SUSTAINABILITY REPORT 2019

SUSTAINABILITY REPORT

2019Consolidated Non-Financial Statement pursuant to Legislative Decree No. 254/2016

SUSTAINABILITY REPORT 2019 Consolidated Non-Financial Statement pursuant to Legislative Decree No. 254/2016 FINCANTIERI GROUP FINCANTIERI GROUP

C ONTENTS

LETTER TO STAKEHOLDERS 4 Quality at the core 112 Ongoing dialogue 118 FINCANTIERI IN NUMBERS 8 For our people 120 We aim to attract talent 121 A SUSTAINABLE GROUP 11 We train and enhance our people 124 Our identity 12 with an eye on excellence Our sustainability strategy 19 Diversity and inclusion as an asset 128 Our commitment to health and safety 131 RESPONSIBLE GOVERNANCE 37 Well-being for our people 137 Corporate Governance 38 We listen to our people 142 and Remuneration Policy For the community 144 Our system of internal control 44 Our lines of action 146 and risk management We dialogue with communities and 153 Our rules on fair conduct 46 institutions We respect human rights 51 We protect data and information 55 FINCANTIERI FOR THE ENVIRONMENT 154 To reduce our impact 156 FINCANTIERI FOR SOCIETY 59 Our management system 158 For the economy and the market 60 We invest for the environment 170 Economic value for stakeholders 62 We protect biodiversity 171 Our economic satellite businesses 68 To promote sustainability 172 For innovation 70 Our ever greener ships 172 We are innovators 70 We raise our partners’ awareness 182 We cooperate in order to create value 75 of eco-sustainability Our main projects 80 Together for a more eco-sustainable 183 For a sustainable supply chain 86 environment Who are our suppliers and how we 88 choose them ANNEXES 184 How we monitor them 93 Methodological note 186 Characteristics and management of the 98 Description of material topics 190 supply chain of foreign companies Global Compact reconciliation table 192 Ongoing dialogue 102 GRI Content Index 194 For our customers 104 Independent auditors’ report on the 206 More sustainable and safer ships 107 consolidated non-financial statement

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ten universal principles relating to human by the Ministry of Infrastructure and between the training offered by universities rights, labour, the environment and the Transport for innovation in the naval field. and the needs of employers, to improve the fight against corruption, through political quality of training and research processes actions, business practices and social and Our commitment to innovation also sees us and to offer young people a series of civil behaviour. Fincantieri is the largest engaging as partners of leading institutions academic paths with innovative content to shipbuilder, and the first cruise shipbuilder, of higher education. In fact, we have prepare them for entry into the world of to adopt these principles in its strategy. signed an extensive agreement to establish work. new cooperative relationships in the civil, This important result on the external front industrial and information engineering Young people are therefore a resource was immediately followed by another sectors with the University of Calabria, one to be invested in with determination, but equally important one internally. We refer of the largest universities in the South of are certainly not the only target for our to the “Fincantieri for the green future” Italy, which will allow us to tap into a pool ambitious and worthwhile projects. Our campaign, aimed at increasing awareness of of excellence in terms of academic and reference communities, i.e. the populations environmental sustainability among all our research standards, with students ready of the areas where we are present, are in stakeholders, primarily involving our own to take advantage of the opportunities turn essential partners, and we constantly LETTER TO STAKEHOLDERS employees as well as contractor personnel, that the Company can offer in Italy and promote proactive initiatives to improve to encourage them to make a positive and abroad. Moreover, our subsidiary Issel Nord, their welfare, as well as the wellbeing of tangible contribution to environmental which specializes in logistics engineering our employees and their families. Among The 2019 financial year saw the publication protection through their behaviour in and high added value services, has been the many projects of this type, we want of our third Sustainability Report. For everyday life, not just in the workplace. working with the University of Genoa- to mention the extension of our charitable our Group, a new phase of further Polo Guglielmo Marconi to develop the projects to include local Food Banks for improvement is opening up, in which the Let’s review some of the most important "Integrated Product Support and Lifecycle the recovery of food surpluses in Bari and issues of corporate responsibility have been actions pursued during the year just ended. Management” course: a new opportunity Ancona, after starting similar projects introduced into business processes and are In the field of Research and Innovation, 2019 for students of Master’s degree courses in the Ligurian shipyards. Last summer, becoming increasingly harmonized with saw us spearheading two agreements of in Mechanical Engineering - Design and together with the Municipality of Genoa, them. The stated objective is, of course, to prime national importance. The first, with Production and Yacht Design, which has we inaugurated a summer centre that promote and consolidate a strong culture Cassa Depositi e Prestiti (CDP), our main obtained the direct patronage of the welcomed not only the children of our of sustainability in a planned way, reflecting shareholder, and Snam, in the key sectors Product Support & Specifications Group employees but also the rest of the city. Fincantieri's strategic vision. for the development of port facilities in Italy of ASD, the AeroSpace and Defence Finally, we have signed an agreement and sustainable technologies for maritime Industries Association of Europe, and will with the Municipality of Monfalcone for Last year, as part of this virtuous path, transport, in line with the Proposal for an also concern the software tools developed the construction of a nursery school, we published the Sustainability Plan, a Integrated National Plan for Energy and by our Company. In agreement with the committing ourselves to renovate a truly fundamental milestone, with which Climate (PNIEC). The second, again with Liguria Region, we have also helped to building owned by the Municipality, with we stated our long-term commitments CDP, together with Eni, lays the foundations launch the “Senior technician for the an investment totally at our expense of over a five-year period, and we achieved for establishing a company to develop production and maintenance of means euro 1 million, in addition to the payment of all the objectives for 2019. A further step and build power stations that use waves of transport and related infrastructure" management and consumption costs up to was taken by joining the United Nations to produce electricity. We also presented, course at the Accademia della Marina a maximum amount of euro 300,000 per Global Compact, the world’s largest in collaboration with the National Mercantile (Merchant Navy Academy). All year for the first three years. business sustainability initiative. The Research Council (CNR), the results of six these initiatives concretely demonstrate the scheme involves voluntary adherence to multidisciplinary research projects funded Group's desire to create greater synergy

4 5 FINCANTIERI GROUP GRUPPOFINCANTIERI FINCANTIERI GROUP

Alongside this there is constant dedication them, as in the case of the stipulation of to the aspects of people's lives that are an insurance cover specifically designed most closely linked to work in Group for the COVID-19 health emergency, aimed shipyards around the world. In September at all the employees of the Group’s Italian the Palermo site also completed the companies and of the companies in the process for RINA to issue OHSAS 18001 and supply network. In this context, Fincantieri ISO 14001 certificates of conformity, the has currently suspended production highest international standards of health activities at Italian shipyards as of 16 March, and safety at work and environmental signing an agreement with the national protection: with this result the Company trade unions, the cornerstone of which arrived at full coverage of all the Group's is to guarantee continuity of production Italian production units. Looking overseas, when they are resumed. Now, as is our however, we cannot fail to mention the two custom, we want to look to the future with safety awards obtained by our Marinette determination: we want to restart as soon shipyard, which in 2019 received both the as possible, guaranteeing the health and “Excellence in Safety” and “Improvement safety of our employees and those of the in Safety” awards from the Shipbuilding companies in the supplier network while Council of America. maintaining the leadership, employment levels and credibility that Fincantieri has Once again it is worth pointing out that earned with its domestic and foreign Fincantieri does not just see sustainability customers - fundamental elements not only as an opportunity, but as a real mission for Fincantieri and its system, but also for to achieve and represent a model of the stability of the national economy. The excellence. challenge ahead of us is very tough, but we have emerged stronger from all the other In conclusion, we cannot fail to mention crises we have faced, and this time, despite the situation that we have all been facing the most serious emergency since the here for a few weeks now. Since the first second post-war period, it will be the same signs of the COVID-19 epidemiological again. phenomenon, the Company has set up a crisis committee to monitor and coordinate the necessary actions. In this way we were able to promptly implement all the measures aimed at safeguarding the health of all workers, through initiatives in line with the indications given and the measures progressively adopted by the

government, and often supplementing GIUSEPPE BONO Fincantieri Chief Executive Officer

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FINCANTIERI IN NUMBERS

SHIPYARDS AND DOCKS MAIN SUBSIDIARIES EUROPE EUROPE ASIA ITALY ITALY CHINA Trieste +7,000 FINCANTIERI S.p.A. Fincantieri (Shanghai) Trading Monfalcone Ships designed Cetena INDIA and built + Marghera € 5.8 bln 230 Seastema Fincantieri India Revenues Years of history € 134 mln Sestri Ponente PRINCIPAL Research, Isotta Fraschini Motori Vard Electrical Installation Western development and and Engineering (India) Genoa shipbuilder innovation Fincantieri Oil&Gas Riva Trigoso - Muggiano Marine Interiors QATAR Ancona Marine Interiors Cabins Fincantieri Services Middle East Castellammare di Stabia Insis SINGAPORE Palermo Seanergy A Marine Interiors Vard Holdings NORWAY Company Vard Shipholdings Singapore Aukra Fincantieri SI JAPAN Brattvaag Fincantieri Infrastructure FMSNA YK Brevik Fincantieri Infrastructure Opere Marittime VIETNAM Langsten Issel Nord Vard Vung Tau Søviknes NORWAY ROMANIA VARD Group Braila AMERICAS Vard Design USA Tulcea Vard Piping Fincantieri Marine Group Vard Electro Fincantieri Marine Systems ASIA Vard Accomodation North America VIETNAM Seaonics Fincantieri Services USA Vung Tau Almost ROMANIA Fincantieri USA 20,000 Vard Tulcea CANADA +580,000 employees at 31.12.2019 Vard Marine AMERICAS Hours of training 57% 43% Vard Braila provided other Italy USA countries CROATIA BRAZIL Marinette € 32.7 bln Vard Design Liburna Vard Promar Total backlog Sturgeon Bay SWEDEN Green Bay -5,093 Fincantieri Sweden OCEANIA tCO2e BRAZIL GHG emissions POLAND AUSTRALIA st Suape 20 1 98 Seaonics Polska Fincantieri Australia Player in Vessels in Shipyards - Total 4 diversification order book area of 5.4km2 Continents and innovation +6,000 Suppliers in Italy alone

8 9 A SUSTAINABLE GROUP

• OUR IDENTITY

• OUR SUSTAINABILITY STRATEGY

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We are a unique group in the world. OUR IDENTITY We are the only operators capable of building all types of highly complex vessels Fincantieri Group (also referred to here as The Group, which has its headquarters in Fincantieri, Group or Company) is one of Trieste, has built more than 7,000 vessels the world’s largest shipbuilding groups and in its over 230 years of history. With 19,823 number one in terms of diversification and employees, including more than 9,300 in Italy, innovation. and 20 shipyards spanning 4 continents, our We are a global multinational company and customers include the major cruise operators, the only operators capable of building all the Italian and US Navy, as well as several types of highly complex vessels from cruise foreign Navies. We are a partner of some of ships to mega-yachts, from naval vessels to the main European defence companies within high-tech offshore vessels. supranational programs. We are the leader in cruise ship design and Fincantieri is focused on customer satisfaction construction and a reference player in all and for this reason, over the years, it has high-tech shipbuilding industry sectors. evolved its organizational structure to adapt We work to create an increasingly it to the Group’s strategies and to respond technological and sustainable future, focusing to the challenges posed by the market in a on innovation and respect for people and the timely manner. Today the Group consists of environment. a number of companies with headquarters in Italy and around the world, and adopts an integrated production model based on excellence. Fincantieri has 82 subsidiaries, 26 of which are Italian and 56 of which are foreign. As part of its growth and business strengthening strategy, 14 new companies were acquired or established in 2019. In particular, in order to strengthen activities in high-tech sectors, during the year a majority stake was acquired in Insis S.p.A., a company active in the information technology and cyber security sectors, which operates on domestic and foreign markets both directly and as a technological partner of large industrial groups. Fincantieri's business is widely diversified by end markets, geographical exposure and by client base, with revenue mainly generated from cruise ship, naval and offshore vessel construction. Compared with less diversified players, such diversification allows it to mitigate the effects of any fluctuations in demand on the end markets served.

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GROUP OVERVIEW

OFFSHORE SHIPBUILDING AND SPECIALIZED EQUIPMENT, SYSTEMS AND SERVICES OTHER

SEGMENTS VESSELS BUSINESS AREAS

Cruise ships Ferries Naval Vessels Mega-Yacht Offshore and Systems and Services Electronics, Infrastructure Corporate Contemporay Cruise ferry Aircraft Carriers Mega-yacht > 70 m Specialized Vessels Components Ship repairs Systems and Design, construction and functions Premium Ro-Pax Destroyers Drilling units Cabins Refitting Software assembly of steel structures Strategic Direction and Upper Premium Dual fuel ferries Frigates Offshore support vessels Public areas Refurbishment Design and integration of on large projects: Coordination Luxury Corvettes (AHTS-PSV-OSCV) Electrical, electronic and Conversions complex systems (system • bridges • Governance, Legal and Exploration/Niche Patrol vessels Specialized vessels electromechanical integrated Product lifecycle integration) with a focus on • viaducts Corporate Affairs systems Expedition cruise vessels Amphibious ships Fishery/Aquaculture management automation • airports • Accounting and Finance Automation systems Logistic support ships Offshore Wind • Integrated logistic support Cyber security • ports • Human Resources

PRODUCT PORTFOLIO Entertainment systems Multirole and Research • In-service support • maritime/hydraulic works • Information Systems Stabilization, propulsion, Vessels positioning and power • Refitting • large commercial and • Research & Innovation Special vessels generation systems • Conversions industrial buildings • Purchasing Submarines Steam turbines Training and assistance Steel structure for large scale projects

FINCANTIERI S.p.A. Fincantieri Marine Group FINCANTIERI S.p.A. FINCANTIERI S.p.A. FINCANTIERI S.p.A. Seastema S.p.A. Fincantieri FINCANTIERI S.p.A. • Monfalcone Holdings Inc. Fincantieri Oil&Gas S.p.A. • Riva Trigoso • Arsenale Triestino San Issel Nord S.r.l. Infrastructure S.p.A. • Marghera FMG LLC Vard Group AS Seaf S.p.A. Marco Insis Group Fincantieri Infrastructure Opere • Sestri Ponente • Sturgeon Bay • Aukra Isotta Fraschini Motori S.p.A. • Bacino di Genova Marittime S.p.A. • Integrated Naval Shipyard Marinette Marine • Brattvaag Fincantieri SI S.p.A. FMSNA Inc. Pergenova S.c.p.a. Navale Riva Trigoso and Corporation LLC • Brevik Marine Interiors Cabins S.p.A. Fincantieri Services Middle Fincantieri Dragaggi Muggiano • Marinette Vard Promar SA Marine Interiors S.p.A. East LLC Ecologici S.p.A. • Ancona ACE Marine LLC • Suape Seanergy a Marine Interiors Fincantieri Services USA LLC • Castellammare di Stabia • Green Bay Vard Vung Tau Ltd. company S.r.l. • Palermo Fincantieri India Pte Ltd. • Vung Tau Luxury Interiors Factory S.r.l. Vard Group AS Fincantieri do Brasil Vard Electro AS Fincantieri Sweden AB • Langsten Partecipacões SA Vard Design AS Unifer Navale S.r.l. • Søviknes Fincantieri USA Inc. Vard Piping AS Vard Tulcea SA Fincantieri Australia PTY Ltd. Vard Marine Inc. • Tulcea Fincantieri (Shanghai) Seaonics AS Vard Braila SA Trading Co. Ltd.

MAIN SUBSIDIARIES/ASSOCIATES/JOINT VENTURES MAIN SUBSIDIARIES/ASSOCIATES/JOINT • Braila Etihad Ship Building LLC. Vard Accommodations AS Orizzonte Sistemi Navali S.p.A. Cetena S.p.A. CSSC - Fincantieri Cruise Industry Development Ltd.

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SHAREHOLDERS STRUCTURE 71.32% of Fincantieri’s share capital of Vision, Mission and Values 862,980,725.70 euros is held, through the VISION MISSION INDISTINCT MARKET CDP Industria S.p.A. subsidiary CDP Industria S.p.A., by Cassa Depositi e Prestiti (CDP) S.p.A., a company We aspire to be world leaders in the industrial Technological development and continuous controlled by the Ministry of Economy and sectors where we operate, becoming a reference improvement are the goals that we have set for 28.26% Finance. The remainder of share capital was point for our customers, always selecting high ourselves, and we are determined to pursue distributed between a number of private value-added sectors and standing out for our them. investors (none of whom held significant diversification and innovation. Our every action, project, initiative or 0.42 % The Sea Ahead: all those who work for the decision is based on strict observance of the FINCANTIERI S.p.A. interests of 3% or above) and own shares Fincantieri Group steer for this course: talented law, labour protection and protection of (OWN SHARES) 71.32 % (of around 0.42% of shares representing the men and women working responsibly to the environment, safeguarding the interests of share capital). help develop our idea of a future increasingly our shareholders, employees, clients, trade and characterized by innovation, performance and financial partners, local communities and groups, sustainability. creating value for every stakeholder.

CHARACTERISTICS OF THE The sea is our natural element, the one we units, ferries and luxury yachts that will play SHAREHOLDER STRUCTURE YES/NO % sharecapital understand better and faster than the rest. a leading role in the seafaring history of In every epoch, we have built ships equipped tomorrow. Because our hallmark has always Shareholders’ agreements No - with state-of-the-art technology that sail been the focus on our values and the courage Shareholding threshold for the the seas from north to south and from east to change. submission of slates for the to west. Today we look towards the future, The values live in our people, in our appoinment of corporate - 1% bodies and officers ready to take on new challenges in order to relationships with partners, in our actions to build the cruise ships, naval vessels, offshore implement our new Mission and Vision.

OUR STRENGTHS VALUES

PEOPLE SYSTEM TECHNOLOGICAL Everything we do focuses on enabling the growth, enhancement INTEGRATOR CAPABILITIES LEADERSHIP and training of people, based on the daily attention we pay to the quality of our work and our relations with others SUSTAINABILITY

INNOVATION SAFETY We aim at continuously improving We ensure high levels our products and working methods of occupational safety TAILOR MADE BUSINESS through technological innovation and health SUSTAINABILITY PRODUCTS DIVERSIFICATION

CUSTOMER FOCUS INTEGRITY We meet customer requirements We take responsibility for our actions and and we rigorously honor our we put great care into our work, adhering FLEXIBLE & GLOBAL WIDE PORTFOLIO commitments to strict principles of ethics, loyalty and PRODUCTION NETWORK OF CLIENTS & PRODUCTS professional fairness

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OUR SUSTAINABILITY STRATEGY

Our business model due to the strategic business area and For us, a company is sustainable when it product type, for each order we develop generates value with the future and not just We are able to produce different types directly project management, design, the present in mind, namely when it also of units at the same time, and we have hull procurement and manufacture, while generates value for those who come after the flexibility to cope with any changes our role mainly involves integration and us. To do this, we work so that every person occurring during construction. Our products coordination of a qualified network of in the Group understands the value of being feature a high level of personalization and, expert suppliers for the preparation of sustainable and reflects in their everyday in many cases, are prototypes with cutting- systems, accommodation and, for naval work the fundamental principles of social edge technological solutions. As such, they vessels, weapons systems. In terms of responsibility, undertaking and contributing We are also committed to contributing to require significant efforts in terms of design, business model we have adopted a make or to satisfying the stakeholder expectations the Sustainable Development Goals (SDGs) procurement, production, planning and buy strategy for each step of development today and tomorrow, creating a virtuous of the United Nations 2030 Agenda for order management. We act as a systems and construction of the vessel order, with cycle that generates synergy and shared, Sustainable Development, approved by integrator, usually acting as the prime/ the objective of keeping core skills and high proactive commitment. Sustainability is not the General Assembly in 2015. These are general contractor, managing the project value-added activities within the Group and just an opportunity but a duty and a real common sustainable development goals for for vessel construction as a whole and outsourcing to qualified suppliers specialist mission to represent a model of excellence today’s complex social challenges. These taking on responsibility for this. activities that are low value-added or non- in the world. Being sustainable means goals are an important reference for the Typically, while there are differences essential. constantly improving health and safety in international community and for Fincantieri the workplace, developing technological in conducting its business. innovation, promoting a responsible supply chain, maintaining customer satisfaction BUSINESS MODEL: SUMMARY DIAGRAM and trust, engaging with local communities by supporting them and, last but not least, reducing environmental impact by helping to combat climate change. This is all with the aim of finding a tomorrow that is better than today. DESIGN As a sign of our commitment and the importance of increasing integration of sustainability in our strategic choices, in CONTRACT PROJECT FINANCING PRODUCTION GUARANTEE AND 2019 we joined the United Nations Global ACQUISITION MANAGEMENT AFTER SALES Compact, the most wide-ranging business sustainability initiative in the world. This is a voluntary initiative to adopt ten universal

PROCUREMENT principles related to human rights, labour, the environment and the fight against corruption, which promote the values of sustainability in the long term through political actions, business practices and

For more information on the business model, see the website www.fincantieri.com/en/group/business-model social and civil behaviour.

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Sustainability Governance sustainability, we have a Sustainability Our sustainability path environmental sustainability, creating value Governance Model that provides for: in the long term. This is why the important To guarantee adequate protection and We have decided to structure our (material) topics for the Group have been monitoring of processes associated with sustainability path by adopting an integrated integrated into its business strategy and why strategy that is capable of combining business the Fincantieri Group’s Sustainability Plan has ELISABETTA OLIVERI growth and financial stability with social and been implemented. LUCA CHAIRMAN PAOLA ERRICO MURATORIO MULTIFUNCTIONAL WORKING GROUP STAGES OF THE SUSTAINABILITY PATH FEDERICA BOARD SANTINI SUSTAINABILITY OF UNIT DIRECTORS LOCAL Definition SUSTAINABILITY REPRESENTATIVES COMMITTEE ABROAD MATERIAL TOPICS

Identification SUSTAINABILITY COMMITTEE STAKEHOLDERS

Set up in 2016 by Fincantieri’s Board of Directors, it is composed of 4 independent members. In accordance with the By- Laws and the Corporate Governance Code for listed companies, the Committee is tasked with supporting, with adequate investigative activities, both proactive and advisory, the assessments and decisions made by the Board on sustainability Preparation Identification issues connected with the Company activities and the dynamics of its interaction with all stakeholders. In particular, the SUSTAINABILITY SUSTAINABILITY REPORT RISKS Committee supports the Board in relation to the Company’s respect for and promotion of human rights, labour rights, and related section the environment, transparency and combating corruption, health and safety within the Company’s activities, the rights on the website of all stakeholders, product liability and its innovation. The Committee has the right to access the company information and functions necessary in order to perform its duties. In order to carry out its tasks, the Committee may use external consultants, through the Company’s structures, provided they are suitably bound to the necessary confidentiality. The Chairman of the Committee reports on the Committee’s activities to the Board of Directors at the earliest opportunity. The Committee met 6 times in 2019.

SUSTAINABILITY UNIT MULTIFUNCTIONAL WORKING GROUP LOCAL REPRESENTATIVES ABROAD Definition Definition OBJECTIVES, TARGETS COMMITMENTS It reports directly to the Deputy It supports the Sustainability They represent the VARD group, AND TIMESCALES Chief Financial Officer, coordinates unit by helping prepare the Fincantieri Marine Group and sustainability activities, ensures Sustainability Report and Fincantieri Marine Systems North compliance with the commitments defining objectives, targets and America Inc.. undertaken, monitors the progress timescales for the sustainability They support the Sustainability unit of projects and achievement of commitments undertaken by the and the Working Group by collecting the sustainability objectives while Group. The Working Group is and managing the information continually keeping the Sustainability made up of representatives from for the Sustainability Report and Committee informed. the departments most involved in coordinate in turn with a working sustainability issues. group, specifically dedicated to sustainability.

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Who are our stakeholders? In 2017, we analysed and identified the main For each group of stakeholders, the main constantly engaging with their individual categories of stakeholders, both within tools, listening channels and frequency with groups of stakeholders. We consider listening to and involving and outside the Group. More specifically, which they are contacted are identified our stakeholders is paramount in order to consideration was given to those stakeholders with the aim of gathering their expectations understand their needs, their interests and towards whom Fincantieri has responsibilities and needs and communicating the results their expectations. Stakeholders' involvement and those persons or entities able to influence achieved and the programmes promoted by allows us to develop long-term relationships the Group’s performance; their level of the Group. Responsibility for relations with which become a source of competitive representativeness and authoritativeness have the various stakeholders is spread across advantage for our Group. also been considered. the whole Group, with specific functions

STAKEHOLDERS

ENVIRONMENT FINANCIAL COMMUNITY Fincantieri’s mission is to become a model of excellence in environmental protection, and it therefore adopts, in its strategic choices Financial dialogue is constant, in compliance with the law and in line with best working practices, and business processes at all levels, the principles of environmental sustainability when carrying out its work ensuring complete transparency Direct contact with bodies and ad hoc working parties Press releases, periodic presentation of financial results, conference calls, shareholder meetings, meetings with investors and analysts, one-to-one presentations, road shows and shipyard tours. E-mail address dedicated to Investor Relations for institutional investors and small shareholders Continuous dialogue and periodic meetings Frequency as set by law and internal organizational models; dialogue with investors is continuous and related to investor engagement strategies; dialogue with analysts is continuous and related to analyst engagement strategies COMMUNITY Fincantieri is aware of its role in the local community and considers the demands of the latter, collaborating systematically with all the relevant figures in the area. Fincantieri promotes proactive initiatives that foster the development of the local community and areas where the Company operates CUSTOMERS Fincantieri always listens to its customers’ needs, each ship is the product of a strong relationship with Participation in working parties, meetings with representatives from NGOs and non-profit organizations, civil society FREQUENCY the shipowner institutions and associations, press conferences. Periodic meetings with schools and universities to discuss and develop topics for research, internships, work-study schemes The entire shipbuilding process calls for a continuous relationship between the project manager and the customer TOOLS AND CHANNELS and their staff Continuous dialogue and periodic meetings STAKEHOLDERS Direct, continuous relationship

SUPPLIERS AND PARTNERS Fincantieri suppliers are a valuable strategic resource. That is why the Company promotes long-term relationships and HUMAN RESOURCES sharing of responsibilities and development At Fincantieri people come first. Constant collaboration and cooperation allow for individual and group growth, making ideas and practices, responsibilities and actions a common factor Meetings with strategic suppliers, dedicated audits at selected suppliers, feedback questionnaires. Various activities related to health and safety topics Days dedicated to education, individual performance reviews, discussions with labour unions and employee representatives, involvement in specific initiatives, and performance evaluation meetings. Courses, various activities, e-learning related to Continuous dialogue and periodic meetings health and safety topics Continuous dialogue and periodic meetings

LABOUR UNIONS Fincantieri confirms the importance of hands-on representation of its workers through suitable levels of involvement, awareness and the assignment of co-responsibility for production objectives and issues of common interest. Accordingly, a new system of industrial relations INSTITUTIONS AND PUBLIC ADMINISTRATION has been implemented in line with the relevant commercial, economic and production context The distinct nature of Fincantieri’s business calls for a continuous relationship with Institutions and the Public Administration Meetings, working parties/discussions and the establishment of appropriate joint bodies to address various topics with the labour unions Direct contacts, internet, ad hoc working groups, definition and development of common projects on all levels Continuous dialogue and periodic meetings Continuous dialogue and periodic meetings

22 23 FINCANTIERI GROUP FINCANTIERI GROUP

In particular, we are in constant dialogue Fincantieri in the media In 2019, we involved our employees, To define the most significant topics we with investors, analysts and rating agencies, customers, suppliers and partners, the analysed both the perception of the topics providing reliable information on the Group’s An important role in spreading the financial community and other stakeholders from the Company’s perspective, through activities so as to increase the market’s sustainability culture is played by the in helping us understand where we can and a questionnaire, and from the perspective confidence in us and create long-term Marketing Communication and Media should make the most impact, in an initial of customers, suppliers and partners, the relationships. The annual occasions where Relations department in conveying all the path of engagement that we are committed financial community and other stakeholders shareholders meet the Company’s top messages, which originate from direct to developing over time. We have identified, through a special online survey, asking them to management are the Shareholders’ Meeting dialogue with management both inside and together with them, the material issues evaluate the material topics identified by the and Investor Day. Over the year we organized outside the Group. considered relevant for both the Company Company. 148 events for groups and individuals, In 2019, the initiatives promoted, in particular and its stakeholders. Both internally and externally the topics were including teleconference meetings and visits by the Media Relations office, have produced evaluated on a scale of 1-4, where 4 is "highly to facilities. numerous articles that mention Fincantieri, significant". A materiality threshold was We also dialogue with national and divided as follows: Which material topics have been identified defined (corresponding to 2), beyond which international legislators and institutions to by our stakeholders? an issue must be accounted for. NUMBER OF ITEMS maintain constructive collaboration, interpret and apply new regulations correctly and We launched and have since consolidated Joint consideration of internal and external TV & RADIO share expertise, initiatives and projects. We of which 37% on over time a process called materiality significance led to the identification of the contribute to public consultations defining 2,000 sustainability issues analysis, aimed at identifying material topics material topics. The materiality matrix has new legal measures and regulations for the for sustainability, namely those topics that been updated based on the responses of the PRINT industry, providing practical indications. of which 44% on 7,200 are relevant from an economic, social and stakeholders contacted and a new material To support the development of its business, sustainability issues environmental point of view for Fincantieri topic deemed relevant by both the Company Fincantieri S.p.A. and its subsidiaries and its stakeholders. We use the results of the and the stakeholders has been added: cyber participate in the governance of various analysis to define the Group’s commitments, security. national and international associations, Another important tool in Fincantieri’s the objectives of the Sustainability Plan and stimulating, along with the other associates, communications strategy is use of social the reporting of the Sustainability Report. effective, systematic action in the areas of networks. In 2019, there were about 25,500 research and development and promotion of articles online. PROCESS FOR STAKEHOLDER ENGAGEMENT ON MATERIAL TOPICS - 2019 the various stakeholders’ interests. The main organizations and associations FOLLOWERS ON SOCIAL MEDIA with which we actively collaborate are Confindustria, Federmeccanica, ASSONAVE, LINKEDIN with over 147,000 followers (+50,000 compared to 2018) Federazione del Mare, Euroyards, Vessel for 231 STAKEHOLDERS with over 170,000 followers INVOLVED the Future, Surface Navy Association, etc. when we also include subsidiaries

For more information on memberships and participation in associations, see the website www.fincantieri.com/en/ INSTAGRAM with over 24,000 followers 17 MATERIAL TOPICS NEW MATERIALITY APPROVAZIONEPRESENTATION DA PARTETO APPROVAL BY THE BOARD sustainability/governance/memberships-and-participation- in-associations (+11,000 compared to 2018) IDENTIFIED MATRIX THEDEL SUSTAINABILITY CONSIGLIO DI OF DIRECTORS with over 46,500 followers AMMINISTRAZIONECOMMITTEE We meet regularly with our customers, when we also include Fincantieri Yachts employees and representatives of the 17 TOP MANAGERS INVOLVED communities where we operate in the pursuit YOUTUBE with over 6,000 followers of constant collaboration and continuous (+ 2,200 compared to 2018) improvement.

24 25 FINCANTIERI GROUP FINCANTIERI GROUP

PROCESS FOR DEFINING THE MATERIALITY MATRIX What are our sustainability risks? Governance Code for the Italian Stock Market. In Fincantieri the Risk Office coordinates and IDENTIFICATION OF TOPICS We have Enterprise Risk Management (ERM) supports management with regard to risk Analysis of topics that are relevant for international standards, rating agencies and international organizations processes and systems to detect, evaluate assessment tools and methodologies, and Industry analysis and benchmarking with reference to industry best practices and monitor the main company risks (Risk aggregates and consolidates the results of Analysis of Fincantieri’s policies, procedures and main documents Universe), in compliance with the requirements their mitigation. DEFINING THE RELEVANCE OF THE TOPICS IDENTIFIED for listed companies as per the Corporate

INTERNAL EVALUATION EXTERNAL EVALUATION RISK UNIVERSE Evaluation of the topics by the members of the Multifunctional Working Group and validation of top managers Evaluation of 17 topics by external stakeholders EXTERNAL RISKS Identification of 17 relevant topics - Economic Cycle (Macro and Sectorial) - Laws and Regulations - Supplier Dependency INTERNAL MATERIALITY EXTERNAL MATERIALITY - Customers (Business Concentration) - Country Risk - Competition - New Technologies - Economic Policy (incentives) - Natual Disasters and Catastrophes MATERIALITY MATRIX 2019 INTERNAL RISKS 4.00 FINANCIAL OPERATIONAL AND SUPPLY CHAIN ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

3.80 Price: - Product Technology - Reputational Risk Health and safety in the workplace - Ecologically compatible product - Exchange Rate - Projects Quality and Safety Innovation, research and development Governance and Economic development 3.60 and financial sustainability Climate change business integrity - Energy, Raw Materials and - Industrial productivity - Environment Product quality and compliance (operational efficiency) Environmental impact Procurement activities Components’ Price - Implementation of the Mission and Environmental management of products and services with technical standards 3.40 - Warehouse Management Human rights Customer satisfaction - Interest Rate Values in terms of Sustainability Cyber security - Management System - Governance, Strategy and Company welfare Training and education 3.20 Protection Liquidity: Sustainability Compliance Diversity and equal opportunity of employment and - Organizational Complexity - Rating agencies and sustainability industrial relationships - Cash Flow of the Yard indices 3.00 - Access to credit - Outsourcing

Stakeholders - Sustainable Supply Chain - People Relations with Credit: - Project Management 2.80 local communities - Investor & Public Relations - Counterparty Risk - Business Interruption - Training, incentives, and assessment 2.60 - Credit Scoring GOVERNANCE/COMPLIANCE of the sustainability performance PLANNING AND REPORTING - System of Powers and Duties Management INFORMATION MANAGEMENT 2.40 - Planning and Budgeting - Corporate Data and Information - Segregation of Duties Protection - Evaluation 2.20 - Corruption and Frauds - Reliability and Integrity - Controlling - Health, Safety and Environment - IT infrastructure Management 2.00 - Disclosure HUMAN RESOURCES STRATEGIC 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80 4.00 Fincantieri - Taxation - Change Management - Brand Positioning Governance Economic responsibility Human resources responsibility Social responsibility Product responsibility Environmental responsibility LEGAL - Labour Relations - Production Capacity - Customer Satisfaction - Intellectual Property - Human Resources Management The materiality matrix is reviewed annually in accordance with the Standards of the Global - Business Portfolio - Litigation and Disputes - Staff Retention Reporting Initiative and approved by the Board of Directors. - Partnerships and Alliances - Performance Management - Criminality (common and organized) Management and terrorism - Labour Cost The description of the material topics is available in the annexes p. 190 - Acquisition, Integration and Disposal

26 27 FINCANTIERI GROUP FINCANTIERI GROUP

In 2017, the Risk Officer integrated the Risk • initial identification of 16 potential categories • integration of the risks identified above into of this Sustainability Report. Universe with risks concerning sustainability. of sustainability risk; the Risk Universe, in the specific The integration process was conducted as • comparison with Fincantieri’s company risk Environmental, Social and Governance (ESG) The reporting required for the information follows: model and with the materiality matrix; category. to be provided to the company bodies • exclusion of certain sustainability risks envisages a specific report on ESG risks for • mapping of sustainability and climate change because they were not considered applicable The 10 sustainability risks included in the Sustainability Committee, with the aim of risks by business sector in a context similar to to the company or because they were already Fincantieri’s Risk Universe are shown below; facilitating its function of providing guidance to that of Fincantieri; present in Fincantieri’s Risk Universe; their management is described in the chapters the Company.

MACRO AREA RISK EVENT DESCRIPTION OF RISK MANAGEMENT METHOD MACRO AREA RISK EVENT DESCRIPTION OF RISK MANAGEMENT METHOD

• Risk of not achieving an excellent sustainability rating with specialized Chapter: Rating agencies and Chapter: • Risk of the absence or inadequacy of training programs with consequent rating companies and analysts, or of a negative impact on reputation Fincantieri for society/For our sustainability indices A sustainable Group Training, incentives, lack of skills in relation to sustainability issues. This category also includes following a poor sustainability rating people/We train and enhance and assessment of the risk that individual performance objectives are not aligned with or specific our people with an eye on the sustainability enough to guide conduct to support the sustainability strategy, and/or there excellence/Our commitment performance are no adequate indices to measure sustainability performance to health and safety Chapter: • Risk of damage to the Company brand that exposes it to loss of clients, Responsible Governance/ Reputation risk profits and the competitive advantage gained on the market Our rules on fair conduct Human resources resp. Chapter: Fincantieri for society/For • Risk that the Company, within its strategy of sustainable growth, does not our people/We train and implement processes aimed at valuing human capital, guaranteeing respect People enhance our people with an • Risk of not adopting Public Relations strategies on the sustainability for diversity and equal opportunity, protecting human rights, and ensuring eye on excellence/Diversity issues or transmission of inconsistent Company messages regarding the health and safety of the workers and inclusion as an asset/ environmental, social and governance initiatives. Risk of not using the Chapter: Our commitment to health lever of sustainability to build and broaden relations with stakeholders. Investor & Public A sustainable Group/Our and safety This category includes the risk that relationships with local, national and Relation sustainability strategy international counterparties (local cities and authorities/associations, legal Chapter: and government authorities, industrial associations, etc.) are inefficient or Fincantieri for the Ecologically • Risk that the Company invests in and builds products and/or uses ineffective, influencing the Company’s ability to compete environment/To promote compatible product materials incompatible with environmental protection Governance development sustainability/Our ever greener Product resp. ships • Risk that the Governance Model is not adequately communicated to all levels of the Company, creating ineffective communication regarding Chapter: sustainability issues among the stakeholders, Board of Directors, and • Risk that due diligence on potential suppliers is not conducted adequately Governance, Strategy A sustainable Group/Our Chapter: company management, incorrect delegation of powers, and inappropriate and of lack of monitoring of respect for environmental and social regulations and Sustainability sustainability strategy Fincantieri for society/For a decisions on sustainability. This category also includes the risk of lack Sustainable in contracts concluded, with consequent execution of activities not in line Compliance Governance, sustainable supply chain/ of implementation of monitoring programs for activities related to Supply Chain with the sustainability principles (correct use of natural resources, protection economic, social and How we monitor them sustainability or the risk of inadequate preventive or investigative checks of individual rights, etc.) and controls relative to sustainability performance environmental resp.

