Sustainability Report Eni for 2017

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SUSTAINABILITY REPORT

ENI FOR 2017

*00199* *00200* Guida dell’azionista 2018 ITA Guida dell’azionista 2018 ING

*00201* *00202* Relazione Finanziaria 2017 ITA Annual Report 2017 ENG

*00203* *00204* Fact Book 2017 ITA Fact Book 2017 ENG

*00205* *00206* Luanda - Angola - (photo, Marilia Cioni) (photo, - Angola - Luanda Eni For 2017 ITA Eni For 2017 ENG

*00207* *00208* Decarbonizzazione Eni For 2017 ITA Decarbonizzazione Eni For 2017 ENG

*00209* *00210* Performace Eni For 2017 ITA Performance Eni For 2017 ENG

*00211* *00212* Eni In 2017 Annual Report on Form 20F 2017 ENG

*00213* *00214* Relazione sul Governo Societario 2017 ITA Relazione sul Governo Societario 2017 ENG

*00215* *00216* Relazione sula Remunerazione 2018 ITA Relazione sula Remunerazione 2018 ENG MISSION

We are an energy company. We are working to build a future where everyone can access energy resources efficiently and sustainably. Our work is based on passion and innovation, on our unique strengths and skills, on the quality of our people and in recognising that diversity across all aspects of our operations and organisation is something to be cherished. We believe in the value of long term partnerships with the countries and communities where we operate.

Eni SpA

Registered Office Piazzale Enrico Mattei, 1 - Rome - Italy Share capital: € 4,005,358,876.00 fully paid-up Business Register of Rome, taxpayer’s code 00484960588

Other Branches Via Emilia, 1 San Donato Milanese (MI) - Italy

Piazza Ezio Vanoni, 1 San Donato Milanese (MI) - Italy

Page layout and supervision K-Change Srl - Rome - Italy

Print Tipografia Facciotti Srl - Rome - Italy

Printed on XPer Fedrigoni paper CONTENTS

Message to our stakeholders 3 Eni in the world 4 Eni activities: the value cycle 6 A responsible and sustainable company approach 7 Stakeholder engagement activities 10 Sustainable Development Goals (SDGs) 12 Materiality: key sustainability issues 13

PATH TO OPERATING COOPERATION DECARBONIZATION MODEL MODEL

ANNEX Main results and targets 14 Main results and targets 38 Eni for 2017 - Path NOI – Eni's people 16 Sustainability in the to decarbonization Safety 21 business value cycle 40 Climate Governance Digitalization as Access to energy: a growth lever 24 an integral part of the Risk Management business model 42 Respect for the environment 25 Climate Strategy An example of teamwork: Metrics & Targets Research and development 30 exploration activities Human rights 31 in Myanmar 44 Transparency Interview with the Danish and anti-corruption 36 Institute for Human Rights 46 Local development projects 47 A protagonist's story of the Green River Project 50 Local content 56

Reporting principles and criteria 57 ANNEXES Independent Auditors’ Report 58 Eni for 2017 - Sustainability Performance (available on eni.com) GRI Content Index (available on eni.com)

The 17 Sustainable Development Goals (SDGs) for 2030, promoted by the United Nations, are used by Eni as a guide for its development projects over the long-term.

In 2017 Eni has drawn up the Consolidated Disclosure of Non-Financial Information, in accordance with the Italian Legislative Decree 254/2016, published in the Annual Report, available on eni.com. During the Middle Ages, a pilgrim made a vow to reach a distant sanctuary, as was customary in those days. After several days of walking, he found himself passing along a narrow road that climbed up the desolate side of a sun-burnt hillside. Grey mouths of stone quarries opened up along the path. Here and there, sitting on the ground, men chiselled large rock fragments into square stone building blocks. The pilgrim approached the nearest man. He looked at him pityingly. Dust and sweat had made him unrecognizable, his eyes smarted from the stone dust and showed his terrible weariness. His arm seemed to be fused with the heavy hammer, which he continued to raise and beat rhythmically. “What are you doing?” asked the pilgrim. “Can’t you see?” answered the man rudely, without even raising his head. “I’m killing myself with drudgery.” The pilgrim said nothing and went on his way. He soon came across a second stonecutter. He too was just as tired, hurt and dusty. “What are you doing?” the pilgrim asked him. “Can’t you see? I work from morning to night to support my wife and children”, answered the man. The pilgrim continued his journey in silence. He had almost reached the top of the hill, when he saw a third stonecutter. He was exhausted, just like the others. His face too was covered in a layer of dust and sweat, but his eyes, wounded by the shards of stone, were strangely calm. “What are you doing?” asked the pilgrim. “Can’t you see?” answered the man, smiling proudly. “I am building a cathedral”. And with his arm he gestured down to the valley where a huge building was being erected, an array of columns, arches and bold grey stone spires, pointing towards the sky.

Charles Péguy

In August 2012 Eni, along with the Municipality of L'Aquila, signed a memorandum of understanding for the restoration of the Basilica of Santa Maria di Collemaggio, seriously damaged by the 2009 earthquake. The agreement proposed a broadly-based collaboration model involving central and local institutions, universities and companies. The restoration project entrusted the planning and design, works direction and safety coordination to the Superintendency of Architecture and Landscape of Abruzzo, after which the Superintendency of Archaeology, Fine Arts and Landscape for L’Aquila and Cratere took over. The more technical and scientific support activities were guaranteed by the Polytechnic Institute of Milan, La Sapienza of Rome and the University of L’Aquila.

The cerimony for the inauguration of the restored Basilica was held on December 20th, 2017. ENI FOR 2017 3

MESSAGE TO OUR STAKEHOLDERS

Over these last years, each and every one of us has participated decarbonization, following the recommendations laid down by in the significant change that Eni has gone through in the quest the Task Force on Climate-related Financial Disclosure, of which to create long-term value, and this is exemplified in Péguy’s Eni - the only company in the industry - has been a member words and symbolism. The heart of this change is the result of since its establishment. everybody’s contribution, and is commensurate with our skills However, a company’s responsibility does not end with and responsibilities. combating climate change. To reduce current and prospective Creating value for the company and its stakeholders in the risks, close attention must be paid to integrity, safety and short, medium and particularly in the long-term, is a strategic protection of people, asset integrity and respect for the requirement for an energy company like Eni, where investment environment, also through a commitment to research. Discipline horizons span several decades. We can grow only if the is also the integration of the human rights perspective in all Countries and communities where we operate also grow in a our systems and in all our operations all over the world, sustainable way. To be credible partners, we have to share an an approach that supports the expansion of our business economic diversification path with them, bearing the risks and activities. An example of this is the impact analyses on human uncertainties that this may entail together. rights that steered our relations with communities in Myanmar, Occasionally, the economic situation poses challenges that a new Country for us, which you can find illustrated in this report. drive companies to focus only on the short-term, side-lining the Sustainable growth means contributing to the development of need to prepare for tomorrow’s challenges. We have made every our host Countries: we carry out many of our operations in areas effort to avoid doing this. of the world that still need to overcome essential challenges This is why, in the last four years, we have transformed Eni into in terms of life dignity. Today, over one billion people do not an integrated and efficient energy company, capable of creating have access to electricity and the problem is increasingly value even in the most complex market situations and seizing concentrated in Sub-Saharan Africa. Around 3 billion people opportunities for energy transition. do not have access to modern and clean forms of energy for We have opened up a path based on the skills and motivation cooking, with serious harm to their health and, according to of our people, working on the company culture and corporate the International Energy Agency, the number will still be over identity, embracing diversity, skills and the spirit of integration. 2 billion people in 2030. Thanks to the results we achieved, we then initiated an industrial We are an energy company and we are morally obligated to expansion phase which is underpinned by a focus on financial build a future where everyone can access energy resources in discipline: discipline and expansion are synonymous with an efficient and sustainable way, and this is the premise that sustainable growth. lies at the heart of our cooperation model. To succeed in this Growing together with our stakeholders, with a proactive undertaking and to contribute to development requires that approach to development, first and foremost requires aspects of sustainability are integrated into every phase of considerable effort - both our own and that of the private our business to create value both for the territories and for the sector, and as far as possible in a shared context. We have clear company, reducing risks of every nature. references at international level that help us with this, including, In the Countries where we operate we invest in the production within the UN, the Guiding Principles on Business on Human of oil and natural gas for export as well as for the local market. Rights (UNGP), the Sustainable Development Goals (SDGs) We also invest in sectors that are not our core business, such and the Global Compact. as electricity generation to provide access to energy, The world is facing many challenges and the role of the private thus contributing to a fundamental development need. sector is fundamental. We cover them in “Eni for 2017” along Development that has to be shared in order to create integration with our strategy to combine financial stability with social and and value for a future where everyone can be a protagonist, environmental sustainability to create long-term value for all embracing diversity to contribute even more effectively to the stakeholders. This strategy deploys a host Country cooperation common good: this is our business approach, illustrated here model, a clear path to decarbonization and an operating in Eni for 2017. model that grasps opportunities whilst reducing risks and environmental and social impacts. The need to combat climate change concerns our industry in particular and it has been resolutely expressed by the Paris Agreement of 2015, which we support. The transformation of the way we produce and consume energy is so important that it requires utmost clarity and lucidity of analysis. This is why Claudio Descalzi this year we have prepared a special report on our path to Chief Executive Officer 4 E N I F O R 2 0 1 7 E N I F O R 2 0 1 7 5

2015 2016 2017 ENI IN THE WORLD 1,816

A 1,760 1,759 Belgium u a i s l t a Cyprus r r i t a s Saudi Arabia Croatia u A Denmark P E& (48%) (50%) (53%) E& P China HYDROCARBON PRODUCTION(a) G&P G&P South Korea France R&M & C (% GAS EQUITY) Germany United Arab Emirates R&M & C (thousand boe/day) Japan Greece Jordan 2015 2016 2017 Eni is an integrated energy Greenland ia d ia In s 0.45 ne 0.35 o 0.33 company of 32,000 people d n Ireland I in 71 Countries around q a n Ir ta hs the world Italy k Luxembourg za Ka TRIR WORKFORCE ait (total recordable injuries/hours worked) uw Mo K x 1,000,000 nt r Eni focuses on continuous growth based en ma eg an ro My on the exploration of hydrocarbon resources 2015 2016 2017 Norway and the creation of long-term value, an Om 0.177 0.166 0.162 for a future in which everyone can access Netherlands n energy resources efficiently and sustainably. ista Pak This is why Eni has launched a transition Poland ia path towards a low-carbon future which Russ gives natural gas a central role alongside E&P GHG EMISSION Portugal ore (b) increasing development of renewable sources. Singap INTENSITY RATE Eni activities are aimed at guaranteeing (ton of CO eq/toe) United Kingdom 2 the protection and promotion of human Taiwan rights, compliance with safe and fair working standards, the safeguard of the Czech Republic East Timor environment and the fight against corruption. 42.52 Since its foundation, Eni has been committed Turkme Slovakia nistan DIRECT GHG EMISSIONS 2017 to supporting the development (million tonnes CO2eq) of the Countries in which it operates, Romania Vietnam paying attention to local needs: this has become the Company's strenght. ia Sloven

Spain P 185 RR&M & C & P 2017 G & R&D EXPENDITURES E (€ million) E&P G&P R&M & C Sweden Alg eria Switzerland 10 14 18 Europe An rkey go Tu la C 72 on go of which RELATED 2017 Ukraine R&M & C 15 4 5 Africa Ivory Coast TO DECARBONIZATION(c) (€ million) Hungary G Egypt & E P Asia & G P ab 14 11 6 o and Oceania G n h 70.7 a n a (d) a Kenya COMMUNITY INVESTMENT 2017 n ti n L (€ million) 7 1 3 Americas e a i g d b r a e A n r Lybia ri a o a C d Morocco a u (a) Includes Eni’s share in joint ventures and associated c M E o companies valued using the equity method. N Eni activities: z Mexico o i a (b) E&P GHG emissions on gross production g South Africa g a m Exploration & Production (E&P), a l T e of hydrocarbons from reservoirs operated entirely b b e u r i u i o n a que by Eni (100%). Gas & Power (G&P), Refining & Marketing z T i e s i (c) This investment refers to: energy transition, biorefining, & n a and Chemicals (R&M & C). United States e d green chemistry, renewable sources, emissions’ reduction a V d and energy efficiency. i n i (d) Amounts relating to resettlement and livelihood r T restoration activities are included. 4 E N I F O R 2 0 1 7 E N I F O R 2 0 1 7 5

2015 2016 2017 ENI IN THE WORLD 1,816

ENI ACTIVITIES: THE VALUE CYCLE

Eni aims to provide energy solutions development, creating economic, people. This business aspect creates that are increasingly more sustainable, environmental and social value, thanks value for stakeholders, the company also through technological to the skills and the motivation of its and society as a whole over time.

UPSTREAM MID-DOWNSTREAM FINAL MARKET Exploration, development Transport and storage of hydrocarbons, Sale of gas, electricity, LNG and extraction of oil and natural gas refining and distribution of products and products in the European market and in markets outside Europe through trading activities

Reﬁneries, petrochemical plants Exploration (traditional Fuels/Biofuels and green)

International Chemical products oil and gas Offshore Trading /bio-based chemicals & shipping markets

Lubricants Development Transmission of oil and gas Gas liquefaction network ﬁelds

LNG regasiﬁcation Onshore B2B Gas and energy

B2C Electricity CES generation AC S Production using

renewable sources T O Y

NEW ENERGY ENER G SOLUTIONS

Eni engages in oil and natural gas Combined-Cycle Gas Turbine (CCGT) additional value in the projects. exploration, field development and power plants, Eni’s refinery system as well This approach allows to reduce the production in 46 Countries, mainly in by Versalis’ chemical plants. The supply of plants’ energy costs and to make Italy, Algeria, Angola, Congo, Egypt, commodities is optimised through trading available a greater quantity of gas for Ghana, Libya, Mozambique, Nigeria, activity. A vertical integration among the local consumption or export. In addition, Norway, Kazakhstan, the UK, the United business units allows the company to Eni is developing various projects, not States and Venezuela. capture synergies in operations and reach related to its assets, which will allow the In the Countries of operations, Eni invests cost efficiencies. distribution of green energy to national in the production of oil and natural gas Since 2015, the New Energy Solutions networks, and in Countries of operations. for export and for the local market aiming Department has been created for the Also in the Downstream sector, Eni has to a shared development. Eni sells gas, development of renewable energy. developed, in addition to the traditional electricity, LNG and oil products in the Thanks to a distinctive business model, business, the green production of biofuels, European and extra-European markets, which allows to replace natural gas through the conversion of the traditional also leveraging on trading activities. consumption of the assets with solar refineries of Porto Marghera and Gela Products availability is ensured by oil or wind energy, Eni is able to exploit into biorefineries, and has integrated and gas production in the upstream industrial, logistical, contractual and traditional chemistry with a range of business, long-term gas supply contracts, commercial synergies to create products from renewable sources. ENI FOR 2017 7

A RESPONSIBLE AND SUSTAINABLE COMPANY APPROACH

Eni’s business model is focused on relating to profitability and growth, challenge in the energy sector is creating long-term value, for both efficiency, operational excellence providing access to energy resources the company and stakeholders, and prevention of business risks. for all efficiently and sustainably through the achievement of goals Eni recognizes that the main while combating climate change.

2015-2040 ENERGY DEMAND (Gtoe)

20 2040 VS 2015 WORLD 16 +29% 12 GLOBAL DEMAND

8 -4% DEMAND FROM OECD COUNTRIES 4 +49% DEMAND FROM 2015 2020 2025 2030 2035 2040 NON-OECD COUNTRIES IEA New Policies Scenario Energy Outlook 2017.

To meet this challenge Eni has fundamental pillars: competences • an operating model that reduces adopted an integrated strategy aimed and innovation, risk management business risks as well as social at achieving its operating objectives, and compliance. and environmental impacts; combining financial robustness This strategy is enshrined in the • a cooperation model with the host with social and environmental company’s mission leverages on: Countries based on long lasting sustainability, based on 3 • a path to decarbonization; partnerships

Accordingly, supporting the Countries' for all, valuing people, safeguarding the for human rights, ethics and transparency development in order to promote efficient environment, fighting climate change, are the fundamental values integrated and sustainable access to energy resources protecting health and safety, respecting within Eni’s business model. 8 ENI FOR 2017

| Sustainability governance

Eni’s Board of Directors has always objectives have been included in the 2018 OBJECTIVES FOR THE ANNUAL VARIABLE INCENTIVE played a central role in the definition of annual variable incentive plan for the PLAN OF THE CEO/GM1 ENVIRONMENTAL sustainability policies and strategies, and CEO and for all managers with strategic SUSTAINABILITY also in the validation of related results. responsibilities, reflecting the importance 25% AND HUMAN CAPITAL For 2017 and 2018, sustainability that Eni recognises to these issues. 12,5% 12,5% SEVERITY GHG EMISSIONS INCIDENT RATE INTENSITY UPSTREAM

ROLES AND RESPONSIBILITIES ON SUSTAINABILITY ISSUES

BOARD OF DIRECTORS

Sets up the Board Committees: • Defines the Corporate Governance system. IN 2017 THE BOD APPOINTED AN • Defines the fundamental lines of the organizational, ADVISORY BOARD TO CONTROL AND RISK COMMITTEE administrative and accounting structure and the ANALYSE THE MAIN GEOPOLITICAL, REMUNERATION COMMITTEE guidelines for the internal control and risk TECHNOLOGICAL management system and assesses their adequacy. AND ECONOMIC NOMINATION COMMITTEE TRENDS AND THE • Examines the main risks on a quarterly basis. DECARBONIZATION SUSTAINABILITY AND SCENARIOS COMMITTEE • Approves the fundamental lines of the internal PROCESS. SINCE 2014 regulatory system, policies and, as a rule, internal compliance and governance regulations. Performs advisory and consultative functions for the BOD • Defines, upon the proposal of the CEO, the strategic on scenarios and sustainability. With particular reference lines and objectives, including those on sustainability. to: health; welfare and safety of people and • Examines and approves the Policy on the communities; respect and protection of rights, Remuneration of Directors and managers. particularly human rights; local development; access to • Examines and approves the integrated financial energy, energy sustainability and climate change; reporting, the Non-Financial Disclosure (NFD), Eni for, environmental protection and efficiency in the use of the Annual Report on Payments to Governments, resources; integrity and transparency; innovation. the UK Modern Slavery Act statement.

CHAIRMAN CHIEF EXECUTIVE OFFICER

• Central role in the internal control and risk management system. • Main responsible for the management of the Company, • Steers the activities of the BOD and, among other things, notwithstanding the tasks reserved to the Board. ensures training for Board members, also on sustainability issues. • Implements the BOD’s resolutions, informs and • In exercising their institutional role of representation, the Chairman presents proposals to the BOD and to the Committees. ensures dialogue with investors and the market.

