SNAM Annual Report 2019 - Environmental and health and safety aspects

Relevance and related risks

The material issues that Snam considers to be linked to aspects relating to the environment, health and safety are the following ones:

Climate change: because the company operates in the energy sector, Snam is aware of its role in fighting against climate change. Snam actually includes challenging targets for the reduction of emissions and energy efficiency projects in its strategy to guarantee an ever-decreasing impact on climate change. However, the issue of climate change and the contribution that different operators can make to mitigating its risks are becoming increasingly central to the strategies of players in the energy sector as well as, gradually, in other sectors. Snam promotes more sustainable business management through the use and production of energy from renewable sources (e.g. installation of photovoltaic, biomethane, bio-LNG and hydrogen systems). In this sense, together with the development of scenarios shared with Terna, as provided for by legislation, and which envisage a central role for gas in the context of the energy transition to a world with neutrality with respect to CO₂ emissions, Snam is promoting the development and use of green gas, which in some cases represent the only solution with respect to the broader decarbonisation objectives.
Green business: Snam integrates new green businesses in its operations like biogas, compatibility with increasing amounts of hydrogen, power-to-gas technologies and focuses on sustainable mobility, aimed at promoting de-carbonisation and less use of energy, as described in the new 2019-2023 Strategic Plan. For more information, please refer to the paragraphs “Snam in brief” and the “2019-2023 Strategic Plan” in the Integrated Management Report.
Health and safety: the safety of our people is a vital factor in Snam’s day to day activities and we actively monitor the actual and potential risks in order to mitigate and prevent accidents in the workplace and the impacts on people’s health.
Protecting local areas and biodiversity: Snam is committed to preserve biodiversity in the areas in which it operates through efficient and responsible environmental management, specifically during the construction of infrastructures. Snam safeguards the landscape heritage and the areas in which there are Group plants or facilities, through surveying and monitoring activities aimed at minimising the impacts on biodiversity and the most important habitats and it minimises its environmental impact by including policies to protect the soil, subsoil and water table during operations.

Protecting the air and the management of waste and water resources are issues that are not only material following the materiality analysis, but are supervised by Snam. As far as air protection is concerned, the only significant emissions are those of nitrogen oxides that derive mainly from the combustion of natural gas in the gas turbines installed in the compression plants (thrust and storage). There has been a programme in place for many years to reduce these emissions which involves altering some of the existing turbines and installing new units with low emission combustion systems (DLE). As regards water management, this is not a material issue because water resources are used in limited quantities, mainly in the operations of the GNL Italia regasification plant and for sanitary and green care use. In the same way, waste management is also not a material issue, taking into consideration the limited amount of waste produced by the company’s operations.

The main operational risk with an impact on the environment, health and safety is represented by breakages or damage to pipelines and plants, also as a result of extraordinary events such as fires, landslides or extreme weather conditions due to climate change. These events could cause significant damage in addition to a reduction in revenues.

The complete list of risks to the environment, health and safety is as follows:

Climate change risk within strategic risks;
Possible violation of rules and regulations risk in relation to the health and safety of workers and the environment within the legal and non-compliance risks;
Breakage or damage to the pipeline risk with damage to the environment/people within operational risks;
Environmental risks within operational risks.

A more extensive description of these risks is given in the chapter Risk factors and uncertainty in the Integrated Management Report.

Policies, commitments and management model

With regard to environmental and health and safety issues, Snam is committed, through the HSEQ Policy and the Sustainable Development Policy to:

ensure respect for the protection of health and safety of workers and the environment, through the prevention of accidents, injuries and occupational illnesses;
promote actions to fight climate change by implementing operational and management measures to reduce greenhouse gas emissions;
promote energy efficiency and guarantee the sustainable use of natural resources;
prevent pollution and guarantee the protection of ecosystems and biodiversity;
set up procedures to identify and respond to emergency situations and monitor the consequences of accidents.

The management of the aspects mentioned in the policies and the consequent actions for their implementation are mainly implemented within the management systems developed in compliance with the international standards ISO 14001 and OHSAS 18001, systems regularly verified and certified by a third-party which all Group companies have. These actions are detailed in the Report on Integrated Management:

for the development and maintenance aspects of the management systems, refer to the paragraph “Mitigation of environmental, health and safety impacts – Management systems”: this paragraph contains the certifications of the Company and the subsidiaries and details of the audits conducted by a team of auditors;
for aspects of heath protection and accident prevents, see the paragraph “Mitigation of environmental, health and safety impacts – Prevention of accidents and health protection”: this paragraph contains corporate initiatives for the prevention of accidents and how much the Company does for the health and health monitoring of its employees;
as far as the aspects regarding greenhouse gas emissions, energy efficiency, the production and use of energy from renewable sources are concerned, see the paragraphs “Summary data and information – Operating performance” and “Mitigation of environmental, health and safety impacts – Climate change and energy efficiency”: these paragraphs give details of the Company’s greenhouse gas emissions, the initiatives for containing emissions and energy efficiency and on the type, capacity and quantity of energy produced by renewable energy plants owned by Snam;
for the mitigation aspects of environmental impacts and the protection of biodiversity, see the paragraph “Mitigation of environmental, health and safety impacts – Environmental monitoring and restoration in the development of the pipeline network”: this paragraph contains details on the environmental restoration activities related to the installation of new infrastructures.