• Risk that the Company adopts inadequate measures for incorporating • Risk of lack of integration or poor integration in company processes sustainability principles in its evaluation of environmental issues and Chapter: Implementation and activities of the sustainability principles (including ethics) defined performs activities not in line with sustainability principles. This category Chapter: Fincantieri for the of the Mission and in the Sustainability Governance Model. This category includes the risk Environment also covers lack of activation of controls aimed at preventing environmental A sustainable Group/Our environment/To reduce our Values in terms relating to the absence or inadequacy of a monitoring and control process damage or lack of/inadequate evaluation and implementation of sustainability strategy Environmental impact of Sustainability for environmental and social issues, as well as inadequate assignment of programmes for the recovery of biodiversity following environmental resources for this purpose Resp. damage

28 29 FINCANTIERI GROUP

Which are our sustainability commitments? to a healthy, resilient, sustainable society, where people can advance and prosper. Our mission, values and principles mean The Group’s commitments are contained in that we must commit to increasingly the Charter of Sustainability Commitments sustainable and responsible development. approved by the Board of Directors. We have defined our commitments for each material topic with the aim of contributing

MACRO AREA MACRO AREA

• Promotion of the sustainability culture in line with the Group Values, encouraging managers to think in a sustainable manner within their sphere of influence • Collaboration with governments, national and international associations to adopt policies and strategies to contribute to a healthy, inclusive, resilient and sustainable society for everyone

Governance

• Guarantee protection of the computer systems and data by minimizing the risks of Cyber security network breaches and corruption of data or sensitive processes, and develop the cyber security strategy for products and services

• Listen to demands and expectations in order to maximize customer satisfaction • Promotion and maintenance of a responsible supply chain that shares our values and is based on long-lasting relationships founded on integrity, transparency and respect Climate change Protection of employment and industrial relationships

Human resources resp. Environmental resp.

• Development of ecologically sustainable products and services with the aim of • Continuous improvement of the health and safety conditions of workers contributing to a circular and low carbon economy

LaThe Carta Charter degli of SustainabilityImpegni di Sostenibilità Commitments è disponibile is available sul on sitothe websiteinternet www.fincantieri.com/globalassets/sostenibilita2/pdf/fincantieri_charter-www.fincantieri.com/it/sostenibilita/governance/i-nostri-impegni of-sustainability-commitments.pdf

30 31 FINCANTIERI GROUP FINCANTIERI GROUP

Which are our sustainability objectives? commitments undertaken by Fincantieri are objective from the 2018-2022 Business Plan; generally to the Group’s growth; broken down in the Charter of Sustainability it comprises 17 material topics such as the • the other 11 material topics are associated Through the Sustainability Plan we highlight Commitments into qualitative and materiality matrix and 32 objectives to be specifically with one of the 4 Pillars and our strong intention to be a responsible quantitative targets that can be measured achieved in the short, medium and long term. show a clear correlation between the Group, whose policies are aimed at over time. With the integrated strategy business drivers and those aspects of generating and distributing increasing (Sustainability Plan and Business Plan) The 17 material topics for Sustainability sustainability that the Company recognises resources to all stakeholders and with a we are able to manage its response to the are linked to the 4 Pillars of the Business as significant; commitment that is first and foremost challenges posed by the market of today Plan (Long-term visibility, New horizons • Fincantieri’s objectives contribute in shown in the sustainable management of its and tomorrow in a sustainable way. and markets, Innovation, Streamlined particular to the achievement of the 6 business. It is the Group’s strategic approach production). In particular: SDGs that Fincantieri has recognised as to sustainability and it addresses some The Sustainability Plan has been updated significant for its business and in line with global challenges (the UN’s Sustainability with the integration of the new material • 6 material topics are horizontal in that its strategic direction. Development Goals - SDGs) and the topic of cyber security, acquiring the they involve all 4 Pillars and contribute

STRATEGIC DIRECTION AND SUSTAINABILITY

BUSINESS PLAN SUSTAINABILITY PLAN

4 Pilastri 6 Horizontal topics 11 Specific topics

7. Protection of employment and industrial relationships Long term visibility 1 Governance and business integrity 8. Training and education Backlog supported by positive underlying momentum, 9. Diversity and equal opportunity particularly in the cruise segment 10. Company welfare Growth 2 Cyber security New horizons and markets Expansion into new geographical areas and development 3 11. Customer satisfaction of after-sales services Economic and financial sustainability

4 Innovation Climate change 12. Product quality, compliance with technical standards Shareholders Proven capability to develop cutting-edge designs and 13. Innovation, research and development return technological solutions to meet clients’ evolving needs 14. Environmental impact of products and services 5 Relations with local communities

Streamlined production 15. Health and safety in the workplace Continued focus on seamless execution through streamlining 6 16. Procurement activities Human rights of processes and production 17. Environmental management Profitability

32 33 FINCANTIERI GROUP FINCANTIERI GROUP

The Sustainability Plan is approved by the those objectives. All the 2019 objectives of the 2018-2022 describe the related initiatives are marked Board of Directors of Fincantieri S.p.A. The Plan’s objectives are revised on a yearly Sustainability Plan have been achieved and with the following logo: basis taking in account the results achieved two 2020 objectives have been completed Responsibility for achieving the objectives in and adding the new needs that arise over early (Including a sustainability module in the Sustainability Plan lies with the different time. The reference base year against which the Fincantieri Corporate University training PLAN corporate departments involved, which the quantitative targets in the Plan are programmes and Company car pooling OBJECTIVE dedicate resources, tools and know-how to defined is 2017. project). The pages in this Report that COMPLETED implement the actions underlying IN 2019

Sustainability objectives achieved in 2019

TOPIC COMMITMENT OBJECTIVES PAGE TOPIC COMMITMENT OBJECTIVES PAGE Promotion of the sustainability culture in line Include a sustainability module in the Gradual assignment of sustainability Training and Promotion of growth, training and enhancement with the Group Values, encouraging managers Fincantieri Corporate University training 126 objectives in the Company’s variable 141 education of human capital to think in a sustainable manner within their programmes remuneration system sphere of influence Diversity and equal Promotion of programmes to promote diversity Commitment to human rights and diversity 52 Maintenance of the Corporate Governance opportunity and inclusion within the Group Governance and system and risk management (including Structure an Emergency Response & Crisis 135 business integrity sustainability risk) in line with international best Management process in Safety & Security Increase the wellbeing of people through practices LONG TERM VISIBILITY Company welfare Company car pooling project 166 innovative solutions rather than traditional ones Integration of sustainability topics in dialogue Implement an external stakeholder Product quality, Continuous improvement of quality and respect with stakeholders (timeliness, accuracy, and 25 Keep ISO 9001 certifications on the engagement programme compliance for technical standards, in all phases of the exhaustive flow of information to stakeholders) Quality Management Systems and product 114 with technical production process to meet the high standards certifications in line with market expectations required by the business Promotion of research projects to develop standards Support for research to improve the analysis and new solutions for energy savings or reduction Environmental Development of ecologically sustainable

INNOVATION Definition of an eco-design system to Climate change management of risks associated with climate of emissions in collaboration with research 183 products and services with the aim of

HORIZONTAL TOPICS HORIZONTAL impact of products promote the development of environmentally 180 change institutes / universities on issues associated contributing to a circular and low carbon and services sustainable ships with climate risks economy

Dialogue with and support for local communities Promotion and support of a responsible and Code of Ethics for suppliers 54 Relations with Procurement sustainable supply chain that shares our values through social, cultural and educational Commitment to managing social activities 145 Organise meetings and opportunities for local communities practices and is based on long-lasting relationships initiatives. dialogue with suppliers as well as training on 102 founded on integrity, transparency and respect sustainability issues Annual audits to assess and monitor the Respect for human rights through the adoption most critical suppliers in terms of human Human rights of policies and creation of programmes to 96 Environmental Increase employee awareness of environmental Launch the sustainable office project (10 rights, health and safety and the environment 160 promote diversity and inclusion within the Group management impact and promote virtuous behaviour rules)

(second party audit) STREAMLINED PRODUCTION

The purpose, methodology used and the full Sustainability Plan describing the objectives, targets and timescales are available on the website www.fincantieri.com/en/sustainability/governance/sustainability-plan

34 35 RESPONSIBLE GOVERNANCE

• CORPORATE GOVERNANCE AND REMUNERATION POLICY

• OUR SYSTEM OF INTERNAL CONTROL AND RISK MANAGEMENT

• OUR RULES ON FAIR CONDUCT

• WE RESPECT HUMAN RIGHTS

• WE PROTECT DATA AND INFORMATION

36 37 FINCANTIERI GROUP FINCANTIERI GROUP

Ethics, social responsibility, transparency, lawfulness, fairness and sustainability are Fincantieri’s absolute values governance model in the clear and responsible Shareholders’ Meeting Board of Directors performance of the Group’s business, contributing significantly to the creation of The Shareholders’ Meeting is the company The Company’s Board of Directors (BoD) sustainable value for all stakeholders in the body through which the shareholders is the Company’s central organization for medium to long term. participate in Company decisions on topics Corporate Governance, holding the widest Fincantieri performs its business with reserved for them according to law and powers for its ordinary and extraordinary respect for the law, internal regulations and Company By-laws. administration, including the definition of professional ethics. To this end, we have strategic direction, organization and control developed a set of policies and guidelines that of the Company and the Group. The Board of We are aware of the role played by and support the Company on a day-to-day basis. Directors currently consists of ten members, importance of an appropriate corporate six of whom are independent, and was nominated during the Ordinary Shareholders’ Meeting held on 5 April 2019 for financial years 2019, 2020, and 2021. CORPORATE GOVERNANCE AND REMUNERATION POLICY COMPOSITION OF THE BOARD OF DIRECTORS AND ITS COMMITTEES ON THE DATE OF THE REPORT

Fincantieri’s corporate governance model Corporate Governance Code issued by the is in line with the recommendations of the Italian Stock Market and has the following structure. Sh. meeting to app. fin. stat. 2021

Sh. meeting to app. fin. stat. 2021

SHAREHOLDERS’ MEETING Barbara Alemanni Sh. meeting to app. fin. stat. 2021 Sh. meeting to app. fin. stat. 2021 C

Luca Errico Sh. meeting to app. fin. stat. 2021 BOARD OF DIRECTORS Sh. meeting to app. fin. stat. 2021 C

CONTROL BOARD OF CHIEF EXECUTIVE CHAIRMAN REMUNERATION NOMINATION SUSTAINABILITY Elisabetta Oliveri Sh. meeting to app. fin. stat. 2021 C SUPERVISORY (DIRECTOR IN CHARGE AND RISK AUDIT STATUTORY OFFICER COMMITTEE COMMITTEE COMMITTEE FIRM AUDITORS BODY OF THE ICRMS) COMMITTEE Sh. meeting to app. fin. stat. 2021

Federica Santini Sh. meeting to app. fin. stat. 2021

Federica Seganti Sh. meeting to app. fin. stat. 2021 C

GENERAL RISK HEAD OF MANAGER OFFICER INTERNAL 1 The Member of the Control and Risk Committee who replaces the Director Santini when the C: Chairman of the Committee. AUDITING committee, meeting as the RPT Committee, examines major operations with related parties. √: Satisfies the requirements. CRC: Control and Risk Committee. -: Not applicable. RC: Remuneration Committee. X: Member of the Committee. NC: Nomination Committee. SC: Sustainability Committee.

CHIEF FINANCIAL OFFICER IN OFFICER CHARGE

38 39 FINCANTIERI GROUP FINCANTIERI GROUP

OTHER INFORMATION ON THE BOARD OF DIRECTORS * Their composition, responsibilities and Board of Statutory Auditors methods of operation, as well as the powers AVERAGE FOR LISTED COMPANIES ** and means assigned, are regulated by specific The Board of Statutory Auditors consists of regulations approved by the Board of Directors three Standing Auditors and three Alternate Number of Directors 10 10.0 10.9 when these Committees were established and Auditors appointed by at the ordinary Number of executives 2 2.5 2.5 later amended based on changes introduced Shareholders’ meeting using a dedicated Number of non-executives 8 2.9 2.9 over time to the Corporate Governance Code. procedure. The Auditors in office satisfy the Number of non-executives that do not 2 2.9 2.9 qualify as independent under the Code All members of the Committees are non- requirements of integrity, professionalism and Number of independent under the Code 6 4.6 5.6 executive Directors, mostly independent, independence. % less represented gender 50 - - and have functional areas of expertise for Average age of Directors 56.3 57 - performing the roles they have been assigned. No. of BoD meetings 13 11.2 11.2 % attendance at BoD meetings 88.6 93 - COMPOSITION OF THE BOARD OF STATUTORY AUDITORS ON THE DATE OF THE REPORT Average duration of BoD meetings 104 min. 138 min. 153 min. MEMBERS ROLE EXPIRY OF TERM Board evaluation Implemented 84.1% - Position on multiple offices Adopted 47% 58%

* The statistical data of this table for Fincantieri refer to the composition and operation of the Board of Directors during 2019. Statutory Auditor ** Latest available data taken from the Assonime - Emittenti Titoli S.p.A. report: “Corporate Governance in Italy: corporate governance, remuneration and comply-or-explain (year 2019)” issued on 26 Statutory Auditor January 2020.

CHARACTERISTICS OF THE MEMBERS OF THE BOARD OF DIRECTORS

AREA OF EXPERTISE AGE The Auditors act completely autonomously and and the Chairman of the Board of Directors 40.0% independently from all shareholders. Therefore, about the nature, terms, origins and extent of 11.1% an Auditor who - independently or on behalf this interest. The Auditors are also obligated INTERNATIONAL RELATIONS 33.3% 11.1% of third parties - has an interest in a particular to respect the limits on multiple offices LEGAL transaction/operation of the Company must held as director and auditor in Italian joint

FINANCIAL 20.0% 20.0% promptly and fully inform the other Auditors stock companies provided for by applicable regulatory provisions and by the By-laws. 55.5% 44.4% INDUSTRIAL 10.0% 10.0% OTHER INFORMATION ON THE BOARD OF STATUTORY AUDITORS* PLANNING AND STRATEGY < 45 years 45/50 years 51/55 years 56/65years > 65 AVERAGE FOR LISTED COMPANIES **

Number of Auditors 3 - - Average age of Auditors 57.67 55.8 - GENDER The Board of Directors has structured its No. of meetings 12 13.8 16.3 organization, also establishing four dedicated Average duration of meetings 105 min. 149 min. 152 min. Board Committees, that carry out proactive % attendance by Auditors 100 97 - 50% 50% proposal and consultation tasks: the Control MEN WOMEN * The statistical data of this table for Fincantieri refer to the composition and operation of the Board of Statutory Auditors during 2019. and Risk Committee, the Remuneration ** Latest available data taken from the Assonime - Emittenti Titoli S.p.A. report: “Corporate Governance in Italy: corporate governance, remuneration and comply-or-explain (year 2019)” issued on 26 January 2020. Committee, the Nomination Committee and For more information on Corporate Governance, see the Report on Corporate Governance and Ownership Structure, the Sustainability Committee. www.fincantieri.com/en/governance/corporate-governance-system/corporate-governance-reports

40 41 FINCANTIERI GROUP FINCANTIERI GROUP

Remuneration policy Policy is aimed at achieving the Company’s The structure of the remuneration package is set out below. strategic priorities and enhancing sustainable TYPE OF REMUNERATION PURPOSE POSITIONS INVOLVED Fincantieri’s Remuneration Policy is approved performance. annually by the Board of Directors, on the In continuation of the LTI Plan 2016-2018, Fixed remuneration Remunerates the role and more • Chairman proposal of the Remuneration Committee. on 27 March 2018, the Board of Directors specifically the responsibilities • Chief Executive Officer The Board of Directors is also the company approved the LTI Plan 2019-2021 which assigned to the recipients, taking • Non-executive Directors account, among other things, of the • General Manager body responsible for proper enactment of essentially follows the same structure though experience, quality of contribution • Executives with Strategic the Policy, that relies on the support of the with the addition of another objective made to achieving the business Responsibilities Remuneration Committee, which acts to associated with sustainability. results and level of excellence with • Other Key Executives provide consultancy and proposals. The creation of sustainable value in the respect to the assigned duties. The adequacy, overall consistency, and medium to long term, alignment of the Short-term variable Remunerates results achieved • Chairman concrete application of the Remuneration interests of management with those of remuneration (annual in the short term and is aimed • Chief Executive Officer Policy are evaluated by the Remuneration the shareholders and support for retention MBO) at expressing the industrial plan • General Manager Committee, as recommended by the capacity are the primary objectives of strategies into a series of annual, • Executives with Strategic individual and group objectives, Responsibilities Corporate Governance Code and as indicated this Plan, in line with the indications in the capable of decisively influencing • Other Key Executives in the regulations for the Committee. The Corporate Governance Code and the best and the performances of the executives Remuneration Committee consists of four most widespread market practices. involved. non-executive members, three of whom are independent and at least one of whom Medium-long term Remunerates results achieved in the The beneficiaries are individually medium-long term and is aimed at identified at the discretion of the has adequate knowledge and experience in PAY-MIX 2019-2021 LTI variable remuneration (Performance Share Plan) improving the alignment of interests Board of Directors, on the advice of finance or pay policy, evaluated by the Board of the recipients with those of the Remuneration Committee, among of Directors when nominated. the shareholders and supporting the following persons: The parties covered by the Remuneration the retention capabilities for key • Chief Executive Officer resources. and, according to the Chief Executive Policy are the Chief Executive Officer, the 25.0% 41.8% 38.0% 36.0% 29.9% Officer’s indications, the following Chairman, the General Manager, Executives persons: with Strategic Responsibilities and other Key 75.0% • General Manager Executives. 19.9% • Executives with Strategic 22.0% 20.3% Responsibilities Management of the Remuneration Policy 21.8% 50.2% • Other Key Executives is delegated to the Chief Executive Officer, 40.0% 43.7% 36.4% supported by the Human Resources and Industrial Relations Management. For more information, see the Remuneration Report available on the website www.fincantieri.com/en/governance/remuneration Verification of the qualitative and quantitative Chairman Chief Executive General Executives Other Key performance objectives and consequent Officer Manager with Strategic Executives Responsibilities determination of any sums of money due to the interested parties is performed following approval of the financial statements FIXED COMPONENT for the year following verification by the SHORT TERM VARIABLE COMPONENT Chief Executive Officer. The Remuneration MEDIUM-LONG TERM VARIABLE COMPONENT

42 43 FINCANTIERI GROUP FINCANTIERI GROUP

OUR SYSTEM OF INTERNAL CONTROL AND RISK MANAGEMENT

The System of Internal Control and Risk the methods defined in the Group’s regulatory Management System (ICRMS) of the Company system and internal procedures for the is formed by a set of tools, organizational maintenance, updating, and correct operation structures, and company procedures aimed at of the ICRMS. Oversight BOARD OF Overall Support of contributing business conduct which is honest, Following is a representative diagram of the BOARD INTERNAL CONTROL STATUTORY AUDITORS orientation and AND RISK the Board’s fair and consistent with the objectives set by OF DIRECTORS parties involved in Risk Management at various SUPERVISORY BODY monitoring COMMITTEE (CRC) evaluations and the Board of Directors. titles. decisions The ICRMS is integrated within the general organizational aspects and corporate governance system adopted by the Assurance Company and, taking into account the main INTERNAL (3rd level of reference models, allows and promotes the AUDITING defence) identification, measurement, management, and monitoring of the main risks as well as the dependability, accuracy, reliability and timeliness of the financial report. This system, Establishment and DIRECTOR based on leading international practices, is maintenance RESPONSIBLE RISK OFFICER divided into the three traditional levels of FOR THE ICRMS control:

• 1st level: the operational functions identify and evaluate the risks and implement specific treatments for their management; • 2nd level: the functions responsible for risk Implementation MANAGEMENT of ERM Risk (DIRECTORS, control define the methods and tools for DEPARTMENTS, management at UNITS) risk management and perform monitoring all levels of the activities; organization • 3rd level: the Internal Auditing function provides independent evaluations regarding the entire system.

For more information, see the Internal Control and Risk Management section on the website www.fincantieri.com/en/governance/internal- The guidelines, approved by the Board of control-and-risk-management Directors, identify the main parties involved in the preparation and implementation of an effective internal control and risk management system, involving each of them based on their As part of the ERM process, in 2019 the Risk area of expertise. Management Model that maps the persons It is also required that all employees of responsible for managing and monitoring risks the Group, as part of their functions and was updated in agreement with the Director in responsibilities, actively intervene according to charge of ICRMS.

44 45 FINCANTIERI GROUP FINCANTIERI GROUP

OUR RULES ON FAIR CONDUCT

We believe that success can be long lasting We conduct our business with respect for Code of Conduct application, and these corporate bodies/ only with responsible, ethical business the law, internal regulations and professional officers may also make proposals to management; the Group’s actions are ethics. To this end, we have developed a set of All those who work for Fincantieri, without supplement or amend its provisions. performed with integrity, honesty and policies and guidelines that support us in our exception or distinction, are committed to The Code of Conduct is available on the website www. dedication and based on mutual trust, so activities and which are described in various observing and ensuring the observance of the fincantieri.com/globalassets/sustainability2/business- ethics/fincantieri_code_of_conduct.pdf that growth is also guided by the principle of chapters of the Sustainability Report. company’s Code of Conduct, which, for the shared values. smooth operation, reliability and reputation of the Group, requires that all the activities are conducted in compliance with the law, Organizational Model with international conventions and in strict accordance with the human rights enshrined in Fincantieri has adopted an organization, the UN Universal Declaration. management and control model according to Operating according to the principle of fair Legislative Decree No. 231/2001 (Organizational competition, with honesty, integrity, fairness Model), the latest version of which was approved Charter of Sustainability and good faith, respecting the legitimate by the Board of Directors on 14 February 2019. It Code of Conduct Commitments interests of our stakeholders, shareholders, consists of a general section, which illustrates the Policy on Human Rights – employees, customers, commercial and principles, departments and basic components commitment for the respect of human rights and diversity Suppliers’ Code of Ethics financial partners and of the general public of the Organizational Model, and special parts, and local communities in which we conduct which identify the activities at risk of crime, our activities is fundamental for the smooth the principles of conduct, and the control Fincantieri Group’s Policy operation, reliability and reputation of the procedures for the specific types of crimes Corporate Security on initiatives for the Group, but at the same time represents a key considered relevant. Policy Community and Territory asset for Fincantieri’s ongoing success. In The Organizational Model is available on the website www. no way does the conviction of acting in the fincantieri.com/globalassets/sostenibilita2/business-ethics/ fincantieri_modello-231-parte-generale_feb2019_en_pubbl.pdf CODES AND POLICIES interest or advantage of the Company justify Anti-corruption adopting conduct that goes against these Policy Purchasing Policy principles and all conduct contrary to the words or spirit of the Code will be subject to Anti-corruption Policy Environment, sanctions as mentioned in the Code. Health and We are committed to encouraging and Given the extensive geographic context in Privacy Policy Safety Policy promoting knowledge of the Code among which we operate, the Company has adopted employees and with all parties who have a number of internal rules aimed at identifying Safety Policy Quality Policy business relations with Fincantieri and we and applying a global anti-corruption policy monitor observation of the Code, providing that defines the expectations for conducting suitable tools for information, prevention and business operations in strict compliance with control, and ensuring the transparency of the best international standards on anti- existing operations and conduct. corruption legislation. The Group’s commitment The Board of Directors and the Company to combating corruption - established in primis management is responsible for verifying by the Code of Conduct - is reflected in a series the Code of Conduct’s implementation and of corporate documents that are its existing

46 47 FINCANTIERI GROUP FINCANTIERI GROUP

means to combat corruption. The first of anti-corruption procedures has been met Communication and training on the anti- who had not participated in the previous these documents is the Anti-corruption within the range of the annual planned audits, corruption procedures and policies editions. For employees of Italian subsidiaries, Policy adopted by the Company in 2014 and approved by the Board of Directors. The specific anti-corruption training meetings are updated in January 2019, which introduces a Supervisory Body plays a special role. Its With regard to Legislative Decree No. held, organized by their supervisory bodies regulatory system to protect sensitive areas. activities call for the periodic collection of 231/01, and in particular relating to anti- with a view to extending this training to the confidential information in order to identify corruption and safety at work, an e-learning e-learning mode. potentially risky conduct with reference to training project has been in place since 2016, The Board of Directors receives an annual The Anti-corruption Policy is available on the website www.fincantieri.com/globalassets/sostenibilita2/business- corruption both with respect to Italian and supported by the Supervisory Body and the report from the Supervisory Body on the ethics/20190125_anticorruzione_eng.pdf foreign Public Administrations, and to private Internal Auditing function. activities performed, including training. As part of the process of constant evolution parties. The Organizational, Management The training system for this course is divided Regarding foreign subsidiaries, the VARD and continuous improvement of the and Control Model according to Legislative into differentiated paths in order to allow group and Fincantieri Marine Systems North Company’s anti-corruption system, we Decree No. 231/2001 and the corporate targeted distribution of the information America Inc. (FMSNA) have held training on launched a project in 2019 with the aim of regulatory framework are subject to a based on the roles of the people involved. the Code of Conduct and business ethics, obtaining certification by the end of 2020 for continuous updating process to comply with The “general” path has been delivered while in 2019 Fincantieri Marine Group (FMG) its anti-corruption management systems, one organizational and legal changes and to to all employees of the Parent Company did not carry out any training on the issues in objective included in the Sustainability Plan. adequately respond to the possible risk of (equipped with company PC and email), question since the contents of the course have The project, which avails itself of advisory committing crimes. while agents and specific corporate been revised and it will be resumed in 2020. support, envisages the Internal Auditing departments were also given specific The courses were held in the local language of Function coordinating a working group made Among the tools for preventing the risk of modules. the countries where the companies involved in up of the company functions/departments corruption, the Company has - since 2009 - During 2019, the program continued with training are based (Italy, USA, Norway, Croatia, most directly involved in sensitive processes, adopted a system for reporting infringements the provision of an on-line course for Poland, Romania and Vietnam). in order to prepare and/or integrate the to the Supervisory Body (whistleblowing), agents focusing on anti-corruption and The table below shows the data on the overall Company’s procedural and organizational also defined in the Organizational Model, company risks, and new editions of the number of employees who received training in controls to adapt them to the standards which enables employees and third parties general course and on safety at work and 2018 and 2019. required by certification. At an organizational to report issues involving non-compliance the environment were started for those level, in order to oversee the Company’s anti- with the provisions of the Code of Conduct, corruption system, in accordance with the the Organizational Model, or of the ISO 37001 standard, it is the responsibility of corporate procedures or, otherwise, the WHITE COLLAR BLUE COLLAR SENIOR MANAGERS MIDDLE MANAGERS EMPLOYEES EMPLOYEES TOTAL the Board of Directors to identify and appoint law. Since January 2019, an update of the the “anti-corruption compliance function”, whistleblowing computer system has been 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 giving it the appropriate operational made operational. This system uses an FINCANTIERI 99 7 69 55 500 1,140 0 2 668 1,204

responsibilities and authority to carry out its independent platform to send reports and is VARD 9 3 38 6 75 53 47 78 169 140 duties. To this end, the Board of Directors an evolution in terms its suitability in order FMG 31 0 129 0 387 0 23 0 570 0 established the Anti-Corruption function at to ensure the confidentiality of the sources FMSNA 1 3 8 11 16 24 31 27 56 65 the meeting held on 28 January 2020. and of the information communicated (as required by Law No. 179 of 30 November TOTAL 140 13 244 72 978 1,217 101 107 1,463 1,409 With reference to the Parent Company, 2017). % of total employees 37% 3% 21% 6% 14% 16% 1% 1% 8% 7% the Internal Auditing function examines and independently evaluates the internal For more information on the whistleblowing system and on all the anti-corruption procedural tools, see the website controls to verify if what is required by the www.fincantieri.com/en/governance/business-ethics

48 49 FINCANTIERI GROUP FINCANTIERI GROUP

WE RESPECT HUMAN RIGHTS

As regards monitoring of corruption cases, on 27 February 2017, aimed at preventing We are committed to ensuring and it should be noted that no confirmed cases infiltration attempts by organized crime. promoting respect for human rights, a of corruption involved companies in the The agreement represents a fundamental priority for the Group, in all business areas Fincantieri Group were found in 2018 and milestone that unifies the procedures and among all stakeholders, whether Group 2019. for control against organized crime on a employees or suppliers. We conduct our national level in companies considered at activities in accordance with fundamental “high risk” and which enabled, since its human rights standards. National Framework Tender Protocol activation, more than 2,200 reports to be As proof of this commitment, our policies sent to the relevant local Prefectures on and practices are aligned with: Having identified in the tender system a key firms that operate on contracts and sub- element for our ability to develop and raise contracts in all locations of the Fincantieri • International Bill of Human Rights, our competitive standing in our reference Group. including the United Nations (UN) markets, we have always paid constant The agreement, in addition to having set up Universal Declaration on Human Rights; attention, also in this context, to ensuring a permanent round table in the Minister’s • Fundamental Conventions of the maximum transparency. Office, guarantees an invaluable exchange International Labor Organization (ILO); It is in fact in the interest of the Company of information for those cases considered • Guidelines of the Organization for to ensure respect for legality and to defend most at high risk and, should any issues Economic Co-Operation and Development the market from interference by organized arise, enables Fincantieri to adopt the most (OECD) for Multinational Enterprises; crime, as well as from undue interference appropriate protective measures while also • Ten principles of the United Nations Global and pressures from common criminals, reconciling the necessary confidentiality Compact. preventing any possible infiltration attempt requirements of the parties involved. by organized crime during the process of Under the agreement, Fincantieri also asks The Group has adopted the Policy On awarding tenders, in capital expenditure and the supply chain concerned to ensure the Human Rights – Commitment for the in production activities. highest levels of transparency and fairness respect of human rights and diversity To this end, since 1999, Fincantieri has been and fulfil their obligations to combat and the Suppliers’ Code of Ethics, two working on improved cooperation with the against and report any instances that relevant documents to guide the company’s relevant local authorities and, over time, has could entail conspiracy to commit a crime activities, following an approach to business arrived at signing Legality and Transparency - including mafia-type conspiracy - or, by that is not limited to compliance with the Protocols, which led to the signing of way of example, corruption, fraud, money regulations in force in the countries where a single National Framework Tender laundering and extortion. we operate, but proactively oriented towards Protocol with the Ministry of the Interior the protection of human rights. The documents approved by the Board of Directors confirm our commitment to protecting human rights as stated in the Code of Conduct, the Charter of Sustainability Commitments and the Sustainability Plan.

50 51 FINCANTIERI GROUP FINCANTIERI GROUP

Policy on human rights rights and the promotion of diversity and The Policy was developed with the parallel to identify the regulatory scenario, inclusion, Fincantieri has drawn up the Policy involvement of Group companies, under standards, the main trends and any risks on Human Rights – Commitment for the the coordination of the Human Resources present. Using the results of the assessment respect of human rights and diversity departments and in close collaboration and benchmark carried out with a number of PLAN OBJECTIVE with the main corporate functions. This significant players, the areas of intervention COMPLETED The principles on which the public comprehensive involvement has made it have been defined and the Policy has been IN 2019 commitment to human rights adopted possible to carry out an exhaustive mapping drawn up, which will be followed by a work within the lines of the Policy is based and the of the initiatives and best practices in place plan for effective implementation and consequent commitment to share a collective in the various companies within the countries monitoring capable of overseeing the logic In order to define principles and rules that awareness of their importance within the in which the Group operates. In fact, a study of continuous improvement. guide the strategies, activities and initiatives of Company can be represented as follows: of the reference context was carried out in the entire Group towards respect for human

METHODOLOGICAL APPROACH

REJECTION OF FORCED LABOR AND CHILD LABOR Policy approval ASSESSMENT FREEDOM OF Action Plan RESPECT OF THE ASSOCIATION EXECUTE RIGHTS OF LOCAL AND COLLECTIVE Analysis of internal context DESIGN COMMUINITIES BARGAINING Analysis of external context and benchmark Policy PRINCIPLES development and drafting

PROMOTION OF FAIR ATTENTION TO HEALTH AND EQUITABLE Policy on Human Rights – Commitment for the respect of human rights and diversity www.fincantieri.com/globalassets/sostenibilita2/ AND SAFETY AT WORK CONDITIONS OF responsabilita-risorse-umane/diverita-e-pari-opportunita/fincantieri_policy_on_human_rights2.pdf EMPLOYMENT AND WORK Even in countries like Vietnam, where ensuring their continuous respect and human rights might be more at risk, the provides specific training to all new recruits. Company constantly monitors these issues. In 2019, 1,861 hours of human rights training The Vietnamese shipyard has been certified were provided in the Vietnamese shipyard The document contains a focus on Diversity strategic factors for company competitive in compliance with SA 8000. The model with the participation of 267 people. and Inclusion, elements we consider advantage and people development. guarantees a virtuous process aimed at

52 53 FINCANTIERI GROUP FINCANTIERI GROUP

WE PROTECT DATA AND INFORMATION

Suppliers’ Code of Ethics adopt in order to pursue a development that The Company’s focus on cyber security • lifecycle management of cyber security integrates competitiveness, environmental has gradually intensified in response to the incidents; sustainability and social responsibility, capable ever-increasing complexity and frequency of • conducting periodic IT security of establishing a long-term partnership based cyber attacks carried out against companies assessments aimed at identifying and on integrity, honesty and mutual transparency. with national and international strategic remedying any gaps; importance. The sophistication of cyber • providing awareness campaigns to The Suppliers' Code of Ethichs is available on the website www. PLAN fincantieri.com/globalassets/sostenibilita2/responsabilita- threats - made possible by the operation of employees, aimed at improving awareness risorse-umane/diverita-e-pari-opportunita/fincantieri_policy_ OBJECTIVE on_human_rights2.pdf COMPLETED consolidated international groups, some of of cyber risks and shedding light on the IN 2019 which supported by the governments of the most widespread attack techniques (e.g. To guarantee respect for human rights in countries to which they belong - requires social engineering) and the organizational the supply chain, a specific objective has the constant adjustment of the company’s and behavioural methods for neutralizing been included in the Sustainability Plan that defenses and processes for protecting IT them; provides for annual second-party audits to assets, as an additional element to protect • managing cyber risks within a more monitor and evaluate strategic suppliers the Company’s industrial know-how and general framework of operational risks that In order to respect the Group’s commitment to in terms of respect for human rights, market competitiveness. may negatively impact on the Company’s promoting a responsible and sustainable supply safeguarding workers’ health and safety, and For this reason, in 2019 we further business and image. chain, with respect for human rights, we have protecting the environment. strengthened the Cyber Security function, adopted the Suppliers’ Code of Ethics. The activating a pervasive multi-year program Fincantieri - in its capacity as a strategic document defines the values and principles For more details on the Suppliers’ Code of Ethics and audits, focused on managing and mitigating cyber company for the national system - continues please refer to the chapter “For a sustainable supply chain”. of conduct that suppliers must refer to and risks, which develops far-reaching project to collaborate with the State Police and initiatives on the company’s technological other important national institutions infrastructure, such as: through information sharing activities on significant cyber events recorded on its IT • creation of a program to protect the infrastructure. industrial networks supporting ship production on 4 pilot shipyards We are aware of our social responsibilities (Monfalcone, Marghera, Ancona and Riva and in light of the full transposition of the Trigoso) to allow the monitoring, protection principles laid down to protect personal and management of field equipment; data, we have launched a process to comply • development of a model to manage with Regulation (EU) 2016/679 of the cyber security aspects related to product European Parliament and of the Council of development processes; 27 April 2016 on the protection of natural • definition of the Group business model persons with regard to the processing of with regard to the Information Security personal data and on the free movement of Policy Architecture; such data, and repealing Directive 95/46/ • implementation of tools based on Artificial EC (the GDPR), became fully applicable on Intelligence to identify a standard 25 May 2018. At the end of this process, the behavioural model capable of highlighting Company adopted a privacy management any anomalies in user actions; system, whose founding principles are • central monitoring of core corporate contained in the Policy on General Principles services;

