SUSTAINABILITY REPORT
ENVIRONMENT 2018 Consolidated Non-Financial Statement pursuant to Legislative Decree No. 254/2016 AND CLIMATE CHANGE
CUSTOMERS AND PRODUCTS
RESEARCH AND INNOVATION
SUPPLIERS
QUALITY
PEOPLE
COMMUNITY
GOVERNANCE FINCANTIERI GROUP
SUSTAINABILITY REPORT 2018 Consolidated Non-Financial Statement pursuant to Legislative Decree No. 254/2016 FINCANTIERI GROUP FINCANTIERI GROUP
I NDICE
LETTER FROM THE CHIEF PEOPLE 61 COMMUNITIES 133 EXECUTIVE OFFICER 4 People in numbers 63 Our initiatives 135 Recruitment policies, management Fincantieri Foundation 141 THE FINCANTIERI PLANET 6 and enhancement of human capital 65 Training and development 66 ENVIRONMENT AND CLIMATE THE FINCANTIERI GROUP 9 Diversity and equal opportunities 69 CHANGE 143 Our history: the bond with the sea 12 Health and safety 71 Environmental management system 144 Group overview 14 Company welfare 75 Environmental aspects 146 Vision, mission and values 16 Industrial relations 76 Environmental investments 152 Business model 17 Remuneration 77 Economic value for stakeholders 19 ANNEXES 155 Economic satellite businesses 20 RESEARCH AND INNOVATION 79 Methodological note 156 Memberships and participation in A clear vision for 2030 80 Description of material topics 160 associations 22 Structured processes for innovation 81 GRI content index 162
The role of Cetena 83 Independent auditors’ report on the SUSTAINABILITY FOR FINCANTIERI 25 Widespread network 83 consolidated non-financial statement 174 Sustainability governance 26 Main projects 88 Our stakeholders 28 Our Sustainability strategy 31 CUSTOMERS AND PRODUCTS 95 Materiality analysis 32 Our customers 96 Sustainability in risk mapping 33 Product portfolio 100 Charter of Sustainability Commitments 36 Eco-sustainable design 110 Sustainability Plan 38 Quality policy and assurance 112 ETHICS AND RESPONSIBLE BUSINESS Customer satisfaction and retention 115 MANAGEMENT 43 Corporate Governance SUPPLY CHAIN 117 and Remunerations Policy 44 Characteristics of the supply System of internal control and risk chain 119 management 51 Supply chain management 119 Our policies and management tools 54 Characteristics and management Cyber Security 58 of the supply chain of foreign Privacy protection 58 companies 127
2 3 FINCANTIERI GROUP FINCANTIERI GROUP
satisfaction and loyalty, continuous dialogue this multimedia video course is for those primarily by liquid natural gas. Along with and support to local communities working in the Group’s Italian shipyards the path forged by our commitment to and reduction in environmental impact, and mainly to all the employees of external innovation, I want to highlight that, as part contributing to the fight against climate companies, a catchment area that numbers of the agreement between the University change. approximately 30,000 people, women of Trieste, Fincantieri and Intergraph, we and men of various nationalities and opened a new integrated ship design I can therefore report that, in 2018, our ethnicities, whose contribution cannot be laboratory, a multidisciplinary environment desire to be a responsible Group - one that disregarded. Fincantieri for the Future and which is the only one of its kind in Italy. promotes policies to create ever more value Towards Zero Accidents, two fundamental for all our stakeholders - has strengthened campaigns launched in the past and In conclusion, we are aware that the even further, with a commitment that is concerning, respectively, the employee Company’s prestige and image is expressed, primarily, in the sustainable development process and improvement of measured today by its ability to combine management of our business in the working conditions as well as a reduction in professionalism and quality with strict long term. Sustainability is not just an accidents, have continued and their results respect for the law and expectations opportunity but for Fincantieri it is a are ever more significant. In addition, the regarding the protection of local genuine mission to represent a model of Memorandum of Understanding signed communities. The values and principles we excellence. with the Ministry of Education, Universities believe in - based on an ethical approach and Research aimed to strengthen the to carrying out our business - are laid out LETTER FROM THE CHIEF EXECUTIVE OFFICER Let’s look into some of the most important relationship between the system of higher in our Code of Conduct and disseminated actions developed last year in more detail. education and technical training and the to all levels and all positions. Our signing Last year we published our first To give the appropriate importance to world of work in the shipbuilding industry. of the National Framework Tender Protocol Sustainability Report in which we described projects and results, our website has a with the Ministry of the Interior best our corporate social responsibility new “Sustainability” section, where the Our commitment to protecting the outlines this corporate vision. initiatives, an aspect that is garnering overriding themes are social responsibility environment will also continue to be of the increased significance in long-term value towards both the environment and to highest possible level. The strategic choices creation. In 2018, we made important human resources. The latter in particular, for and business processes adopted at all strides along this virtuous path, notably the a large manufacturing company like us, are levels, in terms of project and systems, are publication of our Sustainability Plan - a in every respect our most important assets. in line with the principles of short, medium major step in spreading and consolidating a Talented women and men from all over the and long-term environmental sustainability. sustainability culture. world represent the Group’s inestimable This begins with a preventive approach and potential for knowledge and innovative continues with responsible management of The Plan is the best expression of capabilities. This is demonstrated by the the production chain and raising awareness Fincantieri’s strategic vision. Its integration three Employment Protocols we signed this among all those involved. with the Business Plan will enable us year with the Friuli Venezia Giulia, Liguria to manage our response to the market and Campania regions, aimed at promoting In this light, the studies and research challenges of today and tomorrow, employment and aiding the socio-economic carried out by the Company on innovation combining business growth and financial development of these territories where we are of paramount importance. Some of the stability in line with the principles of work. A far-reaching safety project was agreements we have signed in the cruise social and environmental sustainability. launched in January, dedicated to two ship segment are proof of this. In particular, Our increased commitment concerns factors that have always been considered two of our projects, focused on reducing GIUSEPPE BONO the promotion of a responsible supply strategic for the Company: the well-being environmental impact, have caught the Fincantieri Chief Executive Officer chain, employee involvement, constant of all employees and the maintenance interest of shipowners such as Tui Cruises improvement of health and safety at work, and improvement of all the environments and Princess Cruises. In cooperation with support for technological innovation, with which they interact. “Together in these companies, we will develop new maintenance of high levels of customer safety” was started on these premises; classes of next generation ships powered
4 5 FINCANTIERI GROUP FINCANTIERI GROUP
THE FINCANTIERI PLANET SHIPYARDS AND DOCKS MAIN SUBSIDIARIES EUROPE EUROPE ASIA ITALY ITALY CHINA + Trieste 7,000 FINCANTIERI S.p.A. Fincantieri (Shanghai) Trading Ships designed CSSC - Fincantieri Monfalcone and built CETENA € 5.5 bln +230 Cruise Industry Development Marghera € 122 mln Delfi Revenues Years of history Sestri Ponente PRINCIPAL Research, Seastema INDIA development and Western Fincantieri India Genoa shipbuilder innovation Isotta Fraschini Motori Riva Trigoso - Muggiano Fincantieri Oil&Gas Vard Electrical Installation Ancona Seaf and Engineering (India) Castellammare di Stabia Marine Interiors UAE Palermo Fincantieri SI Etihad Ship Building NORWAY Fincantieri Infrastructure QATAR Aukra Issel Nord Fincantieri Brattvaag Seanergy A Marine Interiors Services Middle East Brevik Company SINGAPORE Langsten NORWAY Vard Holdings Søviknes VARD Group Vard Shipholdings Singapore ROMANIA Vard Design JAPAN Braila Vard Piping FMSNA YK Tulcea Vard Electro Vard Accomodation AMERICAS Seaonics ASIA USA SWEDEN VIETNAM Group Holdings Fincantieri Sweden Vung Tau Fincantieri Marine POLAND +19,000 Systems North America + Employees Seaonics Polska 650,000 Fincantieri Services USA AMERICAS Hours of training 55% other countries USA provided - 45% Italy Fincantieri USA Marinette € 33.8 bln Vard Marine US Sturgeon Bay Total backlog CANADA Green Bay Vard Marine +253,000tCO e 2 BRAZIL BRAZIL GHG emissions st Suape 20 1 98 Fincantieri do Brasil Shipyards - Total Player in Vessels in 4 Participações area of 5.4km2 diversification order book Continents and innovation +5,000 Suppliers in Italy OCEANIA alone AUSTRALIA Fincantieri Australia
6 7 FINCANTIERI GROUP FINCANTIERI GROUP
T HE FINCANTIERI GROUP
OUR HISTORY: THE BOND WITH THE SEA
GROUP OVERVIEW
VISION, MISSION AND VALUES
BUSINESS MODEL
ECONOMIC VALUE FOR STAKEHOLDERS
ECONOMIC SATELLITE BUSINESSES
MEMBERSHIPS AND PARTICIPATION IN ASSOCIATIONS
8 9 FINCANTIERI GROUP FINCANTIERI GROUP
A global Group that is the only one components and after-sales services. As at 31 December 2018, 71.64% of SHAREHOLDERS STRUCTURE in the world with roots in Italy and The Group, which has its headquarters in Fincantieri’s share capital of 862,980,725.70 fruits around the world Trieste, has built more than 7,000 vessels euros is held, through the subsidiary Fintecna in its over 230 years of history. With 19,274 S.p.A., by Cassa Depositi e Prestiti (CDP) INDISTINCT MARKET FINTECNA S.p.A. Quoted on the Milan Stock Exchange, employees, including more than 8,600 S.p.A., a company controlled by the Ministry Fincantieri is one of the world’s largest in Italy, and 20 shipyards spanning 4 of Economy and Finance. The remainder shipbuilding groups and number one in continents, Fincantieri is now the leading of share capital was distributed between a 28.08% terms of diversification and innovation. Western shipbuilder. Its customers include number of private investors (none of whom It is leader in cruise ship design and the major cruise operators, the Italian held significant interests of 3% or above) 0.28 % construction and a reference player in all and US Navy, as well as several foreign and own shares (of around 0.28% of shares FINCANTIERI S.p.A high-tech shipbuilding industry sectors, Navies, and it is a partner of some of the representing the share capital). (OWN 71.64 % SHARES) from naval to offshore vessels, highly main European defence companies within The composition in terms of shareholder complex special vessels and ferries to supranational programs. structure is shown below. mega yachts, as well as in ship repairs and Fincantieri bases its technological and conversions, the production of systems and operational excellence on specific strengths.
CHARACTERISTICS OF THE % sharecapital SHAREHOLDER STRUCTURE YES/NO
Shareholders’ agreements No -
Shareholding threshold for the submission of slates for the - 1% appoinment of corporate System bodies and officers Technological integrator leadership capabilities
OUR STRENGTHS Business Tailor made diversification products
Wide portfolio of Flexible & global clients & products production network
10 11 FINCANTIERI GROUP FINCANTIERI GROUP
OUR HISTORY: THE BOND WITH THE SEA the Amerigo Vespucci, the educational ship ship. Within this path of constant growth natural bond that defines it, along with the of the Italian Naval Academy, and the trans- and development, the Group’s calling-card courage to change combined with tradition, The Fincantieri Group has produced Atlantic Rex, winner of the Blue Riband for continues to be, as it was two centuries experience and innovation. legendary ships in its shipyards, for example the fastest Atlantic crossing by a passenger ago, an in-depth knowledge of the sea, a
The Group moves forward with a strategy of further diversification and internationalization: 2008 • At the end of 2008 it acquires the Manitowoc Marine Group in the United States, now 2013 known as Fincantieri Marine Group, entering the United States Defence market. The top modern Italian shipbuilder begins its • Etihad Ship Building LLC is founded, a joint venture for the construction and repair of 1780 activities in Castellammare di Stabia. ships for the Navies in the Middle East. • In 2009 Seastema S.p.A. is founded, with ABB, serving the Automation Industry. • In 2011 an operating unit dedicated to logistic and after-sales support is established to meet the growing demand for these services. • The mega yachts business unit delivers the first 134 metre mega yacht, winner of the 2012 World Superyacht Award. Fincantieri is established as • January 2013 purchase of the Norwegian Group VARD, publicly traded on the Singapore a finance company to control 1959 Stock Market, among the world-leaders in the construction of top-tier offshore support the main Italian shipyards. vessels.
The Group is traded in the Italian Stock Market and the company Marine Interiors is founded, Fincantieri is converted intoan operating company. 1984 2014 a company specialized in the design, refitting, and delivery of “turnkey” cabins. 1984
The Company enters the cruise ship The following are founded: business and delivers its first vessel, the 1990s • Fincantieri SI, a company that designs, Crown Princess, to the Carnival Group. produces, and supplies innovative industrial 2015 electric, electronic and electromechanical 1990 integrated systems. • Clear recovery of operating and economic • Fincantieri (Shanghai) Trading Co. Ltd., 2016 performance in line with the objectives The Destriero sets the record, which Chinese branch, with headquarters in Shanghai, of the 2016-2020 Business Plan. stands today, for the fastest Atlantic to ensure the Group’s presence 1992 • Signature of a major agreement with China State Ocean crossing without refuelling. in the Chinese market. Shipbuilding Corporation (CSSC) for the formation of a joint venture aimed at developing the Chinese • Signature of Memorandum of Agreement with CSSC and Carnival Corporation cruise market. for the construction of two cruise ships, with an option for 2017 • Establishment of Fincantieri Australia, with four more for the Chinese market. headquarters in Canberra, to manage all activities The Group strengthens its strategy for growth, expanding its business boundary 2000 • Acquisition of more shares in the VARD Group with an increase from 55.63% to related to the tender to win the maxi-order from the into three new business areas: 2007 79.74% as of 31st December, 2017. Royal Australian Navy. • Mega Yachts, creating the Fincantieri Yachts product line, focused on the • Fincantieri and Ferretti Group sign a cooperation agreement to develop • Endorsement of the CDP (Carbon Disclosure Project). design and construction of large luxury yachts. commercial and industrial synergies. • Definition with the main trade unions of • Ship repairs and conversion, through the expansion of its vessel transformation • Signature of National Legality Framework Agreement. the terms for renewing the supplementary and conversion business. • Various R&D agreements are signed with ENI (Energy Systems), GE Power labour agreement applying to all employees of • Systems and components with the aim of strengthening the business by acting (Emissions Reduction), and Mapei (Chemical Products). FINCANTIERI S.p.A. and some subsidiaries. as a “systems integrator” for the design and construction of turnkey solutions, • ISO/IEC 27001:2013 and ISO 9001:2015 certifications offering products to customers in both the naval and industrial sectors. received from RINA Services.
• The share purchase agreement acquire 50% (+1% on loan) of the • A cooperation agreement is signed between Fincantieri and the Food • An order is received from TUI Cruise and an agreement is signed with • The VARD group completes its de-listing from the Singapore Stock capital of STX France is signed. Bank of Liguria to donate food surpluses to people in need. Princess Cruises for the construction of new-generation cruise ships Exchange. After the de-listing, Fincantieri holds a 97.22% interest. • Isotta Fraschini Motori is awarded Best Italian Client 2017 of Lloyd’s • The “Together in safety” programme is started, a multimedia video powered by LNG (Liquid Natural Gas). • Fincantieri Group’s first Sustainability Plan is approved. Register for an innovative approach in the relationships between the course for workers. • An agreement between the University of Trieste, Fincantieri and company and supply chain. • Fincantieri Group’s first Sustainability Report is approved by the Board Intergraph, for the new integrated ship design laboratory. • Three Employment Protocols are signed with the Friuli Venezia Giulia, of Directors. • An agreement is signed between the State Police and Fincantieri to Liguria and Campania regions. combat cyber crime.
12 13 FINCANTIERI GROUP FINCANTIERI GROUP
GROUP OVERVIEW companies with headquarters in Italy and headquarters in Norway, Fincantieri Marine the Singapore Stock Market on 2 November around the world, and adopts an integrated Group LLC, Fincantieri Marine Systems 2018. After the de-listing, Fincantieri holds a Over the years, Fincantieri’s organization has production model, designed to achieve North America Inc., Isotta Fraschini Motori 97.22% interest. continuously evolved to adapt the Group’s excellence. S.p.A., Marine Interiors S.p.A. and CETENA Below is a diagram which highlights the structure to its strategies and to respond to Fincantieri has 70 subsidiaries, 15 of which are S.p.A. The main organizational changes that macro-organization of the Group and the customer requirements in a timely manner. Italian and 55 of which are foreign. The main occurred during year concerned the VARD main companies by business area. Today the Group consists of a number of ones are: VARD, a group with operational group, which completed its de-listing from
SHIPBUILDING OFFSHORE AND SPECIALIZED EQUIPMENT, SYSTEMS AND SERVICES OTHER SEGMENTS VESSELS BUSINESS AREAS
Cruise ships Ferries Naval Vessels Mega Yachts Offshore and Systems and Services Contemporay Cruise ferry Aircraft Carriers Mega yachts > 70 m Specialized Vessels Components Ship repairs Premium Ro-Pax Destroyers Drilling units Cabins Refitting Upper Premium Dual fuel ferries Frigates Offshore support vessels Public areas Refurbishment Luxury Corvettes (AHTS-PSV-OSCV) Electrical, electronic and Conversions Exploration/Niche Patrol vessels Specialized vessels electromechanical integrated Product lifecycle management Aquaculture systems PRODUCT PORTFOLIO Expedition cruise vessels Amphibious ships • Integrated logistic support Automation systems Logistic support ships Offshore Wind • In-service support Entertainment systems Multirole and Research Vessels • Refitting Stabilization, propulsion, Special vessels positioning and power • Conversions Submarines generation systems Training and assistance Steam turbines Steel structure for large scale projects
FINCANTIERI S.p.A. Fincantieri Marine Group Holdings Inc. FINCANTIERI S.p.A. FINCANTIERI S.p.A. FINCANTIERI S.p.A. • Monfalcone FMG LLC Fincantieri Oil&Gas S.p.A. • Riva Trigoso • Arsenale Triestino San Marco FINCANTIERI S.p.A. • Marghera • Sturgeon Bay VARD Group AS Seastema S.p.A. • Bacino di Genova • Sestri Ponente Marinette Marine Corporation LLC • Aukra Seaf S.p.A. • Integrated Naval Shipyard Navale Riva Trigoso and Muggiano • Marinette • Brattvaag Isotta Fraschini Motori S.p.A. Delfi S.r.l. • Ancona ACE Marine LLC • Brevik • Bari Issel Nord S.r.l. • Castellammare di Stabia • Green Bay Vard Promar SA Fincantieri SI S.p.A. FMSNA Inc. • Palermo Fincantieri India Pte Ltd. • Suape Marine Interiors S.p.A. Fincantieri Services Middle East LLC VARD Group AS Fincantieri do Brasil Partecipacões SA Vard Vung Tau Ltd. M.I. Galley S.r.l. Fincantieri Services USA LLC • Langsten Fincantieri USA Inc. • Vung Tau Fincantieri Infrastructure S.p.A. • Søviknes Fincantieri Australia PTY Ltd. Vard Electro AS Fincantieri Sweden AB Vard Tulcea SA Fincantieri (Shanghai) Trading Co. Ltd. Vard Design AS Unifer Navale S.r.l. • Tulcea Etihad Ship Building LLC. Vard Piping AS Vard Braila SA Orizzonte Sistemi Navali S.p.A. Vard Marine Inc.
MAIN SUBSIDIARIES/ASSOCIATES/JOINT VENTURES MAIN SUBSIDIARIES/ASSOCIATES/JOINT • Braila CSSC - Fincantieri Cruise Industry Development Ltd. Seaonics AS Vard Accommodations AS Cetena S.p.A.
14 15 FINCANTIERI GROUP FINCANTIERI GROUP
VISION, MISSION AND VALUES The Fincantieri value system is a large BUSINESS MODEL design, which includes a global network of The Vision, Mission and Values of Fincantieri connections of skills and knowledge, at sea The products made by the Group feature a are the supporting pillars of the Group and on land. high level of personalization and, in many culture. The values are fundamental guidelines, cases, are prototypes with cutting-edge cornerstones of the business, recognized technological solutions. and adopted by all who work in the Group, As such, they require significant efforts in VISION MISSION in individual, corporate and team actions. terms of design, procurement, production, We aspire to become world leaders in all sectors Technological development and continuous They mark out a shared course into an planning and order management. that require highly advanced solutions, setting improvement are the goals that we have set for increasingly sustainable, technological and As part of its activities, the Group acts as ourselves still further apart by our diversification ourselves, and we are determined to pursue them. high performance future. a systems integrator, usually acting as the and innovation work. Our every action, project, initiative or decision After defining the values and as part of the prime/general contractor, managing the The Sea Ahead: all those who work for the is based on principles and guidelines that are project Fincantieri for the Future, 2018 saw project for vessel construction as a whole Fincantieri Group steer for this course: talented implemented across the Group: strict observance men and women working responsibly to of the law, labour protection and protection of the creation of the Group’s Behaviour Pact. and taking on responsibility for this. help develop our idea of a future increasingly the environment, safeguarding the interests of Creating a behaviour pact has meant clearly Typically, while there are differences due characterized by technology, performance and our shareholders, employees, clients, trade and defining the key behaviours that each to the strategic business area and product sustainability. financial partners, local communities and groups, person must adopt every day in order to type, for each order the Group directly creating value for every stakeholder. make the values stronger, more embraced develops project management, design, and experienced at all levels. hull procurement and manufacture, while VALUES The contributions of colleagues have its role mainly involves integration and been collected in every office and in every coordination of a qualified network of shipyard with the aim of creating a shared expert suppliers for the preparation of PEOPLE document, in order to build the future of systems, accommodation and, for military Everything we do focuses on enabling the Company together in a tangible and vessels, weapons systems. The need for the growth, enhancement and training of people, based on the daily attention effective way. continuous research into methods to reduce we pay to the quality of our work and our relations with others A campaign to communicate the Behaviour costs and development and construction INNOVATION Pact to employees will be launched in the times for vessel orders has led the Group to We aim at continuously improving our products and first months of 2019, at the end of a project develop a business model characterized by working methods through that lays the foundations of the Group’s high flexibility and integration of the main technological innovation identity, on which the new organizational business processes as well as cutting-edge culture will be based. technological solutions. In terms of business FINCANTIERI model the Group has adopted a make or SAFETY buy strategy for each step of development We ensure high levels of occupational safety and construction of the vessel order, with and health the objective of keeping core skills and high value-added activities within the Group and outsourcing to qualified suppliers specialist activities that are low value-added or non- essential. CUSTOMER FOCUS Generally, the Group contracts during all We meet customer INTEGRITY requirements and we We take responsibility for our actions stages of development and construction rigorously honor our and we put great care into our work, of the order, especially for design and commitments adhering to strict principles of ethics, loyalty and professional fairness production areas, also to ensure effective and efficient management of fluctuations in the order backlog and optimize
16 17 FINCANTIERI GROUP FINCANTIERI GROUP
saturation of the Group workforce. are: (i) contract acquisition; (ii) project ECONOMIC VALUE FOR STAKEHOLDERS value generated and distributed indicator The main processes into which the Group management; (iii) design; (iv) procurement; (201-1) in the GRI Sustainability Reporting value chain is divided, described below (v) production; (vi) guarantee and after The Group believes in an economy that is Standards (2016), represents the economic and illustrated in the following diagram, sales; (vii) financing. a system of relations based on trust and impact of the Group’s business for the benefit transparency, an integrated dynamic network of the main stakeholder categories. In terms of cross-cutting communities, built over of Economic Value distribution, it is important BUSINESS MODEL: SUMMARY DIAGRAM Support processes Core processes time to create and exchange value. In this to observe that the impacts produced are
Timeline not Pre-contract stage Post-contract stage to scale(1) (3-4) Contract (10-12) First sheet cut (10-13) Launch (8-11) Delivery (12-24) context, the distribution of Economic Value, mostly limited to the local area, specifically Contract calculated according to the direct economic with reference to personnel and suppliers. acquisition Tender/negotiations
Project Order management Management Project management
Basic design Functional design ITEMS DESCRIPTION 2017 2018 VAR 2018/2017
Design 3D Model ECONOMIC VALUE euro/million 5,047 5,513 9.2% GENERATED DIRECTLY Development design a) Revenue Sales revenue euro/million 5,020 5,474 9.0% Management of changes b) Finance income Interest income and return on euro/million 27 40 47.5% Procurement Procurement equity investments c) Capital gains/losses on Business profits euro/million - (0) - Sheet cutting Pipe construction business profits DISTRIBUTED ECONOMIC euro/million 4,804 5,266 9.6% Pre-fabrication Pre-outfitting Production VALUE Pre-assembly a) Operating costs Payments to suppliers euro/million 3,734 4,089 9.5%
Assembly Outfitting b) Cost of personnel Payments to employees euro/million 912 952 4.3% Guarantee and Guarantee and c) Dividends Payments to suppliers of euro/million - 17 - after sales after sales capital (shareholders)
ECA commitment (2) Support for export credit negotiation Documentation for draw down d) Interest paid and financial Payments to suppliers of euro/million 115 141 22.3% Financing costs capital (banking institutions) Financing of working capital e) Duties and taxes Payment of duties, taxes and euro/million 40 64 60.8% other financial and legal fees 1 Indicative timing for the Cruise Ship market. 2 Export Credit Agency commitment, often required as a condition for the validity of the vessel contract. f) Donations to associations Community investments euro/million 3 3 26.1% ECONOMIC VALUE Calculated as the difference euro/million 242 247 2.2% RETAINED between the economic value For more information on the Business Model, see the website www.fincantieri.com/en/group/business-model generated and the economic value distributed
REVENUES BY OPERATING COUNTRIES 2017 2018 VAR 2018/2017 Italy euro/million 3,642 3,989 9.5% Norway euro/million 670 817 22.0% United States euro/million 498 467 -6.2% Brazil euro/million 121 135 11.4% Other countries euro/million 89 66 -25.0% Total euro/million 5,020 5,474 9.0%
18 19 FINCANTIERI GROUP FINCANTIERI GROUP
ECONOMIC SATELLITE BUSINESSES on average € 2.7 to € 3.6 billion of business volume for the Italian System: Thanks to a competitive production Employed Employed 29,200 79,900 model that is strongly linked to the Italian • directly generated by Fincantieri: about € by Fincantieri by Fincantieri production network, Fincantieri generates 600 to 800 million; companies subcontractors additional impact on the national economy. • additional through stimulation of satellite businesses: about € 2.1 to 2.8 billion. 50,700
With the current record level of order Employed in economic PRODUCTION PRODUCTION backlog, over the next few years, Fincantieri MODEL SUPPLY IMPACT OF 32,000 sectors correlated CHAIN FINCANTIERI will have, due to the multiplier effect of its with the consumption (Make or buy) = + ON THE ITALIAN of those directly ECONOMY activities, an average annual impact of 1% on employed and indirectly the Italian Gross Domestic Product (GDP). employed (first-tier) by The impact on employment can be 8,650 Fincantieri calculated by initially considering direct According to a Censis study, the Fifth Report employment, that is direct jobs at Direct employees Direct + Indirect Total Direct + Indirect Employment induced Total Employment on the Economy of the Sea 2015, every euro Fincantieri in Italy, to which first-tier indirect in Italy 1st tier 1st and 2nd tier through consumption invested in shipyards produces a value 4.5 employment is added, that is jobs at times greater, mostly benefitting the area Fincantieri contractors, as well as second- ~ 3.7x ~ 5.5x ~ 3.4x ~ 8.9x where it is located, through the involvement tier employment, represented by jobs at of a wide and diverse network of companies, sub-contractors. In turn, it is necessary to many of which are highly specialized small add to this final employment figure the or medium-sized enterprises. satellite business jobs due to consumption MULTIPLIER Each cruise ship built by Fincantieri develops by the families of all employees. Source: FC estimates based on Censis data.
From the graph it can be seen that: Considering both the effects upstream and downstream of its production organization, • the approximately 8,650 direct resources Fincantieri has a significant employment at Fincantieri activate in Italy more than multiplier effect of about 8.9, confirming 50,700 employment units in industry the broad impact the Company has on the (considering contracts and subcontracts) in the country’s economic system. manufacturing industry; • adding to this the induced effect of family consumption, employment stands at around 79,900 units.
