WE BELIEVE IN A SUSTAINABLE FUTURE Ansaldo STS 2012 Sustainability Report ANSALDO STS S.p.A. 2012 SUSTAINABILITY Registered Offi ce: 16151 Genova REPORT Via Paolo Mantovani, 3 - 5 Paid-in Share Capital Euro 80,000,000 R.E.A. n. 421689 Register of Enterprises of Genoa Tax Code 01371160662 www.ansaldo-sts.com A Finmeccanica Company TRANSLATION FROM THE ITALIAN ORIGINAL WHICH REMAINS THE DEFINITIVE VERSION Ansaldo STS in brief Listed on the Milan Stock Exchange, Ansaldo STS provides product and solutions that improve the safety and effi ciency of railway and urban rail transportation systems, by designing and supplying traffi c management and signalling systems, in addition to related services. The company acts as a general contractor, system integrator and supplier of HIGHLIGHTS 2012 1 major turnkey projects around the world. INDEX 2 LETTER FROM THE CHAIRMAN AND CEO 4 IDENTITY 7 COMPANY PROFILE 8 Highlights 2012 SUSTAINABILITY AND STAKEHOLDERS 22 (IAS compliant amounts EUR million) CORPORATE GOVERNANCE AND ORGANISATION 31 ECONOMIC SUSTAINABILITY 47 Orders Order-book Revenues THE BUSINESS MODEL 48 PERFORMANCE AND KEY FIGURES 52 2012 1,492.3 2012 5,683.3 2012 1,247.8 VALUE DIRECTLY GENERATED AND DISTRIBUTED 55 2011 2,163.7 2011 5,452.8 2011 1,211.9 GOVERNING INNOVATION 56 SOCIAL SUSTAINABILITY 63 HUMAN RESOURCES 64 INVESTORS 92 CUSTOMERS AND THE MARKET 102 SUPPLY CHAIN 114 EBIT ROS Net Profit THE PUBLIC 122 2012 117.1 2012 9.4% 2012 75.7 2011 2011 2011 ENVIRONMENTAL SUSTAINABILITY, HEALTH AND SAFETY 135 116.1 9.6% 73.1 ENVIRONMENTAL POLICY 136 ENVIRONMENTAL PERFORMANCE 148 HEALTH AND SAFETY POLICY 162 REPORTING METHODOLOGY 168 Net Working Capital Net Cash GRI CONTENT INDEX 170 2012 (48.1) 2012 (302.0) CDERTIFICATE OF COMPLIANCE 176 2011 (89.0) 2011 (289.7) 1 XXXXX | XXXXXXXXXXXXXXX Ansaldo STS | 2012 Sustainability Report Index LETTER FROM THE CHAIRMAN AND THE CEO 4 Investor Relations 94 Transparency and Accuracy of Information 95 IDENTITYY 7 Share Performance and Analysts' Rating 95 Company Profi le 8 The Perception of Financial Markets 96 Mission 10 Banks 100 Core Values 11 Commitments made and Commitments for the future 101 Company History 12 Customers and the Market 102 Business Segmentss 14 Tenders 103 Ansaldo STS around the World 16 Business Ethics 104 Main Projects 20 Product Innovation: Safety and Respect for the Environment 105 Sustainability and Stakeholders 22 Customer Satisfaction 107 Sustainable Development 22 Communications 110 Ansaldo STS' Stakeholders 23 Litigation Management 110 Internal Sustainability Committee 24 Commitments made and Commitments for the future 111 Materiality Analysis 25 Supply Chain 114 Global Compact 26 Costs and Type of Purchase 115 Best practice for Sustainability 29 Supply Chain Sustainability Policy 116 Corporate Governance and Organisation 31 Vetting and Eligibility of Suppliers 117 Corporate Governance 31 Responsible litigation management 120 Governance Bodies and Tools 31 Commitments made and Commitments for the future 121 Internal Control Risk and Risk Management System 38 The Public 122 Organisational Structure 41 The Management Model for Institutional Affairs 123 Research Projects with Italian and EU Public Institutions 124 ECONOMIC SUSTAINABILITY 47 Participation in Trade Associations 129 The Business Model 48 Partnerships with universities: technological and managerial training 129 The Market Carachteristics and Ansaldo STS' Position 49 Media affairs 130 Ansaldo STS' Strategy 50 Ansaldo STS and the community 131 Competitive Advantages of Business Units 51 Commitments made and Commitments for the future 133 Performance and Key Figures 52 ENVIRONMENTAL, HEALTH AND SAFETY SUSTAINABILITY 135 Value Directly Generated and Distribuited 55 Environmental Policy 136 Governing Innovation 56 Management, certifi cation and registration systems 137 The Main Products Conceived and Undergoing Development 57 Integrated management system 138 Research in 2012 58 Environmental training 140 Investments in Innovation and Intellectual Property 60 Commitment to fi ght climate change 142 The Finmeccanica Innovation Award 60 Environmental Performances 148 Energy consumption 151 SOCIAL SUSTAINABILITY 63 Consumption of raw materials 154 Human Resources 64 Atmospheric emissions 154 Human Resource Management Policy 65 Water management 155 Headcount 65 Waste production and management 156 Recruitment and Hiring 70 Non-conformities and environmental complaints 158 Training and Development 71 Costs and investments for the environment, health and safety 160 Internazionalisation and Multiculturalism 74 Commitments made and commitments for the future 161 Remuneration and Incentives 76 The Health and Safety Policy 162 People Caree 79 Implementation of relevant legislation 163 Employee Initiatives 79 Training 