CHIEF SERVICES & STAKEHOLDER RELATIONS OFFICER CROSSCUTTING SUPPORT FUNCTION TO ALL THE BUSINESS LINES Monitors the definition of sustainability guidelines, methods and instruments, promoting ever greater integration with operational processes.

IMPRESSO STRUCTURE RESPONSIBLE AND SUSTAINABLE ENTERPRISE • Ensures monitoring of changes in the external context and identification of key sustainability issues, also thanks to dialogue with stakeholders. • Proposes, together with other functions, the sustainability priorities and objectives in the strategic plan for the Business Lines and support functions, ensuring the dissemination of a sustainability culture. • Oversees the coordination of initiatives aimed at guaranteeing respect for human rights in company activities. • Oversees the process of defining, developing and implementing the plan of initiatives for the territory, in line with the business objectives as well as the needs of the communities and territories concerned.

LOCAL OFFICES SUSTAINABILITY CONTACTS Define the development plans for the territory in order to maximize the benefits for the Countries in which Eni operates and to create added value for the company, identifying new business opportunities and consolidating relations with host Countries.

1) Chief Executive Officer, General Manager. ENI FOR 2017 9

| Integrated risk management model

Eni has developed and adopted an risk-informed decisions, with full long-term ones, as part of an organic Integrated Risk Management Model2 consideration of actual and potential and comprehensive vision. to ensure that management takes future risks, including medium and The integrated risk management model:

˝ ˝ ˝ ATTRIBUTES THE BOARD IS BASED ON IMPACT ASSESSMENTS IS CARRIED OUT THROUGH OF DIRECTORS WITH A CENTRAL CONCERNING ECONOMIC, A QUARTERLY ANALYSIS ROLE IN DEFINING THE NATURE AND FINANCIAL, OPERATIONAL, OF THE RISK PROFILE. LEVEL OF RISK COMPATIBLE WITH THE SOCIAL, ENVIRONMENTAL STRATEGIC TARGETS INCLUDING IN AND REPUTATIONAL ASPECTS. THE VALUATION PROCESS ALL THOSE RISKS WHICH COULD BE CONSISTENT FOR THE SUSTAINABILITY OF THE BUSINESS IN THE MEDIUM/LONG-TERM.

In 2017: in place by the management; RISKS: POTENTIAL EVENTS THAT COULD • two assessment cycles were • 81 subsidiaries present in 28 AFFECT ENI’S ACTIVITIES carried out: the Annual Risk Profile Countries were involved, identifying AND WHOSE OCCURRENCE COULD Assessment in the first half of approximately 150 risks, including IMPACT ON THE the year and the Interim Top Risk 20 top risks, grouped into strategic, ACHIEVEMENT OF THE MAIN BUSINESS Assessment in the second half; external and operational risks. OBJECTIVES. • three monitoring cycles were Risk profile analysis is also carried out performed on the top risks and using a long-term perspective and, as part on the implementation status of this, analysis of the risks associated with of the treatment actions put climate change are particularly important3.

THE INTEGRATED RISK MANAGEMENT PROCESS

RISK MANAGEMENT GUIDELINES Deﬁnition by the BOD of the nature and level of risk compatible with the strategic objectives.

1 RISK STRATEGY Contribution to the definition of the Strategic Plan through analyses that support the understanding and evaluation 2 of the likelihood of the underlying risk (e.g. definition of specific de-risking objectives).

RISK ASSESSMENT & TREATMENT 3 Periodic cycles of risk assessment aimed at identifying IRM the main risk events that could impact on the achievement of the company objectives and the related treatment actions.

INTEGRATED RISK MANAGEMENT 4 RISK MONITORING Quarterly analyses on the evolution of the main risks and on the progress status of the treatment actions. 5 RISK REPORTING Representation of information on the management 6 and monitoring activities for the main risks through quarterly reports submitted to the attention of the Board of Directors.

RISK CULTURE Promotion and dissemination of awareness, at all organizational levels, that appropriate risk identiﬁcation, assessment and management could have an effect on the achievement of the company objectives and values.

2) For more information, see the Annual Report, Integrated Risk Management. 3) For more information, see the annex Path to Decarbonization, pages 10-15. 10 ENI FOR 2017 CONTRACTORS, SUPPLIERS AND COMMERCIAL PARTNERS FINANCIAL COMMUNITY DOMESTIC, EUROPEAN AND STAKEHOLDER ENGAGEMENT Required respect of Eni’s Code of Launch of the strategic plan in INTERNATIONAL INSTITUTIONS Ethics, Eni’s Guidelines for the London and Milan and top VOLUNTARY PARTECIPATION IN Meetings on energy issues with local protection and promotion of Human management Road-Show. ORGANIZATIONS AND CATEGORY ACTIVITIES political/institutional members, ENI’S PEOPLE AND NATIONAL Rights and Company’s Model 231. Conference call on quarterly results. ASSOCIATIONS national, European and international, AND INTERNATIONAL Meetings with local companies Participation in tematic conferences included the Italian diplomatic Membership and partecipation to LABOUR UNIONS addressed to illustrate the sustainability organized by financial institutions. representations abroad and foreign OGCI(c), IPIECA(d), WBCSD(e), Operating in 71 Countries, Eni’s values (respect of Human Rights). Corporate governance Road-Show Internal communication plan diplomatic representations in Italy and UN Global Compact, CIDU(f), EITI(g). Awarding of the best suppliers in terms held by Eni's Chairman in London, focused on strategy, targets, Eni’s international organizations. Interaction/collaboration with Eni believes that the relationship of safety performance in the year with Paris and Milan. results and on integration topics, Active participation to technical and Danish Institute for Human Rights the Eni Safety Award. Engagement with investors about with stakeholders is an essential declined in: insitutional worktables, and Business. Possible communications of not industrial topics, financial and ESG a) Organization and process mixed/intergovernative commissions, Education initiatives and promotion conformity/improvement areas themes also relating to Shareholders’ element for value creation (Leadership Meeting; Global Engage; public consultations, international of defined sustainabilty topics. emerging as result of processes Annual meetings. “NOI”, for the team; Safety & business forum and opportunities of Support to the specific materials and mutual trust of qualification. Environment Day 2017); dialogue promoted by Government realization (Guidelines, webinar, etc.) b) Know-how integration and and the Italian Parliament. and sharing of the best practices. experience (best practices sharing, Information and relation activity Cycles of meeting focused on Eni’s storytelling, support to organization with national and local stakeholders suppliers crediting procedures. In its activities, Eni faces a multitude of and communication of defined to restart negotiations with Conventions with company evidences different stakeholders on a day-to-day initiatives); MISE/Italian Regions. about sustainabilty matters. basis and has always paid a great deal c) Culture and behaviour. Continuous dialogue with European Participation to associative organism of attention to managing relations Meeting with national and Commission and European Parliament and specialized worktables. through the direct involvement of international labour unions, about decarbonization themes, mobility, stakeholders and the establishment of in the field of Global Framework energy access and development. LOCAL COMMUNITIES & COMMUNITY long-term collaborative relationships. Agreement(a), finalized to a dialogue BASED ORGANIZATIONS This collaboration is crucial for the on certain social and working specific local needs in order to promote situations in Countries of worker Start of consultation activities with the representatives’ origin. shared development, reduce potential Authorities and the local communities ORGANIZATIONS OF risks and identify new business for planning, management and INTERNATIONAL AND realization of initiatives for the opportunities. This approach is based UNIVERSITIES AND NATIONAL ADVOCACY on the proactive involvement not just community in Congo (development (b) CUSTOMERS AND CONSUMERS RESEARCH CENTRES of important or potentially critical and implementation of CATREP ), Proactive dialogue and sharing stakeholders, but also those who, while Iraq (planning of long-term education Dialogue with the national and Four-year renewal of Eni/MIT of informations on sustainabilty activities), Egypt (planning of sustainable topics regarding the main sites staying silent, represent the needs and international Customers’ Associations agreement on technology activities connected to Zhor), Nigeria with focus on circular sustainabilty, development for fighting the of Eni’s presence. requirements – often unexpressed – of (renegotiation of single sustainabilty the different local social and economic in chemical and refining business. climate change. MoU regarding every community). Workshop on sustainable Three-year collaboration agreement contexts. This complex relationship Public consultation in permitting and environmental remediations realized with the University of Bologna on is managed by Eni through functions operative processes in Myanmar, by Syndial, about sustainable R&D themes on energy. expressly dedicated to interacting Mozambique, Montenegro, Mexico, mobility and renewable energies. Realization of “Eni Award Lectures”, with specific types of stakeholders Kazakhstan and Ghana. Sponsorization of “Mobiltime” project cycle of lessons given by the and through the use of a web-based Constant dialogue with the Community to promote the sustainable mobility winners of the previous editon of the innovative platform, which enables Resettlement Committee in Palma area in the Italian cities. Eni Award and by members of the stakeholders to be mapped, real time in Mozambique, supporting the Five local meetings organized with research Commission. monitoring of their requests resettlement process. the Customers’ Associations of the and management of the necessary CNCU(h). response actions. VOLUNTARY CONTRACTORS, PARTECIPATION ORGANIZATIONS PEOPLE AND NATIONAL LOCAL COMMUNITIES SUPPLIERS AND DOMESTIC, EUROPEAN UNIVERSITIES AND IN ORGANIZATIONS OF INTERNATIONAL Key issues AND INTERNATIONAL & COMMUNITY BASED COMMERCIAL FINANCIAL CUSTOMERS AND AND INTERNATIONAL RESEARCH AND CATEGORY AND NATIONAL TRADE UNIONS ORGANIZATIONS PARTNERS COMMUNITY CONSUMERS INSTITUTIONS CENTRES ASSOCIATIONS ADVOCACY

Health and safety in the workplace Climate change and energy efﬁciency Management of environmental impacts Protection of human rights Integrity and transparency Fairness and transparency of commercial policies Challenges for development Relations with the community and local development Economic and ﬁnancial value creation Sustainable management of the supply chain Asset integrity and emergency management Corporate governance Risks and vulnerabilities in the energy sector Organizational environment and welfare Response capacity to the consumers needs

(a) Global Framework Agreement on Industrial Relations and on International level and on Company’s Social Responsability, subscribed by Eni in 2016 with IndustriALL Global (c) Oil and Gas Climate Initiative. (f) Interministrial Commitee on Human Rights. Union and with the Italian Union Labour Organizations of Industry. (d) Oil & Gas association active in environmental and social issues. (g) Extractive Industries Transparency Initiative. (b) Centre d'Appui Technique et de Ressources Professionnelles. (e) World Business Council for Sustainable Development. (h) Italian National Council of Consumers and Users. ENI FOR 2017 11 CONTRACTORS, SUPPLIERS AND COMMERCIAL PARTNERS FINANCIAL COMMUNITY DOMESTIC, EUROPEAN AND Required respect of Eni’s Code of Launch of the strategic plan in INTERNATIONAL INSTITUTIONS Ethics, Eni’s Guidelines for the London and Milan and top VOLUNTARY PARTECIPATION IN Meetings on energy issues with local protection and promotion of Human management Road-Show. ORGANIZATIONS AND CATEGORY political/institutional members, ENI’S PEOPLE AND NATIONAL Rights and Company’s Model 231. Conference call on quarterly results. ASSOCIATIONS national, European and international, AND INTERNATIONAL Meetings with local companies Participation in tematic conferences included the Italian diplomatic Membership and partecipation to LABOUR UNIONS addressed to illustrate the sustainability organized by financial institutions. representations abroad and foreign OGCI(c), IPIECA(d), WBCSD(e), Operating in 71 Countries, Eni’s values (respect of Human Rights). Corporate governance Road-Show Internal communication plan diplomatic representations in Italy and UN Global Compact, CIDU(f), EITI(g). Awarding of the best suppliers in terms held by Eni's Chairman in London, focused on strategy, targets, Eni’s international organizations. Interaction/collaboration with Eni believes that the relationship of safety performance in the year with Paris and Milan. results and on integration topics, Active participation to technical and Danish Institute for Human Rights the Eni Safety Award. Engagement with investors about with stakeholders is an essential declined in: insitutional worktables, and Business. Possible communications of not industrial topics, financial and ESG a) Organization and process mixed/intergovernative commissions, Education initiatives and promotion conformity/improvement areas themes also relating to Shareholders’ element for value creation (Leadership Meeting; Global Engage; public consultations, international of defined sustainabilty topics. emerging as result of processes Annual meetings. “NOI”, for the team; Safety & business forum and opportunities of Support to the specific materials and mutual trust of qualification. Environment Day 2017); dialogue promoted by Government realization (Guidelines, webinar, etc.) b) Know-how integration and and the Italian Parliament. and sharing of the best practices. experience (best practices sharing, Information and relation activity Cycles of meeting focused on Eni’s storytelling, support to organization with national and local stakeholders suppliers crediting procedures. In its activities, Eni faces a multitude of and communication of defined to restart negotiations with Conventions with company evidences different stakeholders on a day-to-day initiatives); MISE/Italian Regions. about sustainabilty matters. basis and has always paid a great deal c) Culture and behaviour. Continuous dialogue with European Participation to associative organism of attention to managing relations Meeting with national and Commission and European Parliament and specialized worktables. through the direct involvement of international labour unions, about decarbonization themes, mobility, stakeholders and the establishment of in the field of Global Framework energy access and development. LOCAL COMMUNITIES & COMMUNITY long-term collaborative relationships. Agreement(a), finalized to a dialogue BASED ORGANIZATIONS This collaboration is crucial for the on certain social and working specific local needs in order to promote situations in Countries of worker Start of consultation activities with the representatives’ origin. shared development, reduce potential Authorities and the local communities ORGANIZATIONS OF risks and identify new business for planning, management and INTERNATIONAL AND realization of initiatives for the opportunities. This approach is based UNIVERSITIES AND NATIONAL ADVOCACY on the proactive involvement not just community in Congo (development (b) CUSTOMERS AND CONSUMERS RESEARCH CENTRES of important or potentially critical and implementation of CATREP ), Proactive dialogue and sharing stakeholders, but also those who, while Iraq (planning of long-term education Dialogue with the national and Four-year renewal of Eni/MIT of informations on sustainabilty activities), Egypt (planning of sustainable topics regarding the main sites staying silent, represent the needs and international Customers’ Associations agreement on technology activities connected to Zhor), Nigeria with focus on circular sustainabilty, development for fighting the of Eni’s presence. requirements – often unexpressed – of (renegotiation of single sustainabilty the different local social and economic in chemical and refining business. climate change. MoU regarding every community). Workshop on sustainable Three-year collaboration agreement contexts. This complex relationship Public consultation in permitting and environmental remediations realized with the University of Bologna on is managed by Eni through functions operative processes in Myanmar, by Syndial, about sustainable R&D themes on energy. expressly dedicated to interacting Mozambique, Montenegro, Mexico, mobility and renewable energies. Realization of “Eni Award Lectures”, with specific types of stakeholders Kazakhstan and Ghana. Sponsorization of “Mobiltime” project cycle of lessons given by the and through the use of a web-based Constant dialogue with the Community to promote the sustainable mobility winners of the previous editon of the innovative platform, which enables Resettlement Committee in Palma area in the Italian cities. Eni Award and by members of the stakeholders to be mapped, real time in Mozambique, supporting the Five local meetings organized with research Commission. monitoring of their requests resettlement process. the Customers’ Associations of the and management of the necessary CNCU(h). response actions. VOLUNTARY CONTRACTORS, PARTECIPATION ORGANIZATIONS PEOPLE AND NATIONAL LOCAL COMMUNITIES SUPPLIERS AND DOMESTIC, EUROPEAN UNIVERSITIES AND IN ORGANIZATIONS OF INTERNATIONAL Key issues AND INTERNATIONAL & COMMUNITY BASED COMMERCIAL FINANCIAL CUSTOMERS AND AND INTERNATIONAL RESEARCH AND CATEGORY AND NATIONAL TRADE UNIONS ORGANIZATIONS PARTNERS COMMUNITY CONSUMERS INSTITUTIONS CENTRES ASSOCIATIONS ADVOCACY

SUSTAINABLE DEVELOPMENT GOALS (SDGs)

The UN’s 2030 agenda for Sustainable global challenges, energy plays a indirectly to achieving the SDGs. For this Development, presented in New fundamental role in the achievement purpose, in 2017, Eni launched a project York in September 2015, identifies of primary needs, the socio-economic with the Columbia Center on Sustainable 17 Sustainable Development Goals development of Countries, protection Investment to develop a model for (SDGs) which represent common of the environment and international prioritizing the SDGs. This model allows goals for the current complex social security. the identification of the Sustainable challenges and are an important With this awareness, Eni has set itself Development Goals on which Eni can reference for the international the goal to define to what extent its contribute through its business activities community. As part of these activities are able to contribute directly or and associated projects.

COLUMBIA CENTER ON SUSTAINABLE INVESTMENT PRIORITY SDGS FOR AN ENERGY COMPANY WHICH OPERATES MAINLY IN AFRICA

1 PRIORITY AT GLOBAL LEVEL Create long-term value through efﬁcient and sustainable access to energy resources for everyone in a low-carbon future.

2 BUSINESS APPROACH Incentivize long-lasting, inclusive and sustainable economic growth by promoting innovation and fair industrialization through operations integrity.

3 MANAGEMENT OF ACTIVITIES Reduce environmental impacts through responsible resource management and sustainable production and consumption models, protecting the ecosystems in which Eni operates.

4 LOCAL LEVEL ACTIVITIES Support host Countries by endorsing sustainable development paths in response to local needs.

As part of the Columbia Center on many Countries of operation. objectives of the Paris Climate Sustainable Investment’s analysis, Significant efforts have been placed Agreement. The report also Eni’s initiatives, governance systems to follow best practices regarding emphasizes further opportunities and incentive mechanisms were environmental monitoring and to bolster SDGs 5 and 10 reviewed. The report found that reporting to avoid negative impacts through gender-sensitive and Eni has initiatives impacting all 17 on SDGs 14 and 15. In the last few participatory processes in local SDGs. The company is particularly years, a number of climate change interventions. Furthermore, in line committed to contributing to the activities have been developed that with SDG 17, Eni is committed achievement of SDGs 7 and 8. help address SDG 13. The report to sharing competencies and Its health and education programs recognizes these important steps economic resources with a variety for employees and communities and encourages additional plans of organizations toward the contribute to SDGs 3 and 4 in and timelines in respect of the achievement of the SDGs.

THE MAIN OBJECTIVES AND INITIATIVES ON THESE ISSUES ARE EXAMINED IN THIS DOCUMENT. ENI FOR 2017 13

MATERIALITY: KEY SUSTAINABILITY ISSUES

The integrated planning process The process starts with the definition business support functions, which are enables Eni to identify the key of strategic guidelines, also on the basis for the four-year strategic sustainability issues and consequently sustainability, issued by the CEO plan and later for the managerial the related action plans and objectives. for the different business lines and objectives (MBO).

