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Materiality GRI - G4: 18,19

Materiality is a key element in strengthening Snam’s sustainability strategy. Taking into account the recommendations of the new G4 reporting guidelines from the GRI (Global Reporting Initiative), which give more emphasis to the reporting of material topics, Snam has begun updating those topics that have historically fallen within the scope of its sustainability activities, to bring the most important of these into sharper focus.

The materiality analysis, which necessarily included management involvement and the point of view of stakeholders, gave rise to the reasoned selection of topics that strengthen Snam’s sustainability commitment and on which its reporting will focus.

Methods

The analysis starts by identifying the topics highlighted in the main sustainability guidelines (ISO 26000 and GRI-G4), generally seen as representative of the Company’s external outlook since they are identified in a context of multi-stakeholder debate and dialogue at the international level.

These topics are then put into context in the utilities sector, in which all Snam’s core businesses operate, using the benchmark of 2012 sustainability reporting by the biggest international players in this sector and the questionnaires of the main ratings agencies.

A series of important topics emerged from this initial phase. To define the materiality of these topics, we:

  1. Analysed the situation in the sector, public opinion and the pressures on the Company. This not only enabled assessment of the changes in political, economic and social phenomena, both globally and locally, that could influence Snam’s strategies in the short and long term, but also enabled identification of further topics or the strengthening of topics already identified through analysis of the press, the internet and other media;
  2. Analysed the perception of the topics from the point of view of external stakeholders, using commitment tools that pick up the perception of Snam’s image among key spokespeople, designed to gather opinions, uncertainties, ideas and observations in terms of sustainability and governance;
  3. Analysed the Code of Ethics and the policies adopted by Snam;
  4. Analysed the topics from an internal point of view by interviewing the managers of various departments.

Combined examination of important internal and external factors led to the identification of priority areas with greater materiality for the Company.

List of Material Aspects according to the GRI-G4 standard GRI - G4: 20, 21

The outcomes emerged from the materiality check previously described, were subsequently associated to the aspects predefined by G4, choosing those that are most representative in relation to our purpose. The materiality aspects are reported in a list in the table below (column “materiality aspects”).

The analysis proceeds specifying the fields in which the aspects were resulting positive to the materiality check (column “aspect boundary”) both internally (relating to the different activities undertaken by Snam) and externally to the organization. Moreover, the limitations emerged with the reporting activity referring to the boundaries of each aspect, were as well reported (when needed) in the table, under the column (“Limitation concerning the aspect’s boundaries).

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Material Aspects

Aspect Boundary

Limitation of Aspect Boundary

 

Within the Organitazion

Outside the Organization

Within the Organitazion

Outside the Organization

 

T Transportation S Storage C Corporate

 

D Distribution R Regasification n.a. Not applicable

Economic Performance

T, D, S, R, C

Investor. Regulation Authority Client

-

-

Indirect economic impacts

T, D, S, R, C

-

-

n.a.

Procurement practices

T, D, S, R, C

Suppliers

-

Reporting not extended second -tier suppliers

Energy

T, S

Suppliers

-

Suppliers’ energy consumption not ccounted

Biodiversity

T

-

-

n.a.

Emissions

T, D, S, R,

Suppliers

-

Suppliers’ nitrogen oxide emissions not accounted

Overall

T, S

-

-

n.a.

Suppliers Enviromental Assessment

T, D, S, R, C

Suppliers

-

Reporting not extended second -tier suppliers

Employee

T, D, S, R, C

-

-

-

Labor/Management Relations

T, D, S, R, C

-

-

n.a.

Occupational Health and Safety

T, D, S, R, C

Suppliers

-

-

Training and education

T, D, S, R, C

Suppliers

-

Suppliers’ training not accounted

Suppliers assessment for labor practices

T, D, S, R, C

Suppliers

-

Reporting not extended second -tier suppliers

Local communities

T, D, S, R, C

-

-

n.a.

Anti-Corruption

T, D, S, R, C

Suppliers

-

Reporting not extended second -tier suppliers

Compliance

T, D, S, R, C

-

-

n.a.

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Topic

External outlook

Internal outlook

Creating sustainable value

This is the most important topic for all strategic infrastructure operators, which are now required to pursue their mission in a difficult economic and social landscape.

Snam has always focused on promoting sustainable development throughout the value chain. Today, it is earmarking the financial, technical and organisational resources that it needs to respond to future challenges.

Corporate governance management

Corporate governance is now seen as a key variable in investment decision-making, as there is a clear link between good governance and creating and distributing value.

Snam has always regarded its corporate governance system as an essential factor in pursuing its corporate mission, as it ensures a balance between the expectations of shareholders and of parties with legitimate interests in the Company’s activities, and, more generally, in the proper functioning of the “gas system”.
Snam’s corporate governance system is based on certain key principles, such as creating fair and transparent Company management. This includes marking out information flows between the corporate bodies and defining the internal control and risk management system effectively.
Snam has always been committed to maintaining and strengthening a corporate government system aligned with national and international best practice, which can handle the complexities of the situations in which the Company has to operate, and the challenges associated with a clear and sustainable development strategy.

Risk and crisis management

Companies aim to create closer links between risk management and strategic planning.

Snam monitors this topic closely, and has continued to work in this area to ensure a cycle of continuous improvement in the management of its risk model. As well as establishing a Corporate and Enterprise Risk Management department and implementing a system designed to help senior management to identify, measure, manage and monitor the key risks that could affect the achievement of strategic objectives, Snam recently issued a new Business Continuity Management policy.

