mapping and modelling, planning, awareness taking meaningful action to cut emissions and provide Flood/drought sustainable infrastructure to their citizens, but more needs campaigns to be done to mitigate the risks of climate change. Precipitation Policy, mapping and modelling, water infrastructure, planning

Mass movement Other Responders identifying Responders identifying current significant hazards social risks as a result of arising from climate change climate change

Top 3 adaptation activities Number of cites reported by cities reporting them 21 90% 76% Flood mapping 8 Cities

Landslide risk mapping 6

75% 75% Projects and policies 4 targeted at those most 5 Regions vulnerable

Top 3 reported city-wide emissions reduction activities To better shape and drive action on climate change, Italian local authorities are setting targets: Overall number of climate actions implemented These include mitigation actions by local authorities in Italy implemented both at city-wide and local government levels, as well as adaptation actions and those meant Cities with established Regions with established to increase water security and tackle targets targets 230 Cities 108 Regions related risks

Emissions reduction targets 14 4

Energy efficiency targets N/A 3 Number of cities, states and regions responding to CDP globally

533 579 Energy efficiency/retrofit Renewable energy targets 5 3 measures Cities 314 Low or zero carbon energy 207 supply generation 110 States & 73 66 100 101 48 12 Improve fuel economy and regions reduce CO2 from motorized 2011 2012 2013 2014 2015 2016 2017 vehicles

12 13 H H List of responding cities and C regions in Italy in 2017: H H City Region 3 of 4 set 2050 emissions Bolzano Emilia Romagna Cagliari Lombardia regions reduction targets Ferrara Sardegna Firenze Veneto Genova Lucca Milano Monza Napoli Olbia Across the globe, cities continue Oristano to implement local policies Padova IN 2017, 362 CITIES REPORTED 1,045 CLIMATE-RELATED and infrastructure projects that Parma PROJECTS TO CDP, REPRESENTING OVER $52 BILLION USD. address climate change and build Piacenza resilience, but face barriers to Ravenna securing the necessary finance. NORTH AMERICA EUROPE Reggio Emilia In Italy, 14 of the 21 290 168 Rimini responding cities report Torino that they see economic Udine Venezia opportunities coming from AFRICA APAC Verbania 148 better management of LATAM 118 climate change impacts, 321 while 13 of them already collaborate with businesses on sustainability issues or projects. The total cost of cities Cities: CDP's reporting platform is one of the official reporting platforms for the projects amounts to 100 million euro. Under its Global Covenant of Mayors for Climate & Energy - alongside the carbonn Climate programs, Registry and the EU Covenant of Mayors platform. It is also the official reporting CDP partners platform for C40 Cities Climate Leadership Group. From 2019, CDP and ICLEI - with relevant Local Governments for Sustainability - will join efforts and present a unified climate reporting platform for cities. international MATCHMAKER aims to fill this gap between the public and private sectors. It provides subscribers with initiatives and States and Regions: CDP partnered with The Climate Group on the information on climate resilient infrastructure projects in cities through a specialized project dashboard. Using organizations. Under2Coalition and nrg4SD on RegionsAdapt. data from 570 cities, collected through CDP, Matchmaker works with cities to highlight projects in flood control, waste management, sustainable transportation, renewable energy, water management, and energy efficiency Cities, States and Regions and Companies: Drawing on vital information and links them to the investment community. reported through its unique global environmental disclosure system, CDP also provides data for the Non-state Actor Zone for Climate Action (NAZCA) online portal, hosted by United Nations Framework Convention on Climate Change (UNFCCC) to showcase non-state climate ambition and keep the momentum.

14 15 Water security: CDP Investor Initiatives Case studies from Italian cities, regions and companies Italian signatories and members

Water security represents one of the greatest challenges that businesses, Climate change, water scarcity, flooding, pollution and investors, governments and citizens will face in the upcoming decades. Italy deforestation present real, material risks to investors, is heavily affected by water-related hazards, and Italian disclosers to CDP in but they also present opportunities. To protect long term 2017 made this clear in reporting the extent to which their vulnerability to investments and make better decisions institutional water risks influences their actions. Broader action, better risk assessment investors must have the best available data. CDP provides and strengthened cooperation among the public and private sectors an unparalleled set of data and award-winning insights to are crucial steps to manage water risks, protect citizens and seize the its members and signatories. CDP leverages the power of opportunities arising from a better water stewardship. investors to ask companies environmental disclosure.