CEO STRATEGIC MBO GUIDELINES PLAN

SUSTAINABILITY GUIDELINES ARE DEFINED BASED ON 3 ELEMENTS

ANALYSIS OF RISK ASSESSMENT STAKEHOLDERS’ SUSTAINABILITY SCENARIO RESULTS PERSPECTIVE

Analysis of emerging issues with regard to Identification of Eni’s main risks including Process that identifies the priority issues business context and the progress achieved potential environmental, health and safety, for the various company stakeholders. on objectives. social and reputational impacts.

THE ANALYSIS IS PRESENTED TO THE THE CEO SUBMITS THE COMPANY’S THE ISSUES ARE IDENTIFIED SUSTAINABILITY AND SCENARIOS MAIN RISKS TO THE BOARD OF ACCORDING TO GRI STANDARDS, AA1000 COMMITTEE AND APPROVED DIRECTORS ON A QUARTERLY BASIS. ACCOUNTABILITY AND IFC GUIDELINES4. BY ENI’S BOARD OF DIRECTORS.

These Guidelines identify, by business area, the key material sustainability issues that affect the company’s ability to create value over the short, medium and long-term. These issues are shown below under the three levers of the business model.

PATH OPERATING COOPERATION TO DECARBONIZATION MODEL MODEL

• Combatting climate change: • Employment and diversity • Access to energy reduction of GHG emissions, • People’s safety and asset integrity • Economic diversification energy efficiency, promotion • Occupational health and local • Local development of natural gas and renewables, communities health (education, access to water biofuels and green chemistry • Reduction of environmental impacts and sanitation, health) • Technological innovation (protecting water resources, • Local content biodiversity, oil spills) • Circular economy and waste • Human rights • Integrity in business management (transparency, anti-corruption)

4) Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in Emerging Markets. OPERATING MODEL

MAIN RESULTS AND TARGETS

PEOPLE PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

PROFESSIONAL Around 3,400 people involved in knowledge mapping Continuous development of models for the definition CAREER PATHS campaigns to enhance high quality technical and of professional growth plans and enhancement of professional skills and define technical career paths. technical skills. WORLDWIDE MATERNITY Implementation of the OPI(a) on paternity and maternity Mapping of the ratifications of the main ILO Conventions AND PATERNITY POLICY leave to guarantee 10 days’ leave on full pay to both in Countries where Eni is present (60 Countries). parents in Italy and abroad. PARENTAL 100 enrollments in the Maternity as a Master Continue to develop the training potential of the LEARNING PATH programme (MAAM). parental experience. IN-HOUSE +80% of in-house training (550 active trainers Maximization of the training provided in-house. TRAINING and a further 600 teachers with more limited teaching experience). RAISING AWARENESS ABOUT Planning and design of the programme to rise awareness Dissemination of the training and awareness campaign UNCONSCIOUS BIAS of unconscious bias and the possibility of overcoming it. for a systemic cultural reflection on an ever more effective management of diversity and inclusion. SMART WORKING (ITALY) Pilot Smart Working project on new-parenthood in which Confirmation of Smart Working for new parents and 303 new mothers and fathers participated in 2017. extension to people affected by certain health conditions; Gradual extension by organizational area; EniProgetti, EniServizi and Syndial involved in a first phase. On the basis of the first phase results, further extensions would be evaluated in the four years plan.

(a) Professional Operating Instruction.

SAFETY PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

REDUCTION OF TOTAL TRIR 0.33 (- 6.8% vs 2016). Zero injuries. RECORDABLE INJURY RATE (TRIR)(b) IMPROVE PROCESS SAFETY Definition and execution of process safety audit Creation of a pool of internal process safety auditors AND ASSET INTEGRITY programmes for the business lines and at to carry out audits using a uniform assessment method. headquarter level. Monitoring the implementation of corrective actions arising from the audits. CONSOLIDATION OF THE The Inside Lesson Learned and Eni in Safety 2 projects Launch of a new campaign to promote safe behaviour SAFETY CULTURE INSIDE AND have been launched to share and disseminate experience in all work environments and in life more generally. OUTSIDE THE COMPANY acquired in the field, through an analysis of mistakes and correct conduct.

(b) Employees and contractors. TRIR: Total Recordable Incident Rate. The operating model’s excellence lies in the constant commitment to minimizing risks and to creating opportunities along the whole cycle of activities with respect to people, environment and safeguarding safety. Eni is focused on innovation, on support to Countries' development, on promotion of human rights, and on integrity in managing the business. “Noi”, Eni’s team, composed of over 32,000 people, makes all this possible.

HEALTH PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

PROMOTING HEALTH A strategic plan has been developed on health promotion Implementation of the health promotion plan OF EMPLOYEES for employees and their families to be applied in all in accordance with the reference technical guidelines Eni companies. and the topic areas identified as priority.

RESEARCH AND DEVELOPMENT PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

INVESTMENTS €185 million (+15% vs 2016). €776 million. IN R&D

HUMAN RIGHTS PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

CONTINUOUS IMPROVEMENT The inter-functional working group “Business Finalization of the action plan with the main and human rights” has been set up. improvement areas in relation to international standards. TRAINING AND AWARENESS The e-learning training on human rights continued Delivery to the defined target, completion of the RAISING and 3 modules have been prepared on Human Procurement module and delivery of training on Human Resources, Relations with the Territory and Security Rights with regard to Human Resources, Relations with (delivery started) and planning has started on the the Territory and Security. Procurement module.

DIGITALIZATION PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

DIGITAL TRASFORMATION Digital acceleration phase started along the entire Over 150 digitalization projects started in all the main value chain. operational areas, for asset integrity and to improve HSE performances.

TRANSPARENCY PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

TRANSPARENCY Implementation of the new mandatory reporting regime Promoting the active role of subsidiaries in local EITI OF PAYMENTS and an EITI support community for subsidiaries. Multi-Stakeholder Groups.

RESPECT FOR THE ENVIRONMENT PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

% INCREASE FORMATION 59% (+1% vs 2016). 83% increase in re-injection by 2021 in Nigeria, Congo, WATER RE-INJECTED Turkmenistan and Angola. REDUCTION OF OPERATIONAL -35% in the number of operational oil spills and spills Further reductions in the number of events and volumes OIL SPILLS AND THOSE caused by sabotage. spilled due to investments of €111.1 million over the Plan, CAUSED BY SABOTAGE €25.7 million invested in prevention (+20% vs 2016). to which current costs of €66.7 million must be added. 16 ENI FOR 2017 | OPERATING MODEL

NOI - ENI'S PEOPLE

Eni’s business model is based on element in achieving the objectives. THE TEAM internal skills, an asset that is built Only people who are involved can up over time and with dedication be aware of the fact that their work, 32,195 PEOPLE and which increases its value in the like the work of every single person 20,468 11,727 long-term. This is why people are in the company, none excluded, IN ITALY ABROAD a priority among the company’s is part of a broader project and stakeholders and they are a key a common objective.

“EVERY SINGLE PERSON IS FUNDAMENTAL AND THE SPECIFIC ROLE OF EACH ONE CONTRIBUTES TO ACHIEVING OUR COMMON GOALS. INVESTING IN ONE ANOTHER, COLLABORATING WITH GENEROSITY AND HUMILITY, IS THE KEY THAT WILL ALLOW US TO TRANSFORM OURSELVES INTO AN EXCELLENT TEAM ABLE TO FREE UP ENERGY AND REALIZE OUR FULL POTENTIAL.”

CEO’S BLOG “THE ENERGY OF DIALOGUE”, 14 APRIL 2017

Accordingly, considering the current element and the related skills and strengthened since 2015 from the scenario, Eni has chosen to go against competencies. launch of the CEO’s blog on the the grain emphasizing the fundamental This is a new communication company intranet, triggering an open importance that attributes to its people. approach directed at all company and direct dialogue with all Eni's In fact, despite the Oil & Gas sector levels and guided by the desire people, which recorded over 240,000 has recorded a reduction of more than to explore together: the profound hits6 in 2017. 400,000 employees5 in the period transformation that Eni is undergoing, This intranet, MyEni, is a channel that 2014-2016, Eni has kept its workforce the company results, as well as the is constantly evolving and engages essentially unchanged. commitments undertaken towards more and more people through the The team culture promoted by the people, the market, shareholders and narration of stories and internal skills, CEO is based on placing at the centre all the other stakeholders. and over 20 million hits are recorded of the business activities the human A commitment that has been each year.

IN 2017, TO INCREASE PEOPLE'S ENGAGEMENT, THE CEO PARTECIPATED IN PERSON TO SEVERAL EVENTS:

LEADERSHIP • Meeting entitled “Noi, the value of a team” to concentrate on the value of Eni's people, on what has been MEETING: NOI, built that has enabled Eni to achieve record results. It involved the top management. THE VALUE OF A TEAM (APRIL 2017) GLOBAL • Evolution of the annual event to communicate strategies and objectives to promote greater direct ENGAGE participation and interaction. (MAY 2017) • Programme launched by the CEO with the “Global Engage with CEO” event: it involved a specific target of colleagues, under 40s with 5-10 years service, and it was streamed by over 23 thousand colleagues; furthermore, over 200 questions were posted live on #ASKCEO. The programme was then continued by all the top management with 13 live meetings of the business areas with different population segment and communication abroad and with operational sites - over 33 hits on the live streaming of the events. NOI FOR THE • 6,000 managers met up to reflect on the “diffused leadership” business model TEAM (˛ Detailed on next page). (JULY 2017) YEAR-END • The CEO and the Chairman participated in the event addressed to young new hires to share the results of EVENT the year which was streamed live on MyEni, gaining over 11,000 hits. (DECEMBER 2017)

5) Source: Graves & Co. 6) Hits means the number of times the pages were clicked on. ENI FOR 2017 | OPERATING MODEL 17

NOI FOR THE TEAM 13 JULY 2017

"The six-legged dog is our home… generosity, dialogue and listening, where for Eni's people; We are the soul of this house, the each manager is a node in a network of • being aware of their role. facilitators, we are people who fuel flowing energy, connecting functions the company. Connection is the basis and skills, so that the company moves As part of the action plan, 6 Team Building of our management model because forward, in unison, towards its objectives. sessions were also carried out with level when highly technological, engineering, I and II managers with the aim of further physics and mathematical departments The 6,000 managers who attended encouraging inter-functional and are connected, it creates a driving force, the event undertook the following cross-cutting integration. new projects emerge and life is pumped commitments at the end of the day: into the company's future… We must • promote the sharing of goals and work to create a team which focuses strategies; on corporate priorities: this is where • encourage cooperation at first hand; LISTENING, DIALOGUE, SHARING, TRUST AND PASSION the energy multiplies, this is where the • involve Eni's people; ARE ESSENTIAL VALUES dog lights up”. Event "NOI for the team", • invest time for Eni's people; FOR ENI'S PEOPLE BECAUSE Claudio Descalzi, 13 July 2017. An event • give and ask for feedback; THEY ARE THE NECESSARY to reflect on the “diffused leadership” • do and ask for follow-up; PROFESSIONAL SKILLS business model based on: trust, humility, • define professional development paths FOR A TEAM!

NOI FOR THE TEAM: 2017 TRAINING INITIATIVES:

INITIATIVE ADDRESSED TO OBJECTIVES PEOPLE INVOLVED NEXT STEPS

ENI TELLS Middle managers • Provide tools to better understand the business also Approx. 230 Involvement of ITS OWN from support through case studies. learners and 130 other 450 people. STORY function • Transmitting key concepts and specific terminology in-house trainers and Italian about the way Eni operates. subsidiaries • Bringing different activity areas closer together. • Facilitating the creation of an internal network between colleagues and an open dialogue between functions. ENI New hires in Italy • Boost knowledge of Eni and its activities. 90 in 3 editions Involvement of all ACADEMY and abroad • Transfer and share Eni’s values, also by listening to the young new hires stories of top managers. in Italy and abroad, • Build long-lasting networking with other colleagues. with an average • Build and develop skills such as team building, of approx. 300 integration, diversity and inclusion. people a year. ENERGY Managers in Italy • Consolidate and develop a widespread and inclusive Approx. 2,950, Launch of new TO LEAD and abroad leadership. of which 790 editions and • Strengthen a single corporate identity based on the international involvement of values of integration and collaboration. managers all managers of resources in Italy and abroad. MENTORING Young middle • Support mentees in building their own professional 32 mentors Launch of new PROJECT managers career path, also through the transfer of values and and 32 mentees editions with the (mentees) and experiences from mentors, promoting also a culture involvement of senior managers of diversity which enhance intergenerational dialogue. approx. 60 mentors (mentors) and 60 mentees. 18 ENI FOR 2017 | OPERATING MODEL

| Equal opportunities – Diversity as a resource

The commitment to managing and with local companies is confirmed by presence. Furthermore, in 2017, from an developing Eni's people is global, the percentage of total local workforce analysis carried out in 30 Countries, with no distinction between nationality standing at 30% in Countries that Eni the minimum levels defined in Eni’s or Country. In the upstream sector, the has recently entered and reaching 90% remuneration policy are significantly commitment to greater integration in those where it built a long-standing higher than the market minimums.

LOCAL ENI PEOPLE IN THE UPSTREAM SECTOR 10% 18% 70% OVER

90% 82% 30% 90% OF LOCAL PEOPLE IN COUNTRIES WITH A HISTORICAL PRESENCE

COUNTRIES WITH COUNTRIES WITH RECENT ENTRY HISTORICAL PRESENCE AN INTERMEDIATE PRESENCE COUNTRIES Locals Expatriates

RATIO BETWEEN ENI MINIMUM WAGE POLICY AND MARKET MINIMUM WAGE (1ST DECILE) (Middle managers - Senior staff - Employees)

100-115 116-130 131-150 151-180 > 180

Eni is aware that the promotion of an area of responsibility that goes and serves the culture of work and gender equality is part of a cultural beyond business growth objectives social development. and identity evolution which lies in

IN 2017

7,580 WOMEN 32% PRESENCE OF WOMEN 25% WOMEN IN MANAGEMENT POSITIONS IN THE BOARDS 26% WOMEN IN MIDDLE MANAGER POSITIONS 97% PAY GAP WOMEN VS MEN 14% WOMEN IN SENIOR MANAGER POSITIONS ENI FOR 2017 | OPERATING MODEL 19

MAIN GENDER MANAGEMENT INITIATIVES 2017

˛ Identification of objectives to strengthen gender equality models (Eni professionals and managers) who can relate (with regards to attraction, recruitment in the company and their own testimony. presence on the Boards) and raising awareness in all the ˛ Participation in “Manifesto for female employment", resources' management and development processes. aimed at enhancing female talent in the company9. ˛ Participation in national and international initiatives to ˛ Meetings with high school students to encourage technical develop female leadership including those promoted by and scientific studies and with undergraduates, Valore D, ERT and WEF7. A significant initiative is Inspiring using women’s testimony about the company. Girls8, which aims to create greater awareness among girls ˛ Inter-company initiatives to promote technical careers of their talent, freeing them from gender stereotypes which for women (such as Girls in Motion) and motivational hold back ambition, through a network of 100 internal role surveys for women employees.

| Welfare initiatives

In 2017, Eni created a welfare plan in welfare goods and services, which health sector (check-up "Prevent line with its values, which have always can be purchased through a web with Eni"); placed the care and enhancement of platform, benefiting from the related • the stipulation of a welfare protocol its people at the centre. This plan, that tax and social security opportunities; with the social partners in which an confirms the consolidated initiatives • the implementation of new important plan has been defined to in support of the families, has been initiatives aimed at caregivers for the strengthen supplementary health further strengthened with: management of non self-sufficient care and a closer collaboration with • the launch of the EniFlex program relatives and programs dedicated the schools through scholarships and which allows the conversion of a to elderly parents and the specific initiatives for the inclusion of share of the participation bonus into strengthening of initiatives in the the new generations in the company.

| Skill enhancement

In addition to the training initiatives content. Further training initiatives are TOP-CLASS TRAINING INITIATIVES related to the “NOI for the team” according to the needs of the different • MEDEA MASTER message, Eni promotes the roles with the aim of upgrading and • COLLABORATION WITH THE BEST ITALIAN AND development of skills and merits by consolidating the skills of everyone. INTERNATIONAL UNIVERSITIES • SCHOOL-WORK providing wide-ranging training, Eni confirms its focus on the ALTERNATION PROGRAM in terms of technical and behavioural development of core business skills. • FIRST LEVEL APPRENTICESHIPS

TRAINING HOURS IN 2017 - AMOUNT INVESTED IN TRAINING

2015 177,609902,025 17% 30.7 MILLION 2016 195,311735,034 19% +9% +19% 2017 232,399878,713 24% COMPARED OF TRAINING TO 2016 HOURS COMPARED E-learnings In class In house training (%) TO 2016

Furthermore, to prepare young company know-how, autonomously It also uses training programmes aimed graduates for work in the energy sector, (MEDEA Master10) and in collaboration at young university lecturers to enable Eni provides top-class training paths with the best universities in Italy and in them to acquire and transfer world to integrate academic knowledge with the Countries where Eni operates. class skills.

7) ERT – European Round Table; WEF – World Economic Forum. 8) Project promoted by Valore D, of which Eni is a main sponsor. 9) Promoted by Valore D with the patronage of the Italian presidency of the G7 and the Department for Equal Opportunities of the Council of Ministers of the Italian Presidency. 10) The Scuola Enrico Mattei Master - an MBA focused on two core subjects: Global Energy (GE) and Managing Technical Assets (MTA). 20 ENI FOR 2017 | OPERATING MODEL

After the Protocol signed with 2016-2018, will involve over 6,000 technical colleges and professional MIUR and MLPS11, Eni continued the students in various regions of Italy centres in different Eni operational school-work alternation program - and the First Level Apprenticeship sites and offices. which, in the three-year period which involves 180 students from

STARTING FROM GELA: REDUCING SCHOOL DROP-OUT RATES GELA, ITALY; SINCE 2016

ITALY

THE FIGURES ENI’S RESPONSE Dropping out of school is an old problem In Sicily, one of the regions most affected and it occurs in schools throughout the by this phenomenon, Eni has launched a world. The Italian figures12, especially in project against dropping out of school at schools in certain regions (e.g. Sicily or the Istituto Majorana in Gela, which had a Campania, where the rate in 2016 was 27% very high drop-out rate. Eni has invested and 18% respectively) are still a long way in teacher training and has provided off the goal set by the European Union: classrooms and students with equipment 10% by 2020. and advanced technologies (iPads, multimedia boards, Wi-Fi connection Using technologies for teaching has also THE CAUSES and computers) with the aim of building enabled children with disabilities to follow Why do young people lose interest in a learning pathway using modern and lessons more easily, working with applications school? There are many reasons for this: innovative languages to create a more that are designed especially for them. socio-economic context, lack of confidence stimulating and engaging learning This commitment continued in the in the future, little connection between environment. The results were immediate: 2017-2018 school year: all the new 1st year school and the labour market and, the drop-out rate fell from 48% to 13% classrooms have been equipped in general, boredom. in the first year (2016-2017). with modern technologies.

| Health

Eni considers health protection an and health surveillance processes;

essential requirement for the company • the implementation of the ˝ OCCUPATIONAL HEALTH and promotes physical, psychological programme to standardize company AND INDUSTRIAL HYGIENE and social well-being of Eni’s people, healthcare facilities by surveying and

˝ HEALTHCARE AND their families and of the communities checking the structural, functional TRAVELLER HEALTH of the Countries in which it operates. and equipment requirements

The commitment towards employees and subsequent identification of ˝ MANAGEMENT OF MEDICAL EMERGENCIES health continued in 2017 through: corrective actions.