Management transparency

This is an important topic in terms of safeguarding legitimate stakeholder interests.

In Snam’s case it is even more important given that it operates in regulated markets.

Anti-corruption

Combating corruption is a key global challenge. Nearly all countries have increased their anti-corruption efforts in recent years. Corruption is an obstacle to effective business and fair competition that cannot be tolerated.

Snam has been combating corruption for several years, expressly prohibiting “corrupt practices, illegitimate favours, collusion and requests for personal benefits for oneself or others, either directly or through third parties” in its own Code of Ethics. Specifically, since 2010 Snam has launched its own action against corruption by:
- creating the Anti-Corruption Unit within the Legal and Corporate Affairs and Compliance Department;
- issuing the anti-corruption procedure and the ancillary procedures;
- raising employee awareness with specific information and training activities. Since 2010, about 16,000 hours of training have been delivered on the subject.

Health and safety

Health and safety at work is one of the most recognised and consolidated rights in every sector. The topic is generally regarded as material by definition, particularly in the industrial sectors. It is highly relevant and a major focus for public opinion, as demonstrated by the recent amendment to planned regulations relating to health and safety in the workplace, carried out during the process of conversion to law of Decree-Law 69/13 (the “Fare” Decree).

The topic, which is relevant and significant for Snam’s business, is closely monitored. To ensure the timely alignment of its management systems and compliance with the laws in force, Snam is constantly meeting with people, employee safety representatives and stakeholders.

Developing and making the most of human capital

Developing professional skills and managerial abilities, as well as managing human capital, is particularly important in view of the greater complexity caused by market changes at both national and international level.

Snam invests in activities designed to increase its employees’ range of skills and develop their management and professional expertise.

Employment and safeguarding jobs

This is perhaps the most relevant “social” topic, given the persisting negative effects that the economic crisis is having on Italy, particularly in terms of the outlook for youth employment.

Snam maintains its employment levels, and will see substantial generational turnover with the hiring of 250 young people, which will also help with age management.

Relations with regulatory authorities

In a difficult context for the national economy, the regulatory authority is increasingly keen to foster competition in the system.

Snam will have to pay increasing attention to the efficiency of its infrastructure, assessing its investments very carefully and sharing its plans with the Authority.

Quality and development of services

One priority for European policy in the next few years will be growth in competition and flexibility in the sector, benefiting end users (high-quality service and lower costs).

As part of its plan to take on the role of market facilitator, Snam will have to continue to adjust its commercial offering while keeping service quality high.

Management of the strategic supply chain

The opportunity to extend the scope of corporate liability to the supply chain is a factor that has now been taken on board in many sectors of the global economy.

Snam operates almost exclusively at national level, but has for some time been committed – partly due to the role it plays – to transparency and proper management of suppliers and the extension to these suppliers of good practice and culture in terms of safety at work and environmental protection.

Stakeholder relations and involvement

Stakeholder engagement is now playing an even greater role in response to the changing conditions in which companies operate. Increasingly, companies have to interact knowledgeably with a world that is more complex, globalised and dynamic, and made up of multiple problems (environmental, moral, legal and institutional), players and interests needing attention.

Snam works to encourage and reward stakeholder involvement through a corporate culture that aims to express the values of corporate responsibility as fully as possible. Snam uses a wide variety of tools and opportunities for involvement (e.g. the climate analysis, workshops, portals, customer satisfaction surveys, etc.).

Protecting the territory and biodiversity

The infrastructure-related actions that support network development can spark conflict at local level. To avoid this, procedures to involve the communities concerned should be used during the various phases of these actions, from planning and creating pipeline courses to restoring and replenishing habitats. In some cases, compensation is not a principle that is shared by communities that experience environmental damage. Involvement and dialogue make it easier to establish new sites, and to reduce transaction costs.

This topic is constantly monitored, given the nature of Snam’s infrastructure-related actions.
When it develops new sites, Snam uses procedures that pass stringent environmental and safety compatibility assessments to make them more acceptable for stakeholders. These assessments are made as part of the Environmental Impact Assessment (EIA), after which the administrations in charge issue the authorisations provided for by current regulations.
Safeguarding the natural value of areas where it conducts new works is important to Snam. In choosing courses for pipeline development, Snam tries to limit passage through areas of natural importance. When this cannot be avoided, close attention is paid using surveys and biodiversity monitoring.

Climate change and energy efficiency

The environmental emergency has led to the creation of hundreds of protest movements worldwide, giving rise to activism and a civil commitment to change the energy model. Broad-based popular involvement in global movements, which represents much more than just being in environmental association, shows the scale of the challenge and confirm the widespread awareness that the solutions adopted so far are still not enough. Nevertheless, during the last year the topic has been less present among communication channels and public opinion discussions. The reason for this lies in the increasing importance that the economic crisis is playing and in the fact that CO2 emissions have recently fallen due to the economic downturn.

Snam is a national energy market operator, and is a key adviser to the government in the preparation of National Energy Strategy documents. It is also part of the UN Global Compact initiative.
Issues of energy consumption and CO2 and methane emissions are inherent to the Company’s activity.
The Company therefore has a very high level of responsibility towards its stakeholders in respect of its commitment to reducing GHG emissions to limit the phenomenon of climate change

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