54 55 FINCANTIERI GROUP FINCANTIERI GROUP

of the Privacy Management System (Privacy to process personal data, Fincantieri has As regards the security measures to be for employees, limiting access to data in Policy) which establishes, among other carried out a pervasive training campaign implemented to guarantee and protect data, compliance with regulatory requirements, things, the main processes needed to ensure that reached the employees of the Parent the ISO/IEC 27001:2013 and ISO 9001:2015 carrying out the related training, sharing the protections envisaged by the legislation. Company and was extended to the Italian certifications, which represent deeper the mapping results with the shipyards With this policy Fincantieri undertakes to subsidiaries. integration with the information technology and offices in the various territories so that establish and maintain over time a control The Privacy Management System was required by the personal data protection it can be implemented according to local model aimed at protecting the personal laid out in detail in a specific Privacy obligations, were confirmed again in 2019, characteristics. data collected and processed as part of Management System Manual and by confirming compliance with the level of the operational processes of its business, operational procedures that identify certain reliability required by international standards. Fincantieri Marine Group, complying in promoting the development of a pervasive processes that are especially critical such particular with the provisions of the Health privacy culture at Group level. With this in as management of data breaches and With regard to foreign subsidiaries, the Insurance Portability and Accountability Act mind, in addition to the dissemination of management of requests from data subjects VARD group, complying with the provisions (HIPAA), has prepared a detailed document privacy statements to the data subjects asserting their rights. of the GDPR, has adopted the following on the protection of employees’ medical and instructions to personnel authorized line of action: implementing an overall data, providing training to those who have mapping of processes that involve personal access to such information. data, implementing the privacy policy

LAWFULNESS, TRANSPARENCY AND FAIRNESS OF PERSONAL DATA PROCESSING

INTEGRITY AND DATA MINIMIZATION CONFIDENTIALITY PRINCIPLES OF FINCANTIERI’S PRIVACY POLICY STORAGE LIMITATION OF PERSONAL DATA ACCURACY DATA PURPOSE LIMITATION OF PERSONAL DATA PROCESSING

56 57 FINCANTIERI FOR SOCIETY

• FOR THE ECONOMY AND THE MARKET

• FOR INNOVATION

• FOR A SUSTAINABLE SUPPLY CHAIN

• FOR OUR CUSTOMERS

• FOR OUR PEOPLE

• FOR THE COMMUNITY

58 59 FINCANTIERI GROUP FINCANTIERI GROUP

FOR THE ECONOMY AND THE MARKET

We believe in an economy that is a system of relations based on trust of collaboration between large Italian heritage at the disposal of the city and the and transparency, an integrated dynamic network of cross-cutting companies that are mutually supportive country. communities, built over time to create and exchange value of each other, placing a unique industrial

In recent years, new technologies and Salini Impregilo, a leading partner and changes in people’s behaviour have led to company in the sector with which it set up structural changes in many industrial sectors, the consortium PERGENOVA. The latter’s resulting in the emergence of new markets, mission is to give back to the city of Genoa growth and employment opportunities, the viaduct over the Polcevera river, which but also to the need to adapt the business collapsed following the tragedy on 14 August model in order to seize all the opportunities. 2018. Fincantieri Infrastructure contributes in this case by pooling the entire know-how In this context, our business model - of the Fincantieri Group: the Valeggio sul diversified by end markets, geographical Mincio shipyard produces the metal sheets, areas and customer portfolio - is able to face beams and semi-finished products which new challenges by seizing all opportunities are then assembled at the Castellammare without ignoring their social and di Stabia and Sestri Ponente shipyards. environmental implications. Our goal always The latter shipyard will also support all remains that of combining business with operations in logistical terms given its reducing environmental impact, meeting the proximity to the bridge site. needs of local communities and improving In addition, the technological skills of the the safety of our people and our suppliers. automation, safety and monitoring systems of the Group’s various subsidiaries will also We are committed to developing and be integrated. promoting innovative solutions that The reconstruction of the bridge is destined contribute to the achievement of the UN to become the symbol of the rebirth of a 2030 Sustainable Development Goals great city like Genoa, but also the symbol of (SDGs), through a structured organization, a new phase of the country’s development. the activation of virtuous ecosystems, and It will show that also in Italy, thanks to by leveraging on access to new technologies. a virtuous collaboration between the public and private spheres, it is possible With this in mind, we are also actively to build infrastructures with certain times involved in the construction of the new and costs, from the stage of identifying Genoa Bridge, a project that Fincantieri the needs to execution. The hope is that Infrastructure manages together with the Genoa project can represent a model

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ECONOMIC VALUE FOR STAKEHOLDERS

The creation of economic value is essential In 2019, we distributed a total economic value Since 2013, following the acquisition of the order backlog offers some guarantee of to ensure that the Group is safeguarded over of €5.8 billion to suppliers, collaborators, VARD group, our worldwide presence has visibility that supports the development of time and, therefore, its sustainability. The lenders, Public Administration and the increased to around 20 countries, mainly in leading-edge supply chains and technology distribution of economic value, determined community. This is a significant value, the Italy, Norway and the United States, which districts, creating a driving force for the in accordance with the “direct economic impact of which remains limited mainly to the together produce 98% of revenues. In 2019, subcontractor network and fostering Italian value generated and distributed” (201-1) of territory, particularly with regard to personnel 33% of revenues were generated by cruise export and innovation. the GRI Sustainability Reporting Standards and suppliers. ships equipped with green technologies (2016), represents the economic impact such as scrubbers that purify exhaust fumes Our leadership is also based on the ability of our business for the benefit of the main from hazardous chemicals and pollutants, to create jobs all over the world, offering stakeholder categories. selective catalytic reduction systems (SCR) people the opportunity to establish a stable for ships or liquefied natural gas (LNG) and long-term relationship with us, and to propulsion. share with them the same idea of growth, improvement and personal fulfilment. In DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED REVENUES BY OPERATING COUNTRIES Italy, in particular, our workforce grew by 2018 2019 VAR 2018 2019 VAR DESCRIPTION euro/million euro/million 2019/2018 euro/million euro/million 2019/2018 672 employees, confirming Fincantieri’s primary role in the employment context. We ECONOMIC VALUE GENERATED 5,513 5,897 7.0% Italy 3,989 4,448 11.5% DIRECTLY recorded an increase of 2.8% at Group level Norway 817 731 -10.6% Revenue Sales revenue 5,474 5,849 6.9% compared to 2018. United States 467 581 24.4% Finance income Interest income and return on equity 40 50 24.8% investments Other countries 201 89 -55.7% In order to support our production, we Capital gains/losses on Business profits (0) (2) 224.5% TOTAL 5,474 5,849 6.9% business profits The data refer to the entire Fincantieri Group. have created a production network that DISTRIBUTED ECONOMIC VALUE 5,266 5,796 10.1% requires our shipyards work in synergy and Operating costs Payments to suppliers 4,089 4,505 10.2% Fincantieri’s worldwide order book at collaboration with each other so that one Cost of personnel Payments to employees 952 1,001 5.2% December 2019 contains 109 ships and single order brings value to different regions Dividends Payments to suppliers of capital (shareholders) 17 17 0.0% amounts to €32.7 billion (including those or nations and not only to the production Interest paid and financial Payments to suppliers of capital (banking 141 187 33.1% under a Memorandum of Understanding) site where the ship is delivered. For example, costs institutions) with deliveries stretching to 2027. Demand with regard to the vessels produced by the Duties and taxes Payment of duties, taxes and other financial 64 84 29.8% and legal fees drivers continue to be positive in 2019; in VARD group in the five shipyards in Norway, Donations to associations Community investments 3 2* -33.3% the cruise business, in particular, there is it is worth noting that these are also partly ECONOMIC VALUE RETAINED alculated as the difference between the 247 101** -59.0% a demand to replace ships that entered built with the operational contribution of economic value generated and the economic fleets in the early 1990s, and now made the two shipyards in Romania, the shipyard value distributed obsolete by the entry into force of new in Brazil and the one in Vietnam. With *In 2019, a new method of reporting than the one used in 2018 was developed in order to bring it closer to the London Benchmarking Group (LBG) model. **The figure does not include “Net profit/(loss) from discontinued operations”. safety and environmental regulations this integration it possible, on the one The data refer to the entire Fincantieri Group. and by the increased profitability of new hand, to ensure the proper combination generation ships with lower management of functionality, capacity, cost control costs and a diverse range of entertainment and proximity to the market in order to on board. There was also considerable satisfy the desires of a wide and diversified activity in the market for naval vessels, with international portfolio of customers at the the finalization of several contracts, mainly highest level and, on the other hand, to assigned to domestic shipbuilders. The generate internationally distributed value by

62 63 FINCANTIERI GROUP

Thanks to the adoption of a strategic Regional Employment Centre which, in approach to the market, over the years many cases, ended with them being hired we have evaluated and finalized several by Fincantieri or by satellite businesses. M&A transactions and acquired entire Some resources were included in pre-hiring companies in financial difficulties but with training courses aimed at acquiring the skills solid industrial backgrounds, also giving of the main shipbuilding trades (e.g. welders, priority to direct hiring or hiring through carpenters, pipers) which the Region is our chain of subsidiaries belonging to the promoting in collaboration with Fincantieri. Group. These actions have enabled us to safeguard know-how, strengthen our skills In order to relaunch the shipbuilding hub and support the economic system of the in the port of Palermo, a protocol of intent territories in which we operate. By way of was signed between the Authority of the example, Fincantieri Infrastructure took Western Sicilian maritime port system and over the company Cordioli & C. s.r.l. of Fincantieri, with the shared objective of Valeggio sul Mincio from the extraordinary establishing the Sicilian site as one of the administration procedure managed by the most important centres in the Mediterranean. Ministry of Economic Development, in order The Palermo site also completed the process promoting the transfer of technology and entire families and territories and contribute to increase its expertise in the construction for RINA to issue OHSAS 18001 and ISO knowledge aimed at fostering independent significantly to employment growth and the and major works sector and help safeguard 14001 certificates of conformity, the highest local development even in non-European positive evolution of the socio-economic dozens of jobs. As part of the same international standards of health and safety countries with different levels of economic context of the areas in which we operate. operation, Fincantieri Infrastructure started at work and environmental protection. development. Moreover, this preventive In cases of business reorganization (mergers, to refurbish the industrial buildings of the With this result, the company arrived at full model also allows us to address possible acquisitions, etc.), we try to safeguard our former Cordioli plant, equipping them with coverage of all the Group’s certified Italian risks related to climate change. people by, if necessary, assigning new tasks new technologically advanced equipment production units. with targeted training or retraining, based on for cutting, welding and processing We are present in different geographical each person’s ability and experience. steel, even for large thicknesses, and We have also signed a preliminary areas of Italy and the world, some of We also pay close attention to the therefore rebuilding a solid production and cooperation agreement with Cassa them in precarious or developing socio- professional capital that a territory is able employment base. Depositi e Prestiti (CDP) and Snam aimed economic contexts, characterized by a to express and try to enhance it as much In addition, it is worth mentioning that since at identifying, defining and implementing limited presence of large companies, a as possible. In this context, Fincantieri early 2019, Fincantieri has been working with strategic medium-term projects in some large number of small enterprises, where purchased a majority share of the capital the Friuli Venezia Giulia Region, and more key segments for innovation and the employment rates and the labour market are of Insis, a company based in Follo (La specifically with the Central Directorate for development of the Italian ports and the not very dynamic and not always evolved. Spezia), operating in the IT and electronic Work, Training, Education and Family, in development of sustainable technologies for This involves a considerable investment in sectors, that employs a total of around order to encourage the redeployment of sea transport, in line with the Proposals of terms of both organizational and economic 100 people, 70% of whom are engineers, unemployed staff who have left companies the National Integrated Plan for Energy and resources in order to address and make system engineers and specialist technicians, in crisis in the area. The activity, in particular, the Climate (PNIEC). Fincantieri and Snam up for the shortcomings of infrastructure namely a pool of expertise that is difficult to involved the over 150 workers of the will share their technical expertise by setting networks and the lack of a widespread find on the market or one that can only be company Eaton s.r.l. who participated in up dedicated working groups and CDP will business culture. Through our shipyards we developed internally over a particularly long a selection process with Fincantieri, the support, from an economic and financial are able to guarantee economic stability to period of time. economic satellite businesses and the perspective and in line with its institutional

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mission, projects that have positive effects of with the creation of social value in the long and in line with the provisions contained in We pay great attention to the search and public interest. term. Such a vast geographical perimeter the Integrated Environmental Authorization, selection of long-lasting partnerships with necessarily implies confronting different the Company has undertaken, in addition to those who contribute to the creation of Our economic contribution in the various enterprises and an in-depth knowledge of an extensive investment programme at the our products and services and represent countries where we are present is also the territory and the needs of the various Monfalcone site, to replace the windows and us in the world. Working with our suppliers expressed at tax level and is divided into stakeholders in order to identify targeted doors in some of the houses most exposed has an additional positive impact on the various types of taxes, which can be solutions. to the noise generated by the shipyard’s communities in which we operate by grouped into the following categories: production processes. This work will take creating jobs and increasing our partners’ For this reason we try to reduce our impacts place during 2020 under the coordination of business volumes. • income tax, corporation tax; through responsible management, helping the Municipality of Monfalcone. The initiatives implemented by the Group • property taxes, charges on ownership, sale the institutions in the territories where we In addition, the company is transforming the for the individual stakeholder groups are or lease of property; are present. area of the former railway into a cycle path described in the various chapters of this • taxes on labour, including taxes collected and has arranged free buses to reach the Report. and paid to the tax authorities on behalf of Numerous initiatives have been implemented shipyard from the external parking areas. employees; in the Monfalcone area, where one of Also at the Monfalcone site, a project has • indirect taxes levied on the production and our most significant shipyards is located. been developed to provide healthcare consumption of goods and services, such Fincantieri and the Municipality of directly on site to non-resident staff in as VAT, customs duties, etc. Monfalcone, sharing the need to increase order to reduce the impact on the hospital's local school facilities, also caused by the emergency services operating units, In the spirit of the Code of Conduct, we impact of the population active in the improving the quality of the service offered are committed to acting with honesty and shipyard, have conducted a feasibility study to each worker concerned and at the same integrity in all tax matters and aim to pursue for the renovation of a building, owned by time ensuring prevention and diagnostics. a transparent and sustainable long-term tax the Municipality, to be used as a nursery strategy. We are committed to complying school. The project envisages the creation Fincantieri signed a joint working agreement with legislation in all jurisdictions in which we of a number of classrooms equipped with for charitable purposes with the Banco operate, working closely with tax authorities, all the necessary services, potentially able to Alimentare (Food Bank) of the Liguria and tax advisors and auditors to ensure payment accommodate about one hundred children. Marche Regions and with the companies that of the taxes due. After the Agreement is signed, scheduled provide catering services at the canteens in for spring 2020, Fincantieri will return the the Muggiano and Ancona shipyards. Under Our massive presence in the territories property to the Municipality of Monfalcone, these initiatives, which replicate similar where we operate certainly generates renovated and adapted for the new use, in experiences already underway at the Sestri benefits, but it can also cause inconvenience time for the start of the 2020/21 school year. Ponente and Riva Trigoso shipyards, the to the local population. For this reason we Fincantieri has also undertaken to bear the Company donates the food not eaten at the are committed to respecting the rights operating costs with a contribution for the shipyard canteens in order to redistribute it of communities and contributing to their first three years of activity. to charities that support and help the poor economic and social progress, interacting and, more generally, people in need. Further with a variety of stakeholders on a daily We are also strongly committed to reducing agreements with the Food Bank or other basis. The search for shared value for the the environmental impacts, generated by our associations will be concluded during 2020, Company and its stakeholders represents activities, on the community. As part of the where locally compatible. an opportunity to combine competitiveness noise reduction plan adopted by Fincantieri

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OUR ECONOMIC SATELLITE BUSINESSES

As already mentioned, we believe in an of a wide and diverse network of companies, economy that is a system of relations, an many of which are highly specialized small or 31,400 86,100 integrated dynamic network, built over time medium-sized enterprises. Employed Employed to create and exchange value. Thanks to a Each cruise ship built by Fincantieri develops by Fincantieri by Fincantieri companies subcontractors competitive production model that is strongly on average € 2.7 to € 3.6 billion of business linked to the Italian production network, volume for the Italian System: Fincantieri generates additional impact on 54,700 the national economy. • directly generated by Fincantieri: about € 600 to 800 million; • additional through stimulation of satellite 34,530 Employed in economic sectors correlated with businesses: about € 2.1 to 2.8 billion. PRODUCTION the consumption of those directly employed PRODUCTION SUPPLY IMPACT OF MODEL CHAIN FINCANTIERI The impact on employment can be calculated and indirectly (Make or buy) + = ON THE ITALIAN 9,330 employed (first-tier) by ECONOMY by initially considering direct employment, Fincantieri that is direct jobs at Fincantieri in Italy, to which first-tier indirect employment is added, Direct employees Direct + Indirect Total Direct + Indirect Employment induced Total Employment that is jobs at Fincantieri contractors, as well in Italy 1st tier 1st and 2nd tier through consumption According to a Censis study, the Fifth Report as second-tier employment, represented by on the Economy of the Sea 2015, every euro jobs at sub-contractors. In turn, it is necessary ~ 3.7x ~ 5.5x ~ 3.4x ~ 8.9x invested in shipyards produces a value 4.5 to add to this final employment figure the times greater, mostly benefitting the area satellite business jobs due to consumption by where it is located, through the involvement the families of all employees. MULTIPLIER

From the graph it can be seen that: Considering both the effects upstream and downstream of its production organization, • the approximately 9,300 direct resources Fincantieri therefore has a significant at Fincantieri activate in Italy more than employment multiplier effect of about 8.9x, 54,000 employment units in industry confirming the broad impact the Company (considering contracts and subcontracts) in has on the country’s economic system. the manufacturing industry; • adding to this the induced effect of family consumption, employment exceeds 86,000 units.

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FOR INNOVATION

Innovation is growth and we never cease to innovate environmental challenges of our time. implementing our strategic vision by We have set ourselves the objective of focusing our Research and Innovation process on five fundamental pillars:

Green Ship Eco-sustainability and energy efficiency of ships Our main objective has always been to keep WE ARE INNOVATORS our world leadership in all the high value- added segments of the shipbuilding industry. The main objective we have set ourselves in Our competitive advantage lies in our order to direct our work strategically in the capacity to provide highly technological and near future is the definition, shared with our customized solutions and is evident whenever European partners, of a vision of innovation Smart Offshore Infrastructure Smart Ship Introduction of innovative trajectories in the shipbuilding industry. The digitization the need to apply solid know-how in system solutions supporting of ships integration emerges. This is confirmed by our commitment in the the Blue Economy recent definition of the Strategic Research 5 PILLARS OF RESEARCH AND INNOVATION We have repeatedly confirmed our position Agenda (SRA) of WATERBORNE, the as one of the most competitive global players, European Research and Innovation Platform thanks to our flexibility and ability to adapt for Waterborne Industries. The work was to significant and cyclical changes in market carried out in collaboration with the main needs. These fluctuations require a continuous associations in the industry to outline the Smart Yard Development of facilities and Autonomous Ship process of change that generates product prospects for collective development in the processes more efficient, safe and The automation of ships innovations, applicable to all types of ships, coming years. In particular, WATERBORNE’s sustainable and process innovations, which are necessary SRA proposes to radically transform in order to apply new technologies and waterborne transport by giving new impetus recover productivity. to European leadership in high value- In order to be strategically valid for the and fields of interest. We are constantly added ships. This will be feasible thanks Group, each research project pursues at engaged in industrial research, experimental We aim to be proactive towards shipowners to the definition of new business models least one of these fundamental directions. development and process innovation by always offering innovative solutions that aimed at supporting sustainable growth in in order to improve existing products, anticipate future technological evolutions. the shipping industry and the integration RESEARCH AND processes and services and to expand our of goods and passenger transport into a DEVELOPMENT knowledge base to support our entry into The constant updating of products and COSTS processes is one of the fundamental values seamless solution for shipping, ports and promising new market sectors worldwide. of Fincantieri that have led to it being one of related logistics. the most competitive players in its business € 134 mln Long-term activities are defined, in globally. In this sense, the capacity to seize In this context, innovation is a key element agreement with the business units and on the promising synergies in terms of for the European shipbuilding industry to subsidiaries, starting from an analysis of the innovation at international level characterizes continue to maintain a global leadership economic and technological megatrends the Group’s actions and makes it gradually position, demonstrating that it is fully able that will be significant for the maritime more integrated with and sensitive to market to handle the greatest technological and Our Research and Innovation activities segment over the next decade. dynamics. extend to various areas with different aims

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An analysis of the policy documents anticipating the needs of the end customers Fincantieri draws up a Research and of the process of defining the Group’s produced by international organizations, for our product. The directions to be taken Innovation Plan (R&I Plan) every year. development strategy. The innovation with research centres and, more generally, by our suggested by recent market surveys show The Plan is the tool that the Group uses to suppliers process also contributes to the stakeholders, allows us to define the areas the importance of concentrating our efforts effectively implement its strategy and it plan. This process is dedicated to analysing which have not yet been explored and where on issues such as energy efficiency and is the cornerstone of the other processes the specific perspective of the partners the Group’s resources can be invested. reduction of operating costs, maximization in Research and Innovation. The annual operating upstream in the value chain - in of payload and at the same time perceived redefinition of the projects is essential in order to define joint development roadmaps As regards the medium and short term, quality, and improvement of safety. In the order to maintain consistency between the that enable the Group and its ecosystem our commitment is aimed at satisfying shorter term, however, the focus is on activities carried out during the previous of suppliers of components and related both the requests we expect to receive in developing and innovating technologies year, new corporate objectives and the subsystems to achieve joint objectives. order to meet the needs of the end users and applying them to each individual market needs envisaged in the near future. The plan is also fuelled by the Technology of the product and those actually received order. Timely fulfilment of the shipowner’s Scouting process which aims to analyse from shipowners. In the first case, we are requests often requires the development The plan takes its momentum from the emerging technologies in detail, including committed to off-the-shelf innovation, of technological solutions or the study of processes analysing technological and in sectors far removed from the world of i.e. those activities that are not directly innovative materials and systems to be economic megatrends, carried out by our shipping, and assess their potential impact applicable to orders, but are strategic in applied during the ship design phase. analysts or sector stakeholders, as part on our products, services and processes.

INNOVATION OUR CORE PROCESSES ARE DESIGNED TO DRIVE INNOVATION FORWARD

Monitoring INNOVATION DRIVERS AND NEEDS High Innovation with megatrends suppliers STRATEGIC RESEARCH AGENDA BUSINESS IDENTIFICATION EXPANSION OF NEW BUSINESS THROUGH INCREMENTAL TECHNOLOGY SCOUTING OPPORTUNITIES INNOVATIONS

CONTINUITY TECHNOLOGY DISCONTINUITY INNOVATION WITH SUPPLIERS AND MAINTENANCE SCOUTING AND GROWTH

Business expansion RESEARCH & INNOVATION PLAN TECHNOLOGY TRANSFER INTELLECTUAL PROPERTY INNOVATION PROTECTION INCREMENTAL ROOTED IN INNOVATION OF CURRENT CURRENT PRODUCTS PRODUCTS New product RESEARCH PROJECTS FUNDED BY PUBLIC INSTITUTIONS concepts R&I plan

WORKING GROUPS IN NATIONAL AND INTERNATIONAL TECHNOLOGICAL CLUSTERS AND ASSOCIATIONS Low Degree of technological innovation Low High

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WE COOPERATE IN ORDER TO CREATE VALUE

The Group develops the projects in the objective of ensuring, in any case, that In order to take full advantage of Research We often promote long-term relationships Research and Innovation Plan with the researchers collaborating in the projects and Innovation processes, in addition to through the creation of wide-ranging aim of ensuring a competitive advantage have the freedom to publish by designing making the most of our internal expertise, cooperative development programs. for the Group and for the companies that processes that allow us to quickly assess we are aware of our role as an integrator, Aware of the significant boost that these collaborated to achieve common results. the advisability of filing patent applications, wholeheartedly adopting the Open can provide, we continuously aim to The value generated by Research and and agreeing on a case-by-case basis on the Innovation paradigm, researching and expand our partnership networks at local Innovation projects is captured in particular degree of abstraction of the publications, proposing collaborations with partners and international level, both within the through two fundamental processes: so as to ensure effective protection of their operating upstream in their own value projects we finance independently and by technology transfer and intellectual property industrial secrets. chain, or with other stakeholders working to cooperating in the creation of consortia that management. innovate tools, products and services in the respond to the innovation challenges raised The Parent Company’s patent portfolio maritime field. by public actors, such as the Horizon 2020 The first is a fundamental step to transfer currently contains: programme. knowledge, even if intangible, into services and applied technologies aimed at a wider INNOVATION audience of users. In particular, this phase takes place after each project is closed 38 20-30% and is aimed at ensuring that the results, PATENTS 70-80% OUTFITTING (Suppliers) PLATFORM including intangible knowledge, models and 14 (Fincantieri) algorithms, are correctly transmitted to the DESIGN MODELS* relevant departments of all divisions. Once finalized, all the project documentation and 11 the material produced are uploaded to a REGISTERED special database which can be accessed by TRADEMARKS the designers after a simple request.

* of details of the hulls and superstructures of cruise ships However, while enlarging the user base aids the marketing of the technology, if the In conducting Research and Innovation intellectual property of the results attained activities, we use the support of the CETENA from the research is not properly protected, research centre. Thanks to its experience there is a risk that the competitive in research and consultancy in the naval advantage obtained will be nullified. It is and maritime field since 1962, this is the therefore essential to protect the intellectual cornerstone of the Group’s pre-competitive property of the results obtained, delivered research. CETENA’s main tasks range from through not only collaboration with suppliers fluid dynamics to structural design, including but also joint work with universities and the application of innovative materials, from research centres, assessing, on a case- energy efficiency and control of emissions to by-case basis, whether it is appropriate safety issues, and from the development of to use it as an industrial secret or by software and simulators to testing activities. filing trademarks, patents and models. In this context, we have set ourselves the

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In embracing the Open Innovation model, A common strategy: from global to local European priorities for Research and we take into account a wide range of level Technological Innovation. stakeholders: In the context of the Group’s collaborations, The WATERBORNE Technology Platform, These take part in various collaborative those activated to define our medium- which updated its Strategic Research projects, giving an important contribution to basic research topics. They cooperate long term vision and to jointly define the Agenda in 2019, played a key role in in the development of innovative ideas to The activities aimed at identifying transfer onto the product. the technological priorities to be documents setting out the sector’s priorities, proposing the establishment of the co- developed in the short, medium and long term and that have highly at local, national and supranational level, are Programmed European Partnership NETWORK OF strategic importance and guarantee UNIVERSITIES AND value added for future products. RESEARCH particularly important. “Zero-emission waterborne transport” to CENTRES be launched within the Horizon Europe These are involved in numerous projects to develop specific SUPPLIERS CUSTOMERS In addition to maintaining a large number of programme to develop solutions to components. The innovation with suppliers process identifies partners bilateral relationships with other companies transform the waterborne transport sector with whom a common technological in our sector, and with universities and into a zero-emission sector towards the development strategy can be built. These are constantly involved in the development of new prototypes as well as in various collaborative research institutes, we are active in various year 2050, in line with the objectives of the TRADE research projects, supporting the associations and forums, with the aim of European Green Deal. ASSOCIATIONS AND CLASSIFICATION certification and approval processes SOCIETIES for new technologies. Cooperation is both contributing to the definition of sector INDUSTRY FORUMS facilitated by entering into specific agreements. roadmaps at a general level, and providing Fincantieri has contributed to the policy START-UPS Represent an attractive opportunity our contribution on individual technical papers of the industry associations Sea to exchange ideas aimed at or technological issues, including through Europe and Hydrogen Europe. The former consolidating a shared vision on the main Research and Innovation issues. the activation of pre-competitive research is the European association of shipyards Constantly monitored, they often guarantee the first steps towards the projects. and manufacturers of maritime systems, industrialization of new technologies. while the latter is the European association During 2019, we actively participated in representing the industry and research for the work of European sectoral technology the development of hydrogen technologies associations. One of the most important and fuel cells. In particular, Hydrogen We strongly believe in the possibility of of collaborations and participations in various strategic partners of the European Europe, among its objectives, aims to creating value in a collaborative way and, for industry round tables both in Italy and in the Commission is represented by the European support the launch of the institutionalized this reason, we have created a dense network main countries where the Group operates. Technology Platform WATERBORNE, of European partnership “Clean Hydrogen for which we are active members. The platform Europe” in the Horizon Europe programme aims to maintain continuous dialogue and to support the activities of the "Fuel between all stakeholders in the maritime, Cells and Hydrogen" Joint Undertaking (FCH naval, port, logistics and blue growth fields JU) of Horizon 2020. (an expression that brings together various economic activities including, for example, At European level, we also cooperate with: fisheries, aquaculture, maritime tourism, maritime biotechnology, collection of • EuroYards, the association of leading renewable energy from oceans, mining from European manufacturers, where we the ocean floor), through the consolidation actively contribute to the activities of a shared consensus aimed at identifying of the technical committee and the

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working group on product and process of the regional territories in which the In addition, VARD has recently joined the Shipbuilding Research Program (NSRP) digitalization; Company is located. The districts involved in Joint Industry Project (JIP), the Open funded by the US Government in order to • the Cooperative Research Ships cooperation relationships with the Group are: Simulation Platform, with the aim of creating carry out research and innovation initiatives. consortium, which focuses on the study an open source digital platform to be used The NSRP project, founded in collaboration of hydrodynamic, structural and general • Maritime Technology Cluster Friuli Venezia during the development of new ships. with U.S. Shipyards, studies and develops issues related to large ships interpreted Giulia (MareTC FVG); new processes and designs to improve ship both from an operational and design point • Distretto Ligure delle Tecnologie Marine production in the United States and make it of view; (DLTM); United States: the National Shipbuilding more efficient. The activities carried out in • European Council for Maritime Applied • Distretto Tecnologico Ligure sui Sistemi Research Program this context range from welding techniques R&D (ECMAR), sector association that Intelligenti Integrati (SIIT); to design for maintenance concepts, via the aims to develop a common strategy for • Distretto sull'Ingegneria dei Materiali The American subsidiary Marinette Marine study of strategies to reduce ship weight European research in the maritime sector. polimerici e composti e Strutture (IMAST); actively collaborates with research centres and the implementation of innovative • Distretto Tecnologico sui Trasporti Navali, and universities, through the National coating solutions. As part of our Italian activities, we have Commerciali e da Diporto (NAVTEC). contributed to the work of the Trasporti Italia 2020 NTC and the formation of the Blue Italian Growth NTC. During 2019, Norway: the main partnerships following a participatory process, both clusters published their action plans for the The Group benefits from the relationships three-year period 2019-2021. Fincantieri that the subsidiary VARD maintains with actively contributed to the drafting of these the Norwegian academic and research plans, whose contents were transferred into world. Partnerships are active with the the contribution that the two associations NTNU - the Norwegian University of Science made to the National Research Programme and Technology - and the SINTEF - The (NRP) drafting committee. Foundation for Industrial and Technical Research. The latter currently represents one At the Italian level, we also collaborate with of the main independent research centres in AIRI, the Italian Association for Industrial northern Europe. Research, contributing to the definition of This close cooperation has led to the the technical analysis documents, which are establishment of two centres for research- often taken as a reference for evaluating based Innovation (SFI): actions that support innovation, which are activated by public administrations. • Smart Marine SFI: the centre’s main focus is to increase the potential of the Over the year Fincantieri contributed, Norwegian maritime sector within the through its representatives in the Italian segment of sustainable waterborne regional technological districts, to the transport; analysis of the context and local application • Move SFI: the centre’s activities are of the sector’s development strategies, focused on increasing the value of contributing, in particular, to the definition maritime operations by developing IT of intelligent development strategies (S3) knowledge, methods and tools.

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OUR MAIN PROJECTS

In 2019, we have activated over 90 Research and Innovation RESEARCH • PIAQUO - Practical • ESS Control System • DC Grid Power Analysis: the AND INNOVATION projects, funded through our own resources and through PROJECTS Implementation of AQUO: a (v2.0): the project, financed project, financed internally Research and Innovation programmes funded at European, cooperative project financed internally by the subsidiary by the subsidiary VARD, national and regional level. Some of the projects are carried by the European LIFE VARD, aims to study more aims to optimize the Direct out through close cooperation with universities and research programme, which aims to capacious batteries, at a Current (DC) grid through institutes, through the awarding of specific assignments 90 mitigate issues related to reduced cost, combined advanced techniques for or the funding of doctoral fellowships, research grants, underwater noise and reduce with an advanced the simulation of micro grid or positions in partner universities. All the projects can its impact on the marine management and control applications in the marine be classified within 5 development trajectories, which are ecosystem by optimizing system for energy storage sector. Fincantieri’s vision for the sector. propellers and developing in order to guarantee longer a self-assessment model in autonomy and improve real time. device safety.