20 21 FINCANTIERI GROUP FINCANTIERI GROUP
MEMBERSHIPS AND PARTICIPATION IN national and international associations, ASSOCIATION/ORGANIZATION GOVERNING BODY ASSOCIATIONS stimulating, along with the other associates, Wisconsin Safety Council - Organization of the State of Wisconsin that promotes safety Member effective, systematic action in the areas of at work To support the development of its business, research and development and promotion of Society of Naval Architects & Marine Engineers (SNAME) - Association promoting Member education, development of subjects related to the marine industry Fincantieri S.p.A. and its subsidiaries the various stakeholders’ interests. participate in the governance of various Marinette & Menominee Chamber of Commerce - Local Chamber of Commerce for the Executive committee economic development and growth of the Marinette area Marinette & Menominee Area Community Foundation (MMACF) - Non-profit Member organization supporting growth in the community by identifying investment opportunities ASSOCIATION/ORGANIZATION GOVERNING BODY Surface Navy Association (SNA) - Association of all government, industry and academic Chairman Confindustria FVG - Industrial association Chairman entities with interests in surface naval vessel activities Confindustria Venezia Giulia- Industrial association Board of Administration National Navy League - Non-profit organization that supports those who provide services Collaboration at sea: the Navy, Marine Corps, Coast Guard and Merchant Navy of the United States of Confindustria, Genova, La Spezia, Pordenone, Venezia - Industrial association Vice-Chairman America Confindustria Ancona - Industrial association Council member National Shipbuilding And Ship Repair Research (NSRP) - Management of national Collaboration in research Confindustria Napoli - Industrial association General Council research and development funding for the shipbuilding industry initiatives Federmeccanica - Association of mechanical engineering industries Vice-Chairman New North - Non-profit organization for business and economic development and the Steering Committee promotion of cooperation between leaders in the public and private sector of the 18 ASSONAVE - Italian Association of the Naval Engineering Industry Chairman counties in Northeast Wisconsin - Italian maritime cluster Steering Committee Federazione del Mare National Infrastructure Advisory Council (NIAC) - The advisory council that advises Council Member Club Diplomatia - Association Steering Committee the President, through the Secretary of Homeland Security, on the security of critical infrastructure sectors and their IT systems Institute of International Business (IAI) Steering Committee New Manufacturing Alliance - A group of manufacturers working with educators, Collaboration Aspen Institute Italia - Association Executive committee chambers of commerce and state organizations to promote manufacturing in the Institute for the study of international relations (ISPI) Chairman Northeast of Wisconsin Assonime - Association of Italian Joint-Stock Companies Council member North Coast Marine Manufacturing Alliance - Association of ship, boat and yacht Steering Committee manufacturers in the region to promote, develop and grow the industry Euroyards - European association for the promotion of shipyard interests Executive committee University of Wisconsin Marinette Foundation - Independent non-governmental Steering Committee Vessel For The Future - European association for research in the field of vessels Vice-Chairman organization with the aim of raising, investing and distributing funds for the benefit of the Blue Italian Growth National Technology Cluster (NTC BIG) Chairman University of Wisconsin-Marinette (SCA) - National trade association representing the US Member European Council for Maritime Applied R&D (ECMAR) Chairman Shipbuilders Council of America shipbuilding industry Cooperative Research Ship (CRS) Board of Directors Governor-Elect Tony Evers Transition Committee - Committee created with the aim Jan Allman, President Federation of Italian companies for Aerospace, Defense and Security (AIAD) Steering Committee to support the Governor-Elect Tony Evers. Members of the committee are tasked with and CEO of Fincantieri sharing contacts and ideas for the Evers administration Marinette Marine, Atena (FVG) - Italian Naval Technology Association Steering Committee member of the Mare Tc FVG - Technology Cluster (Monfalcone) Chief Executive Officer Committee Trasporti Italia 2020 National Technology Cluster (NTC) Committee of Chamber of Commerce and Industry Braila - Promotion in the area of Braila of Romanian Member strategic direction and companies abroad management Asociația Constructorilor Navali din România (ANCONAV) – Association of Romanian Member Liguria District for Marine Technology (La Spezia) (DTML) Board of Directors shipbuilders Liguria Technology District for Integrated Intelligent Systems (SIIT) Board of Directors CONPIROM - Confederation representing the interests of employers with the public Chairman authorities, trade unions and other local and foreign organizations Campania Technology District for Polymeric Material Engineering (IMAST) Board of Directors The Norwegian Society for Electric and Automatic Control (NFEA) - Non-profit Main Sponsor Sicily Technology District for Naval Transport (NAVTEC) Board of Directors association focused on the electrical and automation sectors Nautica Italiana - Association affiliated with the Altagamma Foundation Vice-Chairman DNV GL Forum - Integration of local Ship Design Environment in Poland Member Virginia Ship Repair Counsel - Association of companies in Virginia involved in ship repair Member Norsk Industri Maritim (The Federation of Norwegian Industries) - Trade association Member that dialogues with institutions to ensure the adoption of policies aimed at maintaining Society for Human Resources Management - Association offering consultancy and Human Resources competitiveness in Norwegian industry support to the Human Resources department Coordinator
Shipbuilders Council of America - Association promoting the shipbuilding industry Member Federation of the Manufacturing Industry (FEPA CM) - Organization that represents the Member in the USA confederation of employers in industry, agriculture, construction and services in Romania
22 23 FINCANTIERI GROUP FINCANTIERI GROUP
S USTAINABILITY FOR FINCANTIERI
SUSTAINABILITY GOVERNANCE
OUR STAKEHOLDERS
OUR SUSTAINABILITY STRATEGY
MATERIALITY ANALYSIS
SUSTAINABILITY IN RISK MAPPING
CHARTER OF SUSTAINABILITY COMMITMENTS
SUSTAINABILITY PLAN
24 25 FINCANTIERI GROUP FINCANTIERI GROUP
Sustainability is a real mission for and social responsibility. The Committee • The Sustainability unit, which reports Human Resources and Industrial Relations, Fincantieri, it is the capacity to is composed of 4 independent members directly to the Deputy Chief Financial Legal Affairs, Procurement, Research and respond to the challenges posed and provides the Board of Directors with Officer, coordinates sustainability activities, Innovation, Design, Security, System and by the market today and tomorrow, proposals and consultation services, ensures compliance with the commitments Technology Development, Supply Chain, creating value in the long term specifically it: undertaken, monitors the progress of projects Internal Auditing, Quality and Performance and achievement of the sustainability Improvement, Strategic Market Analysis A company is sustainable when each - adequately investigates issues related to objectives while continually keeping the and Administration, Finance and Control person has understood its value and reflects the sustainability of Company activities Sustainability Committee informed. departments/units. in their everyday work the fundamental and the dynamics of its interaction with all • The multifunctional Working Group is • Local representatives abroad for the VARD principles of responsibility, commitment and stakeholders; coordinated by the Administration, Finance group, for Fincantieri Marine Group and for consideration for stakeholder expectations, - plays an advisory and informative role and Control Department and tasked with Fincantieri Marine System North America Inc. creating a virtuous cycle that generates for the Board of Directors on non-financial helping prepare the Sustainability Report and collect and manage the information for the synergy and shared, proactive commitment. matters such as the Company’s compliance defining objectives, targets and timescales for Sustainability Report and coordinate in turn For Fincantieri, sustainability is not just with and promotion of human rights, labour the sustainability commitments undertaken with a working group, specifically dedicated an opportunity but a real mission to rights, environmental rights, combating by the Group. The Working Group includes to sustainability. The representatives abroad represent a model of excellence in the corruption, health and safety of corporate representatives nominated by the Marketing, report directly to the Sustainability unit and/ world, a pervasive approach to business activities, the rights of all stakeholders, and Communication and Media Relations, or the Working Group. that is able to respond to the challenges product liability. of a globalized world and is increasingly sensitive to the impacts generated by The Chairman of the Committee reports on industrial processes on society and the the Committee’s activities at each meeting environment. Sustainability in Fincantieri of the Board of Directors. The Committee translates into strict observance of the met 6 times in 2018. SUSTAINABILITY law, protection of workers, environmental COMMITTEE protection, and safeguarding the interests of the shareholders, employees, customers, commercial and financial partners, general public and local communities, creating long- CHAIRMAN LOCAL term value for all stakeholders. GIANFRANCO REPRESENTATIVES AGOSTINETTO ABROAD Board of Directors SUSTAINABILITY UNIT SUSTAINABILITY GOVERNANCE
To guarantee adequate protection and MASSIMILIANO NICOLETTA monitoring of processes associated with CESARE GIADROSSI sustainability, Fincantieri has a Sustainability MULTIFUNCTIONAL Governance Model that provides for: WORKING GROUP
• The Sustainability Committee, established SIMONE by the Fincantieri’s Board of Directors in ANICHINI 2016, aims to supervise overall management of sustainability in the Company and For more information on the Sustainability Committee, see the Report on Corporate Governance and Ownership Structure available define the strategic lines, commitments on the website www.fincantieri.com/en/governance/corporate-governance-system/corporate-governance-reports and projects for sustainable development
26 27 FINCANTIERI GROUP FINCANTIERI GROUP
OUR STAKEHOLDERS competitive advantage for the Group. their level of representativeness and promoted by the Group. Responsibility for The main categories of stakeholders, both authoritativeness have also been considered. relations with the various stakeholders is Fincantieri considers listening to and within and outside the Group, have been The graphic below details, for each group spread across the whole Group, with specific involving stakeholders is paramount in order analysed and identified. More specifically, of stakeholder, the main tools, listening functions constantly engaging with their to understand their needs, their interests and consideration was given to those channels and frequency with which they are individual groups of stakeholders. their expectations. Stakeholder involvement stakeholders towards whom Fincantieri has contacted with the aim of gathering their allows the development of long-term responsibilities and those persons or entities expectations and needs and communicating relationships which become a source of able to influence the Group’s performance; the results achieved and the programmes
FINANCIAL COMMUNITY ENVIRONMENT Financial dialogue is constant, in compliance with the law and in line with best working practices, Fincantieri’s mission is to become a model of excellence in environmental protection, and it therefore adopts, in its ensuring complete transparency strategic choices and business processes at all levels, the principles of environmental sustainability when carrying out its work 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 Direct contact with bodies and ad hoc working parties 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 Participation in working parties, meetings with representatives from NGOs and non-profit organizations, CUSTOMERS civil society institutions and associations, press conferences. Periodic meetings with schools and universities FREQUENCY Fincantieri always listens to its customers’ needs, each ship is the product of a strong relationship with the to discuss and develop topics for research, internships, work-study schemes shipowner Continuous dialogue and periodic meetings TOOLS AND CHANNELS The entire shipbuilding process calls for a continuous relationship between the project manager and the STAKEHOLDER customer and their staff Direct, continuous relationship
Fincantieri SUPPLIERS AND PARTNERS HUMAN RESOURCES Fincantieri suppliers are a valuable strategic resource. That is why the Company promotes long-term At Fincantieri people come first. Constant collaboration and cooperation allow for individual and group growth, relationships and sharing of responsibilities and development making ideas and practices, responsibilities and actions a common factor Days dedicated to education, individual performance reviews, discussions with labour unions and employee Meetings with strategic suppliers, dedicated audits at selected suppliers, feedback questionnaires. Various representatives, involvement in specific initiatives, and performance evaluation meetings. Courses, various activities related to health and safety topics activities, e-learning related to health and safety topics Continuous dialogue and periodic meetings 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. INSTITUTIONS AND PUBLIC ADMINISTRATION Accordingly, a new system of industrial relations has been implemented in line with the relevant commercial, The distinct nature of Fincantieri’s business calls for a continuous relationship with Institutions and the Public Administration economic and production context Direct contacts, internet, ad hoc working groups, definition and development of common projects Meetings, working parties/discussions and the establishment of appropriate joint bodies to address various topics with the labour unions on all levels Continuous dialogue and periodic meetings Continuous dialogue and periodic meetings
28 29 FINCANTIERI GROUP FINCANTIERI GROUP
An important role in spreading the Since 2017 Fincantieri has also been active The Group’s website, www.fincantieri.com, integrated strategy that is capable of sustainability culture is played by the on Instagram, the third most popular social has an Investor Relations section containing combining business growth and financial Marketing Communication and Media network after Facebook and YouTube. On information that is useful for shareholders, stability with social and environmental Relations department in conveying all the this platform, the Company publishes high- investors, analysts and for the financial sustainability, creating value in the long term. messages, which originate from direct impact photographs that create, through the community in general. This is why the important (material) topics dialogue with management both inside and strength of the image, a daily dialogue with for the Group have been integrated into its outside the Group. the user, raising awareness and improving business strategy and why the Fincantieri the reputation of the brand among its OUR SUSTAINABILITY STRATEGY Group’s Sustainability Plan has been In 2018, the initiatives promoted, in particular stakeholders. implemented. by the Media Relations office, have produced In January 2019 the channel had more than Fincantieri has decided to structure Fincantieri’s sustainability path has taken the numerous articles: 13,000 followers, with an average monthly its sustainability path by adopting an following approach. growth rate of between 500 and 600 new users. NUMBER OF ITEMS Fincantieri Yachts has its own Instagram channel, dedicated to the luxury segment, established just a few months after the Corporate channel. The latter has performed OBJECTIVES SUSTAINABILITY even better with an organic growth reaching TOPICS COMMITMENTS & 526 TV & RADIO PLAN almost 16,000 followers at an average rate of TARGETS over 600 new users a month. PRINT 2,812 With the same objectives, some of the Group’s subsidiaries are also present on • Materiality analysis to define • Definition of the Charter of • Involvement of the • Preparation of the proposed ONLINE the sustainability topics that are Sustainability Commitments multifunctional Working Group Sustainability Plan 20,900 this social platform. Specifically, Fincantieri significant for the Company based on the significant in the definition of objectives Australia, CETENA, VARD, Fincantieri Marine topics to formalise corporate targets and timetables that meet • Assessment of the • Involvement of internal commitment the commitments undertaken by Sustainability Plan by the Group and Marine Interiors have helped to stakeholders to assess the topics’ the Company Top Management and the relevance for the definition of the • Approval of the Sustainability Committee, expand the follower base of the Group to commitment scope Commitments by the Board • Alignement with the drivers of approval by the Board of more than 120,000 people. of Directors the 2018-2022 Businnes Plan Directors • Identification of the non- To ensure accurate, transparent, effective financial risks and alignment with Another important tool in Fincantieri’s and reliable financial reporting, Fincantieri the most significant sustainability topics communications strategy is use of social established, from the moment of its listing networks. The Company has been present for in 2014, an Investor Relations office. The some time on LinkedIn, YouTube and since purpose of the office is to provide reliable 2017 on Instagram. information on the Group’s activities so as to increase the market’s confidence in the Group and create long-term relations with shareholders. Investor Relations prevents information from being disseminated in the LinkedIn, the main social network for market inconsistently and makes important professional contacts, allows Fincantieri to give information available to all actual or potential the Company prestige through the publication investors at the same time. of high-quality content and the contribution of In 2018, Fincantieri kept up constant dialogue its employees, using the method of employer with its investors, organizing nearly 170 branding. events for groups and individuals, including In January 2019, the Fincantieri profile had over teleconference meetings and visits to 88,000 followers (30,000 more than last year). facilities.
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MATERIALITY ANALYSIS The evaluation of each aspect, with a scale SUSTAINABILITY IN RISK MAPPING specifically centred on sustainability. from 1 to 4 (where 4 is highly significant), was The Fincantieri Risk Universe has been Fincantieri launched a process in 2016 to identify performed by the multifunctional working At Fincantieri, the Risk Officer is responsible defined as part of the “ERM project” which the material topics and a materiality analysis was group, taking into account two aspects for mapping the main company risks as provided the Company with an Enterprise performed to identify important information. (significance for Fincantieri, significance well as reporting the mitigation actions level process for detecting, evaluating and It is updated each year in compliance with the for stakeholders) and then approved by that the business takes to manage the risk monitoring the main company risks, in Global Reporting Initiative Standards. Fincantieri's Board of Directors. (Enterprise Risk Management). In 2017, compliance with the requirements for listed The purpose of the materiality analysis is to A materiality threshold was defined the Risk Officer integrated the company companies as per the Corporate Governance identify, using a matrix, the material topics, (corresponding to 2), beyond which an risk model (Fincantieri Risk Universe) with Code for the Italian Stock Market. The that is those topics that are actually important issue must be accounted for. Based on the additional risks concerning corporate social Company’s Risk Universe is given below. for Fincantieri and for its stakeholders. evaluation, the materiality matrix highlights responsibility following a structured process The assessment of the importance of the a linear correlation between the topics that topics identified was performed based on are significant for Fincantieri and those that the significance of their economic, social are significant for the stakeholders, indicating RISK UNIVERSE and environmental impact on the Company a substantial overlap of interests within and EXTERNAL RISKS and their level of influence on stakeholders’ outside the Group.
decisions. - Economic Cycle (Macro and Sectorial) - Laws and Regulations - Supplier Dependency - Customers (Business Concentration) - Country Risk - Competition - New Technologies - Economic Policy (incentives) - Natual Disasters and Catastrophes 4.00 INTERNAL RISKS
3.80 FINANCIAL OPERATIONAL AND SUPPLY CHAIN CORPORATE SOCIAL RESPONSABILITY (CSR) Price: - Product Technology - Reputational Risk 3.60 - Ecologically compatible - Exchange Rate - Projects Quality and Safety Governance Health and safety product development and business in the workplace 3.40 Relations with integrity - Energy, Raw Materials and - Industrial productivity - Environment local communities Components’ Price (operational efficiency) - Implementation of the Mission and Economic and financial sustainability - Warehouse management Values in terms of Sustainability 3.20 - Interest Rate Environmental impact of products and services Product quality and compliance - Governance, Strategy and with technical standards - Management System Customer satisfaction Liquidity: Sustainability Compliance 3.00 - Organizational Complexity Stakeholder - Rating agencies and sustainability Protection of employment and - Cash Flow industrial relationships of the Yard indices 2.80 Training and education - Access to credit Company welfare Climate change - Outsourcing - Sustainable Supply Chain - People Human rights Environmental management Credit: - Project Management 2.60 - Investor & Public Relations Diversity and equal opportunity Procurement activities - Counterparty Risk - Business Interruption - Training, incentives, and 2.40 GOVERNANCE/COMPLIANCE - Credit Scoring assessment of the sustainability Innovation, research and development - System of Powers and Duties PLANNING AND REPORTING performance 2.20 Management INFORMATION MANAGEMENT - Planning and Budgeting - Segregation of Duties - Corporate Data and Information 2.00 Protection 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80 4.00 - Evaluation - Corruption and Frauds - Reliability and Integrity Fincantieri - Controlling - Health, Safety and Environment - IT infrastructure Management Economic responsibility Environmental responsibility Social responsibility Product responsibility Human resources responsibility Governance HUMAN RESOURCES - Disclosure STRATEGIC - Taxation - Change Management - Brand Positioning All topics indicated in the matrix are subject to inclusion in the Sustainability Report. LEGAL - Labour Relations - Production Capacity - Customer Satisfaction - Intellectual Property - Human Resources Management - Business Portfolio The description of the material topics is available in the annexes p. 160 - Staff Retention - Litigation and Disputes - Partnerships and Alliances - Performance Management - Criminality (common and organized) Management and terrorism - Labour Cost - Acquisition, Integration and Disposal
32 33 FINCANTIERI GROUP FINCANTIERI GROUP
The process is divided into parts, starting The table on the opposite page shows MACRO AREA RISK EVENT DESCRIPTION OF RISK MANAGEMENT METHOD with risk (and opportunity) mapping in the 10 sustainability risks included • Risk of not achieving an excellent sustainability rating with Chapter: terms of sustainability and climate change, in Fincantieri’s Risk Universe; their Rating agencies and sustainability indices specialized rating companies and analysts, or of a negative impact on Sustainability for using specific tools to identify the main management is described in the chapters of reputation following a poor sustainability rating Fincantieri risks by business area. The objective is to this Sustainability Report. Chapter: provide a vision of the set of pervasive and The first assessment of sustainability risks • Risk of damage to the Company brand that exposes it to loss of Ethics and responsible Reputation risk business management/Our evolving risks and the interconnections was prepared in time for the approval clients, profits and the competitive advantage gained on the market policies and management that may pose a threat to the creation of of the financial statements for 2017 and tools value and achievement of the corporate it continued in 2018 based on the new • Risk of not adopting Public Relations strategies on the sustainability objectives in a context similar to that of timescales laid down by the ERM procedure. issues or transmission of inconsistent Company messages regarding environmental, social and governance initiatives. Risk of not using the Fincantieri. Compared to last year, the Governance, lever of sustainability to build and broaden relations with stakeholders. Chapter: Sustainability for Investor & Public This category includes the risk that relationships with local, national From this process, 16 potential categories Strategy and Sustainability Compliance, Relations Fincantieri/Our and international counterparties (local cities and authorities/ stakeholders of sustainability risk were identified. Implementation of the Mission and Values associations, legal and government authorities, industrial associations, These risks were then compared with the in terms of Sustainability risks were also etc.) are inefficient or ineffective, influencing the Company’s ability to compete Fincantieri company risk model and with assessed; they had been excluded from Governance the materiality matrix, to check whether the 2017 evaluation because there was no • Risk that the Governance Model is not adequately communicated to all levels of the Company, creating ineffective communication it was necessary to add them to the Risk Sustainability Governance Model, however regarding sustainability issues among the stakeholders, Board of Chapter: Governance, Strategy Directors, and company management, incorrect delegation of powers, Sustainability Universe. one was adopted in December 2018. and Sustainability for Fincantieri/ and inappropriate decisions on sustainability. This category also From the analysis it emerged that some The reporting required for the information Compliance Sustainability includes the risk of lack of implementation of monitoring programs for Governance sustainability risks are already present in to be provided to the company bodies activities related to sustainability or the risk of inadequate preventive or investigative checks and controls relative to sustainability performance Fincantieri’s Risk Universe; others, following envisages a specific report on CSR risks more in-depth checks, were not considered for the Sustainability Committee, with the • Risk of lack of integration or poor integration in company processes Chapter: Implementation and activities of the sustainability principles (including ethics) applicable to the Company. Consequently, aim of facilitating its function of providing defined in the Sustainability Governance Model. This category Sustainability for of the Mission and Fincantieri/Our the Risk Map and specific Corporate guidance to the Company. Values in terms of includes the risk relating to the absence or inadequacy of a Sustainability Sustainability monitoring and control process for environmental and social issues, strategy Social Responsibility (CSR) category was as well as inadequate assignment of resources for this purpose integrated. • Risk of the absence or inadequacy of training programmes with Training, incentives, consequent lack of skills in relation to sustainability issues. This Chapter: and assessment category also includes the risk that individual performance objectives People/Training and of the sustainability are not aligned with or specific enough to guide conduct to support the development/Health performance sustainability strategy, and/or there are no adequate indices to measure and safety sustainability performance Human Resources • Risk that the Company, within its strategy of sustainable growth, Chapter: does not implement processes aimed at valuing human capital, People/Training and resp. People development/Diversity guaranteeing respect for diversity and equal opportunity, protecting and equal opportunity/ human rights, and ensuring the health and safety of the workers Health and Safety
Chapter: Ecologically compatible • Risk that the Company invests in and builds products and/or uses Customers and Products/ product development materials incompatible with environmental protection Products/Eco-Sustainable Product resp. Design
• Risk that due diligence on potential suppliers is not conducted adequately and of lack of monitoring of respect for environmental and Chapter: Supply chain/Supply Governance, Sustainable Supply social regulations in contracts concluded, with consequent execution Chain chain management economics, human of activities not in line with the sustainability principles (correct use of resources, social and natural resources, protection of individual rights, etc.) environmental resp. • Risk that the Company adopts inadequate measures for incorporating sustainability principles in its evaluation of environmental issues and perform activities not in line with Chapter: Environment sustainability principles. This category also covers lack of activation Environment and of controls aimed at preventing environmental damage or lack of/ Climate Change Environmental inadequate evaluation and implementation of programmes for the resp. recovery of biodiversity following environmental damage
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CHARTER OF SUSTAINABILITY COMMITMENTS
With the Charter of Sustainability Commitments, approved by Fincantieri’s Board of Directors in 2018, the Group defines its commitments for each material topic with the aim of contributing to a healthy, resilient, sustainable society, where people can advance and prosper. A more sustainable and responsible development, for Fincantieri, is expressed through the dissemination of the sustainability culture, promotion of a responsible supply chain, involvement of employees, constant improvement of health Protection of employment and industrial relationships and safety at work, support of technological innovation, maintaining customer satisfaction and loyalty, continuous dialogue with and support of local communities, reducing environmental impacts and contributing to Human the fight against climate change. resources resp. The main sustainability commitments are given below.
Environmental resp.
The Charter of Sustainability Commitments is available on the website www.fincantieri.com/en/sustainability/governance/our-commitments
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SUSTAINABILITY PLAN to sustainability and it addresses some The Sustainability Plan is approved by • 5 material topics are horizontal in that they global challenges (the UN’s Sustainability Fincantieri’s Board of Directors and comprises involve all 4 Pillars and contribute generally to Another step along the sustainability path was Development Goals - SDGs) and the 16 material topics enshrined in the materiality the Group’s growth. made with the approval of the Sustainability commitments undertaken by Fincantieri are matrix, 23 sustainability commitments and • The other 11 material topics are associated Plan by Fincantieri’s Board of Directors. This broken down in the Charter of Sustainability 31 objectives to be achieved in the short, with one of the 4 Pillars and show a clear plan highlights and bolsters the intention Commitments into qualitative and quantitative medium and long term. correlation between the business drivers to be a responsible Group, whose policies targets that can be measured over time. The 16 material topics for sustainability are and those aspects of sustainability that the are aimed at generating and distributing With the integrated strategy (Sustainability linked to the 4 Pillars of the Business Plan Company recognises as significant. increasing resources to all stakeholders and Plan and Business Plan) Fincantieri is able to (Long term visibility, New horizons and • Fincantieri’s objectives contribute in particular with a commitment that is first and foremost manage its response to the challenges posed markets, Innovation, Streamlined production). to the achievement of the 6 SDGs that shown in the sustainable management of its by the market of today and tomorrow in a In particular: Fincantieri has recognised as significant for its business. It is the Group’s strategic approach sustainable way. business and in line with its strategic direction.
STRATEGIC DIRECTION AND SUSTAINABILITY
BUSINESS PLAN SUSTAINABILITY PLAN
4 Pillars 5 Horizontal topics 11 Specific topics
Long term visibility 6. Protection of employment and Backlog supported by positive industrial relationships underlying momentum, 1 7. Training and education particularly in the cruise GOVERNANCE AND 8. Diversity and equal opportunity Growth segment BUSINESS INTEGRITY 9. Company welfare
New horizons and markets 2 Expansion into new geographical ECONOMIC areas and development AND FINANCIAL 10. Customer satisfaction of after-sales services SUSTAINABILITY
3 CLIMATE CHANGE Innovation 11. Product quality, compliance Proven capability to develop with technical standards Shareholders cutting-edge designs and 12. Innovation, research and return technological solutions to meet 4 development clients’ evolving needs 13. Environmental impact RELATIONS WITH of products and services LOCAL COMMUNITIES
Streamlined production 14. Health and safety in the workplace Continued focus on seamless execution through streamlining 5 15. Procurement activities of processes and production HUMAN RIGHTS 16. Environmental management
Profitability
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Responsibility for achieving the objectives MATERIAL TOPIC OBJECTIVES TIMETABLE in the Sustainability Plan lies with the • Gradual assignment of sustainability objectives in the Company’s variable remuneration system 2019 representatives of the units involved, which • Structure an Emergency Response & Crisis Management process in Safety & Security 2019 • Implementation of the International Ship and Port Facility Security Code (ISPS Code) 2020 dedicate resources, tools and know-how • ISO 37001 Certification 2020 to implement the actions underlying those • Implement an external Stakeholder engagement programme 2022 objectives. To focus people’s attention and commitment on the strategic objectives, • Contents of the Business Plan 2022 sustainability objectives have also been • Research projects to develop new solutions for energy savings or reduction of emissions in Climate change 2019-2030 included in the short-term variable collaboration with Research Institutes / Universities on issues associated with climate risks remuneration system with a weight from 10% to 30%. • Commitment to managing social activities 2019 • Enter into agreements with Food Banks or other associations to redirect food surpluses in canteens at 2020 The Plan’s objectives are updated on a Fincantieri sites yearly basis taking in account the results • Annual audits to assess and monitor the most critical suppliers in terms of human rights, health and achieved and adding the new needs that 2019 safety and the environment (Second Party Audit) arise over time. The reference base year against which the quantitative targets in the Protection of employment • Promoting the hiring of under-35s 2022 Plan are defined is 2017. and industrial relationships The objectives contained in the • Collect proposals and improvement initiatives with regard to sustainability from employees and 2020 Sustainability Plan are given below. implement them (FincantieriON project) • Include a sustainability module in the Fincantieri Corporate University training programmes 2020
• Commitment to human rights and diversity 2019 • Develop a training programme for facilitators on sustainability issues and in particular on diversity 2020 and its promotion in the Company
• Launch the smart working tool to support maternity from before birth until the child reaches one year 2021 as well as resources with evident non-fitness to work certified by the competent doctor • Company car pooling project 2019-2020
• Develop and apply methodologies for detecting the level of customer satisfaction. Identify new 2019-2021 organisational solutions to strengthen customer loyalty
• Keep ISO 9001 certifications on the Quality Management Systems and product certifications in line Annually with market expectations
• Development of intelligent ships and platforms (smart ships/smart offshore infrastructure) and 2030 autonomous ships. Development of innovative solutions for yards (Smart Yards)
• Develop technological solutions that enable energy savings to be increased for ships with the same 2030 features (green ships) • Definition of an eco-design system to promote the development of environmentally sustainable ships 2019
• Obtain ISO 45001 certification 2020 • Initiatives to engage subcontractors (workshops, “last metre”) on issues associated with health and 2021 safety • Health promotion to disseminate healthy lifestyles 2022
• Code of Ethics for suppliers 2019 • Organise meetings and opportunities for dialogue with suppliers as well as training on sustainability issues 2019 • Deliver a training course on sustainability and responsible procurement principles to employees who interact directly with suppliers 2022
• Reduction of Scope 2 greenhouse gas (GHG) emissions 2020 • Obtain ISO 50001 certification 2021 • Increase the portion of electricity from renewable sources 2020 • Launch the Sustainable Office Project (10 rules) 2019
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
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E THICS AND RESPONSIBLE BUSINESS MANAGEMENT
CORPORATE GOVERNANCE AND REMUNERATIONS POLICY
SYSTEM OF INTERNAL CONTROL AND RISK MANAGEMENT
OUR POLICIES AND MANAGEMENT TOOLS
CYBER SECURITY
PRIVACY PROTECTION
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Ethics, social responsibility, In a challenging economic and financial Shareholders’ Meeting Corporate Governance, holding the widest transparency, lawfulness, fairness context, Fincantieri is aware of the role The Shareholders’ Meeting is the company powers for its ordinary and extraordinary and sustainability are Fincantieri’s played by and importance of an appropriate body through which the shareholders administration, including the definition of absolute values corporate governance model in the clear participate in Company decisions on topics strategic direction, organization and control and responsible performance of the reserved for them according to law and of the Company and the Group. The Board of Group’s business, contributing significantly Company By-laws. Directors currently consists of nine members, to the creation of sustainable value for all six of whom are independent. The Board of stakeholders in the medium to long term. Board of Directors Directors was nominated during the Ordinary The Group performs its business with The Company’s Board of Directors (BoD) Shareholders’ Meeting held on 19 May 2016 for respect for the law, internal regulations and is the Company’s central organization for financial years 2016, 2017, and 2018. professional ethics. To this end, it has also developed a set of policies and guidelines that support the Company on a day-to-day basis. COMPOSITION OF THE BOARD OF DIRECTORS AND ITS COMMITTEES ON THE DATE OF THE REPORT
CORPORATE GOVERNANCE AND REMUNERATIONS POLICY
Fincantieri’s corporate governance model C is in line with the recommendations of the Corporate Governance Code issued by the Italian Stock Market and has the following C structure.
C
SHAREHOLDERS’ MEETING C
1 The Member of the Control and Risk Committee who replaces the Director Palermo when the SC Sustainability Committee. committee, meeting as the RPT Committee, examines major operations with related parties. C: Chairman of the Committee. CRC: Control and Risk Committee. √: Satisfies the requirements. RC: Remuneration Committee. -: Not applicable. NC: Nomination Committee. X: Member of the Committee. BOARD OF DIRECTORS
CONTROL BOARD OF CHIEF EXECUTIVE CHAIRMAN REMUNERATION NOMINATION SUSTAINABILITY (DIRECTOR IN CHARGE AND RISK EXTERNAL STATUTORY SUPERVISORY OFFICER OF THE ICRMS) COMMITTEE COMMITTEE COMMITTEE COMMITTEE AUDITORS AUDITORS BODY
2 GENERAL RISK HEAD OF MANAGERS* OFFICER NTERNAL AUDITING
CHIEF FINANCIAL OFFICER IN OFFICER CHARGE
* On 22 January 2019, the Board of Directors, upon proposal of the Chief Executive Officer, appointed a second General Manager who will support the General Manager already appointed on 26 September 2016.
