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1 Contents A year of sustainability .............................................................................................. 4 Strategy, sustainability and value ................................................................................. 7 About us ............................................................................................................ 7 Sustainability for the Hera Group ............................................................................. 10 Sustainability and risk management .......................................................................... 19 Dialogue with our stakeholders ................................................................................ 34 The economic value for our stakeholders .................................................................... 38 Customers ............................................................................................................ 47 Objectives and performance ................................................................................... 47 Our customers .................................................................................................... 49 The cost of our services ........................................................................................ 53 Service quality ................................................................................................... 71 Quality of drinking water ....................................................................................... 74 Service safety and continuity .................................................................................. 78 Customer relations .............................................................................................. 85 Customer satisfaction survey and other dialogue initiatives ............................................. 93 Case studies for our customers ................................................................................ 96 Workforce .......................................................................................................... 103 Objectives and performance ................................................................................. 103 Workforce ....................................................................................................... 104 Diversity and equal opportunities ........................................................................... 111 Training and professional development .................................................................... 115 Health and safety .............................................................................................. 121 Remuneration and incentives ................................................................................ 126 Industrial relations ............................................................................................ 129 The internal climate survey and other dialogue initiatives ............................................. 134 Case studies for employees .................................................................................. 141 Shareholders and Financial Institutions ....................................................................... 146 Hera’s commitment toward the investors ................................................................. 146 Complete transparency with the shareholders and the financial market on the creation of value148 The commitment to reduce the investment risk ......................................................... 149 Corporate Governance and safeguards for shareholders ................................................ 151 The composition of the shareholding structure ........................................................... 152 Financial structure ............................................................................................ 154 The Green Bond ................................................................................................ 155 The Environment and Future Generations .................................................................... 157 Objectives and results ........................................................................................ 157 Energy production ............................................................................................. 159 Energy efficiency .............................................................................................. 167 Production and distribution of water ....................................................................... 173 Wastewater treatment quality .............................................................................. 176 Atmospheric emissions ........................................................................................ 180 Greenhouse gas emissions .................................................................................... 189 Waste collected ................................................................................................ 191 Separate waste collection .................................................................................... 197 Waste disposed of ............................................................................................. 204 Waste produced by Hera ..................................................................................... 213 Biodiversity ..................................................................................................... 214 The initiatives for the local community .................................................................... 216 Public Administration ......................................................................................... 230 Case Studies for the Environment and Future Generations ............................................. 236 Suppliers ............................................................................................................ 260 Objectives and performance ................................................................................. 260 Our suppliers ................................................................................................... 261 2 Operations within local communities ....................................................................... 263 Qualification and selection of suppliers .................................................................... 265 Contract management ........................................................................................ 274 Supplier relations .............................................................................................. 278 Case studies for suppliers .................................................................................... 279 Methodological guide to the Report ............................................................................ 282 Drawing up this report ........................................................................................ 282 Annexes ............................................................................................................. 287 3 A year of sustainability Letter to stakeholders Our 2015 Sustainability Report... a value for us and for our stakeholders Once again in this Report, our economic, social and environmental sustainability results are highly positive, within an evolutionary perspective of shared value. Completely renewed last year, it reflects our commitment to make our objectives and results accessible to stakeholders every year, in full transparency and with the aim of building the trust we need. We have written it again this year keeping in mind the people who will read it and we have further developed its communication structure, in a search for constant improvement just like our way of doing business. And with the aim of meeting the knowledge expectations of all our stakeholders. Our business strategy embraces sustainability: this is our approach Our business plan is divided into four strategic lines - growth, excellence, efficiency and innovation. Sustainability, in its various spheres, is cross-cutting through the four lines and has been a key priority for the Group ever since its establishment. Its integration in our business activities is implemented through: • strong attention to systems of values, at the basis of our activities, which was the topic in 2015 of a training course delivered to AcegasApsAmga employees and which we are about to update, as we do every three years, with involvement of the workforce; • continuous improvement of the Group’s accountability profile, as witnessed by the report and by the vertical theme reports which explain in detail what we do and how we do it with regard to particularly sensitive issues (further expanded and improved in 2015); • a balanced scorecard system associated with a bonus system involving all management and in which sustainability objectives account averagely for 20% of variable remuneration in 2015; • strengthening of the governance system and management of business risks, according to a renewed integrated system for enterprise risk management, managed with a view to maintaining operations and to ensuring safety. Our priorities are service quality and staying close to customers, which we do by listening to them We listen to our customers so that we can improve: the survey carried out in 2015 on the quality of the services provided by the Group (around 5,300 interviews) reported a high satisfaction index (70/100), on the rise compared to the previous year. The results will be used to define
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