The preventive assessments of the effects on the environment and on the safety of new settlements are carried out in the context of the Environmental Impact Assessment (EIA) procedures, at the end of which the administrations responsible, both at central and local level, issue the authorisations required by current legislation. The progress of the permit activities is reported in the paragraph “Progress of activities related to obtaining permits” in the chapters Natural gas transportation and storage in the Integrated Management Report.

Overseeing the safety and quality levels of the plants is of great importance to Snam. The pipelines were regularly inspected on foot, in vehicles and by helicopter to detect potential hazardous situations and an inspection was carried out on the pipeline conditions by inserting smart devices in them to detect any defects. These actions are described in detail in the paragraph “Summary data and information – Maintenance of plant security and quality” of the Integrated Management Report.

Environmental and safety requirements in the workplace are considered in the qualification and selection of suppliers. The highly critical suppliers operating in the procurement of works, the most significant and most risky category for core activities, in particular for health and safety and environmental aspects, are all in possession of certified quality, environmental and safety management systems according to ISO 9001, ISO 14001 and OHSAS 18001 or ISO 45001 standards. The aspects of health and safety and environmental management are also part of the evaluation phase of the services rendered by suppliers.

The fight against climate change not only takes the form of actions to reduce emissions and energy efficiency projects, but it is also expressed on a strategic level through increasing the use of natural gas as a key factor in the decarbonisation process. The Company is committed to the integration of the new green businesses in its operations, with special reference to the development of green gases, such as hydrogen, biomethane and synthetic methane.

Performance indicators

The indicators representing the results of the management of environmental aspects with details of the reference GRI standard are listed below.

Compared with 2018, accidents involving employees halved, going from 4 to 2, while those involving contractors increased from 3 to 5, none of which were fatal.

Snam Scope 1 emissions for 2019 stood at around 1.35 million tonnes of CO_2eq, a 10% reduction compared with 2018, in spite of the 3.5% increase in the volume of natural gas transported in the pipeline network. The reduction in direct emissions, like the reduction in energy consumption (-8.5%) is mainly due to initiatives to reduce natural gas emissions implemented in the reference period, a demonstration of the effectiveness of the decarbonisation strategy adopted by Snam at the time.

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Indicator

GRI Standard

Unit metering

2017

2018

2019

(a)	Number of working days lost (calendar days) due to accidents at work resulting in absence of at least one day per thousand hours worked. Data is calculated including the contribution of fatal accidents, for each of which 7,500 days of absence were considered.
(b)	In 2019 a case of an occupational illness was reported which is in the process of being confirmed.
(c)	For the purposes of calculating the employee absenteeism rate, all hours worked (paid and unpaid) were excluded, excluding holidays and recoveries. The absenteeism rate does not include Senior Managers and mandatory or voluntary maternity leave.
(d)	The emissions of CO_2eq were consolidated according to the operational control approach. The GHG gas included in the calculation are CO₂ and CH4 and the emissions are calculated with a GWP of methane equal to 28, as indicated in the scientific study by the Intergovernmental Panel on Climate Change (IPCC) “Fifth Assessment Report IPCC”.
(e)	The percentage of electricity produced from renewable sources and consumed by the Group depends on the individual national electricity mixes. For Italy, there is also a self-consumption of electricity from renewable sources.
(f)	Natura 2000 sites are special protection areas/sites of Community interest. The indicator gives the km of lines laid in these sites in the year. In 2019, the only Natura 2000 site affected by the installation of infrastructure was SIC Vallata dello Stilaro by the works on the “S. Andrea Apostolo dello Ionio – Caulonia Pipeline”, the “Stilo and Bivongi By-pass” and the “Municipality of Bivongi Connection”.

Employee accident frequency index

403-2

Accidents per
106 hours worked

1.24

0.84

0.41

Contractor accident frequency index

0.54

0.41

0.71

Severity rate for employee accidents (a)

Work days
lost per
103 hours worked

0.05

0.02

0.03

Severity rate for contractor accidents (a)

Work days
lost per
103 hours worked

0.83

0.03

0.07

Employee accidents (of which fatal)

no.

6(0)

4(0)

2(0)

of which due to a traffic accident

of which due to a professional accident (maintenance, inspection, checks)

of which due to a general accident (slipping, bumpage, tripping)

Contractor accidents (of which fatal)

5(1)

3(0)

5(0)

Recognised cases of professional illnesses (b)

Employee absenteeism (c)

4.7

4.6

4.5

Women employees absenteeism

4.8

5.1

Men employees absenteeism

4.6

4.4

Emissions of CO_2eq – scope 1 (d)

305-1

103 t CO_2eq

1,500

1,497

1,347

Energy consumption.

302-1

12,582.3

13,281.0

12,152.2

of which natural gas

12,153.2

12,801.4

11,627.9

of which diesel

77.9

91.0

82.6

of which gasoline

2.3

2.8

3.9

of which LPG

0.4

0.4

of which electricity purchased on the network (e)

335.3

372.8

419.6

of which thermal energy purchased

10.8

8.5

14.8

of which electricity from renewable sources

2.4

4.1

3.0

Transportation network within Natura 2000 sites (f)

304-1

12.6

1.4

3.68

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Environmental and health and safety aspects

Relevance and related risks

Policies, commitments and management model

Performance indicators