sustainability report 2007 “the facts and figures behind our commitment” Contents Letter from the Chairman of the Board..................................................................................................................... 4 Letter from the Managing Director........................................................................................................................... 5 The Report .................................................................................................................................................. 6 Reading this Report .................................................................................................................................................. 6 Drawing up this Report............................................................................................................................................. 7 About us .................................................................................................................................................... 11 Hera today............................................................................................................................................................... 11 History .................................................................................................................................................................... 11 Services managed ................................................................................................................................................... 12 Mission, Charter of Values and Code of Ethics...................................................................................................... 14 Managing sustainability.......................................................................................................................................... 17 The instruments of governance............................................................................................................................... 23 Dialogue with stakeholders...................................................................................................................... 33 Mapping Hera’s stakeholders ................................................................................................................................. 33 Listening, dialogue and involvement initiatives...................................................................................................... 35 Dialogue on the Sustainability Report .................................................................................................................... 47 Results and Value added.......................................................................................................................... 49 Operating results..................................................................................................................................................... 49 Allocation of value added ....................................................................................................................................... 53 Workforce ................................................................................................................................................. 57 Objectives and performance ................................................................................................................................... 57 Breakdown.............................................................................................................................................................. 58 Turnover ................................................................................................................................................................. 61 Diversity and equal opportunities ........................................................................................................................... 64 Training .................................................................................................................................................................. 66 Pay, salaries and bonuses........................................................................................................................................ 72 Health and safety .................................................................................................................................................... 75 Industrial relations .................................................................................................................................................. 78 Internal communication .......................................................................................................................................... 80 Cultural associations............................................................................................................................................... 82 Customers ................................................................................................................................................. 84 Objectives and performance ................................................................................................................................... 84 Breakdown.............................................................................................................................................................. 85 Tariffs and billing ................................................................................................................................................... 87 Service quality ........................................................................................................................................................ 95 The quality of drinking water ................................................................................................................................. 97 Service security..................................................................................................................................................... 101 Customer relations................................................................................................................................................ 105 Shareholders ........................................................................................................................................... 109 The objectives and the results............................................................................................................................... 109 Breakdown............................................................................................................................................................ 110 Corporate Governance and safeguards for shareholders....................................................................................... 112 Distribution of dividends ...................................................................................................................................... 113 Stock exchange share performance....................................................................................................................... 113 Relations with investors and financial analysts..................................................................................................... 116 Financial Institutions ............................................................................................................................. 118 Suppliers.................................................................................................................................................. 120 Objectives and performance ................................................................................................................................. 120 Breakdown............................................................................................................................................................ 121 Operations within local communities.................................................................................................................... 124 Qualification and selection of suppliers................................................................................................................ 125 Contract management ........................................................................................................................................... 128 Supplier relations.................................................................................................................................................. 130 Public Administration............................................................................................................................ 131 Objectives and performance ................................................................................................................................. 131 Breakdown............................................................................................................................................................ 131 Relationships with municipalities and other local authorities............................................................................... 133 Relations with authorities ..................................................................................................................................... 135 Research projects.................................................................................................................................................