• the process of identifying, monitoring The regulatory system and the ˝ HEALTH and controlling work risks, including system for managing activities PROMOTION those not specifically regulated, in ensures Eni’s commitment in the ˝ HEALTH FOR THE close cooperation with the industrial areas listed on the right: COMMUNITIES

11) MIUR: Ministry for Education, Universities and Research; MLPS: Ministry for Employment and Social Policies. 12) MIUR: “La dispersione scolastica nell’a.s. 2015/2016 e nel passaggio all’a.s. 2016/2017” (School drop-out rates during the 2015/2016 academic year and before the 2016/2017 academic year). ENI FOR 2017 | OPERATING MODEL 21

SAFETY

| Safety at work

Eni considers safety at work not just this is why Eni continues to pursue contractors. In 2017, the most as a priority but also as a shared commitments and actions to eliminate important initiatives, concerned the value within the organization and accidents among employees and following areas listed below.

SAFETY SAFETY PROCESS EMERGENCIES INDICES CULTURE SAFETY MANAGEMENT

Adoption of the new Proactive Promotion of the safety culture Implementation of the Process Promotions of actions Safety Index to increase through the project “Inside Safety Management System, to improve emergency awareness in the reporting and Lesson Learned” and “Eni in related audit protocol and of preparedness and response. analysis of near misses and Safety 2”, local Safety Days performance indicators. hazardous conditions. and Safety Road Shows.

In 2017 there was a further • Safety Culture Program (SCP), hazardous conditions, monitoring significant reduction in the total indicator of proactiveness which of mitigating actions, dissemination recordable injury rate of the involves aspects concerning of lessons learned and safety workforce (TRIR): -6.8% compared preventive management of safety golden rules and execution of to 2016 both for employees (-17.2%) (i.e. reporting of near misses and complex emergency drills). and contractors (-2%). Unfortunately there was one fatal accident on TOTAL RECORDABLE INJURY RATE (TRIR) an offshore platform in Egypt: (Total recordable injuries/hours worked) X 1,000,000 the contractor died from an electric 0.45 0.47 0.41 shock due to accidental contact 0.35 0.36 0.35 0.33 0.34 with live parts. 0.30 In 2017, two new safety performance indicators were adopted: • Severity Incident Rate (SIR), which gives incidents with serious consequences a greater weight in 2015 2016 2017 the formula; Workforce Employees Contractors

| Safety culture

Eni has always been committed to projects that promote healthy and safe is a safety leader at work, providing the continous dissemination of the behaviour in all work environments and example to others, also thanks to the safety culture as an essential part in life in general. The goal is to motivate management commitment. of the company's activities, through safety so that every single employee

INSIDE LESSON LEARNED ROAD SHOW SAFETY PACT

18,000 people involved, both employees Safety Road Shows ongoing with top 41 industrial sites/plants and over 1,900 firms and contractors, in Italy and abroad, management, employees and contractors involved in the signing of the Safety Pact, in the “Inside Lesson Learned” project: to share results, goals and new projects. a sharing and collaboration initiative new methods for disseminating and sharing between Eni and its contractors to adopt the lessons learned through video clips. and use innovative safety management tools. 22 ENI FOR 2017 | OPERATING MODEL

| Asset integrity

Asset integrity is the ability of the the integrity of all its assets, for ASSET asset to perform its required function their entire life cycle, from the initial INTEGRITY effectively and efficiently in order planning and design stage (Design

to achieve the company targets in Integrity), to procurement, construction, DESIGN OPERATING INTEGRITY INTEGRITY protecting people, the environment and installation and inspection (Technical the company’s assets and reputation. Integrity), to operational management TECHNICAL INTEGRITY By adopting an Asset Integrity and decommissioning (Operating Management System, Eni guarantees Integrity).

THE MAIN BENEFITS OF AN EFFECTIVE AND EFFICIENT ASSET INTEGRITY MANAGEMENT SYSTEM ARE:

Early Greater safety Greater reliability Maximization Optimization Asset value Reduction identification, and protection of the asset’s of production. of the inspection maximization. of losses due to reduction and against any systems and and maintenance unplanned management accidents. subsystems. costs. shut-down. of risks.

TECHNOLOGIES FOR MONITORING THE ASSETS AND ENSURE ENVIRONMENTAL PROTECTION

Eni has developed a series of technologies to ensure the containment system, based on a proprietary technology protection of the marine environment. patented by Eni, which allows to increase the capture of hydrocarbons in case of unexpected escape from submarine ˛ CLEAN SEA wells, thus limiting the environmental impact of the blowout. Innovative technology developed by Eni, based on the use of an AUV (Autonomous Underwater Vehicle), which makes ˛ KILLING SYSTEM marine environmental monitoring and offshore asset inspection Auxiliary system for securing (killing) submarine wells to be used possible in an automatic way, optimizing the cost and duration in case of loss of accidental control during the drilling phase. of operations. The system maintains vertical positioning with respect to the well thanks to the remote coordinated control of two submarine ˛ RAPID CUBE vehicles (ROV), facilitating the reinsertion of the drilling string for (Rapid Containment of Underwater Blowout Events): innovative the killing operations.

˛ More details and video on eni.com ENI FOR 2017 | OPERATING MODEL 23

| Process safety

Eni has developed and implemented enable comparison and consistency and the analysis of the associated a Process Safety Management between the results and an activity indicators Tier 1, Tier 2 and Tier 3.1. System with the aim of preventing was launched to monitor and report In addition, the commitment and controlling, throughout the life on any corrective actions that to disseminating the process cycle of its assets, uncontrolled emerged. Continuous monitoring of safety culture is ongoing through releases of hazardous substances process safety performance is carried communication and awareness that can become major accidents, out through the reporting of Losses raising activities such as newsletters protecting the safety of people, of Primary Containment (LOPC) and specific seminars. environment, productivity, company assets and reputation. For this purpose, Eni has specialized staff NUMBER OF PROCESS SAFETY EVENTS LOSSES OF PRIMARY and structures for the proactive CONTAINMENT: identification, assessment and 6% RELEASES OF GAS, LIQUIDS AND ANY FIRES mitigation of risks that could AND EXPLOSIONS 18% 23 result from process or equipment ASSOCIATED WITH THEM. 67 TIER 1, TIER 2 AND malfunctions or from inadequate 76% TIER 3.1 INDICATE THE 276 SERIOUSNESS OF THE procedures. Furthermore, the process CONSEQUENCES (FROM safety standards of the various MOST SERIOUS TO LEAST SERIOUS) IN TERMS business lines and the auditing OF QUANTITIES RELEASED process have been harmonized to Tier 1 Tier 2 Tier 3.1 AND DAMAGES TO PEOPLE

| Emergency preparedness and response

Emergency management is essential safeguarding the overall value of situations in order to test response to protect people, the environment or the company and, at the same time, capacity in terms of plans, resources, assets and facilities, when a critical the context in which operations are vehicles and materials. Conducting condition occurs, after an event of carried out. Emergency management drills involves Eni structures, vehicles industrial or natural origin that could is mainly preparedness, which and, in the complex drills, also Local result in a potentially hazardous consists mostly in prevention, and it or Central Authorities such as the situation, which requires exceptional is based on a careful identification Prefecture, Police, Port Authority and urgent measures. and analysis of the risks in order to and Fire Fighters. Eni’s effective and efficient respond, when necessary, as quickly emergency response enables it to as possible. Drills are essential in OVER 200 COMPLEX DRILLS protect the "system" as a whole, order to prepare for emergency CONDUCTED IN 2017

COLLABORATION WITH THE CIVIL PROTECTION DEPARTMENT

In 2017, Eni continued to support the Civil Protection in central Italy, Eni responded to the request for collaboration Department in emergency management after the recent crisis from the Department by setting up technical and scientific caused by the sequence of earthquakes in Amatrice – Norcia dialogue with the centres of competence such as the Istituto – Visso in Italy. As part of the RETRACE-3D (centRal italy Nazionale di Geofisica e Vulcanologia (INGV), the Istituto EarThquakes integRAted Crustal modEl) coordinated by the Superiore per la Protezione e la Ricerca Ambientale (ISPRA) Civil Protection Department, to build an advanced crustal model and the National Research Council (CNR), making subsurface of the tectonic seismic structure responsible for the earthquake data available from Eni’s own seismic technology unit. 24 ENI FOR 2017 | OPERATING MODEL

DIGITALIZATION AS A GROWTH LEVER

ENI’S DIGITAL TRANSFORMATION IS A STORY OF INTEGRATION OF PEOPLE, SKILLS, TECHNOLOGY AND IT SCIENCE. IT IS THANKS TO THIS MIX THAT ENI HAS BEEN ABLE TO ACHIEVE EXTRAORDINARY RESULTS, SUCH AS THE DISCOVERY OF THE ZOHR FIELD IN EGYPT, THE LARGEST EVER MADE IN THE MEDITERRANEAN SEA

˛ More details and video on eni.com

Eni has been on a path of digital • improvement of the staff’s health processes, which will become transformation for several decades and and safety; increasingly data-driven. it has managed to transform the need • further increase in the plants’ In the long-term, this digital to process large amounts of data into level of reliability, operability and transformation is part of a broader a significant competitive advantage. technical integrity, with knock-on process of evolution that will make This digitalization path recently saw benefits in terms of both safety Eni even more integrated in its the launch of the HPC4 supercomputer and environmental impact; processes, as well as increasingly at the Green data Center, making Eni’s • strengthening of economic- capable of combining emerging digital computer system the most powerful operational performances; competences with traditional technical industrial system worldwide. Eni’s • development of new business skills, open to innovation, quicker in digital transformation has wide- models; operational and work processes, and ranging transversal objectives: • acceleration of decision-making increasingly attractive to young talent.

NEW DIGITAL TECHNOLOGIES TO SUPPORT THE HEALTH AND SAFETY OF OPERATORS

The new digital technologies for safety issues are the pillars of Eni’s new strategy and the commitment of the whole company in the innovation process. Numerous projects have been launched in recent months:

˛ ELECTRONIC WORK PERMITS (e-WP): Eni makes other remotely piloted devices) and reducing exposure to available a computer application which supports different risk factors. the compilation, management and digital storage of ˛ ENHANCED OPERATOR: enables an increase of the safety Work Permits. and operability at field level through a series of applications ˛ SMART SAFETY: provides site staff with a series of Personal and technologies used by operators in mobility, Protective Equipment with sensors able to signal potential which support and simplify operational activities. hazardous or emergency situations. ˛ VIRTUAL REALITY APPLIED TO STAFF TRAINING: enables ˛ UNMANNED AERIAL VEHICLES (UAV) FOR MONITORING reproduction of the real environment using visual and audio ACTIVITIES: redefines the execution parameters of certain effects and it guarantees that the operations carried out by site operations, using new UAV technologies (drones or the operator are as faithful as possible to reality. ENI FOR 2017 | OPERATING MODEL 25

RESPECT FOR THE ENVIRONMENT

Protection of the environment, component of how Eni operates. an integrated health, safety and based on the principles of To ensure a uniform approach that environment Management System, prevention, protection, information adheres to the best technologies and certified under ISO 14001, in all its and participation, is an essential international practices, Eni adopts plants and production units.

| Circular economy

The circular economy is the economy the products reuse and the recovery and improvement in environmental that can regenerate itself, in which the of waste. The path towards a circular performances and it involves four withdrawal of resources and waste economy represents a necessary areas, in which the contribution of disposal are minimized, thanks to challenge and an opportunity for research and technological innovation the optimization of production, Eni, in terms of both profitability is fundamental.

CONSOLIDATION MANAGEMENT EXTENSIVE ADOPTION EVOLUTION OF THE AND EXPANSION OF ASSETS FOR OF MANAGEMENT BUSINESS MODEL OF EXISTING ACTIONS DIVESTMENT INSTRUMENTS

Expansion of the production Energy and water efficiency Conversion, requalification, Green procurement and ICT of renewable energy and/or programmes, flaring down recovery and sustainable solutions to promote the use of recovered or renewable projects and projects to reduce remediation projects. spread of the circular culture material (Energy Solutions, methane losses with resulting in Eni and beyond company Green Refinery and Green savings in natural gas. boundaries. Chemistry).

POSEIDON PROJECT ADRIATIC SEA, ITALY

THE OFFSHORE PLATFORMS ARE BEING TURNED INTO PARKS TO SUPPORT BIODIVERSITY

ITALY

PROJECT OBJECTIVE offshore structures that would otherwise The pilot project, in cooperation with the be removed, consequently modifying the CNR (National Research Council) and ecosystem that has formed naturally in the under Eni platforms and to send data ISMAR (Institute of Marine Science), has surrounding marine area over time. to researchers on shore. the goal of converting offshore platforms The project is composed of 4 • Controlled Tracking Cetacean (CTC) that are no longer in production, through interconnected modules: to monitor the migration of cetaceans minor technical modifications, into • Eni Free Wave Over the Sea (EFOS) and turtles in order to track their interconnected scientific stations with high to provide a public maritime radio lifecycles and to gather useful technological content to study the marine communication service based on the information on sea conditions. environment. This conversion is repeatable latest wireless microwave technologies. • Pilot Fish Farm (PFF) which involves and reproducible and aims to create the • Evaluation Biomass Increment (EBI) the rearing of mussels, oysters and first technological marine park in the to study the marine fauna populating other molluscs, near selected and Adriatic Sea and in Europe, which enhances the Adriatic Sea and whose habitat lies controlled platforms.

˛ More details on eni.com 26 ENI FOR 2017 | OPERATING MODEL

| Efficient use of water

For years Eni has recorded rather low only a small part (8%) is used in the for industrial use (from 4.2 to 6.0 Mm3/ consumption of fresh water, thanks upstream sector. year for the next 4 years), thanks to the to the use of sea water (over 90%) As part of the circular economy, groundwater treatment plants (TAF), mainly for thermal cooling. Fresh Eni invests in further improving water while in the petrochemical sector, water is used (approximately 119 treatment systems, aimed at enabling which is responsible for over 60% million m3, -7.9% vs 2016) essentially industrial re-use of poor quality water13. of Eni’s fresh water withdrawals, in the downstream production and In the downstream section, consistent the recycling/reuse rate of fresh water the production of electricity and volumes of water are made available reached 90% in 2017.

WATER WITHDRAWALS ONLY 8% OF THE TOTAL FRESH (million m3) WATER WITHDRAWALS REFERS TO THE UPSTREAM SECTOR: EVEN THOUGH MORE THAN 50% 2015 1,63413157 OF THESE WITHDRAWALS ARE LOCATED IN WATER STRESSED 2016 1,71012129 COUNTRIES, 2017 1,65016119 ONLY 5% Sea water Brackish water from subsoil or surface Fresh water OF THEM OCCURRED IN THESE AREAS

WATER STRESSED AREAS Eni performs an annual mapping and stressed areas are concentrated in Enterprises for Water and Climate monitoring of water risks and drought the upstream sector in which specific Change, promoted by the Ministry scenarios to define long-term actions, water management plans are used to for the Environment, with the aim of also to prevent and mitigate the reduce consumption. developing strategic lines to manage effects of climate change. To support its commitment, in 2017, water resources and to promote Nearly all the withdrawals from water Eni joined the Alliance of Italian climate change adaptation.

OPTIMIZING THE USE OF FRESH WATER BHIT AND BADHRA, PAKISTAN; 2015-2017

PAKISTAN

PROJECT OBJECTIVE practices, as well as the need to To highlight improvement margins in increase awareness on the importance the fresh water management in a water of water resources. stressed area and to implement an action plan. MAIN IMPROVEMENT ACTIONS IMPLEMENTED importance of water management 2015 - ANALYSIS OF FRESH WATER • Works on the water distribution in the daily tasks, among employees CONSUMPTION in gas fields, by civil and network for civil and industrial and local communities. industrial usage and by local communities usage. from 7 wells, some of which suffering from • Reuse of water from the water water stress. The investigation highlighted 40% DECREASE treatment plants for irrigation. IN FRESH WATER areas for improvement in managing water • Plant optimization. WITHDRAWALS both in infrastructures and in management • Awareness raising actions on the IN 2016-2017

13) Such as industrial or civil drainage water, rainwater or contaminated groundwater. ENI FOR 2017 | OPERATING MODEL 27

| Oil spill management

The number of oil spills fell Centre occurred at the beginning of 2014 (peak year). Prevention activities significantly in 2017, both in terms February. At the end of 2017 more continued in 2017 with increasingly of operational spills14 and spills from than 2,400 barrels of oil had been well-integrated actions in all areas: sabotage. However, the volume of recovered on the site, almost the total from research to the administrative operational spills (3,228 barrels) has volume spilled. Acts of sabotage only level, from the technical areas of increased since 2016 due to the leak occurred in Nigeria, where the volume prevention to the increase of controls in a storage tank in the Val d’Agri Oil spilled has decreased by 51% since and direct interventions on assets.

OIL SPILLS

EVENTS VOLUMES OF OIL SPILLS OVER (number) bbl 25.7€ MILLION 2015 83167 2015 1,63414,847 INVESTED IN 2017 IN OIL SPILL PREVENTION 2016 85158 2016 1,2314,682 -35% 2017 55102 2017 3,2283,236 NUMBER OF OPERATIONAL OIL SPILLS AND FROM SABOTAGE VS 2016

Operational From sabotage

OIL SPILLS FROM SABOTAGE IN NIGERIA

2013 oil thefts 2017 oil thefts 2013 other sabotage BRASS TERMINAL 2017 other sabotage BRASS TERMINAL

CONTEXT RESPONSES ADOPTED OIL SPILLS FROM SABOTAGE In Nigeria, oil spills from sabotage are Eni has adopted the best available as common as they are devastating for technologies, in accordance with national 2014 6,610 284 the ecosystem and the socio-economic laws and international standards. In particular, 2015 10,530 158 context of the Country. Similarly to other innovative techniques were introduced to industry operators, Eni, from 2007 to 2014, improve the early identification of losses 2016 3,953 143 recorded a significant increase of spills along the pipelines (e.g. use of optical fibers) into the environment, safety problems and to discourage the activity of oil theft 2017 3,236 102 and damages to assets. (e.g. use of chemicals / mechanical barriers) Volume of oil spills from sabotage Number of sabotage events

OIL SPILLS FROM SABOTAGE ARE THE CAUSE OF AROUND 90% OF THE SPILLS RECORDED IN RECENT YEARS

14) Oil leaks associated with asset integrity (e.g. corrosion, valve leaks). 28 ENI FOR 2017 | OPERATING MODEL

- 65% OIL SPILLS EVENTS VS 2014

- 51% VOLUMES OF OIL SPILLS VS 2014

CAMPAIGN LAUNCHED BY ENI TO RAISE AWARENESS ABOUT THE CONSEQUENCES OF HYDROCARBON SPILLS.