44 45 FINCANTIERI GROUP FINCANTIERI GROUP
OTHER INFORMATION ON THE BOARD OF DIRECTORS* The Board of Directors has structured regulated by specific regulations approved its organization, also establishing four by the Board of Directors when these AVERAGE FOR LISTED COMPANIES ** dedicated Board Committees that carry Committees were established and later out proactive proposal and consultation amended based on changes introduced over Number of Directors 9 10.0 10.8 tasks: the Control and Risk Committee, time to the Corporate Governance Code. Number of executives 2 2.5 2.5 the Remuneration Committee, the All members of the Committees are non- Number of non-executives 7 3.0 3.2 Nomination Committee and the executive Directors, mostly independent, Number of non-executives that do not 1 3.1 - qualify as independent under the Code Sustainability Committee. Their composition, and have functional areas of expertise Number of independent under the Code 6 4.4 5.1 responsibilities and methods of operation, as for performing the roles they have been % less represented gender 33.3 - - well as the powers and means assigned, are assigned. Average age of Directors 60.1 57.1 - No. of BoD meetings 10 11.1 10.0 INFORMATION ON THE COMMITTEES * % attendance at BoD meetings 95.5 92 - AVERAGE FOR LISTED COMPANIES ** Average duration of BoD meetings 141 min. 134 min. 144 min. Board evaluation Implemented 83.6% - No. of CRC meetings 71 7.7 8.4 Position on multiple offices Adopted 48% 58% % attendance at CRC meetings 88.88 - - * The statistical data of this table for Fincantieri refer to the composition and operation of the Board of Directors during 2018. ** 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 2018)” issued on 25 Average duration of CRC meetings 69.17 min. 117 min. 119 min. January 2019. No. of RC meetings 5 4.7 4.8 CHARACTERISTICS OF THE MEMBERS OF THE BOARD OF DIRECTORS % attendance at RC meetings 100 - - Average duration of RC meetings 54 min. 68 min. 68 min. AREA OF EXPERTISE AGE No. of NC meetings 3 5.4 2.9 % attendance at NC meetings 77.77 - - Average duration of NC meetings 70 min. 57 min. 53 min. 11.1% No. of SC meetings 6 - - INTERNATIONAL RELATIONS 33.33% 33.33% 33.3% 11.1% % attendance at SC meetings 70.83 - - LEGAL Average duration of SC meetings 76.66 min. - - 22.22% INDUSTRIAL * The statistical data of this table for Fincantieri refer to the composition and operation of the Board Committees during 2018. ** 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 2018)” issued on 25 January 2019. 55.5% 44.4% FINANCIAL 11.11% 1 Of which one also as the RPT Committee. PLANNING AND STRATEGY 45/50 YEARS 51/55 YEARS 55/65 YEARS 65 +
46 47 FINCANTIERI GROUP FINCANTIERI GROUP
Board of Statutory Auditors Shareholders’ meeting using a dedicated Remunerations Policy 2016-2018) for the Company management. The Board of Statutory Auditors consists of procedure. The Auditors in office satisfy the Fincantieri’s Remunerations Policy is In continuation of the LTI Plan 2016-2018, three Standing Auditors and three Alternate requirements of integrity, professionalism approved annually by the Board of Directors, on 27 March 2018, the Board of Directors Auditors appointed by at the ordinary and independence. on the proposal of the Remuneration approved the LTI Plan 2019-2021 which Committee. The Board of Directors is also essential follows the same structure though COMPOSITION OF THE BOARD OF STATUTORY AUDITORS ON THE DATE OF THE REPORT the company body responsible for proper with the addition of another objective MEMBERS ROLE EXPIRY OF TERM enactment of the Policy, that relies on the associated with sustainability. support of the Remuneration Committee, The creation of sustainable value in the which acts to provide consultancy and medium to long term, alignment of the proposals. interests of management with those of The adequacy, overall consistency, and the shareholders and support for retention concrete application of the Remunerations capacity are the primary objectives of Policy are evaluated by the Remuneration this Plan, in line with the indications in the Committee, as recommended by the Corporate Governance Code and the best The Auditors act completely autonomously Board of Directors about the nature, terms, Corporate Governance Code and as and most widespread market practices. and independently from all shareholders. origins and extent of this interest. indicated in the regulations for the Below is a graphic representation of the Therefore, an Auditor who - independently The Auditors are also obligated to respect Committee. pay-mix. or on behalf of third parties - has an interest the limits on multiple offices held as director The Remuneration Committee consists of in a particular transaction/operation of the and auditor in Italian joint stock companies three non-executive members, two of whom PAY MIX Company must promptly and fully inform provided for by applicable regulatory are independent and at least one of whom the other Auditors and the Chairman of the provisions and by the By-laws. has adequate knowledge and experience in finance or pay policy, evaluated by the Board 25.0% 38.5% 32.6% 27.5% 24. 0% OTHER INFORMATION ON THE BOARD OF STATUTORY AUDITORS* of Directors when nominated. The parties covered by the Remunerations AVERAGE FOR LISTED COMPANIES ** 75.0% 21.7% 21.5% Policy are the Chief Executive Officer, the 23.0% 23.9% Chairman, the General Managers, Executives 54.5% Number of Auditors 3 - - 50.8% with Strategic Responsibilities and other Key 43.5% Average age of Auditors 56.66 55.9 - 38.5% Executives. No. of meetings 10 13.4 13.6 Management of the Remunerations Policy Average duration of meetings 219 min. 148 min. 146 min. is delegated to the Chief Executive Officer, % attendance by Auditors 100 96 - Chairman Chief Executive General Executives Other Key supported by the Human Resources and Officer Managers with Strategic Executives * The statistical data of this table for Fincantieri refer to the composition and operation of the Board of Statutory Auditors during 2018. Responsibilities ** 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 2018)” issued on 25 Industrial Relations Management. January 2019. Verification of the qualitative and quantitative performance objectives and For more information on Corporate Governance, see the Report on Corporate Governance and Ownership Structure, www.fincantieri.com/en/governance/corporate-governance-system/corporate-governance-reports consequent determination of any sums FIXED COMPONENT of money due to the interested parties is SHORT TERM VARIABLE COMPONENT performed following approval of the financial MEDIUM-LONG TERM VARIABLE COMPONENT statements for the year following verification by the Chief Executive Officer. The Remunerations Policy is aimed at achieving the Company’s strategic priorities and enhancing sustainable performance. On 10th November 2016, the Board of Directors approved a medium to long-term incentive plan (Performance Share Plan
48 49 FINCANTIERI GROUP FINCANTIERI GROUP
PAY-MIX 2019-2021 LTI PLAN SYSTEM OF INTERNAL CONTROL AND RISK • 1st level: the operational functions identify MANAGEMENT and evaluate the risks and implement specific 25.0% 41.8% 38.0% 36.4% 29.6% treatments for their management; The System of Internal Control and Risk • 2nd level: the functions responsible for risk 19.9% 75.0% 19.3% Management System (ICRMS) is formed by control define the methods and tools for 21.8% 22.0% a set of tools, organizational structures, and risk management and perform monitoring 44.3% 50.5% 40.0% Company procedures aimed at contributing activities; 36.4% business conduct which is honest, fair and • 3rd level: the Internal Auditing function consistent with the objectives set by the provides independent evaluations regarding Board of Directors. the entire system. Chairman Chief Executive General Executives Other Key Officer Managers with Strategic Executives The ICRMS is integrated within the general Responsibilities FIXED COMPONENT organizational aspects and corporate The Guidelines, approved by the Board of SHORT-TERM VARIABLE COMPONENT governance system adopted by the Directors, identify the main parties involved
MEDIUM-LONG TERM VARIABLE COMPONENT Company and, taking into account the main in the preparation and implementation reference models, allows and promotes the of an effective internal control and risk identification, measurement, management, management system, involving, based on The structure of the remuneration package is and monitoring of the main risks as well as their area of expertise the following parties, set out below. the dependability, accuracy, reliability and in addition to the Board of Directors and the timeliness of the financial report. Control and Risk Committee. TYPE OF REMUNERATION PURPOSE POSITIONS INVOLVED This system, based on leading international Fixed remuneration Remunerates the role and more • Chairman practices, is divided into the three traditional specifically the responsibilities • Chief Executive Officer levels of control: assigned to the recipients, taking • Non-executive Directors account, among other things, of the • General Managers experience, quality of contribution • Executives with Strategic BODY/FUNCTION CONTACT NOTES made to achieving the business Responsibilities Director responsible for the ICRMS Chairman of the Board of Directors - results and level of excellence with • Other Key Executives Internal Auditing function - Inside the Company respect to the assigned duties. Head of Internal Auditing Stefano Dentilli Reporting hierarchy of the BoD Short-term variable Remunerates results achieved • Chairman Risk Officer Stefano Dentilli - remuneration (annual in the short term and is aimed • Chief Executive Officer Officer in charge Felice Bonavolontà 1 Group Accounting and Administration MBO) at expressing the industrial plan • General Managers Head strategies into a series of annual, • Executives with Strategic Supervisory Body Guido Zanardi (Chairman) External member individual and group objectives, Responsibilities Giorgio Pani External member capable of decisively influencing • Other Key Executives Stefano Dentilli Internal member the performances of the executives Board of Statutory Auditors Gianluca Ferrero (Chairman) involved. Roberto Spada - Fioranna Vittoria Negri Medium-long term Remunerates results achieved in the The beneficiaries are individually Independent auditors PricewaterhouseCoopers S.p.A. Expiration: Financial statement 2021 variable remuneration medium-long term and is aimed at identified at the discretion of the approval meeting (Performance Share Plan) improving the alignment of interests Board of Directors, on the advice of of the recipients with those of the Remuneration Committee, among 1 The position of Officer in Charge of preparing the company’s accounting documents in accordance with Article 154-bis of the Italian Consolidated Law on Finance (TUF) was conferred on Mr Felice Bonavolontà, substituting Mr Carlo Gainelli, at the Board of Directors meeting held on 22 June 2018. The latter therefore held the position of Officer in the shareholders and supporting the following persons: Charge in the time period from 1 January 2018 to 22 June 2018. the retention capabilities for key • Chief Executive Officer resources. and, according to the Chief Executive Officer’s indications, the following persons: • General Managers • Executives with Strategic Responsibilities • Other Key Executives
For more information, see the Remuneration Report available on the website www.fincantieri.com/en/governance/remuneration
50 51 FINCANTIERI GROUP FINCANTIERI GROUP
It is also required that all employees of for the maintenance, updating, and correct During 2018, the Control and Risk Committee the Group, as part of their functions and operation of the ICRMS. reviewed the scheduling of ERM activities. responsibilities, actively intervene according Following is a representative diagram of The internal procedures were then changed to the methods defined in the Group’s the parties involved in Risk Management at to include, on the one hand, the activation regulatory system and internal procedures various titles. of a process to assess the risks and controls (existing and to be implemented) at least once a year in order to monitor the dynamics in terms of exposure and operational effectiveness of the mitigation actions identified; and on the other, to activate specific Support of Oversight BOARD OF Overall INTERNAL CONTROL checks on management of the main risks by STATUTORY AUDITORS orientation and BOARD the Board’s OF DIRECTORS AND RISK the Risk Owners, particularly with regard to SUPERVISORY BODY monitoring COMMITTEE (CRC) evaluations and decisions the existence, application and assessment of the effectiveness of the existing controls and/or actual implementation or progress of additional controls to be implemented. Assurance In the ERM process, the following were INTERNAL (3rd level of updated in 2018: AUDITING defence)
• the Risk Universe, by fine-tuning possible existing risks and integration with specific risks Establishment and related to sustainability; DIRECTOR • the Risk Management Model, in line with maintenance RESPONSIBLE RISK OFFICER FOR THE ICRMS organizational changes; • the economic parameters underlying the definition of the thresholds and the impact evaluation scale, in line with the business plan.
Implementation MANAGEMENT of ERM Risk (DIRECTORS, DEPARTMENTS, management at UNITS) all levels of the organization
For more information, see the Report on Corporate Governance and Ownership Structure available on the website www.fincantieri.com/en/governance/internal-control-and-risk-management
52 53 FINCANTIERI GROUP FINCANTIERI GROUP
OUR POLICIES AND MANAGEMENT TOOLS the general public and local communities in Organizational Model which the Company conducts its activities. Fincantieri has adopted an organization, Fincantieri performs its business with Fincantieri believes that success can be management and control model according respect for the law, internal regulations long lasting only with responsible, ethical to Legislative Decree No. 231/2001 and professional ethics. To this end, it has business management; the Group’s actions (Organizational Model), the latest version developed a set of policies and guidelines that are performed with integrity, honesty and of which was approved by the Board of support its business. dedication and based on mutual trust, so Directors in February 2019. It consists of a In particular: that growth is also guided by the principle of general section, which illustrates the principles, shared values. departments and basic components of the • Code of Conduct All those who work for Fincantieri, without Organizational Model, and special parts, • Organizational Model exception or distinction, are committed to which identify the activities at risk of crime, • Anti-corruption Policy observing and ensuring the observance of the principles of conduct, and the control • National Framework Tender Protocol such principles in the context of their own procedures for the specific types of crimes • Quality Policy tasks and responsibilities. In no way does considered relevant. the conviction of acting in the interest or For more information on the Quality Policy, please see The organizational model is available on the website the chapter Customers and Products p. 112 advantage of the Company justify adopting www.fincantieri.com/en/governance/etica-dimpresa/ conduct that goes against these principles. model-231 The Company is committed to encouraging • Purchasing Policy and promoting knowledge of the Code
For more information on the Purchasing Policy, please among employees and including any Anti-corruption Policy Agreements; (iii) Grants, Donations, see the chapter Supply Chain p. 118 constructive contributions. All conduct Given the extensive geographic context in Sponsorships, Gifts and Hospitality; (iv) contrary to the words or spirit of the Code which Fincantieri operates, the Company External Collaborations; (v) Conflicts • Environmental Policy will be subject to sanctions as outlined in has adopted a number of internal rules of Interest; (vi) Management of Offset the Code. The principles outlined in the aimed at identifying and applying a global Agreements; (vii) Know your customer; (viii) For more information on the Environmental Policy, please see the chapter Environment and Climate Change p. 144 Code of Conduct can be supported by anti-corruption policy that defines the Joint Ventures. specific directives, regulations or internal expectations for conducting business In 2018, structured processes were defined procedures aimed at making its application operations in strict compliance with the best for contracts with foreign governments or Code of Conduct more concrete and effective. The Code is international standards on anti-corruption companies that require offset agreements Compliance with the Code of Conduct by shared with all parties who have business legislation. The first of these tools is the anti- and for methods to manage the business all Company employees is of fundamental relations with Fincantieri. The Company corruption policy that the Company adopted relationship with a new customer (Know importance for the smooth operation, monitors observation of the Code, providing in 2014 and updated in January 2019. Your Customer), and guidelines were set out reliability and reputation of the Group, suitable tools for information, prevention and The Group’s commitment to combating for defining partnership and joint venture factors that represent a key asset for control, and ensuring the transparency of corruption, established in primis by the agreements. Fincantieri’s ongoing success. existing operations and conduct. The Board Code of Conduct - is reflected in a series In addition to the foregoing, the Company All of the Group’s activities are conducted in of Directors and the Company management of corporate documents that are its has also - since 2009 - adopted a system for compliance with the law, with international is responsible for verifying the Code of existing means to combat corruption (anti- reporting infringements to the Supervisory conventions and in strict accordance with Conduct’s implementation and application, corruption documents) in the functional Body (whistleblowing), also defined in the human rights enshrined in the UN and these corporate bodies/officers may and geographical areas in which the Group the Organizational Model, which enables Universal Declaration. also make proposals to supplement or operates. This regulatory system, which employees and third parties to report issues Fincantieri operates according to the amend its provisions. is moreover continually evolving, includes involving non-compliance with the provisions principle of fair competition, with honesty, the following sensitive matters, each of of the Code of Conduct, the Organizational
integrity, fairness and good faith, respecting The Code of Conduct is available on the website which is regulated by specific documents Model, or of the corporate procedures www.fincantieri.com/en/governance/etica-dimpresa/ the legitimate interests of its stakeholders, codice-di-comportamento or company practices: (i) Management of adopted by the Company or, otherwise, shareholders, employees, customers, Dealings with the Public Administration; the law. In January 2019, an update of commercial and financial partners and of (ii) Management of Services Provision the Company’s whistleblowing computer
54 55 FINCANTIERI GROUP FINCANTIERI GROUP
system was made operational. This system which began in the same year. The training SENIOR MIDDLE WHITE COLLAR BLUE COLLAR % of total uses an independent platform that enables system for this course, primarily focused MANAGERS MANAGERS EMPLOYEES EMPLOYEES TOTAL employees reports to be sent, without or without on anti-corruption and safety at work, has 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 recording them on the system, and is an been divided into differentiated paths in evolution in terms its suitability in ensuring order to allow targeted distribution of the FINCANTIERI 151 99 310 69 3,189 500 0 0 3,650 668 44% 8% the confidentiality of the sources and of the information based on the roles of the people VARD 4 9 43 38 10 75 0 47 57 169 1% 2%
information communicated. involved. It was held in e-learning mode over FMG 23 35 99 129 261 387 18 23 401 574 20% 30% The Company also intends to achieve ISO the platform adopted by the Company with FMSNA 1 1 8 8 16 16 35 31 60 56 100% 100% 37001 certification for its anti-corruption the objective of expanding the population management systems, as an integral part reached, offering greater flexibility of use TOTAL 179 144 460 244 3,476 978 53 101 4,168 1,467 21% 8% of the Sustainability Plan adopted by the for the users, guaranteeing the provision of % of total employees per category 50% 38% 42% 21% 52% 14% 0% 1% 21% 8% Company. uniform information, as well as reducing the
With reference to the Parent Company, costs of training and refresher courses. The The 2017 data for the FMG Group have been revised for comparison purposes following changes to the collection criteria. the Internal Auditing function examines course is divided into different paths based and independently evaluates the internal on the resources involved. The “general” As regards monitoring of corruption cases, it milestone that unifies the procedures controls to verify if what is required by the path has been delivered to all employees should be notes that no cases of corruption for control against organized crime on a anti-corruption procedures has been met of the Parent Company (equipped with concerning companies in the Fincantieri national level in companies considered within the range of the annual planned company PC and email), while agents and Group were found in 2017 and 2018. at “high risk” that operate on contracts audits, approved by the Board of Directors. specific corporate departments were also and sub-contracts in all locations of the The Supervisory Body plays a special role. given specific modules. National Framework Tender Protocol Fincantieri Group. It guarantees an invaluable Its activities call for the periodic collection During 2018, the program continued with Having identified in the tender system a key exchange of information and, should any of confidential information in order to the provision of a specific on-line course element for its ability to develop and raise its issues arise, enables Fincantieri to adopt the identify potentially risky conduct with for agents focusing on anti-corruption and competitive standing in reference markets, most appropriate protective measures while reference to corruption both with respect to company risks, and new editions of the Fincantieri has always paid constant also reconciling the necessary confidentiality Italian and foreign Public Administrations, general course and on safety at work and attention, also in this context, to ensuring requirements of the parties involved. and to private parties. The Organizational, the environment were started for those who maximum transparency. Under the agreement, Fincantieri also asks Management and Control Model according had not participated in the previous edition. It is in fact in the interest of the Company the supply chain concerned to ensure the to Legislative Decree No. 231/2001 and the For employees of Italian subsidiaries, to ensure respect for legality and to defend highest levels of transparency and fairness corporate regulatory framework are subject specific anti-corruption training meetings the market from interference by organized and fulfil their obligations to combat to a continuous updating process to comply are held, organized by their supervisory crime, as well as from undue interference against and report any instances that with organisational and legal changes and to bodies, while at this time the extension and pressures from common criminals, could entail conspiracy to commit a crime adequately respond to the possible risk of of this training to the e-learning mode is preventing any possible infiltration attempt - including mafia-type conspiracy - or, by committing crimes. only at the planning stage. The Board of by organized crime during the process of way of example, corruption, fraud, money Directors receives an annual report from awarding tenders, in capital expenditure and laundering and extortion. For more information on the whistleblowing system and on all the Supervisory Body on the activities the anti-corruption procedural tools, see the website in production activities. www.fincantieri.com/en/governance/etica-dimpresa performed, including training. To this end, since 1999, Fincantieri has been Regarding foreign subsidiaries, the working on improved cooperation with the Communication and training on the Fincantieri Marine Group (FMG), Fincantieri relevant local authorities and, over time, has anti-corruption procedures and policies Marine Systems North America Inc. arrived at signing Legality and Transparency Since 2016, the Internal Auditing function, (FMSNA) and the VARD group have held Protocols, which led to the signing of along with the Supervisory Body, has training on the Code of Conduct and a single National Framework Tender provided support to the Human Resources business ethics. Protocol with the Ministry of the Interior Management with preparatory activities The table below shows the data on the on 27 February 2017, aimed at preventing for the expanded on-line training project overall number of employees who received infiltration attempts by organized crime. based on Legislative Decree No. 231/01 training in 2017 and 2018. The agreement represents a fundamental
56 57 FINCANTIERI GROUP FINCANTIERI GROUP
CYBER SECURITY As a result of the improvements introduced In this context, Fincantieri - aware of its that reached the employees of the Parent and the whole system of processes, social responsibilities and in light of the full Company and was extended to the Italian The Company’s focus on cyber security procedures and controls on ICT, Fincantieri transposition of the principles laid down to subsidiaries. has gradually intensified in response to the satisfied the certification requirements ofISO/ protect personal data - launched a process The Privacy Management System was ever-increasing complexity and frequency of IEC 27001:2013 and ISO 9001:2015 during to comply with this regulation the year. laid out in detail in a specific Privacy cyber attacks carried out all the time against 2018. This confirms compliance with the level At the end of this process, the Company Management System Manual and by companies with national and international of reliability envisaged by the certification adopted a privacy management system, operational procedures that identify certain strategic importance. issued at the end of 2017 by the RINA Services whose founding principles are contained processes that are especially critical such The sophistication of cyber threats - made certification body and that the correct in the Policy on General Principles of the as management of data breaches and possible by the operation of consolidated approach has been adopted in managing the Privacy Management System (Privacy management of requests from data subjects international groups, some of which supported mutability of cyber risks. Policy) which establishes, among other asserting their rights. by the governments of the countries to which In 2018, Fincantieri - in its capacity as a things, the main processes needed to ensure As regards the security measures to be they belong - requires the constant adjustment strategic company for the national system the protections envisaged by the legislation. implemented to guarantee and protect of the company’s defenses and processes for and listed on the stock exchange - signed With this policy Fincantieri undertakes to personal data, ISO/IEC 27001:2013 and ISO protecting IT assets, as an additional element an important institutional cooperation establish and maintain over time a control 9001:2015 certifications, which represent to protect the Company’s industrial know-how agreement with the State Police to exchange model aimed at protecting the personal deeper integration with the information and market competitiveness. information on criminal events recorded on data collected and processed as part of technology required by the personal data In line with these emerging needs, Fincantieri its IT infrastructure, with a view to actively the operational processes of its business, protection obligations, were confirmed again has implemented a pervasive multi-year contributing to combating and formally promoting the development of a pervasive in 2018. programme focused on managing and reporting cyber incursion attempts to defraud privacy culture at Group level. With this in mitigating cyber risks. the Company and compromise its know-how, mind, in addition to the dissemination of The most significant of the main initiatives in image and business continuity. privacy statements to the data subjects this area are: In response to the ever-increasing complexity and instructions to personnel authorized and frequency with which cyber attacks to process personal data, Fincantieri has • establishing processes to monitor security are carried out and in compliance with the carried out a pervasive training campaign events and 24-hour management of cyber rules in force, including naval rules, various events; subsidiaries have implemented cyber security • implementing control points in line with the countermeasures or used the in-service cyber security/privacy-by-design principle, features developed by the Parent Company. LAWFULNESS, within the processes for purchasing and TRANSPARENCY designing the main Information and AND FAIRNESS OF Communications Technology (ICT) products PRIVACY PROTECTION PERSONAL DATA and services; PROCESSING • conducting periodic IT security assessments Regulation (EU) 2016/679 of the European INTEGRITY AND DATA MINIMIZATION aimed at identifying and remedying any gaps; Parliament and of the Council of 27 April CONFIDENTIALITY • providing awareness campaigns to 2016 on the protection of natural persons employees, aimed at improving awareness of with regard to the processing of personal PRINCIPLES cyber risks and shedding light on the most data and on the free movement of such OF FINCANTIERI’S widespread attack techniques (e.g. Social data, and repealing Directive 95/46/EC (the PRIVACY POLICY Engineering) and the organizational and “GDPR”) became fully applicable on 25 May STORAGE behavioural methods for neutralizing them; 2018. From this date, for the first time, a LIMITATION DATA ACCURACY • managing cyber risks within a more general unified regulatory framework that defines OF PERSONAL DATA framework of operational risks that may the fundamental principles applicable to negatively impact on the Company’s business the processing of such data started to be PURPOSE LIMITATION and image. applied within the European Union. OF PERSONAL DATA PROCESSING
58 59 FINCANTIERI GROUP FINCANTIERI GROUP
P EOPLE
PEOPLE IN NUMBERS
RECRUITMENT POLICIES, MANAGEMENT AND ENHANCEMENT OF HUMAN CAPITAL
TRAINING AND DEVELOPMENT
DIVERSITY AND EQUAL OPPORTUNITIES
HEALTH AND SAFETY
COMPANY WELFARE
INDUSTRIAL RELATIONS
REMUNERATION
60 61 FINCANTIERI GROUP FINCANTIERI GROUP
Everything we do focuses on actual behaviours that can be observed and PEOPLE IN NUMBERS enabling the growth, enhancement translated into everyday life. and training of people, based To disseminate the culture, corporate values WORKFORCE BY TOTAL GEOGRAPHICAL AREA on the daily attention we pay to and all the initiatives launched as part of the TOTAL: 19,274 the quality of our work and our change path, in early 2018 Fincantieri set up a relations with others. network of internal facilitators, people in the ITALY ASIA (from Fincantieri’s Charter of Group who, owing to their personality, attitude 8,662 Values) and natural inclination, can facilitate the change 2,060 45% process, stimulate participation at all levels, 11% Putting people at the core and putting leveraging on formal and informal occasions, 784 them in the position to give the best and making everyone aware that they each can 4% of themselves: this is the goal that the and must be an active part in the change. Fincantieri Group pursues in managing FincantieriON, the initiative launched to NORTH and developing its resources. Developing promote the generation - by individuals AMERICA the Company is only achieved through the employees - and sharing of innovative success of its people, its most important proposals aimed at improving the product, 1 asset. processes, working methods and life in the In this regard, the change management Company, was particularly successful. Over 0% project Fincantieri for the Future, launched 360 ideas were collected and 25, including at the end of 2016 with the first survey on the “Great Idea” (the very best), received 308 all the Group’s employees in Italy and it acknowledgements and awards. 2% OCEANIA was repeated a year later to measure the In 2018, the change management project effectiveness of the improvement initiatives was also extended to VARD, VARD for the 7,459 put in place. The results were shared with Future. The first step was to administer a SOUTH AMERICA all the employees in the Group’s different survey that involved nearly 6,000 employees 38% REST OF EUROPE offices/yards (over 6,000 people), and an in the Romanian and Vietnamese sites and it
analysis of the results showed a strong resulted in a high response rate. The survey The data refer to the entire Fincantieri Group. sense of belonging and increased pride in explored employees’ perception of and working for Fincantieri. Working groups have willingness to participate in the improvement been established in the various production path undertaken by the Group, identifying the units, to which participation is voluntary, main barriers to change and the degree of which have contributed to the preparation integration with Fincantieri. of the Group’s Behaviour Pact, translating Fincantieri Marine Group conducted a survey the corporate values, defined by employees on all employees in the Group at the end of the during the first stage of the project, into year with the same goal in mind.
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RECRUITMENT POLICIES, MANAGEMENT offers that are devised, implemented AND ENHANCEMENT OF HUMAN CAPITAL and promoted in close synergy with the FULL TIME stakeholders operating in the world of work WOMEN As enshrined in the Code of Conduct, and training. Fincantieri operates with due regard to Fincantieri has therefore adopted policies 2,385 16,889 19,029 diversity and equal opportunities and does and strategies aimed at enhancing the 12% not permit any kind of discrimination, from knowledge and professional skills available 88% 99% personnel selection and throughout the in the territories in which it operates. entire employment relationship. All the In particular, it has further developed 245 MEN 1% companies in the Group work in accordance its connection with the main national with these principles, as defined in the and international Universities and with PART TIME respective guidelines or corporate policies. Maritime Academies, owing to its growing TOTAL In order to meet the needs arising from presence at career days and the promotion the development of the business in terms of specific career guidance, training and FIXED TERM BLUE COLLAR 19,274 EMPLOYEES of internationalism, diversification and recruitments days - called Meet Fincantieri strong growth, the Fincantieri Group adopts - in Universities. The Group continues 1,464 recruiting and employer branding strategies to cooperate with Secondary Education 8% SENIOR MANAGERS 10,783 aimed at identifying and recruiting the best Institutions (known as High Schools talent on the market. and Technical Schools abroad) in Italy, 377 56% Each year the Company maintains and particularly with the Work-Study schemes 17,810 2% improves its employer market position, at (Law No. 107/2015), with public (local both national and international level. This and regional) institutions through career 92% 6,949 1,165 6% growth can be seen among students and guidance and recruitment days and tours 36% professionals and it is the result of targeted around its shipyards. PERMANENT actions that are being developed including Fincantieri consciously aims to be a guiding MIDDLE MANAGERS thought the main web and social network element for strategies aimed at building a WHITE COLLAR EMPLOYEES platforms. synergistic network between public and Fincantieri Marine Group and VARD have a private institutions, companies and districts structured system of internal job posting, in the shipbuilding industry. In practical which gives employees the opportunity terms, Fincantieri established working EMPLOYEES BY AGE RANGE to apply for job vacancies, and therefore groups with the main national and local 2018 making themselves the prime movers of educational institutions in 2018 to identify ≤ 30 YEARS 30-50 YEARS ≥ 50 YEARS Total their own career paths. the potential evolution of the training plans Senior Managers 0 171 206 377 In 2018, over 20,000 job applications were and study programmes in order to bring received through the company web portal Middle Managers 29 679 457 1,165 them closer to the needs of companies. “Work with us” alone (around 6% more than This pro-active cooperation led to projects White Collar Employees 1,167 4,111 1,671 6,949 in 2017). Fincantieri recruited 529 people with the Central Office for Labour, Training, Blue Collar Employees 1,475 6,429 2,879 10,783 and organized around 280 internships, Education and Family of the Friuli Venezia Total 2,671 11,390 5,213 19,274 approximately 40% of which resulted in Giulia region and with the Liguria region. employment contracts. Across the Group These initiatives have culminated in the 2,612 people were recruited. setting up of a Regional Labour Agency 14% 59% 27% Fincantieri is an integral part of the Desk in the Monfalcone shipyard which production fabric in Italy and abroad and has facilitated the meeting of employment it is fully aware of the need to strengthen demand and supply in the shipbuilding
The data refer to the entire Fincantieri Group. the skills available on the market through industry and, in Liguria, with the creation
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of a “virtual desk” on the Formazionelavoro of the first ITS Ship Design course in Italy, In 2018, the Group invested over 4 million euros already launched will have a significant impact platform which identifies and manages job developed by the Adriatic Nautical Academy to meet training needs, with 34.3 average hours in coming years as well. vacancies in the shipbuilding industry. in partnership with Fincantieri, which is of training per capita. Technical training is also one of the priorities To support development of the whole also the Founding Partner and member of The training programmes provided by the for subsidiaries, in both Italy and abroad, and shipbuilding industry, Fincantieri has also the Steering Committee and the Executive Fincantieri Corporate University, the it has been especially focused on the issues expressed the need to train and prepare Committee. Company’s management training school, have of production, design, new technological technical career profiles that are not easily To promote the Fincantieri brand on the been updated in terms of content and delivery solutions, augmented reality, after-sales available in the market. This led to an employment markets of the Countries methods in order to better respond to business service, with the aim of improving the quality important cooperation with the Ministry of in which the Group operates, solid needs and the prospects related to order of services and products supplied to the Education, Universities and Research (MIUR) cooperations have been implemented with backlog. customer. which resulted in the Memorandum of the main Universities which have established Numerous editions of the Academy The Quality Improvement programme of Understanding signed on 20 November 2018. Naval Engineering courses, including programme have taken place. This programme the Merchant Shipping Division continued; The MoU aims to promote and encourage the through participation in career guidance and is dedicated to young people who have at training level it was delivered in the development of study paths at Istituti Tecnici Meet Fincantieri days. recently been hired by the Company and aims Training for Quality project, a broad range Superiori (ITS - Higher Technical Colleges) to encourage integration into the company of technical-operational courses aimed at throughout Italy, and mainly in the areas in environment, providing them with training on manual workers and production supervisors which Fincantieri operates, to train specialist TRAINING AND DEVELOPMENT cross-functional issues and facilitate an aptitude within the Group and those working in technical roles in line with the profiles sought. to manage change. contractors. In 2018, over 26,500 hours Fincantieri and MIUR have agreed on the In the Group’s Talent Management process, Further training paths have been implemented of training were delivered to Fincantieri fact that ITSs are the most efficient means training and development play a key role to accompany employees’ development employees and, as part of life long learning, to meet the demands of the employment in the enhancing human capital. People towards managerial positions and to increase, the project will continue in 2019. market, particularly as regards the highly are actively involved in their own career from an integrated business view, the relational To keep attention focused on quality issues, specialized profiles needed in the sector. development paths, from the perspective of and methodological skills of recently appointed the Naval Shipping Division also developed a Among the initiatives implemented, an responsibility, defi122ning career goals and managers. specific course for new hires on the current important role is played by the launching awareness of training needs. The Project Management Academy has procedures in the naval and after-sales been introduced in the institutional training areas, while VARD delivered more training programmes offered by the Fincantieri courses aimed at product quality standards Corporate University. This modular training during the year. programme aims to accelerate the placement A special training course was dedicated to OVER 650,000 of people in Project Management Team and to production supervisors and managers of the HOURS OF MEN 34.3 WOMEN strengthen the specific knowledge and skills production and design areas. It was aimed TRAINING required of them. at strengthening the necessary managerial PROVIDED As evidence of the importance given to and relational skills to effectively guide their 33.8 38.0 sustainability issues, an objective that teams towards the corporate objectives. AVERAGE HOURS envisages the development of the subject in Similarly, over the year, Fincantieri Marine OF TRAINING PER CAPITA the Corporate University’s training programmes Group and VARD developed a training has been included in the 2018-2022 path on leadership for supervisors and Sustainability Plan. staff in technical roles, aimed at facilitating The training provided aims to strengthen and development into the team leaders. WHITE COLLAR maintain technical and specialist skills and Globalization and the broadening of the EMPLOYEES 14.5 a key role is played by the Integrated Ship business scenarios in which the Group 47.9 Design & Manufacturing (ISDM) project, which operates from day to day have intensified, envisages the development of new technical in line with the Company Language Policy, 10.0 MIDDLE MANAGERS 17.8 and managerial tools to support product the demand for and provision of training to BLUE COLLAR EMPLOYEES design and development. The training activities improve language skills across the board. SENIOR MANAGERS
The data refer to the entire Fincantieri Group.