163 Trade Unions 85 Health and safety performance 164 In-house communications 87 Commitments made and Commitments for the future 166 Company Climate 89 Litigation Management 90 METHODOLOGICAL NOTES 168 Commitments made and Commitments for the future 90 Investors 92 GRI CONTENT INDEX 170 Shareholders 93 Share Capital and Dividends 93 CERTIFICATE OF COMPLIANCE 178 2 3 Letter from the Chairman and the CEO Ansaldo STS | 2012 Sustainability Report Letter from the Chairman and the CEO As this is the fourth annual Ansaldo STS sustainability report, we believe It is the market that demands this of us: customers increasingly ask us that the culture of sustainable growth has been increasingly developed - even within the scope of tenders - to demonstrate how we carry out our within the company and throughout our various branches, and less activities responsibly, in order to ensure the growing, or at least consistent, because we operate in a sector that is already highly focused on these quality of our solutions and products. This is why we must devote ever more aspects, and more because we have approached sustainability as a attention to the performance of our suppliers and motivate our employees, strategic choice informed by our awareness of the importance that it has while achieving sound operating results that are integrated with ethical, in relationships with all the company’s stakeholders. social and environmental results as well. We focus on sustainability because we operate in a sector that favours This year’s sustainability report carries forward this vision and urges us the use of means with a low impact on the environment and because we to refl ect upon the actual progress we have made, giving us an invaluable are convinced that practices that integrate sustainability in the business opportunity to show stakeholders how to correctly envision our sustainability generate the best results over time, at least in terms of their reliability strategy, demonstrating the reliability of our decisions and strategies, in and duration. Ansaldo STS upholds sustainable practices because addition to underscoring our passion for what we do. sustainability is intrinsic to our mission, which is to develop railway and urban rail transportation systems by offering increasingly sophisticated The 2012 sustainability report therefore focuses on highlighting the products and solutions that are safe, environmentally-friendly and that initiatives and good practices that people in our company are devoted to ensure the related systems are safe and effi cient. It is our aim to help implementing, with an ongoing focus on the integrated management of all improve the daily lives of everyone who directly or indirectly uses these the above aspects. systems. What we refer to as good practices consist, in truth, of “the innovation This is why we continuously search for more and better ways to take of our sustainable approach”, which is to say the development of new advantage of new opportunities and contribute to maintaining the technologies, solutions and industrial and corporate governance processes, balance between the various needs of our stakeholders. as well as the management of resources and relationships with outside 2012 was another complex year for the world, and the continuing stakeholder. fi nancial crisis, especially in Europe, exacerbated the growing competition between organisations, including those in our sector, although global growth forecasts were confi rmed at an These include new initiatives like our future leaders project, an international personnel recruitment and development annual rate of roughly 3% over the next three years. Indeed, it is in years like this that we can best measure our ability process for voluntary candidates, the development of customer satisfaction systems for services offered to end to develop, maintain our hold on market share and achieve long-term targets. The sector in which we operate and, to a users of major lines we have built, informing our suppliers in supply chain management, in order to meet specifi c greater extent, our experience and technologies, enable us to pursue the continuous improvements we seek in our day- sustainability requirements, and, fi nally, our ongoing focus on gathering feedback from the fi nancial market to better to-day and strategic decisions. direct management communications and transparency. Ansaldo STS performed well in 2012: we achieved our fi nancial goals, built and delivered our work and projects and The growth of a business is the result of the integrated management of all the elements that interact with it, and those innovated our products. we have mentioned are only a few examples of the importance we give to sustainability in Ansaldo STS’ business model. It is signifi