Objectives, actions and results

CUSTOMER SATISFACTION SURVEY RESULTS

 (*) In 2020 the survey covered both 2019 and 2020

ETHICS AND COMPLIANCE

The Italgas Group operates on the basis of a Corporate Management System comprising an Organisational System and a Regulatory System that defines roles, responsibilities, powers and rules of conduct to be upheld in going about the corporate business. The Corporate Management System is updated continuously with a view to guaranteeing the effectiveness and efficiency of processes, safeguarding the company’s assets and ensuring compliance with legislation, thereby allowing Italgas to also direct the management and coordination of the subsidiaries. The correctness and transparency of business management aim not only to ensure a correct management model and dialogue with stakeholders, but also to prevent corruption.
On 14 December 2023, the Italgas S.p.A. BoD approved the update of the Code of Ethics (general essential principle of the 231 Model adopted by Italgas and by the Group companies in accordance with Italian Legislative Decree no. 231/2001) in order to optimise the Italgas Group commitment to protecting cultural and landscape heritage. The Code of Ethics, available on the Company’s website, is a collection of the values that the Group recognises, accepts and shares and the responsibilities it assumes within and outside of its organisation. The Code of Ethics recalls the principles of corporate responsibility that must be respected, inter alia, in the areas of sustainability, the prevention and fight against corruption, health and safety in the workplace, relations with stakeholders and suppliers, and personal data protection. The Code of Ethics applies with regard to all “Italgas people”, i.e. directors, statutory auditors, management and employees of the Group, as well as all of those who work to achieve its objectives, each within the scope of their functions and responsibilities.
During 2023, comprehensive trainings were provided to all employees’ categories (including full-time, part-time and temporary) as well as contractors, covering the following subjects: Code of Ethics, Model 231, Anti-corruption, Antitrust and Data Protection

In the following tables, data reflect 100% of revenues, 100% of consolidated operations and FTEs as at 31 December of
each year.

REPORTING ON BREACHES

GRI 2-28 Membership of associations
GRI 415-1 Political contribution

DIALOGUE THROUGH PARTNERSHIPS 

In the following tables, data reflect 100% of revenues, 100% of consolidated operations and FTEs as at 31
December of each year, if not specified otherwise.

Share of employees Contractors or temporary staff as a % of
employees

DIVERSITY INDICATOR

In 2022 we continued our commitment towards Diversity and Inclusion, achieving a
rate of women in managerial role of 24.9%^* (vs 22% in 2021).

*Values related to overall Group perimeter. Italian value:
24.7%

GRI 405-2 – ITALY RATIO OF BASIC SALARY AND REMUNERATION OF WOMEN TO
MEN

EMPLOYEES BY LEVEL OF EDUCATION

EMPLOYEES BY LEVEL OF EDUCATION (% OF THE TOTAL)

VOLUNTARY OUTGOING TURNOVER
RATE

*Calculated as: voluntary leavers/employees as at 31.12

NEW RECRUITS (HEADCOUNT)* – GRI 401-1

*Only market entries are considered.

NEW RECRUITS BY NATIONALITY

OUTGOING TURNOVER – BY MANAGEMENT
LEVEL * GRI 401-1

*Calculated as: leavers/employees as at 31.12 every year for each cluster.

OUTGOING TURNOVER RATE– BY AGE AND GENDER* GRI 401-1

*Calculated as: leavers/employees as at 31.12 every year for each cluster.

OUTGOING TURNOVER RATE– BY NATIONALITY* GRI 401-1

PERCENTAGE OF NEW POSITIONS HELD BY IN-HOUSE
CANDIDATES

TURNOVER RATE GRI 401-1

EMPLOYEE AVARAGE TURNOVER

INBOUND TURNOVER RATE*  GRI 401-1

*Calculated as: new recruits/employees as at 31.12 every year for each cluster.

OUTGOING WORKERS* GRI-401-1

*Termination by mutual agreement and other outgoings.

OUTGOING TURNOVER RATE* GRI 401-1

*Calculated as: leavers/employees as at 31.12 every year for each cluster.

TRAINING

In 2023 we pursued in our commitment towards training (target: 45 hours per
employee by 2029), achieving a total number of hours of training per employee of 40,34**

GRI 404-1 AVERAGE HOURS OF TRAININGS PER YEARS PER EMPLOYEE

HOURS OF TRAINING BY AGE RANGE

COLLECTIVE AGREEMENTS GRI 102-41

In the following tables, year-end data reflect 100% of revenues, 100% of consolidated operations and FTEs as at 31 December

HSEQE POLICY

For details on Italgas’ Group Health and Safety policy please refer to the link

HSEQE Policy Italgas.