ACTIONS TO RAISE AWARENESS These activities, integrated with the multiple • Pipeline Monitoring System (e-vpms) IN LOCAL COMMUNITIES interventions and commitments of all the extended to 35 km of pipelines. Eni has pursued activities to raise awareness stakeholders to combat oil spills sabotages, • Installation of mechanical/cage in local communities about the consequences have helped to significantly reduce the protections at wells and anti-theft valves. of hydrocarbon spills for the environment number of hydrocarbon thefts. • Launch of the pilot campaign to raise and for the socio-economic context of the awareness in 10 villages in the Country. Several activities have also been 2017 MAIN RESULTS Swamp Area. promoted to improve the quality of life of • -65% events of oil spills and -51% local communities and to avoid sabotage volumes of oil spills vs 2014. NEXT STEPS actions and oil thefts, such as: • -91% thefts of hydrocarbons vs 2013 in • Constant focus in order to guarantee • implementation and development of the Swamp Area15 (in 2013 production the integrity of industrial assets and to agricultural, livestock, fishing and trade was interrupted to protect the safety of prevent operational spills. activities (GRP 2.0 see the Cooperation people and the environment). • Continuous improvement of pipeline Model's chapter); • No pending clean-up activities. monitoring and surveillance activities. • projects on access to energy, education • +50% direct surveillance, also thanks to • Scale up of the campaign to raise and drinking water; the support of communities. awareness about the environment and • reforestation project for mangrove forests • +46% vs 2016 helicopters used for the of the socio-economic development in the areas most affected. assets' surveillance. projects.

˛ More details on the NIGERIAN AGIP OIL COMPANY LIMITED (NAOC) website

| Biodiversity

Eni operates in multiple environmental identified, among the international of local communities, are identified contexts worldwide, characterized and national concessions exploited and managed correctly. Eni evaluates by diverse ecological sensitivity by Eni, those which overlap with the risks in terms of complexity of and different regulatory systems. protected areas17 and/or priority sites each project, and the value of the Management of BES (Biodiversity for the conservation of biodiversity18. natural environment and local social and Ecosystem Services) issues is Eni’s approach to the management context. By applying the Mitigation a key component of the integrated of BES ensures that the interrelations Hierarchy19, Eni prioritizes preventive Health, Safety and Environmental between environmental aspects like mitigation measures, monitoring management system as well as of BES, climate change, management their effectiveness and adapting its Eni’s operating practices. In 2017, of water resources and social issues, management approach according to Eni updated its BES16 Policy and such as the sustainable development the results observed.

15) Swamp area located at the end of the Niger Delta. 16) Biodiversity and Ecosystem Services. For more details, see the Policy published on eni.com. 17) World Database of Protected Areas, February 2016. 18) Key Biodiversity Areas: M'Boundi (Congo); Villano BLK10 (Ecuador); Ashrafi Development area, Belayim Land (Sinai) DL, Ekma (Sinai) DL, Feiran (Sinai) DL, Ras Gharra (Sinai) DL (Egypt); Sanga-Sanga (Indonesia); Zubair (Iraq); OML 60, 61 and 63 (Nigeria); Concessions in DICS, DIME and EniMed (Italy); Bhit, Badhra and Kadanwari (Pakistan); Block 110/14c Lennox Field, Block 110/15a all, Block 48/30a all, Block 52/4a all, Block 52/5a all (England); Nikaitchuq (United States) - 2017 elaboration of 2016 data. 19) The sequence of actions to prevent and avoid impacts and, where this is not possible, reduce any impact to a minimum, restore and, where significant residual impacts remain, compensate the risks and impacts related to biodiversity on communities and on the environment. ENI FOR 2017 | OPERATING MODEL 29

AN EXAMPLE OF BIODIVERSITY MANAGEMENT OPTIMIZATION M'BOUNDI, CONGO; 2016-2017

CONGO

In line with its own policies, the conservation of biodiversity, ecosystems and natural resources is one of Eni’s main action principles.

AREA entrasted to the international NGO Wildlife Since 2007, Eni operates the M’Boundi oil Conservation Society (WCS), which, between Eni are a first solution, such as: field and its satellites Zingali, Kouakouala 2016 and 2017, carried out field monitoring • controlling roads access; and Loufika, located approximately and confirmed the presence of iconic and • prohibition for employees and 35 km North-East of Pointe-Noire, at the important species for conservation, such contractors to transport and consume edge of the tropical rainforest. as gorillas and chimpanzees, around the game meat; The site is considered priority for Eni Loufika platform, where the forest is still • adoption of health measures to stop the due to the presence, nearby, of protected little disturbed by human activities. This transmission of diseases and important areas for biodiversity at presence suggests that production activities to the primates; international level and due to its operational are compatible with the persistence of these • raising awareness among workers and complexity. species, which are however threatened in local communities on the importance of their habitat by unregulated use of natural the area’s biodiversity. BIODIVERSITY ACTION PLAN (BAP) resources, by poaching and deforestation. In The success in defining and implementing Eni, in conjunction with the NGO Flora and fact roads originally opened to allow access long-term mitigation measures in Fauna International (FFI), has implemented to the production platform are now used by the Loufika area will depend on the a Biodiversity and Ecosystems Services local communities, and at the same time involvement of all territory users, on the (BES) assessment which has led to facilitate access by poachers and charcoal commitment of local Authorities, and the definition of a BAP to manage the producers to forest resources. will have to be driven mainly by the sensitivities identified by applying development of alternatives for economic the company's best practices. PRIORITY ACTIONS growth based on the sustainable use of The BAP implementation has been Some activities already implemented by natural resources.

PRODUCTION IN THE BARENTS SEA

Eni produces hydrocarbons in the production. The specific environmental which is made possible due to cutting- Barents Sea, where, in 2016, off the coast and climatic features of the area entail edge technologies. In this context, of Norway, the Goliat20 reservoir started the need for a sustainable approach Eni’s approach involves:

Offshore drilling operations The use of the best drilling Local native populations are Activities are carried out only in in ice-free areas only, which technologies, reducing the involved, they are informed and periods that have a minimum are considered workable areas diameter of wells, managing their activities are protected. impact on the surrounding where the operational risk is pressure, blow-out preventer Their skills in managing habitat, with the application minimum and manageable and robotic systems to prevent emergencies are enhanced. of specific biodiversity with the know-how and and contain any oil spills. conservation models for the best technologies currently local realities and pioneering available. oil spill prevention plans.

20) More details on eniday. 30 ENI FOR 2017 | OPERATING MODEL

RESEARCH AND DEVELOPMENT

Research and Development (R&D) is supporting the Green Refinery, sulphide into products with a key element for Eni’s transformation innovation in the valorisation added value. into an integrated energy company of biomass, remediations and Moreover, to enhance internal skills, in a decarbonization context. environmental protection, and Eni is committed to spreading In addition to strengthening the core supporting the transition stage knowledge across all the functions business through the development towards a gradual decarbonization21 and also through the Knowledge of technologies able to reduce of the energy mix. This is possible Management System (#KMS), which exploration risks and maximize through the promotion of the use of in 2017 recorded another increase in operational efficiency, R&D deals gas and also through new business the number of Eni's people actively with the development of new opportunities such as the conversion involved, confirming the importance solutions in the renewables sector, of carbon dioxide and hydrogen of a sharing culture.

R&D EXPENDITURES 2017 (€ million)

PATH TO DECARBONIZATION 72 € MILLION

70.5 26.4 15.6 25.2 8.3 12.5 12.3 4.1 9.7 185 € MILLION ENERGY EFFICIENCY REDUCTION PROMOTION OF EMISSIONS OF BIOREFINING ENVIRONMENT SAFETY AND SAFETY GREEN CHEMISTRY OF NATURAL GAS NATURAL OF RENEWABLES RISK REDUCTION

AS EXPLORATION AS 6,631 27 11

OTHER ISSUES SUCH ISSUES OTHER EXISTING PATENTS FIRST PATENT FILING FIRST PATENT FILING APPLICATIONS IN 2017 ON RENEWABLE SOURCES

| Tangible value generated by R&D

Eni has been committed to In 2017, the estimated tangible value application of innovative technologies identifying the value generated by generated was €914 million. The for the discovery and development applying innovative technologies 25% reduction compared to 2016 is of the super-giant Zohr gas field in developed in-house and with mainly attributable to the presence, Egypt. The main technologies that third parties. in 2016, of benefits arising from the contributed to the 2017 result were:

The application of the The extension to other The application of The use of proprietary The application of proprietary drilling wells of the use of proprietary technology software for processing experimental and technology e-cd™ in emerging technologies to monitor pipelines seismic signals which innovative fluid the exploration wells able to reduce oil e-vmps™ with a guarantees results at characterisation and in the development well abandonment significant reduction in industry excellence level procedures which have of Egyptian offshore estimations for activities thefts and therefore in and significant cost brought significant which have significantly in Italy and Angola. the recovery costs and savings in licences and savings in offshore reduced drilling times. reclamation. code maintenance. production in Angola.

21) For more details, see Eni for 2017, Path to decarbonization, Research and development for energy transition, pag. 28.

!"#$%#&%'()'("$*#+%,)--*-)%,"' ' ENI FOR 2017 | OPERATING MODEL 31

HUMAN RIGHTS

“RESPECT FOR HUMAN RIGHTS IS A CRUCIAL TOPIC, A PRIORITY IN OUR WAY OF DOING BUSINESS AND IT RELATES TO THE MANAGEMENT OF MANY COMPANY ACTIVITIES.” (CLAUDIO DESCALZI, CEO)

Eni undertakes to ensure respect of of the same year. As confirmation INTERFUNCTIONAL WORKING GROUP ON “HUMAN RIGHTS internationally recognized human of this commitment, in March 2017, AND BUSINESS” SUPPORTED BY THE DANISH INSTITUTE rights as part of its activities and Eni started an inter-functional FOR HUMAN RIGHTS to promote its respect as part of working group on “Human Rights THE HUMAN RIGHTS' activities contracted out to, or and Business” to better monitor and SECTION ON ENI.COM WAS UPDATED IN LINE WITH conducted with partners, in line manage the risk of any violations THE UNGP REPORTING with the requirements of the UN and to promote a continuous FRAMEWORK (www.ungpreporting.org) Guiding Principles for Businesses improvement of its performance, and Human Rights (UNGP) of 2011, in line with the main international also included in the review of the standards and best practices OECD’s Guidelines for multinationals regarding human rights and business.

| Eni training activities on human rights

Following the awareness campaign These courses, developed with the ABOUT started in 2016, in 2017 Eni prepared support of the Danish Institute for training modules for the most relevant Human Rights, are aimed at creating 24,000 functions on the management a language, a common and shared PEOPLE TRAINED ON HUMAN of human rights such as Human culture about human rights within the RIGHTS THROUGH Resources, Community Relations and company and improve understanding E-LEARNING IN 2016-2017 Security (whose training module has of the possible impacts of business on already been delivered). human rights. 32 ENI FOR 2017 | OPERATING MODEL

The most relevant aspects related operating context, and are defined should be concentrated, also in to human rights and business are as those with a higher potential risk terms of communication with strictly related to the sector and the and on which the greatest efforts stakeholders.

SALIENT ISSUES

HUMAN RIGHTS HUMAN RIGHTS HUMAN RIGHTS RESPECT FOR HUMAN IN THE WORKPLACE AND SECURITY IN THE SUPPLY CHAIN RIGHTS IN (SEE SUPPLIERS COMMUNITIES MANAGEMENT CHAPTER) (SEE COOPERATION MODEL CHAPTER)

| Human rights in the workplace: industrial relations

Respecting the rights of the people lasting relationships. In line with this Responsibility in the context of the working in Eni and for Eni is fundamental commitment, in 2017 Eni held the first Global Framework Agreement22 signed for building mutually satisfactory and annual meeting on Corporate Social with the trade unions.

FIRST ANNUAL MEETING WITH TRADE UNIONS, AS PART OF THE GLOBAL FRAMEWORK AGREEMENT SAN DONATO MILANESE, ITALY; DECEMBER 2017

OBJECTIVE PARTICIPANTS NEXT STEPS During the meeting, Eni’s 2017-2020 Eni representatives, the international In 2018, a training programme on the Strategic Plan was presented, along trade union federation IndustriALL Global Global Framework Agreement on with a focus on employment, the main Union, the main Italian trade unions, the International Industrial Relations and HSE performance indicators and Eni’s members of the Select Committee of the Corporate Social Responsibility will be sustainability approach. The meeting was European Works Council and a delegation delivered and will involve all Eni also an opportunity for discussion and of workers’ representatives from Eni's employees worldwide. examination of the various social and trade businesses in Ghana, Mozambique union organisations active in the home and Tunisia. Countries of the workers’ representatives.

˛ More details on eni.com

22) Global Framework Agreement on International Industrial Relations and Corporate Social Responsibility, signed by Eni in 2016 with IndustriALL Global Union and with the Italian trade union organizations. ENI FOR 2017 | OPERATING MODEL 33

| Human rights and security

Eni manages its security operations in line with the indications of the Eni has designed a consistent set of in accordance with the international Voluntary Principles on Security & rules, processes and instruments to principles on human rights and also Human Rights. ensure that:

Suppliers of security forces are The contractual terms include Security operators and The events considered most at selected, among other things, provisions on respect for supervisors receive appropriate risk are managed in compliance according to criteria related to human rights. training on respect for human with international standards. human rights. rights.

Eni also delivers training initiatives because of their involvement from in Pakistan and Iraq (2011), in the for public and private security forces the very early stages of the planning, Republic of Congo and Angola and refresher courses for Eni security valuing their input and support. From (2012), in Indonesia and Algeria personnel. 2009 to date, training sessions have (2013), in Mozambique (2014), When planning these initiatives, the been carried out in Eni offices in in Kenya (2015), in Venezuela public security forces are considered Rome and San Donato Milanese and Ecuador (2016) and in partners rather than participants (2009), in Egypt and Nigeria (2010), Nigeria (2017).

A WORKSHOP ON SECURITY AND HUMAN RIGHTS ABUJA AND PORT HARCOURT, NIGERIA; 20 NOVEMBER 2017 FOR THE NIGERIAN SECURITY FORCES

NIGERIA

PROJECT OBJECTIVE INITIATIVE PARTICIPANTS Raising awareness among the Nigerian Eni has organized a three-day seminar • Over 300 members of the Security Forces. security forces on the promotion and to support the spread of the human • The Lieutenant General Tukur Yusuf protection of human rights to align the rules rights culture among the Nigerian public Buratai, Chief of Army Staff in Nigeria, of engagement with international standards and private security forces and to train together with the highest ranking members and best practices. them about respecting human rights and of the Nigerian security forces. avoiding excessive use of force. • The Director of the National Commission RECOGNITION The courses were held by an external for Human Rights with other relevant The Eni training programme for security trainer and organized in accordance with members of the organization. and human rights has been recognized the Voluntary Principles on Security and • The NAOC/AERN/NAE Managing Director as a best practice by the “Responsible Human Rights (VPSHR). and NAOC General Manager District23. Business Advancing Peace”, the joint publication between the UN’s Global ENI MANAGES SECURITY ACTIVITIES IN FULL COMPLIANCE WITH Compact and the Principles for HUMAN RIGHTS, WITH PARTICULAR REFERENCE TO ASPECTS SUCH Responsible Investment (PRI). AS THE PROTECTION OF PHISICAL INTEGRITY, THE RELATIONS WITH LOCAL COMMUNITIES AND THE RESPECT OF PRINCIPLES SUCH AS ˛ More details on eni.com THE RIGHT TO LIFE, TO HEALTH AND FREEDOM OF EXPRESSION

23) Nigerian Agip Oil Company (NAOC)/Agip Energy and Natural Resources (AENR)/Nigerian Agip Exploration (NAE). 3344 EENIN I FORF OR 2017 20 1 7 | |OPERATING MODEL L O OMODELP E R A TIV O

| LaSupply gestione chain dei management Fornitori

Eni, isconsap awareev ofole the del important ruolo rilev ante nelEni prequiresrocesso thatdi p resuppliersvenzione make dei ri aschi. cantitrustontrasto laws alla candorruzione fair competition., osservanza srolevolt playedo da par byte dellaits supply propria chain catena in di Nell’ambiformal commitmentto del processo to respecting di diEni leggi performs e regolamenti selection, inandtegrità etica e frealizingornitura nellaits commitments realizzazione with dei p ropri pprinciplesrocurement such, Eni as richiede the protection ai fornit ori un cmanagementorrettezza nelle processes relazioni aimed, rispet atto delle impegniregard to in social materia responsibility di responsabilità fandormale promotion impegno of al human rispett orights, di principi noanalyzingrme anti thetrust reliability e di con cofo rritsen suppliers,za leale. socialeand as , suchha messo it has in implemented atto un modello a qualihigh ,standards tutela e p rofom safetyozione at dei work, diritti assessing their technical capacity, dimanagement gestione vol tmodelo a promu to promoteovere pr essoits umanienvironmental, standard protection, elevati di sicurezza monitoring their performance and ivalues fornitori with i p rsuppliersopri valori and e a tocoin involvevolgerli sulanti-corruption, lavoro, salvagua compliancerdia dell’ambien with lawste, integrity, verifying that the suitability them in the risk prevention process. and regulations, ethical integrity and and social requirements necessary for As part of the procurement process, correctness in relations, respect for collaboration with Eni are maintained.