Green Ship Recent contracts, whether • Technologies with low they are related to the environmental impact: Smart Ship for example) and to assess For the past several years, sectors of new builds or a project conducted in and Autonomous the impacts of projects the concept of greening has refitting, feature the use cooperation with the CNR Ship activated with the aim of established itself as one of of advanced technologies, and the Universities of increasing digital integration the guidelines for innovation such as liquefied natural gas Genoa, Naples and Palermo, In the context of the to measures capable of and on-board autonomy (the processes and has acquired (LNG), batteries, modern funded by the Italian Ministry development model improving the resilience STESS project, for example). fundamental importance in pollutant reducing and of Economic Development. proposed by the Industry 4.0 of ships, guarantee an Great importance is given the eyes of the public. The energy saving systems. The project sets out to paradigm, the enhancement increase of overall safety. to the modelling of possible European Union, with the Fincantieri applies a holistic realize a laboratory ship of IoT (Internet of Things) Lastly, one of the most cyber attack risks and the recent European Green Deal, approach in design and approximately 25 metres and smart devices has taken interesting challenges countermeasures to be taken the International Maritime building, integrating in the long to study power on fundamental importance. for the shipbuilding both logically and physically Organization (IMO) and the best way the systems on generation technologies with These are pervasive across all industry is to develop to prevent these eventualities. Cruise Line International board, pursuing continuous low environmental impact. industrial sectors and ships autonomous ships for use The main projects related Association (CLIA), have improvement in energy • Sustainable Ship Design are not exempt from this in any operational scenario, to these issues which are defined precise objectives to efficiency and supporting the Program: the project aims “intelligent” revolution. The including in busy port areas. already active or in advanced reduce polluting emissions (in introduction of new green to create and validate a improvement of monitoring These concepts also have state of preparation are:

particular CO2) for the next fuels, technologies for de- holistic approach to energy systems and operational important repercussions decades. carbonization, including fuel efficiency and emission support systems give value on maintenance and after- • OCEAN2020 - Open We consider Green Ship as cells, as well as the study of reduction in ship design, also added to the whole ship sales activities, as well as Cooperation for European a milestone of our vision high-performance materials. through a careful control product and help improve strong implications on cyber mAritime awareNess: the and the activities carried The main projects active and of EEDI (Energy Efficiency their global safety. security aspects. These project is funded by the out in 2019 confirm this related to these issues are: Design Index). The study of design and aspects of the ship product European Defence Agency commitment. operational solutions to are studied and developed (EDA) and its purpose is the reduce the frequency both in specifically dedicated integration of unmanned of accidents, in addition projects (the ECHO project, systems in addition to

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the introduction and use Economic Development, • SAFEMODE - Strengthening of situational awareness aims to develop prototype synergies between Aviation Smart pilot project started as part • Marghera shipyard concepts in the maritime technologies, guidelines and and maritime in the area Yard of the production process production process environment. The project processes that, in the future, of human Factors towards innovation project at the innovation: a project, envisages the cooperation will enable the offer and achieving more Efficient Marghera site. In the years financed by the Italian of over 40 international delivery of an overall after- and resilient MODEs of We have set ourselves several to come, the aim will be to Ministry of Economic partners. sales service bundled with transportation: the project, development objectives follow a ship throughout its Development, aimed at • Integrated Bridge (SeaQ Fincantieri products. funded under the Horizon as regards safety and entire life cycle, including achieving the requirements Bridge): this innovative • ECHO - European network 2020 programme, aims productivity at work with trying to facilitate the last for yards and infrastructure solution allows the of Cybersecurity centres to develop a new design a view to improving all the phase - decommissioning - for the construction of integration of a wide and competence Hub for framework for “HUman Risk design and construction studying new welding and large ship sections in the selection of navigation and innovation and Operations: Informed Design” (HURID) phases in the shipyard. The joining procedures. The main Marghera shipyard by communication solutions project, funded under the in order to identify, collect introduction and application projects active and related to reviewing the layout and the in a system controllable Horizon 2020 programme, and assess human factor of innovative computer these issues are: production process. from the vessel’s bridge. aimed at developing a data in order to provide models, logistics and quality • Monfalcone shipyard This allows a considerable coordinated and structured properly risk-based systems control procedures in line • RAMSSES - Realisation and production process simplification of on- approach to proactively deisgn and operative with Industry 4.0 guidelines Demonstration of Advanced innovation: the project, board operations and a increase the EU’s cyber procedures. will drive the evolution of the Material Solutions for financed by the Italian consequent increase in defence through efficient • Smart Cabin (v2.0): the shipyards of the future. This Sustainable and Efficient Ministry of Economic security. transectorial partnerships. project, financed internally area has also given rise to Ships: a cooperation project, Development, has the • Cyber: project funded by • FLARE - FLooding Accident by the subsidiary VARD, studies and developments funded under the Horizon strategic goal to innovate the Liguria region and REsponse: cooperative aims to expand the related to the cyber security 2020 programme, that aims the production process of aimed at studying different project, funded under the knowledge base in the field aspects of production to widen the application of cruise ships, focusing on cyber security aspects for Horizon 2020 programme, of home automation in processes, with particular advanced materials in the increasing the efficiency critical infrastructures. which aims to develop a order to increase perceived emphasis on the security European maritime industry and quality of the mounting • STESS - Systems and methodology based on quality and improve the of Information Technology by also carefully studying and outfitting of the technologies to improve risk analysis to assess and onboard experience of (IT) infrastructures and the aspects related to industrial sections to significantly after sales services: the control the risk of flooding passengers. OT infrastructures of the methods. In particular, the reduce dry-dock lead times. project, financed by in real time on board shipyards (linked to the world project sets out to analyse the Italian Ministry for passenger ships. of Operational Technology, the different applications such as, for example, the of high-strength steel and networks that control composites on board. automatic machines), with a

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Smart Offshore study of support vehicles • Inertial Sea Wave Energy Infrastructure for transferring people and Converter: the project aims materials to and from land. to design an innovative An important part of our The main projects active and system to convert sea waves business is the offshore related to these issues are: into electrical energy. Within market. Current trends in this the consortium, Fincantieri sector are driven by the need • Modular Production deals in particular with to more efficiently harness Platform: the project aims making the system suitable the maritime environment to develop a concept of for the marine environment, through the use of structures modular floating platform structural studies and aimed at work and life at for offshore operations, innovative materials for the sea as well as clean energy particularly for the initial hull construction. production. The displacement stage of oil and gas of offshore activities to ever exploitation. remote areas will require the

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FOR A SUSTAINABLE SUPPLY CHAIN

We promote a responsible and sustainable supply chain based on long- Awareness of the supply chain’s strategic Suppliers are required to adhere to the Code lasting relationships founded on integrity, transparency and respect nature and the need to coordinate a vast and of Ethics and to share it with their employees, varied network of suppliers means it is essential subsidiaries, collaborators and subcontractors, to seek long-term partner relationships that as well as to monitor compliance with it and are based on transparency, collaboration and to report promptly any alleged or actual mutual respect. violations of the law, the Suppliers’ Code of In this sense, it is extremely important that Ethics, the Organization, Management and suppliers respect the Code of Conduct that the Control Model pursuant to Legislative Decree Development of a responsible and Purchasing Policy, the primary goal of which Company has implemented, which contains the 231/2001, or any contractual agreement with sustainable supply chain is part of a broader is to communicate the Group’s commitment principles and rules that must be observed. the Company. corporate vision that actively enhances to strengthening the development of solid In order to strengthen the bond with our and protects social and environmental and long-lasting relationships with its suppliers, in 2019 we drew up the Suppliers’ The importance of the relationship with responsibility, fully integrating them in the partners in order to pursue a common goal Code of Ethics, approved by the Board of suppliers is underlined by the fact that our strategic guidelines. of sustainable development together. Directors. This document is intended to convey product is highly customized, since it is Our suppliers are an integral part of this The core aspects of our Purchasing Policy are: the values, principles and responsibilities designed and engineered to the specific strategy and they are asked to share the defined by our Code of Conduct, Charter of needs of the individual customer. Sustainability Commitments and Sustainability Plan. It has been defined based on national and This entails active management of make- international best practices and principles. The or-buy procurement strategies during document was developed by the Procurement every single phase of development and CONTINUOUS SEARCH FOR Department with the involvement of various implementation of the naval job, while INNOVATION corporate functions (Sustainability, Human maintaining constant synergy with its Resources, Internal Auditing, Legal Affairs) and suppliers in the continuous search for high GUARANTEE was shared with Italian and foreign subsidiaries. value added solutions. PARTNERSHIPS OF QUALITY The Code is based on three fundamental pillars:

CORE ASPECTS OF THE PURCHASING SAFEGUARDING POLICY AND RESPECTING THE ENVIRONMENT HEALTH RESPECT FOR AND AND SAFETY SAFEGUARDING OF THE AT WORK ENVIRONMENT

BUSINESS ETHICS SUPPLIERS CODE OF ETHICS AND INTEGRITY

BUSINESS LABOR AND ETHICS AND HUMAN RIGHTS INTEGRITY

The Suppliers’ Code of Conduct is available on the website The Purchasing Policy is available on the website www.fincantieri.com/globalassets/sostenibilita2/pdf/purchasing_policy.pdf www.fincantieri.com/globalassets/sostenibilita2/responsabilita- economica/fincantieri_suppliers_code_of_ethics2.pdf

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WHO ARE OUR SUPPLIERS AND HOW WE CHOOSE THEM

The soul of the supply chain Awareness of the supply chain’s strategic The data on the value of orders issued are nature and the need to coordinate a vast given below. Approximately 80% of the finished product and varied network of suppliers lead us to is made with the contribution of our seek long-term partner relationships that are suppliers: Fincantieri works as de facto based on transparency, collaboration and VALUE OF ORDERS ISSUED BY PRODUCT CATEGORY VALUE OF ORDERS ISSUED BY GEOGRAPHICAL AREA system integrator, taking responsibility for mutual respect. (euro/000) (euro/000) the shipbuilding project as a whole. 2018 2019 2018 2019 Turnkey 1,663,864 1,583,443 Italy 3.257,747 3,468,099 Supply 1,334,825 1,304,499 Rest of Europe 697,283 684,998 North America 786 40,368 FINCANTIERI SUPPLY CHAIN Contracts 439,691 525,568 Asia 2,075 22,651 Services 425,427 556,483 Oceania 127,996 131 Investments 183,488 202,064 DESIGN South America 4 3,824 Engineering 38,610 48,044 Africa 14 30 Total 4,085,905* 4,220,101** Total 4,085,905* 4,220,101**

PURCHASING *Intercompany Value 2018: 415,169 thousands of euros. **Intercompany Value 2019: 409,658 thousands of euros. The data refer to Fincantieri S.p.A. and to the Italian subsidiaries. RAW COMPLEX SEMI-FINISHED MATERIALS COMPONENTS GOODS TURNKEY

PRODUCTION Fincantieri S.p.A. and the Italian subsidiaries of the previous year, showing a slight growth confirmed in 2019 the purchasing volumes trend of 3%.

OUTFITTING ASSEMBLY

PROJECT MANAGEMENT

Supply chain numbers sectors (furniture suppliers, air conditioning systems, electrical/electronic systems, etc.). As regards the Italian activities, Fincantieri acts In particular, through our shipyards, as leader and group hub for a large number we contribute to the maintenance and of Small and Medium Enterprises (SMEs), an development of the industrial system of the important factor in the flexibility and wealth regions in which we operate. creating capacity of local production systems, allowing them to access projects of great Over breadth and value, taking on a global market they would otherwise be excluded from due to € 4.2 bln 84% 6,000 In issued orders Italian companies companies their small size. (€3.5 bln) involved, mostly SMEs The Company supports a large network of highly specialized Italian SMEs in various macro-

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e-Procurement • requests for offers, made available to selected suppliers to meeting all their legal most recent company agreements. suppliers in digital format, to which they obligations, in particular with regard to Fincantieri Suppliers is Fincantieri’s can respond by sending their economic and the rights of employees, starting from the Indicators are used to monitor the supplier e-procurement system dedicated to supplier technical offers on the same platform; qualification phase - and their inclusion in base, such as supplier turnover, employee management (www.fincantieri-suppliers.com), • purchase contracts, digitally signed and made the Register of Suppliers - and the awarding turnover, employment contract type and providing support throughout all the stages of available electronically to suppliers, who of orders. Further controls are envisaged geographical origin of the contracting procurement activities. in turn can accept them directly on the when entering the production sites and companies’ personnel. In line with the objective of strengthening system without printing and sending paper during the entire time they remain at the communication with our suppliers, the portal is documents to Fincantieri. operating units. In particular, from January to December developed to manage the following processes: 2019, 2,292 companies entered the Italian Using the e-procurement system saves a lot of These guidelines and trends were shared at shipyards, of which 1,052 were not present at • marketing, offering the possibility to each time, transport costs (and related emissions of the trade union level and implemented in the the beginning of the year.

supplier to participate in the selection process CO2), printing and use of paper throughout the regarding Italy by registering on the portal; procurement process. NO. OF COMPANIES PRESENT NO. OF OTHER COMPANIES THAT PERIOD IN ITALIAN SHIPYARDS IN THE ENTERED IN THE SUBSEQUENT NO. COMPANIES THAT ENTERED MONTH MONTHS ITALIAN YARDS IN 2019 January 2019 1,240 (A) - 2,292 (A+B) February-December Management of contracting companies The prospect of stabilizing the supplier 2019 - 1,052 (B) - base by pursuing long-term partnerships The data refer to Fincantieri S.p.A. The production process we have adopted is with the consequent continuity in terms of In the same period, the shipyards hosted from EU countries (18.3%). Non-EU citizens structured to operate as an integrated model worker presence in the individual production 42,455 employees of contracted companies, totaled 29%. that makes use of skills, technologies and sites is able to provide the best response mainly Italian nationals (52.7%) or coming production capacities both inside and outside to the expectations formulated by some the Company. institutional stakeholders in areas involved. ORIGIN OF WORKERS

The widespread participation of the The continuity of companies and the ITALY resources involved in company business reduction of worker turnover can in fact 52.7% 1.7% OTHER EU processes and the sharing of common allow local authorities to improve the EUROPE NON-EU principles, behaviours and objectives are planning of infrastructure and social 18.3% 27.3% REST OF THE WORLD fundamental for achieving continuous services, as well as result in a more effective The data refer to Fincantieri S.p.A. improvement objectives. We have therefore management of integration policies. pressed on, in continuity with the guidelines In the field of employment relationships, the total, fixed-term contracts accounted for adopted in recent years, with significantly We have signed further framework permanent contracts accounted for 43.9% of 37.4%. Agency staff contracts accounted for 11%. reducing the supply chain in some specific agreements with leading employment NUMBER OF CONTRACTING COMPANY WORKERS activities (insulation, painting) and at the agencies in order to make it easier for same time we have intensified actions satellite businesses to find qualified PERMANENT FIXED TERM AGENCY STAFF OTHER TYPES TOTAL aimed at consolidating the relationship with resources, also through specific training 18,615 15,897 4,664 3,279 42,455 suppliers considered strategic, in particular courses aimed at the most sought-after 43.9% 37.4% 11.0% 7.7% 100% The data refer to Fincantieri S.p.A. for supply activities and turnkey contracts, professional profiles. through medium/long-term contractual The entire supply process is subject to The most prevalent nationalities (excluding Romanians (13.3%). agreements. controls and constraints that commit Italians) were Bengalis (17.3%) and

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HOW WE MONITOR THEM

Supplier qualification process A stringent performance monitoring process As part of the supplier monitoring system, QUALIFICATION OF SUPPLIERS IN THE REGISTER is carried out so that suppliers can maintain we use a continuous performance evaluation Development and efficiency of our their qualified status and to promptly system, in which all the relevant corporate supply chain start immediately at the manage any critical issues. departments take part (balanced scorecard), supplier selection phase, which follows A supplier remains qualified as long as the in order to guarantee that the required a documented procedure in order 1 reasons for its inclusion in the Register of standards are met over time. Through the to guarantee impartiality and equal INFORMATION Suppliers continue to exist and until the use of specific purchase methods adapted REQUEST AND opportunities for all the parties involved. COLLECTION monitoring of its performance is considered for the different product categories, we are critical to the point of expulsion. committed to obtaining the best conditions Management and the continuous 2 We monitor the supply chain using a life and performance throughout the entire life improvement of a pool of trusted and cycle management approach to reduce cycle of the product. innovative suppliers is essential in order to PREQUALIFICATION the environmental and social impact of a achieve the goals we have set for ourselves product or service over its entire lifetime SUPPLIERS EVALUATED at Group level in economic and sustainability to a minimum. In particular, sensitivity terms. Fincantieri’s purchasing office 3 towards and respect for the environment is provides suppliers with constant technical VISIT TO THE spread along the whole production chain, support for all activities related to the SUPPLIER and this has led to increasing exchanges of 99% selection and qualification process, including information and documents with suppliers. those concerning sustainability. Fincantieri 4 recognises that the supplier base is a SUPPLIER MONITORING significant asset for the entire company, and QUALIFICATION as such it should be valued and protected. Of the 759 qualified strategic suppliers at This is why we have developed a stringent 1 the end of 2019, 99% were subject to an qualification and performance monitoring evaluation, with the following results: process for strategic suppliers, based on MONITORING the evaluation of economic, technical, • 89% satisfactory; reputational, social and environmental • 10% with some gaps that can be resolved aspects. 2 by themselves; CRITICAL ISSUE • 1% with serious issues, for which the In this sense, the collection of MANAGEMENT adoption of an improvement plan or environmental and social information is replacement is planned. active during the pre-qualification stage, e.g. 3 possession of environmental, health, work Moreover, the main problems are examined ACTION safety and social responsibility certifications. MONITORING through cross-involvement within Supplier Oversight, the body that gathers the 4 different functions and departments SUPPLIER and takes decisions resulting based OVERSIGHT on examination of these critical issues. MEETINGS Prominence is given to issues related to safety, the environment and protection of

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labour rights, with specific focus onethical employees, and the existence of a structure that should be valued and protected, also contract award phase, in capital expenditure and reputational aspects during both the dedicated to safety at work, takes place so as not to compromise the trust placed and in production activities, our Group has qualification and the monitoring phases. during both the pre-qualification document in us by our stakeholders, and by using a established a stronger cooperation with These values are essential for the whole collection phase and the quality inspection risk intelligence based strategy we ensure the local competent Prefectures, stipulating Group and are a priority in all company phase at the supplier’s premises, as well as that our supply chain leans towards more Legality and Transparency Protocols, which decisions, including those relating to the during entry in our shipyards. extensive compliance with regard to anti- since 2017 have merged into a National pool of suppliers. money laundering, counter-terrorism, anti- Protocol. Evaluation of certain fundamental For us business integrity and the ethical corruption and sanctions at international Data on qualification and monitoring aspects, such as the technical/professional and reputational aspects that accompany level. activities in 2018 and 2019 are given below. suitability of the company, the regularity it are a constant guideline. We are aware Furthermore, in order to prevent any of contributions and remuneration of that corporate reputation is a strategic asset possible infiltration of organized crime in the

QUALIFICATION AND MONITORING ACTIVITIES 2018 2019 Total number of suppliers registered on the portal 3,387 3,727 Total number of qualified suppliers (strategic in the register) 744 759 Total number of qualified suppliers in the year 385 394 No. of new suppliers qualified in the year 82 54 % orders run through the portal 88.0% 90.5% No. of audit visits carried out during the year 51 68

The data refer to Fincantieri S.p.A..

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We periodically schedule monitoring rights, environment, health and safety specific aspects analysed. The expectations activities at our suppliers through different aspects. Two checklists were implemented considered in the checklists and verified PLAN types of audit visits. As the importance of to make the evidence found during the during the inspections are summarized in OBJECTIVE the inspection visit is also recognised for audits more uniform: one related to the the diagrams below, where a 100% result COMPLETED sustainability, as set out in the Sustainability environment and one related to health, indicates full compliance with Fincantieri’s IN 2019 Plan, 35 sustainability audits were carried safety and human rights, which were divided requirements. out in 2019 at strategic suppliers for human into thematic areas that consider the

AUDIT RESULTS – ENVIRONMENT AUDIT RESULTS – HEALTH, SAFETY AND HUMAN RIGHTS

ATMOSPHERIC EMISSIONS ORGANIZATION HUMAN RIGHTS HEALTH SURVEILLANCE INSPECTION 100 WASTE 100100

80 8080 INSPECTION PERIODIC MEETINGS TRANSPORT OF DANGEROUS 60 WATER DISCHARGES 6060 GOODS – ADR REGULATIONS 40 4040 PLANTS RISK 20 AND WORK 2020 ASSESSMENT SOIL AND SUBSOIL NOISE POLLUTION EQUIPMENT DOCUMENT CONTAMINATION

FIRST AID SPECIFIC RISK ASSESSMENT WATER RESOURCES SUSTAINABLE MOBILITY

FIRE PREVENTION AND INFORMATION, EMERGENCIES TRAINING PCB ENERGY RESOURCES AND EDUCATION SAFETY SIGNS ACCIDENT DETERMINATION AND MANAGEMENT MATERIALS OZONE-DEPLETING PERSONAL CONTAINING ASBESTOS SUBSTANCES AND PROTECTIVE EQUIPMENT GREENHOUSE GASES

During the year, 5 audits were below To ensure compliance with our standards, we expectations and will be the subject of a are committed to continuing our audit work new meeting in 2020 to check up on the during 2020 and have a target of at least 40 improvement path identified. audits.

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CHARACTERISTICS AND MANAGEMENT OF THE SUPPLY CHAIN OF FOREIGN COMPANIES

Fincantieri Marine Group: supply chain the selection of suppliers based on criteria The procedure followed for requests defined by FMG. of quality, technical capability, delivery times for offers/quotations begins with the For complex systems or larger services, the Through Fincantieri Marine Group (FMG) and continuous improvement. The goal development of a list of suppliers that are supplier subscribes and accepts the supply we are one of the leading manufacturers is to select a supplier able to sustain the able to guarantee the supply and meet all purpose and certain technical specifications. of medium-sized ships in the United States programme, seeking the best compromise the working, environmental and government The data on the value of orders issued are and we operate for civilian customers and in terms of price and quality, in order requirements as per terms and conditions given below. government agencies. The US Government to support the business and satisfy the is the main customer of Fincantieri Marinette customer. Marine (FMM) and requires high quality, high In accordance with the procedure adopted, performance goods and services provided specificaudits are carried out on suppliers, VALUE OF ORDERS ISSUED BY PRODUCT CATEGORY VALUE OF ORDERS ISSUED BY GEOGRAPHICAL AREA by suppliers with proven experience. which are also subjected to reassessments. (euro/000) (euro/000) In order to fulfil the objectives of Congress, In particular, when a supplier does not 2018 2019 2018 2019 the company supports small and medium maintain the capabilities and qualities that Turnkey 37,811 102,146 Italy 0 0 enterprises in selecting its suppliers, in led to its enrolment in the register and Supply 80,004 188,285 Rest of Europe 644 12,381 North America 179,430 388,233 particular those run by women, economically becomes critical to the FMM business, it is Contracts 53,656 75,609 Asia 15 159 and socially disadvantaged individuals, expelled from the list of usable suppliers. Services 2,449 12,566 Oceania 0 0 veterans, and companies that are part of In particular, 4 audits were carried out on Investments 4,614 1,329 South America 0 0 the Historically Underutilized Business Zone suppliers in 2019. Engineering 1,555 20,838 Africa 0 0 Program (HUB zones). Founded in 1997, The purchase process is defined through Total 180,089 400,773 Total 180,089 400,773 the HUBZone Program aims to promote various procedures that describe all the The data refer to Fincantieri Marine Group. economic development and employment steps that must be followed to issue a growth in disadvantaged areas, helping small purchase order according to the needs of businesses located in these areas through FMM. privileged access to opportunities in the Suppliers are selected according to various public procurement sector. criteria, starting from their experience in In 2019, 798 suppliers received a purchase the marine sector and their observance of order from FMG, the majority of which are US law in social and environmental areas. situated in the United States. Other additional factors that are considered With the exception of indirect purchases, include: estimated cost, purchase frequency, almost all purchases are managed directly size, position, shipowner’s recommendations, with the manufacturer, unless it is necessary recorded non-conformities, etc. to go through an agent or there is a cost An orientation course is provided to advantage in resorting to a wholesaler or suppliers performing services in shipyards distributor. before the works begin, to verify that they All suppliers working in the government meet certain insurance requirements. They programme are required to sign a specific also carry out shipyard safety training Non-Disclosure Agreement (NDA) and are courses and are familiarized with the selected according to a specific procedure correct contact representatives within the for selection and evaluation which defines company, in order to ensure an appropriate the process and the methods to guarantee communication flow.

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VARD group: supply chain are managed by the procurement teams of Company. Suppliers who work for VARD Audit activities are carried out periodically the various sites. first receivesafety courses, available in through the yard health, safety, environment Approximately 60% of the VARD group’s Goods and services are purchased from 5 different languages. The acquisition of and quality (HSEQ) managers accompanied value of orders issued concern Norwegian suppliers who can guarantee specific goods and services is based on technical by the central purchasing function to suppliers and 32% are located in other quality levels. Suppliers must be selected and commercial information. Requests for check compliance with the contractual European countries. The remaining 8% is from those that have been registered as proposals are sent to the possible suppliers, requirements agreed for the jobs. In 2019, distributed between South America and approved suppliers (maker list) through a and after the technical and commercial 75 audits were carried out on suppliers, 43 Asia. direct evaluation by VARD or an evaluation approval, a winning supplier is selected. A of which based on environmental and social The selection criteria used are based on the by other companies within the VARD contract/agreement is then signed and a criteria, none received a negative evaluation. maker list, but also on the supply history and group. During the supplier selection purchase order is issued. In particular, VARD Vung Tau, which holds previous purchasing experiences. process, preferential requirements include Purchase orders are issued on two SA 8000 certification, also carried out 17 Turnkey contracts are the most commonly possession of certification concerning health, complementary systems, through which the audits of its suppliers in 2019 based on used type of purchase orders, followed by safety, anti-corruption and the environment. entire procurement process is managed: checklists covering environmental and social materials and equipment. Together they production specifications, order approval issues; these did not reveal any critical represent 72% of the total orders issued by For activities relating to the cruise sector, a processes, delivery times and payment situations. the group. new market segment for VARD, the central conditions. Purchasing management is entrusted to the purchasing management team also uses The data on the value of orders issued are Alesund headquarters, while purchase plans qualified suppliers approved by the Parent given below.

VALUE OF ORDERS ISSUED BY PRODUCT CATEGORY VALUE OF ORDERS ISSUED BY GEOGRAPHICAL AREA (euro/000) (euro/000) 2018 2019 2018 2019 Turnkey 546,680 570,944 Norway 632,229 794,031 Supply 451,644 389,744 Rest of Europe 604,898 430,664 North America 4,002 6,277 Contracts 155,532 145,730 Asia 73,967 88,197 Services 122,754 147,744 Oceania 129 292 Investments 14,273 7,532 South America 38,038 8,963 Engineering 62,381 66,730 Africa 0 0 Total 1,353,263* 1,328,424** Total 1,353,263* 1,328,424**

*VARD group Intercompany Value 2018: estimated in approx. 427,600 thousands of euros. ** VARD group Intercompany Value 2019: estimated in approx. 518,900 thousands of euros. The data refer to the VARD group.

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ONGOING DIALOGUE

The Group’s focus on its relationships with with the aim of studying the actions and suppliers is constantly evolving. Therefore, the governance model adopted. This constant commitment and communication approach gives us greater awareness of are essential in order to help the Company the certifications that suppliers possess promote more positive and mutually and the corporate procedures, policies and beneficial relationships. We believe that management systems currently adopted by close cooperation with the supply chain suppliers, and enables us to follow a shared is essential in order to achieve high levels path of sustainable development. of quality in the finished product and in the entire production process. With a view to establishing a stable and long-lasting relationship, based on transparency and collaboration, we are actively committed to promoting dialogue with our suppliers through periodic meetings to share information, including on sustainability.

PLAN OBJECTIVE COMPLETED IN 2019

During 2019, we organized our first sustainability meeting with the participation of 23 strategic suppliers. Sustainability has steered these meetings, during which topics such as the Sustainability Plan and related objectives were presented, with particular emphasis on those concerning the supply chain. Moreover, in order to increase our partners’ awareness of and involvement in social and environmental issues, a fact-finding questionnaire was sent out in 2019 to a panel of 75 suppliers considered significant,

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FOR OUR CUSTOMERS

We imagine a world where respect for the sea, the environment and Our customers people is combined with technological excellence and where our products can be tools for sustainable growth We look towards the future, ready to take on new challenges in order to build the cruise ships, naval vessels, offshore units, ferries and luxury yachts of tomorrow. One of the keys to our success is our highly diversified activities in terms of final market, geographical area and customer portfolio.

Each new ship is the flagship of our and economic growth. Thanks to a pool of The customers who purchase cruise ships produced by the Merchant Shipping Division of Fincantieri SpA and VARD are the CRUISE leading cruise operators in the world. The customer portfolio has expanded considerably over the last few years, thanks to the capabilities’ progress, enhanced by a system resources dedicated to naval research and CUSTOMERS ability to design and build widely differing types of cruise ship, with strong customization by customer, geographical area and of selected suppliers that, with the best design, we aim to create increasingly safe market segment served. craftsmanship tradition and the class of a and environmentally sustainable ships. In our unique design, allow us to best interpret strategies, we have embraced the objectives the style and needs of each segment. of the International Maritime Organization The customers who purchase the products of the Naval Shipping Division of Fincantieri SpA and Fincantieri Marine Group are government entities, both Italian and foreign, including the Ministry of Defence, the Navy, the Coastguard and all entities NAVAL Technological development is essential (IMO), summarized in the slogan “Safe, secure appointed to make acquisitions in the Defence sector. CUSTOMERS because it means market competitiveness and efficient transport on clean oceans”.

FERRY Ferries designed and built by Fincantieri and VARD are intended for private and public clients, both Italian and foreign, operating mainly in the Mediterranean, the North Sea and the Baltic Sea, and meet the most demanding requirements in CUSTOMERS this sector in terms of technological innovation, low environmental impact, energy saving and diversification.

The mega-yachts designed by Fincantieri are intended for private customers who fall into the category of MEGA-YACHT ultra-high net worth individuals. CUSTOMERS

EQUIPMENT, The Group offers its naval equipment, systems and components to the internal captive market and to other shipbuilders and industrial SYSTEMS AND operators (such as, for example, engineering companies active in the installation of power plants as well as companies responsible for carrying out complex projects, for instance in the Oil & Gas sector). The main customers of these equipment, systems and components COMPONENTS include the customers of each of the other business sectors: civilian, naval and offshore. In addition, the main customers include CUSTOMERS shipbuilders and industrial operators.

The main customers of the Group’s offshore division are shipowners and charter companies that provide logistical support and services for the construction and operation of offshore facilities for companies active in the Oil & Gas industry. These also include OFFSHORE AND large contractors specializing in offering turnkey services for the commissioning of large projects and offshore infrastructure, as well as the main drilling contractors specializing in the management of semi-submersible drilling vessels and platforms. In SPECIALIZED addition to the design and production of offshore support units, VARD also supports the production of special vessels, such as VESSELS ferries powered by liquefied natural gas (LNG) or hybrid (battery) systems, mainly for shipowners in Northern Europe, and vessels CUSTOMERS used by customers active in the aquaculture sector and the maintenance and construction of offshore wind farms.

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MORE SUSTAINABLE AND SAFER SHIPS

CUSTOMERS BY MAIN BUSINESS AREA The world market for cruise ships is afar. As early as the beginning of the 20th rigorous, selective and is characterized by century, the shipyards of Genoa and Trieste CUSTOMERS DIVERSIFICATION SHIPS DELIVERED IN 2019 AND EXPECTED the presence of high-profile shipbuilders. were already producing jewels of design DELIVERIES IN THE COMING YEARS In this scenario, we are leaders in design and fittings, with extraordinarily innovative 1 Ships delivered in 2019 2002 TODAY Expected deliveries until 2027 and production, a success that comes from engineering solutions.

KAISER FRANZ JOSEPH 1912 Monfalcone The largest ship ever launched in the Mediterranean 8 46

CRUISE SATURNIA 1927 Monfalcone DUILIO The first ship with balcony cabins 1923 Genoa Sestri The first Italian 2 ocean super-liner AUGUSTUS 1927 Genoa Sestri The first ship with Lido bridge Guardia MM Costiera US Navy and outdoor pool Italiana MM Italiana Italiana VESPUCCI Qatar Emiri CONTE DI SAVOIA US Coast Naval U.A.E. 1931 Castellammare di Stabia Guardia Guard Forces Navy 1932 Trieste Costiera The largest training Italiana Turkish Algerian Iraq Coast ship of all time The first ship equipped

NAVAL Navy Navy Guard 3 37 with stabilizers US Navy Bangladesh Peruvian Indian Coast Navy Navy Guard

US Coast Armed Kenya Saudy RAFFAELLO Guard Forces of Navy Arabia Malta Navy 1965 Trieste

3 The last ocean liner built in Italy (Michelangelo

4 and Raffaello 5 are twin ships) VICTORIA EUGENIO C. 1931 Trieste 1966 Monfalcone 15 15 The first air-conditioned ship The first Costa REX cruise ship 1932 Genoa Sestri 6 The first ship with spa and tanning beds. The OFFSHORE & SPECIALIZED VESSELS fastest ocean liner in the world (30 knots) 6 6 MICHELANGELO OCEANIC 1965 Genoa Sestri 1966 Monfalcone

Source: Company information at 31.12.2019. The last ocean liner built in Sestri The first cruise ship 1 As of 31 December 2019. equipped with 2 One cruise ship below 10,000 Gross Ton delivered and one under construction. 3 Topaz Energy and Marine have become P&O Maritime Logistics. The new logo is not yet available. magrodome 4 Previously called: Technip. 5 Previously called: Farstad. 6 Ferry operator.

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A cruise ship is an ideal and self-sufficient technological and innovative solutions We are an accredited representative with In particular, the SOLAS (Safety Of Life At floating city in constant communication (in particular in the areas of safety, noise the IMO, the specialized Agency at global Sea) Convention aims to specify common with land. It is designed, built and managed reduction, stability and ship operating level for issuing directives on maritime safety international standards in order to safeguard to respect the ecosystems of the areas in speed) and the results they yield can be and environmental protection. The main human life at sea, establishing safety which it must operate and to safeguard the used in the ship design. In this sense, each conventions between the IMO’s member standards for technical aspects and for health and life of those temporarily living ship can be considered a new product as it states are aimed at: the preparedness of personnel in case of there for work or fun, thousands of people is the result of the combination of specific emergency. All ships produced must comply from different countries and cultures, who design activities in response to customer • improving maritime security (mostly from a with these rules, which are constantly live together and adhere to its rules of needs and of research and innovation safety point of view) – SOLAS; evolving. governance. activities. • limiting the pollution of the seas – MARPOL; We oversee all stages of production, The Group offers a diversified product • standardizing maritime labour rules – ILO. including design, supplier selection, portfolio, which includes ships of very construction, commissioning, testing and different sizes, from 10,000 to 175,000 gross PRODUCT EVOLUTION: SAFETY AND RELIABILITY delivery. tonnage and with a length between 110 and The ships designed and built by the Group 345 metres, characterized by the diversity Ships delivered Ships delivered Ships delivered Ships delivered are not standard vessels; each one is a and richness of the fittings in the hotel before 2009 after 2009 after 2010 after 2024 tailor-made product that reflects the part and the entertainment services offered 2009 2010 2024 specific needs of the customer. In addition, to meet the needs of all types Determistic damage stability Probabilistic damage stability SOLAS - Safe Return to Port SOLAS 2020

we carry out activities to develop applied of customers. Further class notations: Ships of 120 metres in length Increased stability requirements Machinery availability. or more or with 3 or more main for new cruise ships in conditions Dual propulsion system. vertical zones (mvz) must be of partial flooding (damage) Independent propulsion system. designed so that, in an emergency, caused by collision and THE NUMBERS OF COMPLEXITY - What you need on average to build a cruise ship passengers and crew can remain grounding. on board and the ship can proceed to the nearest port. MQ OF PUBLIC SPACE: KMs OF CABLE: THE SIZE OF THREE MORE THAN 7 TIMES HOURS OF FOOTBALL FIELDS THE DISTANCE FROM SHIPYARD WORK Commercial ships, including cruise ships, such as docking in U.S. ports that follow U.S. ROME TO VENICE 3,800 must have a valid class certificate, issued Coast Guard (USCG) rules or, if they relate 22,000 after verification that they comply with the to hygiene, food processing, environments, 135,000 regulations of a classification body. The accident prevention, and air conditioning DESIGN HOURS 2,000,000 primary aim of the classification body is to systems, those of the U.S. Public Health ensure that ships are designed, constructed Service (USPHS). and maintained in such a way as to In addition to being a product designed to minimize the risks to life, the environment be safe, ships are designed and built for The Group is directly involved in the is therefore a fundamental element, at a and property. Achievement of the class the comfort of everyone on board, whether development of international regulations strategic and technological level, in the early demonstrates that all the controls in the passengers or crew members. There are for safety and our activities are carried identification of possible trends in the market various phases of the ship’s life have been also dedicated relaxation areas, which may out in close collaboration with the flag and of the emergence of new needs by successful. include swimming pools, bars, gyms or agency, classification bodies, the sector’s proposing solutions that are innovative and All equipment and appliances installed discos for crew members. industrial associations, shipping companies competitive at product level and comply with on board follow the manufacturer’s or The ships are designed to make more and and the main international research bodies. the technical, economic and environmental internationally recognized standards. more spaces accessible to people with Monitoring of regulatory developments feasibility standards at process level. Other regulations are determined locally, disabilities, for example by providing easy

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access with ramps, optical and acoustic In naval shipbuilding, we are one of the few Systems to improve air quality have been from the preliminary phase of the project to warning systems and devices that facilitate operators able to design and build a wide introduced for the well-being of the crew be flexible, modular and reliable, with low mobility and therefore allowing all travellers and complete product portfolio that includes and, where it has been possible to increase environmental impact, easily reconfigurable to enjoy the full range of services available surface combat vessels, auxiliary and the well-being of the crew compatibly and upgradable. on board. specialized vessels, as well as submarines. with the vessel’s operational profiles, In the event of an operation to support With regard to materials, the Company Our ships are equipped with state-of-the-art the following improvements have been populations affected by a natural disaster, has adopted an internal procedure on the command and control systems. Although introduced: the new vessels will be able to provide “Asbestos Free Declaration” which aims the Group assembles and installs armaments drinking water, electricity and health to ensure that the products produced are supplied by third parties in the process of • increased air changes per hour for the support through its own hospital facilities. In free of asbestos, polychlorinated biphenyls building and equipping its naval vessels heating, ventilation and air conditioning addition to the particular attention giving to (PCBs) and ozone depleting substances according to the customer’s instructions, the (HVAC) system; reducing emissions of fumes, the treatment (ODS). The procedure also defines the Group has never manufactured and does • increased fresh air supply for each air of wastewater and the use of bio-fuels, components, structures and equipment not manufacture armaments or weapon change per hour for the HVAC system; the vessels will be able to intervene to that require the Declaration by suppliers. In components itself. • extension of HVAC in some operational contain a contaminated tract of sea, with addition, with regard to the management As part of the general concept of the areas (e.g. hangar); the possibility of collecting and stowing the of chemical products, suppliers must naval vessel’s survivability, studies are • increased liveability of the areas intended polluting substances. declare and ensure that their products and being carried out to further reduce its for the crew by ensuring more square Consolidating the experience gained on the services are developed using only materials vulnerability to cyber attacks. In addition, an metres per person, introducing modular projects for the Italian Navy, the logistics and substances that are not prohibited by observatory has been set up to screen laws cabins with attached integrated toilet/ ship for the Qatari Navy (LPD Qatar) is applicable laws and regulations and that are and regulations relating to environmental shower unit and partitions to cut noise being developed, where the concepts of not classified as mutagenic or carcinogenic. aspects, chemical risk and health and safety pollution; flexibility, modularity and low environmental In the last phase of the ship’s construction, at work, with the aim of making the already • use of water-based paints for interior areas. impact have been enhanced. The new vessel dedicated sessions are held to enable the established contractual requirements can also be used for humanitarian purposes crew to familiarize themselves with the on- complementary to the current regulatory The renewal process for the Italian Navy fleet in crisis areas both in times of peace and in board systems, particularly those relating situation. has a distinctly dual approach, typical of the times of war. to safety, before the ship enters service. In For each ship, the residual risk assessment Armed Forces. The Navy is often engaged in Lastly, the International Convention for general, education and training is provided document as provided for by Legislative non-military tasks such as aiding populations the Prevention of Pollution from Ships directly by the suppliers of the different Decree 81/2008 is delivered to the ship’s affected by natural disasters, monitoring (MARPOL) aims to prevent and minimize systems. captain. and protecting archaeological heritage, pollution from ships, whether accidental and transporting humanitarian materials pollution or pollution resulting from and basic necessities, which is influencing routine operations. We are committed to the current use of the fleet and the way in various projects with the aim of containing which the renewal process is taking place. environmental impact throughout the ship’s The new constructions are designed right life cycle.

These initiatives are described in detail in the chapters “For innovation – Our main projects” and “Fincantieri for the environment – Our ever greener ships”.

