Sustainability Report 2007 Message from the Chief Executive Officer In this second annual Sustainability Report Eni declares its commitments and goals, describes the actions undertaken and those which are planned, reports the achieved results. The 2007 Sustainability Report has evolved following a process of listening to the expectations and information needs of Eni’s stakeholders, who require the company to be transparent about its vision and strategy for sustainable and secure energy generation. The reliability of the information contained in this report and on Eni’s website is guaranteed by a reporting system which brings together corporate and operational functions, an independent mechanism that verifies the processes used to gather the information worldwide and testimonials from our project partners. 2007 has been an important year. Sustainability has become an integral part of corporate processes and has qualified Eni to enter the Dow Jones Sustainability World Index, the FTSE4Good Index and the Climate Disclosure Leadership Index. The awareness that the results obtained are not a point of conclusion and the general scenario outlined in this Report have led us to identify the actions which are still to be taken, using dialogue and innovation capacity as a way to promote a sustainable development. Carbon Disclosure Project Leadership Index since 2007 The operational activities and the commitments for Sustainability IV Countries of operational activities VI Commitment to sustainable development VIII Responsible energy - Paolo Scaroni Interviewed by Angela Wilkinson Eni and the Future of Energy 3 The energy scenario and the challenges in the Oil & Gas sector 4 The cooperation models with producer countries 5 The production and access to hydrocarbon reserves 6 Eni’s role in the security of gas supplies for Europe 7 Eni and climate change 12 The Cooperation Model in a Country of Historical Presence The Model of Sustainability 15 The Governance of Sustainability 17 The relations with stakeholders The System of Corporate Governance and Corporate Ethics 21 Corporate Governance 23 The control system 24 The protection of Human Rights 25 The application of Eni’s principles to the supply chain People 27 Safety 29 Health 32 Value and development of Eni’s people 35 Training, knowledge management and people involvement 37 The Welfare of Eni’s people Diversity as a resource 38 Industrial relations and labour standards Environmental protection 41 Environmental management 42 Operational activities and the environment 44 Ecosystem protection and biodiversity 45 Water management 46 Air quality protection 47 Waste management 48 Soil protection Territories and local communities 51 Eni’s policies and tools for territories 55 Expenditure for territories and local communities Country initiatives 59 Sponsorships 60 Contribuitions to Associations The Foundations Customers 63 The value of the Eni brand 64 Our fuels 67 Gas and electricity sales Eni in Kazakhstan 70 The Kashagan and Karachaganak projects 70 Sustainability aspects Appendices 72 Key Sustainability indicators 74 Methodology note 76 The GfK Eurisko Survey on the Eni Sustainability Report 2007 77 Assurance Statement 79 IPIECA/GRI consistency table ENI SUSTAINABILITY REPORT 2007 Eni Eni is an integrated energy company, which operates in 70 countries, in the activities of finding, producing, transporting, transforming and marketing oil and gas. Exploration & Production Revenues: 87,256 € million Gas & Power Adjusted net profit: 10,094 € million Refining & Marketing Capital expenditure: 10,593 € million Staff: 75,862 employees Petrochemicals Engineering and Construction Exploration & Production Eni operates in hydrocarbon exploration and production mainly in Italy, North Africa, West Africa, the Caspian Sea, the North Sea, the Gulf of Mexico and Alaska. Based on crude oil market values at the end of 2007, proved reserves stand at 6,37 billion boe, with an all sources replacement rate of 90% and a reserve life index of 10 years. Revenues: 27,278 € million Adjusted net profit: 6,491 € million Capital expenditure: 6,625 € million Staff: 9,334 employees Production: 1,736 boe/day Gas & Power Refining & Marketing Petrochemicals The Gas & Power business covers all phases of Eni is Italy’s leading producer in oil refining and Through its subsidiary Polimeri Europa, Eni is the gas value chain - supply, transmission, marketing, and is particularly strong in a number engaged in the production and sale of a broad distribution and sale - through a truly original of other European markets. Eni’s integrated portfolio of products, backed by its range of and unique integrated business model. Eni is the system approach to the refining and marketing proprietary technologies, latest generation