SUPPLIER SELECTION AND MANAGEMENT PROCESS

QUALIFICATION HUMAN RIGHTS ASSESSMENT Assessment of technical capacity, Suppliers’ declaration compliance with HSEQ Gap analysis on compliance of their commitment to respect requirements, sustainability and with the main international Eni principles and signing organizational aspects for suppliers, standards on human rights of contractual clauses defining action plans aimed and workers’ rights containing aspects at filling any gaps on potentially on social responsibility and continuous critical suppliers improvement

DUE DILIGENCE FEEDBACK PRINCIPLES PROTECTED Analysis of the ethical/social Monitoring supplier performance integrity and counterparty risk and maintenance of their Compliance with the laws Protection of human rights (reliability in terms of operations, qualification suitability as well as Anti-corruption business, economics/finance, of the necessary social Health and Safety legal and compliance characteristics to collaborate of potential and Safeguarding the with Eni environment actual suppliers) Business ethics

DURING 2017, MORE THAN 5,000 SUPPLIERS WERE SUBJECT TO CHECK AND ASSESSMENT WITH REFERENCE TO SUSTAINABILITY ASPECTS: FOR 24% OF THESE SUPPLIERS POTENTIAL CRITICALITIES AND/OR POSSIBLE AREAS OF IMPROVEMENT WERE IDENTIFIED; FOR 5% OF SUPPLIERS CHECKED, THE CRITICALITIES REVEALED LED TO THE PRO-TEMPORE SUSPENSION OF RELATIONS WITH ENI

TThisale modellomanagement di gestione model ga enablesrantisce Eni deido notrapporti meet qualo the minimumra i fornitori acceptable non Inolnumeroustre, Eni èengagement impegnata in activities numerose adto constantlyEni un moni monitortoraggio its costan supplierste sui soddisﬁnostandards laidgli standa downr dby minimi Eni. di inizitiwith suppliersve di engagement such as: con i fornitori pandropri to f osuspendrnitori, ﬁno relations alla sospensione if suppliers aFurthermore,ccettabilità stabiliti Eni is involved da Eni. in quali ad esempio:

InLocalcon tmeetingsri sul territ orwithio rlocalivolti aenterprises,lle imprese InIndividualcontri ind meetingsividuali co withn sel eselectzionat suppliersi EAnnualventi a eventsnnuali withcon lathe pa participationrtecipazione and lorganizedocali, orga niwithzzat tradei in c oassociationsllaborazione and/or con fasor niparttori of ne thell’amb assessmentsito degli assessm on humanent su i eawarding premiaz iofon supplierse di forni twhoori c hehave ha achievednno alocalssoc Authorities,iazioni di ca duringtegoria which e/o au Eni’storità values locali, dirights,ritti um to araiseni,pe rand sen createsibilizz aawarenessre e creare on rtheeal ibestzzat osafety nell’an performanceno le miglio riand pe rwhoform ance duandra principlesnte i quali sorelatedno ill utost rsustainabilityati i valori e i ctheonsap issueev olofe ztheza Promotionsul tema de andlla P rProtectionomozione dhavei sicu distinguishedrezza e che s themselvesi sono distinti for a theirnche per parerin illustrated.cipi Eni nell’ambito della sostenibilità eof T uHumantela de i Rights.Diritti Umani icommitmentl commitmen (Safetyt (Safety & & Environment Environment Day). Day) ENI FOR 2017 | OPERATING MODEL 35

HUMAN RIGHTS ASSESSMENT IN THE SUPPLY CHAIN

STIMULATE A DEVELOPMENT-ORIENTED APPROACH AND CONTINUOUS IMPROVEMENT ON HUMAN RIGHTS' RESPECT

˛ BACKGROUND • Impossibility for women who fall pregnant during the trial Over time Eni has boosted its commitment to encourage period to take advantage of maternity leave. its suppliers to develop skills on sustainability issues and to • No clear indication of the number of annual holidays due. promote the main ILO standards. The results of the assessment have been used to: A model has been implemented to identify the areas most at • define a monitoring plan on a group of employees to check risk, for which contractual leverage is used, and focus its efforts. that information on salary calculation and the related payment is traced precisely and accurately; ˛ AREA • define an improvement plan to fill the gaps found in the Identification of an African Country, considered at high risk employment contracts applied, particularly concerning in terms of human rights violations and selection of a local employees’ maternity leave and annual holidays. supplier belonging to a sector that has been identified as critical for workers’ rights. ˛ FOLLOW-UP The recommendations have been adopted and implemented by ˛ PROCESS the supplier within the agreed time. The assessment is carried out with the aim of understanding the supplier’s strengths and weaknesses on issues of social ˛ LESSONS LEARNED responsibility, particularly on workers’ rights, and increasing Key elements for success: involving the parties concerned awareness of this issue through: more effectively in the process, demonstrating adequate • supplier engagement; cultural sensitivity in conducting interviews with workers and • on site visit; presenting results as an opportunity for development and • check of social policies, procedures, employment continuous improvement. contracts applied; Challenges: putting interviewed workers at their ease, avoiding • sample checks of sensitive documents; them feeling intimidated and ensuring that there are no • individual and/or group interviews on a representative repercussions when delicate information is revealed, group of workers; therefore ensuring that the interviews correctly reflect • sharing the results and definition of the action plan the actual working situation. required in order to fill any gaps found. 172 HUMAN RIGHTS ASSESSMENTS CARRIED ˛ CRITICALITIES FOUND AND ACTIONS REQUIRED OUT TO DATE SINCE 2008 ON ENI SUPPLIERS • Lack of transparency in employment contracts with regard AT 14 SITES AND 41 PEOPLE TRAINED to remuneration conditions. AS QUALIFIED SA8000 AUDITORS 36 ENI FOR 2017 | OPERATING MODEL

TRANSPARENCY AND ANTI-CORRUPTION

Improving governance and communities and encouraging To achieve these objectives, Eni transparency in the extraction sector governaments to publish a more adheres to international initiatives and is crucial in order to foster a proper use exhaustive disclosure on payments, publishes a more complete disclosure of resources and prevent corruption, investments and revenues generated on payments, investments and revenues increasing awareness among local by Oil & Gas activities. generated by the Oil & Gas activities.

ENI AND EITI Since 2005, Eni actively takes part in the Extractive Industries Transparency Initiative (EITI). This global initiative promotes responsible and transparent use of the financial resources generated in the extractive sector and prevention of corruption. Eni follows EITI's activities at international level (as an observer in the Board meetings) and at local level (through local trade associations). TRANSPARENCY In line with the EITI standard, since 2015 (2014 data) Eni has provided a voluntary disclosure on payments OF PAYMENTS made to Governments and, since 2017 (2016 data), has published its “Report on payments to Governments” TO GOVERNMENTS in compliance with the European Directive 2013/34 EU. ENI’S TAX Eni provides public access to its tax strategy, in order: i) to calculate the taxes in the different systems where STRATEGY Eni operates in a correct way; ii) to mitigate the risks of legal and economic double taxation on profits; iii) to prevent possible disputes with the tax Authorities by activating the available instruments. ENI’S INTEREST Eni believes that carrying out interests’ representation activities with various institutions is both a duty REPRESENTATION and a need, not only to protect the company’s interests, but also to provide the necessary information to ACTIVITIES comprehensively assess the impacts. This is why Eni cultivates transparent dialogue with the Institutions and organized bodies of civil society in all the Countries in which operates. In this regard, in 2017 Eni actively participated in the National Energy Strategy consultation, promoted by the Ministers of Economic Development and of the Environment and Protection of Land and Sea, providing opinions and proposals to the institutional bodies which are working on defining the Country’s long-term energy strategy.

| Eni’s Anti-Corruption Compliance Program

The repudiation of all forms of ENI’S ANTI-CORRUPTION COMPLIANCE PROGRAM corruption has been one of the fundamental ethical principles of Eni’s Code of Practice since 1998 and this is why Eni has TOP LEVEL COMMITMENT a system of rules and controls aimed at preventing corruption Adoption of anti-corruption regulatory instruments for Eni Spa and its subsidiaries PRINCIPLES (Anti-Corruption Compliance Program).

INSTRUMENTS ENI SPA WAS THE FIRST ITALIAN COMPANY TO ACHIEVE ISO 37001:2016 “ANTIBRIBERY MANAGEMENT SYSTEMS” CERTIFICATION RULES DUE DILIGENCE AND COMMUNICATION TRAINING ACTIONS DISCIPLINARY REMEDIES CONTRACTUAL

ENI'S PEOPLE Function Anti-Corruption Compliance Anti-Corruption Focal Point ACTORS Compliance Business Support E N I F OR 2 0 1 7 | MOD E L L O O P E R A T I V O 37

ENI FOR 2017 | OPERATING MODEL 37

Aware that the first element for the knowledge of the prevention tools, through a periodic compulsory development of an effective strategy in 2009 Eni launched a capillary training programme which against corruption is an in-depth awareness and training activity, consists of:

E-LEARNING INTERACTIVE JOB SPECIFIC COURSES WORKSHOPS TRAININGS Online courses aimed at training the entire In class training events for staff at risk In class training events for professional company population. of corruption. areas at risk of corruption.

In class workshops are carried out in areas considered at high risk of corruption on the basis of the Corruption Perception Index published by annually Transparency International and taking into account Eni’s presence in the individual sites.

On-site anti-corruption workshop 2017 1,434 Number of course participants by Country Interactive workshops Job speciﬁc trainings PARTICIPANTS AT INTERACTIVE Algeria 46 WORKSHOPS, 44 OF WHICH 105 1,366 ON SITE Angola 59 63 1,539 Austria 52 PARTICIPANTS 16 AT JOB SPECIFIC Cyprus 23 TRAININGS, OF WHICH 141 1,354 ON SITE Congo 78 73 Indonesia 109 310 Italy 372 123 Kazakhstan 76 36 Mexico 21 185 Nigeria 326 19 Netherlands 26 32 Russia 34 44 Tunisia 32 173 United Kingdom 102 0 100 200 300 400

Countries in which Eni organized on-site anti-corruption workshops in 2017

Country in which Eni organizes workshops

Perceived Corruption according to the Perception Index 2017 by Transparency International 0 100 COOPERATION MODEL

MAIN RESULTS AND TARGETS

ACCESS TO ENERGY PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

DISTRIBUTION OF GAS • +17% vs 2016 of gas sold to local markets (56 billion m3). • Continue to increase the percentage of gas sold TO LOCAL MARKETS • Development of OTCP project in Ghana. to local markets. • Gurantee supply of gas to power up to 1 GW in Ghana, power generation, enough to convert to gas 50% of the electricity production in the Country.

IMPACT ASSESSMENTS PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

LOCAL CONTENT The assessment has been extended in Angola Extend the model to the Countries where Eni has greater VALORISATION and in central northern Italy. presence. ASSESSMENT OF PROJECT Collaboration with the Politecnico di Milano has begun Methodology development and start-up of two pilot tests IMPACTS/BENEFITS to develop a methodology. for access to energy projects in Congo and Nigeria. FOR THE COMMUNITIES SUSTAINABLE DEVELOPMENT Analysis carried out to prioritize the SDGs on which Eni Realization of a pilot test in a Country where Eni has GOALS (SDGS) can contribute the most. operational activities.

PUBLIC-PRIVATE PARTNERSHIPS PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

FAO - FOOD AND AGRICULTURE Collaboration agreement signed in Nigeria. Realize a project to increase access to water in ORGANIZATION OF THE North-East Nigeria. UNITED NATIONS CIHEAM-INTERNATIONAL Collaboration agreement signed. Realize an aquaculture project in Egypt. CENTER FOR ADVANCED MEDITERRANEAN AGRONOMIC STUDIES FACULTY OF AGRICULTURE Collaboration agreement signed. Develop agricultural-zootechnical projects in Congo OF UNIVERSITÀ DEGLI STUDI and Mozambique. DI MILANO Eni’s distinctive mark has always been its willingness to meet the development needs of the Countries of presence through concrete actions realized in collaboration with local Authorities and stakeholders in order to create long-term value. In particular, with its business, Eni aims to extend access to energy in an efficient and sustainable way also to reduce socio-economic gaps. Fighting energy poverty is the first step towards meeting the primary needs associated with education, health and economic development, areas in which Eni realizes specific initiatives. These initiatives are planned in accordance with the Country Development Plans, the UN 2030 Agenda and the National Determined Contributions (NDC - COP21), with the public/private partnerships perspective.

COMMUNITY INVESTMENT PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

COMMUNITY INVESTMENT €70.7 million(a). €400 million of which €99 million in the first year of the plan.

LOCAL DEVELOPMENT PROJECTS PROGRESS IN 2017 VS 2016 OBJECTIVES FOR 2018-2021

ACCESS TO Projects in 7 villages in the Niger Delta (Nigeria) through Approximately €4 million of investments expected. OFF-GRID ENERGY the installation of 2,700 kW of capacity. ECONOMIC Launch of the CATREP (Center d'Appui Technique et de Approximately €150 million of investments expected. DIVERSIFICATION(b) Ressources Professionnelles) to provide agro-technical services to the 25 villages involved in the HINDA project (Congo). EDUCATION(c) Around 5,000 students in 11 schools in Congo involved Approximately €110 million of investments expected. in the HINDA project and expansion of 7 schools in the Niger Delta (Nigeria). ACCESS TO WATER 40,000 people benefitted from the maintenance of 23 Approximately €48 million of investments expected. AND SANITATION wells in Congo, the realization of 6 new wells in Nigeria and one well with a desalination plant in Kenya serving approximately 1,500 people. HEALTH 900,000 people involved in communities health initiatives Approximately €34 million of investments expected. in 10 Countries where Eni is present.

(a) Including amounts relating to resettlement and livelihood restoration. (b) Including infrastructures, agricultural and food security projects and projects supporting micro-entrepreneurship. (c) Including the construction of schools, projects for primary and secondary education, vocational training, teachers training and university scholarships. 40 ENI FOR 2017 | COOPERATION MODEL

SUSTAINABILITY IN THE BUSINESS VALUE CYCLE

A sustainable approach characterises applicable in all operating contexts. local context which ensures respect all Eni’s activities starting from In this sense, Eni is committed to for standards of excellence during all negotiation, passing through all better integrating this approach business phases, in accordance with the operational processes from at organizational level and in the the Country Development Plan, in line exploration to decommissioning. company regulatory system. with the UN 2030 Agenda and the For this approach to be effective This integration is necessary to define National Determined Contributions it needs to be systematic and a more structured action plan for the (NDC – COP21).

Integration of sustainability issues in business activities

Analysis of the environmental and socio-economic context and assessment of primary needs in line with international standards

Stakeholder register & management plan and grievance mechanism

Environmental and socio-economic impact analysis and management (including the potential impacts on human rights)

Deﬁnition of the local development plan

Valorisation of positive social effects and local content

Golden Rules for international negotiations

Development Decommissioning Exploration Operating Operating Operating Instructions Instructions Instructions

Pre-acquisition Acquisition Exploration Development Production Decommissioning

Beneﬁts arising from integration: long-term value creation

Engagement with governments and international organizations

Identiﬁcation of possible sustainability risks/opportunities for the project

Strengthen multi-stakeholder partnerships with governments, international organizations and civil societies

Support the Country’s development needs and align with international standards

Ensure the acquisition of/access to land and assets while observing the strictest international standards

Reduce operating costs/risks of blocking operations

Eni’s business projects envisage needs of communities in relation the basis of Eni’s presence in the preliminary analysis of the to the environmental and socio- local context. These tools ensure local socio-economic systems, economic impacts, including the the definition of Local Development also through a mapping of the potential impacts on human rights. Plans to support the Country’s needs, stakeholders and their requests to Furthermore an assessment of risks also thanks to the definition of Local fully understand the context and the and opportunities is performed on Content plans. ENI FOR 2017 | COOPERATION MODEL 41

Furthermore, Eni ensures that the processes, such as for example, during the negotiation phase, were sustainability issues are formalized in the exploration, development defined in 2017 with the aim to and included in the regulatory and decommissioning processes. include sustainability aspects in the instruments for the business The Golden Rules, to be applied oil contracts.

SUSTAINABILITY ASPECTS

GOLDEN RULES Eni has defined a new set of guidelines aimed at supporting the negotiations phase. FOR NEGOTIATIONS The objective is to create value in the short, medium and long-term, in the Countries where Eni is present, through the integration, in oil contracts, joint venture agreements and other contracts, of important sustainability issues such as governance, local development, access to energy, local content, sharing and transfer of knowledge and competences, environmental, social and health impact assessment, environmental protection and remediation and human rights. EXPLORATION Sustainability aspects within business activities and related regulatory instruments have OPERATING INSTRUCTION been introduced. The aim of these operating instructions is to describe the actions to be implemented during the exploration, development and decommissioning activities, to ensure that they are carried out: DEVELOPMENT • taking into account stakeholders needs and expectations; OPERATING INSTRUCTION • ensure that any negative impacts on the local context are minimized and any positive ones are maximized; DECOMMISSIONING • with the full consent of the local communities and the agreement of the involved OPERATING INSTRUCTION Authorities, while creating value for the hosting territory in full respect of the local culture and values.

THE INTEGRATION OF SUSTAINABILITY IN THE DIFFERENT ACTIVITIES’ PHASES ENABLES ENI TO MAXIMIZE THE BENEFITS FOR LOCAL DEVELOPMENT, TO REDUCE RISKS OF ALL KINDS AND TO SEIZE NEW BUSINESS OPPORTUNITIES

| ISO 26000 compliance

The assessment of risks and impacts which defines the continuous 2016, 14 local subsidiaries have been at local level takes place also through improvement of its management evaluated. Specific Action Plans were compliance check according to system and includes human rights developed, starting from 2017, to fill the UNI ISO 2600024 Guideline, among its subjects. In 2015 and the gaps identified.

MAIN STRENGTHS: MAIN AREAS FOR IMPROVEMENT IDENTIFIED:

˝ EMPLOYMENT RELATIONS ˝ DEFINITION OF POSITIONS AND WORKING CONDITIONS: DEDICATED TO THE MANAGEMENT EMPLOYMENT, DEVELOPMENT OF OF SOCIAL RESPONSIBILITY IN ALL HUMAN RESOURCES AND SOCIAL THE LOCAL SUBSIDIARIES DIALOGUE

˝ APPLICATION OF AN INTEGRATED ˝ SYSTEM FOR MONITORING HEALTH, SAFETY AND THE EFFECTIVENESS OF ENVIRONMENT MANAGEMENT SOCIAL INITIATIVES SYSTEM

˝ SUSTAINABILITY COMMUNICATION

˝ ATTENTION TO THE NEEDS AT LOCAL LEVEL OF LOCAL COMMUNITIES AND THEIR INVOLVEMENT

24) It defines the principles and priority issues to be followed in order to act in a socially responsible way. 42 ENI FOR 2017 | COOPERATION MODEL

ACCESS TO ENERGY: AN INTEGRAL PART OF THE BUSINESS MODEL

“WE ARE AN ENERGY COMPANY. WE ARE WORKING TO BUILD A FUTURE WHERE EVERYONE CAN ACCESS ENERGY RESOURCES EFFICIENTLY AND SUSTAINABLY."

