Move with us Life, values, environment SUSTAINABILITY REPORT 2010 Chairman’s letter 4 Chief Executive Offi cer’s letter 5 Reporting methodology 6 Climate change and Ansaldo STS sustainability 8 Identity of Ansaldo STS 11 Profi le of the Group 12 Sustainability of development at Ansaldo STS 26 Governance and Organization 48 Creation of economic value and innovation 61 Creation of value 62 The governance of innovation 72 The Stakeholders of Ansaldo STS 77 Human resources 78 Investor relations 100 Relations with customers and markets 112 Supply chain management 122 Exchange relationships with the community 130 Environment, Health and Safety 141 Environment 142 Workers’ health and safety 156 GRI Content Index 160 Certifi cate of compliance 164 Ansaldo STS | Sustainability Report 2010 Welcome to Ansaldo STS Ansaldo STS is a technology company which is listed on the Milan Stock Exchange, and is active in the sector of railway transport and urban rail transport systems as designer and supplier of traffi c management and signalling systems, and related services. It acts as general contractor, system integrator and turnkey provider of major projects all over the world. Our commitment to the issue of sustainable development is expressed in the countries where we operate, across all fi ve continents through the spreading of our corporate vision, focusing on environmental and social aspects and on promoting, through our work, cooperation with local cultures. Consistently with this vision, this year we participated in Global Compact, a voluntary initiative launched by the UNO to spread the culture of respecting human rights, labour, the environment and the fi ght against corruption. 1 XXXXX | XXXXXXXXXXXXXXX Table of contents Chairman’s letter 4 Chief Executive Offi cer’s letter 5 Reporting methodology 6 Climate change and Ansaldo STS sustainability 8 IDENTITY OF ANSALDO STS 11 PROFILE OF THE GROUP 12 Mission 14 Core Values 15 History of Ansaldo - key milestones 16 Business segments - business type 18 Ansaldo around the world 20 The main projects 24 SUSTAINABILITY OF DEVELOPMENT AT ANSALDO STS 26 Economic sustainability 27 Environmental sustainability, health and safety 30 Social sustainability 31 Listening to, and dialogue with, Stakeholders 32 Sustainability programme 42 GOVERNANCE AND ORGANIZATION 48 Corporate Governance 48 Organisational structure 56 CREATION OF ECONOMIC VALUE AND INNOVATION 61 CREATION OF VALUE 62 The Excellence Programs 63 The competitive advantages of the Business Units 64 Key fi gures 65 Economic value directly generated and distributed 67 Income Statement and Balance Sheet 68 The investment plan 71 THE GOVERNANCE OF INNOVATION 72 The main products designed and under development 73 Investments in innovation and intellectual property 75 THE STAKEHOLDERS OF ANSALDO STS 77 HUMAN RESOURCES 78 Personnel management policy 79 Headcount and breakdown 79 People with disabilities 83 Pay and incentive schemes 84 Employee benefi ts 87 People care 90 Recruitment and selection 91 Training and development 92 Internationalisation and multicultural environment 94 Industrial relations 95 Internal communication 97 Climate analysis 98 Litigation management 98 2 2 Ansaldo STS | Sustainability Report 2010 INVESTOR RELATIONS 100 Partners and Shareholders 101 Lenders 108 RELATIONS WITH CUSTOMERS AND MARKETS 112 Features of the Customers 113 Market performances 113 Competitive tenders 115 Product innovation and quality of relationships 117 Ethics in business 119 Communication activities 120 Litigation management 121 SUPPLY CHAIN MANAGEMENT 122 Costs and types of purchases 124 Selection and qualifi cation of suppliers 125 Contractual instruments 127 Monitoring activities 128 E-Procurement platform 129 Litigation management 129 EXCHANGE RELATIONSHIPS WITH THE COMMUNITY 130 Institutional relations management model 131 Research projects with national and European Union public institutions 132 Participation in trade associations 136 Partnerships with Universities: technological and managerial training 136 Media relations 137 Relationships with the communities 138 ENVIRONMENT, HEALTH AND SAFETY 141 ENVIRONMENT 142 Environmental policy 143 Management systems, certifi cations and registrations 144 Implementation of regulations 145 Training in environmental issues 146 Environmental performances 146 The Carbon Management System 150 WORKERS’ HEALTH AND SAFETY 156 Safety and health policy 156 Implementation of regulations 157 Training 157 Safety and health performance 158 GRI CONTENT INDEX 160 CERTIFICATE OF COMPLIANCE 164 3 3 Chairman’s letter and Chief Executive Offi cer’s letter Chairman’s letter The recent fi nancial crisis has highlighted the low sustainability of management models that focus only on short-term economic results, pointing out the growing need and greater importance of sustainable development of the business over the long term. In a macroeconomic scenario still suffering from the effects of the crisis, Ansaldo STS confi rms its intention to maintain a business management model, the economic targets of which satisfy the requirements for sustainable growth