Investor signatories and CDP’s Investor Program - backed in 2017 List of investor signatories and members members by type by 650 institutional investor signatories in Italy in 2017: of Italian companies of Italian of Italian regions 50% 50% 50% representing in excess of US$87 trillion in report that they are exposed companies identified see substantive risks to water risks. However, only strategic, operational to their water supply in assets - works with investors to understand Investor signatories Investor members 40% undertake a water risk or market opportunities the short or long term, their data and analysis requirements and Assicurazioni Generali SpA Eurizon Capital SGR assessment covering both direct that have a substantive mainly increased water offers tools and solutions to help them. operations and supply chains, potential to benefit their stress and scarcity, declining Credito Valtellinese Etica SGR suggesting that water risks may organization. water quality, flooding Our global data from companies and cities in be underestimated. and inadequate or aging Fondazione Cariplo infrastructures. response to climate change, water insecurity and deforestation and our award-winning Fondo Pegaso investor research series is driving investor Fondo Pensione Cometa decision-making. Italian cities are taking action, improving water stewardship and creating better places to live and work. Here are the cases: Our analysis helps investors understand the UniCredit Asset Owners risks they run in their portfolios. 50% Our insights shape engagement and add Gruppo Facing increasing flooding as a city of rivers and Increased system efficiency: more Banks value not only in financial returns but by Milan case study canals, it is now firmly on path to becoming a renewable energy use, as well as extended 20% building a more sustainable future. sustainable city. the city's district heating network, using heat Asset Managers from gas power plants, waste-to-energy 30% Completed thorough flood mapping and its next plants and ground-source heat-pumps For more information about the CDP To view the full list of investor signatories urban plan will better consider climate impacts in long- Investor Program, including the benefits please visit: http://bit.ly/2uW3336 term planning; Collaboration with the private sector of becoming a signatory or member is key to making Milan a resilient city: the Launched Smart Cities Initiative, which aims to municipality working directly with businesses please visit: http://bit.ly/2vvsrhp develop new business industries, access new funding to upgrade the city’s street and traffic lights to sources through 100 Resilient Cities, boost energy LEDs, and set up car sharing programs. efficiency, andcut emissions by 20% by 2020

Facing storm surges, coastal flooding and sea- completion in 2022, an estimated further 50 Venice case study level rises, Venice is seeing sustainability million euros is needed per year to maintain The Climate Rating for Funds opportunities. the city in the face of environmental impacts; Climetrics' simple 1-5 Climetrics is the world’s first climate rating for investment The City of Venice manages a special High Tides Set a climate target to reduce emissions by More than 3,500 rating lets any investor Centre, which provides daily forecasts digitally. The 23% by 2020. To achieve the goal, the city funds. With public rating results and a fully-transparent funds covered, identify funds that are city also has raised pathways that allow people to leads the way on resource efficiency methodology, Climetrics enables fund investors to well-positioned in the representing about move around during high tide; through infrastructure improvements, integrate climate change into their investment decisions. transition to a low- mandatory water meters, efficient waste- €2 trillion in fund Project MOSE is currently underway to protect Venice carbon economy management initiatives and upgrading All ratings can be viewed for free online at investments. from sea surges and coastal flooding, by using streetlights and traffic lights to LEDs. mobile gates to ‘close’ the lagoon at high tide. Due for www.climetrics-rating.org

16 17 CDP contacts Report author Design Steven Tebbe Elena Eugenia Beuchod Wendy Duboff Managing Director Engagement Officer Italy [email protected] [email protected] Esther Cuervo Investor Engagement [email protected] Matteo Brezza Account Manager Media enquiries [email protected] Josh Snodin Senior Communications Officer [email protected] Policy Engagement Susanne Draeger Senior Public Affairs Officer [email protected]

Cities, States and Regions Engagement Shirin Reuvers Cities, States and Regions Senior Manager [email protected]

Address Scoring partner Italy Communications partner Italy CDP Worldwide (Europe) gGmbH c/o WeWork, Potsdamer Platz-Kemperplatz 1 10785 Berlin,Deutschland www.cdp.net Twitter: @cdp

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