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QUALITY AT THE CORE

We are aware that the complexity of our Every company or division adopts a Quality The Quality Policy defines our mission to Quality Policy into the strategic choices and business requires high standards in terms Management System (QMS), certified achieve and maintain an excellent level of business processes at the various levels. of quality, cost and time of products and according to the ISO 9001 standard, which quality in all our activities, incorporating services offered. This is why we have ensures compliance with the best standards. the following seven points of the corporate adopted a Quality Policy able to convey the 100% of Italian production sites are certified commitment of the Group’s resources on ISO 9001 and 96% at Group level. specific key points. The goal is to achieve Quality assurance at each stage of the All resources, whatever level and and maintain an excellent level of quality in process, from the acquisition of the contract Market challenges and complexity are increasingly driving continuous improvement organization they belong to, must strategic choices, business processes and to the design and procurement, down to the and innovation: projects, activities and know what quality, cost and time methods must be continuously improved, objective they have to achieve every activity. production or provision of the services, is looking for solutions that make development entrusted to each process owner. and construction processes simpler, faster and more reliable, defining sustainable, fail-safe standards that are respected by all CLARITY Attention to correct planning, OF OBJECTIVES control and compliance with plans is essential for quality EFFECTIVE operations PLANNING CONTINUOUS IMPROVEMENT

THE 7 POINTS

OF FINCANTIERI'S QUALITY AS THE QUALITY POLICY SOURCE OF QUALITY PREVENTION OF INFORMATION

The quality of processes, and consequently of RIGHT products and services, QUALITY OF also depends on FIRST TIME Product quality is built step the timeliness, PEOPLE AND by step into every single completeness RESPONSIBILITY phase of the process: every and accuracy of actor, whether internal or information a supplier, must know the Training, developing rules, regulations, standards, and motivating practices and conditions resources that can Every standard, every reach the optimal level process and every activity of competence and must be designed to work skills well the first time

The Quality Policy is available on the website www.fincantieri.com/globalassets/sostenibilita2/responsabilita-prodotto/quality_policy.pdf

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• the Quality bodies of the Italian subsidiaries In 2019, Fincantieri Infrastructure − quality system standards and (Isotta Fraschini Motori, Marine Interiors, manufactured and assembled the new procedures; Cetena, Seastema, Issel Nord, Fincantieri bridge in Genoa (Polcevera viaduct), − standard to be applied; SI). entrusting part of the production to • organizational aspects: PLAN the Castellammare di Stabia and Sestri − organization and resources for the job; OBJECTIVE A total of 17 audits were carried out and shipyards: in order to do so, these shipyards − interfaces and communications; COMPLETED IN 2019 the formalized findings were almost all have obtained ISO EN 1090 certification – • control and inspection plans. class “C”, i.e. minor and/or similar to a Execution of steel structures and aluminium recommendation, with the exception of one structures. When designing and building complex class “B” finding made against one of the In December 2019, the Naval Shipping products and systems, such as cruise ships, subsidiaries, relating to the way performance Division obtained the NATO AQAP 2110 military submarines or industrial diesel and quality indicators are monitored. (Quality Assurance Requirements for Design, engines, there is always the possibility that As regards the US subsidiaries, Fincantieri Development and Production) certificate the process may be subject to deviations As envisaged in the Sustainability Plan, Marine Systems North America Inc. and issued by the Swiss Association for Quality from standards, design changes, unexpected we maintained all our quality certifications the Fincantieri Marine Group’s shipyards and Management Systems (SQS) for the events and supply or execution errors. These in 2019. To maintain the ISO 9001:2015 Marinette and Green Bay have achieved ISO Genoa Department and the Muggiano and “non-quality” events are normally detected certification, the Group’s divisions and 9001:2015 certification. The subsidiary VARD Riva Trigoso sites. and tracked by internal structures, by the companies were subjected to official carries out its operations in compliance with customer's inspection staff and by the audits by the certification body. The 12 the Group’s Health, Safety, Environment and classification bodies, or more rarely after audits conducted by the certification body Quality (HSEQ) Manual and the Policy, the Quality monitoring delivery, with interventions in the guarantee RINA in 2019 on the Quality Systems of principles and strategies of which are based and after sales period. The remedial actions Fincantieri’s Italian organizations certified as on the ISO standards. VARD’s efforts are In Italy, the Quality Management System is follow the industrial practice that involves compliant resulted in satisfactory outcomes. aimed at ensuring that safety is achieved at also applied to job orders, whether they be increasing costs/times to adjust, repair, Moreover, in line with its responsibilities, the all times and in all areas. Its production sites naval or other products, through the job redo and replace in order to minimize the company Quality body has carried out a all have ISO 9001:2015 certification. Quality Plan (QP). impact for the customer. The quantitative series of internal audits, aimed at verifying The QP is a set of documents and Control and qualitative analysis of these events, the correct application of the corporate For more information on the certified shipyards and Plans attached to the contract and governs appropriately recorded and classified, companies, see the website www.fincantieri.com/en/ documentation on processes that have a sustainability/certifications all aspects related to quality assurance, gives rise to mechanisms for reviewing significant impact on quality, as required by control and monitoring valid for the job in the projects; in the case of shipbuilding, the ISO 9001 standard. In particular, four In addition to the system certifications question. It guides the operating structures the analyses trigger the processes of macro organizational areas were examined: mentioned, the subsidiary Marine Interiors in the correct design, construction and continuous improvement, in order to ensure is in charge of the design, refitting and testing of the product. that the same errors are not repeated in • the Quality bodies of the shipping delivery of turnkey cabins and has achieved The job Quality Plan is structured as follows: subsequent jobs. A closing report/booklet departments/units; the MED B product certification and MED is produced, with the main lessons learned, • the Corporate functions related to primary D process certification issued by RINA • object of the project; in order to share with all the operating processes; certification body. MED certifications attest • main characteristics of the job; sites the countermeasures to the error • the Quality bodies of the production sites compliance with EU Directive 2014/93/EU • applicable documents: causes identified and make the consequent (Monfalcone, Sestri, Ancona, Integrated - Fire Protection Requirements of Marine − for the project; prevention and improvement actions Shipyard); Equipment Directive (MED). − rules, laws and regulations; possible.

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We regularly monitor quality indicators, at a Regarding the management of military We regularly survey the market and the meetings with representatives of Lockheed divisional level (for homogeneous business orders, during 2019 four audits were carried competition, from which certain “loyalty” Martin and the US Navy. These sessions areas) and at production level: out by the Italian Government Quality factors can be deduced. cover the following areas: technical, testing, Assurance (AQG), which involved the FREMM In Italy, five new ships were delivered in planning, quality, after sales and Integrated • shipbuilding sectors (cruise ships, naval Programme, the Multi-Purpose Patrol Vessel 2019, four cruise ships and one naval vessel. Logistics Support (ILS). During these vessels, mega yachts), are classified by job (PPA), Logistic Support Ship (LSS) and Delivery of the 8th frigate in the FREMM monitoring sessions, the company receives and by construction, which allows detailed Landing Helicopter Dock (LHD) jobs, with 16 programme was accompanied by a letter of feedback on the degree of customer comparisons to be made with regard to non-conformities, of which 11 have already congratulations from the customer OCCAR satisfaction and on any problems. The homogeneous “objects” and “phases”; been resolved and 5 are being resolved. (Organisation for Joint Armament Co- corrective actions are defined at that time, • in the plant and components sector (e.g. operation). with subsequent follow-up. diesel engines, turbines, naval systems and systems, cabins for passenger ships), the Customer satisfaction As part of the Sustainability Plan, there is In VARD, customers’ requirements and classification is by production process, a specific objective regarding customer expectations are defined during contract facilitated by repetitions in small and The main sector in which we operate is satisfaction which includes the development negotiations and are maintained and medium-sized series. intrinsically characterized by a limited number of the Customer Satisfaction Index (CSI) developed throughout all the project of competitors and customers. The measure system. For its regulation, in 2019, the stages. Customer satisfaction is monitored The VARD subsidiary also uses the Quality of customer satisfaction and retention cannot internal procedure was defined and tested periodically and continuously, both during Plan for its projects. The quality indicators therefore be based on significant data and on two orders, one from the Cruise Ship the production stage and during the and the achievement of the related annual statistical samples. It requires instead a long- Division and one from the Naval Shipping guarantee and after-sales period. Each objectives constitute a fundamental part term analysis of the relationship between Division. The resulting CSI of 85/100 is a very product is subject to voluntary feedback of the incentive programmes of the entire market trends, assignment of orders and satisfactory starting value. by customers. Customers also provide Fincantieri organization. jobs to the various players, the time taken the company with voluntary testimonials. to transform negotiations into orders, the Fincantieri Marine Group surveys customer Unsurprisingly, the company’s slogan is “Built maintenance of historic customers, and the satisfaction three times a year through on Trust”. acquisition and retention of new customers.

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ONGOING DIALOGUE

The shipbuilding sector is constantly Our challenge is to integrate and unify the EXHIBITIONS developing, which is why in order to demands of these industry players in the 6-8 May 12-14 November create products that are increasingly safe, most effective way and to combine the SEA AIR SPACE - SAS POWERGEN EUROPE sustainable, efficient and have a lower design, safety and sustainability of our environmental impact, it is important to ships in the optimal way. PARIS BUSAN - FRANCE - - SOUTH KOREA - WASHINGTON VENICE create long-term relationships with all - USA - - ITALY - the stakeholders involved in the process. In order to maintain constant contacts, ARLINGTON - USA - 22-25 October 25-28 September MADEX Therefore, we are in constant dialogue and we are also committed to collaborating 25-27 June MONACO YACHT ELECTRIC AND HYBRID SHOW - MYS cooperation with: with the various stakeholders (shipowning 15-17 January WORLD EXPO 2019 companies, agencies, suppliers) through SURFACE NAVY 18-23 June ASSOCIATION - SNA SALONE NAUTICO • shipowning companies, which intercept working parties, one-to-one meetings, MONACO VENEZIA AMSTERDAM - PRINCIPATO DI MONACO - SINGAPORE the new needs of end customers video and tele-conferencing. - NETHERLANDS - NEW ORLEANS (cruise passengers) and promote the - USA - development of the market in terms of An important opportunity for dialogue 14-16 May products and services. We constantly with customers and potential customers 4-6 December IMDEX ASIA INTERNATIONAL listen to the needs of the shipowner, is participation in exhibitions. This is WORK BOAT SHOW building each ship according to their an essential activity for the Group as it

specifications. By nature, the entire provides direct contact with customers, FT. 30 October-3 November SHANGHAY LAUDERDALE FORT LAUDERDALE - CHINA - - USA - shipbuilding process requires a continuous reinforces the consolidation of the brand INTERNATIONAL BOAT relationship between the Project Manager, in the reference markets and can be an SHOW - FLIBS 3-6 December the customer and their staff; opportunity to communicate the launch of MARINTEC CHINA • the bodies issuing the regulations, new products. Fincantieri took part in 25 PALM BEACH whether national or private, which exhibitions in 2019. - USA -

monitor ship operations and update 28-31 March INTERNATIONAL SYDNEY the regulations to prevent damage and BOAT SHOW 8-11 April - AUSTRALIA- accidents; SEATRADE CRUISE GLOBAL • suppliers that develop and make 18-20 June CRUISE SHIP 8-10 ottobre INTERIORS EXPO PACIFIC 2019 available new products and systems MIAMI DUBAI - UNITED ARAB EMIRATES - for new constructions based on market - USA - requirements. VIAREGGIO RIO DE - ITALY - 26 February-2 March JANEIRO - BRAZIL - DUBAI BOAT SHOW

9-12 May 2-5 April VERSILIA YACHTING LAAD DEFENCE RENDEZ-VOUS DOHA - QATAR - & SECURITY ABU DHABI 11-12 June - UNITED ARAB EMIRATES - CYBER SECURITY BARCELONA FOR ENERGY 26-28 June - SPAIN - & TRANSPORT GENOA SHIPPING WEEK 8-20 December INFRASTRUCTURE 14 ottobre QATAR CONNEXT NATIONAL DAY 17-21 February 4-5 December IDEX/NAVDEX KUWAIT CRUISE SHIP INTERIORS - KUWAIT - EXPO EUROPE GENOA - ITALY - 10-12 December GULF DEFENSE & AEROSPACE - GDA

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FOR OUR PEOPLE

Everything we do focuses on enabling the growth, enhancement and EMPLOYEES BY TYPE OF CONTRACT training of people, based on the daily attention we pay to the quality of TOTAL 19,823 1,284 our work and our relations with others 6% FIXED TERM 100 10,551 18,539 53% BLUE COLLAR 80 94% PERMANENT EMPLOYEES 60

40

Developing a globally shared vision, their engagement in the Company. Our spreading a common culture and promoting objective, through the implementation of 7,608 19,582 38% WHITE COLLAR 99% FULL TIME an increasingly motivating work environment a common “People Strategy” among the EMPLOYEES that responds quickly to business needs are Group companies, is to aim for excellence the challenges we set ourselves in 2019. The by increasing people’s well-being and their constant development and enhancement of productivity. people are the strategic levers that increase 1,274 241 7% MIDDLE 1% PART TIME MANAGERS 390 2% SENIOR MANAGERS WORKFORCE BY GEOGRAPHICAL AREA The data refer to the entire Fincantieri Group. TOTAL 19,823 ASIA 9,334 ITALY WE AIM TO ATTRACT TALENT 47% 2,204 We are convinced that real change For this reason our selection process is 11% 775 depends on who is promoting it: people structured, transparent and guarantees a who contribute to creating the future of thorough evaluation of candidates in terms of 4% the Company and their own future with technical and cross-functional skills, aptitudes commitment, dedication and passion. and professional aspirations. NORTH AMERICA SELECTION PROCESS

APTITUDINAL/ COLLECTING CVS PHONE INTERVIEW MOTIVATIONAL 121 TEST 1% 7,389

SOUTH AMERICA 37% REST SCREENING INTERVIEWS JOB OFFER OF EUROPE

The data refer to the entire Fincantieri Group.

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During 2019, over 21,000 applications internships were activated, both curricular Superiore Sant’Anna in Pisa and the first course (Higher Technical Education and were received through the company’s web and post-curricular, of which 49% were then level university master’s degree in nautical Training) for ship designers in Monfalcone, portal “Work with us” (compared to around transformed into employment contracts. The and naval Interior Design with the University the course for Process Technician for 20,000 in 2018). In Italy, 787 people were Group as a whole hired 2,767 people, 44.7% of Trieste. Shipbuilding in Genoa and the two hired, of whom 62% are under 35, and 272 of whom were 30 years of age or under. editions of the “Ship Master” courses in La Spezia and Sestri Levante. To support In 2019 Fincantieri was the expansion of the training offered by HIRES BY AGE GROUP AND GENDER awarded the Universum institutions in the Ligurian capital, we have prize as Most Attractive joined the TecnOrientarsi Memorandum of ≤ 30 YEARS 30-50 YEARS ≥ 50 YEARS TOTAL Employers among Understanding, signed in October between 2018 2019 2018 2019 2018 2019 2018 2019 companies in the Confindustria Genova and the network Total 1,034 1,238 1,248 1,237 330 292 2,612 2,767 Industrial Engineering of professional colleges. We also offer of which women 188 234 217 185 46 34 451 453 and Manufacturing sector work-study opportunities, as part of the The data refer to the entire Fincantieri Group. according to STEM (Science, Technology, PCTO (Paths for Cross-functional Skills Engineering & Mathematics) student and Orientation), to students at technical In an increasingly complex labour market, Partnerships with universities rankings of the leading Italian universities. colleges located in the territories where we where there is a growing professional In 2019, Fincantieri won the Universum have our sites. mismatch between supply and demand for In order to have a direct and constant award as Best Employer for STEM • ITS Foundations: in accordance with the profiles with technical and technological contact with students and teachers, professionals, professionals with up to five Memorandum of Understanding signed skills, we work constantly to make selection we actively participate in “Career Days” years’ experience, among companies in the in May 2018 with the MIUR, we have processes better and more effective and organized by universities and various local Industrial Engineering sector. expanded our collaboration activities to enhance our recruiting and employer institutions, we promote meeting days with with the Higher Technical College (ITS) branding policies and strategies. Our university students dedicated to introducing Foundations, thanks to our managers’ employer branding strategies are translated the Company (“Meet Fincantieri”), we carry teaching posts, company visits and into an increasingly active presence on social out moments of learning with seminars, Technical institutes and ITS Foundations internships for students. On this point, networks, including LinkedIn and Instagram, classroom testimonials, orientation sessions, during 2019 we designed a new course and above all through a synergistic network as well as guided tours for students and In 2019, we intensified our relationship with the Merchant Marine Academy for of education and training actors, at national school classes at construction sites and with secondary educational institutions to senior technicians for the supervision and and international level, which see the technical departments. We have several ensure the training of qualified resources installation of on-board systems. Further involvement of secondary schools, Istituti conventions in place to support the with profiles that allow them to be easily initiatives are being launched which will Tecnici Superiori Foundations (ITS - Higher development of teaching, scientific research employed in typical roles in the shipbuilding affect territories with a lower rate of Technical Colleges), universities and business and higher education at university and post- industry, both within the Group and in development. schools, with the aim of promoting the graduate level. In particular, Fincantieri has satellite companies. The main collaborations development of knowledge and skills sought collaborated in and promoted the Cassa activated with a view to supporting and applied in the Company. Depositi Prestiti (CDP) MBA master’s degree orientation and employment are given below. at the Luiss Business School in Rome, reserved for employees of the CDP group. • Technical institutes and vocational schools: We are also collaborating in the design we have launched various initiatives in of the MIND - Management & Innovation collaboration with technical colleges Design - master’s degree with the Scuola and vocational schools, such as the IFTS

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WE TRAIN AND ENHANCE OUR PEOPLE WITH AN EYE ON EXCELLENCE

and consolidating cross-functional For us, the training and development of Training skills related to innovation and change people are the two fundamental strategic EMPLOYEES management, soft skills and knowledge of TRAINED levers of the Talent Management process, Also during 2019 the Group continued its 87% foreign languages. since, by facilitating growth from within, policy of investing in training programmes 17,295 • Corporate University: this is Fincantieri’s we make it possible for individuals to aimed at improving the technical and in-house management training school, increase their skills, enhance their potential professional know-how of its resources, which consists of technical-managerial and professionalism and encourage their ensuring effective monitoring of roles and The training we offer is mainly based on 3 training courses aimed at increasing motivation and involvement. encouraging the dissemination of cross- tools: employees’ skills at various stages of functional skills. Investments in training individual development. Numerous editions programmes amounted to euro 4.8 million, • FORmare catalogue: includes courses of the Academy programme took place with an average of 29.7 hours of training per aimed at covering technical-specialist over the year. This programme is dedicated capita. needs and developing professional know- to young people who have recently how through training initiatives on the been hired by the Company and aims to main specialized software and applications encourage integration into the company used in the Company, on processes, environment, providing them with training regulations and other activities involved on cross-functional issues and facilitate an in the development of the ship product aptitude to manage change. OVER and maintenance of quality standards. In 580,000 29.7 addition to technical training, the catalogue HOURS includes courses aimed at strengthening OF TRAINING PROVIDED 28.7 36.6 AVERAGE HOURS OF TRAINING PER CAPITA MEN WOMEN

15.8 39.0

9.5 MIDDLE MANAGERS 20.3 BLUE COLLAR EMPLOYEES

SENIOR MANAGERS WHITE COLLAR EMPLOYEES

The data refer to the entire Fincantieri Group. The per capita hours are calculated as the ratio between hours provided to the whole workforce and the number of employees in service at the end of the year.

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for bringing together, communicating and the most complete, objective and analytical self-assessment and assessment by others. working synergistically among different view of the various dimensions under At the beginning of the year the Parent generations and, on the other, working on evaluation. Company completed the 360° assessment trust/esteem to break down barriers and process that had begun in 2018. PLAN create a shared team identity, starting from • Performance appraisal: a key tool in • Potential appraisal: aimed at a target OBJECTIVE the enhancement of individual peculiarities human capital development processes group of resources determined by age, COMPLETED and pride linked to the sense of belonging that aims to improve employees’ company seniority, role and qualification IN 2019 to the Group. One of the most significant performance through individual feedback requirements. It takes the form of an team building initiatives is the “Development that all employees, from workers to assessment activity which, on the one Challenge”, dedicated to young resources managers, receive at least once a year. hand, offers the possibility of highlighting, who have already completed the Academy This tool supports and directs meritocratic through feedback interviews, the strengths, course and continuing their training in appraisals, helps customize the personal areas of improvement and growth In line with the Sustainability Plan, and as order to reactivate group dynamics, and development processes and define the motivation and, on the other hand, makes part of the Corporate University’s training the “Effective Relationships” course, which training offered in line with the skills gaps it possible to structure an individual programmes, we have introduced a module is intended for production supervisors highlighted. development plan in terms of short/ dedicated to sustainability issues. In 2019, and technical figures in the shipyard, as an medium-term training activities, coaching, 131 employees were trained on these issues. opportunity to develop management and mentoring, career paths and job rotation. relational skills. PERCENTAGE OF EMPLOYEES EVALUATED - 2019 • Safety Academy: includes training courses Senior managers on health, safety and the environment 62% People development that the Company offers its employees Evaluation processes of which women 69% as activities aimed at providing useful Middle managers 76% During 2019, people review activities, knowledge for identifying, reducing The assessment processes are based on of which women 72% which are an active management tool used and managing risks in the workplace. the Company Skills Model which aims White collar employees 78% by the HR Department and managers to During 2019, training activities relating to enhance and encourage consistent of which women 74% develop employees, played a key role in to environmental management were behaviour at all levels of the organization Blue collar employees 80% enhancing human capital and defining increased, with courses dedicated to and to develop the appropriate skills to of which women 88% professional growth paths and succession specific professional figures such as deal with future challenges. This model Total 79% plans. People review activities are launched energy managers and resources involved includes skills related to “knowing”, such of which women 78% from a synergistic work carried out every

in managing environmental and safety as knowledge of corporate strategy and The data refer to the entire Fincantieri Group. six months by the HR Department and by certification systems. specialist and process know-how, “knowing the business line and allow the population how to do”, such as the skills and abilities to be mapped using the data related to the possessed and the experience gained, • 360° assessment: a tool intended for all performance appraisal, potential appraisal Team building and “knowing how to be”, namely those managers with at least five staff members. and the experience gained within the soft skills necessary to ensure appropriate It aims to assess the typical skills of team Company in a systematic and structured During the year, we have proposed various interaction between the individual and managers, such as feedback, delegation, way. The strategic output that emerges team building activities with the aim, the organizational context (leadership, development of team members and from this mapping is the identification of on the one hand, of understanding the teamwork, feedback, staff management). recognition of others, and aims to provide high potential, namely those resources obstacles hindering team performance The evaluation processes in place at the evaluator with a complete overview of with greater potential and usefulness in the and identifying the most valid mechanisms Fincantieri are structured in order to ensure the skills being evaluated by comparing Company, on which to invest so that in the

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DIVERSITY AND INCLUSION AS AN ASSET

future they can play key roles in driving the We reject any form of discrimination based In order to enhance diversity and promote The main issues on which the Company business. The ultimate goal of people review on ethnicity, colour, gender, age, disability, inclusion, in line with the existing regulatory is determined to influence diversity and meetings is to plan the development actions sexual orientation, religion, political framework for equal opportunities, we are equal opportunities are represented by necessary to accompany the growth of opinion, nationality and social origin. We committed to: age diversity, to encourage generational talent through a career path, with structured are committed to maintaining a work exchange through the enhancement of job rotations that provide for both environment that is free from any and all • creating an inclusive work environment young people and the recruitment of senior horizontal and vertical growth, national and forms of violence or harassment. that ensures respect, integrity, personal resources, gender diversity, with the aim of international mobility activities, training and The Group has therefore adopted the development and equal opportunities; providing modern forms of work-life balance, mentoring that support the development Policy on Human Rights – Commitment • increasing employee awareness of diversity and cultural diversity, to stimulate creativity of interpersonal skills and encourage the for the Respect of Human Rights and and equal opportunities; and nurture an increasingly open corporate creation of a professional network, even Diversity, which reaffirms our commitment • encouraging the commitment of all Group culture. outside the area in which the talent works. to protecting human rights and promoting employees to act with respect and integrity More specifically, there were 198 people diversity as strategic elements for the in every relationship; involved in mobility processes in 2019. company’s competitiveness and the • requiring suppliers to behave in a manner development of our people. We operate consistent with respect for human dignity. Once a year, in order to ensure effective with utmost respect for diversity and equal oversight of key positions and allow for opportunities and we do not permit any kind EMPLOYEES BY AGE RANGE structured and organic reflection on the of discrimination, from personnel selection Group’s managerial assets, succession and throughout the entire employment ≤ 30 YEARS 30-50 YEARS ≥ 50 YEARS TOTAL plans for top management are updated to relationship. The change management 2018 2019 2018 2019 2018 2019 2018 2019 guarantee and safeguard continuity, stability path that characterizes the Fincantieri for Senior managers 0 0 171 175 206 215 377 390 and oversight of the business. the Future initiative is a pure expression Middle of how each person, regardless of gender, managers 29 23 679 744 457 507 1,165 1,274 We have developed coaching in a more age or nationality, represents a source of White collar 1,167 1,396 4,106 4,370 1,676 1,842 6,949 7,608 structured and widespread way to “wealth” for the Company. The presence employees enhance management effectiveness. This of different skills, experiences and cultures Blue collar employees 1,475 1,397 6,428 5,990 2,880 3,164 10,783 10,551 is a voluntary development tool aimed fuels the exchange of opinions, comparison Total 2,671 2,816 11,384 11,279 5,219 5,728 19,274 19,823 at facilitating and supporting resources and dialogue, promoting the growth of % Incidence 14% 14% 59% 57% 27% 29% 100% 100% in becoming aware of themselves, their the organization, intellectual enrichment, The data refer to the entire Fincantieri Group. possibilities and potential, allowing them innovation and the gradual development of to plan development actions aimed at an inclusive working environment. PERCENTAGE OF EMPLOYEES BY GENDER PERCENTAGE OF WOMEN ON THE BOARD strengthening and consolidating their managerial skills. 2018 2019 2018 2019 Men 16,889 88% 17,214 87% Women on the Board 33% 50%

Women 2,385 12% 2,609 13%

Total 19,274 100% 19,283 100%

The data refer to the entire Fincantieri Group.

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OUR COMMITMENT TO HEALTH AND SAFETY

PERCENTAGE OF WOMEN BY CATEGORY OF THE CATEGORY TOTAL - 2019 Safety at work, workers’ health, the and envisages the participation of all the maintenance and improvement of work supervisors involved in processing and the TOTAL 13% environments have always been our main workers’ safety representatives. drivers and the foundation of our policies, in a vision that considers safety a strategic and Furthermore, the meetings of the Quality 7% 22% development factor for the Company. and Safety Committees are held periodically 13% 7% The continued implementation of tools in each production unit. These committees, SENIOR WHITE COLLAR associated with the certification of composed of the site Management and the EMPLOYEES MANAGERS MIDDLE BLUE COLLAR the company's systems for managing people reporting to management, including MANAGERS EMPLOYEES health and safety at work, according to the quality, health, safety and environment The data refer to the entire Fincantieri Group. the requirements of OHSAS 18001/ISO managers, have the aim of supervising and 45001, has resulted in the broadening of monitoring production processes during PERCENTAGE OF WOMEN TRAINED OF TOTAL WOMEN - 2019 We are constantly working to promote the the work population involved, facilitating their constant evolution and within their insertion of people with different physical dissemination of corporate culture growth different complexities. In these committees, and psychological abilities, in line with paths. workers’ requests and any critical elements the characteristics of shipbuilding and the This result is monitored through the that may have emerged during joint risk profiles associated with the industry. systematic implementation of internal inspections of the operational areas or within 2,310 459 people with disabilities work in the audits connected to the certification of the Commission for Safety and Environment Fincantieri Group. management systems and it has been have a prompt and timely response. The US companies, Fincantieri Marine further supported by the various actions 89% Group and Fincantieri Marine Systems implemented as part of the Towards Zero Similarly, in the United States, the Fincantieri WOMEN TRAINED North America Inc., as in the past few years, Accidents project. Marine Group organizes monthly meetings have organized specifictraining activities between health & safety and environment aimed at creating greater awareness of and managers and union representatives to

The data refer to the entire Fincantieri Group. sensitivity to diversity issues. Towards Zero Accidents analyse and share the results of accident analyses, performance indicators and the

Policy on Human Rights – Commitment for the respect of human rights and diversity www.fincantieri.com/globalassets/sostenibilita2/responsabilita- For several years the Towards Zero main updates to the safety management risorse-umane/diverita-e-pari-opportunita/fincantieri_policy_on_human_rights2.pdf Accidents project has involved all the system. resources concerned with the Company’s production process within a structured plan The trend in injury data and rates for of initiatives and it has continued along its employees and contractors is constantly path of activities aimed at employees and monitored, both at company and site level, suppliers and at contractors’ employees. and a special monthly report informs Top Management, all employers and all the To consolidate good practices and the health and safety managers. Similarly, with constant monitoring of the production the aim of involving and informing the entire dynamics, coordination meetings on safety company audience with view to prevention, and the environment are organized which, the documented analyses of accidents scheduled at least every two weeks, are and near misses at individual shipyards carried out directly in the production areas are systematically shared in a particularly

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detailed format, which is sent electronically. measures, etc.). This type of risk, together The US subsidiaries have maintained a high also certified Fincantieri Marinette Marine The same data, together with other health, with all the specific risks present in the commitment to safety and the environment for achieving one million consecutive hours safety and environmental (HSE) issues, workplace, is addressed in the safety courses and have received numerous awards for worked without injury or illness. are compared and examined at quarterly for employees regardless of their position. excellence. In 2019, Fincantieri Marinette Fincantieri Ace Marine has developed and meetings involving all site managers on The risk assessment process, in particular Marine won the Safety Excellence Award launched the SLAM (Stop, Look, Assess, health and safety at work issues. In the those related to health and safety at work, is and the Safety Improvement Award, both Manage) programme that involves the same context, the corporate HR manager the subject of specific company guidelines recognized by the Shipbuilders Council of employees and aims to promote a pro-active coordinates work to share best practices, and subsequent operating procedures. America. The National Safety Council has vision of health and safety in the workplace. raise issues of common interest and identify improvement proposals on which to involve The VARD subsidiary, similarly to Towards and direct the Group’s activities. Zero Accidents, continues to implement its MAIN HEALTH AND SAFETY INDICATORS Vision Zero project, the results of which 2018 2019 Particular importance is attached, within confirm a positive trend. Rate of absenteeism 3.6 3.7 the mechanisms governing variable Rate of recordable work-related injuries 8.5 9.7 pay, to objectives related to health and Further initiatives have been implemented Rate of high-consequence work-related injuries n.a.* 0.1 safety at work and environmental issues. with the aim of preventing any type of Rate of fatalities as a result of work-related injury 0 0 The company’s best performance and accident to people and the environment: Number of injuries 366 383 sustainability improvement objectives are - of which work-related 301 339 benchmarks used to monitor and stimulate • using the Safety Observation tool to report - of which high-consequence work-related n.a.* 3 the performance result and determine the any anomalies found; - of which fatalities as a result of work-related 1 0 related economic impact. • reporting health and safety indicators at - of which while travelling 65 44 the monthly management meetings; Number of injuries - women 19 21 Evidence of work-related stress risk has • organization of an internal accident Number of training hours in health and safety 152,791 186,958 been the subject of targeted pathways prevention week; Number of employees trained in health and safety n.a.* 14,362 involving employees and workers’ safety • monthly discussions on health and safety Investments in health and safety (euros) 7,077,620 5,877,467 representatives in identifying possible (required by law in Brazil); *Data reported since 2019 as per 403 – Occupation health and safety GRI Standards 2018. sources of risk. Surveys and tests carried • electing an internal commission for the The data refer to the entire Fincantieri Group. out individually and for homogeneous prevention of accidents; groups allow the Company to acquire results • the internal distribution, based on the Together in Safety people enter the Group’s production sites and elements which are used to define, Group’s guidelines, of a booklet with the for the first time. where necessary, appropriate initiatives ten golden rules for health and safety at The multimedia support Together in Safety The video is available in the 10 languages with a view to reducing risk and promoting work. is available in order to protect all the most used in Fincantieri’s shipyards and personal well-being (training, organizational resources involved in the production process customized to the logistics of each site in and promote correct behaviour, including Italy. It provides information on each of the from an environmental perspective, in all production units and on the work risks that the Italian shipyards. This is a training video, characterize shipbuilding. with a duration of over three hours, aimed at employees of subcontractors (a user In Italy, the Active Safety project continues, catchment of around 30,000 people), and on a regular basis, to provide training and it must be watched in the classroom when information to all workers (direct employees

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and employees of contractors) present at • analysis of the current near miss model Security evolution of risks present in local scenarios individual shipyards. During working hours mapping (i.e. events which potentially can and for training and education activities and directly at the workplace, the individual cause accidents) and its possible evolution; Owing to the more frequent and widespread based on contingency plans. We also have a supervisors explain the subject matter to • identification and implementation of new presence of employees who travel or are Virtual Crisis Management software platform, their staff, who are given a leaflet. In 2019, training and information initiatives aimed on secondment abroad, with the Travel which allows committees to meet virtually to 9 different editions were carried out with a at promoting a culture of prevention, Security programme we have developed manage possible crisis situations even when duration of approximately 30 minutes each, and innovative communication tools to an ongoing mapping of risks in foreign on the move or when the Company is closed which is in addition to the activities required strengthen workers’ awareness of the countries to guarantee the security of (at night or on holidays). by law. risks in the production process and the travelling employees and the sustainability appropriate safety measures. of the locations associated with business With reference to the security problems operations. Therefore, around 16,000 foreign connected to the globalization of the Memorandum of understanding with INAIL travel routes are monitored. business, mention should be made of the Supplier evaluation International Ship and Port Facility Security In April 2019, we signed with the National (ISPS) Code, Chapter XI-2 of the SOLAS Institute for Insurance against Accidents Safety, environmental and human rights Regulation developed by the International at Work (INAIL) a memorandum of issues are an integral part of the supplier Marine Organization (IMO), a comprehensive understanding aimed at developing a evaluation process. Contractors are already set of rules to enhance ship and port facility safety at work culture and at implementing subject to evaluation from a financial, quality, PLAN security in order to mitigate the risk of acts OBJECTIVE activities and projects with the goal of contractual and production perspective and COMPLETED of terrorism and other unlawful acts. On the consistently reducing accidents and they are assessed using a predefined format IN 2019 basis of the types of ships interacting with the occupational diseases. The MoU, which and scorecards focused on health, safety areas pertaining to Fincantieri, the relevant follows on from long-term cooperation, and environment issues. The assessments authority has determined its obligation for determines the scope and implementation by the various shipyards have led to the the Arsenale Triestino San Marco, Muggiano methodologies of activities aimed at calculation of the overall performances of and Palermo shipyards, while considering protecting workers’ health and safety. In the companies and are subject to permanent the Monfalcone and Marghera shipyards particular: monitoring within Supplier Oversight. As required by the Sustainability Plan, as occasional. The necessary professional through the activation of a Crisis figures have already been identified at these • production process analysis, with respect Management system (abroad), 12 shipyards, and the planned activities and to the risks related to the shipbuilding contingency plans have been drawn up and facilities have been implemented. Following industry and in particular those arising updated for the most important foreign on from our commitment to maintain an from interferences between the activities sites and locations where the Company is effective system of corporate governance and of internal and external resources; present. The plans are managed by special risk management, we have decided to launch • monitoring of the health and safety crisis committees (CMTs) which include, in a project to implement the ISPS Code, in management ystem in place for contract addition to employers, travellers and the order to adopt a methodology in line with the work in the shipbuilding industry and its relevant Health and Safety Department above-mentioned international best practices, possible evolution; Managers, the heads of all functions involved to protect our assets as well as its ship • evolution analysis of accidents in the in the travel and personnel management product, also for the Ancona, Castellammare represented sectors, supplemented with process. Each CMT, in accordance with di Stabia, Genoa Sestri Ponente, Riva Trigoso a comparison of the data collected at corporate procedures, met at least twice shipyards and for the Trieste, Rome and European level; a year, to update team members on the Genoa offices.