The HSEQE policy of Italgas was discussed for oversight by the Board in June 2023. The Board approves the Strategic Plan and the Sustainable Value Creation Plan of the Group. The Board approves the sustainability targets of the group, including those related to the environment and health and safety and monitors the performance of the group towards the targets

LOST
 TIME INJURY FREQUENCY RATE AND FATALITIES EMPLOYEES

LOST TIME INJURY FREQUENCY RATE AND FATALITIES CONTRACTORS

Lost time injury frequency rate was defined as: “number of injuries recorded / million hours worked

SOCIAL COST OF WORK-RELATED INJURIES

Social cost of work-related injuries represents the impact evaluation methodology to assess the external impact to affected stakeholders with regard to the issue “Safety of network, assets and people”. Ouput KPI (n. of injuries) was assessed through a social cost of work-related injuries, resulting in a total negative impact of approx. 1,154,501 euros. Considering that 6 injuries for the Group’s contractors occurred, the social cost of work-related injuries resulted in a total negative impact of 407,471 euros.

Italgas conducts regular local stakeholder engagement programs, applied at all local operations, especially with local authorities of the territories impacted by its operations. Such programs are performed through impact assessments to identify potential negative impacts of Italgas operations as well as maximizing value creation in local communities. To do this, the Group established clear communication channels for local stakeholder to communicate with Italgas and providing capacity building to them to effectively communicate with the Group, i.e. leaving personal contacts of local business leads within Local Institutional Relations function, as well as meetings with local authorities. Local end users have also access to relevant website section to communicate grievances.

Italgas conducts reviews to gauge local stakeholders’ perceptions on its strategy and operations also by regularly conducting meetings with relevant stakeholders to foster trust and understanding through constructive dialogue.

Italgas tracks grievances to ensure that any issue raised by local stakeholders are addressed promptly and effectively, also by a system that register all outside-in and inside-out mail correspondence. In 2023, 413 grieviance from local stakeholders were communicated through the aforementioned system. Also, Italgas press office periodically invites local media to events, press conferences, and local initiatives to present specific activities, to deepen mutual understanding, and to provide additional channels of contact with journalists who regularly cover energy and infrastructure topics.

In the following tables, data reflect 100% of revenues, 100% of consolidated operations and FTEs as at 31 December of each year.

STANDARD GRI 203-1 INFRASTRUCTURE INVESTMENTS AND SERVICES SUPPORTED

^*86% of the liberal disbursements activated by the Group in 2020 consisted of donations to various hospitals for the purchase of machinery, equipment, and functional garrisons (such as devices for the protection of health facility personnel, inpatient beds and technical equipment) and contributed to the setting up of new areas to meet the needs arising from the emergency situation related to the pandemic and ensure hospital service.

Over the years, Italgas has implemented a robust and comprehensive ESG program for suppliers, which is constantly updated and consists of a collection of activities and measures aimed to recognize and assess potential ESG risks and, accordingly, to plan corrective measures to ensure solid sustainability performance of the Group’s supply chain.

To ensure the integrity of the supply chain and to maintain the expected quality and efficiency standards, Italgas uses a series of instruments, such as supplier qualification and appraisal processes, inspections audits and performance monitoring during the execution of contracts. Purchasing practices are continuously reviewed and updated to ensure alignment with the Supplier of Conduct and to avoid potential conflicts with ESG requirements.

Supplier screening and assessment are the step to identify, monitor and manage potential risks. Among other activities, Italgas performs systematic desk assessments with a development of specific Corrective Action Plans. Also, on-site assessment are carried out for relevant and strategic suppliers, also involving 3rd party auditors.

Supplier Development Process consists in a series of trainings regarding both Italgas’ suppliers ESG program, process and requirements, and specific workshop where case studies are shared to provide ESG benchmarking to suppliers with the final aim of spreading best practices on different ESG topics (circular economy, wastes, D&I, energy efficiency, cybersecurity).

Moreover, Italgas supports suppliers on the implementation of corrective actions identified during the Supplier Assessment, also through the implementation of capacity building programs. The aim of this initiative is to systematically improve supplier practices and performance on specific ESG topics (e.g., CO2 emissions), sharing Italgas’ objectives and targets with suppliers.

Since 2018 Italgas has set sustainability thresholds and criteria in tender procedure. Each year the model has been improved and enhanced. As well, a sustainability questionnaire compulsory for most of all qualified suppliers has been implemented and results in a rating assigned. The aim is to use the information collected to determine the general and specific level of sustainability of each supplier. The rating allows access to the Italgas Supplier Portal. If the resulting rating is lower than the set threshold, the supplier cannot be admitted to the qualification process. Average-low ratings are subjected to development plans, and an on-site audit.