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for improvement. An individual development at the core” and better address the plan is prepared after the feedback which challenges posed by the global market. collects the support actions aimed at The Company promotes and encourages strengthening the most critical competencies. cooperation and interaction between people Appraisals of performance and potential are the who have acquired experience in different drivers that guide the people review activities socio-cultural contexts, so that, with their in the Fincantieri Group. These help identify contribution, they can fuel a corporate culture resources with greater potential and usefulness that is increasingly open. in the Company and the development actions Fincantieri recognizes the value of the needed to accompany their growth. In fact, international and multicultural context in which potential appraisal weighs the maturity of it operates and it nourishes it with recruiting each individual resource’s cognitive, realization, and job rotation policies aimed at promoting relational and coordination skills and examines the sharing of know-how and best practices, as the potential for the resource to hold more well as the integration and inclusion of people. Fincantieri’s increasing presence in Performance appraisal complex positions, including those far outside Fincantieri’s capacity and willingness to involve international scenarios and the need to As part of the policies to enhance and protect their usual perimeter of activity. Individual and integrate female and male workers of protect the people working abroad have human capital, Fincantieri adopts a variety of career paths are identified and defined on different nationalities, religions, customs and been the basis for relaunching the Travel tools to evaluate its resources with the aim of these bases and aim to put in place the steps traditions into a participatory model is seen Security course. In 2019, more information facilitating their growth and enabling them to needed to accrue the experience and essential daily in all the production sites. was developed for all employees to raise perform at their best. skills through job rotation, classroom and on- The US companies, Fincantieri Marine Group awareness of the risks associated with travel Among these, performance appraisal is the the-job training and coaching paths. and Fincantieri Marine Systems North America abroad and to provide them with consequent systematic and consolidated process in Italy The people review activity also helps Inc., and the VARD group have organized indications on how to behave. that enables the core competencies of all succession plans to be set up, with are an specifictraining activities aimed at creating The introduction of the new European employees, from manual workers to managers, essential tool for identifying managers who, in greater awareness of and sensitivity to diversity Regulation on Data Protection (GDPR) to be measured on an annual basis. The value the future, could take on positions of strategic issues and preventing discrimination to ensure entailed a significant training commitment in added of the process is represented by the importance for the business, thus ensuring the respect for equal opportunities. order to fulfil the legal obligations and give feedback interview that each manager carries availability of potential “successors” for key Some significant data are given below which substance to the internal procedures. With out individually with their collaborators in order roles in the short and medium term. reflect the Company’s commitment to gender the same purposes, the Parent Company has to share the results of the appraisal and define With the same aim, Fincantieri Marine diversity. In Fincantieri, the presence of women, promoted training and information activities future targets. The foreign subsidiaries have Group has introduced a policy aimed at which in constantly increasing in absolute value, with regards to Listed Companies, Enterprise also adopted advanced appraisal systems that inter-generational cooperation, also through achieved a growth rate over the last year that Risk Management, IT Security, Organizational measure the performance attained compared mentoring and training activities from senior to is significantly higher than that of the overall Model and the administrative responsibility of to the assigned objectives, allowing job rotation junior workers. population (+13.3% vs. +4.3%). More emblematic legal entities under Legislative Decree and professional growth opportunities to be is the data related to the hiring of women, which No. 231. assessed. is 24.7% higher than the previous year. From the perspective of continuity with In 2018, the Parent Company launched the 360° DIVERSITY AND EQUAL OPPORTUNITIES The Company’s focus on work-life balance is the path of cultural growth and resource assessment, a development tool that enables put into practice through various initiatives, in involvement that the Group has undertaken a full appraisal of the resource to be obtained Fincantieri respects the dignity of each addition to those that are part of the welfare for some time, various training and by comparing self-assessment and assessment person and offers equal opportunities to all its system, which aim to increase workers’ information activities on health and safety at by others. The multiple feedback perspectives employees, avoiding any form of discrimination satisfaction and commitment towards the work and the environment were promoted collected (self-assessment, appraisal by the in terms of differences in gender, age, health, Company. There are special arrangements with in 2018, in addition to and in furtherance of manager, by colleagues and by collaborators) nationality, political opinions or religious beliefs. day care centres, seaside or mountain resorts that required by law. The hours of training are shared and discussed in a feedback Fincantieri recognizes, at all levels, diversity as during the summer, daytime summer camps delivered on these issues accounted for 23.1% interview which aims to develop in employees a a value to be cultivated in the organization in and after-school activities for the children of of the total hours of training. greater awareness of their strengths and areas order to consolidate the aim to “put people employees.
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Human rights HEALTH AND SAFETY Safety at work, workers’ health, the Fincantieri operates within the reference maintenance and improvement of work framework of the UN’s Universal Declaration of environments have always been the main Human Rights, the fundamental Conventions OUR POLICY drivers of the Company’s policies, in a of the International Labour Organization (ILO) vision that considers safety a strategic and and the Guidelines of the Organisation for Safety development factor for the Company. Economic Co-Operation and Development In this light, the continued implementation (OECD) for Multinational Enterprises. • It is of fundamental importance for of tools associated with the certification Fincantieri undertakes to ensure that the the Fincantieri Group and the priority of the Company's systems for managing company policy is designed to create and in all the choices our Company has health and safety at work, according to the maintain the skills and competences of each made. requirements of OHSAS 18001, has resulted employee, recognizing merits, respecting in the broadening of the work population equal opportunities and protecting human • It is a necessary condition both for involved, facilitating dissemination of rights. our present and for the future we are corporate culture growth paths. Even in countries with the greatest risk for building. This result is monitored through the human rights such as Vietnam and Brazil, the systematic implementation of internal Company constantly monitors these issues. • It means all sharing the same audits connected to the certification of In particular, the Vietnamese shipyard has SA example to follow - for our top management systems and it has been 8000 certification, a system that guarantees management and for each one of us. further supported by the various initiatives respect for these rights and envisages specific implemented as part of the Towards Zero training for all new hires. • It means growth for our Company, in Accidents project. terms of efficiency and quality. Owing to the more frequent and widespread presence of employees who travel or • It means training and information: are on secondment abroad, the Travel more knowledge, more safety. Security programme has developed an ongoing mapping of risks in foreign • It means cultural change. countries to guarantee the security of travelling employees and the sustainability This is the only way to achieve our of the locations associated with business “Zero Accidents” target, our one and operations. Through the coordination of a only top priority. Crisis Management system, the contingency plans related to the most important sites have been drafted and updated and the
GIUSEPPE BONO monitoring of over 12,000 travel routes has Chief Executive Officer of FINCANTIERI S.p.A. been guaranteed.
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companies) in the training and information of equipment and work tools, the use of TRAVEL SECURITY IS IMPORTANT, FIND OUT WHY of their respective employees and in the personal protective equipment and keeping sharing of the same issue and common the work station clean and tidy. illustrative material. In 2018, 10 different The VARD group, similarly to Towards Zero editions were carried out with a duration of Accidents, has further developed its Vision 30 minutes. Zero project, the results of which confirm a Code of Conduct Prepare for travel Protect company Keep your eyes open Behave appropriately Your health is important When travelling for Fincantieri, Before leaving, remember to information Pay attention to what As a Fincantieri employee, When you're abroad, always Over the year, the supplier evaluation positive trend. employees undertake to read carefully the directions • Remember not to talk out is happening around you must always behave in try to drink bottled water. Eat promote the Group's interests. provided by the Travel Security loud about business matters: You. Criminals could compliance with the laws of cooked food. Wash/disinfect process has received a significant boost Multiple initiatives have been carried out Employees must follow the office. They will help you better someone might be listening! take advantage of your the country you are visiting. your hands often: this simple laws, customs and regulations understand the situation carelessness; do not help routine helps avoid illness. as regards safety issues. Contractors with the aim of preventing any type of of the host country and you are about to face. Learn • Do not forget that using them. Do not go to isolated Remember that Fincantieri Before leaving, consult the behave in a manner that does about customs, laws and free Wi-Fi can be extremely areas, especially if you are is committed to fighting occupational physician and/ not harm the interests of the local culture by consulting dangerous: do not use open alone. Try to vary your routine corruption and inappropriate or the Health and Safety are already subject to evaluation from accident to people and the environment: Company. the T.R.I.S. company platform, networks, they are not and the route from home/hotel behaviour. Department Manager of Travel Security section, secure! (e.g. at hotels or to the office. your office if you have health a financial, quality, contractual and The tips included in this available on the company airports). problems or would like more guide can help you travel intranet. Do not forget that it • If you are carrying company Make a copy of your information on the health production perspective and they have been • using the Safety Observation tool to safely: this is our goal! Also is better to avoid discussing assets (mobile phone, laptop, documents aspects of travelling. remember to keep in mind politics, religion or personal etc.), do not leave them Losing documents is a assessed using a predefined format and report any anomalies found; your colleagues travelling beliefs in public and that unattended; they contain common problem, so keep a with you. If someone has a in some countries the confidential data copy in a safe place. Do not problem, but hesitates to ask consumption of alcohol and/or show your passport/identity scorecards focused on health, safety and • reporting health and safety indicators at for help, contact Fincantieri drugs is strictly prohibited. card unless requested by a Corporate Security, which is public authority. environment issues, also by the various the monthly management meetings; always there to lend a hand. Attention to frauds Once you arrive at your shipyards, with the direct involvement of • organizing the prevention week to reduce destination, do not rely on unofficial services. the managers of the relative areas. The internal accidents; Be extremely careful when someone offers to help you. Do not accept lifts from strangers assessments have led to the calculation of • monthly discussions on health and safety or improvised taxis. the overall performances of the companies (required by law in Brazil); and will be subject to permanent • electing an internal commission for the monitoring within Supplier Oversight. prevention of accidents; The Training for Quality initiative aims to • the internal distribution of a booklet with Towards Zero Accidents project and Safety Committees meet regularly, verify and strengthen the technical and the ten golden rules for health and safety at For several years the Towards Zero are supervised by the Management of the operational know-how of production work, based on the Group’s guidelines. Accidents project has involved all the production unit and are composed of all supervisors and skilled workers (in both resources concerned with the Company’s those reporting to the management and by Fincantieri and contractors) and it has been The US subsidiaries have maintained a high production process within a structured plan the quality, health, safety and environment extended to all Italian shipyards. commitment to safety and the environment of initiatives. In 2018, a series of activities managers. Workers are represented in As part of this initiative, those skills and have received numerous awards for were carried out that were aimed at these Committees through their safety and that have a direct impact on product excellence. employees and suppliers and at contractors’ environment representatives. quality have been analysed along with employees. The documented analysis of accidents and the consequent identification of any To consolidate good practices and the near misses at the individual sites, made training needs, including elements directly constant monitoring of the production with the use of a computerized format, is concerning safety, such as the proper use dynamics, careful attention has been paid shared among all the organizational units to coordination meetings on safety and and has made the involvement of the entire the environment which, scheduled at least Company systematic, particularly detailed every two weeks, are carried out directly in and timely. the production areas with the participation The Active Safety project involves training/ of all the supervisors involved in processing information provision beyond that required and the workers’ safety representatives. by law and is carried out on a monthly At the level of individual production unit, basis during working hours and directly at Fincantieri has established the Quality the workplace. The new element relates to and Safety Committees with the aim of the direct and simultaneous involvement monitoring the production processes within of supervisors (production managers for their different complexities. The Quality Fincantieri, site managers for external
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While Fincantieri Bay Shipbuilding won the people enter the Group’s production sites certifying its management system over the Social Bonus, is used on an annual basis Shipbuilders Council of America Excellence for the first time. the course of the year, aims to achieve and exclusively on welfare services and is a in Safety Award for the fourth year running, The aim is to represent and simplify the certification of compliance with the management element that is consolidated Fincantieri Marinette Marine and Fincantieri main risks present in the shipyard and the requirements of the standard by 2019. within the Company. Moreover, workers Bay Shipbuilding have been awarded correct operational methods, also in order The US site of Fincantieri Marinette Marine can convert variable awards linked to the the Excellence in Safety Award by the to prevent and minimize the interference maintained the certification of its health achievement of assigned objectives into Shipbuilders Council of America. Fincantieri risks of certain stages in which several and safety at work management system, in welfare entitlements. The Company also Ace Marine has developed the SLAM (Stop, activities are carried out. compliance with the requirements of OHSAS adds a further increase of 10% to the value Look, Assess, Manage) programme that The Together in Safety video focuses on 18001. converted for employees who decide to use involves the employees and intends to 35 risk situations and describes over 180 The VARD group maintained OHSAS 18001 this opportunity, thereby strengthening the promote a pro-active vision of health and recommended prevention and protection certification for the VARD Braila and VARD connection between the achievement of safety in the workplace. measures to inform and make the worker Tulcea (Romania) shipyards, as well as production objectives and consolidation of aware of the risk situations present in the the VARD Vung Tau (Vietnam) shipyard. the overall welfare system. Together in Safety project workplace. All VARD shipyards are aligned with SA Welfare is also extended to the other Italian A new tool has been made available and The video has been developed in the 8000 standards, which are based on the subsidiaries and/or associates that fall operational in all Italian shipyards since 10 languages most used in Fincantieri International Labour Organization (ILO) within the scope of the national collective January 2018. It is aimed at protecting sites and, in the context of each of the conventions and the Universal Declaration of bargaining agreements. human resources and promoting correct Italian production units, with a first part Human Rights (Vung Tau is also certified). On this point, particular attention has behaviour, including from an environmental customized to the logistics of each been paid to transport issues. In 2018, the perspective: Together in Safety. shipyard. For more information on the certified shipyards reimbursement of public transport costs was and companies, see the website This is a multimedia training video, with www.fincantieri.com/en/sustainability/certifications included among the convertible services. a duration of over three hours, aimed With this benefit the employee can request at employees of subcontractors (a user the total or partial reimbursement of public catchment of around 30,000 people), and COMPANY WELFARE transport costs for themselves and/or for it must be watched in the classroom when their dependent family members. With the 2016 cooperate agreement Confirming the validity of the welfare model Fincantieri laid the foundations for a welfare it has adopted, Fincantieri won the Welfare MAIN HEALTH AND SAFETY INDICATORS 2017 2018 model able to seize on the employment Awards 2018 for the best plan in application Severity index 0.3 0.3 and enterprise market dynamics, translating of the National Collective Bargaining Rate of occupational disease 0.1 0.1 them into a modern and efficient Agreement for Steelworkers, and a special Rate of absenteeism 3.6 3.6 management of the available resources. Welfare Awards 2018 award for welfare Injury rate 10.5 10.3 The welfare system is available to employees policies aimed at blue collar employees. Number of injuries 383 366 in general, including part time and fixed In the same vein, the spread of corporate - of which in the workplace 343 301 term employees, and is also recognized for car pooling (namely two or more people - of which while travelling 40 65 the employees of Italian subsidiaries and/ sharing a private car for the commute to and Number of injuries in the workplace - fatalities 0 1 or associates falling under the application of from work) continued and in 2019 it will be Number of injuries - women 39 19 the supplementary labour agreement (Isotta extended to all companies in the Group. The data refer to the entire Fincantieri Group. Fraschini Motori S.p.A., CETENA S.p.A. and To respond to the increasing need for a Orizzonte Sistemi Navali S.p.A.). work/life balance, in addition to envisaging OHSAS 18001 and SA 8000 certifications related policy adopted by the Company. Employees can access a wide range of greater working hour flexibility as regards During 2018, Fincantieri continued The sites that have already been certified goods, and services through a special portal. the times for arriving and leaving the implementing and consolidating the continued to be monitored by the RINA The options most used by employees are workplace, the Company has launched an occupational health and safety management certification body to ensure certification welfare vouchers (40%), services for families initial trial of the smart working tool. systems in its operating units, with the aim maintenance or renewal. (21%) and supplementary pensions (15%). In relation to supplementary health care, of supporting the implementation of the The Palermo shipyard, which had started Part of the performance bonus, also called an agreement was defined with the
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national trade unions for the new Health which in some cases, in addition to trade REMUNERATION of excellence with respect to the duties Plan, which has guaranteed a considerable unions, include workers. This is the case assigned. increase in the level of services provided to of the Bilateral Joint Technical Body which The remuneration of employees, whether This component is sufficient to remunerate employees and a further extension to family continued to operate in all the company manual workers or office staff, is defined in the services performed, including in members covered with the contribution sites in 2018. Its purpose is to increase the relation to the relevant labour market and the event of no payment or only partial paid by the Company. Health services motivation and participation of employees in accordance with the provisions of the payment of the variable components, where were provided both directly, through the in the innovation processes, combing National Collective Bargaining Agreement envisaged. The fixed component is also such facilities contracted by the operator and in the necessary increases in efficiency and and company level contracts. as to ensure a suitably competitive position the form of reimbursement and access to productivity with the improvement of life with respect to the level of salary paid by the them was facilitated by assistance for Group and work quality. market for the specific position. employees only. On a national level, work continued in the The variable component, on the other hand, The agreement also confirmed the various joint commissions and special € 951 mln remunerates the results achieved in the short opportunity for pensioners, under the attention was given to further developing PERSONNEL COSTS and long term and is aimed at translating operator’s most favourable conditions, to training issues, the structuring of a plan company strategies into a series of individual continue to make use of the supplementary of initiatives for the prevention and Remuneration consists of a fixed and Group objectives, capable of decisively health care benefits with a contribution paid containment of accidents and protection component, aimed at fairly rewarding the influencing the performance of the people for by them. of the environment with the constant and work performed, and a variable component, involved. Fincantieri Marine Group provides benefits increasing involvement of the supply chain. linked to predetermined and measurable The variable component also focuses to all employees working at least 30 hours Solidarity leave was established during performance objectives, mostly in the form people’s attention and commitment on a week. Benefits include subscription to the the year. It offers employees the option of welfare and non-monetary benefits. strategic objectives, though not necessarily Group Health Medical Plan, which covers of passing their own holiday and leave In general, the fixed component remunerates economic ones, such as those related to various services: a medical coverage plan, entitlements to colleagues in serious need the role and responsibilities assigned to each sustainability, in line with the Sustainability a dental coverage plan and vision coverage and it was extended with the trade union employee, taking account of the level of Plan approved in December 2018, which plan for eye health. The costs are borne agreement to the Sestri Ponente shipyard. experience, the quality of the contribution also includes objectives on quality, safety at partly by the Company and partly by the Employees are guaranteed freedom of that each employee brings to the attainment work, the environment and anti-corruption, worker. In addition, there are other benefits association throughout the Group. In 2018, of the business results, as well as the level among others. not included in the above plans, such as 52% of employees are registered with trade the on-site clinic, vacation and holiday pay, unions. the policy on short-long term disability, Specific information procedures are RATIO BETWEEN WOMEN’S BASIC REMUNERATION AND AVERAGE REMUNERATION life insurance for accidental death & envisaged for any restructuring processes 2018 dismemberment, the retirement plan and the which involve trade union organizations. The SENIOR MIDDLE WHITE COLLAR BLUE COLLAR MANAGERS MANAGERS EMPLOYEES EMPLOYEES employee assistance programme. restructuring methods (e.g. early retirement, FINCANTIERI 0.9 0.9 0.9 0.9 The VARD group provides its employees, reduction of working hours, retraining, VARD 0.3 n.a.* 0.4 0.3 using different methods depending on the etc.) are subject to different structuring FMG 1.2 0.9 0.8 0.9 location, with medical assistance, internal depending on the context in which they are FMSNA 0.0 0.0 1.1 0.0 catering services, food cards, training used. incentives and support for transport to and The VARD group signed five collective from home. bargaining agreements for foreign RATIO BETWEEN WOMEN’S GLOBAL REMUNERATION AND AVERAGE REMUNERATION subsidiaries in 2018. 2018 INDUSTRIAL RELATIONS SENIOR MIDDLE WHITE COLLAR BLUE COLLAR MANAGERS MANAGERS EMPLOYEES EMPLOYEES Industrial relations in Fincantieri are based FINCANTIERI 0.9 0.9 0.9 0.9 on a very advanced participatory model and VARD 0.3 n.a.* 0.5 0.3 are developed through the activities FMG 1.2 0.9 0.8 0.9 of various commissions and specific bodies, FMSNA 0.0 0.1 1.1 0.0 * Data for the VARD group is not available given that it is incomplete.
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R ESEARCH AND INNOVATION
A CLEAR VISION FOR 2030
STRUCTURED PROCESSES FOR INNOVATION
THE ROLE OF CETENA
WIDESPREAD NETWORK
MAIN PROJECTS
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Innovation is growth and Fincantieri that it intends to pursue in the coming years, STRUCTURED PROCESSES FOR INNOVATION never ceases to innovate and one from which it intends to channel its actions. It has been possible, as a result COSTS IN RESEARCH, Fincantieri aims to maintain its position as of collaboration with other Italian and INNOVATION AND DEVELOPMENT world leader in all shipbuilding segments French shipbuilders and through the relative that require advanced, high value-added associations (ASSONAVE and GICAN), to solutions. Fincantieri technological leadership establish a collective development vision for is based on our high capacity to innovate and civil and naval technological innovation. on our system integrator know-how; it is an The ASSONAVE–GICAN roadmap is built € 122 mln essential target that we aim at by considering on five pillars, called Visions, associated technological development and continuous with the technological objectives that improvement as the key goals of every action, need to be achieved in order to ensure project, initiative and decision made by the their success. These pillars, which are the Group. core direction of Fincantieri’s Research The Group’s R&D activities are steered in at developing specific design solutions that A business subject to cyclical trends and Innovation process, are the eco- three main directions: are not directly applicable to orders, but are over time, such as the naval one, requires sustainability and energy efficiency of ships necessary to anticipate customer needs, for considerable flexibility in order for any (Green Ships), their digitalization (Smart • development of technologies and example in areas such as energy efficiency company to enter new market segments. This Ships), their automation (Autonomous innovation applied to the order, i.e. activities and reduction of operating costs, maximizing flexibility can only be guaranteed by carefully Ships), the development of more efficient, aimed at developing technological solutions, payload - the typical profitability indicator managing innovation strategies. A recent safe and sustainable production facilities materials and innovative systems that are for naval products -, and perceived quality, example of the Group’s flexibility is VARD’s and processes (Smart Yards) and the carried out during the design of ships and and improving safety; development of new projects that build on its introduction of innovative solutions for necessary to meet the specific needs of • long-term innovation, i.e. activities aimed at experience, acquired in the offshore segment, Blue Economy growth (Smart Offshore shipowners; developing the Group's technologies also in and in the production of vessels capable of Infrastructures). The importance of this • off-the-shelf innovation, i.e. activities aimed order to support entry into new sectors. operating in extreme conditions. vision is attested by the inclusion of these Product and process innovation is one pillars in the 2018-2022 Sustainability Plan. of the fundamental values of Fincantieri Fincantieri actively supports and promotes that have led to it being one of the most its roadmap towards innovation with the INNOVATION Innovation with suppliers competitive players in its business globally. relevant organizations at national level (the In this sense, the capacity to seize on the national technology clusters Trasporti Italia High promising synergies in terms of innovation 2020 and Blue Italian Growth) and European BUSINESS IDENTIFICATION at international level characterizes the level (the WATERBORNE technology EXPANSION OF NEW BUSINESS Monitoring THROUGH INCREMENTAL Group’s actions and makes it gradually more platform and the Sea Europe association) OPPORTUNITIES megatrends integrated with and sensitive to market in the conviction that they represent the INNOVATIONS dynamics. dynamics of technological development in CONTINUITY TECHNOLOGY DISCONTINUITY the medium- to long-term which are needed AND MAINTENANCE SCOUTING AND GROWTH
in order to bolster competitiveness of the Business expansion INNOVATION INCREMENTAL ROOTED IN A CLEAR VISION FOR 2030 European shipbuilding industry. Innovation INNOVATION OF CURRENT CURRENT New product is a key element for the operating segment PRODUCTS PRODUCTS concepts Consolidating a shared path with its to continue to maintain a global leadership European partners in research and position, demonstrating that it is fully able R&I plan innovation in the shipbuilding industry is one to handle the greatest technological and of the Group’s most ambitious objectives environmental challenges of our time. Low Degree of technological innovation Low High
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Fincantieri has defined a structured and anticipate market trends. These different Protecting intellectual property enables in terms of type and geographical location. articulated process for preparing the processes are supported by Technology Fincantieri to get the greatest possible The role of system integrator played Research and Innovation Plan (R&I Plan). Scouting, aimed at identifying the emerging benefit from the results of the research by Fincantieri requires the creation of The R&I Plan represents the operational technologies, including in sectors far and innovation activities, from its know- long-lasting relationships that enable tool that the Group uses to gain greater removed from the world of shipping. how - accrued and consolidated over the the implementation of cooperative competitiveness on the international market, The Technology Scouting and innovation years - and from the design solutions that development programmes in order to pursue allowing it to generate and maintain a activities with suppliers help to fuel and have enabled it to acquire leadership in the development of new technologies, competitive edge against its competitors. contaminate the R&I Plan with ideas from its market sectors. For example, in 2018 continuous improvement of current ones - in It is redefined annually in order to maintain abroad, always guaranteeing a long-term a patent was granted for an innovated terms of quality, efficiency and costs - and consistency between developed activities, vision on the most recent technologies. radar system which enables a 360-degree the reduction of risks. corporate objectives and market needs. The processes are structured to maximize view contemporaneously, various models The Group also continuously studies new the impact on the final product of the of the design of details of the hulls and concepts, promoting the generation of studies and results of various projects. superstructures of cruise ships, and patent innovations within its business perimeter, In particular, competitive advantage is for a Smart Cabin system which enables collaborates with suppliers to produce maximized by not overlooking both the home automation solutions to be applied to innovative solutions that also lead to a technological transfer aspects - facilitating cabins. 20-30% possible business expansion, and constantly the application of new discoveries on board 70-80% OUTFITTING (Suppliers) PLATFORM monitors technological megatrends to - and the intellectual property aspects. (Fincantieri) THE ROLE OF CETENA
The Research and Innovation processes are supported by CETENA, the Research Centre In this way the Group has given substance OUR CORE PROCESSES ARE DESIGNED TO DRIVE INNOVATION FORWARD that is the key element of the Group’s pre- to the paradigm of open innovation, a model competitive research. Since 1962, CETENA of cooperation between firms and research INNOVATION DRIVERS AND NEEDS (Centro per gli studi di Tecnica Navale) has facilities, creating a network of extensive and STRATEGIC RESEARCH AGENDA carried out research and consultancy in the widespread collaborations at international level. naval and maritime field, at both national In order to ensure the integration of internal
TECHNOLOGY SCOUTING and international level, to support shipyards, and external innovation processes, the R&I shipowners, navies and maritime operators. Plan takes into consideration the various CETENA’s main tasks concern purely naval stakeholders: INNOVATION WITH SUPPLIERS areas including fluid dynamics, innovative structures and materials, energy efficiency • Suppliers: suppliers are involved in and control of emissions, safety and tools numerous projects in the Research and RESEARCH & INNOVATION PLAN TECHNOLOGY TRANSFER INTELLECTUAL PROPERTY PROTECTION for decision support, development of Innovation Plan and in various open manoeuvre and navigation simulators and collaborations of which the Group is part. testing activities at sea and in the laboratory. They are also a principal element of the RESEARCH PROJECTS FUNDED BY PUBLIC INSTITUTIONS Innovation with Suppliers process that envisages the identification of the main WIDESPREAD NETWORK technological systems of the ship product WORKING GROUPS IN NATIONAL AND INTERNATIONAL TECHNOLOGICAL CLUSTERS AND ASSOCIATIONS and the relative development roadmap. The complexity of its products has driven The main partners for building a common Fincantieri to think about its own innovation strategy of joint technological development processes, founding them on both internal aimed at pursuing the objectives defined skills and on the creation of partnerships in the roadmap are identified based on this with various external stakeholders that differ analysis.
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• Network of Universities and research Institutions: the Group collaborates systematically with the main universities and research centres, developing important international partnerships. The methods of cooperation are different and range from joint participation in collaborative projects and direct collaboration on specific topics to developing innovative ideas to transfer onto the product through Innovation Challenges. • Classification Societies: responsible for certifying the consistency of the product and the production methods applied to the product, they are a significant partner throughout the entire production chain. The Group cooperates with Classification Societies on a day-to-day basis in the development of new prototypes. It also shares activities in various collaborative projects and recently entered into several specific agreements to facilitate research activities and collaborative development. • Customers: the Group always seeks to Italy: National Technology Clusters and with the need for innovation and increased anticipate customer needs. Therefore Regional Technological Districts competitiveness emerging from companies various activities are implemented in order UNIVERSITIES To systematize the activities carried out by in the country. 2018 saw a continuation of to identify the technological priorities to be the different actors nationally, Fincantieri the activities of the Trasporti Italia 2020 NTC developed in the short, medium and long actively participates in the activities and the formation of the Blue Italian Growth term. These include a careful analysis of the SUPPLIERS CUSTOMERS performed by the National Technology NTC. progress of the requests formalized in the Clusters (NTC) and by the relevant Regional Trasporti Italia 2020 NTC: Fincantieri technical specifications, direct contacts, Technology Districts, that are driving participates in the maritime Working market surveys and Voice of the Customer economic growth in the regions and the Group of the Trasporti Italia 2020 NTC. (VoC) analyses. national economic system as a whole. The objective of Trasporti Italia 2020 is to • Trade associations and industry forums: Since 2016, NTCs perform, for their create synergy between the various supply IND. FORUMS CLASS. SOC. represent an important area for exchanging respective areas of competence, the chains and to identify future research and ideas and a hothouse for the cultivation of function of soft governance at the meeting- innovation trajectories for the surface fruitful partnerships aimed at consolidating START UPS point between scientific research and transportation industry. a shared vision on the main research and industry. The purpose of the clusters is to In 2018, the Trasporti Italia 2020 NTC worked development issues. mobilise the industrial system, research to maintain important dialogue with the system and Public Administration to jointly Ministry of Economic Development (MiSE) create extensive national partnerships that and the Ministry of Economy and Finance address shared priorities. Moreover, they (MEF) aimed at steering actions in support fuel strategies for research, development of firms with particular focus on the issue of and training of human resources, and the automatic incentives (R&D, Training 4.0, etc.) relative implementation plans to maximize and producing an impact analysis of the the impact on the economic system, in line Stability Law on the above issues.
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Blue Italian Growth NTC: Fincantieri actively • The Polymeric and Composite Materials - the Smart Marine SFI: the centre aims to took part in launching the activities of the Blue and Structures Engineering District (IMAST) improve the positioning of the Norwegian Italian Growth (NTC BIG), including through in the Campania region, founded for the maritime sector in the segment of sustainable direct participation with two members on the development of cutting-edge skills in waterborne transport; Scientific and Technical Committee and two innovative materials for the aerospace, - the Move SFI: the centre is focused on members on the Steering Committee. In 2018, maritime, automotive, bio-medical, polymer improving operations in maritime and the NTC BIG continued with consultation and electronics and construction industries. develops IT knowledge, methods and tools. coordination actions with the main players in • Sicily Technology District for Naval the public and private research system on the Transport (NAVTEC), focused on improving Europe: the main partnerships topic of Blue Growth aimed at defining its own the skills of the network of strategic During 2018, European stakeholders in the Three-Year Action Plan. suppliers within the field of ship repair and maritime sector were strongly committed, in Regional technological districts: at a regional conversion in Sicily. line with the initiatives launched in previous level, the cluster policy has strengthened the years, to relaunching the WATERBORNE roles of the districts; Fincantieri works with The objective of the districts is also to European Technology Platform, changing five technology districts located in the areas integrate the skills present in the research the membership procedures by opening of its shipyards. system and the business world, and to up to a wider range of private entities and allow suppliers, universities and research strengthening communication skills and • The Friuli Venezia Giulia Maritime centres to interact in close contact with the strategic collaborations with other European Technology Cluster (MareTC FVG), Group for the development of technological entities. The WATERBORNE European which has the objective of promoting solutions. Technology Platform is the most important and developing scientific and applied strategic partner of the European Commission research, technological development and Norway: the main partnerships in identifying the research priorities in the training, as well as the communication The Group, through the subsidiaries of maritime, naval, port, logistics and blue of results, the stimulus for innovative VARD group, regularly cooperates with the growth fields, consolidating widespread activities, the exchange of knowledge and Norwegian academic and research world. consensus among the many stakeholders experience, technology transfer, sharing In particular we are regularly involved in in the sector. Fincantieri recognizes the and dissemination of information between activities carried out in partnership with importance of participating in the industry companies and research organizations. the NTNU - the Norwegian University of consultation processes needed to define Furthermore, it aims to encourage Science and Technology - and the SINTEF - the European guidelines for research and internationalization and to promote the The Foundation for Industrial and Technical technological innovation and is therefore an growth of the intangible value of the Friuli Research - one of the main independent active participant in WATERBORNE and fully Venezia Giulia region maritime technology research centres in northern Europe. involved in its relaunch. In 2018, Fincantieri system. This close cooperation has driven to the participated in the work of numerous • The Liguria District for Marine Technology establishment of two centres for research- working groups, contributing significantly (DLTM), focused on the development of new based Innovation (SFI), within a framework to the preparation of the platform’s visions solutions for marine systems for naval and initiative established by the Research and missions, appropriately integrated in a leisure marine industry, for vessel systems Council of Norway. These temporary centres Strategic Research Agenda for the sector for defence and security, and for monitoring, (established for the period 2015-2023) at European level. This document aims to reclamation and safety of the marine aim to improve the ability to innovate in a help the process for identifying the industry environment. specific industrial sector by creating close priorities in terms of research and innovation, • The Liguria Technology District for partnerships between companies and also with reference to the issue of mobility, by Integrated Intelligent Systems (SIIT), research groups, focused on medium- to European institutions, identifying a long-term created for the development of virtual long-term research goals. technological development path capable of reality, simulation and support tools for the In particular, the Group operates through the strengthening global competitiveness in the automation of processes and logistics. following three segments: sector.