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WELL-BEING FOR OUR PEOPLE

OHSAS 18001 / ISO 45001 and SA 8000 Fraschini Motori has achieved the first ISO We have implemented a welfare model that pension and health programme, which certifications 45001 certification in accordance with the is able to positively affect the welfare of our are complementary to the measures relevant requirements. people and, at the same time, capture the already defined in terms of supplementary During 2019, we continued implementing most modern dynamics of the labour market pensions and healthcare, the National and consolidating the occupational The US site of Fincantieri Marinette Marine, and the business. Collective Bargaining Agreement (CCNL) health and safety management systems already previously certified in compliance and the company’s supplementary labour in our operating units (65% of sites are with OHSAS 18001, has planned to migrate The welfare tools, defined with the corporate agreement, were also highly appreciated. certified), with the aim of supporting the its health and safety at work management agreement in 2016, are aimed at employees The portal also provides other categories implementation of the policy adopted by the system to the ISO 45001 standard during in general of Fincantieri S.p.A., including of services such as training courses, travel Company. 2020. part-time and fixed term employees, and are and holidays, mortgage repayments, leisure, also recognized for the employees of Italian sport and wellness. In 2019, eight Italian sites completed the The VARD group maintained OHSAS 18001 subsidiaries and/or associates falling under As regards welfare policies, particular migration process to the new ISO 45001 certification for the Romanian Braila and the application of the supplementary labour attention has been paid to public transport standard and we plan to complete the Tulcea shipyards, as well as the Vietnamese agreement. and mobility issues, with an eye on transition of the remainder by 2020. In Vung Tau shipyard. Within the welfare system, the Social Bonus sustainability. The employee can request the parallel, the surveillance activity by the is particularly important because of its total or partial reimbursement of the ticket, accredited certification body to maintain the All VARD shipyards are aligned with SA characteristics. The bonus is paid annually such as the season ticket for the bus or train, existing management systems continues. 8000 standards, which are based on the and exclusively in welfare services and any for themselves and/or for their dependent The Palermo shipyard has achieved the first International Labour Organization (ILO) unused bonus amounts are automatically family members. OHSAS 18001 certification in accordance conventions and the Universal Declaration of allocated to the individual employee’s with the requirements of the reference Human Rights (Vung Tau is also certified). supplementary pension fund. To strengthen Confirming the validity of the welfare model standard while the subsidiary Isotta the connection between the achievement it has adopted, Fincantieri - having previously For more information on the certified shipyards and of production objectives and consolidation won the Welfare Awards 2018 for the best companies, see the website www.fincantieri.com/en/sustainability/certifications of the overall welfare system, employees plan in application of the National Collective who decide to convert variable bonuses Bargaining Agreement for Steelworkers into welfare are paid a further increase of and for welfare policies aimed at blue collar 10% on the value converted. In 2019, 25% employees - won the Welfare Award for the of the overall performance Bonus was Best Welfare Network Plan 2019 due to the converted into welfare services. For an territorial extension of the welfare system. employee to benefit from company welfare, we have a special portal through which Again with a view to generating positive the employee can access a wide range of repercussions in terms of environmental goods and services. The most requested sustainability, during 2019 the promotion services were those intended for the family, campaign for the use of corporate car in particular for the training of children and pooling (namely two or more people sharing assistance to family members, together with a private car for the commute to and from welfare vouchers, which can be spent in work) was implemented and provided for establishments with which the employees incentives and the recognition of bonuses. themselves have often asked the Company In order to respond to the growing need to arrange special prices. The supplementary for work-life balance, we continued to

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test smart working for particular personal coverage plan for eye health. The costs are and employment trends. processes, combining the necessary situations. borne partly by the Company and partly by increases in efficiency and productivity with The Company’s focus on work-life balance, the worker. Additional benefits are available The Committee also meets when there are the improvement of working conditions and which is already included in the National that are not included in the above plans, changes in the company and ownership the environment. Collective Bargaining Agreement for such as the on-site clinic, vacation and structure, significant organizational steelworkers where a worker dealing with holiday pay, the policy on short/long term changes, significant changes in labour With regard to the subjective right to serious family situations can take a period disability, life insurance for accidental death policy, restructuring and/or reorganization continuous training, Fincantieri operates of leave of absence of up to two years, has & dismemberment, the retirement plan and projects and restructuring and development in line with the provisions of the National also been implemented indirectly with the the employee assistance programme. programmes. Collective Bargaining Agreement signed involvement of company clubs, through in 2016, guaranteeing the possibility of initiatives that meet the employees’ needs: The VARD group provides its employees, In fact, any restructuring and/or participating, either directly or at the initiative special arrangements with day care centres, using different methods depending on the reorganization processes provide for specific of the Company, in training courses lasting seaside or mountain resorts during the location, with medical assistance, internal information procedures with the involvement at least 24 hours per person during the three summer, daytime summer camps and after- catering services, food cards, training of trade unions, in order to identify the most years of the National Collective Bargaining school activities. incentives and support for transport to and appropriate tools (e.g. early retirement, Agreement. from home. reduction of working hours, social shock With regard to supplementary health care, absorbers, retraining, etc.) and their different This approach has provided yet more since January 2018 the Company has been a structuring according to the different impetus to the training process, which is member of the Health Fund for steelworkers, Industrial relations contexts. already effectively monitored, helping to called “MètaSalute”, with a supplementary further awareness of the need for companies health care plan for employees and Industrial relations in Fincantieri are The supplementary agreement also and workers to invest in the continuous dependent family members, also covered characterized by a participatory model governs the operation of the Joint National updating of skills and knowledge, identified free of charge. Health services are provided that is developed through the activities of Committee on Safety at Work and the Joint as strategic factors when responding to both directly, through the facilities various commissions defined by the 2016 National Training Committee. Composed of technological, organizational and market contracted by the operator and in the form supplementary labour agreement, which 3 company representatives and 3 workers’ changes. of reimbursement. in some cases, in addition to trade unions, representatives, these joint committees are include workers. responsible for analysing the characteristics In relation to the growing process of The Fincantieri agreement on health and trends of the issues within internal internationalization and with a view to care also confirmed the opportunity for A strategically important body is the evolution, verifying the consistency of encouraging the full involvement of Group pensioners, under the most favourable Advisory Committee, composed of the initiatives implemented, proposing workers, Fincantieri, together with the conditions, to continue to make use of the 12 members, 6 of which are company and evaluating new general or specialized trade unions, is committed to setting up a supplementary health care benefits with a representatives and 6 trade unions, initiatives, and evaluating and approving special working group for the establishment contribution paid for by them. which meets annually for information and intervention plans. of the European Works Council (EWC), consultation between the Parties on issues the purpose of which will be to inform and Fincantieri Marine Group provides benefits such as market scenarios and competitive Each company site has a Bilateral Joint consult the workers of EU-wide companies. to all employees working for at least 30 positioning, economic performance, Technical Body and a Committee on Safety hours a week. Benefits include subscription alliances and strategic partnerships, business and Environment. Their purpose is, by The current supplementary labour agreement to the Group Health Medical Plan, which strategies, technological innovations, safety systematically involving all resources, to will also be fully effective in 2020, since covers various services: a medical coverage at work, training and retraining, relations with increase the motivation and participation the trade union agreement providing for its plan, a dental coverage plan and vision educational institutions and/or universities, of employees in the change and innovation extension was signed in December 2019.

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Employees are guaranteed freedom of Remuneration be provided not only in monetary form, but As set out in the Sustainability Plan, to association throughout the Group. In 2019, also in the form of welfare or non-monetary promote a culture of sustainability in line 52% of employees are registered with trade benefits. with the Group’s Values, sustainability unions. objectives with a weight of no less than € 1 bln 10% up to a maximum of 30% have PERSONNEL COSTS The VARD group has established a model of been included in the short-term variable industrial relations that is strongly oriented remuneration system (MBO). In 2019, 13.3% towards in The remuneration of employees (blue collar of MBO Plan recipients received at least one dialogue with trade unions PLAN order to identify and provide impetus for and white collar) is defined in relation to OBJECTIVE sustainability target. the changes needed to ensure a stable the relevant labour market and with the COMPLETED and profitable future for the Company. provisions of the collective bargaining IN 2019 As regards remuneration between genders, During 2019, especially in the Norwegian agreements and company level contracts and the ratio of women’s (basic and global) shipyards, agreements and protocols were consists of a fixed component and a variable remuneration compared to men is given signed to define phases, rules and timing component. below. for the gradual cessation of VARD activities at the Aukra and Brevik shipyards and to The fixed component remunerates the role manage the personnel concerned through and, specifically, the responsibilities assigned RATIO BETWEEN WOMEN’S BASIC SALARY AND MEN’S RATIO BETWEEN WOMEN’S GLOBAL REMUNERATION redeployments or support in the search for to each employee, taking account of, AVERAGE SALARY - 2019 AND MEN’S AVERAGE REMUNERATION - 2019 new opportunities. Trade union agreements among other things, the level of experience, WHITE BLUE WHITE BLUE SENIOR MIDDLE COLLAR COLLAR SENIOR MIDDLE COLLAR COLLAR have been signed at the VARD shipyards the quality of the contribution that each MANAGERS MANAGERS EMPLOYEES EMPLOYEES MANAGERS MANAGERS EMPLOYEES EMPLOYEES in Braila and Tulcea in Romania to improve employee brings to the attainment of the Fincantieri 1.0 0.9 0.9 0.9 Fincantieri 1.0 1.0 0.9 0.9 productivity (reorganization of work business results, as well as the level of VARD group VARD group programmes, shift changes, breaks), with the excellence with respect to the duties assigned 0.5 1.0 0.7 0.8 0.5 1.0 0.7 0.8 Fincantieri Fincantieri simultaneous introduction, in terms of pay, and is sufficient to remunerate the services Marine Group 1.4 0.9 0.8 0.9 Marine Group 1.3 1.0 0.8 0.8 of a bonus system focused on results. performed in the event of no payment or only Fincantieri Marine Fincantieri Marine partial payment of the variable components, Systems North 0.0 0.8 0.9 0.8 Systems North 0.0 0.7 0.8 0.6 America Inc. America Inc. where envisaged. It is also such as to ensure a suitably competitive position with respect to the level of salary paid by the market for the specific position.

The variable component is linked to predetermined and measurable Group and individual performance objectives and remunerates, according to the different structures, the results achieved in the short and long term. The latter, moreover, focuses people’s attention and commitment on the achievement of strategic objectives and can

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WE LISTEN TO OUR PEOPLE

We believe that dialogue and listening are set up to review the new change initiatives The project was given a essential for creating relationships based on and collect people’s suggestions, with a view 2019 green perspective with the trust and transparency, which is why we have to continuous improvement through a new launch of Fincantieri for developed the following listening initiatives survey that recorded a higher response rate the Green Future, a new initiative that aims over the years. than the previous year (+7%). to raise awareness and bring employees closer to environmental issues, making them protagonists of a path of continuous As part of our development The evidence that emerged, improvement. Fincantieri for the Green 2016 and improvement initiatives, 2018 including the growing Future is a call to action, an invitation and we have launched the awareness of the need an incentive to make a tangible contribution Fincantieri for the Future project in Italy with for change and how it is a living and vital to environmental protection with virtuous the aim of developing and implementing process within the Company, as well as behaviour, small daily actions, simple an organic path of management change a strong and increased pride in working gestures and attention to waste, starting at all levels, which is needed in order at Fincantieri, was shared during 2018 in with greater awareness and sensitivity to to best respond to current and future meetings with employees, who were able environmental sustainability in the Company. competitive challenges. The first step of the to actively participate in the project also With the aim of promoting environmental project saw the active engagement of and through a direct dialogue with management. sustainability not only as an opportunity, listening to workers through an anonymous An external eyewitness attended the but as a real mission, the second edition questionnaire aimed at identifying the meetings and brought practical examples of FincantieriON will be launched in 2020. organizational climate, people’s expectations of the connection between values and The initiative, aimed at all employees, aims and their suggestions. behaviour in the world of work. After this to promote the collection of innovative meeting, various working groups were ideas that may suggest the introduction established aimed at defining the Group of materials, system and organizational The results obtained from this Conduct Agreement, which translates the solutions and, more generally, a process of 2017 first survey were the starting corporate values, defined during the first change that can bring about continuous point for designing, planning stage of the project, into actual behaviours improvement within the Company with a and implementing improvement actions that can be observed and translated into view to sustainability so that the resource in response to the objective evidence that everyday life. exploitation, technological development and emerged, the so-called “change shipyards”. Again with the aim of “putting people at the investment management are increasingly With the aim of promoting the exchange core”, disseminating the culture, corporate compatible with protecting the environment of opinions, confrontation and dialogue, values and all the initiatives launched as part and the creation of long-term value. considered fundamental tools for the growth of the change management project, we set of people and the organization as a whole, up a network of internal facilitators, Group we shared the results that emerged and the employees who, owing to their personality, contents of the “change shipyards” launched aptitude and natural inclination, can facilitate during dedicated meetings held in all the change process, stimulate everyday production units, divisions, departments and participation at all levels, leveraging on Italian subsidiaries, which involved more than formal and informal occasions, with the aim 6,500 resources. Using the same procedure of making everyone aware that they each can as the first step, a monitoring process was and must be an active part in the change.

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FOR THE COMMUNITY

We are committed to dialoguing with and supporting communities In accordance with the Sustainability Plan, a through a number of initiatives with the aim of advancing the principles Fincantieri Group Policy on initiatives for the of a healthy, resilient and sustainable society for everyone Community and Territory has been drawn up in which: PLAN OBJECTIVE • the Group is committed to dialoguing COMPLETED IN 2019 with and supporting local communities as stated in its Code of Conduct and Charter of Sustainability Commitments; We direct our activities in line with our values, • are contained the lines of action on which mission and vision by carefully assessing the community support strategy is based; the context, needs and requirements of the € 2.4 mln • the path of active participation that territories in which we are present. FOR THE COMMUNITY the Group has undertaken towards the We support and involve local communities communities and territories on which it is through initiatives, donations, gifts and present is fully expressed. investments aimed at responding to the needs most felt by communities by becoming In 2019, at Group level we allocated The document is approved by the Board of an active part of the social and economic approximately euro 2.4 million to initiatives in Directors of Fincantieri S.p.A. development of the territory. favour of the community.

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OUR LINES OF ACTION Fostering employment and integration, including through the promotion of educational and training programmes

Our goal is to:

Fostering employment and integration, • facilitate the matching of labour supply and demand; also by promoting educational and training programs • activate a virtuous circle and an ever closer bond with local communities; • create opportunities for growth and enhance the skills of people and businesses.

We are committed to creating a pool of suitably trained personnel to stimulate the Fincantieri Strengthening Group identity and the Raising awareness about climate sense of belonging among employees system, particularly with reference to the supply chain, in order to cope with workloads. changes and environmental impacts and with the community With this in mind we are developing, together with regional and municipal administrations, several initiatives, such as specific pre-employment courses and recruitment days, in which the satellite businesses took part in the search for specialized personnel. These initiatives OUR LINES OF ACTION involved, as a priority, unemployed people or non-workers as a result of businesses that suffered economic crisis in the territory. Ensuring health protection Promoting activities aimed at and promoting research preserving and enhancing artistic, historic and cultural heritage We work continuously to promote the Professional Training System related to the maritime economy by participating in Higher Technical Colleges (ITS) and Higher Technical Education (IFTS).

Supporting scientific research STRADAMICA PESCHIERE MUNICIPALITY OF Supporting the underprivileged and technological innovation Project organized by the UNIVERSITY STUDENT MONFALCONE Prefecture of Gorizia and ACCOMMODATION Coverage of school fees aimed at high school FOUNDATION (Genoa) for some children at the students in the province in A charitable trust that Monfalcone nursery school. order to make young people pursues educational and Contribution to the aware of road safety. research aims. It provides renovation project of a training, research, study building in Monfalcone to be orientation and volunteer used as a nursery school. activities and awards More details on the initiative are scholarships to particularly described on p. 66. deserving students with limited economic resources.

EDUCATIONAL AND TRAINING PROGRAMMES • Career Day for the unemployed/non-workers. • Orientation activities with colleges. • Pre-employment courses to train the unemployed/non-workers on critical professional skills and two-year post-diploma specialization (ITS). • Targeted actions for staff made redundant due to companies in economic crisis.

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Strengthening the Group’s identity and sense of belonging with employees and Promoting cultural activities to protect and enhance artistic, historic and with communities cultural heritage

In our shipyards (in Italy, Norway, Romania and the United States), we organize many events Culture can drive growth in the territory. We want to contribute to the attractiveness of local that are an important opportunity for us to open our doors to the employees and communities territories and increase their development opportunities by recovering and enhancing artistic in the territory and promote awareness of the Company and its values. and historical peculiarities and supporting cultural initiatives.

FAMILY DAY / WORKERS VISIT BIMBI A BORDO (CHILDREN ON BOARD) GIUSEPPE VERDI OPERA CAMPIELLO FOUNDATION MUCA - MONFALCONE Through these initiatives in Events dedicated to all the children of employees from HOUSE FOUNDATION Sponsor of the 57th edition SHIPBUILDING MUSEUM Italy alone around 19,000 Fincantieri and the external companies aged between 4 and Supporting the activities of of the Campiello Literary Collaboration with MuCa people, both employees and 10, allowing them to board and see the ship built by their the Giuseppe Verdi Opera Prize. - Monfalcone Shipbuilding workers in satellite businesses, family members. House Foundation in Trieste Museum - through the were able to spend a few In Italy alone, around 3,600 children aged between 4 and 10, entrusted the tasks of Fincantieri Foundation. hours in the shipyards with accompanied by 1,800 adults, participated in this initiative. conservation, enhancement their families and, where and promotion of opera and possible, visit with the ships. symphonic music.

OPEN SHIPYARDS COMPANY CLUBS LINK - PREMIO LUCHETTA CULTURAL EVENTS Several shipyards open their In 2019, more than 16,000 registered members benefited INCONTRA MARCO LUCHETTA • Partnership in “GEOgraphies, write the Earth, read the doors to school children from the activities of the 9 company clubs at national level, INTERNATIONAL JOURNALISM Earth”, the literary festival held in the Municipality of and university students and of which approximately 8,000 were current and former PRIZE Monfalcone. groups to show and explain Fincantieri employees. Festival of good journalism • Sponsorship in Pordenone Legge. the naval production process. The premises of the company clubs, the staff in charge of consisting of interviews, the administrative management and the economic resources presentations dedicated to BARCOLANA UNIONE FINCANTIERI necessary for their maintenance are predominantly provided new publications and talks Participation and local identity are pivotal elements of the MONFALCONE by Fincantieri. with leading figures in the Barcolana, an international sailing regatta held in Trieste, Supporting the youth football news. which, in 2019, held 400 events over 10 days. team Unione Fincantieri Over 15,000 admissions at Calcio Monfalcone, which thirty events over three days. bears the Company’s name.

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Supporting the vulnerable Fincantieri Foundation Fincantieri Foundation (www.fondazionefincantieri.it) supports the corporate culture in a continuous, organic and authoritative way, and is a link with the social fabric and it Support to people in difficulty and the promotion of volunteer initiatives for disadvantaged establishes a socially responsible, equitable and virtuous communities is an issue that we feel strongly about and we translate this feeling into relationship with local territories. practical help through numerous initiatives. During 2019, the Foundation carried out numerous activities:

RICREARTI ASSOCIATION NOIHANDIAMO ASSOCIATION ANDREA DORIA INSTITUTE Contribution to the organization of the exhibition “From The restoration and display A recovery and job Partnership in the LaMaxGua Support for welfare activities Julius Caesar to Leonardo da Vinci” held by the Municipality of the historical model of the placement project project, which aims to make aimed at the families of of Monfalcone in the MuCa and in the Contemporary Art Vulcania motorboat. for unemployed or a boat safely accessible to soldiers currently in service Gallery. disadvantaged people that people with severe mobility or who have served in the makes gadgets by reusing limitations. Italian Navy and who are in a Digitization of the Marghera Assistance to students, associations and public entities with Fincantieri’s promotional particularly difficult economic shipyard’s photographic regard to historical research on the shipbuilding world and materials otherwise destined situation. archive (around 2,300 digitally on Fincantieri’s activities in the archives of Monfalcone and for disposal. reproduced photos) and Muggiano. In 2019, 1,600 art shopping FOOD BANK implementation activities in bags and 2,000 key rings Agreements with the Food Bank and the companies that the Palermo archive. were created for Fincantieri. provide catering services to collect unconsumed food in canteens and redistribute it to those bodies providing GOFFREDO DE BANFIELD assistance and help to people in need. ASSOCIATION More details on the initiative are described on p. 67. Support for the elderly who are not self-sufficient with Supporting scientific research and technological innovation staff made up mostly of volunteers.

We support scientific research and technological innovation for a sustainable future. With this objective we promote and support multiple activities aimed at spreading a culture of technological innovation and research and the realization of scientific projects with the contribution of scholars and experts.

PARTICIPATION IN EVENTS / CONFERENCES COOPERATION PROTOCOLS • Trieste Next - Festival of Scientific Research. Projects for teaching and • Science Festival in Genoa. research activities, internships • SUPEHR 2019 (SUstainable PolyEnergy generation and and doctorates with: HaRvesting) future technologies for sustainable energy • Universities; generation. • Business Schools; • Colleges.

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WE DIALOGUE WITH COMMUNITIES AND Protecting health and promoting research INSTITUTIONS

Our contribution primarily consists of initiatives to support the medical-scientific sector or Our structure and international presence before Parliament, the Government and to support the sick. We are convinced that it is only through scientific research that we can throughout the world brings with it dialogue national institutions whose actions could improve people’s quality of life and prospects, because health protection is an ethical and with very different realities and requires that have a direct or indirect impact on society, social value of primary importance. we have in-depth knowledge of the territory through symmetrical relations with its and the needs of stakeholders with the aim counterparties. of effectively responding to demands and ITALIAN RED CROSS PESCHIERE UNIVERSITY FRIENDS OF THE HEART define priorities. Our approach is aimed at transparency by Support to the Hospitality STUDENT ACCOMMODATION ASSOCIATION The relationship and dialogue with local representing the interests of the Group, as a Centre of the Italian Red FOUNDATION Creation of a multimedia communities is managed internally at Parent whole, and in full institutional respect for the Cross in Genoa, which Award of scholarships laboratory at the Maggiore Company level through the Central and roles of our counterparties. hosts families and children to particularly deserving Hospital in Trieste used Local Administration Relations function. We have built a process based on mutual under treatment in the students with limited by researchers from the This function represents: trust, presenting the Company’s perspective oncology and haematology economic resources. Cardiovascular Centre, before public decision-makers, supporting departments of the Gaslini the Friuli Venezia Giulia • our direct line with Institutions and Public our arguments, also through the preparation Institute. Regional Cardiovascular Administrations and we use it to channel all of position papers always supported by a Observatory and the the requests from and to local areas; legal/regulatory and scientific foundation. Interuniversity Consortium • the Fincantieri Group and all our associates Healthcare Research & Pharmacoepidemiology.

Raising awareness on climate change issues and environmental impacts

Respect for the environment, for local territories and for each individual with whom we share areas and activities, is an essential prerequisite to ensure the continuity and growth of our Group over time, to the benefit of future generations.

FINCANTIERI FOR THE GREEN FUTURE OUR FUTURE TAKES ROOT Communication campaign aimed at creating greater Participation in the awareness and sensitivity on environmental issues and fundraising for the encouraging all employees to make a tangible contribution to reforestation of the mountain safeguarding the environment. areas in Friuli Venezia Giulia after the Vaia storm. More details on the initiative are described on p. 160.

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• TO REDUCE OUR IMPACT

• TO PROMOTE SUSTAINABILITY

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TO REDUCE OUR IMPACT

We want to play an active role towards a more sustainable economy and We want to reduce our environmental impact Therefore, we look for options that allow us to society. We are committed to monitoring and reducing our direct impacts through responsible resource management reduce the direct impact of our operations and and contributing to limiting global warming with our greener ships, a and sustainable patterns of production and the indirect impact associated with the value responsible supply chain and by engaging in dialogue and collaboration consumption, protecting the biodiversity of the chain that characterizes our business. with agencies and institutions territories where we operate.

OUR COMMITMENTS TOWARDS AN ECO-SUSTAINABLE ECONOMY

TO REDUCE DIRECT IMPACT OBJECTIVE In a world where natural resources are, by a source of risk and an opportunity. For this • Action to raise energy efficiency and reduce • 20% reduction of Scope 2 GHG emissions their very nature, limited, where people are reason, we seek to monitor them constantly by 2020 carbon dioxide (CO2) and other pollutant highly mobile and that is subject to climate and to analyse them with the dual purpose emissions • ISO 50001 – Energy Management System change, companies are called on to implement of, on the one hand, identifying all the risks • Conservation of natural resources, certification appropriate mitigation and adaptation for which it is appropriate to adopt mitigation biodiversity, and reduction of environmental • Increase the portion of electricity from impact renewable sources methods in order to address these phenomena and/or adaptation measures and, on the • Awareness campaign and create value in the long term. other, exploiting opportunities to develop the • Increase employee awareness of environmental impact and promote virtuous The aspects linked to climate change are both business and improve efficiency. behaviour

TO REDUCE INDIRECT IMPACT OBJECTIVE

• Development of ecologically sustainable • Development of technological solutions that products and services with the aim of contributing enable energy savings to be increased for to a circular and low carbon economy ships with the same features (green ships) • Promotion and support of a responsible and • Definition of an eco-design to promote the sustainable supply chain that shares our values development of environmentally sustainable ships and is based on long-lasting relationships founded on integrity, transparency and respect

TO HELP COMBAT CLIMATE CHANGE OBJECTIVE

• Support for research to improve the analysis • Research projects to develop new solutions and management of risks associated with for energy savings or reduction of emissions climate change in collaboration with research institutes / universities on issues associated with climate risks

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OUR MANAGEMENT SYSTEM

We are committed to reducing our direct impact by reducing consumption and waste produced, and prioritizing the use of eco- sustainable resources, such as certified Compliance with international, national and local legislative provisions in force on Continuous improvement of energy from renewable sources. this subject environmental and health and safety performance promoted We want to represent a model of excellence through the development of also in terms of maximum environmental policies, guidelines and the adoption of management systems protection and we see the environmental certified in accordance with management system as the tool for COMPLYING the regulations and reference standards adopted implementing and monitoring the actions WITH LEGISLATIVE PROVISIONS taken to carry out the commitments made. The Company’s Policies relating to the IMPROVING environment, health and safety at work were CONTINUOUSLY updated and integrated in 2019. As far as environmental protection is PRINCIPLES OF THE concerned, the commitments undertaken in the new Environment, Health and Safety ENVIRONMENT, Policy are: HEALTH AND SAFETY Meeting stakeholder expectations PROMOTING POLICY and the formal obligations • assess the risks and environmental AWARENESS undertaken by Fincantieri as a fundamental prerequisite impact of its activities and manage the OF EMPLOYEES for the creation of value and AND SUPPLIERS the promotion of sustainable environmental aspects using the principles MEETING development of precaution and prevention; STAKEHOLDERS' • promote the use of the best available EXPECTATIONS technologies and the use of products with Involvement and promotion of employee a lower environmental impact; and supplier awareness in the process of protecting the environment and health • implement improvement plans aimed at and safety at work containing and reducing its emissions to air, water and soil, the continuous efficiency of the Company’s energy performance including through the use of energy from renewable sources, and the minimization The Environment, Health and Safety Policy is available on the website www.fincantieri.com/globalassets/sostenibilita2/politica_ambiente_salute_e_sicurezza_sul_lavoro_en.pdf and proper management of waste; • safeguard the natural value and biodiversity of the territories affected by the presence of its sites by implementing appropriate environmental measures and protections; • design and develop eco-sustainable products.

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We are committed to implementing and During 2019, in accordance with the Environmental aspects To make the quality of data acquired maintaining our management systems objective of the Sustainability Plan, we more reliable and identify the consequent in particular; all the production sites of committed ourselves to spreading and We are bound by laws and regulations improvement actions, the installation of Fincantieri S.p.A., the US Marinette site, as promoting the culture of environmental to protect the environment and people’s more advanced measurement systems has well as the Braila and Tulcea shipyards in sustainability by launching a communication health which impose limits on atmospheric continued, giving priority to those for the Romania and Vung Tau in Vietnam of the campaign (for a “sustainable” office), within emissions, discharges into water and soil most significant energy consumption and VARD group are certified ISO 14001:2015. the Fincantieri for the Green Future project, and set rules for the treatment of hazardous which are more easily dealt with from a that is focused on promoting virtuous and waste and the reclamation of any polluted performance perspective. The process of Environmental audits are carried out eco-sustainable behaviour. sites. improving the energy efficiency of lighting regularly in all the sites by the specific The objectives of the campaign are to: No significant environmental accidents systems, carried out with the gradual internal structures and all the reports of any occurred in the Group’s production sites in installation of solutions based on LED environmental accidents are collected and • consolidate the culture of sustainability 2019. technology, continued. During 2019, this managed systematically. and the virtuous path that the Group has intervention involved the Castellammare The individual certified sites adopt specific undertaken in terms of environmental di Stabia, Monfalcone, Palermo and Sestri site policies consistent with the guidelines protection, giving practical form to the Energy Ponente shipyards in Italy, the Braila shipyard defined at company level. The latter are objectives published in the Sustainability in Romania, the Marinette shipyard in the binding for all Fincantieri employees and are Plan; The Parent Company produces an energy United States and the subsidiary Isotta shared with all suppliers through frequent • disseminate projects and strategies aimed diagnosis each year (in 2019 with reference Fraschini Motori’s production site in Bari. coordination activities. at reducing environmental impact to all to consumption in 2018), in compliance with stakeholders by first involving employees, the regulatory requirements of Legislative The good results from the Ancona shipyard For more information on the certified shipyards and but also suppliers, in the sustainability path; Decree 102/2014, aimed at identifying regarding the experimental introduction of companies, see the website www.fincantieri.com/en/sustainability/certifications • create greater awareness and sensitivity in inefficiencies and implementing an annual a remote control and automatic shutdown order to encourage all employees to make programme to modernize the plants, system for the mobile welding fume As part of the management systems, a tangible contribution to safeguarding the including through the implementation of extractors has validated the initiative, which the individual production units plan environment with virtuous behaviours in new technologies capable of guaranteeing is expected to be implemented in 2020 specifictraining/information activities on day-to-day life, both at work and at home. ever better performance in terms of energy at the Marghera, Monfalcone and Sestri environmental issues on an annual basis, efficiency. Ponente shipyards. based on identified needs, to increase the The campaign was launched by distributing level of knowledge and raise awareness of a brochure to all employees that illustrates ENERGY CONSUMPTION their employees on individual issues. the virtuous behaviour to be adopted in everyday life, both in the workplace and at 2018 2019 home, and with the symbolic distribution ELECTRICITY ELECTRICITY of a gadget (an aluminium water bottle to PLAN 48% 50% OBJECTIVE encourage people to reduce their plastic TOTAL TOTAL COMPLETED consumption). IN 2019 2,620,706 -1.5% 2,580,329 The subsidiary Insis has also promoted an GJ GJ internal campaign on lighting management FUEL FUEL and a policy on reusing materials. 52% 50%

The data refer to the entire Fincantieri Group.

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As per the objective of the Sustainability In addition to the actions undertaken in The main initiatives implemented concern a significant reduction in drinking water Plan, we are committed to increasing the previous years and during 2019, we have leakage tests and repairs to distribution consumption. share of electricity from renewable sources. included in our Sustainability Plan the networks, implementation of more efficient In 2019, about 50% of the electricity needed objective of obtaining ISO 50001:2018 gasification systems for the technical gas 72% of the water is taken from the municipal/ to satisfy the demand of Italian production certification for theEnergy Management tanks, and installation of timed mixers in state water supplies, 27% from the ground sites and companies was purchased System of Fincantieri S.p.A. by 2021. With changing rooms. water and 1% from the sea, there are no other and sourced from renewable sources this in mind, a gap analysis was carried types of withdrawal. Water withdrawals are (hydroelectric, wind, photovoltaic) certified out in 2019 with the aim of assessing Fincantieri Marine Group has also mainly used in the production and sanitation with Guarantees of Origin (GO). Taking the current energy management system implemented systematic network leakage process. also into account the contribution of the against the requirements of the standard monitoring activities, which have led to subsidiary VARD in relation to its Norwegian and consequently identifying the activities sites, 40% of the electricity consumed by the needed in order to obtain certification. The WATER WITHDRAWAL entire Group comes from renewable sources. activity involved representatives of the main organizational units concerned with the In other countries the purchase and certification process, who will subsequently 2018 GROUND WATER GROUND WATER 2019 production of energy from renewable play an active role in maintaining it. The 1,074,901 841,577 sources was not significant for reporting process of identifying and formalizing m3 m3 purposes. specific working groups (Energy Team) has been initiated and more than 50 people TOTAL TOTAL throughout the Company are expected to be 3,144,856 -1,7% 3,092,190 ELECTRICITY involved. m3 m3

FROM RENEWABLE SOURCES STATE/MUNICIPAL STATE/MUNICIPAL WATER SUPPLIES WATER SUPPLIES Water 2,069,955 2,218,301 m3 m3 Water is a precious natural resource whose SEA availability is increasingly limited owing to 32,312 climate change. Safeguarding it is one of m3 40% the main commitments in our Policy and is 60% also one of the aims of the communication/ awareness project, aimed at promoting The data refer to the entire Fincantieri Group. virtuous and eco-sustainable day-to-day behaviour. We take measures to improve efficiency in the use and quality of water as part of our environmental management systems at the FROM NON-RENEWABLE SOURCES level of individual shipyards. We monitor The data refer to the entire Fincantieri Group. water consumption during the production cycle, planning and implementing system interventions aimed at saving water resources.

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Water discharges and heavy metals automation; Most of the materials used for the hull Waste • steel, iron, plastics and other iron and non- are ferrous and are therefore by their As regards water discharges, in accordance iron alloys for the piping installed on board; nature reusable. Steel is a 100% recyclable The criteria identified for managing with the authorization profiles of the different • welding materials; material and it can be recycled countless processing residues and waste disposal are production sites, sampling and laboratory • paint products. times without losing any of its original included in the guidelines revised in 2019, analysis are conducted regularly to monitor properties. This product is therefore never which provide for the development of a the quality of the discharges and guarantee In line with the contents of the Policy consumed, but continuously transformed production unit procedure to manage the that the limits laid down by the law for regarding the use of chemical products, the through recycling processes that make it a site’s specificities. analytes (heavy metals in particular) which are supply choices, where there are equivalent permanent material, a concept underpinning Waste produced by our activities is subject to monitoring. technical characteristics and/or compatible the circular economy. delivered to authorized sites according to performance, have been oriented towards its classification and, in line with the policies With a view to continuous improvement, products with a lower environmental impact. adopted by the Group, recovery destinations we are revising the current plant layouts at For the most commonly used paint products are favoured and maximized. the various production sites, while new and in shipbuilding, joint initiatives have been technologically more advanced solutions are carried out with the major suppliers on the already being implemented. market to identify low-solvent or water- WASTE BY TYPE based alternatives. 2018 NON HAZARDOUS 2019 NON HAZARDOUS Raw materials RAW MATERIALS 192,752 t 171,801 t MEASUREMENT 2018 2019 Procurement of raw materials has a strategic UNIT 91% 9% role for the Company. 89% 11% Carbon HAZARDOUS HAZARDOUS In recent years we have given more dioxide t 19,252* 24,345 18,921 t 20,766 t significance to the selection of materials in order to reduce their environmental impact Argon m3 822,757* 1,122,444 TOTAL 211,673 t TOTAL 192,567 t as much as possible. As best described in the section on eco- design, even while preparing specific Nitrogen m3 557,401 599,937 contractual techniques, and consequently WASTE BY DISPOSAL METHOD those needed for the procurement process, we work to identify materials for the interiors Ferrous t 136,022 144,426 2018 RECOVERY 2019 RECOVERY that, though possessing the same technical, 160,503 t 152,228 t qualitative and compliance characteristics, are also environmentally compatible. Oxygen m3 6,529,773* 7,056,615 76% 79% The main raw materials present in the 21% production cycle are: 24% DISPOSAL DISPOSAL 51,170 t 40,339 t Paints l 2,345,228* 2,812,032 • iron for the hull; 10% TOTAL 211,673 t TOTAL 192,567 t • copper for the electric wiring and *The data for 2018 have been revised for comparison purposes following the inclusion of data for the VARD group. The data refer to the entire Fincantieri Group, except for the procurement of ferrous materials and nitrogen which concern Fincantieri S.p.A. and Fincantieri Marine Group. The data refer to the entire Fincantieri Group.

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In Italian sites the overall percentage of for home/work journeys by sharing the use kilometres, distributed as follows: Greenhouse gas emissions waste sent for recovery over 2019 was about of personal cars. The system makes it easy 75%. to for employees to get in touch with each CORPORATE MOBILITY - 2019 The VARD group identifies the optimization other, certify the results in terms of energy OVER TOTAL EMISSIONS from Scope 1-2-3 of recovery activities as a priority: in 2019, and environmental savings and access a PLANE 830,000 tCO2e waste sent for recovery amounted to about reward system that encourages participation 57,659,128 km -1% compared 90% of the total waste produced. in the initiative and helps to change to 2018 85% TRAIN In the United States, Fincantieri Marine established habits. In parallel, an option 4% 2,543,409 km Group has specific waste management is being tested in the same digital system In 2019, our total greenhouse gas (GHG) 11% CAR policies and procedures and aims to to certify home/work journeys by bicycle 7,407,443 km emissions from direct emissions from continuously improve its waste management and on foot, and here too access a reward sources owned by or under the control of processes. In 2019, thanks to the activities system. TOTAL 67,609,980 km the Group (Scope 1), indirect emissions from

implemented, the total waste produced had The data refer to the entire Fincantieri Group. electricity consumption (Scope 2) and other fallen by 67% and 56% had been sent to In 2019, the use of the car pooling service indirect emission (Scope 3) amounted to recovery. certified a saving of 327,000 kilometres With regard to the fleet of company cars 834,632 tonnes of carbon dioxide equivalent

travelled, corresponding to 42,683 kg of for personal and business use, the gradual (tCO2e) compared to 839,725 tCO2e in 2018. carbon dioxide. replacement of current vehicles with hybrid All our initiatives are aimed at reducing Corporate mobility vehicles is planned, as is already the case with our emissions and our commitment to the With the same aim, we have completed the service vehicles. fight against climate change is confirmed Through corporate and local initiatives, we installation of electrical charging points at In the United States Fincantieri Marinette by the inclusion in the Sustainability Plan promote a model of sustainable mobility all production sites and their use has been Marine has implemented a car pooling policy. of the objective to reduce indirect (Scope 2) management that concretely affects made available to employees. In the same vein and with the same purpose, emissions by 20% by 2020 compared to the reduction of greenhouse gas (GHG) as an alternative to using cars, areas have been 2017. emissions, leading to a change in established The agreement with the provider of welfare made available to park bikes and, at the same habits with a greener perspective. services allows for the reimbursement of time, the use of company vehicles inside the season tickets issued for use on public shipyards has been limited. transport. SCOPE 1 AND SCOPE 2 GHG EMISSIONS PLAN OBJECTIVE Company policy promotes the use of public COMPLETED transport for work journeys whenever this 2018 DIRECT EMISSIONS 2019 IN 2019 is possible and does not create excessive 99,817 (SCOPE 1) 96,610 tCO e difficulties for travel, thus avoiding recourse 2 tCO2e to car use. We are also investing in new -3.2% As envisaged in the Sustainability Plan, 2019 technologies to reduce employees’ travel TOTAL TOTALE was the year of the launch of the company for work, promoting the use of video and 203,183 -16.6% 169,535 digital car pooling service in Fincantieri teleconferencing. tCO e S.p.A. and in the Group’s Italian subsidiaries. tCO2e 2 This service is designed to provide and In 2019, the Group’s employees made 103,366 INDIRECT EMISSIONS 72,925 encourage an alternative sustainable solution business trips totalling over 67.6 million (SCOPE 2) tCO e tCO2e 2 -29.4%

The data refer to the entire Fincantieri Group.