ENI’S MISSION

The issue of access to energy has Energy is a central element for climate change, food production or always been one of Eni’s priority almost the major challenges and increasing income, access to energy commitments and this is clearly opportunities that the world is facing is essential25. reflected in Eni’s mission. today. Whether it is work, safety, Energy poverty26 has two faces:

1.1 BILLION PEOPLE 2.8 BILLION PEOPLE DO NOT HAVE ACCESS TO ELECTRICITY DO NOT HAVE ACCESS TO CLEAN COOKING

• 600 million people in Sub-Saharan Africa do not have • 850 million people in Sub-Saharan Africa. access to electricity. • 1.8 billion people in Asia • Average per capita consumption of 200 kWh in Sub-Saharan do not have the resources to keep their homes sufficiently warm or Africa, 5,900 kWh in Europe, 13,000 kWh in the USA. cook in a not harmful way for the health and the environment.

| Construction of infrastructure for the production and transport of gas

The strategy to reduce social and company’s credibility and opens new natural gas in 2017 (+17% vs 2016). economic gaps by developing energy business opportunities as well as In particular, in 10 Countries Eni sells sources is an integral part of the consolidates the link with Countries. its entire production to supply the business model. In this regard, Eni This has allowed Eni to reach new domestic market. invests in building infrastructures for local markets and guarantee Countries the production and transport of gas energy independence, which is for both export and local consumption necessary for economic growth. for electricity generation. This aims Overall, Eni supplies the domestic BILLION M3 at developing local markets, aware markets in 14 Countries thanks to a 56 OF GAS SOLD that growing together reinforces the supply of 56 billion cubic metres of TO LOCAL MARKETS

SALES OF GAS TO LOCAL MARKETS (billion m3/year)

25 2016 2017 82% % of gas production sold to local markets 20 100% 100% to local markets 15

10 100% 100% 5 100% 100% 100% 27% 100% 100% 100% 76% 100% 12% 0 ITALY LIBYA EGYPT CONGO TUNISIA NIGERIA ALGERIA CROATIA PAKISTAN AUSTRALIA INDONESIA VENEZUELA GREAT BRITAIN GREAT UNITED STATES

25) Sources: UNRIC, United Nations Regional Information Centre. 26) Sources: International Energy Agency, Energy Access Outlook 2017. ENI FOR 2017 | COOPERATION MODEL 43

| Construction of thermal power stations

In Africa, Eni invests in the To date, Eni has invested a total of IN THE SUB-SAHARAN REGION INSTALLED construction of thermal power approximately $2 billion in CAPACITY OF APPROX stations by using the associated Sub-Saharan Africa in the construction gas which was traditionally used and restoration of networks and power 1 GW FOR OVER 18 MILLION to be flared. The aim is to diversify plants in Nigeria (Kwale Okpai power PEOPLE the energy mix, which is currently plant with an installed power capacity composed of 50% biomass and 50% of 480 MW) and in Congo (CEC and coal, introducing a cleaner source CED power plants), with a significant such as natural gas. In this way Eni reduction of gas flaring in both has become the biggest producer Countries. This successful model will of electricity out of all the oil be soon replicated in other Countries More details on Eniday The Centrale Electrique du Congo: the story companies. where Eni is present.

THE INTEGRATED PROJECT THAT BRINGS ENERGY TO THE COUNTRY GHANA; SINCE 2015

GHANA

THE PROJECT ACCESS TO ENERGY Offshore Cape Three Points (OCTP) is an The project, supported by the World Bank, integrated deepwater project that includes will allow the supply of domestic gas two phases: to national power stations for at least Ghana’s national-gas resources is a high • development of oil fields; the oil 15 years, thereby satisfying the demand priority because it will improve access production was launched in May 2017; for energy in both urban and rural to energy in the country, increase revenue • development of gas fields (expected environments and in the areas where it from the sector – meaning subsidies can in 2018). is most needed. Long-term production be reduced, and create additional income The OCTP development project is a of non-associated gas will sustain the for the government. The OCTP project concrete example of Eni's dual flag growth of the domestic thermal energy means natural gas is available locally approach: 49% of contracts were sector by accelerating the industrial and affordably, ensuring a cleaner and awarded to local companies, about 2,300 development of Ghana. Developing more stable and secure energy supply. Ghanaians are currently employed in the various projects and operational activities A UNIQUE PROJECT TO DEVELOP NON-ASSOCIATED GAS and each year 1.3 million dollars are IN DEEPWATER ENTIRELY FOR THE DOMESTIC MARKET intended for scholarships and training. IN SUB-SAHARAN AFRICA

˛ More details on eni.com 44 ENI FOR 2017 | COOPERATION MODEL

AN EXAMPLE OF TEAMWORK: EXPLORATION ACTIVITIES IN MYANMAR

WE CONSIDER HUMAN RIGHTS FROM THE EARLIEST ASSESSMENT STAGES OF NEW PROJECTS TO AVOID HARMFUL CONDUCT AND TO HELP TO IMPROVE ACCESS TO FUNDAMENTAL RIGHTS

MYANMAR

˛ More details on eniday

˛ CONTEXT Myanmar - Onshore block RSF-5, subsistence for the local population Magway region. In this remote area, and life revolves around the seasons, characterised by extreme climatic crops, water supplies and the small conditions, land is the only way of economic activities developed.

˛ EXPLORATION ACTIVITIES Eni has been a protagonist in the new 2017 in the RFS-5 block, Eni completed course of the Burmese economy since exploration activities involving 3D 2014, when it acquired four oil licences onshore seismic surveying in an area (2 onshore and 2 offshore) and became of over 520 km2 that involves 16,800 a player in the energy sector. In 2016- properties.

˛ PROJECT OBJECTIVE Guiding the exploration activities, Eni with the support of the Danish all the stakeholders. Following the which have entailed the temporary Institute for Human Rights (DIHR). recommandations received from occupation of agricultural land, This analysis was completed DIHR, Eni implemented a series implementing the recommendations in July 2016 and published 27 in of mitigation actions that have that emerged from the human rights support of the commitment to characterized and influenced the impact assessment, conducted by transparency and collaboration with entire course of the project (1 year).

˛ POTENTIAL CRITICALITIES HIGHLIGHTED FROM THE IMPACT ANALYSIS CARRIED OUT BY THE DIHR: • The process for access to and • the need to guarantee the adequacy through Burmese subcontractors (93% temporary use of land, considering of working conditions to the local of the local workforce with an average the 16,800 properties there; workforce involved in the project presence of 550/600 workers on site).

27) Results on the website: https://www.eni.com/docs/it_IT/enipedia/presenza-internazionale/asia-e-oceania/myanmar/dihr-eni-myanmar-rsf-5-human-rights-report-final.pdf. ENI FOR 2017 | COOPERATION MODEL 45

˛ MANAGEMENT MEASURES ADOPTED BY ENI • Definition and implementation of a local communities to guarantee the but establishing a strong presence in procedure to manage the relationship proper management of the temporary terms of supervision with a team of 60 with the local communities involved land acquisition process and to share professionals on site. in the project, from the preliminary the formula adopted for payments • Signature of binding agreements with identification of the people affected and salaries, since no references are the seismic contractor and relative local by the project until payment of envisaged in local regulations. subcontractors, aimed at guaranteeing compensation. • Structuring, from the very beginning alignment of general working • Organization of several public of the activities, of a local grievance conditions to the provisions of the consultations with the involvement of mechanism, without delegating the Burmese labour law, to Eni standards Authorities, trade organizations and management of it to the contractor, and to the main international standards.

˛ FOLLOW-UP Once the project ended, at the beginning DIHR, the general consensus among • a large government delegation led by the of 2018: stakeholders was very positive, both for Minister of Energy and Electricity and • the Danish Institute for Human the work carried out and the thorough by the Chief Minister of Magway visited Rights returned to visit the area and and systematic approach adopted to the Eni Base Camp, defining the project assess the impact of operations in build a relationship of mutual trust with an unprecedented model in the Country the area by interviewing workers, the the communities with regard to human for the application of international HSE villages involved, NGOs and CBOs rights and the workforce; and sustainability standards. and local Authorities, carrying out 18 interviews with 150 people in Yangon AT THE END OF JANUARY 2018, ENI SUCCESSFULLY CONCLUDED and Magway. According to the ONE OF THE MOST EXTENSIVE LAND SURVEYS EVER ACQUIRED ON SITE 46 ENI FOR 2017 | COOPERATION MODEL

UNDERSTANDING THE RISKS TO PREVENT IMPACTS

Interview with Tulika Bansal, Senior Adviser

THE INTERVIEW Human Rights and Business, Danish Institute for Human Rights (DIHR)

In your opinion, what is the added value in relying on a third In 2017 Eni and DIHR decided to conduct a follow-up party, such as the Danish Institute for Human Rights, to carry assessment in 2018 to evaluate how Eni had implemented out a Human Rights Impact Assessment (HRIA)? the checklist and other controls, in particular regarding In accordance with the UN Guiding Principles on Business consultation and engagement, land management and and Human Rights, companies should assess and address compensation, access to grievance mechanisms and their potential and actual human rights impacts drawing contractor relations. During a one-week visit, DIHR spoke on independent human rights expertise. When Eni entered with all relevant stakeholders in Magway, in particular with Myanmar, Eni and DIHR decided to collaborate on a HRIA of community members whose land had been accessed, Eni Myanmar’s seismic survey in Magway region, in order to to hear first-hand how Eni had performed. understand its potential human rights risks and impacts. The benefit of conducting this HRIA is that DIHR understands Could you share some challenges and the most valuable the human rights and business context in Myanmar as one of lessons learned from this activity? the founders of the Myanmar Centre for Responsible Business. One of the challenges related to the assessment was peoples’ Also, working with DIHR in conducting this HRIA, perceptions of oil and gas projects in Myanmar and in Eni engaged with various stakeholders in Myanmar on particular in Magway. Due to negative past experiences, the issue of human rights very early on in the process, community members in Magway were worried about new before its activities started. This engagement with business companies coming in. Providing communities and CSOs with partners, Civil Society Organizations (CSOs) and community proper information beforehand, meaningfully engaging and members through an independent third party, helped to build consulting with them before and during the assessment and a sustainable relationship with them and demonstrate that establishing a well-functioning grievance mechanism where Eni had all intentions to do business right. affected persons could lodge grievances, proved successful methods to help taking away this worry. Which activities has the Danish Institute for Human Rights Also, in preparation for the seismic activities, it proved carried out with Eni in Myanmar? difficult to obtain consent from all community members In 2016 DIHR conducted a HRIA of Block RSF-5 in Magway to access their land for the seismic survey. Lack of region. In preparation for the HRIA, desktop research on the understanding and technical knowledge led to some human rights context and a mapping of relevant stakeholders villagers initially consenting to accessing their land, to engage with during the in-country assessment were but later changing their minds fearing that their land and carried out. DIHR collaborated with the Environmental, livelihoods would be affected. A key lesson learnt is that Social and Health Impact Assessment (ESHIA) team, alongside properly explaining the process, including technical aspects whom the HRIA was carried out, to align the fieldwork and what potential damages could look like is necessary process and avoid consulting the same stakeholders twice. for landowners and users to understand what the impacts During the 2-week field assessment, the team interviewed could be. One of the positive aspects of this exercise was Eni HQ staff and workers, its business partner MPRL, NGOs the successful implementation of the checklist that DIHR and CSOs, and community members. The purpose was to developed ahead of the seismic campaign. By doing this understand Eni Myanmar’s potential footprint in the area, in a timely manner, Eni was able to integrate the checklists and how its activities could have impacts on land, livelihoods, into its internal policies, procedures and practices, including safety and security and workers’ rights. Following the when identifying a contractor, before the project started and assessment, DIHR developed a human rights report with the thereby minimizing negative impacts. assessment findings and recommendations for Eni, including A discussion on the implementation of the checklist and a checklist of actions Eni and its seismic contractor should challenges was also carried out between Eni and DIHR, take to avoid or mitigate negative impacts in preparation for, allowing to provide feedback and to plan for the follow-up during and after its seismic campaign. assessment before the end of the project. ENI FOR 2017 | COOPERATION MODEL 47

LOCAL DEVELOPMENT PROJECTS

The cooperation model is based on the interacting on an continuous basis interventions to respond to the needs “dual flag” approach, which means that with local institutions and stakeholders of local communities. Eni cooperates with host Countries, in order to identify the necessary

PILLARS OF THE COOPERATION MODEL: PUBLIC-PRIVATE INSTRUMENTS COMMUNITY INVESTMENT PARTNERSHIP (PPP) AND METHODOLOGIES

Definition of interventions to support local Definition of Public-Private Partnerships Definition of instruments and methodologies development which are not only located with different kinds of organizations to that enable Eni to identify the needs of local in the areas of Eni's operations, but are pool together resources, not just economic populations, define targets and measure the designed with a broader scope and aligned resources but also in terms of ability, impacts of its initiatives. For example, to national development plans. know-how and experiences. In particular, the Local Content Project was launched Better living conditions in the Countries strategic partnerships have been formed to assess the effects of Eni's activities in where Eni operates can also contribute to with national and international organizations operational context. the creation of a dignified life and reduce and institutions and other local cooperation migrant flows. agencies/bodies, such as the collaboration with the International Finance Corporation (IFC), which allowed Eni to adopt procedures in line with the international best practices.

MAIN PARTNERSHIPS IN AFRICA

FAO NIGERIA UNIVERSITÀ DI BOLOGNACIHEAM(b) FOOD AND AGRICULTURE ORGANIZATION EGYPT OF THE UNITED NATIONS Water access project for the population Design and implementation of an affected by the humanitarian crisis in the aquaculture program in Port Said. North-East of the Country(a). E4IMPACT KENYA POLITECNICO DI MILANO FOUNDATION, SPINOFF OF ALTIS ALTA SCUOLA IMPRESA E SOCIETÀ CONGO AND NIGERIA OF UNIVERSITÀ CATTOLICA Eni Impact Tool: pilot project to measure Project to promote entrepreneurship the socio-economic impacts of energy in Kenya, in particular female and high-impact access programs. entrepreneurship, to stimulate the opening of new companies to the internationalization UNIVERSITÀ STATALE DI MILANO and to create employment opportunities for young people. CONGO UNHCR KENYA AGRARIAN FACULTY Technical support to the CATREP activities UNITED NATIONS HIGH COMMISSIONER (Centre d'Appui Technique et de Ressources FOR REFUGEES Professionnelles). Project for the electriﬁcation of schools in the Dadaab refugee camp through HALO TRUST ANGOLA the supply of renewable energy. NONGOVERNMENT BRITISH UNIVERSIDADE E. MONDLANE ORGANIZATION Collaboration for mine removal in the districts MOZAMBIQUE of Huíla and Namibe. Collaboration for the training of university professors and the launch of a specialized (a) In particular in the states of Adamawa, Bauchi, Borno, course in oil engineering. Gambe, Taraba and Yobe. UNIVERSITÀ STATALE DI MILANO MOZAMBIQUE AGRARIAN FACULTY Collaboration for the deﬁnition of a zootechnical program in the Cabo Delgado area.

(b) International Center for Advanced Mediterranean Agronomic Studies. 48 ENI FOR 2017 | COOPERATION MODEL

| Interventions supporting local development

In addition to industrial projects to communities in the Countries where sustainable development paths based develop natural gas, Eni promotes it operates. These initiatives are on local needs, in synergy with the a broad portfolio of initiatives for designed to create independent and business objectives.

COMMUNITY INVESTMENT 2017 € million BY SECTOR OF INTERVENTION COMMUNITY INVESTMENT (€ million) ACCESS TO ENERGY OFF GRID 1.1 76.5 70.7 EDUCATION AND TRAINING 17.4 64.2

WATER AND SANITATION 0.7

ECONOMIC DIVERSIFICATION 30.2

HEALTH 7.1

(a) OTHER ACTIVITIES 14.2 2015 2016 2017

TOTAL 70.7

(a) Other activities include: €3.6 million Life on land; €7.5 million Livelihood restoration & Resettlement; €3.1 million Stakeholder and sustainability management.

COMMUNITY INVESTMENT 2017 BY GEOGRAPHICAL AREA € million

Rest of Europe Asia

of which 1.4 resettlement 4.9 7.0 34.3 7.1

0.4 22.9 Italy of which resettlement 0.2

Americas Africa Australia and Oceania

In the following pages are described some examples of initiatives to support local communities in the Countries in which Eni operates. On the eni.com website it is possible to deepen both the case studies mentioned in Eni for and the other social projects that Eni carries out, by Country and by sector of intervention. ENI FOR 2017 | COOPERATION MODEL 49

| Economic diversification

Eni promotes actions to boost local activities such as agriculture, opportunities to be created for socio-economic development in micro-entrepreneurship and people and enterprises and an independent and sustainable construction of infrastructure. promote female and young people way using actions to develop These actions allow new job empowerment.

WE EAT WHAT WE GROW AND WE GROW WHAT WE EAT INDONESIA; 2016-2017

INDONESIA

Over 50 families have cultivated at home vegetables and fruits for their own domestic need.

CONTEXT agricultural skills while reducing their The conservation rate for mangrove trees In the 1950s, Handil Baru and Handil Baru dependency to the Oil & Gas industry; reached 70% when the plantation was Darat were areas with abundant plantations 2) Ensure environmental sustainability by managed by the local community (vs growing coffee, coconut, rice and other maximizing the use of uncultivated and 40% forecast by statistics). products; the local economy was based on non-productive lands abundant in the area; • In 2017, the Joglo Tani centre for agriculture. These nature’s gift was abruptly 3) Support local communities through the agricultural development was built in ceased to exist due to El Nino happened in construction of a Centre for the agriculture collaboration with the local community early 80s, forcing those farmers to take jobs development. and Eni. Local people donated their lands with Oil & Gas companies operated in the (2 hectares) to be used for this purpose. area. The land became sterile, the coffee NEXT STEPS • 51 families involved in the cultivation industry disappeared. The industrialization Strengthening the Centre in terms of of fruits and vegetables for their own of rubber plantations has exacerbated the production to make it a centre of excellence domestic needs, with the immediate situation, going from historical heterocultures with the involvement of other 100 families. benefit of saving up to 100-200 USD to becoming monoculture plantations. per month per family. RESULTS AND BENEFICIARIES • Provided support in acquiring knowledge PROJECT GOAL • Over 50,000 mangrove trees were and facilitating meetings between 1) Reduce poverty for locals by creating planted along the coast to protect the local communities and experts in the economic opportunities based on their community against continued sea erosion. agricultural sector.

˛ More details on eni.com 50 ENI FOR 2017 | COOPERATION MODEL

A PROTAGONIST’S

THE INTERVIEW STORY

Interview with Celestina Aaron, native of Rivers State, in Nigeria, as a testimony of the benefits of the Green River Project

"THE MOST IMPORTANT THING I WILL NOT FORGET, IS THEY ARE NOT ONLY TEACHING US, THEY ALSO EMPOWER US."

Return to agriculture: with advanced methodologies, production, home economics and value addition. I devoted focusing on communities and micro credit. time to perfect the skills acquired from these training and The Green River Project (GRP) was launched in 1987 and I have never regretted. I have also made use of the GRP’s is aimed at developing a sustainable agricultural and food micro credit system a couple of times which has boosted production system to promote the social and economic my agri-food enterprise. The income I have earned has well-being of the rural populations of the Niger Delta, financed other family projects, providing the food and where Eni operates. education my family needs, at home and abroad.