in terms of the interaction between ethics, governance and fi nance. Environment, health and social relations are expressed in new demands for a high quality of life and in a context of increasing urbanisation and population growth: Ansaldo STS responds as a leader in the markets of railway and metro mass transit systems, considering these needs as growth opportunities for the industry in which it operates. The response of Ansaldo STS is based on the natural passion of a group and of its management which pursues the goal to enhance quality of life through concrete solutions for the benefi t of the community. The equilibrium between these needs and the economic-fi nancial objectives forms an integral part of our corporate culture and the audited 2010 Sustainability Report, the second such document following the 2009 report, demonstrates the sensitivity and the continuous commitment of Ansaldo STS to achieving its objectives for the creation of value for Shareholders and for the protection of the interests of all other Stakeholders. Alessandro Pansa Chairman of Ansaldo STS S.S.p.A.p.A. 4 Ansaldo STS | Sustainability Report 2010 Chief Executive Offi cer’s letter The sustainability of business activities, as with any other human activity, is a matter of common sense. It is common sense to be committed to making Ansaldo STS a good place to work, so as to allow our people to give their best in pursuing corporate objectives. In 2010 we adopted a global and integrated model for the development of human resources aimed at guaranteeing consistent and uniform professional growth opportunities for all employees. It is common sense to try to understand the needs and strategies of our clients, in order to be able to create solutions of excellence that fully satisfy them, thus building a track record of success which is our best hallmark for gaining access to new markets. At the end of 2010 we acquired an important order for the construction of a new line of the Copenhagen Metro: this client’s satisfaction with the construction of a previous line, which was recognised as one of the most state-of- the-art in the world, certainly played a key role in this success. It is common sense to pursue positive economic and fi nancial performance, protecting our margins and the interests of our shareholders, so as to be able to continue to invest in the excellence of products and project execution. Since the Ansaldo STS stock was fi rst listed on the Milan stock exchange in March 2006, the company has shown continuous improvement in Revenues, Orders, EBIT and Net Profi t year after year. It is common sense to act ethically and prevent and possibly punish any fraudulent conduct which might damage, either internally or externally, a reputation that has been gained over 150 years. It is common sense to work in close and considerate cooperation with our suppliers so that our success is also their success and vice versa. It is common sense to take care of fi nancial and non-fi nancial communication in a prompt and precise manner, so that our value emerges naturally to the outside world, thus strengthening our reputation. It is with this perspective that we have adopted sustainability reporting with the fi rst report prepared for 2009 followed by this one for 2010. It is common sense to act with respect for the environment and for the safety of our workers, considering that our company itself is active in the industry of safety in mass transit, as these are simply the pre-conditions for operating. Common sense has no geographic boundaries and we adopt it in our actions throughout the world, sometimes exceeding the basic legal requirements on the issues of environment and safety. Of course, it may not be easy to apply this common sense but we will do it to the best of our ability. Sergio De Luca CEO of Ansaldo STS S.p.A. 5 Reporting methodology Reporting methodology The 2010 Sustainability Report of the Ansaldo STS Group reports, for the second consecutive year, the economic, social and environmental impact of management operations. The methodology adopted refers directly to the "Sustainability Reporting Guidelines of the GRI (Global Reporting Initiative) version 3.0." In order to ensure a balanced and fair reporting of its performances, the cross-functional Project Group of Ansaldo STS, which was set up in 2009 for preparing the fi rst Sustainability Report, has examined the application of GRI principles which defi ne content and quality of reporting. Materiality – In order to defi ne the topics and indicators used in this report, Ansaldo STS has taken into account all the economic, environmental and social impacts of its business which could affect the assessments and the decisions of its Stakeholders. The importance assigned in the report to different issues refl ects the degree of infl uence that such issues could have on the ability to satisfy the needs of current generations without jeopardising the needs of future generations. The determination of the relevant aspects accounted for in this report refl ects a combination of factors both internal and external to the organisation.