Iren Group 1 2 Sustainability Report 2018 SUSTAINABILITY IN IREN: 2018 HIGHLIGHTS .......................................................................... 2 LETTER TO STAKEHOLDERS ..................................................................................................... 4 NOTE ON METHODOLOGY .......................................................................................................... 6 IREN GROUP ............................................................................................................................... 13 ABOUT US ................................................................................................................... 14 BUSINESS SEGMENTS .............................................................................................. 18 CORPORATE GOVERNANCE .................................................................................... 25 STRATEGIES AND POLICIES FOR SUSTAINABILITY ............................................................. 33 MISSION, VISION AND VALUES ................................................................................ 34 STRATEGIC PLAN TO 2023 ....................................................................................... 34 INSTRUMENTS OF CORPORATE SOCIAL RESPONSIBILITY................................. 36 RELATIONS WITH STAKEHOLDERS ........................................................................ 45 ETHICAL INDEXES ..................................................................................................... 48 COMMITMENT TO IMPROVEMENT ........................................................................... 49 AWARDS AND RECOGNITION .................................................................................. 55 FOCUS: OEKOM CORPORATE RATING ................................................................... 56 IREN’S VALUE ............................................................................................................................ 57 ENVIRONMENT ........................................................................................................................... 61 POLICIES FOR THE ENVIRONMENT ......................................................................... 62 PRODUCTION PROCESSES AND PRINCIPAL ENVIRONMENTAL IMPACTS ......... 62 REDUCTION OF EMISSIONS AND ENVIRONMENTAL IMPACTS ............................ 67 INTEGRATED WATER SERVICE ................................................................................ 70 ENVIRONMENTAL SERVICES .................................................................................... 71 ENERGY PRODUCTION AND SERVICES .................................................................. 73 BIODIVERSITY ............................................................................................................. 77 FOCUS: CARBON DISCLOSURE PROJECT .............................................................. 80 CUSTOMERS ............................................................................................................................... 81 RELATIONS WITH CUSTOMERS ............................................................................... 82 CUSTOMERS IN NUMBERS ....................................................................................... 88 ELECTRICITY ............................................................................................................... 88 GAS............................................................................................................................... 90 DISTRICT HEATING .................................................................................................... 92 INTEGRATED WATER SERVICE ................................................................................ 93 ENVIRONMENTAL SERVICES .................................................................................... 94 ENERGY EFFICIENCY ................................................................................................ 95 TELECOMMUNICATIONS ........................................................................................... 95 FOCUS: IRENGO ......................................................................................................... 96 IREN PEOPLE ............................................................................................................................. 97 HUMAN RESOURCES: IREN’S RESOURCES ........................................................... 98 REMUNERATION SYSTEM ...................................................................................... 100 PERSONNEL SELECTION AND DEVELOPMENT ................................................... 101 PERSONNEL TRAINING ........................................................................................... 102 EQUAL OPPORTUNITIES ......................................................................................... 103 CORPORATE WELFARE .......................................................................................... 105 TRADE UNION AND INDUSTRIAL RELATIONS ...................................................... 107 OCCUPATIONAL HEALTH AND SAFETY ................................................................ 108 FOCUS: TOP EMPLOYER ........................................................................................ 112 SUPPLIERS ............................................................................................................................... 113 POLICIES FOR SUPPLIERS ..................................................................................... 114 SUPPLIER PORTFOLIO AND PURCHASE VOLUMES ........................................... 117 FOCUS: CSR SURVEY OF SUPPLIERS .................................................................. 120 COMMUNITY, LOCAL AREAS AND INSTITUTIONS............................................................... 121 FOCUS: IREN ALONGSIDE “PARMA NON SPRECA” ............................................. 134 SHAREHOLDERS AND FINANCIAL BACKERS ..................................................................... 135 FOCUS: IREN GREEN BOND ................................................................................... 140 FUTURE GENERATIONS .......................................................................................................... 141 SUSTAINABILITY EDUCATION ................................................................................ 142 RESEARCH AND INNOVATION IN THE IREN GROUP........................................... 143 FOCUS: IREN START UP AWARD ........................................................................... 146 COMPLIANCE WITH THE GRI STANDARD AND ITALIAN LEGISLATIVE DECREE 254/2016 ..................................................................................................................................... 147 REPORT OF THE INDEPENDENT AUDITOR .......................................................................... 153 GLOSSARY ............................................................................................................................... 156 Iren Group 1 VALUE 4,041 million Euro of revenue 447 million Euro of investments 1,363 million Euro of added value for stakeholders 0.084 Euro of dividend per share proposed by the BoD ENVIRONMENT 2,451,198 tonnes of CO2 avoided 558,037 TOE saved 87% of electricity produced by environmentally friendly sources (renewable or similar) 64.3% separated waste collection on average (national average 55.5%) 34.8% water network leaks on average (national average 40.7%) IrenGO for electrical mobility over 20,600,000 plastic bottles avoided due to “Acquapubblica” water distribution points CUSTOMERS 1,924,771 customers in the energy sector 2,829,798 inhabitants served in the integrated water service, 2,320,687 in environmental services and 868,130 in district heating 73 service counter positions and around 585,000 customers served 2 million call centre responses approximately 90% of customers satisfied over 790,000 parameters analysed in drinking water and waste water 4.2% electricity network leaks (national average 6.5%) 46% electricity substations checked 81% gas networks inspected 85% district heating networks inspected IREN PEOPLE 99% of employees have a permanent contract or an apprenticeship contract 313 new hires 95% of employees attended at least one training course 1,807 women work within the Group and make up 46% of the BoD 2 Sustainability Report 2018 SUPPLIERS 725 million Euro of orders issued Local suppliers account for 51% 28 social cooperatives work with Iren 1,000 hours of training for third party companies 779 suppliers involved in the survey on environmental and corporate responsibility COMMUNITY, LOCAL AREAS AND INSTITUTIONS 53 projects by the Local Committees for sustainability 1,208 profiles registered on the Irencollabora.it platform 267 projects supported in favour of communities workforce, vehicles and economic resources to support communities affected by disasters 9 Trade Unions at a national and international level employee training on corruption prevention balance between tariffs and investments in the local area for the Integrated Water Service SHAREHOLDERS AND FINANCIAL BACKERS +195% growth of the Iren share in the last 4 years growth forecast of around 10% annually for the dividend per share Fitch Rating “Investment Grade” BBB with stable outlook second Green Bond of 500 million Euro for 12 environmental sustainability projects 165 investment fund managers met FUTURE GENERATIONS