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In the European context, Fincantieri continues context range from welding techniques to Fincantieri aims to continually improve its cooperation, through ASSONAVE, with “design for maintenance” concepts, via the ship energy efficiency and emissions using Sea Europe - the European association of study of strategies to reduce ship weight. a holistic approach able to cover all the shipyards and producers of naval systems on-board sub-systems. Future activities - and, through CETENA, with the European will be focused on reducing emissions to Council For Maritime Applied R&D (ECMAR), MAIN PROJECTS air and water, greater innovation of on- which aims to develop a common strategy for board waste management and disposal European research in the maritime sector in With the identification of a clear innovation systems and reducing noise and vibrations. line with the EU funded research, innovation vision the Company is able to focus on Furthermore, Fincantieri supports the Green and development priorities. Moreover, the research activities and projects to pursue Fuel Switch, also by harnessing renewable Group participates intensely in the activities well-defined trajectories. Often, given the energy, and it believes in developing new of the Cooperative Research Ships (CRS), a complexity of the issues covered, projects are technologies for de-carbonization such as consortium of over 25 members concerned cooperative in nature in order to maximize Fuel Cells, encouraging the introduction of with obtaining data on the hydrodynamic effectiveness by exchanging knowledge high performance materials and promoting behaviour of large ships. Fincantieri also with various actors who are leaders in their eco-design ideas (e.g. design for eco- participates in Hydrogen Europe, the respective sectors. The Group operates compatibility, evaluation of the life cycle, European association representing the through its own resources, with over 90 etc.). industry and research for the development projects, and through programmes funded The main projects active in 2018 and related of hydrogen technologies and fuel cells, at European, national and regional level. to these issues are: which cooperates with the European In accordance with the sector trajectories Commission on the Fuel Cells and Hydrogen mentioned above, it is possible to highlight • High efficiency: a project conducted in Joint Undertaking (FCH JU) innovation the main activities conducted in 2018. cooperation with the Consiglio Nazionale programme. This is a unique public-private delle Ricerche (CNR, National Research partnership that supports research and Green Ship Council) and the University of Trieste, funded technological development activities with the Greening has been steering innovation by the Italian Ministry of Infrastructures and aim of accelerating the market introduction and markets for years now and, today, Transport. The aim of the project was to of hydrogen technologies to realize a low- it represents an important issue in the develop innovative systems solutions for carbon emission energy system. eyes of public opinion. CLIA, the Cruise energy recovery (mainly thermal) and to Lines International Association, recently increase the overall energy efficiency of the United States: the National Shipbuilding announced its formal commitment to systems on board. Research Program reducing carbon emissions by 40% by 2030 • On-board waste-to-energy platform: a The American subsidiary Marinette Marine on all cruise ships, pursuing the International project conducted in cooperation with the carries out most of the research and Maritime Organization’s (IMO) objective to CNR and the Universities of Genoa and innovation initiatives in collaboration with reach zero carbon emissions throughout Trieste, funded by the Italian Ministry of research centres and universities, through the whole naval industry by the end of this Infrastructures and Transport. The aim of the the National Shipbuilding Research Program century. project was to evaluate various options to (NSRP) funded by the US Government. Fincantieri considers Green Ship as a convert the waste produced on board ship NSRP was founded in collaboration with milestone of its vision. The activities in 2018 into energy, in compliance with applicable U.S. Shipyards, which studies and develops confirm this commitment. Recent contracts, environmental regulations. new processes and designs to improve ship whether they are related to the sectors of • Innovative electricity generation: a project production in the United States and make it new builds or refitting, feature the use of conducted in cooperation with the CNR and more efficient. This project allowed Marinette advanced technologies, such as Liquefied the Universities of Genoa and Trieste, funded Marine to launch collaboration initiatives for Natural gas (LNG), batteries, modern by the Italian Ministry of Infrastructures the development of research projects and pollutant reducing and energy saving and Transport. The aim of the research was innovations. The activities carried out in this systems. to develop a preliminary system design
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for a cruise ship powered by a Fuel Cell, the on-board activities help increase the evaluating the technology’s limits for use on value added of the whole ship product and board. improve their global safety. • Technologies with low environmental The study of pre-accident measures, i.e. impact: a project conducted in cooperation design and operational solutions to reduce with the CNR and the Universities of Genoa, the frequency of accidents, in addition Naples and Palermo, funded by the Italian to measures that improve the resilience Ministry of Economic Development. The capacity of ships, i.e. the capacity of a project sets out to realize a laboratory ship ship to survive accidents, will increase approximately 25 metres long to study safety across the board. Furthermore, power generation technologies with low implementing technologically advanced environmental impact. solutions will enable process optimization • BEN – Criteria for energy efficiency and and automation, and will reduce the optimization of the ship’s electrical balance associated operating costs. to reduce environmental impact: the One of the most interesting challenges project is funded by the Liguria region and for the shipbuilding industry is to develop sets out to develop, in close cooperation autonomous ships of a significant size for with the University of Genoa, criteria to use in any operational scenario, including improve energy efficiency and optimize the in busy port areas. The key technological electrical balance so as to reduce the ship’s factors that drive this trend are the environmental impact. implementation of new technologies that, • Sustainable Ship Design Program: the based on the integration of different project aims to create and validate a holistic systems, are able to track ship operations approach to energy efficiency and emission and allow it to manoeuvre autonomously. reduction in ship design, also through a Moreover, each highly smart or autonomous careful control of EEDI (Energy Efficiency ship will require highly advanced Design Index). cybersecurity studies to avoid any type of • New Generation Stabilizers: the project hacker attack. aims to evaluate precisely the influence of The main projects active, or in advanced the different opening arrangements of the stage of launch, in 2018 and related to these fin stabilizers on the vessel’s total drag, thus issues are: increasing the ship’s energy efficiency while in operation. Moreover, the development • E-Cabin: a project conducted in of a special software tool will ensure the cooperation with the Consiglio Nazionale possibility of obtaining accurate energy delle Ricerche (CNR, National Research performance forecasts of the different Council) and the University of Trieste, funded arrangements. by the Italian Ministry of Infrastructures and Transport. The aim of the project was to Smart Ship and Autonomous Vessel develop technological solutions to enable IoT (Internet of Things) and smart devices passengers to use digital devices on board are pervasive across all industrial sectors and cruise ships, enabling new features and ships are not exempt from this “intelligent” improving the cruise experience. revolution. • E-Navigation: a project conducted in The development of sensors, monitoring cooperation with the CNR and the University systems, support systems for navigation and of Genoa, funded by the Italian Ministry
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of Infrastructures and Transport. The aim safety and productivity. Computer models, to increase the number of passenger overall efficiency of offshore operations. of the project was to develop and utilize virtual product methodologies, additive cabins without increasing tonnage. This The increase of offshore activities, and augmented reality tools to improve the manufacture, cobotics, logistics and quality objective will be achieved by developing their gradual displacement to ever remote speed of evaluating the operational scenario control procedures will drive the evolution new accommodation module solutions, areas, will require support infrastructures, by bridge personnel. of the shipyard within Industry 4.0. In enabling the addition of more cabins without particularly those related to transferring • Secure Platform: a project conducted the coming years, ships will be designed increasing ship volume. people and materials to and from land. in cooperation with the CNR and the and produced by considering the life • ISDM - Data process model for the The main projects active in 2018 and related Universities of Trieste and Rome La cycle perspective more, from design to intelligent production of ships: the to these issues are: Sapienza, funded by the Italian Ministry of decommissioning. Moreover, innovative and project, funded by the Italian Ministry of Infrastructures and Transport. The aim of the cost-effective production techniques and Economic Development, sets out to increase • Modular Production Platform: the project project was to design and build equipment methods will be developed, with particular efficiency, effectiveness and integration of aims to develop a concept of modular and tools to increase physical safety on focus on welding and joining procedures. the design process, encouraging the link floating platform for offshore operations, board ship. In particular, a system for with downstream activities (supply chain, particularly for the initial stage of oil and gas automatically detecting any risk situations • RAMSSES - Realisation and Demonstration procurement, production and after sales). exploitation. on board ship (unauthorized access, of Advanced Material Solutions for It also aims to modernize the supporting • Deep Sea Mining: a project aimed at abandoned items, people falling overboard) Sustainable and Efficient Ships: a European technical systems. assessing the commercial potential and and a system for locating and automatically cooperation project, funded under the • VISTA - Virtual sea trial by simulating possible strategic options for entry into the recovering any person who fell overboard Horizon 2020 programme, involving 36 complex marine operations: the project, market of mining in deep-sea or remote have been developed. international partners. The project aims to funded by the Research Council of Norway, areas. • OCEAN2020 - Open Cooperation for widen the application of advanced materials aims to improve the ship design and European mAritime awareNess: the project in the European maritime industry, carefully verification process through development of is funded by the European Defence Agency studying aspects related to industrial methods and models that make it possible (EDA) and its purpose is the integration methods. In particular, the project sets out to to perform a realistic simulation of the ships’ of unmanned systems in addition to the analyse the different applications of special performance while operating. introduction and use of situational awareness steel and composites on board. concepts in the maritime environment. The • SIDRAN - Immersive Design Review in Smart Offshore Infrastructure project envisages the cooperation of over 40 the Naval Sector: the project, funded by The offshore world is evolving rapidly international partners. the Friuli Venezia Giulia region, aims to and Fincantieri wants to lead the change. • Integrated Bridge (SeaQ Bridge): this revolutionize the design review experience The evolution is steered by new business innovative solution allows the integration also thanks to cooperation with the models and by the need to more efficiently of a wide selection of navigation and University of Trieste. The study enabled the harness the maritime environment, also communication solutions in a system use of immersive virtual reality to visualize, thanks to structures that can be adapted controllable from the vessel’s bridge. This including remotely, three-dimensional to different uses, such as work and life at allows a considerable simplification of on- technical drawings developed with CAD, sea. Multipurpose platforms will be able to board operations and a consequent increase making the morphology and details of the support different activities at the same time, in security. designed areas immediately legible to the such as aquaculture, energy production • Cyber: project funded by the Liguria various actors involved in the process. and the extraction of raw materials and region and aimed at studying different cyber • MAESTRI - Accommodation Macro- hydrocarbons. Furthermore, the platforms security aspects for critical infrastructures. Modules and Integrated Structures for will be used to store products (energy and cruise ships: a cooperation project, funded materials) during operation. Their modular Smart Yard by the Friuli Venezia Giulia region, that construction will enable the infrastructure Fincantieri has identified various areas sets out to overcome existing design to be modified during its life cycle by of interest for improving the design and and technological obstacles in order to adding or dismantling individual modules, production stages of future smart yards. build cruise ships with a higher cabin/ and thus meeting requirements that have The main aims are related to improving tonnage ratio. The value proposition is changed over time. This will increase the
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C USTOMERS AND PRODUCTS
OUR CUSTOMERS
PRODUCT PORTFOLIO
ECO-SUSTAINABLE DESIGN
QUALITY POLICY AND ASSURANCE
CUSTOMER SATISFACTION AND RETENTION
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The Fincantieri Group always looks ahead, ready to face new challenges in building the ships that will write the shipping history of CRUISE The customers who purchase cruise ships produced by the Merchant Shipping Division of Fincantieri S.p.A. and VARD are the leading cruise operators in the world. The customer portfolio has expanded considerably over the last few years, thanks to the ability to design and build tomorrow CUSTOMERS widely differing types of cruise ship, with strong customization by customer, geographical area and market segment served.
Technological development is increasingly important for Fincantieri because it means market competitiveness and economic The customers who purchase the products of the Naval Vessels Division of Fincantieri S.p.A. and Fincantieri Marine Group are growth. government entities, both Italian and foreign, including the Ministry of Defence, the Navy, the Coastguard and all entities appointed to NAVAL make acquisitions in the Defence sector. CUSTOMERS As regards products, with a pool of resources dedicated to ship research and design, the Company focuses on maximizing energy savings, reducing emissions to air and water and limiting noise pollution. These measures Ferries designed and built by Fincantieri S.p.A. and VARD are intended for private and public clients, both Italian and FERRY foreign, operating in the Mediterranean, the North Sea and the Baltic Sea, and meet the most demanding requirements in are extremely important in that they allow CUSTOMERS this sector in terms of technological innovation, low environmental impact, energy saving and diversification. ships to access protected marine areas with due regard to the delicate ecosystems. Fincantieri has led important joint projects associated with sustainability at international level, such as Breakthrough in European Ship The mega yachts designed by Fincantieri are intended for private customers MEGA YACHT who fall into the category of ultra high net worth individuals. CUSTOMERS and Shipbuilding Technologies (BESST). In its strategies, the Fincantieri Group has embraced the objectives of the International Maritime Organization, summarized in the The customer portfolio for repair and transformation services includes: REPAIR AND • cruise ship owners; slogan "Safe, secure and efficient transport NAVAL • shipowners from the offshore segment with vessels operating in the Mediterranean area and West Africa; • shipowners for ferries and other types of vessels; on clean oceans". CONVERSION • private owners of mega yachts with vessels moored in the Mediterranean area; CUSTOMERS • shipowners active in the merchant sector working with ships in the Mediterranean and the Great Lakes area.
OUR CUSTOMERS
The main operators of the Group's offshore division are shipowners and charter companies that provide logistical support and services for One of the keys to Fincantieri’s success is its the establishment and operation of offshore facilities for companies active in the Oil & Gas industry. These also include large contractors specializing in offering turnkey services for the commissioning of large projects and offshore infrastructure, as well as the main drilling OFFSHORE highly diversified activities in terms of final contractors specializing in the management of semi-submersible drilling vessels and platforms. market, geographical area and customer In addition to the design and production of offshore support units, VARD also supports the production of special vessels such as ferries CUSTOMERS powered by liquefied natural gas (LNG) or hybrid (battery) systems, mainly for shipowners in Northern Europe, and vessels used by portfolio. customers active in the aquaculture sector and icebreakers.
The Group offers its naval systems and components to the internal captive market and to other shipbuilders and industrial operators SYSTEMS AND (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 systems and components include the customers of COMPONENTS each of the other business sectors, both civilian (owners of passenger ships) and military (i.e. Italian Navy, US Navy, etc.). In addition, the CUSTOMERS main customers include shipbuilders such as the Meyer Werft and Naval Group and industrial operators such as Saipem among the EPC contractors, and Cofely, Vinci Construction and Atzwanger among the industrial operators.
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The table summarizes the major customers Participation in exhibitions brand in the reference markets, and can be by main business area. Participation in trade shows is a very an opportunity to communicate the launch important activity for the Group as it of new products. Fincantieri S.p.A took part provides direct contact with customers and in 22 exhibitions in 2018. CUSTOMERS DIVERSIFICATION LONG-TERM CLIENT RELATIONSHIPS suppliers, reinforces the consolidation of the 1 Ships delivered since 1990 2002 TODAY Vessels in order portfolio 1
22-26 October 16-18 May EURONAVAL BLACK SEA DEFENSE 9-11 April & AEROSPACE NAVY LEAGUE SAS 19-21 June PARIS ELECTRIFY EUROPE BUCHAREST - FRANCE - - ROMANIA -
WASHINGTON - USA - 4-7 September VIENNA 66 8 74 26-29 September SMM - AUSTRIA - CRUISE MONACO YACHT SHOW >25 YEARS 16-19 April HAMBURG DEFENCE - GERMANY - SERVICES MONACO ASIA NEW ORLEANS - PRINCIPALITY OF MONACO - KUALA LUMPUR - USA - - MALESIA - 2
29 November-1 December Guardia WORK BOAT SHOW MM MM Costiera US Navy Italiana Italiana Italiana MM SINGAPORE Italiana Qatar Emiri Guardia US Coast Naval U.A.E. Navy HOUSTON Costiera Guard Forces - USA - Italiana 37 12 49 14-16 March ASIA PACIFIC MARITIME Turkish Algerian Iraq >50 YEARS Coast Navy Navy 12-15 April NAVAL Guard 30 April-3 May US Navy OFFSHORE TECHNOLOGY CONFERENCE SINGAPORE YACHT SHOW 3 Bangladesh Peruvian Indian US Navy >30 YEARS Coast Navy Navy Guard US Coast FORT SHANGHAY Guard US Coast 3 LAUDERDALE - CHINA - Armed Kenya Saudy Guard >20 YEARS - USA - Forces of Navy Arabia Malta Navy 5-8 March 5-10 November SEATRADE CRUISE GLOBAL CHINA 31 October-4 November INTERNATIONAL FORT LAUDERDALE IMPORT EXPO INTERNATIONAL BOAT SHOW DUBAI - UNITED ARAB EMIRATES - 4 19-23 June SEAFUTURE 27 February-3 March VALPARAISO DOHA - CILE - - QATAR - DUBAI BOAT SHOW 59 1 60 VIAREGGIO LA SPEZIA - ITALY - OFFSHORE - ITALY - 4-7 December >20 YEARS EXPONAVAL 12-14 March DOHA INTERNATIONAL MARITIME 10-13 May DEFENCE EXHIBITION & CONFERENCE 5 VERSILIA YACHTING RENDEZ-VOUS 5 LYON - FRANCE - GENOA - ITALY -
Source: Company Information at 31.12.2018. CAIRO 5-7 December 1 As of December 31, 2018. 27 -30 November - EGYPT - EGYPT DEFENCE EXPO 2 One cruise ship below 10,00 Gross Ton. POLLUTEC 3 Through Manitowac Marine Group (now Fincantie ri Marine Group). 4 DOF includes: DOF, DOF Subsea, Norskan Offshore, DOF Deepwater, Techdof Brasil and Dofcon Navegação. 13-15 November 5 Ferry operator. SALONE ORIENTAMENTI DI GENOVA
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PRODUCT PORTFOLIO Cruise ships environment. The activities of the Group, A cruise ship is an ideal and self-sufficient which is directly involved in the development Our historic ships floating city in constant communication of international regulations, are carried out with land. It is designed, built and managed in close collaboration with the Italian Flag KAISER FRANZ JOSEPH to safeguard the health and life of those Agency, Classification Bodies, the sector’s 1912 Monfalcone temporarily living there for work or fun, Industrial Associations, Shipping Companies The largest ship ever launched in the Mediterranean thousands of people from different countries and the main international research bodies. and cultures, who live together and adhere Monitoring of regulatory developments SATURNIA to its rules of governance. For this reason, is therefore a fundamental element, at a 1927 Monfalcone DUILIO The first ship with balcony cabins the Group has an active and proactive role strategic and technological level, in the early 1923 Genova Sestri in the development of international safety identification of possible trends in the market The first Italian regulations. Fincantieri is an accredited and being able to anticipate the emergence ocean super-liner AUGUSTUS 1927 Genova Sestri representative with the International of new needs by proposing solutions that are The first ship with Lido bridge Maritime Organization (IMO), the specialized innovative, competitive and comply with the and outdoor pool United Nations Agency for protecting technical and economic feasibility standards VESPUCCI the safety of human life at sea and the 1931 Castellammare di Stabia CONTE DI SAVOIA at product and process level. The largest training 1932 Trieste ship of all time The first ship equipped with stabilizers THE NUMBERS OF COMPLEXITY - What you need on average to build a cruise ship
RAFFAELLO MQ OF PUBLIC SPACE: KMs OF CABLE: 1965 Trieste THE SIZE OF THREE MORE THAN 7 TIMES HOURS OF FOOTBALL FIELDS THE DISTANCE FROM SHIPYARD WORK The last ocean liner built ROME TO VENICE in Italy (Michelangelo 3,800 and Raffaello 22,000 are twin ships) 135,000 VICTORIA EUGENIO C. DESIGN HOURS 2,000,000 1931 Trieste 1966 Monfalcone The first air-conditioned ship The first Costa REX cruise ship 1932 Genova Sestri The first ship with spa and tanning beds. The The cruise ship industry is highly at a global and local level, requires a rapid fastest ocean liner in the world (30 knots) committed to adopting policies to minimize reduction of emissions into the air and water. MICHELANGELO OCEANIC environmental impact, this is a joint The reduction of environmental impact has 1965 Genova Sestri 1966 Monfalcone effort implemented by cruise lines and become one of the most important drivers The last ocean liner built in Sestri The first cruise ship shipbuilders. for design and innovation in the field of equipped with The regulatory framework, with regulations cruise ships. magrodome
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Fincantieri ships represent a technological I. Energy saving and reduction of carbon
benchmark at the European and global dioxide emissions (CO2) level. They feature the most advanced The Energy Efficiency Design Index (EEDI) is technologies, with technical solutions the main regulatory reference for measuring that provide energy savings, emission energy efficiency. Lower values of the index reduction, high performance and high correspond to greater energy efficiency. quality, guaranteeing very high standards Regulations impose a decrease in values over of comfort on board. time. Below is a graph that represents the provisions of the regulations on the index values, divided into time phases by type of ship.
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EEDI 14 Fincantieri has developed, validated and • exploiting waste heat (fumes and cooling 13 applied on its ships more than 100 initiatives water) with recovery and cogeneration 12 aimed at: systems; The recent 11 Fincantieri projects • systematically reducing the energy needs anticipate the EEDI • improving hydrodynamic and propulsive of users on board. 10 values slated for application efficiency; 9 in 2019-2020
8 ENERGY SAVING SOLUTIONS 7
6 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Size (GRT)
- 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 Existing ship
The regulations impose decreasing EEDI values over time.
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II. Reduction of harmful air emissions Emission Control Areas (ECA), where the The currently most common configuration Another method which is gradually being The International Convention for the most stringent values for reducing harmful for emissions reduction is based on latest established is the substitution of traditional Prevention of Pollution from Ships emissions are applied, and which coincide generation diesel engines combined with fuels with liquefied natural gas (LNG) in (MARPOL) requires a progressive reduction with the main operating areas of the cruise the installation of fume purification systems view of the indisputable benefits in terms of in emissions of harmful gases, in particular industry. European legislation (Directive in the exhaust systems. emission impact. sulphur oxides (SOx) and nitrogen oxides 2012/33/EU) sets further emission limits, (NOx). The constraints are growing over particularly in port areas. SOLUTIONS TO REDUCE HARMFUL AIR EMISSIONS EMISSION IMPACT BY TYPE OF POWER SUPPLY time, and they are particularly stringent in EMISSIONS Purification of exhaust fumes LNG/Dual Fuel propulsion (diesel cycle)
, % SOX EMISSIONS % NOX EMISSIONS NOX reduction: Catalytic muffler in which the nitrogen oxides are NOX I II III NOX 4.5 g/kWh 45.n-0.2 44.n-0.23 9.n-0.2 g/kWh made to react with urea in a high- NOX NO and SO reduction: WORLD n= engine's rated speed temperature process, obtaining pure X X 3.5 17.0 nitrogen (N ) and water vapour solutions for future new Outside ECA-NOX 2 - 67% - 78% - 71% - 97% - 86% 14.4 builds , i.e. fume 9.8 SOX reduction: Scrubbers 1.5 7.7 scrubbers ECA SOX 1.0 Inside ECA-NOX 0.5 3.4 2.0 0.1 EU, in Ports 2000 2011 2016 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Ship construction date Fincantieri has already built a special ferry vessels equipped with electric batteries to for Canada and in 2018 it achieved some cover all or part of the energy requirements: important milestones for LNG cruise ships: • VARD is delivering two ferries to the • Tui Cruises (joint venture between TUI Norwegian operator Torghatten Nord and AG and Royal Caribbean Cruises) ordered a dual-powered electric hybrid cruise ship 2 new-generation cruise ships with a gross with icebreaker features, equipped with tonnage of approximately 161,000 and high capacity batteries and LNG storage on powered by gas. Energy efficiency is a board; focal element of the project, with the dual • VARD will deliver the first electric self- objective of containing consumption under driving container ship in 2020. It will reduce operation and minimizing environmental human intervention over the two years from impact; delivery until reaching complete autonomy in • Princess Cruises, the Carnival group brand, 2022. signed a Memorandum of Agreement with The 80-metre by 15-metre vessel will operate Fincantieri for the construction of 2 cruise in Norway, guaranteeing a transport capacity ships with a gross tonnage of 175,000. The of 120 TEU, replacing 40,000 TIR journeys a vessels will house approximately 4,300 year. passengers and will be based on a new- The vessel will reduce nitrogen oxide (NOx)
generation project, becoming the first of the and carbon dioxide (CO2) emissions and Princess Cruises fleet to be powered mainly improve road safety in a highly populated by liquefied natural gas. urban area.
Another solution for reducing emissions is to build electric or hybrid vessels. The Norwegian subsidiary VARD has contracts and offers for various small/medium-sized
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The development of a logistics system III. Complete treatment and storage of liquid Only bacteriologically and chemically pure USE OF BATTERY MODULES capable of ensuring the availability of and solid waste water can be discharged into the sea (under To cover the Supplementation of the electric LNG (including intermediate storage and Waste treatment is regulated by MARPOL certain conditions). Any other residue must entire load on power supplied by the batteries with bunkering systems) in all major cruise board a traditional generation system (as in (Annexes I, IV, V). The increasingly stringent be stored on board and unloaded in port for hybrid cars). destinations is still at an embryonic stage, regulations in force in areas with a strong further treatment. The energy supplied by the batteries consequently limiting the area of operation cruise vocation, such as Alaska, determine is used: on new ships. the characteristics of the latest generation - exclusively in particular situations The future lies in the application of fuel cells, cruise ships. (for example in port), or - supplemented by the on-board electrochemical conversion devices that diesel engines at times of maximum generate electricity and heat by combining power demand (e.g. maximum WASTE TREATMENT speed navigation). a fuel (typically hydrogen, methanol or methane) and a comburent (oxygen), in Solid Waste Liquid Waste the absence of combustion. In this way, no - collection, dehumidification, kitchen waste - physical and biological treatment (in line However, there are critical issues related polluting substances are actually produced. treatment; with the best land standards) of all on-board to the new technologies. In general, the After the initial development phase, linked - sorting and recycling of hotel waste; wastewater (sewage, grey water, kitchen effluents and laundries); technologies/systems added for the to space exploration and the naval field - compaction and/or incineration (where permitted) of solid waste; - storage of purified water; protection of the environment occupy (submarines), terrestrial applications for the - pelletizing, storage of waste for - thickening and drying of residual sludge for volumes previously intended for the payload. generation of electricity and propulsion (for subsequent unloading in port. subsequent unloading in port. In the case of LNG, accommodating the example prototype trains fuelled by fuel tanks on board (in addition to the liquid fuel cells) are spreading. Studies and research tanks) and installing the related operating are being carried out on their application for IV. Ballast water treatment for the safe and environmentally friendly and safety systems entails a significant generating energy for cruise ships. The ballast water treatment regulations, recycling of ships, contains information on reduction of the useful space on board. International Convention for the Control and potentially hazardous materials used in the Management of Ships’ Ballast Water and construction of the ship, its equipment and Sediments (BWM 2004), require ships to its systems. This document is updated by the shipowner after maintenance and refitting sterilize ballast water before discharging it, activities which could alter the state of the to avoid contamination with species from ship. different ecosystems.
Naval vessels BALLAST WATER TREATMENT The naval vessel construction business is strongly influenced by the continual - Latest generation of ballast water demand to increase efficiency standards treatment systems, based on the pre- filtering of plankton and subsequent in the international defense segment and sterilization with ultraviolet rays. is one of the most demanding challenges. Fincantieri is a reference player for many Navies and it rises to meet the challenge Fincantieri follows all the international best with its consolidated experience in the practices to minimize a ship’s environmental design sector; since 1990, Fincantieri has impact over its life cycle. delivered over 100 naval vessels to ten All ships are delivered with Green Passport different nations. and Clean Design Notation certification. Clean Design Notation certification indicates Its consolidated experience has enabled it that the ship was designed to pollute as little to combine the development of platforms as possible for its entire life cycle while Green with high operational performance with Passport, in accordance with the provisions the development of solutions aimed at of the Hong Kong International Convention containing environmental impacts.
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Thanks to the adoption of an eco-sustainable Grey water and sewage are collected into processes for viscosity reduction and AREAS OF EMISSIONS REDUCTION OF NAVAL design process and the increased sensitivity INTERVENTION TO FIGHTING VESSELS WITH A appropriate physical and chemical treatment then absorption using coalescent filters. towards ecological issues shown by Navies, REDUCE EMISSIONS DISPLACEMENT FROM 6,000 TONS (*) units which macerate the suspended Separation enables the level of pollutants in Fincantieri has been able to operate in solids and reduce the contents of the Total the treated water to be kept under control, CO2 [t/year] NOX [t/year] various fields, adopting solutions aimed at Suspended Solids (TSS), Biochemical guaranteeing a maximum concentration of 15 reducing environmental impact. Optimization of hull lines Oxygen Demand (BOD) and Chemical ppm. Fincantieri has collaborated with the Oxygen Demand (COD) using aerobic As regards end of life, all naval vessels are Introduction of LED lights Italian Navy for many years, focusing on processes. The process also envisages also delivered with a Green Passport. This Painting of ~ 2,000 ~ 40 environmental impact issues right from the superstructures with low disinfection using UV systems. document is the inventory of materials to be preliminary project. The new vessels, some of sun absorption paints The systems adopted are able to achieve monitored during the ship’s life cycle and it which are already in service, feature design Optimized insulation BOD values of 25 mg/l and COD values of is used to ensure that it is scrapped safely choices aimed at containing environmental of internal areas 125 mg/l. and in an environmentally friendly way.
impact in terms of emissions to air, fuel * Use profile: 50,000 nautical miles/year. Bilge water is treated using units that Below is a summary of the main awards consumption, wastewater treatment, use separate the pollutants caused by accidental obtained by the ships produced by of special treatments to preserve the hull On the other hand, the special spills. The system is based on physical Fincantieri. and the possibility, for certain vessels to characteristics of naval vessels and the be delivered shortly, to contain an area of consequent system solutions optimized to sea that is polluted, with the possibility of deliver mission performance currently do not SHIPBUILDING collecting and storing the pollutants on enable the introduction of energy recovery Aircraft Carrier Cavour: board. systems. most powerful non-nuclear CRUISE propulsion system
I. Reduction of carbon dioxide (CO2) and II. Treatment and storage of solid waste The technological solutions adopted are NAVAL nitrogen oxide (NOX) emissions This issue is dealt with by introducing entrusted to the converters. energy savings criteria developed mainly The use of these machines enables waste in ship architecture, namely by selecting to be dried and sterilized. The reduction Carnival Vista: "Eco Notation" by Lloyd's Register endothermic engines (both propulsion in volume and weight and subsequent for exceeding environmental standards engines and power generation engines) with automatic vacuum storage allow on-board appropriate technological solutions and by retention to be increased. OFFSHORE selecting high energy efficiency materials or The modern converters adopted enable Royal Princess: 1st cruise ship fully compliant with the new regulations materials with high efficiency heat transfer. a volume reduction of 70% and weight reduction of 30%.
III. Treatment of liquid waste The mission of these cross- sectional activities is making In this area, technological solutions have sure that all ships provide the best economic (savings) and been adopted that are in line with the technical (environmental, safety, international regulations already used for etc.) performance. Far Samson: most merchant vessels: Normand Maximus: the largest powerful offshore vessel offshore vessel ever built in Norway • IMO MEPC 227 (62) for grey water and Skandi Africa: Ship of the Year 2015 AMC Connector: the EQUIPMENT sewage treatment; world's largest cable layer SYSTEMS & • IMO MEPC 107 (49) for bilge water SERVICES treatment.