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Our energy efficiency measures and the service the new outfitting quay. As regards the optimization of material Other emissions of polluting gases increased use of energy from renewable We should also mention the conversion logistics, in Italy the project to centralize sources (40%) have led to a significant of thermal power stations fuelled with delivery planning (Control Tower), launched The conversion of all the heating networks reduction in indirect emissions from low sulphur content (BTZ) and diesel fuel in 2014, has the goal of managing the in the Italian shipyards has led to the electricity consumption. into thermal power stations fuelled with shipyards’ delivery requests in order to elimination of heavy combustibles and the liquefied natural gas (LNG), also carried out reduce transport costs, improve reliability introduction of methane systems, resulting Total Scope 1 and Scope 2 GHG emissions at the Ancona shipyard, which has led to a and timeliness of deliveries and reduce in negligible sulphur oxide (SOx) emissions.

over hours worked amounted to 0.005 significant reduction in carbon dioxide (CO2) environmental impact. In particular, this VARD and Fincantieri Marine Group have

tCO2e with a reduction of 16% compared to emissions. project has enabled polluting emissions to also significantly reduced (-92%) SOx 2018. be reduced by: emissions, which amounted to 0.74 t in 2018 In 2019, we have further expanded the and 0.06 t in 2019. The Company monitors GHG emissions reporting of other (Scope 3) emissions • planning deliveries using the outgoing and with the aim of continuously improving that refer to the procurement chain for raw return formula; The Group’s emissions of nitrogen oxides performance in terms of impact. materials, employee travel, and consumption • increasing vehicle saturation (combing (NOx), associated solely with natural gas The new 50/60 Hz frequency conversion of raw materials which are the cause of multiple delivery requests into a single combustion, in 2018 amounted to 24.5 tNOx systems to supply ships became fully the different breakdown and increase carrier). and in 2019 24.7 tNOx. operational at the Sestri Ponente shipyard, in emissions. For comparison purposes With a view to continuous improvement, the while at the Ancona shipyard an additional between the two years, we have also The project led to the reduction of 1,300 VARD group is focused on researching new frequency conversion system was added to expanded and revised 2018. journeys in 2019 (corresponding to 383,300 approaches to contain and minimize the

km) and a reduction of 256 t of CO2, equal impact of emissions resulting from industrial

to the average CO2 absorbed in one year by activities. The group’s commitment is also around 43 hectares of forest. demonstrated by its participation, since 2008, in the Confederation of Norwegian

SCOPE 3 GHG EMISSIONS

2018 2019 RAW MATERIAL RAW MATERIAL CONSUMPTION CONSUMPTION 93% 95% EMPLOYEE MOBILITY EMPLOYEE MOBILITY 1% 1%

WASTE DISPOSAL WASTE DISPOSAL 4% 3%

RAW MATERIAL RAW MATERIAL PROCUREMENT CHAIN PROCUREMENT CHAIN 2% 1%

TOTAL 636,542 tCO2e TOTAL 665,098 tCO2e

The 2018 data have been revised for comparison purposes following improvement of the identification and measurement of raw material consumption by the VARD group and the procurement of materials by Fincantieri Marine Group. The data refer to the entire Fincantieri Group, except for the procurement of raw materials which concerns Fincantieri S.p.A. and Fincantieri Marine Group.

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WE INVEST FOR THE ENVIRONMENT WE PROTECT BIODIVERSITY

Enterprises’ NOx-Fund, whose primary ENVIRONMENTAL We promote the efficient use of natural objective is to reduce emissions of NOx. INVESTMENTS resources and the protection of biodiversity, € 10.5 mln identifying potential impacts and mitigation Fincantieri’s production sites are individually actions, since safeguarding the natural value subject to environmental permits that of the areas surrounding the shipyards, prescribe specific limits on the maximum To conserve resources in 2019, we have where the Company’s production is located, consumption and total emissions of volatile invested 10.5 million euros in environmental is of primary importance for Fincantieri. organic compounds (VOCs) into the protection, around 33% more than in 2018. To protect these places, specific and special atmosphere. Compliance with these limits precautions are put in place in accordance is pursued, even when production volumes Fincantieri S.p.A. has for years been with local legislation and activities that could are increasing, by planning a gradual committed to implementing measures aimed directly or indirectly concern the protected replacement of the products used with at continuously improving the impact on area are carefully monitored. alternatives with a lower solvent content all environmental compartments. The main The production sites in Muggiano (surface and by adopting appropriate system ones involved the systems for collecting area of 147,000 m2), Riva Trigoso (surface measures to reduce emissions. These include and treating rainwater, noise containment area 173,000 m2) and Sestri Ponente the installation of new sandblasting and measures related to production and systems (surface area 237,500 m2) are inside an painting facilities and, most recently, the for extracting and treating welding fumes and International Marine Protected Area - Marine one that has been operational since 2017 at new system measures for sandblasting and Mammal Sanctuary, which was established the Monfalcone shipyard that is equipped painting. with the intent to safeguard various kinds of with a post-combustion system and allows These latter work primarily involved the marine life. the elimination of VOCs emitted during Monfalcone shipyard, in line with the processing. improvement programme set up with The production site at Marghera (surface VOC emissions relating to Fincantieri the issue of the Integrated Environmental area 370,000 m2), which is on the Venetian S.p.A.’s production units, in proportion to Authorization. lagoon, is also considered part of the the production volume, have improved On the other hand, at the Muggiano, Riva UNESCO site - Venice and its Lagoon. significantly since 2017. Trigoso and Palermo shipyards, work was In the United States Fincantieri Marinette carried out on the extraction and treatment Marine is positioned next to the Menomonee, OTHER EMISSIONS OF POLLUTING GASES systems for welding fumes. in Wisconsin (for a surface area of 21,315 m2). The river in question is an area to be MEASUREMENT UNIT 2018 2019 In the field of runoffwater management, protected, especially due to the quality works were carried out to upgrade the of the waters, the marshland and the SOx t 0.74 0.06 rainwater collection systems in the quayside ecosystem of aquatic flora and fauna. VARD Promar, in Brazil, occupies a surface area in Sestri Ponente and to optimize the first As regards the VARD group, the Tulcea area of about 800,000 m2 and part of it rainwater treatment plants in the Marghera shipyard, in Romania (for a surface area (250,000 m2) is adjacent to the mangrove NOx t 24.5 24.7 and Palermo shipyards are particularly of about 750,000 m2), is adjacent to forest, considered by WWF to be a biome, important. Finally, the Arsenale Triestino San the Danube Delta, an area protected by that is, one of the fourteen major types of Marco has completed construction of the UNESCO. The ISO 14001 certification, habitat into which the Earth is divided. Also VOC t 505 595 runoff water collection system and has agreed obtained in 2012, certifies the presence of in this case, specific and special precautions 10% with the operator to feed it into a special the protections required to safeguard the are put in place in accordance with local The data refer to the entire Fincantieri Group, except for VOCs which concern Fincantieri S.p.A. and Fincantieri Marine Group. network for subsequent treatment. site. legislation.

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TO PROMOTE SUSTAINABILITY

As part of our activities, we act to raise awareness about issues related to Energy saving and reduction of emissions Lower values of the index correspond to environmental risks and to encourage eco-sustainable behaviour greater energy efficiency. Regulations The International Convention for the impose a decrease in values over time. In Prevention of Pollution from Ships several cases, the ships built by Fincantieri (MARPOL) aims to prevent and minimize anticipate the EEDI values, which are pollution from ships, both accidental expected to be applied from 2025 onwards. pollution and pollution resulting from routine The EEDI scores obtained by Fincantieri’s operations. The MARPOL Annex VI sets cruise ships delivered in the last 5 years with The Group’s activities also have an indirect out the rules for calculating and verifying respect to the provisions of the regulations impact on the environment, in particular compliance with the limits set for the energy on the index values, represented as time through our products, the supply chain and efficiency of ships (Energy Efficiency Design phase curves, are given below. our partnerships. Index - EEDI).

EEDI FOR CRUISE SHIPS OUR EVER GREENER SHIPS Cruise ships

The cruise ship industry is highly The world of navigation, whether cruise, committed to adopting policies to minimize 19 merchant or naval, is going through a environmental impact, this is a joint process of evolution under the principles effort implemented by cruise lines and of sustainability and the circular economy. shipbuilders. 17 For Fincantieri, this scenario is already a The regulatory framework, with regulations

consolidated reality and with our projects at a global and local level, requires a rapid 15 we are literally redesigning the future reduction of emissions into the air and water. Ship 1 /GRT xnm) scenario of navigation, at a strategic The reduction of environmental impact has 2 PHASE 0 13 and technological level. The ships under become one of the most important drivers Ship 2 PHASE 1 construction will be increasingly resemble for design and innovation in the field of Ship 3 a large, hyper-connected, energy self- cruise ships. 11 Ship 4 PHASE 2

sufficient, lighter and green or hybrid Our ships represent a technological Reference line (gCO Ship 5 Ship 6 propellant floating city, capable of recycling benchmark at the European and global Ship 7 PHASE 3 9 Ship 8 up to 90% of the waste produced. level. They feature the most advanced Ship 9 With the technologies already applied today technologies, with technical solutions that we are able to cut 1,200 tons of fuel per year provide energy savings, emission reduction, 7 on a ship of about 130 thousand GRT (gross high performance and high quality. registered tonnage). In particular, we follow all the international 5 15 35 55 75 95 115 135 155 175 best practices to minimize a ship’s Gross Tonnage (x1000) environmental impact throughout its entire life cycle. - Phase 0-1 Jan. 13/31 Dec. 14 - Phase 1-1 Jan. 15/31 Dec. 19 - Phase 2-1 Jan. 20/31 Dec. 24 - Phase 3-1 Jan. 25/going forward

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In particular, we have validated and applied procedure, that are also aimed at energy SOLUTIONS TO REDUCE HARMFUL AIR EMISSIONS EMISSION IMPACT BY TYPE OF POWER SUPPLY on our ships a series of initiatives, included saving and reducing air pollution. EMISSIONS in the company’s “Eco-sustainable Design” PURIFICATION OF EXHAUST FUMES LNG/DUAL FUEL PROPULSION (DIESEL CYCLE)

NOX reduction: Catalytic muffler, SOME ENERGY SAVING SOLUTIONS in which the nitrogen oxides are made to react with urea in a high- NO : REDUCED CONSUMPTION PER SHIP X temperature process, obtaining pure NOX and SOX reduction BY CA 130,000 GRT (t FUEL/YEAR) nitrogen (N ) and water vapour solutions for future new 2 builds

SOX reduction: Scrubbers, i.e. fume scrubbers SOX

Fincantieri already built a special LNG- Another solution for reducing emissions powered ferry for Canada in the past and in is to build electric or hybrid vessels. The 2019 it received orders for prototype “dual- Norwegian subsidiary VARD has contracts fuel” cruise ships primarily powered by LNG: and offers for various small/medium-sized Reduction of harmful air emissions the most vulnerable ecosystems, where the vessels equipped with electric batteries to most stringent values for reducing harmful • Tui Cruises (joint venture between TUI cover all or part of the energy requirements. MARPOL also requires a progressive reduction emissions are applied, and which coincide with AG and Royal Caribbean Cruises) in emissions of harmful gases, in particular the main operating areas of the cruise industry. finalized the order oftwo new-generation • VARD is delivering two ferries to the sulphur oxides (SOx) and nitrogen oxides European legislation (Directive 2012/33/EU) cruise ships with a gross tonnage of Norwegian operator Torghatten Nord and (NOx). The constraints are growing over time, sets further emission limits, particularly in approximately 161,000 and primarily a dual-powered electric hybrid cruise ship and they are particularly stringent in Emission port areas, due to their proximity to intensely powered by LNG. Energy efficiency is one with icebreaker features, equipped with Control Areas (ECA), which broadly identify inhabited areas. of the features of the project, with the dual high capacity batteries and LNG storage on objective of containing consumption under board; % SO EMISSIONS % NO EMISSIONS X x operation and minimizing environmental • VARD will deliver the firstelectric self-

NO I II III NO impact; driving container ship in 2020. It will 4.5 X X g/kWh 45.n-0.2 44.n-0.23 9.n-0.2 g/kWh WORLD • Princess Cruises, the Carnival group brand, gradually reduce human intervention over 3.5 n= engine's rated speed 17.0 Outside ECA-NO finalized the order for the construction the two years from delivery until reaching - 67% - 78% - 71% - 97% - 86% X 14.4 of two cruise ships with a gross tonnage complete autonomy in 2022. The 80-metre 1.5 9.8 ECA 7.7 of 175,000. The vessels will house by 15-metre vessel will operate in Norway, 1.0 Inside ECA-NOX 0.5 3.4 approximately 4,300 passengers and will guaranteeing a transport capacity of 120 0.1 EU, in Ports 2.0

2000 2011 2016 be based on a new-generation project, TEU, replacing 40,000 TIR journeys a year. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Ship construction date becoming the first of the Princess Cruises The vessel will reduce nitrogen oxide (NOx)

fleet to be powered mainly by LNG. and carbon dioxide (CO2) emissions and The currently most common configuration Another method which is gradually being improve road safety in a highly populated for emissions reduction is based on latest established is the substitution of traditional urban area. generation diesel engines combined with the fuels with liquefied natural gas (LNG) in installation of fume purification systems in the view of the indisputable benefits in terms of exhaust systems. emission impact.

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However, there are critical issues related The future lies in the application of fuel cells, to the new technologies. In general, the electrochemical conversion devices that new technological solutions and systems generate electricity and heat by combining introduced for the protection of the a fuel (typically hydrogen, methanol or environment occupy volumes previously methane) and a comburent (oxygen), in intended for the payload. In the case of the absence of combustion. In this way, no LNG, accommodating the tanks on board polluting substances are actually produced. (in addition to the liquid fuel tanks) and After the initial development phase, linked installing the related operating and safety to space exploration and the naval field systems entails a significant reduction of the (submarines), terrestrial applications for the In collaboration with the Consiglio Nazionale The boat, called Zeus, will be powered by useful space on board. The development of generation of electricity and propulsion (for delle Ricerche (CNR, National Research electric propulsion engines, which will be a logistics system capable of ensuring the example prototype trains fuelled by fuel Council) and the Universities of Genoa, powered by a fuel cell system of about 120 availability of LNG (including intermediate cells) are spreading. Studies and research Naples and Palermo, with the contribution kW and a battery system capable of ensuring storage and bunkering systems) in all major are being carried out on their application for of the Italian Ministry of Economic around 6 hours’ navigation autonomy at cruise destinations is still at an embryonic generating energy for cruise ships. Development, we have developed a project zero emissions, thanks to about 50 kg stage, consequently limiting the area of to realize a laboratory ship approximately of hydrogen contained in metal hydride operation on new ships. 25 metres long to study power generation cylinders. Zeus will be the first marine vessel technologies with low environmental impact. powered exclusively by fuel cells.

USE OF BATTERY MODULES Treatment and storage of solid and liquid waste The increasingly stringent regulations in force To cover the Supplementation of the electric entire load on power supplied by the batteries with in areas with a strong cruise vocation and board a traditional generation system (as in Waste treatment is regulated by MARPOL: vulnerable ecosystems, such as Alaska and the hybrid cars). The energy supplied by the batteries Baltic Sea, determine the characteristics of the is used: • Annex I Prevention of pollution by oil and oily latest generation cruise ships. water. Only bacteriologically and chemically pure • exclusively in particular situations • Annex IV Prevention of pollution by sewage. , with an extremely low hydrocarbon (for example in port), or water • Annex V Prevention of pollution by content, can be discharged into the sea • supplemented by the on-board diesel engines at times of shipboard waste. (under certain conditions) in these areas. Any maximum power demand (e.g. other residue must be stored on board and maximum speed navigation). unloaded in port for further treatment.

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The processes for treating, sorting and Naval vessels submarines, studies are underway for the disposing of the waste produced on board are use of fuel cells on naval vessels. shown in the diagram below. The naval vessel construction business is strongly influenced by the continual demand to increase efficiency standards in the Energy saving and reduction of emissions WASTE TREATMENT international defense segment and is one SOLID WASTE LIQUID WASTE of the most demanding challenges. We are This issue is dealt with by introducing a reference player for many Navies and we energy savings criteria developed mainly - collection, dehumidification, kitchen waste - physical and biological treatment (in line treatment; with the best land standards) of all on-board face tough challenges with our consolidated in ship architecture, namely by selecting - sorting and recycling of hotel waste; wastewater (sewage, grey water, kitchen experience in the design sector; since 1990, endothermic engines (both propulsion effluents and laundries); - compaction and/or incineration (where Fincantieri has delivered over 100 naval engines and power generation engines) with - storage of purified water; permitted) of solid waste; vessels to ten different nations. appropriate technological solutions and by - pelletizing, storage of waste for - thickening and drying of residual sludge for subsequent unloading in port. subsequent unloading in port. Its consolidated experience has enabled it selecting high energy efficiency materials or to combine the development of platforms materials with high efficiency heat transfer. with high operational performance with the development of solutions aimed at AREAS OF EMISSIONS REDUCTION OF NAVAL Ballast water treatment Although the disposal of materials at the containing environmental impacts. INTERVENTION TO FIGHTING VESSELS WITH A REDUCE EMISSIONS DISPLACEMENT FROM 6,000 TONS (*) end of the ship’s operational life is not part

The ballast water treatment regulations, of the ship’s construction activities because Thanks to the adoption of an eco-sustainable CO2 [t/YEAR] NOX [t/YEAR]

International Convention for the Control and it is managed directly by the shipowners, design process and the increased sensitivity Optimization of hull lines Management of Ships’ Ballast Water and cruise ships built by Fincantieri have voluntary towards ecological issues shown by Navies, Introduction of LED lights Sediments (BWM 2004), require ships to certifications such as Green Passport, Clean we have been able to operate in many sterilize ballast water before discharging it, Ship or Eco (the name of the certification fields, adopting solutions aimed at reducing Painting of ~ 2,000 ~ 40 superstructures with low to avoid contamination with species from is different depending on the classification environmental impact. We have collaborated sun absorption paints different ecosystems. society). These certifications include our with the Italian Navy for many years, Optimized insulation commitment to provide, on delivery of focusing on environmental impact issues of internal areas

the ship, the list of hazardous materials in right from the preliminary project. The new * Use profile: 50,000 nautical miles/year. BALLAST WATER TREATMENT accordance with the Hong Kong Convention vessels, some of which are already in service, for the safe and environmentally friendly feature design choices aimed at containing On the other hand, the special characteristics

Latest generation of ballast water treatment recycling of ships, adopted by IMO’s MEPC environmental impact in terms of emissions of naval vessels and the consequent system systems, based on the pre-filtering of 197 (62). The classification society will to air, fuel consumption, wastewater solutions optimized to deliver mission plankton and subsequent sterilization with carry out periodic audits throughout the treatment, use of special treatments to performance currently do not enable the ultraviolet rays. life of the ship to ensure compliance with preserve the hull and the possibility, for introduction of energy recovery systems. environmental standards and maintenance of certain vessels to be delivered shortly, to its environmental certification. contain an area of sea that is polluted, with the possibility of collecting and storing the pollutants on board. As regards power generation, building on more than ten years of experience of

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Treatment and storage of liquid and solid kept under control, guaranteeing a maximum to monitor the product’s environmental impact during the entire life cycle of the waste concentration of 15 ppm. sustainability trends over time. product: from technical design development to the choice of systems and materials, The technological solutions adopted for the As regards end of life, all naval vessels are The foundation of the entire process of from procurement to construction, from its treatment of solid waste are entrusted to the also delivered with a Green Passport. This eco-sustainable design lies in the ability management in operation to disposal at its converters. The use of these machines enables document is the inventory of materials to be to contain and improve the environmental end of life. waste to be dried and sterilized. The reduction monitored during the ship’s life cycle and it in volume and weight and subsequent is used to ensure that it is scrapped safely automatic vacuum storage allow on-board and in an environmentally friendly way. retention to be increased. The modern FINCANTIERI converters adopted enable a volume reduction of 70% and weight reduction of 30%. Eco-sustainable design

For liquid waste, we have adopted SPECIFICATIONS DESIGN PURCHASING CONSTRUCTION TESTING OPERATION technological solutions that are in line with DELIVERY the international regulations already used for merchant vessels: PLAN • IMO MEPC 227 (62) for grey water and OBJECTIVE CUSTOMER CUSTOMER sewage treatment. COMPLETED IN 2019 • IMO MEPC 107 (49) for bilge water treatment.

Grey water and sewage are collected into Identifying solutions that reduce energy on the environment, have the additional appropriate physical and chemical treatment consumption, atmospheric emissions, waste purpose of making work easier and making units which macerate the suspended production and improve the environmental the hospitality provided on board more solids and reduce the contents of the Total In line with the Environmental Policy impact of the production process and comfortable. Suspended Solids (TSS), Biochemical Oxygen guidelines and the objectives of the materials used, taking as reference similar Finally, it should be stressed that sustainability Demand (BOD) and Chemical Oxygen Sustainability Plan, the design process has products as well as “best in class”, therefore assessments are also taken into account with Demand (COD) using aerobic processes. The been revised with reference to the basic benefits the entire context (population and regard to decommissioning activities, helping process also envisages disinfection using UV principles and logic of eco-sustainable surrounding area) in which the individual to guide choices on materials, components systems. design and the related requirements have production site is located. and systems with characteristics that limit The systems adopted are able to achieve BOD been incorporated into a specific procedure. The design choices made in relation to the environmental impact of the dismantling values of 25 mg/l and COD values of 125 mg/l. managing the ship during its operation and and disposal operations at the end of Bilge water is treated using units that separate As part of this, and with reference to the its performance, in addition to seeking to the product’s life, which remain the sole the pollutants caused by accidental spills. different environmental aspects, we have contain consumption and minimize the impact responsibility of the shipowner. The system is based on physical processes defined criteria to enhance internally the for viscosity reduction and then absorption technological solutions adopted for each using coalescent filters. Separation enables the ship built. This approach makes it possible level of pollutants in the treated water to be to compare the different constructions and

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WE RAISE OUR PARTNERS’ AWARENESS OF TOGETHER FOR A MORE SUSTAINABLE ECO-SUSTAINABILITY ENVIRONMENT

We ask our suppliers to share our approach sharing principles and commitments on Respect for the environment, for local territories the Ministry’s technical experts. to sustainability in order to achieve one of environmental protection, with the common and for the people with whom we share areas As part of our Research and Innovation our most important corporate objectives: goal of achieving a sustainable supply chain and activities are essential elements in order projects, we have launched several having a responsible and sustainable supply while minimizing environmental impact. For to ensure the continuity and growth of our initiatives within the framework of European chain. this reason we have adopted the Suppliers’ Group over time and to the benefit of future collaborations to study strategies to reduce Code of Ethics that includes among its generations. the environmental impact of our products, We want to represent a model of excellence pillars the protection of and respect for Therefore, we are directly involved in the in particular, with reference to the initiatives also in terms of environmental protection the environment. Suppliers are asked development of international regulations and underway to contribute to the SDG 14 and this is why we have a binding to share the principles contained in the we conduct our business in close collaboration objective - life below water, studies are being environmental policy for all our employees document with their employees, subsidiaries, with the flag agency, classification societies, carried out to reduce underwater noise caused and for all external companies operating in collaborators and subcontractors, with a the sector’s industrial associations, shipping by our products, even though there are no our production sites. We are committed to view to encouraging virtuous behaviour companies and the main international research strict regulations on this issue. the implementation and maintenance of an throughout the supply chain. bodies. An agreement was signed between Environmental Management System at our Fincantieri, Eni, Cassa Depositi e Prestiti, and sites and obtaining ISO 14001 certification For more information on the supply chain, please refer to the Terna with the aim of developing energy chapter “For a sustainable supply chain”. for most of them. We expect all our suppliers systems with reduced environmental impact. PLAN to align themselves with this approach, OBJECTIVE Experimentation of a system that uses wave COMPLETED motion to produce electricity is part of this IN 2019 approach.

We also believe in the value of transparency in reporting and we are guiding change in this Research plays a particularly important role in direction. As proof of this, in 2016 we joined the fight against climate change. Therefore, the the CDP Climate Change Programme, a Sustainability Plan includes a specific objective prestigious British organization whose goal is that provides for the activation of partnerships to improve the management of environmental with universities/research institutes in risks by leveraging information transparency. order to develop new solutions for energy The programme asks the world’s largest efficiency or reduction of greenhouse gas companies from all sectors to participate emissions. In particular, a project was launched in an annual survey of their approach to in 2019 to study proposals for regulations managing their environmental risks and of the allowing the use of fuel cells on board ships, results they achieved. The extensive database with particular focus on passenger ships. resulting from this survey is made available to Fincantieri also presented a project proposal stakeholders. called GreenCruise to the Italian Ministry for In 2019, the Fincantieri Group obtained the Economic Development to study and develop B rating, on a scale ranging from the minimum prototypes of power generation solutions D to the maximum A, which testifies to the using alternative fuels (e.g. LNG and fuel cells). effectiveness of the actions it has taken in the This second project is awaiting evaluation by fight against climate change.

For more information on our collaborations, please refer to the chapter “For innovation”.

182 183 ANNEXES

• METHODOLOGICAL NOTE

• DESCRIPTION OF MATERIAL TOPICS

• GLOBAL COMPACT RECONCILIATION TABLE

• GRI CONTENT INDEX

• INDEPENDENT AUDITORS’ REPORT ON THE CONSOLIDATED NON-FINANCIAL STATEMENT

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METHODOLOGICAL NOTE

The third Sustainability Report of the For further detail on the information required Fincantieri Group, approved by the Board of by the Standards and the indicators reported, Directors on 1 April 2020, is a communication please refer to the table shown in the annex to tool that describes, in a transparent and this document. structured manner, the economic, social and environmental results achieved, and Sustainability reporting is preceded annually In 2019, the Fincantieri Group decided to join The reporting process is based on the current demonstrates the Group’s commitment to by the analysis and identification ofmaterial the Global Compact, the initiative to promote information systems used by the main sustainable development, with the aim of topics (materiality matrix page 26), i.e. and disseminate sustainable development company units are have been integrated using creating value not only for the Company, but those which reflect the significant impacts practices launched and sponsored by the specific data collection sheets and supported also for its stakeholders. for the organization from an economic, United Nations, and has therefore committed by operating manuals in which the methods social and environmental viewpoint, and itself to integrating the ten principles relating for collecting the indicators have been defined. The Report represents the Consolidated which substantially influence stakeholders’ to human rights, labour rights, environmental The data were processed and validated also Non-Financial Statement of the Fincantieri assessments and decisions, and by the protection and combating corruption into its by the various function managers. Group prepared in accordance with Articles mapping and risk management methods. policies, strategies and activities. 3 and 4 of Legislative Decree No. 254/16, As required by the Decree, for each theme The Sustainability Report represents the To enable data and information comparability with reference to the 2019 financial year evidence is given on its materiality in relation Communication on Progress (COP) related to over time and assess the Group’s performance, (from 1 January to 31 December 2019). This to Group’s activities, the risks connected with the activity carried out in 2019. In particular, comparison with the previous year is given document reports, to the extent necessary it, the Company’s policies and commitments a table has been prepared (see appendix), where possible. Furthermore, in order to to ensure an understanding of the activities and the results obtained and monitored using which summarises the actions taken and the correctly show performance and guarantee of the company, its progress, its results and ad hoc indicators capable of representing the results achieved in relation to each of the the reliability of the data, the use of estimates its impact, in relation to the areas considered results in terms of management. above principles and references the pages of was limited to the minimum possible and, if important and required by Article 3 of the the Sustainability Report where these topics present, these are based on the best methods Decree. With reference to the requirements of Article are discussed in greater detail. available and appropriately described. 3, paragraph 2 of Legislative Decree 254/16, The document seeks to present the positive As required by Article 5 of the Decree this some information not considered relevant for The process of collecting data and information and negative aspects in an equal light and, document is a distinct report with the an understanding of the company, its progress, and drafting the Report is coordinated where considered appropriate, a comment on appropriate wording to identify it as the results and impact has been excluded. and managed by the Sustainability unit, the results has been provided. The economic Consolidated Non-Financial Disclosure (NFD) in cooperation with the multifunctional values are expressed in euros (thousands and/ required by the regulation. Fincantieri defined itsSustainability Plan, Working Group. The Report’s contents have or millions of euros). Sometimes the data are approved by the Board of Directors, which is been defined according to the principles rounded to one decimal point or to a round The contents of the Report have been aligned to the 2018-2022 Business Plan and of accuracy, balance, clarity, comparability, number, and therefore their sum may not prepared in accordance with the Global highlights and strengthens the intention to reliability and timeliness. coincide exactly with the total value. Reporting Initiative’s (GRI) Sustainability be a responsible Group. The Plan addresses Reporting Standards of 2016, with the some global challenges (such as the UN’s The Sustainability Report has been prepared in The reporting boundary of the data presented exception of the GRI 303 – Water and Sustainability Development Goals) and details accordance with a specific internal procedure in the Report relates to the companies Effluents and GRI 403 – Occupational Health the commitments undertaken by the Group that defines the roles, responsibilities and fully consolidated (using the line-by-line and Safety indicators which implement the and breaks them down into qualitative and operating methods that Fincantieri S.p.A.’s method) in the consolidation area used GRI 2018 Standard. The Report has been quantitative targets that can be measured and subsidiaries’ staff must follow in order for the consolidated financial statements. prepared in accordance with GRI Standards: over time and subjects them to constant to guarantee the proper management of all Any limitations to the reporting boundary Core option. monitoring. the data required to prepare the document. specified above or clarifications concerning

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MATERIAL ASPECTS the calculation method are indicated in a better estimate was produced to represent the relevant sections of the document. In the multiplier effects that Fincantieri is able to MATERIAL ASPECTS FOR FINCANTIERI BOUNDARY OF ASPECT GRI STANDARD TOPICS particular, with regard to the indicator of produce within the national economic system, MACRO AREA MATERIAL TOPIC INTERNAL EXTERNAL

the direct economic value generated and based on the specific production and business Organizational profile; Ethics and integrity; Governance; distributed (201-1) in 2019, the method of model developed and pursued in recent years Supply chain; Governance and Stakeholder engagement; Group Customers; calculating the amounts allocated to the and the structure of the supply chain, with the business integrity Indirect economic impacts, Community Anti-corruption; Anti- community was revised in order to bring it relative levels of integration upstream of the competitive behaviour closer to the London Benchmarking Group production cycle for naval vessels. Supply chain; Governance Ethics and integrity; Customer Cyber security Group Customers; (LBG) model. It should be noted that with privacy Community regard to the raw materials indicator (301-1) The document was also the subject of a Supply chain; the 2018 data have been revised following the limited assurance engagement according to Economic and financial Economic performance Group Customers; sustainability inclusion of the VARD group data excluding the criteria indicated in the revised ISAE 3000 Community nitrogen and iron, the latter was provided only standard involving the independent auditors Economic Procurement practices; for Fincantieri S.p.A. and Fincantieri Marine Procurement activities Environmental and social Group Supply chain PwC S.p.A. who, at the end of their work, resp. assessment of suppliers Group for both 2018 and 2019. Fincantieri issued the report required under Legislative Market presence; Employment; Protection of Marine Group’s 2018 data for the procurement Decree 254/16 and Consob Regulation 20267 Labour/management relations; employment and Group Community Freedom of association and industrial relationships of materials has been revised for comparative of 2019 concerning the compliance of the collective bargaining purposes and as a result of improved information supplied in the Sustainability Training and education Training and education Group collection systems. Fincantieri Marine Systems Report - Consolidated Non-Financial Human Company welfare Employment Group North America provided data for the first Statement prepared by Fincantieri under resources resp. Diversity and equal year on employee journeys by air and by car. Legislative Decree 254/16 and in accordance Diversity and equal opportunity Group opportunity As a result, indirect Scope 3 greenhouse gas with the reporting standard adopted. Health and safety in the Occupational health and safety Group (GHG) emissions (305-3) for both years were workplace also integrated with emissions from ferrous The Sustainability Report is required to be Local communities and Local communities; Public relations with the local Group Community materials and those for 2018 were revised published annually. The document is also policy area following the update of the data on raw available on the website (www.fincantieri. Environmental and social Supply chain, Human rights Group materials and material procurement data. com), in the Sustainability section. Social resp. assessment of suppliers Community Fincantieri Marine Group’s 2018 data on Product quality and Customer health and minority groups included in the indicator For any further information it is possible to compliance with safety; Customer privacy; Group Customers technical regulations Socioeconomic compliance (405-1) have been reclassified for comparison contact the Sustainability unit at the email and standards purposes to adapt them to the definition that address [email protected] Stakeholder engagement; Innovation, research Customers; is common to the whole Group. Customer health and safety; Group Product and development Supply chain resp. Emissions With regard to the analysis and description of Customer satisfaction Stakeholder engagement Group Customers Community, the main indirect economic impacts associated Climate change Emissions Group Environment with outsourcing of the production chain Materials, Energy; Water Environmental and effluents; Biodiversity, Community, (203-2), Fincantieri has used an econometric Group management Emissions, Effluents and waste; Environment model developed by Censis (a Foundation Environmental compliance recognized with Decree of the President of the Environmental resp. Environmental impact Republic No. 712/1973). Based on this model, of products and Emissions Group Environment services

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DESCRIPTION OF MATERIAL TOPICS

Governance and business integrity company. Individual growth comes with Environmental management Health and safety in the workplace Business integrity is the capacity to develop constant collaboration and cooperation, Environmental protection is at the centre of Safety at work is a condition for the the business fairly and transparently and is a factoring in common ideas and practice, the activities of the Company, which must performance of work without exposure key factor characterizing the identity of the skills and actions, international exchange and commit itself, in carrying out its activities, to the risk of accidents or occupational Group, as well as an important element in its comparison and a multidisciplinary approach. to making the principles of environmental disease. Historically Fincantieri has dedicated reputation. Industrial relations in Fincantieri are based sustainability its own, both in its strategic significant effort to the protection of health Responsible governance ensures fair and on a participative model which values and choices and in its business processes. and safety; over the years it has promoted a transparent conditions in the conduct of enhances the role of trade unions and workers, To this end it must commit itself to improving profound change in safety culture, as a first business affairs and the related company also through the establishment of appropriate energy efficiency and saving, proper step towards further development. The key activities, protecting the company image joint committees. management of water resources and correct element is personnel training as a tool for risk and reputation, meeting the expectations of disposal of waste and effluent. prevention. stakeholders and safeguarding the work of Procurement activities Safeguarding the natural value of the employees. A significant portion of the overall value areas affected by shipyard activities is also Training and education of each ship depends on materials, parts, important. To protect these delicate places, Investment in staff training and development is Cyber security components and turnkey systems supplied specific and special precautions are put in of strategic importance in terms of restoring a The focus on cyber security has gradually by third parties. The Group actively manages place in accordance with local legislation. high level of skill and know-how in the field, at intensified in response to the ever-increasing its make-or-buy procurement strategies and all levels. complexity and frequency of cyber attacks therefore the size of the contribution of third Environmental impact of products and Accordingly the training on offer has been carried out against companies with national party suppliers to the overall value of the services expanded with new technical and managerial and international strategic importance, making project, also through rigorous qualification The Group operates with a “life cycle” training programmes. it necessary to constantly adapt the corporate processes. approach, aiming to minimize the defences and processes for safeguarding IT environmental and social impact of a product Local communities and relations with the assets. Product quality and compliance with or service over its life cycle, departing local area Protecting the integrity and confidentiality technical standards therefore from a model which sees the impact Local development is directly linked both of data and information has become a pillar Excellent levels of quality are in the DNA of the on the environment and society of only with business activities and with the ability to of the corporate digital strategy. The Group Group, because the complexity of its business production activities, and broadening the systematically involve local players, showing guarantees the protection of computer requires high standards in terms of quality and analysis of possible negative external effects awareness of the impact on the community. systems and data by avoiding the risk of compliance with technical regulations and to all the links in the value chain In terms of business activities, networks of network breaches, corruption of sensitive data standards, at each stage of the production small and medium-sized enterprises (SME), or processes, using prevention, detection and process. Responsibility for ensuring quality is Diversity and equal opportunity highly specialized in various macro-sectors, measures against potential cyber attacks. widespread and shared. Diversity allows all the transformations are engaged. and changes currently taking place to be In addition, initiatives to promote the Economic and financial sustainability Customer satisfaction embraced and represents an open, flexible development of local communities are The Group is committed to increasingly Customers and their satisfaction are at the and helpful relational approach. With regard to stimulated and encouraged, with the aim of sustainable and responsible performance, centre of the Group’s interest; customer equal opportunities, significant commitment creating shared value. creating the conditions for development which satisfaction is pursued by constantly involving has been given to increasing the presence of meets the needs and expectations of all its the customer at the execution stage, in the women in the Company. Human rights stakeholders. continuous monitoring of quality and through The Company has a strong commitment to the offer of innovative products. Company welfare ensuring that the skills and competencies of Innovation, research and development This is an innovative tool which permits each employee are developed and maintained, Technological excellence is a key element Climate change efficient management of resources and both through recognition of merit and respect of the Group’s entrepreneurial approach, The Group manages the risks related to provides an alternative to traditional pay and for equal opportunities, with the aim of which allows it to maintain and strengthen climate change, constantly researching new incentive mechanisms. The ultimate aim is to safeguarding the human rights sanctioned by its competitiveness and leading position in methods to improve its practices and minimize improve the quality of life and wellbeing of the Universal Declaration of the UN. Moreover complex, markets with high potential. the impact of emissions resulting from its employees and their families. the Group has always paid the maximum industrial activities. It supports research attention to ensuring transparency and Employment protection and trade union projects in collaboration with research observance of agreements and laws governing relations institutes/universities on issues associated with the contracting (tendering) system, a key People are the key assets of the Group and climate risks. element in its own development capacity and their protection generates wealth for the competitiveness in the relevant markets.