leading supplier of gas in terms of sales on the business is supported by key logistical assets able production plants, and an efficient, all-pervasive European market. Its solid market positioning is to maximize cost savings and generate favorable distribution network. The strategic business underpinned by extensive gas supplies - both returns. areas in the petrochemical sector are basic produced and imported under long-term In terms of distribution networks Eni is the chemicals, plastics and synthetic rubbers. agreements - its access to infrastructure, and its leading distributor in Italy under the trading broad customer portfolio. Eni also operates in name Agip. electricity generation and sale. Revenues: 36,401 € million Revenues: 6,936 € million Revenues: 27,633 € million Adjusted net profit: 319 € million Adjusted net profit: 57 € million Adjusted net profit: 2,936 € million Capital expenditure: 979 € million Capital expenditure: 145 € million Capital expenditure: 1,366 € million Staff: 9,428 employees Staff: 6,534 employees Staff: 11,582 employees Sales: 50.15 million thousand tons of Production: 8,795 tons of petrochemical Sales: 98.96 billion cu m of gas refined products products IV ENI SUSTAINABILITY REPORT 2007 Countries of operational activities Engineering and Construction Other Activities Eni Corporate & Financial Companies Eni’s major operations in oil field services, Through its subsidiaries, Eni also operates in Eni Corporate and its subsidiaries operating in construction and engineering are performed other industrial sectors for the environmental the financial sector take care of strategic through its subsidiary Saipem. The distinctive recovery of contaminated areas, the provision planning, human resources management, technologies and expertise which Saipem of a full array of offshore engineering services, training, group finance and its related financial provides Eni in the engineering and and facility management services. services, administration, information technology, implementation of complex projects are a key procurement, legal affairs, international affairs, element in Eni’s growth and innovation corporate research and development and facility strategies. The integration of Snamprogetti has management. further boosted the competitiveness of Saipem thanks to its complementary business portfolio, wide-ranging clientele, and extensive, worldwide presence. Revenues 8,678 € million Revenues 205 € million Revenues 1,313 € million Adjusted net profit 658 € million Adjusted net profit -210 € million Adjusted net profit -157 € million Capital expenditure 1,410 € million Capital expenditure 59 € million Capital expenditure 109 € million Staff 33,111 employees Staff 1,172 employees Staff 4,701 employees V ENI SUSTAINABILITY REPORT 2007 Commitment to sustainable development Governance and Sustainability Model Commitments 2007 Results 2008 Actions Maintaining and improving a governance • Inclusion of the Eni name in the main • Internal agreement on the new Code of Ethics; system that represents international best sustainability indexes: Dow Jones • Introduction of a new Model 231 including health, safety and environmental risks; practice and is able to manage the Sustainability Index and FTSE4Good; • Creation of training initiatives for the Board of Directors and Board of Statutory Auditors; complexity of the contexts in which Eni • Revision of the Code of Practice; • Testing in two foreign sites of an instrument to assess risks connected with Human Rights; operates and the challenges of Sustainability • Issue of Guidelines on the protection and • Creation of training initiatives on human rights for security staff; promotion of Human Rights and • Opening of dedicated structures in two new markets for supplier knowledge and inclusion of clauses regarding human qualification. rights in the contractual supply standards; • Drawing up and implementation of the Sustainability organizational model. Adopting systematic forms of stakeholder • GfK Eurisko survey for the definition of • Extension of the consultation above all to international bodies (international financial engagement, extending the dialogue on the priority subjects of interest to stakeholders institutions and the European Union); subject of Sustainability with legitimate and for the identification of information to • Promotion of a constant dialogue on Corporate Governance with categories of stakeholders be provided within the reporting; shareholders involved in the issue. • Launching of the Intranet website dedicated to Sustainability and consultation of employees on the subjects contained in the Sustainability Report. People Commitments 2007 Results 2008 Actions Guaranteeing the safety of all Eni’s people • Reduction in the injury frequency