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ECO-SUSTAINABLE DESIGN • product development/construction; • management of the product over its In line with Fincantieri’s Environmental operational life; Policy, the design processes aim to contain • management of the product’s disposal at the environmental impact throughout the end of its life. product’s life cycle. On this premise, the Company firstly implemented a specific As part of the product’s development and corporate procedure that establishes the construction, all the process management basis principles and logic for eco-sustainable decisions (that can be independent of the design related to the Design functions of the product) and design decisions (associated Naval Shipping Division and subsequently, with the product) can have an impact on with the necessary adjustments associated the purchase of materials/systems, on the with the product types, it extended the scope construction and testing of the product, on the of application to the Design functions in the production unit (factory) where the product is Merchant Shipping Division. manufactured and on the surrounding area. The eco-sustainable design criteria apply in the following areas:
FINCANTIERI
TESTING SPECIFICATIONS DESIGN PURCHASING CONSTRUCTION DELIVERY OPERATION
CUSTOMER CUSTOMER
During the design stage, the criteria product’s management over its operational adopted are aimed at identifying: life, consider the aspects related to energy consumption and interaction with the • solutions that reduce the environmental surrounding environment, also take similar impact of the material introduced in the products and those considered “best in production unit for construction; class” in the market as a reference. • solutions that reduce air emissions; The design decisions also take into account • solutions that reduce production of the containment of any environmental waste, particularly waste that has greater impact during the product’s de- environmental impact; commissioning. Therefore, action is taken • solutions that give rise to a reduction in in the choice of materials/components/ energy consumption. systems with characteristics that contain environmental impact during disposal The design decisions, depending on the operations.
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QUALITY POLICY AND ASSURANCE according to the ISO 9001 standard, which In 2018, all the certified Italian organizations • object of the project; ensures compliance with the best standards. have completed their migration to the new • main characteristics of the job; Aware that the complexity of its business Quality assurance at each stage of the version of ISO 9001:2015. • applicable documents: requires high standards in terms of quality, process, from the acquisition of the contract As regards the US subsidiaries, Fincantieri - for the project; cost and time of products and services to the design and procurement, down to the Marine Systems North America Inc. and - rules, laws and regulations; offered, Fincantieri has adopted a Quality production or provision of the services, is the Fincantieri Marine Group’s shipyards - quality system standards and procedures; Policy able to convey the commitment of the entrusted to each process owner. Marinette and Green Bay have achieved ISO - standard to be applied; Group's resources on specific key points. The The Quality Policy defines Fincantieri’s mission 9001:2015 certification. • organizational aspects: goal is to achieve and maintain an excellent to achieve and maintain an excellent level of The subsidiary VARD carries out its - organization and resources for the job; level of quality in strategic choices, business quality in all its activities, incorporating the operations in compliance with the Group’s - interfaces and communications; processes and every activity. following 7 points of the corporate Quality Health, Safety, Environment and Quality • control and inspection plans. Every Company or Division adopts a Quality Policy into the strategic choices and business (HSEQ) Manual and the Policy, the principles Management System (QMS), certified processes at the various levels. and strategies of which are based on the When designing and building complex ISO standards. VARD’s efforts are aimed at products and systems, such as cruise ships, ensuring that safety is achieved at all times military submarines or industrial diesel and in all areas. Its production sites all have engines, there is always the possibility that Market challenges and complexity are All resources, whatever level and ISO 9001:2015 certification. the process may be subject to deviations increasingly driving continuous improvement organization they belong to, must and innovation: projects, activities and know what quality, cost and time from standards, design changes, unexpected methods must be continuously improved, objective they have to achieve events and supply or execution errors. These looking for solutions that make development For more information on the certified shipyards “non-quality” events are normally detected and construction processes simpler, faster and and companies, see the website more reliable, defining sustainable, fail-safe www.fincantieri.com/en/sustainability/certifications and tracked by internal structures, by the standards that are respected by all CLARITY customer's inspection staff and by the Attention to correct planning, OF OBJECTIVES control and compliance with The subsidiary Fincantieri Marine Interiors Classification Bodies, or more rarely after plans is essential for quality is in charge of the design, refitting and delivery, with interventions in the guarantee EFFECTIVE operations PLANNING delivery of turnkey cabins and has achieved and after sales period. CONTINUOUS the MED B product certification and The remedial actions follow the industrial IMPROVEMENT MED D process certification issued by RINA practice that involves increasing costs/times certification body. MED certifications attest to adjust, repair, redo and replace in order to THE 7 POINTS compliance with EU Directive 2014/93/EU minimize the impact for the customer. The - Fire Protection Requirements of Marine quantitative and qualitative analysis of these OF FINCANTIERI'S QUALITY AS THE Equipment Directive (MED). events, appropriately recorded and classified, QUALITY POLICY SOURCE OF gives rise to mechanisms for reviewing the PREVENTION QUALITY Quality monitoring projects; in the case of shipbuilding, the OF INFORMATION In Italy, the Quality Management System is analyses trigger the processes of continuous also applied to job orders, whether they be improvement, in order to ensure that the same The quality of processes, and naval or other products, through the Job errors are not repeated in subsequent jobs. A consequently of Quality Plan (QP). closing report/booklet is produced, with the products and services, RIGHT also depends on QUALITY OF FIRST TIME The QP is a set of documents and Control main lessons learned, in order to communicate PEOPLE AND Product quality is built step the timeliness, by step into every single Plans attached to the contract and governs the countermeasures to the error causes completeness RESPONSIBILITY phase of the process: every and accuracy of actor, whether internal or all aspects related to quality assurance, identified and make the consequent information a supplier, must know the control and monitoring valid for the job in prevention and improvement actions possible, Training, developing rules, regulations, standards, and motivating practices and conditions question. It guides the operating structures in including in other operating sites. Fincantieri Every standard, every resources that can the correct design, construction and testing regularly monitors quality indicators, at a reach the optimal level process and every activity of competence and must be designed to work of the product. divisional level (for homogeneous business skills well the first time The Job Quality Plan is structured as follows: areas) and at production level:
The Quality Policy is available on the website www.fincantieri.com/en/sustainability/quality-and-research/quality-policy-and-assurance
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• shipbuilding sectors (cruise ships, naval From 1996 to 2018, the Group's divisions CUSTOMER SATISFACTION AND RETENTION In order to constantly and effectively vessels, mega yachts), are classified by job and companies were subjected to official pursue customer satisfaction, development and by construction, which allows detailed audits by the RINA certification body, with The main sector in which Fincantieri of the Customer Satisfaction Index (CSI) comparisons to be made with regard to consistently improving results in terms operates is intrinsically characterized was started in 2018, harmonized for all the homogeneous “objects” and “phases”; of the main findings. RINA conducted 12 by a limited number of competitors and companies in the Fincantieri Group, based • in the plant and components sector (e.g. audits in 2018 on the Quality Systems of customers. The measure of customer on shared principles and guidelines - yet diesel engines, turbines, naval systems and Fincantieri’s Italian organizations certified as satisfaction and retention cannot therefore flexible for customization to each company systems, cabins for passenger ships), the compliant with ISO 9001:2015, all resulting in be based on significant data and statistical - that are necessary for each product/ classification is by production process, satisfactory outcomes. samples. It requires instead a long-term market. The importance of this vision is facilitated by repetitions in small and Regarding the management of military analysis of the relationship between market demonstrated by the inclusion of this medium-sized series. orders, during 2018 four audits were carried trends, assignment of orders and jobs to the objective in the 2018-2022 Sustainability out by the Government Quality Assurance various players, the time taken to transform Plan. The VARD group also uses the Quality Plan (AQG) or technical offices of the Italian Navy, negotiations into orders, the maintenance Fincantieri Marine Group surveys customer for its projects. which involved the FREMM Programme of historic customers, and the acquisition satisfaction three times a year through The quality indicators and the achievement and the Multi-Purpose Patrol Vessel (PPA), and retention of new customers. Fincantieri meetings with representatives of Lockheed of the related annual objectives constitute Logistic Support Ship (LSS) and Landing regularly surveys the market and the Martin and the US Navy. These sessions a fundamental part of the incentive Helicopter Dock (LHD) jobs recently ordered competition, from which certain “loyalty” cover the following areas: technical, testing, programmes of the entire Fincantieri by the Italian Navy. factors can be deduced. planning, quality, after sales and Integrated organization. In Italy, 7 new ships and were delivered Logistics Support (ILS). During these in 2018. 1 naval vessel, 1 oceanographic sessions, the Company receives feedback vessel and 5 cruise ships. For 3 of these on the degree of customer satisfaction and (FREMM Martinengo, Viking Orion and on any problems. The corrective actions MSC Seaview), the impressive “zero are defined at that time, with subsequent defects” result was achieved, a significant follow-up. recognition by the respective customers. In VARD, customers’ requirements and Delivery of the 8th frigate in the FREMM expectations are defined during contract programme was accompanied by a letter of negotiations and are maintained and congratulations from the customer OCCAR developed throughout all the project (Organisation for Joint Armament Co- stages. Customer satisfaction is monitored operation). periodically and continuously, both during Furthermore, the new memorandum of the production stage and during the understanding signed with the shipowner guarantee and after-sales period. MSC for the construction of 4 new ships Each product is subject to voluntary in the ultra-luxury segment, which follows feedback by customers. Customers also the deliveries of Seaside and Seaview with provide the company with voluntary zero defects, clearly shows the customer’s testimonials. Unsurprisingly, the company’s satisfaction. slogan is “Built on Trust”.
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S UPPLY CHAIN
CHARACTERISTICS OF THE SUPPLY CHAIN
SUPPLY CHAIN MANAGEMENT
CHARACTERISTICS AND MANAGEMENT OF THE SUPPLY CHAIN OF FOREIGN COMPANIES
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Fincantieri promotes a responsible integrating them in the strategic guidelines. CHARACTERISTICS OF THE SUPPLY CHAIN Awareness of the supply chain’s strategic and sustainable supply chain Fincantieri’s suppliers are an integral part of nature and the need to coordinate a vast and based on long-lasting relationships this strategy and they are asked to share the Approximately 80% of the finished product varied network of suppliers lead the Group founded on integrity, transparency Purchasing Policy, the primary goal of which is is made with the contribution of suppliers: to seek long-term partner relationships that and respect to communicate the Group’s commitment to Fincantieri works as de facto system are based on transparency, collaboration and strengthening the development of solid and integrator, taking responsibility for the mutual respect. Development of a responsible and sustainable long-lasting relationships with its partners in shipbuilding project as a whole. supply chain is part of a broader corporate order to pursue a common goal of sustainable vision that actively enhances and protects development together. social and environmental responsibility, fully The core aspects of our Purchasing Policy are:
FINCANTIERI SUPPLY CHAIN
DESIGN CONTINUOUS SEARCH FOR INNOVATION PURCHASING
RAW COMPLEX SEMI-FINISHED GUARANTEE MATERIALS COMPONENTS GOODS TURNKEY PARTNERSHIPS OF QUALITY PRODUCTION CORE ASPECTS OF THE PURCHASING OUTFITTING ASSEMBLY POLICY HEALTH RESPECT FOR AND AND SAFETY SAFEGUARDING OF THE PROJECT MANAGEMENT AT WORK ENVIRONMENT
BUSINESS ETHICS AND INTEGRITY
SUPPLY CHAIN MANAGEMENT Awards for having promoted an innovative approach between company and supply chain Fincantieri believes above all that close through the Supplier Qualification project The Purchasing Policy is available on the website www.fincantieri.com/en/sustainability/economic/supply-chain cooperation with the supply chain is essential realized together with Lloyd’s Register. in order to achieve high levels of quality in the With a view to establishing a stable and long- The importance of the relationship with This entails active management of make-or- finished product and in the entire production lasting relationship, based on transparency suppliers is underlined by the fact that the buy procurement strategies for every single product manufactured by Fincantieri is phase of development and implementation process. and collaboration, the Company is actively highly customized, since it is designed and of the naval job, while maintaining constant In 2018, Isotta Fraschini Motori S.p.A., a committed to promoting dialogue with its engineered to the specific needs of the synergy with its suppliers in the continuous subsidiary of Fincantieri, was awarded Best suppliers through periodic meetings to share individual customer. search for high value added solutions. Italian Client 2017 in the Lloyd’s Register information.
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To this end, two discussion meetings were to a minimum. In particular, sensitivity For Fincantieri it is essential to have have a concrete effect on the workplace in held with strategic suppliers in 2018 to towards and respect for the environment is relationships based on fairness and managing safely the activities of the human share guidelines, initiatives, projects under spread along the whole production chain, transparency, respecting the legitimate resources employed to carry them out, as well development and to collect feedback and and this has led to increasing exchanges of interests of all stakeholders. as complying with the regulations governing proposals for improvements to supply chain information and documents with suppliers. In this sense, it is extremely important that behaviour also within the Fincantieri plants. management. In this sense, the collection of environmental suppliers accept the Code of Conduct that • Environment Fincantieri monitors the supply chain using and social information is active during the the Company has implemented, which Fincantieri recognizes a policy of choices a life cycle management approach to reduce prequalification stage, e.g. possession of contains the principles and rules that must be aimed at environmental protection as the environmental and social impact of a environmental, health, work safety and social observed. a priority in compliance with national, product or service over its entire lifetime responsibility certifications. From this point of view, therefore, international and industry regulations, and for suppliers are asked to comply with certain this reason it adopts a preventive approach, requirements: requiring its suppliers to adopt attitudes and choices that are equally responsible along the PRODUCTION WITH PROCEDURES - ENVIRONMENTAL CRITERIA • entire supply chain. CONSIDERATIONS ON ENVIRONMENTAL CRITERIA - GREEN ALONG THE SUPPLY CHAIN Innovation Innovation is at the centre of entrepreneurial • Responsibilities activity: a distinctive feature of the ships we Fincantieri's guiding principle is that of build is the high technological content. The acquiring the necessary goods/services continuous adaptation to new conditions and with the best quality/price ratio to meet the the constant search for better solutions for objective of containing costs and ensuring our customers are the values that guide the quality and service levels appropriate to Company and its suppliers in their everyday the satisfaction of the end customer. It RAW MATERIALS PRODUCTION DISTRIBUTION work. must also take into account operational • Quality risks and comply with general guidelines on Suppliers are selected on the basis of a strict the environment, occupational safety and qualification process, aimed at guaranteeing the overall sustainability of its choices in product quality, safety and environmental terms of social impact. Fincantieri expects protection, compliance with timetables, suppliers and subcontractors to assume achievement of economic objectives, their responsibilities throughout the entire INSTALLATION AND TRANSPORT PACKAGING customer satisfaction, and the image of end-to-end supply chain, from manufacturer END-OF-LIFE the Company. The assessment parameters to supplier to end-user, to comply with concern the technical, productive and service safety and environmental regulations and to capabilities, financial soundness, quality maintain conduct that respects the values business systems and safety management. that guide the Company. The supplier must ensure that the entire value chain is subject to an adequate quality management system (QMS). • Health and safety Occupational health and safety is an essential value for the Fincantieri Group and a priority in corporate decisions also in its relations with suppliers. These must in turn play an active role in the field of protection and safety at work and they must commit to spreading the culture of safety at every level and in every corporate setting. This commitment must
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Supplier qualification and monitoring Fincantieri recognises that the supplier A stringent performance monitoring process As part of the supplier monitoring system, process base is a significant asset for the entire is carried out so that suppliers can maintain the Company uses a continuous performance Development and efficiency of Fincantieri’s company, and as such it should be valued their qualified status and to promptly evaluation system, in which all the relevant supply chain start immediately at the and protected. manage any critical issues. corporate departments take part (balanced supplier selection phase, which follows This is why we have developed a stringent A supplier remains qualified as long as the scorecard), in order to guarantee that the a documented procedure in order qualification and performance monitoring reasons for its inclusion in the Register of required standards are met over time. to guarantee impartiality and equal process for strategic suppliers, based on Suppliers continue to exist and until the Through the use of specific purchase methods opportunities for all the parties involved. the evaluation of economic, technical, monitoring of its performance is considered adapted for the different product categories, All suppliers can ask to participate in reputational, social and environmental critical to the point of expulsion. Fincantieri strives to obtain the best the selection process regarding Italy by aspects. conditions and performance throughout the registering on the Fincantieri Suppliers entire life cycle of the product. portal (www.fincantieri-suppliers.com), following clear and precise rules. QUALIFICATION OF SUPPLIERS IN THE REGISTER SUPPLIER MONITORING The system is used for: SUPPLIERS EVALUATED • requests for offers, which are made 1 1 available to selected suppliers in digital INFORMATION format, to which they can respond by REQUEST AND MONITORING sending their economic and technical offers COLLECTION on the same platform; • purchase contracts, which are digitally 2 2 96% signed and made available electronically PREQUALIFICATION CRITICAL ISSUE to suppliers, who in turn can accept them MANAGEMENT directly on the system without printing and sending paper documents to Fincantieri. 3 3 Of the 744 qualified strategic suppliers at Using the e-procurement system saves a VISIT TO THE ACTION the end of 2018, 96% were subject to an lot of time, transport costs (and related SUPPLIER MONITORING evaluation, with the following results:
emissions of CO2), printing and use of paper throughout the procurement process. 4 4 - 91% satisfactory; Fincantieri’s purchasing office provides SUPPLIER - 8% with some gaps that can be resolved by suppliers with constant technical support QUALIFICATION OVERSIGHT themselves; for all activities related to the selection MEETINGS - 1% with serious issues, requiring an and qualification process, including those improvement plan or replacement. concerning sustainability. Management and the continuous improvement of a pool of trusted and innovative suppliers is essential in order to achieve the goals that the Group has set itself in economic and sustainability terms.
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Moreover, the main problems are examined the ethical and reputational aspects that Fincantieri periodically schedules audits at its highly specialized Italian SMEs in various through cross-involvement within Supplier accompany it a constant guideline. suppliers, the importance of the inspection macro-sectors (furniture suppliers, air Oversight, the body that gathers the Fincantieri is aware that corporate visits is also recognized with regards to conditioning systems, electrical/electronic different functions and business units of reputation is a strategic asset that should sustainability. For this reason, a specific systems, etc.). the Company and takes decisions resulting be valued and protected, also so as not objective has been inserted in the 2018- In particular, Fincantieri, through its shipyards, based on examination of these critical issues. to compromise the trust placed in it by its 2022 Sustainability Plan concerning annual is able to contribute to the maintenance and Specific focus is given to issues related to stakeholders. Therefore, Fincantieri uses a audits to assess and monitor the most critical development of the industrial system of the safety and protection at work during both risk intelligence based strategy to ensure suppliers in terms of human rights, health and regions in which it operates. the qualification and the monitoring phases. that its supply chain leans towards more safety and the environment. These values are essential for the whole extensive compliance with regard to anti- Group and are a priority in all company money laundering, counter-terrorism, anti- Supply chain numbers decisions, including those relating to the corruption and sanctions at international As regards the Italian activities, Fincantieri acts Over pool of suppliers. level. as leader and group hub for a large number € 4.1 bln 80% 5,000 Evaluation of certain fundamental aspects, Furthermore, in order to prevent any of Small and Medium Enterprises (SMEs), an in issued orders Italian companies Companies (€3.3 bln) involved, mostly such as the technical/professional possible infiltration of organized crime in the important factor in the flexibility and wealth SMEs suitability of the Company, the regularity contract award phase, in capital expenditure creating capacity of local production systems, of contributions and remuneration of and in production activities, the Group has allowing them to access projects of great employees, and the existence of a structure established a stronger cooperation with breadth and value, taking on a global market dedicated to safety at work, takes place the local competent Prefectures, stipulating they would otherwise be excluded from due The following tables given the numbers on during both the prequalification document Legality and Transparency Protocols, which to their small size. suppliers and purchase orders by product collection phase and the quality inspection since 2017 have merged into a National The Company supports a large network of category and geographical area. phase at the supplier’s premises, as well as Protocol. during entry in our shipyards. Data on qualification and monitoring SUPPLIERS BY PRODUCT CATEGORY Fincantieri makes business integrity and activities in 2017 and 2018 are given below. No. OF SUPPLIERS VALUE OF ORDERS ISSUED BY CATEGORY IN THOUSANDS OF € QUALIFICATION AND MONITORING ACTIVITIES 2017 2018 2017 2018 2017 2018 Total number of suppliers registered on the portal 2,993 3,387 Turnkey 391 300 2,754,114 1,663,864 Total number of qualified suppliers (strategic in the register) 823 744 Supply 2,940 2,524 1,264,615 1,334,825 Total number of qualified suppliers in the year 268 385 Contracts 294 331 402,096 439,691 No. of new suppliers qualified in the year 50 82 Services 1,522 2,324 337,227 425,427 % orders run through the portal 82.0% 88.0% Investments 364 333 71,816 183,488 No. of audit visits carried out during the year 65 51 Engineering 113 64 35,851 38,610
The data refer to Fincantieri S.p.A. Total 5,624 5,876 4,865,719* 4,085,905**
SUPPLIERS BY GEOGRAPHICAL AREA
No. OF SUPPLIERS VALUE OF ORDERS ISSUED BY CATEGORY IN THOUSANDS OF € 2017 2018 2017 2018 Italy 4,869 4,965 4,156,268 3,257,747 Rest of Europe 624 826 637,697 697,283 North America 92 25 56,098 786 Asia 30 40 12,914 2,075 Oceania 5 7 2,251 127,996 South America 2 8 376 4 Africa 2 5 115 14 Total 5,624 5,876 4,865,719* 4,085,905** * Intercompany Value 2017: 469,245 thousands of euros. ** Intercompany Value 2018: 415,169 thousands of euros. The data refer to Fincantieri S,p,A, and to the Italian subsidiaries.
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In 2018, the growth trend in purchasing suppliers within an Enterprise Network which NUMBER OF CONTRACTING COMPANY WORKERS volumes was confirmed, despite relative helps companies to better understand and stability in the docks employment programme. share the processes of change, to refine the PERMANENT FIXED TERM AGENCY STAFF OTHER TYPES TOTAL This shows a 7% increase compared to the relational dynamics and consequently align 15,927 14,149 4,229 2,943 37,248 previous year, excluding the strong impact of their behaviours and the similar opportunity 42.8% 38% 11.2% 8% 100% last year’s non-cruise multi-year contract which it provides workers involved in the tender The most prevalent ethnic groups (excluding was carried out in collaboration with Leonardo, activities. This objective was shared at the Italians) were Bengalis (17.7%) and for which about half of the value of the entire trade union level and implemented in the Romanians (15.3%). programme in terms of order intake has already most recent company agreements. been issued. However, the prospect of stabilizing the supplier base by pursuing long-term With the exception of indirect purchases, Management of contracting companies partnerships and continuity in terms of CHARACTERISTICS AND MANAGEMENT OF The participation of the resources involved worker presence in the areas involved at THE SUPPLY CHAIN OF FOREIGN COMPANIES almost all purchases are managed directly in company business processes and the individual production sites, also meets the with the manufacturer, unless it is necessary sharing of common principles, behaviours expectations formulated by some institutional Fincantieri Marine Group: supply chain to go through an agent or there is a cost and objectives are fundamental for achieving stakeholders, who see in these elements Fincantieri Marine Group (FMG) is one of advantage in resorting to a wholesaler or continuous improvement in the production the prerequisite for a better scaling of the leading manufacturers of medium-sized distributor. Fincantieri model. infrastructures and social services, as well ships in the United States and operates for All suppliers working in the government In this regard, the consolidation of the as for identifying appropriate integration civilian customers and government agencies. programme are required to sign a specific relationship with suppliers and, as a result, a policies. The US Government is the main customer Non-Disclosure Agreement (NDA) and are joint commitment to continuity is of primary Here are some data on the dynamics of Fincantieri Marine Marinette (FMM) and importance, including through the use of in the world of supply: from January to selected according to a specific procedure new aggregation formulae. This context December 2018, 2,180 companies entered requires high quality, high performance for selection and evaluation which defines covers initiatives aimed at promoting the the Company's Italian shipyards, of which 991 goods and services provided by suppliers the process and the methods to guarantee association of several production chain were not present at the beginning of the year. with proven experience. In order to fulfil the selection of suppliers based on criteria the objectives of Congress, the company of quality, technical capability, delivery times No. OF COMPANIES PRESENT No. OF OTHER COMPANIES THAT No. COMPANIES THAT ENTERED supports small and medium enterprises in and continuous improvement. The goal PERIOD IN ITALIAN SHIPYARDS IN THE ENTERED IN THE SUBSEQUENT ITALIAN YARDS IN 2018 MONTH MONTHS selecting its suppliers, in particular those is to select a supplier able to sustain the January 2018 1,189 (A) - 2,180 (A+B) run by women, economically and socially programme, seeking the best compromise in February-December 2018 - 991 (B) - disadvantaged individuals, veterans, and terms of price and quality, in order to support The data refer to Fincantieri S.p.A. companies that are part of the Historically the business and satisfy the customer. In the same period, the shipyards hosted mainly Italian nationals (50.9%) or coming Underutilized Business Zone Program (HUB In accordance with the procedure, specific 37,248 employees of contracted companies, from EU countries (20.1%). zones). Founded in 1997, the HUBZone audits are carried out on suppliers, which Program aims to promote economic are also subjected to reassessments. In development and employment growth particular, when a supplier does not maintain ITALY in disadvantaged areas, helping small the capabilities and qualities that led to its 50.9% 4% OTHER EU businesses located in these areas through enrolment in the register and becomes critical EUROPE NON-EU privileged access to opportunities in the to the FMM business, it is expelled from the public procurement sector. list of usable suppliers. In particular, 18 audits 20.1% 25% REST OF THE WORLD In 2018, 889 suppliers received a purchase were carried out on suppliers in 2018. order from FMM, almost 100% of which are The purchase process is defined through In the field of employment relationships, fixed-term contracts accounted for 38% and situated in the United States, with almost 30% various procedures that describe all the steps permanent contracts accounted for 42.8%, agency staff contracts accounted for 11.2%. in Wisconsin and over 61% small businesses. that must be followed to issue a purchase
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order according to the needs of FMM. SUPPLIERS BY PRODUCT CATEGORY Suppliers are selected according to various 2018 criteria, starting from their experience in the marine sector and their observance of VALUE OF ORDERS No. OF SUPPLIERS ISSUED BY CATEGORY US law in social and environmental areas. IN THOUSANDS OF € Other additional factors that are considered Turnkey 61 37,811 include: estimated cost, purchase frequency, Supply 518 80,004 size, position, shipowner's recommendations, Contracts 194 53,656 customers, other suppliers, recorded non- Services 70 2,449 conformities and visits to production sites, if Investments 28 4,614 required before starting the work. Engineering 18 1,555 An orientation course is provided to Total 889 180,089 suppliers performing services in shipyards before the works begin, to verify that they SUPPLIERS BY GEOGRAPHICAL AREA meet certain insurance requirements. They 2018 also carry out shipyard safety training courses and are familiarized with the correct contact VALUE OF ORDERS No. OF SUPPLIERS ISSUED BY CATEGORY representatives within the Company, in order IN THOUSANDS OF € to ensure an appropriate communication flow. Italy 0 0 The procedure followed for requests Rest of Europe 8 644 for offers/quotations begins with the North America 880 179,430 development of a list of suppliers that are Asia 1 15 able to guarantee the supply and meet all Oceania 0 0 the working, environmental and government South America 0 0 requirements as per FMG's terms and Africa 0 0 conditions. Total 889 180,089 For complex systems or larger services, the The data refer to Fincantieri Marine Group. supplier subscribes and accepts the supply purpose and certain technical specifications. VARD group: Supply chain are managed by the procurement teams of The data on the number of suppliers and Approximately 29% of VARD group the various sites. the value of orders issued in 2018 are given suppliers are located in Norway and another Goods and services are purchased from below. 49% in the rest of Europe. The remaining suppliers who can guarantee specific 22% is distributed mainly between South quality levels. America and Asia. Suppliers must be selected from those that The selection criteria used are based on the have been registered as approved suppliers maker list, but also on the supply history (maker list) through a direct evaluation or and previous purchasing experiences. an evaluation by other companies within Turnkey contracts are the most commonly the group. During the supplier selection used type of purchase orders, followed by process, preferential requirements include materials and equipment. Together they possession of certification concerning represent 73% of the total orders issued by health, safety, anti-corruption and the the group. environment. Purchasing management is entrusted to the For activities relating to the cruise sector, a Alesund headquarters, while purchase plans new market segment for VARD, the central
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purchasing management team also uses production specifications, order approval qualified suppliers approved by the Parent processes, delivery times and payment Company. conditions. Suppliers who work for VARD first receive Audit activities are carried out periodically safety and training courses, available in 5 through the yard health, safety, environment different languages. and quality (HSEQ) managers accompanied The acquisition of goods and services by the central purchasing function to check is based on technical and commercial compliance with the contractual requirements information. Requests for proposals are agreed for the jobs. In 2018, 81 audits were sent to the possible suppliers, and after carried out on suppliers. In particular, VARD the technical and commercial approval, a Vung Tau, which has SA 8000 certification, winning supplier is selected. A contract/ carried out 32 audits based on environmental agreement is then signed and a purchase and social criteria on its suppliers in 2018, two order is issued. of which failed to meet the social criteria. Purchase orders are issued on two The data on the number of suppliers and complementary systems, through which the the value of orders issued in 2018 are given entire procurement process is managed: below.
SUPPLIERS BY PRODUCT CATEGORY 2018 VALUE OF ORDERS No. OF SUPPLIERS ISSUED BY CATEGORY IN THOUSANDS OF € Turnkey 262 546,680 Supply 3,384 451,644 Contracts 318 155,532 Services 2,476 122,754 Investments 148 14,273 Engineering 69 62,381 Total 6,657 1,353,263*
SUPPLIERS BY GEOGRAPHICAL AREA 2018 VALUE OF ORDERS No. OF SUPPLIERS ISSUED BY CATEGORY IN THOUSANDS OF € Norway 1,940 632,229 Rest of Europe 3,272 604,898 North America 17 4,002 Asia 408 73,967 Oceania 7 129 South America 1,013 38,038 Africa 0 0 Total 6,657 1,353,263* * Intra-group value 2018: estimated in approx. 427,600 thousands of euros. The data refer to the VARD group.
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C OMMUNITIES
OUR INITIATIVES
FINCANTIERI FOUNDATION
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The initiatives and commitment of Fincantieri in support of communities OUR INITIATIVES help people and contribute to the socio-economic development of those areas where the Group is present The Group supports and involves local communities via numerous social projects, whether through donations or through direct involvement in the activities carried out. Establishing responsible relationships with Our presence throughout the world implies The main initiatives that the Group supported in 2018 with financial contributions are listed communities is a priority for the Group, and dialogue with very different realities and below. dialogue and supporting them through social, requires in-depth knowledge of the territory cultural and educational initiatives is one of the and the needs of stakeholders in order to commitments in Fincantieri’s Sustainability Plan. effectively respond to demands and define the PROTECTING HEALTH AND PROMOTING RESEARCH The Group is an important reference point in priorities. the areas in which it is present, and over time The issue of the relationship with local it has managed to build a solid cooperation communities is managed at Parent ITALY relationship with the shared goal of creating Company level through the Central and FINCArdiogen research Gaslini Onlus Association Cystic Fibrosis Research long-term value and opportunities for growth Local Administration Relations function project - supports the work of the Onlus Foundation and development. works closely with Public Administrations, - which involves the University Istituto Giannina Gaslini - since 2002 the Foundation associations and committees in order to of Trieste, through the Hospital by funding research has funded 336 projects, 4 channel the requests from and to the local Department of Medical, on paediatric tumors, services useful for the entire areas. Surgical and Health Sciences, technological improvement Italian research network, 700 FOR THE COMMUNITY The Group’s activities are spread over various the Cardiothoracic and of the hospital, supporting researchers and 200 research areas, from social and recreational to cultural Vascular Department A.S.U.I., its primary and most urgent groups and institutes, 400 mln € 3.5 and sporting. In 2018, Fincantieri allocated the Cardiology Hub of needs in order to help children contracts and research grants. approximately 3.5 million euros to initiatives Cattinara Hospital (Trieste). The suffering from rare disease Moreover, it has invested 24 supporting communities. research intends to develop or disease that are difficult to million euros, produced 500 customized cardiological cure. publications on international medicine in order to optimize scientific journals and given diagnoses and develop 550 conference presentations. targeted therapies, with obvious benefits for patients. Protecting health Fostering employment and integration, and promoting research including through the promotion of educational programmes
Strengthening OUR COMMITMENTS Promoting cultural activities to the Group’s identity ARE MAINLY AIMED AT: protect and enhance artistic, and sense of belonging historic and cultural heritage with employees and with communities
Supporting scientific research Supporting the vulnerable and technological innovation
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FOSTERING EMPLOYMENT AND INTEGRATION, INCLUDING THROUGH THE PROMOTION OF PROMOTING CULTURAL ACTIVITIES TO PROTECT AND ENHANCE ARTISTIC, EDUCATIONAL PROGRAMMES HISTORIC AND CULTURAL HERITAGE
ITALY UNITED STATES Culture is a key factor for sustainable and long lasting social and economic growth over time. City of Monfalcone Peschiere University Student Support to various after-school Fincantieri has contributed financially to support several initiatives aimed at restoring the historic, - supporting an initiative Accommodation Foundation educational programmes (e.g. artistic and cultural heritage in the territories in which it is present. aimed at helping all the (Genoa) - a charitable trust workshops) and activities aimed children living in the area get that pursues educational and at raising students’ awareness proper education by covering research aims. It provides of the manufacturing and some school fees and costs training, research, study shipbuilding industries and ITALY associated with taking school orientation and volunteer the opportunities for work Giuseppe Verdi Opera House Foundation (Trieste) EUROFLORA (Genoa) transport to reach the facilities. activities and awards and professional growth. - one of the 14 opera/symphonic foundations entrusted the - this event is an effective scholarships to particularly These projects are carried tasks of conservation, enhancement and promotion of opera opportunity for local deserving students with limited out at numerous schools and symphonic music. promotion and marketing economic resources. and associations in the area: and to enhance talent and Sturgeon Bay High School, Demanio Marittimo Association. KM-278 (Ancona) production excellence. It NORWAY Sevastopol High School, - promotion and enhancement of the Marche territory, including embraced highly topical YoungShip Møre Southern Door High School, the city of Ancona and the port area. issues such as safeguarding - an organization created in 2007 as a meeting place for young Gibraltar High School, TJ Walker artistic and cultural heritage, people who work in various areas of the maritime sector (ship Middle School, Saint John respect for the environment, soil protection and promotion design, production, supply chain, finance, etc.). Bosco Elementary School, Boys ROMANIA of sustainability, all within and Girls Club in Sturgeon Bay. “Days and Nights of European “Johnny Raducanu” Jazz a broader redevelopment Theatre” Braila Theatre Festival 2018 edition project of the Liguria region. Festival - an event recognized - an event that has reached worldwide and organized each its 4th edition and dedicated year in the city of Braila by the to the promotion of theatrical “Centrul de Creație Brăila”. performances from the Balkan states of south east Europe.
