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Shared value

An original interpretation

The new market landscape in which Snam now operates, with the change in paradigm that is transforming the Group from an asset and infrastructure operator to a market facilitator, clearly opens up new opportunities. Snam’s move toward positioning itself among the top players in regulated gas activities involves modulating an innovative approach to corporate sustainability; it involves defining a network citizenship model as the key to juggling the difficult challenge of competitiveness and system reliability with local presence. It involves reconciling the two-fold level in which Snam operates: the “macro” role as European market leader and the demand for executing and managing infrastructure established locally.

This change in the scenario has provided an opportunity to review Snam’s sustainability strategy, in keeping with its value structure. Snam’s corporate responsibility approach is based on the assumption that a company’s role goes beyond service delivery and the consequent generation of economic value. There is much more to it. Snam’s ecosystem is an open system that interacts with multiple stakeholders, and through this interaction the Company can create not only economic value, but also social value.

The Company therefore aims to make the incorporation of sustainability within its business strategies an essential part of its long-term vision. The Shared Value theme is a powerful key to understanding this concept. For Snam, the innovation inherent to this concept is consistent with a stronger approach to reducing and controlling operational and reputational risks, thus creating the conditions for a competitive advantage for the Company and the regions in which it operates.

Snam took up this idea and was one of the first Italian companies to begin a process of reflection in early 2012, aiming to use this new strategic impetus to more effectively combine oversight of risk factors, consolidation of business ethics and enhancement of reputational capital with which management could make the Company a key player in the country’s development. This initial reflection phase was followed by development of an interpretative summary model, leading to a review of the key business processes within this perspective, with the aim of systematising and bringing out not only the Shared Value already produced but also opportunities to produce new value.

This model, loosely based on the theory expressed by Porter and Kramer, was intended to tailor the approach to Snam’s specific situation and the context in which it operates. The Shared Value concept was thus the starting point for a review of the Company’s sustainability approach. Snam aims to create shared value by identifying available corporate assets (knowledge, spaces, skills, operations) that, for a marginal cost, could be made useful for stakeholders, i.e. Snam’s primary interlocutors (e.g. representatives of communities and regions, universities and research institutes, shippers and suppliers, to name a few). This is not simply distribution for philanthropic purposes, but rather involves bringing external rationales into core strategies: not “giving” but “partnership”. This is the only way to activate innovation processes: a company that operates in a sound socio-economic context, and helps to improve it, is sustainable and acquires a competitive advantage. To sum up, Snam aims to generate full sharing of its tangible and intangible resources with society, to help to answer both minor and major needs.

Progress made to date and new projects launched

By applying the interpretative model, it was possible to highlight some actions already in progress that were consistent with the Shared Value framework (already reported in the 2011 and 2012 Sustainability Reports), and then to identify those corporate processes with the most potential.

A road map has now been created, based on priority lines of intervention and planning assumptions. The map:

  • identifies areas in which future planning might eventually be developed;
  • identifies which of these areas can be taken directly to the creation stage and which require preliminary feasibility studies, i.e. in-depth and systematic analyses aimed at identifying which projects to launch, after establishing their materiality and the expected outcomes.

At this point, the Company began a process of identifying Shared Value initiatives and projects, so that an action plan could be drawn up by launching, in an initial phase, feasibility studies on some projects with high potential. The aim of the studies, performed by the Sustainability department with the help of the relevant divisions, was to identify new potential planning areas and assess their materiality, objectives and potential, in order to then plan the necessary actions, assessing the expected results, timeframes and resources.

In 2013, 10 feasibility studies were carried out, based in a consistent way on the four areas for development set out below, in which Snam plans to build hypotheses for the development of its sustainability approach, identifying specific high-impact actions.

  • Open data: sharing and appraising, with local and institutional players, information arising uniquely from Snam’s core businesses, to create synergies and disseminate knowledge throughout the regions in which the Company operates.
  • Greenways: identifying the most appropriate ways of activating processes to create regional value, using Snam’s own assets and network infrastructure throughout the peninsula as tools for osmotic exchange with the region.
  • Sharing Local Energy: sharing with the region, at a marginal symbolic cost, the assets (structures, spaces and knowledge) of the compression stations to feed resources, skills and energy at local level, making them available to local players for environmental protection and social cohesion projects.
  • Powering innovation: identifying potential technological partnerships, with a view to developing innovative products and services that might improve the business and at the same time increase suppliers’ ability to open to new markets.

In 2014, Snam will publish a specific document reporting the results achieved and future targets for reinforcing the Shared Value theme.

For regular updates on Shared Value and the planning achieved and under way, visit “www.snam.it”.

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