How has the Green River Project affected your life? Has the GRP affected other women in your community? I was first introduced to NAOC – GRP by my mother. The importance of GRP cannot be over emphasized. She was taught on different farming methods, food I decided to involve other women in my Community processing and marketing. On the demise of our father, to embrace GRP and change their life benefitting from my mother scaled up her farming using improved seedlings it. Today we have 32 Co-operative Societies that have and skills acquired from GRP to increase her yield. formed a Co-operative Union called Egbema Diamond The revenue generated from sales of farm products Farmers Union. Currently, I am the president of Nrizuruike sustained the family and provided our education. women co-operative, I cannot end this success story When I got married, my mother in law registered me as a without appreciating and commending the efforts member of the GRP farming group. I was trained in modern of the management, the programme managers manioc production techniques, off season vegetable and the entire Eni team.

Green River Project: Video made in collaboration with CNN International

http://advertisementfeature.cnn.com/2017/grp/ ENI FOR 2017 | COOPERATION MODEL 51

| Education and training

Eni’s commitment to education is education to the new generations. surrounding communities is essential accomplished through education This commitment includes the and achievable by raising awareness programs aimed at promoting and construction of schools, projects for on importance of education as a improving access to education, primary and secondary education, driver for a better future and for the in close collaboration with local vocational training, teachers training growth of an informed and inclusive communities and Authorities, and university scholarships. society. contributing to guaranteeing The involvement of families and the

A 360° APPROACH TO PROMOTE EDUCATION PAQUITEQUETE, MOZAMBIQUE; SINCE 2014

MOZAMBIQUE

In the Country, Eni has focused on education, in cooperation with the provincial Authority for education, the local council of Pemba and representatives from the community.

CONTEXT FOCUS ON “APRENDEMOS • the role of “facilitators”. Staff specialized28 The project takes place in the oldest part BRINCANDO” in the use of the new materials, managing of Pemba, a fishing area, which is also The project aims to provide children with classes (in the broadest sense) and the poorest and where school a teaching programme that encourages collaboration with the teacher. attendance is low. reflection on cultural and environmental In their first years at school, children do similarities between their local area and not speak Portuguese but instead speak PROJECT OBJECTIVE the world, stimulating curiosity, interest and their mother tongues. However, integration Supporting the quality of education, not imagination, and supporting their active happens immediately with the children, just through renovations of the school participation. The distinctive elements of who welcomed the presence of facilitators facilities but also with the development of this project have been: as as an element capable of increasing knowledge and skills, improving access to • teaching materials like magnetic interest and attention. Collaboration with schooling in the area. planispheres, magnetic maps and related the teachers took longer, but it turned kits, classifying the areas in environmental, out to be the cornerstone for motivating NEXT STEPS anthropic and cultural terms; the children. Due to the success achieved, not just in terms of participation, learning and BETWEEN 2016 AND 2017, OVER 900 PUPILS collaboration of the children, the teachers WERE INVOLVED WITH AN INCREASING PARTICIPATION and the whole community, the project will AND A REDUCTION OF THE DROP-OUT RATE be rolled out to the Wimbe Primary School in 2018.

More details on Enivideochannel ˛ More details on eni.com Sustainability projects in Mozambique: Powering Mozambique

28) The facilitators were chosen in conjunction with associations in Mozambique and trained on site, under the supervision of an international consultant and a local pedagogical coordinator. 52 ENI FOR 2017 | COOPERATION MODEL

ENI'S COMMUNITY INVESTMENT STRATEGY IN IRAQ

Eni, in line with the principles of its strategy, to be implemented through two 3. ENVIRONMENT/INFRASTRUCTURE mission and following the priorities types of interventions: (i) infrastructural for - In 2017 many initiatives have been and needs of the Country, has oriented 80 school buildings; (ii) pedagogical and developed in the Zubair district, from the planning of social projects vocational training. roads to drinking water systems and in three areas: 2. HEALTH - The health program includes sewage systems. Furthermore, a 1. EDUCATION - Eni supports projects interventions in the main structures of collaboration with the Government of to improve access to primary education the Governorate of Basra: the oncology Basra started to improve the quality of for all in the area of Zubair. With the pediatric hospital of Basra and the the Al-Buradieiah water treatment plant commitment of "educating the new educational hospital for adults, whose long- and to reclaim some polluted and/or generations to build the Country", term objective is the training of doctors and abandoned sites and transform them into Eni proposed a 2017-2022 education medical personnel in Iraq and in Italy. parks for the citizens.

IRAQ , A COMMITMENT FOR EDUCATION ZUBAIR, IRAQ; SINCE 2017

IRAQ

"Sport encourages individuals to face challenges, build interpersonal relationships and unite their efforts to achieve common goals.” Ban Ki-moon, Secretary General of the United Nations

CONTEXT RESULTS AND BENEFICIARIES “Sport & Education”: organization In the south of Iraq and in accordance • Life skill training through basketball: of a special edition of this campaign with the education strategy agreed this pilot project was launched at the at the Weedad school for young at top management level, colleagues Gennat infant school in Al-Burjazia, workers. are offering their time and means to Zubair. 40 female students from Year The school hosts around 90 students. implement individual initiatives to 5 (10-11 years old) were involved in A small football tournament was demonstrate that the commitment to a a programme that combines sport organized followed by an interactive Responsible and Sustainable Enterprise (basketball) and education. lesson on Energy and the Environment. goes beyond working hours. The project This programme allowed to talk about “Life Skills Training Through Basket-Girls' concepts like leadership, team work, NEXT STEPS Empowerment" is a confirmation of this. self esteem, etc. Over 50,000 students are expected to • Awareness Campaign on Energy & benefit from these training activities PROJECT OBJECTIVE Environment Special Edition: in the next 6 years. Using sport to replicate daily situations and to analyse feelings, relationships and COLLEAGUES OFFER THEIR TIME AND MEANS challenges that everyone must face in DEMONSTRATING THAT THE COMMITMENT TO order to promote female empowerment, A RESPONSIBLE AND SUSTAINABLE ENTERPRISE team work and self esteem. GOES BEYOND WORKING HOURS

˛ More details on eni.com ENI FOR 2017 | COOPERATION MODEL 53

| Water, sanitation and hygiene (WASH)

Access to water and basic water is a priority for Eni, as part hygiene and sanitation conditions sanitation is considered a priority of its local intervention strategy. include the building of wells, water for development and therefore Initiatives promoting access to purifying plants, water distribution promoting safe and reliable access to water resources and improve networks and sewers.

EVERY DROP COUNTS PROVINCE OF SINDH, PAKISTAN; SINCE 2013

PAKISTAN

Access to clean and safe drinking water is one of the essential requirements for development and for the well-being of communities.

CONTEXT coordinated in partnership with local • Construction of and installation, In the Nara desert, in particular women NGOs to improve the living conditions with the support of a local NGO in and girls are forced to walk 2-5 km of local communities through the the coastal area, of 42 hand pumps, to collect water and cannot use their constuction of water facilities in the nearby offshore blocks, for the benefits time on livelihood or earning income Bhit and Badhra areas: hand pumps, of 123 families and 3 storage tanks activities. Health and hygiene are also wells dug, tanks for the rainwater for drinking water accessible to 82 compromised due the lack of access to collection to supply 2,000-5,000 families. adequate water. people of the local communities. • Construction of infrastructures for NEXT STEPS PROJECT OBJECTIVE domestic use and for livestock in Eni will continue its commitment to Improve the living conditions of local collaboration with a local NGO in raise awareness among employees and communities through the supply of water. the Kadanwari area: 11 solar powered local communities on the importance of milking machines, 11 hand pumps and adequately managing water resources in RESULTS AND BENEFICIARIES two reverse osmosis systems to meet daily activities and furthermore, to extend • Participation in the Bhit Rural the needs of 500-600 people and access to the primary needs of local Sustainability Program (BRSP), domestic animals. communities.

˛ More details on eni.com 54 ENI FOR 2017 | COOPERATION MODEL

| Community health

Community investments include health as a partner for development. initiatives for communities which The main initiatives implemented, 900,000 consist in the implementation of specific during 2017, concerned: improvement of BENEFICIARIES initiatives, in line with local health policies healthcare staff’s skills, the construction IN 10 COUNTRIES WHERE ENI OPERATES and international best practices, or upgrading of healthcare facilities to improve health conditions and promote and the supply of adequate equipment, the welfare of the local communities. access to drinking water, information and These initiatives represent an important promotion about health issues of interest instrument to improve Eni’s effectiveness to the local population.

HEALTH PROMOTION AS “CULTURE” PORT SAID, EGYPT; 2017

EGYPT

Eni considers protecting health as an essential instrument for improving the living conditions and well-being of individuals and promoting the socio-economic development of communities in accordance with strategic directions and local programmes.

CONTEXT (El Jaraba'ah, Al Manasra and Al Deeba). NEXT STEPS The villages of El Jaraba'ah, El-Manasra and In particular, the healthcare services refer to: The Al Garaba Health Unit was chosen El Deeba are characterized by low living • treatment of endemic diseases; by the Ministry of Health as the Pilot standards, poor infrastructures and almost • emergency room; Unit for a New Health Strategy in line no job opportunities. The recent economic • mother and child clinic; with the Egyptian Government’s crisis has negatively affected the standards • health and Immunisation promotion; “The new health insurance law”. of living of many local communities in • pharmacy services; The Unit itself will be a reference Egypt. According to the Egypt Network for • laboratory; functional structure for a prevention Integrated Development, around 85% of • nutrition; campaign for priority endemic diseases rural areas in Egypt do not have access to • health education; and health promotion for the 7,500 the public network of health and hygiene • dental services; inhabitants of the area of influence of the services or water supply. • management of safe water and offshore industrial project with the collaboration environmental sanitization, for 65 families. of the Faculty of Medicine of Port Said RESULTS AND BENEFICIARIES University. Support work will continue The Family Health Unit was renovated, PROJECT OBJECTIVE to help provide access to basic services equipment and furnishings were provided Provide support to local health Authorities (60 thousand inhabitants in the Emirates and the Primary Health Care services were to deal with an increasing demand for District) and emergency burns unit for improved, serving a local population of around basic healthcare services and hospitals the entire Governorate of Port Said (690 7,500 people distributed across 3 villages for emergencies. thousand inhabitants). ENI FOR 2017 | COOPERATION MODEL 55

| Other activities

In developing new projects, Eni is fair and sustainable compensation IN ACCORDANCE WITH THE REQUIREMENTS committed to ensuring that various measures is quick. With the aim of DEFINED WITHIN THE "LAND ACQUISITION alternatives are considered when improving, or at least restoring, AND INVOLUNTARY choosing an area to acquire, with the the living standards of the communities RESETTLEMENT" STANDARD OF THE aim of minimizing negative impacts involved, Eni applies principles INTERNATIONAL FINANCE on local communities. and methods that comply with CORPORATION (IFC) If the relocation of families and the international standards, such as the IFC loss of livelihood are unavoidable, Eni Performance Standard on involuntary ensures that the process for defining resettlements.

RESETTLEMENT OF THE BEREZOVKA AND BESTAU VILLAGES BEREZOVKA AND BESTAU, KAZAKHSTAN; 2015-2017

KAZAKHSTAN “Karachaganak Petroleum Operating (KPO) believes in the principle of Social Responsibility, this resettlement project is one of the biggest commitments in the sector.” Renato Maroli, KPO General Director29

CONTEXT RESULTS AND BENEFICIARIES In both urban and rural contexts, the Resettlement was decided and guided The resettlement of 464 families (2,005 lodgings are larger than their previous by the region’s authorities, in anticipation people) was planned and implemented ones, equipped with utilities, parking of the further development of the in two stages, between July 2015 and spaces and playing areas for children. Karachaganak field. December 2017, supported by consultations The settlements are close to vital with residents for an informed choice. health facilities, schools, shops and PROJECT OBJECTIVE The new settlements have been chosen very recreational centres. As the co-operator of KPO30, Eni had a carefully: located a few kilometres from the Teachers and doctors have been controlling role in the resettlement, in villages, Aksai and its suburb Araltal allow the given jobs in Aksai, farmers have been the commitment towards improvement people from Berezovka and Bestau to opt for offered lots, while entrepreneurs have (or at least maintaining the initial level) a town apartment or a house with a garden, received economic compensation of housing standards and livelihood without changing their rural lifestyle. Families against any losses arising from the conditions for the two communities. can still maintain their previous social relocation process. Aksai is also a city networks while living in privileged areas of that offers lots of opportunities NEXT STEPS the new urban development of Aksai. for the unemployed. Monitoring and assessment actions will be carried out on the resettlement results. In Araltal, a new nursery school with 320 THE KEY OBJECTIVE IS THAT HOUSING places with modern interactive equipment STANDARDS AND LIVELIHOOD CONDITIONS and equipment for language learning and OF ALL RESIDENTS ARE IMPROVED sport was opened in January 2018. OR AT LEAST KEPT AT THE INITIAL LEVEL

˛ More details on eni.com

29) From the video “Time for a change”, produced by KPO Corporate Affairs: https://www.youtube.com/watch?v=2DI1PNsBgk4). 30) Consortium Karachaganak Petroleum Operating. 56 ENI FOR 2017 | COOPERATION MODEL

LOCAL CONTENT

Local Content valorisation and its in 2016, Eni launched an inter-functional LOCAL CONTENT IS THE ADDED VALUE THAT THE COMPANY CAN monitoring have double value for project to develop a simple model that BRING TO THE SOCIO-ECONOMIC SYSTEM OF THE COUNTRIES IN Eni: in terms of competitiveness, can easily be replicated to assess direct, WHICH ENI OPERATES, OR RATHER they allow to represent the benefits indirect and induced effects of Eni’s THE WAY IN WHICH THE COMPANY, IN CONDUCTING ITS BUSINESS, generated at local level by Eni’s activities in operational contexts. These CAN BE A DRIVER OF DEVELOPMENT presence in the territory and to effects are attributable to economic, support the company in defining the employment and intellectual capital Local Content Plans in the Countries. impacts that Eni’s business generates Moreover, for Countries the knowledge directly at local level and indirectly of the macroeconomic sectors along the supply chain. The ELCE more activated by Eni is a useful (Eni Local Content Evaluation) model, indicator to direct national economic validated by the Politecnico di Milano development investments. As a result, measures:

The effects that can be directly attributed The indirect effects related to economic, The induced effects calculated using to Eni, such as the purchase of goods employment and social impacts multipliers estimated based on Country's and services, taxes and wages paid to regarding Eni’s suppliers along the whole macroeconomic indicators (e.g. greater employees; number of employees trained supply chain. household consumption or new local and investments in local employees jobs created as a result of the economic training activities. development of the Country arising from Eni projects).

The model was applied for the first line with the IFC and World Bank Northern Italy, studying the value time to a pilot project in Ghana, requirements. In 2017, the model was generated in the operational sites of during the construction phase of extended to the production phase of Ravenna (Upstream/Downstream) the OCTP project platform, helping the OCTP project, in Angola (West and Sannazzaro (R&M). to define a Local Content plan in Hub and East Hub) and to Central

CATEGORY OF IMPACTS DIRECT EFFECT INDIRECT EFFECT INDUCED EFFECT

ECONOMIC IMPACT • Eni purchases expenditure • Spending on local goods • Effect of household for local goods and services and services along the consumption as direct and • Eni wages paid to local supply chain indirect employees spend employees • Salaries to local employees their wages within the local • Eni taxes paid of the supply chain economy • Taxes paid by suppliers

EMPLOYMENT IMPACT • Local jobs directly involved • Local jobs along the supply • Local jobs created in the in the project chain directly involved in the private sectors, due to project household consumption • Local jobs created in the public sector, due to Governments revenues

HUMAN CAPITAL DEVELOPMENT • Eni training expenditure • Differential present value of • Household consumption for local employees lifetime earnings expectancy generated by differential between trained and not lifetime earnings expectancy trained employees • Government revenues (additional taxes) ENI FOR 2017 57

REPORTING PRINCIPLES AND CRITERIA

| Reporting system

Eni published its first Consolidated decided to continue to publish Eni for IPIECA/API/OGP. Furthermore, the Non-Financial Information in 2017, as a voluntary disclosure document contents are in line with the Advanced in a dedicated section of the Integrated focused on Eni’s case studies and stories. Level of the Differentiation Programme Annual Report, to provide continuity to The document is prepared in accordance and the additional sustainability the process, started in 2010, to integrate with the “Sustainability Reporting aspects provided for by the Blueprint non-financial information in the Annual Standards” of the Global Reporting for Corporate Sustainability Leadership Report following its participation in Initiative (GRI) with an “in accordance of the UN Global Compact. the International Integrated Reporting - core” level of compliance and also Lastly, eni.com provides further Council (IIRC) in order to prepare taking into consideration the “Oil & information on sustainability issues in integrated financial statements. Gas industry guidance on voluntary order to supplement the information In line with previous years, Eni has sustainability reporting” produced by provided in its reports.

| Materiality, boundary and quality principles

Materiality is the result of a process Company’s capacity to create value was subject to a limited assurance of identification, evaluation and in the short, medium and long-term by an independent company, auditor prioritization of sustainability issues (see “Materiality: key sustainability of Eni Group’s consolidated financial that significantly impact on the issues” on page 13). This document statements as of 31 December, 2017.

CORRELATION TABLE BETWEEN THE KEY SUSTAINABILITY ISSUES FOR ENI AND GRI STANDARDS

INSIDE OUTSIDE BOUNDARY KEY SUSTAINABILITY ISSUES GRI STANDARDS BOUNDARY AND LIMITATIONS

GRI 201 Economic Performance Suppliers GRI 305 Emissions √ and customers Climate change (RNES(a); RNEC(b))

PATH TO PATH GRI 302 Energy √

DECARBONIZATION Technological innovation - √ GRI 401 Employment GRI 404 Training and Education Employment and diversity GRI 405 Diversity of governance bodies and employees √ GRI 202 Market presence Market presence Occupational health and local communities health GRI 403 Occupational H&S √ People’s safety and asset integrity GRI 403 Occupational H&S √ Suppliers Circular economy and waste GRI 306 Effluents and Waste √ GRI 303 Water √ GRI 306 Effluents and Waste √ Environment GRI 304 Biodiversity √ OPERATING MODEL OPERATING GRI 307 Environmental compliance √ GRI 412 Human Rights Assessment Local security forces; Human Rights GRI 410 Security Practices √ GRI 406 Non-Discrimination Suppliers (RNES(a)) GRI 414 Supplier Social Assessment Integrity in business management GRI 205 Anti-Corruption √ Suppliers (RPES(c))

Access to energy, economic diversification, GRI 203 Indirect Economic Impacts local development GRI 413 Local Communities √ MODEL

(a) COOPERATION Local content GRI 204 Procurement Practices √ Suppliers (RNES )

(a) RNES = Reporting not extended to suppliers. (b) RNEC = Reporting not extended to customers. (c) RPES = Reporting partially extended to suppliers. 58 ENI FOR 2017

INDEPENDENT AUDITORS’ REPORT ENI FOR 2017 59 60 ENI FOR 2017 Eni SpA