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SUPPORTING THE VULNERABLE SUPPORTING SCIENTIFIC RESEARCH AND TECHNOLOGICAL INNOVATION
Helping people in difficulty and supporting volunteer initiatives for disadvantaged communities Supporting scientific research and technological innovation means giving further opportunities and people in order to transform their lives for the better is an issue that Fincantieri feels strongly for a sustainable future. With this aim Fincantieri participates and sponsors many activities to about and dedicates numerous initiatives to it. disseminate research and innovation through the development of scientific and educational projects and open dialogue with experts in the field. ITALY Ricrearti Project Food Bank Agreement ITALY - a training and job placement project for unemployed - in 2018, Fincantieri signed a Science Festival scientific, technical, industrial Seafuture & Maritime or disadvantaged people that makes gadgets by reusing cooperation agreement with - an event organized in Genoa and training activities in the Technologies 2018 Fincantieri’s promotional materials that are no longer usable the Food Bank of Liguria and which has reached its 16th field of naval and marine - an event organized in the and are otherwise destined for disposal. companies providing catering edition with the aim to promote, technologies. ATENA organizes Navy Base in La Spezia which Fincantieri, together with Ricrearti, wanted to combine art and services in the canteens of enhance and disseminate NAV, the International includes conferences and ingenuity in social and environmental terms, in line with the the Sestri Ponente and Riva scientific and technological Conference on Ship & Maritime seminars on issues related Company’s own sustainability policy. This recycling activity in Trigoso (Genoa) shipyards culture, with a particular focus Research, which is held every to technology, exhibitions of 2018 created 400 folders, 200 pouches and 500 keychains for to donate the food surpluses on the resources in the Liguria three years and is the only cutting edge products and Fincantieri. for social solidarity purposes. region. Italian scientific event on projects, B2B meetings with The Food Bank redistributes maritime technologies. foreign Navies, at NATO and foodstuffs to charities that Trieste Next - Festival of international level. UNITED STATES support and help the poor Scientific Research AIDI Projects with Universities American Red Cross Association, United Way, Rainbow and, more generally, people - an event that has reached - Italian Association of Lecturers - Fincantieri has an ongoing House, Abundant Life Missions, Saint Vincent De Paul and in need. The Group intends to its 7th edition and promotes on Industrial Facilities which relationship with multiple the Salvation Army, Toys for Kids Campaign expand this charitable initiative dialogue and debate among deals with the development University faculties, it - supporting multiple associations that aim to help and assist to all its canteens in the near the most representative and dissemination of scientific personalities in the field of and technical know-how, from awards scholarships to the people in difficult situations. future. scientific and applied research. the design of industrial facilities most deserving students to their decommissioning, with on Master’s degree courses ATENA the aim of promoting socio- related to areas of major - Italian Association of Naval economic well-being and interest for the Group and Technology that pursues sustainable development. it contributes directly and indirectly in the preparation of many theses. Furthermore, NORWAY in 2018 Fincantieri directly Tallinn Technical University (TTU) funded a doctorate fellowship - the subsidiary CDP Technology actively cooperates with the in Mathematical Analysis, Tallinn Technical University, representatives from the company Models and Applications hold lectures and cooperate with students in realizing projects of awarded by the School for common interest. Advanced Studies in Trieste. The fellowship is aimed at UNITED STATES conducting a joint research University of British Columbia project to create a new, faster - Vard Electro Canada, Vard Marine Canada and Vard Marine USA and more precise way to make support courses on subjects related to the maritime sector in order the necessary calculations to to encourage engineering students to consider the sector as a get the go-ahead for naval genuine work opportunity. projects.
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STRENGTHENING THE GROUP’S IDENTITY AND SENSE ITALY-BARCOLANA OF BELONGING WITH EMPLOYEES AND WITH COMMUNITIES In the sports area, Fincantieri has, yet again, celebrated its connection with the Barcolana and with the city by sponsoring this sailing regatta. The Group organizes numerous events for both employees and for the communities of the The Barcolana has been held for the last 50 years in the Gulf of Trieste and attracts over 200,000 areas in which it operates. These events are particularly significant and they are an important people. It focuses a lot of attention on Trieste and Friuli Venezia Giulia and has become a natural driver opportunity for the Company to open itself to the outside. for promoting the local area. Sport itself entails a huge responsibility, particularly towards young people. Sport is founded on values such as solidarity, healthy competition and merit and is supported by the Fincantieri Group. Family Day of employees from Fincantieri in recreational, sporting and - this type of event promotes and the external companies cultural activities at these dialogue between employees’ aged between 4 and 10, clubs. The premises of the work life and private life. In allowing them to board and company clubs, the staff in FINCANTIERI FOUNDATION this way each employee can see the ship built by their charge of the administrative spend time in the areas they family members. A theatre management and the Founded in 2008, the Fincantieri position between the world of culture and normally only share with their show was also offered by economic resources necessary Foundation aims to promote the reclaiming the world of business. colleagues with their families the shipowner and created for their maintenance are and safeguarding of the Company's During 2018, the Fincantieri Foundation and explain what their job expressly for them. predominantly provided by corporate heritage, in the shape of continued to give further impetus to its involves. Fincantieri. historical documents about naval and institutional activities by carrying out the Marinette Logging and In 2018, more than 17,000 merchant shipbuilding, as well as industrial following activities: Workers’ Visit Heritage Festival Parade registered members benefited archaeological items. It also promotes and - before delivery, all the - each year the subsidiary from the activities of the 9 actively participates in cultural and artistic • contribution to the organization of the art cruise ships are opened up Fincantieri Marinette company clubs at national initiatives, in the broadest sense, of local, exhibition on motor vessels held by the City to workers for a visit. These Marine participates in the level, of which approximately national and international relevance. of Monfalcone in the MuCa. are opportunities to celebrate parade with a LCS model 8,000 were current and retired The Foundation intends to support • As part of Palermo, Italian capital of the completion of a job that designed and built by one Fincantieri employees. business culture in a continuous, systematic Culture in 2018, a contribution to the lasted many months, and in of the employees in the and authoritative way, giving continuity exhibition on the History, present and future addition to the employees, shipyard. All colleagues Organization of visits to the to a history, to a collective memory. of rail transport. these events are also shared actively participate in the shipyards The Foundation has become a link • Management of guided tours at the with the suppliers and the organization of this parade. - in Italy and in Norway the with the social fabric and it establishes Monfalcone and Palermo shipyards for community. In 2018, 5 cruise shipyards host school children a socially responsible, equitable and groups organized by Universities, high ships were delivered by Company Clubs and university students and virtuous relationship with local territories, schools, sailing schools, the Coast Guard the Italian shipyards and, - employees and retired groups to show and explain demonstrating its focus on the communities and the City of Monfalcone. thanks to the Workers’ Visit, former employees can engage the naval production process. of which Fincantieri is now structural part. • Assistance to students, associations and thousands of people were By managing and enhancing the Group’s public entities with regard to historical able to spend a couple Historical Archive, the Foundation has research on the shipbuilding world and of hours on board these retrieved tens of thousands of publications, Fincantieri. splendid jewels of the sea. technical drawings and images relating • Identification and making safe the to the industrial output of shipbuilding, photographic archive of the Marghera and Bimbi a Bordo documents produced in Italian shipyards Palermo shipyards. (Children on Board) since the end of the nineteenth century. - where possible this event Moreover, by participating in conventions, is organized on board exhibitions and conferences it contributes to cruise ships. The event was disseminating and promoting Fincantieri’s dedicated to all the children historical heritage, giving it a symbolic
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E NVIRONMENT AND CLIMATE CHANGE
ENVIRONMENTAL MANAGEMENT SYSTEM
ENVIRONMENTAL ASPECTS
ENVIRONMENTAL INVESTMENTS
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Natural resources are assets ENVIRONMENTAL MANAGEMENT SYSTEM Fincantieri’s Environmental Policy acts on that should be respected: various fronts and it consists of the following Fincantieri believes in sustainable, Environmental Policy principles. environmentally friendly and safe Fincantieri is aware that its level of responsibility growth is judged by its ability to combine, in its work,
professionalism and quality with strict respect Preventive approach for laws and consideration for the needs and Assessing the current and potential environmental In a world where natural resources are, impact of its activities on the environment and managing by their nature, limited, where people expectations of the community in relation to environmental aspects according to the principles of precaution and prevention, promoting the use of the best are highly mobile and that is subject to the protection of public goods. The Company Communication available technologies and raw materials with reduced Making available to all internal and external environmental impact climate change, companies are forced to wants to represent a model of excellence also in parties concerned the environmental policy Environmental impact reduction document, which expresses the will of Reducing the impact and magnitude of its own implement appropriate mitigation and terms of maximum environmental protection. Management regarding the environment and emissions into the air, water and soil adjustment methods in order to address To manage the more significant environmental is binding for all company employees and all external companies working at our shipyards Minimizing waste production and ensuring these phenomena and create value in the aspects associated with its business, Fincantieri correct management, recovery and reuse of waste before final disposal long term. is committed to implementing and maintaining
The aspects linked to climate change are an Environmental Management System, Promoting the protection of ecosystem diversity both a source of risk and an opportunity. certified in accordance with international Limiting climate altering emissions For this reason, Fincantieri seeks to monitor standard ISO 14001, with the aim of supporting them constantly and to analyse them with the policy adopted by the Company and give the dual purpose of, on the one hand, coherence to the production model. PREVENTIVE identifying all the risks for which mitigation All the Italian sites have been certified and have APPROACH Continuous improvement and/or adaptation measures must be completed transition to ISO 14001:2015, while the ENVIRONMENTAL Promoting environmental adopted and, on the other, exploiting Palermo shipyard alone is currently in the interim IMPACT REDUCTION protection opportunities to develop the business and stages which should lead to certification by 2019. COMMUNICATION improve efficiency. Aspects such as the use The Marinette yard in the US also maintained of energy resources are accompanied by certification for its environmental management risks such as energy cost variations, and system, in compliance with the standard. ENVIRONMENTAL they create an opportunity to decrease For the VARD group, the shipyards Braila and SUSTAINABILITY Reducing the PROMOTING CONTINUOUS environmental impact of emissions to air or improve processes by Tulcea in Romania and the Vung Tau shipyard its business activities by KNOWLEDGE AND PRINCIPLES IMPROVEMENT defining improvement reducing wastage and waste. in Vietnam have confirmed their ISO 14001 AWARENESS AMONG programmes which define short, medium For this reason, Fincantieri, aware of its certification. HUMAN RESOURCES and long-term objectives and goals environmental responsibility, is committed to offering value to its stakeholders by MAINTAINING exploiting the opportunities and managing For more information on the certified shipyards RESPONSIBLE and companies, see the website Promoting knowledge REGULATORY the risks that arise from the changing www.fincantieri.com/en/sustainability/certifications and awareness among MANAGEMENT OF THE COMPLIANCE human resources PRODUCTION CHAIN economic, social and environmental context. Involving human resources at every level in the implementation of its As proof of its environmental commitment, Environmental audits are constantly carried environmental policy with every appropriate measure and initiative, Maintaining regulatory compliance in 2016 the Group joined the CDP Climate out in all the sites, as an integral part of the including information and training Continuous monitoring of the development specifically designed to promote of environmental regulations, so that new Change Programme, a prestigious British Vision Zero programme, by the specific environmentally friendly behaviour, and existing site processes/plant are always organization whose goal is to improve the internal structures and all the reports of respect for laws and regulations and in compliance with the relevant standards. for the most stringent internal rules/ Responsible management Constant monitoring of working activities to management of environmental risks by environmental near-misses are collected and procedures adopted of the production chain ensure effective compliance with standards Promoting environmental protection and develop- and prevent non compliant behaviour leveraging information transparency. managed systematically. ment along the entire production chain, involving suppliers and contractors as important players in its own sustainability policy. For further detail see Ensuring that the environmental policy the section dedicated to the supply chain and the relevant management system are implemented at every level of the Company organization
The Environmental Policy is available on the website www.fincantieri.com/en/sustainability/environmental
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ENVIRONMENTAL ASPECTS energy saving initiatives. Consumption has increased compared climate change, therefore safeguarding it is The replacement of traditional lights to the previous year, due to increased one of the main commitments in Fincantieri’s The Group is also bound by laws and with LED lights was extended to the production volumes. Environmental Policy. The Group constantly regulations to protect the environment Castellammare di Stabia, Marghera and Owing to the importance of energy, monitors its consumption of water during and people’s health by imposing limits on Muggiano sites in 2018. Fincantieri has introduced the objective to the production cycle and provides for atmospheric emissions, discharges into Further work to improve energy efficiency obtain ISO 50001 certification for the Parent initiatives to promote virtuous and eco- water and soil and setting rules for the has involved the compressed air generation Company’s Energy Management System by sustainable behaviour also in the offices, treatment of hazardous waste and the plants at the Ancona, Castellammare di 2021 in the 2018-2022 Sustainability Plan. with everyday actions. reclamation of any polluted sites. Stabia and Riva Trigoso sites. In 2018, similarly as has happened in previous No significant environmental accidents The Ancona site carried out a pilot project to Water years, activities have been carried out to occurred in the Group’s production sites in implement a remote control and automatic Water is a precious natural resource whose reduce leaks in the shipyard water networks. 2018. switch-off system for the mobile aspirators availability is increasingly limited owing to for welding fumes, the energy consumption Energy of which is a not insignificant item in the WATER WITHDRAWAL In line with the improvement goals laid energy balance of each production unit. down, the Company worked, by streamlining To improve the quality of data in the its activities, to reduce greenhouse gas diagnoses and identify the consequent emissions and achieve a sustainable use of improvement actions, the prompt TOTAL energy and natural resources. implementation of more advanced systems 2017 1,314,408 Energy consumption was concentrated at 1,779,017 3,093,425 to measure energy consumption has m3 m3 3 the production units and electricity was used continued. m to power not just the plants and production In 2018, the subsidiary VARD has purchased lines but also the ancillary activities and electricity entirely from renewable sources general services. in all its Norwegian sites, for a proportion TOTAL The Parent Company produces an energy of around 8% of the electricity consumed 2018 1,074,901 2,069,955 diagnosis each year for each production unit. 3,144,856 by the whole Group. In other countries the m3 m3 m3 This diagnosis is aimed at identifying energy purchase and production of energy from inefficiencies and to plan improvements and renewable sources was not significant. GROUND WATER STATE/MUNICIPAL WATER SUPPLIES
The data relate to the Fincantieri Group ENERGY CONSUMPTION (GJ) As regards water discharges, in accordance Raw materials with the authorization profiles (AIA - Procurement of raw materials has a strategic ELECTRICITY Integrated Environmental Authorization, role for the Company. ELECTRICITY 49% 48% AUA - Single Environmental Authorization) In recent years more significance has been TOTAL of the different shipyards, sampling and given to the selection of materials in order to laboratory analysis have been conducted reduce their environmental impact as much FUEL 2,620,706 which guarantee that the limits laid down as possible. 51% GJ by the law for analytes which are subject to As best described in the chapter on eco-de- TOTAL monitoring, including the presence of heavy sign, even while preparing specific con- 2,532,540 metals. The monitoring process falls under tractual techniques, and consequently those GJ the actions envisaged by the Environmental needed for the procurement process, mate- Management System which is certified by a rials for the interiors are identified that, thou- FUEL 52% third party entity. gh possessing the same technical, qualitative 2017 2018
The data relate to the Fincantieri Group.
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and compliance characteristics, are also en- In particular, this project has enabled polluting WASTE BY DISPOSAL METHOD vironmentally compatible. emissions to be reduced by: 2017 2018 The main raw materials present in the Group’s 188,484t production cycle are: • planning deliveries using the outgoing and 192,752t return formula; • steel for the hull; • increasing vehicle saturation (combing 90% NON HAZARDOUS 91% NON HAZARDOUS • copper for the electric wiring and automation; multiple delivery requests into a single carrier). 10% HAZARDOUS HAZARDOUS • steel, iron, plastics and other iron and non-iron 9% alloys for the piping installed on board; The project led to the reduction of 210 heavy • welding materials; road vehicles in 2018 and a reduction of 69,300 20,971t 18,921t • paint products. kg of carbon dioxide (CO ), equal to the 2 TOTAL: 209,455t 90% TOTAL: 211,673t average CO2 absorbed in one year by around 11 90% As regards paint products, low solvent paint hectares of forest. products have been introduced, in particular, 2018 for the vessels built by the Naval Division. Waste 160,503t the provider of welfare services, which allows The Merchant Division is working in the same The Company has identified criteria for the for the reimbursement of season tickets issued for use on public transport. direction and is involving its main commercial collection of machining residues and waste 76% RECOVERY partners in a broader project. disposal and they are included in a special The gradual replacement of the service vehicle 24% DISPOSAL procedure that defines the guidelines on pool with vehicles that use hybrid technology responsibilities and procedures. is significant and it has involved, among other TYPE MEASUREMENT 2017 2018 OF MATERIAL UNIT In Italian sites the percentage of waste things, the installation of electrical charging recovery over 2018 was about 70%. 51,170t points in all production sites, and their use has Carbon dioxide t 14,001 15,984 In line with an internal waste management TOTAL: 211,673t been made gradually available to employees.
regulation introduced in 2011 that identifies The10% data refer to the entire Fincantieri Group. In the United States, the company Fincantieri recovery activities as a priority goal, Marinette Marine has confirmed thecar Argon m3 522,988 702,493 the VARD group recorded a significant Corporate mobility pooling policy to encourage the shared use improvement in terms of results: in 2018, Fincantieri aims to reduce greenhouse gas of means of transport, facilitating travel needs. waste recovery was above 90%, compared to (GHG) emissions including through the In the same vein and as an alternative to using Nitrogen m3 604,115 557,401 65% in 2012. sustainable management of mobility. cars, areas have been made available to park In the United States, Fincantieri Marine Group Company policy promotes the use of public bikes and, consequently, the use of company has specific waste management policies transport whenever this is possible and does vehicles inside the shipyards has been limited. Oxygen m3 5,070,424 5,677,634 and procedures and aims to continuously not create excessive difficulties for travel, thus improve its waste management processes. avoiding recourse to car use. Greenhouse gas emissions By monitoring the waste produced, the The Company is investing in new technologies The Company monitors emissions of Paints l 1,636,211 1,882,573 organization is able to ensure that all the to reduce employees’ travel, promoting the use greenhouse gases (GHG) with the aim of material is collected and managed, constantly of video and teleconferencing. continuously improving performance in The 2017 data refer to Fincantieri S.p.A. while the 2018 data include Fincantieri S.p.A. and Fincantieri Marine Group. seeking innovative solutions for recovery, In 2018, a pilot project was implemented with terms of impact. which in 2018 reached around 80%. regard to the Merchant Shipping Division; In view of this, work has been carried In Italy the project to centralize delivery The subsidiary Fincantieri Marinette Marine following an initial assessment to identify the out to reduce leaks in the carbon dioxide planning (Control Tower), launched in 2014, is also reviewing the waste management methods used to travel to and from work, distribution networks (used in welding). has the goal of managing the shipyards’ process in order to reduce the quantity for an internal communication campaign was Moreover, with the aim of containing the delivery requests in order to reduce transport disposal, aiming to increase the quantity launched to enhance sustainable mobility need to produce energy with the on-board costs, improve reliability and timeliness of of waste treated through energy recovery initiatives, including the start of internal car- systems, new electrical points were realized deliveries and reduce environmental impact. processes. pooling. - as an alternative to diesel generators - for In the same vein, there is the agreement with ships under construction or maintenance.
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The new 50/60 Hz frequency conversion The direct emissions of GHG from sources The other indirect (Scope 3) emissions have demonstrated by its participation, since systems to supply ships in the Ancona, owned by or under the direct control of the also been partially calculated in 2018. These 2008, in the Confederation of Norwegian
Muggiano and Sestri Ponente shipyards have Company, fuels for site heating, petrol for concern emissions connected with employee Enterprises’ NOX-Fund, whose primary been put into operation. the company fleet and refrigerant gases travel, consumption of raw materials, water objective is to reduce emissions of nitrogen
The VARD group has completed (Scope 1) and indirect emissions from consumption, waste disposal and the oxides (NOX).
commissioning of similar systems at the electricity consumption (Scope 2) are shown procurement chain for raw materials. These The group’s NOX emissions, associated
Norwegian Brattvaag, Langsten and Aukra below. emissions reached 49,908 tCO2e. solely with natural gas combustion, in 2017
shipyards. amounted to 18.2 tNOX and in 2018 24.5 tNOX. GHG EMISSIONS FROM SCOPE 3 Biodiversity GHG EMISSIONS FROM SCOPE 1 AND SCOPE 2 Fincantieri considers the need to safeguard TOTAL: 49,908 tCO e 2 the natural value of the areas involved in its 53% shipyard activities is particularly important. WASTE DISPOSAL 21% To protect these places, specific and special PROCUREMENT CHAIN FOR RAW MATERIALS precautions are put in place in accordance 95,574 DIRECT EMISSIONS 99,817 with local legislation and activities that could tCO2 e (SCOPE 1) tCO2e directly or indirectly concern the protected 4.4% area are carefully monitored. The production sites in Muggiano (surface area of 147,000 m2), Riva Trigoso (surface TOTAL TOTAL 2 13% area 173,000 m ) and Sestri Ponente (surface 204,271 203,183 CONSUMPTION area 237,500 m2) are inside an International OF RAW MATERIALS Marine Protected Area - Marine Mammal tCO2e tCO2e Sanctuary. 11% 2% EMPLOYEE TRAVEL The protected area was introduced with the WATER CONSUMPTION aim of protecting various marine mammals. 108,697 INDIRECT EMISSIONS 103,366 The production site at Marghera (surface tCO2e (SCOPE 2) tCO2e area 370,000 m2), which is on the Venetian - 4.9% Other emissions of polluting gases lagoon, is also considered part of the The gradual conversion of all the heating UNESCO site - Venice and its Lagoon. networks in the Italian shipyards has involved In the United States Fincantieri Marinette the elimination of heavy combustibles and the Marine is positioned next to the Menomonee, introduction of methane systems, resulting in Wisconsin (for a surface area of 21,315 2017 2018 Scope 1: Direct emissions, from sources owned by or under the control of the Group. Scope 2: Indirect emissions from electricity consumption. in negligible sulphur oxide (SO ) emissions. m2). The river in question is an area to be The data refer to the entire Fincantieri Group. X
The SOX emissions of the VARD group and protected, especially due to the quality Fincantieri Marine Group amounted to 0.13 of the waters, the marshland and the The Group’s commitment to the fight against Scope 2 emissions by 20% by 2020 tSO in 2017 and 0.74 tSO in 2018. ecosystem of aquatic flora and fauna. climate change is demonstrated by the (compared to 2017) in the 2018-2022 X X With a view to continuous improvement, the As regards the VARD group, the Tulcea inclusion of the objective to reduce Sustainability Plan. Norwegian group is focused on researching shipyard, in Romania, occupies a surface new approaches to contain and minimize the area of about 750,000 m2, adjacent to impact of emissions resulting from industrial the Danube Delta, an area protected by activities. The group’s commitment is also UNESCO.
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ENVIRONMENTAL INVESTMENTS FINNER In 2018 the Fincantieri Group invested 7.9 million euros in environmental protection. CUVIER'S BEAKED WHALE
BOTTLE-NOSE ENVIRONMENTAL INVESTMENTS SPERM WHALE € 7.9 mln PILOT WHALE
COWFISH
In particular, the Parent Company launched initiatives to both improve environmental impact and to reduce direct and indirect atmospheric emissions. The works carried out in the Monfalcone shipyard, in line with the improvement COMMON DOLPHIN programme set up with the issue of Autorizzazione Integrata Ambientale (AIA, COMMON SEAL Integrated Environmental Authorization) in 2017, are of particular importance. The main ones involved the systems for collecting The ISO 14001 certification, obtained in 2012, and treating rainwater, noise containment certifies the presence of the precautions measures related to production and systems required to safeguard the site. VARD Promar, for extracting and treating welding fumes. in Brazil, occupies a surface area of about The Sestri Ponente, Muggiano, Marghera and 800,000 m2 and part of it (250,000 m2) is Riva Trigoso shipyards have also carried out adjacent to the mangrove forest, considered work on their systems for extracting and by WWF to be a biome, that is, one of treating welding fumes. While the Arsenale the fourteen major types of habitat into Triestino San Marco shipyard, as part of its which the Earth is divided. Also in this case, water management, has built a collection specific and special precautions are put in system for draining the industrial waste place in accordance with local legislation. produced in the dry dock into the public network. As regards product, the Group committed to various projects with the aim of containing environmental impact throughout the ship’s life cycle. These initiatives are described in more details in the chapters on Customers and Products and Research and Innovation.
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A NNEXES
METHODOLOGICAL NOTE
DESCRIPTION OF MATERIAL TOPICS
GRI CONTENT INDEX
INDEPENDENT AUDITOR'S REPORT ON THE CONSOLIDATED NON-FINANCIAL STATEMENT
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METHODOLOGICAL NOTE of material topics (Materiality matrix p. 32), The process of collecting data and i.e. those which reflect the significant information and drafting the Report The second Sustainability Report of the impacts for the organization from an is coordinated and managed by the Fincantieri Group, approved by the Board economic, social and environmental Sustainability Unit, in cooperation with the of Directors on 25 February 2019, is a viewpoint, and which substantially influence multifunctional Working Group. The Report’s communication tool that describes, in a stakeholders’ assessments and decisions, contents have been defined according to transparent and structured manner, the and by the mapping and risk management the principles of accuracy, balance, clarity, economic, social and environmental results methods. It was also considered useful comparability, reliability and timeliness. achieved, and demonstrates the Group’s to provide, as part of this analysis, a The Sustainability Report has been commitment to sustainable development, comparison of relevant areas emerging prepared in accordance with a specific with the aim of creating value not only for the from the materiality matrix with the best internal procedure that defines the roles, Company, but also for its stakeholders. national and international practices facing responsibilities and operating methods that The Report represents the Consolidated Non- the Company. the Parent Company’s and subsidiaries’ staff Financial Statement of the Fincantieri Group As required by the Decree, for each must follow in order to guarantee the proper prepared in accordance with Articles 3 and 4 theme evidence is given on its materiality management of all the data required to of Legislative Decree No. 254/16, with reference in relation to Group activities, the risks prepare the document. to the 2018 financial year (from 1 January to 31 connected with it, the Company’s policies The reporting process is based on the December 2018). This document reports, to the and commitments and the results obtained current information systems used by extent necessary to ensure an understanding and monitored using ad hoc indicators the main company units are have been of the activities of the company, its progress, capable of representing the results in terms integrated using specific data collection its results and its impact, in relation to the areas of management. sheets and supported by operating manuals considered important and required by Article 3 With reference to the requirements of in which the methods for collecting the of the Decree. Article 3, paragraph 2 of Legislative Decree indicators have been defined. The data were As required by Article 5 of the Decree 254/16, some information not considered processed and validated by the various this document is a distinct report with the relevant for an understanding of the function managers. appropriate wording to identify it as the company, its progress, results and impact To enable data and information Consolidated Non-Financial Statement has been excluded. comparability over time and assess the (NFS) required by the regulation. It should be noted that in 2018 Fincantieri Group’s performance, comparison with The contents of the Report have been defined itsSustainability Plan, approved by the previous year is given where possible. prepared in accordance with the GRI the Board of Directors, which highlights and Furthermore, in order to correctly show Sustainability Reporting Standards (2016) strengthens the intention to be a responsible performance and guarantee the reliability of of the Global Reporting Initiative and Group. The Plan addresses some global the data, the use of estimates was limited to opting for “in accordance-core”. For further challenges (such as the UN’s Sustainability the minimum possible and, if present, these detail on the information required by the Development Goals) and details the are based on the best methods available and Standards and the indicators reported, commitments undertaken by the Group appropriately described. please refer to the table shown in the annex and breaks them down into qualitative and The document seeks to present the positive to this document. quantitative targets that can be measured and negative aspects in an equal light and, Sustainability reporting is preceded over time and subjects them to constant where considered appropriate, a comment annually by the analysis and identification monitoring. on the results has been provided. The economic values are expressed in euros (thousands and/or millions of euros). Sometimes the data are rounded to one decimal point or to a round number, and therefore their sum may not coincide exactly with the total value.