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GLOBAL COMPACT RECONCILIATION TABLE

THE TEN PRINCIPLES SUSTAINABILITY REPORT 2019 PAGE THE TEN PRINCIPLES SUSTAINABILITY REPORT 2019 PAGE

Human rights Environment The Company is committed to ensuring and promoting Fincantieri is committed to: respect for human rights, a priority for the Group, in all business areas and among all stakeholders, whether Group Principles 7, 8, 9 - Businesses are • reducing its direct impact by reducing consumption and waste employees or suppliers. The activities are conducted in required to support a produced, and prioritizing the use of eco-sustainable resources, accordance with fundamental human rights standards. As precautionary approach to such as certified energy from renewable sources; proof of this commitment, the Group’s policies and practices environmental challenges; • protecting the environment and seeing the environmental are aligned with: undertake initiatives that management system as the tool for implementing and Principles 1, 2 - Businesses are promote greater environmental 156-183 required to promote and respect • the International Bill of Human Rights, including the United 46-47; monitoring the actions taken to carry out the commitments universally recognized human Nations (UN) Universal Declaration on Human Rights; 51-54; responsibility; and encourage the made; rights within their sphere of • fundamental Conventions of the International Labor 96-101; development and diffusion • following all the international best practices to minimize a ship’s influence and to ensure that they Organization (ILO); 128-130; of environmentally friendly environmental impact throughout its entire life cycle. The Group are not complicit in human rights • Guidelines of the Organization for Economic Co-Operation and 136 technologies. is committed to developing new technologies to save energy, abuses, even indirectly. Development (OECD) for Multinational Enterprises; reduce emissions and increase the performance and quality of • the Ten principles of the United Nations Global Compact. its ships; • also making its suppliers aware of environmental aspects. Fincantieri promotes sustainability and business ethics in the supply chain by conducting human rights, environmental, occupational health and safety audits on its suppliers. Anti-corruption Fincantieri protects health and safety at work through Fincantieri disseminates ethical principles and corporate values training, awareness and information initiatives. Principle 10 - Businesses are committed to working against and provides training on legality and anti-corruption issues. corruption in all its forms, including Fincantieri carries out reputational audits on suppliers and third 46-50 extortion and bribery. parties. Labour Fincantieri is committed to complying with the ILO’s four core No corruption cases were reported in 2019. labour standards, as set forth in the Declaration on Fundamental Principles and Rights at Work: Support for the Sustainable Fincantieri is also committed to contributing to the achievement of the Sustainable Development Goals defined by the United Development Objectives • freedom of association and the right to collective bargaining; Nations, in particular, the Company is active on goals 7, 8, 9, 12, 13 32-35 • elimination of all forms of forced or compulsory labour; and 14. • effective abolition of child labour; Principles 3, 4, 5, 6 - Businesses are • elimination of all forms of discrimination in respect of required to uphold workers’ employment and occupation. freedom of association and recognize the right to collective Fincantieri rejects any form of discrimination based on ethnicity, 46-47; bargaining; the elimination of all colour, gender, age, disability, sexual orientation, religion, 51-54; forms of forced and compulsory political opinion, nationality and social origin. It is committed 96-101; labour; the effective abolition of to maintaining a work environment that is free from any and all 120-143 child labour; the elimination of all forms of violence or harassment. forms of discrimination in respect of employment and occupation. Fincantieri regulates its relationships with political organizations and labour unions exclusively based on the current laws, regulations and agreements/contracts, guaranteeing the highest principles of transparency and correct conduct.

Fincantieri is committed to initiatives to balance life and work.

Fincantieri provides employees with training and professional development paths.

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Key: GRI CONTENT INDEX CODE INDICATOR DESCRIPTION PAGE FC: Fincantieri S.p.A., Italian and minor EMPLOYEES BY TYPE OF CONTRACT - WOMEN foreign subsidiaries PERMANENT FIXED TERM VARD: VARD group TOTAL “In accordance - Core” option FMG: Fincantieri Marine Group FULL TIME PART TIME FULL TIME PART TIME FMSNA: Fincantieri Marine Systems 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 North America Inc. FC 625 775 141 145 41 38 3 0 810 958 VARD 1,175 1,242 24 23 106 74 4 3 1,309 1,342 FMG 256 295 1 2 0 0 0 0 257 297 The contents of the Report have been prepared in accordance with the GRI Sustainability Reporting Standards of 2016, FMSNA 9 12 0 0 0 0 0 0 9 12 with the exception of the GRIs 303 – Water and Effluents and GRI 403 – Occupational Health and Safety indicators which implement the GRI 2018 Standards. The Report has been prepared in accordance with GRI Standards: Core option. Total 2,065 2,324 166 170 147 112 7 3 2,385 2,609 % Incidence 86.5% 89.1% 7.0% 6.5% 6.2% 4.3% 0.3% 0.1% 100% 100%

GENERAL STANDARD DISCLOSURES The data refer to the entire Fincantieri Group. Other collaborators (interns, apprentices, agency workers) are not included, which in 2019 numbered 1,029, of whom 119 women, as they are not part of the workforce. CODE INDICATOR DESCRIPTION PAGE 102-9 ORGANIZATION PROFILE Supply chain 86-102 102-10 Significant changes to the organization and its supply chain 12-14 102-1 Name of the organization FINCANTIERI S.p.A. 102-11 Precautionary principle 27; 44-45 102-2 Activities, brands, products, and services 8; 14 102-12 External initiatives 24; 70; 75-78 102-3 Location of headquarters 12 102-13 102-4 Location of operations 8 Membership of associations 24 102-5 Ownership and legal form 16 STRATEGY 102-6 Markets served 8 102-14 Statement from a senior decision-maker 4 102-7 Scale of the organization 8 ETHICS AND INTEGRITY 102-8 Information on employees and other workers 120 102-16 Values, principles, standards, and norms of behavior 17; 46-47 EMPLOYEES BY GEOGRAPHICAL AREA GOVERNANCE 2018 2019 102-18 Governance structure 20; 38-41 NUMBER OF EMPLOYEES NUMBER OF EMPLOYEES 102-35 Remuneration policies 42-43 Italy 8,662 44.9% 9,334 47.1% STAKEHOLDER ENGAGEMENT Rest of europe 7,459 38.7% 7,389 37.3% 102-40 List of stakeholder groups 22-23 North america 2,060 10.7% 2,204 11.1% 102-41 Collective bargaining agreements 138-140 The percentage of employees covered by collective bargaining agreements is 95% in Fincantieri S.p.A. and its Italian South america 308 1.6% 121 0.6% subsidiaries compared to 66% for Fincantieri Marine Group, 0% for Fincantieri Marine Systems North America Inc. and Africa a variable coverage in the countries worked in by the VARD group (0% Canada, United States, Poland, Chile, Croatia, 0 - 0 - India, Scotland, Singapore, Estonia, 89% Norway, 99% Brazil, 100% Vietnam, Italy, Romania). Asia 784 4.1% 775 3.9% 102-42 Identifying and selecting stakeholders 22-23 Oceania 1 0.0% 0 0.0% 102-43 Approach to stakeholder engagement 22-23 Total 19,274 100% 19,823 100% 102-44 Key topics and concerns raised 25-26 EMPLOYEES BY TYPE OF CONTRACT PERMANENT FIXED TERM TOTAL FULL TIME PART TIME FULL TIME PART TIME 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 FC 8,304 8,994 160 177 204 171 3 2 8,671 9,344 VARD 7,357 7,278 50 48 1,227 1,099 30 12 8,664 8,437 FMG 1,881 1,975 2 2 0 0 0 0 1,883 1,977 FMSNA 56 65 0 0 0 0 0 0 56 65 Total 17,598 18,312 212 227 1,431 1,270 33 14 19,274 19,823 % Incidence 91.3% 92.4% 1.1% 1.1% 7.4% 6.4% 0.2% 0.1% 100% 100%

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CODE INDICATOR DESCRIPTION PAGE CODE INDICATOR DESCRIPTION PAGE REPORTING PRACTICE PROCUREMENT PRACTICES 102-45 Entities included in the consolidated financial statements 8; 186-189 103-1 Management approach 86-87 103-2 102-46 Defining report content and topic boundaries 186-189 103-3 102-47 List of material topics 26; 190-191 204-1 Proportion of spending on local suppliers 88-89; 98-101 102-48 Restatements of information 186-189 ANTI-CORRUPTION 102-49 Changes in reporting 186-189 103-1 Management approach 46-50 103-2 102-50 Reporting period 186-189 103-3 102-51 Date of most recent report 186-189 205-2 Communication and training about anti-corruption policies and 49-50 procedures 102-52 Reporting cycle 186-189 205-3 Confirmed incidents of corruption and actions taken 50 102-53 Contact point for questions regarding the report 186-189 ANTI-COMPETITIVE BEHAVIOR 102-54 Claims of reporting in accordance with GRI Standards 194 103-1 Management approach 46-50 102-55 GRI content index 194-204 103-2 103-3 102-56 External assurance 206 206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly SPECIFIC STANDARD DISCLOSURES practices No fines or sanctions have been received for actions referred to the reporting period. CATEGORY: ECONOMIC CATEGORY: ENVIRONMENTAL ECONOMIC PERFORMANCE 103-1 Management approach 156-159 103-1 Management approach 62 103-2 103-2 103-3 103-3 Fincantieri is aware that its level of responsibility is judged by its ability to combine, in its work, professionalism and quality with strict respect for laws and consideration for the needs and expectations of the community in relation 201-1 Direct economic value generated and distributed 62 to the protection of public goods. Fincantieri wants to represent a model of excellence also in terms of maximum environmental protection. To manage the more significant environmental aspects and prevent its business having an environmental impact, Fincantieri is committed to implementing and maintaining an Environmental Management System and obtaining the MARKET PRESENCE relevant certification in accordance with international standard ISO 14001 at its sites. 103-1 Management approach 120 8 grievances regarding environmental impacts were filed in 2019, of which 2 referred to previous years and were 103-2 resolved during the year. 103-3 MATERIALS 202-2 Proportion of senior management hired from the local community 301-1 Materials used by weight or volume 164-165 As regards the recruitment policies for senior management, the majority of those recruited (over 94%) are found to be from local profiles and candidates. ENERGY INDIRECT ECONOMIC IMPACTS 302-1 Energy consumption within the organization 161-162 103-1 Management approach 68-69 103-2 Type MEASUREMENT UNIT 2018 2019 103-3 Acetylene GJ 16,769 18,585 203-2 Significant indirect economic impacts 68-69 Natural gas GJ 430,935 425,761 For the analysis and description of the main indirect economic impacts, Fincantieri has used an econometric model Diesel developed by Censis (a Foundation recognized with Decree of the President of the Republic 712/1973). The impact GJ 634,912 612,830 measures were calculated using the analysis and calculation methodology based on Leontief input-output tables, LPG GJ 22,761 14,052 although this model was substantially modified to adapt it to the specific Fincantieri production and company structure. The estimates can be considered sufficiently robust proxies for the multiplier effects that Fincantieri is LNG GJ 4 8 able to produce within the national economic system, given its specific production model, the business model that the Company has built in recent years and the structure of the supply chain, with the relative levels of integration Fuel oil GJ 256,615 224,767 upstream of the production cycle for naval vessels. Total fuel GJ 1,361,996 1,296,003 Total self-generated GJ 587 3,766 thermal energy Total electricity GJ 1,258,122 1,280,560 Of which from renewable GJ 106,376 508,185 sources Total energy GJ 2,620,706 2,580,329

The data refer to the entire Fincantieri Group. Energy consumption varies according to production loads.

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CODE INDICATOR DESCRIPTION PAGE CODE INDICATOR DESCRIPTION PAGE 302-4 Reduction of energy consumption 161 EFFLUENTS AND WASTE INITIATIVE MEASUREMENT BASELINE CONSUMPTION BASELINE SAVING % SAVING 306-2 Waste by type and disposal method 165-166 UNIT CONSUMPTION OBTAINED OBTAINED ENVIRONMENTAL COMPLIANCE LED replacement warehouse kWh May – 60,786 104,482 43,696 41.8% 307-1 Non-compliance with environmental laws and regulations 51 and Package Workshop – December Monfalcone (Italy) 2018 No significant fines were received in the reporting period. LED replacement PRF A kWh 2018 87,093 217,120 130,027 59.9% SUPPLIER ENVIRONMENTAL ASSESSMENT workshop - Castellammare di Stabia (Italy) 103-1 Management approach 86-87 103-2 LED replacement block kWh May – 54,000 133,000 79,000 59.4% 103-3 workshop and OSA – Palermo December (Italy) 2018 308-1 New suppliers that were screened using environmental criteria 92-95 Replacement of outdoor lighting kWh January 174,599 686,499 511,900 74.6% 308-2 Negative environmental impacts in the supply chain and actions 96-101 - Sestri Ponente (Italy) – October taken 2018 CATEGORY: SOCIAL LED Replacement Program – kWh 2018 72,589 421,817 349,228 82.8% Marinette (United States) 103-1 Management approach 120-128 103-2 Replacement yard areas – Braila kWh 2018 106,650 222,916 116,266 52.2% 103-3 (Romania) The Group has staff policies that are characterized by enhancement, professional growth, protection of rights and respect for corporate values. The fundamental principles and rights recognized to workers are detailed in the Code Total 555,717 1,785,834 1,230,117 68.9% of Conduct. Fincantieri operates within the reference framework of the UN’s Universal Declaration of Human Rights, The data relate to the Fincantieri Group. the fundamental Conventions of the International Labour Organization (ILO), the OECD Guidelines for Multinational Enterprises and the ten principles of the United Nations Global Compact. Staff are hired with a proper written contract. Worker exploitation, forced, compulsory or child labour of any kind is WATER AND EFFLUENTS not permitted. Employees are recognized the rights to freedom of association, to establish workers’ representatives and to perform the related duties (including the right to collective bargaining), in accordance with the regulations and 303-1 Interactions with water as a shared resource 162-163 practices in force in the different countries. Lastly, benefits of various kinds, in addition to remuneration, are envisaged 303-2 Management of water discharge-related impacts 164 for the employees. During 2019, 189 grievances were filed related to impacts concerning employment, of which 28 were resolved in the 303-3 Water withdrawal 163 reporting period. The 9 grievances filed related to human rights violations were all resolved during the reporting period. BIODIVERSITY Furthermore, 621 employment disputes are reported relating to employees and former employees for a value of over 260 million euros including the asbestos-related cases dating back to the past. 304-1 Operational sites owned, leased, managed in, or adjacent to, 171 protected areas and areas of high biodiversity value outside EMPLOYMENT protected areas 401-1 New employee hires and employee turnover 121-122 EMISSIONS HIRES 305-1 Direct (Scope 1) GHG emissions 167 The data refer to the entire Fincantieri Group. The emissions have been estimated following the guidelines of the ≤ 30 30-50 ≥ 50 TOTAL Greenhouse Gas (GHG) Protocol. The sources of emission factors are ISPRA and DEFRA for fuels and transport fuels, while they are DEFRA and IPCC for refrigerant gases. 2018 2019 2018 2019 2018 2019 2018 2019 FC 185 360 291 370 53 59 529 789 305-2 Energy indirect (Scope 2) GHG emissions 167 The data refer to the entire Fincantieri Group. The emissions have been estimated following the guidelines of the VARD 726 646 842 646 220 143 1,788 1,435 Greenhouse Gas (GHG) Protocol. The sources of emission factors are ISPRA for Italy and TERNA International Comparisons 214/USA for abroad. FMG 121 226 110 206 57 87 288 519 Emissions from Scope 2 for the Italian sites that have acquired energy from renewable sources certified with the Guarantee of Origin (GO) and those for Norwegian sites of the subsidiary VARD have be calculated used the market- FMSNA 2 6 5 15 0 3 7 24 based methodology which attributes a conversion factor of zero (0) for energy consumption from renewable sources. Total 1,034 1,238 1,248 1,237 330 292 2,612 2,767 305-3 Other indirect (Scope 3) GHG emissions 168 LEAVERS The 2018 data have been revised for comparison purposes following improvement of the identification and measurement of raw material consumption by the VARD group and the procurement of materials by Fincantieri ≤ 30 30-50 ≥ 50 TOTAL Marine Group. The 2019 data refer to the entire Fincantieri Group, except for the procurement of raw materials which concerns 2018 2019 2018 2019 2018 2019 2018 2019 Fincantieri S.p.A. (56% of stocks) and Fincantieri Marine Group. The emissions have been estimated following the guidelines of the Greenhouse Gas (GHG) Protocol. The sources of FC 36 44 80 98 60 82 176 224 the emission factors are DEFRA, EPA and Greenhouse Gas (GHG) Protocol. VARD 746 555 1,134 753 323 334 2,203 1,642 305-4 Intensity of GHG emissions 168 FMG 109 117 159 176 143 139 411 432 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx) and other significant air 169-170 emissions FMSNA 4 1 4 5 1 3 9 9 Total 895 717 1,377 1,032 527 558 2,799 2,307

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CODE INDICATOR DESCRIPTION PAGE CODE INDICATOR DESCRIPTION PAGE HIRES - WOMEN 403-9 Work-related injuries 133 ≤ 30 30-50 ≥ 50 TOTAL HEALTH AND SAFETY INDICATORS 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 FC 56 99 57 59 3 5 116 163 FC VARD FMG FMSNA TOTAL FC VARD FMG FMSNA TOTAL VARD 100 91 139 74 30 16 269 181 Severity index* 0.6 0.1 0.2 0.0 0.3 0.4 0.0 0.1 0 0.2 FMG 32 43 21 47 13 12 66 102 Rate of occupational 0.2 0.1 0 0 0.1 0.2 0.0 0 0 0.1 disease FMSNA 0 1 0 5 0 1 0 7 Rate of absenteeism 4.1 3.4 3.3 0 3.6 3.8 4.0 2.5 0 3.7 Total 188 234 217 185 46 34 451 453 Injury rate/Frequency rate 18.7 3.9 7.9 17.7 10.3 15.7 6.4 10.7 15.5 10.9 LEAVERS - WOMEN Rate of recordable work- 14.8 3.4 7.9 17.7 8.5 12.9 6.2 10.7 15.5 9.7 ≤ 30 30-50 ≥ 50 TOTAL related injuries 2018 2019 2018 2019 2018 2019 2018 2019 Rate of high- n.a.** n.a.** n.a.** n.a.** n.a.** 0.1 0.1 0 0 0.1 consequence work- FC 7 13 14 12 3 9 24 34 related injuries VARD 45 46 68 55 44 40 157 141 Rate of fatalities as a 0 0.1 0 0 0.0 0 0 0 0 0 result of work-related FMG 17 25 31 23 21 18 69 66 injury FMSNA 1 0 1 2 0 0 2 2 Number of injuries 267 69 28 2 366 239 100 42 2 383 Total 70 84 114 92 68 67 252 243 - of which work-related 211 60 28 2 301 197 98 42 2 339

The data refer to the entire Fincantieri Group and do not include intra-group movements. - of which high- n.a.** n.a.** n.a.** n.a.** n.a.** 2 1 0 0 3 In 2019, 2,767 people were hired, including 453 women, and there were 2,307 leavers, including 243 women. consequence work- related The rate of new employee hires was 14.0% (16.4% for women) while the turnover was 11.6% (10.5% for women). - of which fatalities as a 0 1 0 0 1 0 0 0 0 0 401-2 Benefits provided for full-time employees that are not provided to 137-138 result of work-relatedl temporary or part-time employees - of which while 56 9 0 0 65 42 2 0 0 44 LABOUR/MANAGEMENT RELATIONS travelling 402-1 Minimum notice periods regarding operational changes HEALTH AND SAFETY INDICATORS - WOMEN In the case of business reorganization, the Group applies, in Italy and abroad, the instruments provided for by national collective bargaining agreements and contracts and supplementary company contracts. The minimum notice period 2018 2019 in Italy varies depending on the national contracts and for Fincantieri S.p.A. is 25 days while for the Italian subsidiaries FC VARD FMG FMSNA TOTALE FC VARD FMG FMSNA TOTAL either none is provided for or it varies from between 5 and 25 days, for companies in the VARD group it varies depending on the country (90 days in Scotland, 30 days in Brazil, India, Norway, Poland, Romania and Singapore, Severity index* 0.1 0.1 0.3 0 0.1 0.0 0.0 0.0 0 0.0 25 days in Italy, while it is not provided for in Vietnam, Canada, the United States, Estonia, Chile and Croatia). The indicator is not applicable for the American companies Fincantieri Marine Group and Fincantieri Marine Systems Rate of occupational 0 0 0 0 0 0 0 0 0 0 North America Inc. as it is not provided for within contracts. disease OCCUPATIONAL HEALTH AND SAFETY Rate of absenteeism 2.7 4.7 3.7 0 3.9 2.6 5.4 2.9 0 4.1 103-1 Management approach 131-136 Injury rate/Frequency 6.0 2.6 12.4 0 4.7 4.4 1.3 22.4 0 5.0 103-2 rate 103-3 Rate of recordable 1.7 1.7 12.4 0 3.0 2.9 1.3 22.4 0 4.5 403-1 Occupational health and safety management system 131; 136 work-related injuries 403-2 Hazard identification, risk assessment, and incident investigation 131-136 Rate of high- n.a.** n.a.** n.a.** n.a.** n.a.** 0 0 0 0 0 consequence work- 403-3 Occupational health services 131-133 related injuries 403-4 Worker participation, consultation, and communication on 131-133 Rate of fatalities as a 0 0 0 0 0 0 0 0 0 0 occupational health and safety result of work-related injury 403-5 Worker training on occupational health and safety 133 Number of injuries 7 6 6 0 19 6 3 12 0 21 403-6 Promotion of worker health 131-136 - of which work-related 2 4 6 0 12 4 3 12 0 19 403-7 Prevention and mitigation of occupational health and safety impacts 131-136 directly linked by business relationships - of which high- n.a.** n.a.** n.a.** n.a.** n.a.** 0 0 0 0 0 consequence work- 403-8 Workers covered by an occupational health and safety management 136 related system - of which fatalities as a 0 0 0 0 0 0 0 0 0 0 The number of employees at production sites covered by an occupational health and safety management system result of work-related at Group level is 15,261 equal to 91% (in Italy it is 100%). While the number of non-employee staff at production sites covered by an occupational health and safety management system is 42,557 for Fincantieri S.p.A. (100%) and - of which while 5 2 0 0 7 2 0 0 0 2 Fincantieri Marine Group (62%). travelling

The severity index was calculated as: (number of days lost due to injury/hours worked) x 1,000. The rate of occupational disease was calculated as: (number of cases of occupational disease/hours worked) x 200,000. The rate of absenteeism was calculated as: (number of days absent due to injury or illness/workable days) x 100. The injury rate/frequency rate was calculated as: (number of injuries/hours worked) x 1,000,000. The rate of recordable work-related injuries was calculated as: (number of recordable work-related injuries/hours worked) x 1,000,000. The rate of high-consequence work-related injuries was calculated as: (number of high-consequence work-related injuries/hours worked) x 1,000,000. The rate of fatalities as a result of work-related injury was calculated as: (number of fatalities as a result of work-related injury/hours worked) x 1,000,000. * The severity index has been recalculated by no longer comparing it workable hours but to hours worked, so 2018 has also been revised. ** Data reported since 2019 as per 403 - Occupation health and safety GRI Standards 2018. The data refer to the entire Fincantieri Group.

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CODE INDICATOR DESCRIPTION PAGE CODE INDICATOR DESCRIPTION PAGE HEALTH AND SAFETY INDICATORS - NON-EMPLOYEE WORKERS 405-1 Diversity of governance bodies and employees 40; 128-130 2019 EMPLOYEES BY CATEGORY FC VARD FMG FMSNA TOTAL SENIOR MANAGERS MIDDLE MANAGERS WHITE COLLAR BLUE COLLAR TOTAL EMPLOYEES EMPLOYEES Rate of recordable work-related 13.6 10.9 3.0 0 13.1 injuries 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 Rate of high-consequence work- 0.1 0.8 0 0 0.2 FC 255 279 467 518 4,544 5,113 3,405 3,434 8,671 9,344 related injuries VARD 90 80 549 594 1,978 2,031 6,047 5,732 8,664 8,437 Rate of fatalities as a result of 0 0.1 0 0 0 work-related injury FMG 31 28 141 151 411 440 1,300 1,358 1,883 1,977 Number of recordable work- 619 79 3 0 701 FMSNA 1 3 8 11 16 24 31 27 56 65 related injuries Total 377 390 1,165 1,274 6,949 7,608 10,783 10,551 19,274 19,823 - of which high-consequence 3 6 0 0 9 % Incidence 2.0% 2.0% 6.0% 6.4% 36.1% 38.4% 55.9% 53.2% 100% 100% - of which fatalities 0 1 0 0 1 EMPLOYEES BY CATEGORY - WOMEN Number of injuries - women 0 3 0 0 3 SENIOR MANAGERS MIDDLE MANAGERS WHITE COLLAR BLUE COLLAR TOTAL Number of non-employee staff 27,918 12,338 557 0 40,813 EMPLOYEES EMPLOYEES trained on health and safety 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 As regards injuries involving non-employee workers in 2019, 701 injuries were recorded in the workplace at Group level, of which 1 was a fatality. FC 12 14 50 59 740 877 8 8 810 958 VARD 10 12 72 79 633 650 594 601 1,309 1,342 TRAINING AND EDUCATION FMG 3 3 21 21 124 143 109 130 257 297 103-1 Management approach 124-128 FMSNA 0 0 1 2 8 9 0 1 9 12 103-2 103-3 Total 25 29 144 161 1,505 1,679 711 740 2,385 2,609 404-1 Average hours of training per year per employee 124 % Incidence on 6.6% 7.4% 12.4% 12.6% 21.6% 22.1% 6.6% 7.0% 12.4% 13.2% category total HOURS OF TRAINING % Incidence 1.1% 1.1% 6.0% 6.2% 63.1% 64.3% 29.8% 28.4% 100% 100% 2018 2019 VAR 2019/2018 EMPLOYEES BY AGE GROUP Senior managers 3,770 3,689 -2.1% ≤ 30 30-50 ≥ 50 TOTAL Middle managers 16,783 20,030 19.3% 2018 2019 2018 2019 2018 2019 2018 2019 White collar employees 123,778 154,196 24.6% FC 543 768 5,870 5,974 2,258 2,602 8,671 9,344 Blue collar employees 516,102 411,461 -20.3% VARD 1,789 1,626 4,688 4,444 2,187 2,367 8,664 8,437 Total 660,432 589,376 -10.8% FMG 330 412 805 826 748 739 1,883 1,977 HOURS OF TRAINING - WOMEN FMSNA 9 10 27 35 20 20 56 65 2018 2019 VAR 2019/2018 Total 2,671 2,816 11,390 11,279 5,213 5,728 19,274 19,823 Senior managers 252 548 117.6% % Incidence 13.9% 14.2% 59.1% 56.9% 27.0% 28.9% 100% 100% Middle managers 1,639 2,088 27.4% EMPLOYEES BY AGE GROUP - WOMEN White collar employees 22,521 30,303 34.6% Blue collar employees 65,882 62,456 -5.2% ≤ 30 30-50 ≥ 50 TOTAL Total 90,294 95,395 5.6% 2018 2019 2018 2019 2018 2019 2018 2019

The data refer to the entire Fincantieri Group. FC 147 202 499 570 164 186 810 958

404-3 Percentage of employees receiving regular performance and career 126-127 VARD 246 243 686 681 377 418 1,309 1,342 development reviews FMG 50 63 109 135 98 99 257 297 DIVERSITY AND EQUAL OPPORTUNITY FMSNA 1 1 7 9 1 2 9 12 103-1 Management approach 128-130 Total 444 509 1,301 1,395 640 705 2,385 2,609 103-2 103-3 % Incidence 18.6% 19.5% 54.5% 53.5% 26.9% 27.0% 100% 100%

The data refer to the entire Fincantieri Group.

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CODE INDICATOR DESCRIPTION PAGE PERCENTAGE OF EMPLOYEES BELONGING TO MINORITY GROUPS TOTAL OF WHICH WOMEN OF WHICH WITH DISABILITIES 2018 2019 2018 2019 2018 20 19 FC 4.6% 4.6% 7.7% 7.0% 3.5% 3.7% VARD 0.5% 0.2% 0.5% 0.1% 0.5% 0.2% FMG* 4.2% 4.5% 5.1% 5.1% 4.2% 4.5% FMSNA 16.1% 40.0% 0.0% 8.3% 7.1% 13.8% Total 8.6% 2.9% 10.0% 3.2% 2.2% 2.3%

The data refer to the entire Fincantieri Group. * Fincantieri Marine Group's 2018 figures have been revised for comparison purposes by adjusting them to the reporting criteria.

405-2 Ratio of basic salary and remuneration of women to men 140-141 FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING 407-1 Operations and suppliers in which the right to freedom of association 138-140 and collective bargaining may be at risk LOCAL COMMUNITIES 103-1 Management approach 144-145 103-2 103-3 413-1 Operations with local community engagement, impact assessments, 144-145 and development programs SUPPLIER SOCIAL ASSESSMENT 103-1 Management approach 86-87 103-2 103-3 414-1 New suppliers that were screened using social criteria 92-95 414-2 Negative social impacts in the supply chain and actions taken 96-101 PUBLIC POLICY 103-1 Management approach 46-50 103-2 103-3 415-1 Political contributions Fincantieri Marine Group made a contribution of 26,798 euros to the Political Action Committee. CUSTOMER HEALTH AND SAFETY 103-1 Management approach 112-115 103-2 103-3 416-1 Assessment of health and safety impacts of product and service 80-84; 114-116; categories 180-181 CUSTOMER PRIVACY 103-1 Management approach 55-57 103-2 103-3 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data No grievances were filed in the reporting period. SOCIOECONOMIC COMPLIANCE 103-1 Management approach 46-50 103-2 103-3 419-1 Non-compliance with laws and regulations in the social and economic area No significant fines were received in the reporting period.

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Independent auditor’s report on the consolidated non- Auditor’s Independence and Quality Control financial statement pursuant to article 3, paragraph 10, of Legislative Decree No. 254/2016 and article 5 of CONSOB We are independent in accordance with the principles of ethics and independence set out in the Code Regulation No. 20267 of January 2018 of Ethics for Professional Accountants published by the International Ethics Standards Board for Accountants, which are based on the fundamental principles of integrity, objectivity, competence and professional diligence, confidentiality and professional behaviour. Our audit firm adopts the International Standard on Quality Control 1 (ISQC Italia 1) and, accordingly, maintains an overall To the Board of Directors of Fincantieri SpA quality control system which includes processes and procedures for compliance with ethical and professional principles and with applicable laws and regulations.

Pursuant to article 3, paragraph 10, of Legislative Decree No. 254 of 30 December 2016 (the “Decree”) and article 5 of CONSOB Regulation No. 20267/2018, we have been engaged to perform a limited Auditor’s responsibilities assurance engagement on the consolidated non-financial statement of Fincantieri SpA and its subsidiaries (hereafter the “Group”) for the year ended 31 December 2019 prepared in accordance with We are responsible for expressing a conclusion, on the basis of the work performed, regarding the article 4 of the Decree, and approved by the Board of Directors on 1 April 2020 (hereafter the “NFS”). compliance of the NFS with the Decree and with the GRI Standards. We conducted our engagement in accordance with the “International Standard on Assurance Engagements ISAE 3000 (Revised) – Assurance Engagements Other than Audits or Reviews of Historical Financial Information” Responsibilities of the Directors and of the Board of Statutory Auditors for the NFS (hereafter “ISAE 3000 Revised”), issued by the International Auditing and Assurance Standards Board (IAASB) for limited assurance engagements. The standard requires that we plan and apply The Directors are responsible for the preparation of the NFS in accordance with articles 3 and 4 of the procedures in order to obtain limited assurance that the NFS is free of material misstatement. The Decree and with the “GRI-Sustainability Reporting Standards” defined in 2016 and subsequent procedures performed in a limited assurance engagement are less in scope than those performed in a versions (hereafter the “GRI Standards”), set out in the paragraph “Methodological note” of the NFS reasonable assurance engagement in accordance with ISAE 3000 Revised and, therefore, do not identified by them as the reporting standards. provide us with a sufficient level of assurance that we have become aware of all significant facts and circumstances that might be identified in a reasonable assurance engagement. The Directors are also responsible, in the terms prescribed by law, for such internal controls as they determine is necessary to ensure that the NFS is free from material misstatement, whether due to The procedures performed on the NFS were based on our professional judgement and consisted in fraud or unintentional errors. interviews, primarily with company personnel responsible for the preparation of the information presented in the NFS, analysis of documents, recalculations and other procedures designed to obtain Moreover, the Directors are responsible for identifying the content of the NFS, within the matters evidence considered useful. mentioned in article 3, paragraph 1, of the Decree, considering the activities and characteristics of the Group and to the extent necessary to ensure an understanding of the Group’s activities, its In particular, we performed the following procedures: performance, its results and related impacts. 1. analysis of the relevant matters reported in the NFS relating to the activities and Finally, the Directors are responsible for defining the business and organizational model of the Group characteristics of the Group, in order to assess the reasonableness of the selection process used and, with reference to the matters identified and reported in the NFS, for the policies adopted by the in accordance with article 3 of the Decree and with the reporting standard adopted; Group and for the identification and management of risks generated and/or faced by the Group. 2. analysis and assessment of the criteria used to identify the consolidation area, in order to The Board of Statutory Auditors is responsible for overseeing, in the terms prescribed by law, assess their compliance with the Decree; compliance with the Decree. 3. comparison of the financial information reported in the NFS with the information reported in the Fincantieri Group’s Consolidated Financial Statements;

4. understanding of the following matters:

− business and organisational model of the Group, with reference to the management of the matters specified by article 3 of the Decree; − policies adopted by the Group with reference to the matters specified in article 3 of the Decree, actual results and related key performance indicators; − main risks, generated and/or faced by the Group, with reference to the matters specified in article 3 of the Decree. With reference to those matters, we compared the information obtained with the information presented in the NFS and carried out the procedures described under point 5 a) below;

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5. understanding of the processes underlying the preparation, collection and management of the significant qualitative and quantitative information included in the NFS. In particular, we held meetings and interviews with the management of Fincantieri SpA, Vard Tulcea SA, Fincantieri Marine Group LLC, Fincantieri Marine Systems North America Inc and Isotta Fraschini Motori SpA and we performed limited analysis of documentary evidence, to gather information about the processes and procedures for the collection, consolidation, processing and submission of the non-financial information to the function responsible for the preparation of the NFS.

Moreover, for material information, considering the activities and characteristics of the Group:

- at the holding company level:

a) with reference to the qualitative information included in the NFS, and in particular to the business model, the policies adopted and the main risks, we carried out interviews and acquired supporting documentation to verify their consistency with availableevidence; b) with reference to quantitative information, we performed analytical procedures as well as limited tests, in order to assess, on a sample basis, the accuracy of consolidation of the information;

- for the following companies, divisions and sites: Fincantieri SpA (Head Office -Trieste and Castellammare di Stabia site, Italy) Fincantieri Marine Group LLC (Head Office - Green Bay, registered office and site, Sturgeon Bay, Wisconsin), Vard Tulcea SA (registered office and site, Tulcea, Romania) and Isotta Fraschini Motori SpA (registered office and site, Bari, Italy) , which were selected on the basis of their activities, their contribution to the performance indicators at a consolidated level and their location, we carried out site visits during which we met local management and gathered supporting documentation regarding the correct application of the procedures and calculation methods used for the key performance indicators.

Conclusions

Based on the work performed, nothing has come to our attention that causes us to believe that the NFS of the Fincantieri Group as of 31 December 2019 has not been prepared, in all material respects, in compliance with articles 3 and 4 of the Decree and with the GRI Standards.

Trieste, 20 April 2020

PricewaterhouseCoopers SpA

Signed by Signed by

Maria Cristina Landro Paolo Bersani (Partner) (Authorised signatory)

This report has been translated from the Italian original solely for the convenience of international readers. We have not performed any controls on the NFS 2019 translation.

3 of 3 208 Parent Company Registered office Via Genova no. 1 - 34121 Trieste – Italy Tel: +39 040 3193111 Fax: +39 040 3192305 fincantieri.com Share capital Euro 862,980,725.70 Venezia Giulia Company Registry and Tax No. 00397130584 VAT No. 00629440322

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