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The reporting boundary of the data presented associated with outsourcing of the MATERIAL ASPECTS in the Report relates to the Companies fully production chain (203-2), Fincantieri has MATERIAL ASPECTS FOR FINCANTIERI BOUNDARY OF ASPECT consolidated (using the line-by-line method) used an econometric model developed GRI STANDARD TOPICS MACRO AREA MATERIAL TOPIC INTERNAL EXTERNAL in the consolidation area used for the by Censis (a Foundation recognized with consolidated financial statements. The main Decree of the President of the Republic No. Governance and Organizational profile; Ethics Group Supply chain; business integrity and integrity; Governance; Customers; organizational changes that occurred during 712/1973). Based on this model, a better Stakeholder engagement; Community Indirect economic impacts; year concerned the VARD group, which estimate was produced to represent the Anti-corruption; Anti- de-listed from the Singapore Stock Market multiplier effects that Fincantieri is able Governance competitive behaviour on 2 November 2018. After the de-listing, to produce within the national economic Economic and financial Economic and financial Group Supply chain; sustainability performance Customers; Fincantieri holds a 97.22% interest. system, based on the specific production Community Any limitations to the reporting boundary and business model developed and pursued Procurement activities Procurement practices; Supplier Group Supply chain specified above are indicated in the relevant in recent years and the structure of the Economic environmental and social sections of the document. supply chain, with the relative levels of resp. assessment In particular, as regards the subdivision of integration upstream of the production cycle Employment Market presence; Employment; Group Community protection and trade Work/Industrial relations; workforce, the 2017 data have been revised for naval vessels. union relations Freedom of association and to include the 11 employees from minor The document was also the subject of a collective bargaining foreign companies for which the data were limited assurance engagement according Training and education Training and education Group not available. to the criteria indicated in the revised ISAE Human Company welfare Employment Group The indicators related to energy 3000 standard involving the independent resources resp. consumption (302-1) have been revised for auditors PwC S.p.A. who, at the end of Diversity and equal Diversity and equal opportunity Group opportunity comparison purposes following completion their work, issued the report required under Health and safety in the Occupational health and safety Group of the identification and measurement of the Legislative Decree 254/16 and Consob workplace energy sources used, and the calorific values Regulation 20267 of 2018 concerning the Local communities and Local communities; Public Group Community for all the energy types have been updated. compliance of the information supplied in relations with the local policy As regards raw materials (301-1), the 2018 the Sustainability Report - Consolidated area perimeter has been extended to include Non-Financial Statement prepared by Social Human rights Supplier social assessment Group Supply chain; Fincantieri Marine Group. Fincantieri under Legislative Decree 254/16 resp. Community The emissions of direct (Scope 1) and and in accordance with the reporting Product quality and Customer health and safety; Group Customers compliance with Customer privacy; Socio- indirect (Scope 2) greenhouse gases (GHG) standard adopted. technical regulations economic compliance have been recalculated for the year 2017 The Sustainability Report is required to be and standards due to the use of more specific and up-to- published annually. The document is also Innovation, research Stakeholder engagement; Group Supply chain; date emission factors and emissions from available on the website (www.fincantieri. Product and development Customer health and safety; Customers resp. Emissions refrigerant gas and the company fleet have com), in the Sustainability section. Customer satisfaction Stakeholder engagement Group Customers been included in Scope 1. For any further information it is possible to With regard to the analysis and description contact the Sustainability unit at the email Climate change Emissions Group Community; Environment of the main indirect economic impacts address [email protected] Environmental Materials; Energy; Water; Group Community; management Biodiversity; Emissions; Environment Effluents and waste; Environmental Environmental compliance resp. Environmental impact Emissions Group Environment of products and services
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DESCRIPTION OF MATERIAL TOPICS Procurement activities choices and in its business processes. To this effort to the protection of health and safety; A significant portion of the overall value end it must commit itself to improving energy over the years it has promoted a profound Governance and business integrity of each ship depends on materials, parts, efficiency and saving, proper management of change in safety culture, as a first step towards Business integrity is the capacity to develop components and turnkey systems supplied water resources and correct disposal of waste further development. The key element is the business fairly and transparently and is a by third parties. The Group actively manages and effluent. personnel training as a tool for risk prevention. key factor characterizing the identity of the its make-or-buy procurement strategies and Safeguarding the natural value of the Group, as well as an important element in its therefore the size of the contribution of third areas affected by shipyard activities is also Training and education reputation. party suppliers to the overall value of the important. To protect these delicate places, Investment in staff training and development is Responsible governance ensures fair and project, also through rigorous qualification specific and special precautions are put in of strategic importance in terms of restoring a transparent conditions in the conduct of processes. place in accordance with local legislation. high level of skill and know-how in the field, at business affairs and the related company all levels. activities, protecting the company image Product quality and compliance with Environmental impact of products and Accordingly the training on offer has been and reputation, meeting the expectations of technical standards services expanded with new technical and managerial stakeholders and safeguarding the work of Excellent levels of quality are in the DNA of the The Group operates with a “life cycle” training programmes. employees. Group, because the complexity of its business approach, aiming to minimize the requires high standards in terms of quality environmental and social impact of a product Local communities and relations with the Economic and financial sustainability and compliance with technical regulations and or service over its life cycle, departing therefore local area The Company is committed to increasingly standards, at each stage of the production from a model which sees the impact on the Local development is directly linked both sustainable and responsible performance, process. Responsibility for ensuring quality is environment and society of only production with business activities and with the ability to creating the conditions for development widespread and shared. activities, and broadening the analysis of systematically involve local players, showing which meets the needs and expectations of possible negative external effects to all the awareness of the impact on the community. all its stakeholders. Customer satisfaction links in the value chain. In terms of business activities, networks of Customers and their satisfaction are at the small and medium-sized enterprises (SME), Innovation, research and development centre of the Group’s interest; customer Diversity and equal opportunity highly specialized in various macro-sectors, are Technological excellence is a key element satisfaction is pursued by constantly involving Diversity allows all the transformations and engaged. of the Group’s entrepreneurial approach, the customer at the execution stage, in the changes currently taking place to be embraced In addition, initiatives to promote the which allows it to maintain and strengthen continuous monitoring of quality and through and represents an open, flexible and helpful development of local communities are its competitiveness and leading position in the offer of innovative products. relational approach. stimulated and encouraged, with the aim of complex, markets with high potential. With regard to equal opportunities, significant creating shared value. Climate change commitment has been given to increasing the Employment protection and trade union The Group is bound by laws and regulations to presence of women in the Company. Human rights relations protect the environment and people’s health The Company has a strong commitment to People are the key assets of the Group and which impose limits on emissions. Company welfare ensuring that the skills and competencies their protection generates wealth for the The control of emissions is reflected in a This is an innovative tool which permits of each employee are developed and company. Individual growth comes with commitment to continue carrying out research efficient management of resources and maintained, both through recognition of merit constant collaboration and cooperation, into new methods to improve practices provides an alternative to traditional pay and and respect for equal opportunities, with factoring in common ideas and practice, and minimize the emissions resulting from incentive mechanisms. the aim of safeguarding the human rights skills and actions, international exchange industrial activities. The ultimate aim is to improve the quality of life sanctioned by the Universal Declaration and comparison and a multidisciplinary and wellbeing of employees and their families. of the UN. Moreover the Group has always approach. Environmental management paid the maximum attention to ensuring Industrial relations in Fincantieri are based Environmental protection is at the centre of Health and safety in the workplace transparency and observance of agreements on a participative model which values and the activities of the Company, which must Safety at work is a condition for the and laws governing the contracting enhances the role of trade unions and commit itself, in carrying out its activities, performance of work without exposure to (tendering) system, a key element in its own workers, also through the establishment of to making the principles of environmental the risk of accidents or occupational disease. development capacity and competitiveness in appropriate joint committees. sustainability its own, both in its strategic Historically Fincantieri has dedicated significant the relevant markets.
160 161 FINCANTIERI GROUP FINCANTIERI GROUP
GRI CONTENT INDEX Key: CODE INDICATOR DESCRIPTION PAGE FC: FINCANTIERI S.p.A., Italian and minor EMPLOYEES BY TYPE OF CONTRACT - WOMEN foreign subsidiaries “In accordance - core” option PERMANENT FIXED TERM VARD: VARD Group TOTAL FMG: Fincantieri Marine Group FULL TIME PART TIME FULL TIME PART TIME FMSNA: Fincantieri Marine System 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 North America Inc. FC 556 625 121 141 37 41 1 3 715 810 VARD 1,079 1,175 23 24 106 106 0 4 1,208 1,309 FMG 257 256 1 1 0 0 0 0 258 257 GENERAL STANDARD DISCLOSURES FMSNA 10 9 0 0 0 0 0 0 10 9 CODE INDICATOR DESCRIPTION PAGE Total 1,902 2,065 145 166 143 147 1 7 2,191 2,385 ORGANIZATIONAL PROFILE % incidence 86.8% 86.5% 6.6% 7.0% 6.6% 6.2% 0.0% 0.3% 100% 100% 102-1 FINCANTIERI S.p.A. Name of the organization The data refer to the entire Fincantieri Group. Other collaborators (interns, apprentices, agency workers) are not included which in 2018 numbered 791, of whom 72 women, as they are not part of the workforce establishment. 102-2 Primary brands, products, and services 6 102-9 Description of the organization’s supply chain 118-130 102-3 Location of the organization's headquarters 10 102-10 Significant changes to the organization’s size, structure, ownership or 14-15 102-4 Number of countries where the organization operates, and the name 6 supply chain during the reporting period of countries where it has significant operations and/or that are relevant to the sustainability topics covered in the Report 102-11 Explanation of how the precautionary approach is applied 33; 51 102-5 Nature of ownership and legal form 10 102-12 Subscription to or endorsement of externally developed economic, 22; 80; 83-93 environmental and social charters, principles, or other initiatives 102-6 Markets served 6 102-13 Memberships of national or international industry associations 22 102-7 Scale of the organization 6 STRATEGY 102-8 Total number of employees by type, employment contract, region 63 and gender 102-14 Statement from the most senior decision-maker of the organization 4 about the relevance of sustainability to the organization and its EMPLOYEES BY GEOGRAPHICAL AREA strategy for addressing sustainability 2017 2018 ETHICS AND INTEGRITY EMPLOYEES NUMBER EMPLOYEES NUMBER 102-16 Organization’s values, principles, standards and norms of behaviour 16 such as codes of conduct and codes of ethics Italy 8,314 42.5% 8,662 44.9% GOVERNANCE Rest of Europe 6,919 35.4% 7,459 38.7% 102-18 Governance structure of the organization, including committees of 26; 44-47 North America 2,158 11.0% 2,060 10.7% the highest governance body and any committees responsible for decision-making on economic, environmental and social impacts South America 1,345 6.9% 308 1.6% 102-35 Africa 0 - 0 - Remuneration policies 49-50 Asia 805 4.1% 784 4.1% STAKEHOLDER ENGAGEMENT Oceania 4 0.0% 1 0.0% 102-40 List of stakeholder groups engaged by the organization 28-29 Total 19,545 100% 19,274 100% 102-41 Percentage of employees covered by collective bargaining 76 agreements Workforce has decreased from 19,545 to 19,274, mainly due to the reduction of the workforce at the VARD group’s The percentage of employees covered by collective bargaining agreements is 100% in Fincantieri S.p.A. and its Italian Brazilian shipyard. subsidiaries compared to 66% for Fincantieri Marine Group, 0% for Fincantieri Marine System North America Inc. and a variable coverage in the countries worked in by the VARD group (0% Canada, United States, Poland, Chile, Croatia, India, Scotland, Singapore, Estonia, 89% Norway, 100% Vietnam, Brazil, Italy, Romania). EMPLOYEES BY TYPE OF CONTRACT 102-42 Basis for identification and selection of stakeholders with whom to 28-29 PERMANENT FIXED TERM engage TOTAL FULL TIME PART TIME FULL TIME PART TIME 102-43 Approach to stakeholder engagement, specifying frequency of 28-29 engagement by type and by stakeholder group 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 102-44 Report key topics and concerns raised through stakeholder 28-29 FC 7,992 8,304 138 160 186 204 1 3 8,317 8,671 engagement, description of how the organization has responded to VARD 7,829 7,357 42 50 1,301 1,227 0 30 9,172 8,664 those concerns FMG 1,994 1,881 2 2 0 0 0 0 1,996 1,883 FMSNA 60 56 0 0 0 0 0 0 60 56 Total 17,875 17,598 182 212 1,487 1,431 1 33 19,545 19,274 % incidence 91.5% 91.3% 0.9% 1.1% 7.6% 7.4% 0.0% 0.2% 100% 100%
162 163 FINCANTIERI GROUP FINCANTIERI GROUP
CODE INDICATOR DESCRIPTION PAGE CODE INDICATOR DESCRIPTION PAGE MATERIAL ASPECTS AND BOUNDARIES RECONCILIATION OF THE INCOME STATEMENT FROM THE ANNUAL REPORT AND THE ECONOMIC VALUE TABLE IN THE SUSTAINABILITY REPORT 102-45 List of all entities included in the organization’s consolidated financial 6; 156-159 (euro/thousand) a) b) c) a) b) c) d) e) f) statements or equivalent documents and those not included in the Revenue Finance Capital Operating Cost of Dividends Interest Duties Donations Report income gains/losses costs personnel paid and and to associations 102-46 Process for defining the Report content 156-159 on business financial taxes profits costs 102-47 List of the material topics identified in the process for defining report 32 content Provisions (58,759) 102-48 The effects of any restatements of information given in previous 156-159 Finance income 36,635 36,635 reports and reasons for such restatements Finance costs (140,566) 140,566 102-49 Significant changes from previous reporting period 156-159 Income/ 5,942 5,942 102-50 (expense) from Reporting period 156-159 investments 102-51 Date of most recent previous report 156-159 Share of profit (2,905) (2,905) /(loss) of 102-52 Reporting cycle 156-159 investments 102-53 accounted for Contacts and addresses for questions regarding the report or its 156-159 using the equity contents method 102-54 GRI Content Index and "in accordance" option chosen 162 Income taxes (53,220) 53,220 102-55 PROFIT/ 69,123 102-56 External assurance for the report 174 (LOSS) FOR THE YEAR (A) SPECIFIC STANDARD DISCLOSURES Dividends paid 16,874 in 2018 CODE INDICATOR DESCRIPTION PAGE MARKET PRESENCE CATEGORY: ECONOMIC 103-1 Management approach 65 ECONOMIC PERFORMANCE 103-2 103-3 103-1 Management approach 19 103-2 202-2 Proportion of senior management hired from local community 65 103-3 As regards the recruitment policies for senior management, the majority of those recruited (over 70%) are found to be from local profiles and candidates. 201-1 Direct economic value generated and distributed 19 INDIRECT ECONOMIC IMPACTS RECONCILIATION OF THE INCOME STATEMENT FROM THE ANNUAL REPORT AND THE ECONOMIC VALUE TABLE IN THE SUSTAINABILITY REPORT 103-1 Management approach 20 (euro/thousand) a) b) c) a) b) c) d) e) f) 103-2 Revenue Finance Capital Operating Cost of Dividends Interest Duties Donations 103-3 income gains/losses costs personnel paid and and to 203-2 Analysis and description of the main indirect economic impacts, 20 on business financial taxes associations including the extent of impacts profits costs For the analysis and description of the main indirect economic impacts, Fincantieri has used an econometric model Items in 5,473,801 39,672 (489) 4,088,591 951,615 16,874 140,566 64,441 3,530 developed by Censis (a Foundation recognized with Decree of the President of the Republic 712/1973). economic value The impact measures were calculated using the analysis and calculation methodology based on Leontief input-output table from the tables, although this model was substantially modified to adapt it to the specific Fincantieri production and company Sustainability structure. Report The estimates can be considered sufficiently robust proxies for the multiplier effects that Fincantieri is able to produce within the national economic system, given its specific production model, the business model that the Company Values from has built in recent years and the structure of the supply chain, with the relative levels of integration upstream of the Annual Report production cycle for naval vessels. Operating 5,368,896 5,368,896 revenue Other revenue 105,124 104,905 219 and income Materials, (4,104,050) 708 4,088,591 11,221 3,530 services and other costs Personnel costs (951,615) 951,615 Depreciation, (136,359) amortization and impairment
164 165 FINCANTIERI GROUP FINCANTIERI GROUP
CODE INDICATOR DESCRIPTION PAGE CODE INDICATOR DESCRIPTION PAGE PROCUREMENT ACTIVITIES 302-4 Reduction of energy consumption 146-147 103-1 Management approach 118 INITIATIVE MEASUREMENT BASELINE CONSUMPTION BASELINE SAVING % SAVING 103-2 UNIT CONSUMPTION OBTAINED OBTAINED 103-3 Raising efficiency of compressors kWh Sep–Dec 627,520 722,151 94,631 13.1% 204-1 Proportion of spending on local suppliers at significant locations 125; 127; 129 - Ancona 2017 of operation Raising efficiency of compressors kWh Apr–Dec 917,443 1,023,964 106,521 10.4% ANTI-CORRUPTION – Castellammare di Stabia 2017 103-1 Management approach 54-57 Raising efficiency of compressors kWh Oct-Dec 394,820 436,894 42,074 9.6% 103-2 – Riva Trigoso 2017 103-3 Remote control of mobile kWh 2017 2,134,660 2,883,021 748,361 26.0% 205-2 Communication and training on the anti-corruption procedures 56-57 aspirators for welding fumes and policies – Ancona 205-3 Confirmed incidents of corruption and actions taken 57 Replacing lighting systems kWh Apr-Dec 88,013 511,920 423,907 82.8% of outdoor areas with LED 2017 ANTI-COMPETITIVE BEHAVIOUR technology – Marghera 103-1 Management approach 54-57 Replacing lighting systems kWh May-Dec 69,167 198,566 129,399 65.2% 103-2 of outdoor areas with LED 2017 103-3 technology – Muggiano 206-1 Legal actions for anti-competitive behaviour, anti-trust and monopoly Total 4,231,623 5,776,516 1,544,893 26.7% practices The data refer to Fincantieri S.p.A., while the subsidiaries have not implemented significant improvement actions during the year. No fines or sanctions have been received for actions referred to the reporting period. WATER CATEGORY: ENVIRONMENTAL 303-1 Volume of water withdrawn by source of supply 147 103-1 Management approach 144-145 103-2 TYPE OF WITHDRAWAL MEASUREMENT 2017 2018 103-3 UNIT 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 State/municipal water m3 1,779,017 2,069,955 to the protection of public goods. Fincantieri wants to represent a model of excellence also in terms of maximum supplies environmental protection. To manage the more significant environmental aspects and prevent its business having an environmental impact, Ground water m3 1,314,408 1,074,901 Fincantieri is committed to implementing and maintaining an Environmental Management System and obtaining the 3 relevant certification in accordance with international standard ISO 14001 at its sites. Rainwater m 0 0 7 grievances regarding environmental impacts were filed in 2018, of which 1 referred to previous years and was Surface water (streams, m3 0 0 resolved during the year. rivers, lakes, etc.) MATERIALS Total m3 3,093,425 3,144,856 301-1 Materials used by weight or volume 147 The data refer to the entire Fincantieri Group. The 2017 data have been reclassified for comparison purposes following the application of a definition that is common to ENERGY the whole Group. 302-1 Energy consumption within the organization 146-147 BIODIVERSITY TYPE MEASUREMENT 2017 2018 304-1 Operational sites in, or adjacent to, protected areas and areas of high 151-152 UNIT biodiversity value Acetylene GJ 15,997 16,769 EMISSIONS Natural gas GJ 428,591 430,935 305-1 Direct greenhouse gas emissions (Scope 1) 149-150 The data refer to the entire Fincantieri Group. The emissions have been estimated following the guidelines of the Diesel GJ 641,139 634,912 Greenhouse Gas (GHG) Protocol. 2017 emissions have been recalculated using more up-to-date emission factors and LPG GJ 20,297 22,761 including emissions from refrigerant gas and the company fleet. The sources of emission factors are ISPRA and DEFRA for fuels and transport fuels, while they are DEFRA and IPCC LNG GJ 0 4 for refrigerant gases. Fuel oil GJ 189,804 256,615 305-2 Indirect greenhouse gas emissions (Scope 2) 149-150 The data refer to the entire Fincantieri Group. The emissions have been estimated following the guidelines of the Total fuel GJ 1,295,828 1,361,996 Greenhouse Gas (GHG) Protocol. 2017 CO2 e emissions have been recalculated using more up-to-date emission factors. Total self-generated GJ 35 587 The sources of emission factors are ISPRA for Italy and TERNA International Comparisons 214 for abroad. thermal energy Emissions from Scope 2 for the Norwegian sites of the subsidiary VARD have be calculated used the market-based Total electricity GJ 1,236,676 1,258,122 methodology which attributes a conversion factor of zero (0) for energy consumption from renewable sources. of which from renewable GJ 86,571 106,376 305-3 Other indirect greenhouse gas emissions (Scope 3) 151 sources Emissions from water and waste refer to the whole Fincantieri Group, those deriving from the consumption of raw materials and procurement of materials refer to Fincantieri S.p.A. (56% of inventory) and Fincantieri Marine Group, Total energy GJ 2,532,540 2,620,706 those related to employee mobility refer to Fincantieri, Fincantieri Marine Group and the VARD Group. The emissions The data refer to the entire Fincantieri Group. have been estimated following the guidelines of the Greenhouse Gas (GHG) Protocol. The sources of the emission The 2017 data for the VARD group (LPG) and Fincantieri Marine Group (electricity) have been revised for comparison factors are DEFRA, EPA and Greenhouse Gas (GHG) Protocol. purposes following completion of the identification and measurement of the energy sources used, and the calorific values for all the energy types have been updated. 305-7 NOx, SOx, VOC and other significant air emissions 151
166 167 FINCANTIERI GROUP FINCANTIERI GROUP
CODE INDICATOR DESCRIPTION PAGE CODE INDICATOR DESCRIPTION PAGE EFFLUENTS AND WASTE HIRES - WOMEN 306-2 Total weight of waste by type and disposal method 148-149 ≤ 30 30-50 ≥ 50 TOTAL ENVIRONMENTAL COMPLIANCE 2017 2018 2017 2018 2017 2018 2017 2018 307-1 Monetary value of significant fines and total number of non-monetary 144-146 FC 49 56 43 57 1 3 93 116 sanctions for non-compliance with environmental laws and regulations In 2018, Fincantieri Marine Group received and resolved two non-monetary sanctions. VARD 96 100 128 139 22 30 246 269 SUPPLIER ENVIRONMENTAL ASSESSMENT FMG 5 32 18 21 3 13 26 66 FMSNA 1 0 0 0 0 0 1 0 103-1 Management approach 118-119 103-2 Total 151 188 189 217 26 46 366 451 103-3 LEAVERS - WOMEN 308-1 New suppliers screened using environmental criteria 124-125 30 30-50 50 TOTAL 308-2 Number of negative audits performed during the year that do not 125; 127; 130 ≤ ≥ meet the environmental criteria 2017 2018 2017 2018 2017 2018 2017 2018 CATEGORY: SOCIAL FC 6 7 15 14 3 3 24 24 103-1 Management approach 62-66 VARD 54 45 78 68 36 44 168 157 103-2 103-3 FMG 16 17 14 31 8 21 38 69 The Group has staff policies that are characterized by enhancement, professional growth, protection of rights and FMSNA 0 1 2 1 0 0 2 2 respect for corporate values. The fundamental principles and rights recognized to workers are detailed in the Code of Conduct. Fincantieri operates within the reference framework of the UN’s Universal Declaration of Human Rights, the Total 76 70 109 114 47 68 232 252 fundamental Conventions of the International Labour Organization (ILO) and the OECD Guidelines for Multinational Enterprises. The data refer to the entire Fincantieri Group and do not include intra-group movements. Staff are hired with a proper written contract. Worker exploitation, forced, compulsory or child labour of any kind is In 2018, 2,612 people were hired, including 451 women, and there were 2,799 leavers, including 252 women. The rate of not permitted. Employees are recognized the rights to freedom of association, to establish workers’ representatives new employee hires was 13.6% (18.9% for women) while the turnover was 14.5% (10.6% for women). and to perform the related duties (including the right to collective bargaining), in accordance with the regulations and practices in force in the different countries. Lastly, benefits of various kinds, in addition to remuneration, are envisaged 401-2 for the employees. Benefits provided to full-time employees that are not provided 75 During 2018, 201 grievances were filed related to impacts concerning employment, of which 38 were resolved in the to temporary or part time employees, by significant locations of reporting period, while 10 grievances related human rights violations were filed. operation Furthermore, 588 employment disputes are reported relating to employees and former employees for a value of over LABOUR/INDUSTRIAL RELATIONS 190 million euros including the asbestos-related cases dating back to the past. 402-1 Minimum notice periods regarding operational changes, including 76 EMPLOYMENT whether these are specified in collective labour agreements 401-1 Total number and rates of new employee hires and employee 65 In the case of business reorganization, the Group applies, in Italy and abroad, the instruments provided for by national turnover by age group, gender and region collective bargaining agreements and contracts and supplementary company contracts. The minimum notice period in Italy varies depending on the national contracts and for Fincantieri S.p.A. is 25 days while for the Italian subsidiaries HIRES 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, 42 days in Estonia, 30 days in Brazil, Chile, Croatia, India, Norway, ≤ 30 30-50 ≥ 50 TOTAL Poland, Romania and Singapore, 25 days in Italy, 15 days in Canada, the United States, 3 days in Vietnam). The indicator is not applicable for the American companies Fincantieri Marine Group and Fincantieri Marine System 2017 2018 2017 2018 2017 2018 2017 2018 North America Inc. as it is not provided for within contracts. FC 166 185 217 291 40 53 423 529 OCCUPATIONAL HEALTH AND SAFETY VARD 859 726 1,297 842 218 220 2,374 1,788 103-1 Management approach 71-75 103-2 FMG 75 121 106 110 37 57 218 288 103-3 FMSNA 4 2 4 5 0 0 8 7 403-1 Percentage of workers represented in the Health and Safety 72 Committee Total 1,104 1,034 1,624 1,248 295 330 3,023 2,612 The percentage of employees represented in the Health and Safety Committees at Group level is 49%. LEAVERS 403-2 Type of injury and rates of injury, occupational diseases, lost days, and 74 30 30-50 50 TOTAL absenteeism, and total number of work-related fatalities, by region ≤ ≥ and by gender 2017 2018 2017 2018 2017 2018 2017 2018 FC 24 36 104 80 43 60 171 176 VARD 556 746 1,094 1,134 275 323 1,925 2,203 FMG 130 109 172 159 128 143 430 411 FMSNA 3 4 6 4 0 1 9 9 Total 713 895 1,376 1,377 446 527 2,535 2,799
168 169 FINCANTIERI GROUP FINCANTIERI GROUP
CODE INDICATOR DESCRIPTION PAGE CODE INDICATOR DESCRIPTION PAGE HEALTH AND SAFETY INDICATORS HOURS OF TRAINING 2017 2018 2017 2018 VAR 2018/2017 FC VARD FMG FMSNA TOTAL FC VARD FMG FMSNA TOTAL Senior managers 3,572 3,770 5.6% Severity index 0.5 0.1 0.5 0 0.3 0.6 0.1 0.1 0 0.3 Middle managers 20,167 16,783 -16.8% Rate of 0.2 0 0 0 0.1 0.2 0.1 0 0 0.1 White collar employees 165,626 123,778 -25.3% occupational disease Blue collar employees 369,804 516,102 39.6% Rate of 4.0 3.3 3.7 0 3.6 4.1 3.4 3.3 0 3.6 Total 559,168 660,432 18.1% absenteeism HOURS OF TRAINING - WOMEN Injury rate 17.9 5.3 10.0 17.6 10.5 18.7 3.9 7.9 17.7 10.3 2017 2018 VAR 2018/2017 Number of 244 99 38 2 383 267 69 28 2 366 injuries Senior managers 232 252 8.5% - of which in the 208 96 38 1 343 211 60 28 2 301 Middle managers 2,032 1,639 -19.3% workplace White collar employees 27,157 22,521 -17.1% - of which while 36 3 0 1 40 56 9 0 0 65 travelling Blue collar employees 36,402 65,882 81.0% Number of 0 0 0 0 0 0 1 0 0 1 Total 65,823 90,294 37.2% injuries in the The data refer to the entire Fincantieri Group. workplace – fatalities DIVERSITY AND EQUAL OPPORTUNITY HEALTH AND SAFETY INDICATORS - WOMEN 103-1 Management approach 69-70 103-2 2017 2018 103-3 FC VARD FMG FMSNA TOTAL FC VARD FMG FMSNA TOTAL 405-1 Composition of governance bodies and breakdown of employees per 45; 48; 64 employee category according to gender, age group, minority group Severity index 0.1 0.2 0.4 0 0.2 0.1 0.1 0.2 0 0.1 membership, and other indicators of diversity Rate of 0 0 0 0 0 0 0 0 0 0 occupational EMPLOYEES BY CATEGORY disease SENIOR MANAGERS MIDDLE MANAGERS WHITE COLLAR BLUE COLLAR TOTAL Rate of 2.9 5.3 4.0 0 4.4 2.7 4.7 3.7 0 3.9 EMPLOYEES EMPLOYEES absenteeism 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 Injury rate 4.9 15.0 6.1 0 10.9 6.0 2.6 12.4 0 4.7 FC 241 255 434 467 4,187 4,544 3,455 3,405 8,317 8,671 Number of 5 31 3 0 39 7 6 6 0 19 injuries VARD 86 90 536 549 2,023 1,978 6,527 6,047 9,172 8,664 - of which in the 1 30 3 0 34 2 4 6 0 12 FMG 28 31 127 141 411 411 1,430 1,300 1,996 1,883 workplace FMSNA 1 1 8 8 16 16 35 31 60 56 - which while 4 1 0 0 5 5 2 0 0 7 travelling Total 356 377 1,105 1,165 6,637 6,949 11,447 10,783 19,545 19,274 Number of 0 0 0 0 0 0 0 0 0 0 % Incidence on 1.8% 2.0% 5.7% 6.0% 34.0% 36.1% 58.5% 55.9% 100% 100% injuries in the total workforce workplace – fatalities EMPLOYEES BY CATEGORY - WOMEN SENIOR MANAGERS MIDDLE MANAGERS WHITE COLLAR BLUE COLLAR TOTAL The data refer to the entire Fincantieri Group. EMPLOYEES EMPLOYEES The 2017 data for Fincantieri S.p.A. and its Italian subsidiaries and Fincantieri Marine Group have been revised for comparison purposes following the application of a definition that is common to the whole Group. 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 As regards injuries involving non-employee staff in 2018, 724 injuries were recorded in the workplace at Group level, of FC 10 12 45 50 653 740 7 8 715 810 which 2 were fatalities. VARD 9 10 55 72 592 633 552 594 1,208 1,309 TRAINING AND EDUCATION FMG 2 3 16 21 128 124 112 109 258 257 103-1 Management approach 66-69 103-2 FMSNA 0 0 1 1 9 8 0 0 10 9 103-3 Total 21 25 117 144 1,382 1,505 671 711 2,191 2,385 404-1 Average hours of training per year per employee by gender, and by 66 employee category % Incidence on 5.9% 6.6% 10.6% 12.4% 20.8% 21.7% 5.9% 6.6% 11.2% 12.4% total category
170 171 FINCANTIERI GROUP FINCANTIERI GROUP
CODE INDICATOR DESCRIPTION PAGE CODE INDICATOR DESCRIPTION PAGE DIVERSITY AND EQUAL OPPORTUNITY SUPPLIER SOCIAL ASSESSMENT EMPLOYEES BY AGE GROUP 103-1 Management approach 118-119 103-2 ≤ 30 30-50 ≥ 50 TOTAL 103-3 2017 2018 2017 2018 2017 2018 2017 2018 414-1 Percentage of new suppliers that were screened using labour 123-124 practices criteria FC 390 543 6,256 5,870 1,671 2,258 8,317 8,671 414-2 Number of negative audits performed during the year that do not 125; 127; 130 VARD 1,895 1,789 5,575 4,688 1,702 2,187 9,172 8,664 meet the social criteria FMG 318 330 929 805 749 748 1,996 1,883 PUBLIC POLICY FMSNA 8 9 30 27 22 20 60 56 103-1 Management approach 54-57 103-2 Total 2,611 2,671 12,790 11,390 4,144 5,213 19,545 19,274 103-3 % Incidence 13.4% 13.9% 65.4% 59.1% 21.2% 27.0% 100% 100% 415-1 Total value of political contributions by country and recipient/ EMPLOYEES BY AGE GROUP - WOMEN beneficiary Fincantieri Marine Group made a contribution of 50,381 euros to the Political Action Committee. 2018 CUSTOMER HEALTH AND SAFETY 30 30-50 50 TOTAL ≤ ≥ 103-1 Management approach 112-113 FC 147 499 164 810 103-2 103-3 VARD 246 686 377 1,309 416-1 Product and service categories for which health and safety impacts 88-93; 110-115 FMG 50 109 98 257 are assessed for improvement FMSNA 1 7 1 9 CUSTOMER PRIVACY Total 444 1,301 640 2,385 103-1 Management approach 58-59 103-2 % Incidence 18.6% 54.5% 26.9% 100% 103-3 PERCENTAGE OF EMPLOYEES BELONGING TO PROTECTED CATEGORIES 418-1 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data TOTAL OF WHICH WOMEN OF WHICH WITH No grievances were filed in the reporting period. DISABILITIES SOCIO-ECONOMIC COMPLIANCE 2017 2018 2017 2018 2017 2018 103-1 Management approach 54-57 FC 4.6% 4.6% 8.2% 7.7% 3.6% 3.5% 103-2 103-3 VARD 0.1% 0.5% 0% 0.5% 0% 0.5% 419-1 Monetary value of significant fines and total number of non-monetary FMG* 67.1% 64.7% 66.7% 66.1% 3.9% 3.7% sanctions for non-compliance with laws and regulations FMSNA 16.7% 16.1% 10.0% 0.0% 5.0% 7.1% No significant fines were in the reporting period. Total 8.9% 8.6% 10.6% 10.0% 1.9% 2.2%
* According to US law, protected categories include: over 40s, minorities, people with disabilities and veterans. The data refer to the entire Fincantieri Group. The 2017 data for the VARD group have been revised for comparison purposes following changes to the collection criteria.
405-2 Ratio of basic salary and remuneration of women to men 77 by employee category, by significant locations of operation FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING 407-1 Freedom of association and collective bargaining 76 LOCAL COMMUNITIES 103-1 Management approach 134 103-2 103-3 No grievances were filed in the reporting period regarding negative impacts of the Company on the local community. 413-1 Percentage of operations with implemented local community 134 engagement, impact assessments, and development programs Establishing responsible relationships with communities is a priority for the Fincantieri Group, and dialogue and supporting them through social, cultural and educational initiatives is one of the commitments in the Sustainability Plan, therefore all the areas of operation have implemented local community engagement programmes.
172 173 FINCANTIERI GROUP FINCANTIERI GROUP
174 175 FINCANTIERI GROUP FINCANTIERI GROUP
176 177 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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