In addition to qualification requirements, the sustainability score is also required as a minimum criterion for participation in tenders. Suppliers with better ESG performance are preferred by applying a minimum weight to ESG criteria in supplier selection and contract awarding. If they cannot achieve minimum ESG requirements within a set timeframe, they’re excluded from contracting.
The procurement strategy, that includes all ESG suppliers programs indicated above, has been validated by the Board of directors and the results of the monitoring carried out are constantly subjected to top executive management, to align ESG strategies of different functions to reach Group’s sustainability goals, included in the Sustainable Value Creation Plan.

Finally, Italgas is committed to provide continuous training for buyers and for relevant internal stakeholders in their roles, in order to let them understand how their day-to-day actions and decisions are essential part of the Italgas ESG Strategy and to ensure alignment between the supplier ESG strategy and how they implement their roles within the organization.

SUPPLIERS SCREENING

Our supplier screening is an integral part of our Purchasing process. We conduct research to identify categories of suppliers that are critical for our organization, including for reaching our sustainability objectives, based also on the experience built in our day by days operations. The first step of Italgas’ supplier screening programme involves the assessment of potential Environmental, Social and Governance risks associated with country-specific operations, sector-related challenges, and commodity-specific concerns that impact both our operations, the supply chain and the potential interferences. We also consider factors such as the complexity of the supply chain, strategic importance to our operations, volume of trade, and technological impact. Our Suppliers in ‘Strategic Works and Materials’ are particularly scrutinized due to their substantial influence on both our business’s sustainable performance and Environmental, Social and Governance risks associated. By evaluating these aspects we determine which suppliers category may have significant ESG risks before proceeding to a more detailed assessment phase, channeling them into the “strong” qualification process, that implies a deeper evaluation of ESG performance & risk through more detailed data collection requests for the suppliers.

SUPPLIERS ASSESSMENT AND DEVELOPMENT

The supplier assessment process of the Group’s suppliers is the step to identify, monitor and manage potential ESG risks associated with Italgas existing and potential suppliers and, at the same time, to identify and share potential areas of improvement and opportunity.

Italgas performs a systematic desk assessment which also includes verification of evidence and the definition of specific integrated Corrective Action Plan for each supplier. In addition to the audits carried out directly by Italgas personnel, also, on-site assessment (provided by a 3rd party auditing organization, accredited by the AMFORI BSCI Guidelines – Audit Business Social Compliance Initiative and in accordance with ISO/IEC 17021-1:2015 “Conformity assessment – Requirements for bodies providing audit and certification of management systems”) are carried out for relevant and strategic suppliers.

During the on-site assessment on the suppliers, also a guidance and support on the implementation of corrective and improvement actions are provided.

The suppliers’ development process of the Group’s consists in a series of trainings regarding both Italgas suppliers ESG program, process and requirements, and specific workshop where case studies are shared to provide ESG benchmarking to suppliers with the final aim of spreading best practices on different ESG topics (circular economy, wastes, D&I, energy efficiency, cybersecurity). Moreover, Italgas supports suppliers on the implementation of corrective actions identified during the Supplier Assessment, also through the implementation of capacity building programs. The aim of this initiative is to systematically improve supplier practices and performance on specific ESG topics (e.g., CO2 emissions), sharing Italgas’ objectives and targets with suppliers.”

SUPPLIER SCREENING

SUPPLIER ASSESSMENT

CORRECTIVE ACTION PLAN SUPPORT

CAPACITY BUILDING PROGRESS

The company is dedicated to creating a work environment free from direct or indirect discrimination, in accordance with Article 25 of the Equal Opportunities Code, from any form of violence or harassment, whether sexual or based on personal, political, or cultural differences. Italgas strives to ensure that all employees treat others with dignity, respect, and fairness at all times, reflecting an inclusive approach that aligns with the company’s values.

Italgas has been a TCFD supporter since October 2021.

In the following tables, data reflect 100% of revenues, 100% of consolidated operations and FTEs as at 31
December of each year, if not specified otherwise.

The protocol used for GHG emissions accounting is the GHG Protocol.

SANCTIONS
In 2024, just like in 2023, 2022, 2021, 2020, 2019, 2018 and 2017, the Italgas Group did not receive any significant
sanctions for breaching environmental laws and regulations.

SMART METERS
As at 31 December 2023 in Italy practically all active mass-market meters are now smart (98,2%) while in Greece
64.4k active meters out of 0.599mn are smart. Overall the % of active smart meters was 91,5% at the end of 2023.

HSEQE POLICY
For details on Italgas’ Group Environmental policy please refer to the link HSEQE Policy Italgas
The HSEQ policy of Italgas was discussed for oversight by the Board in June 2023. The Board approves the
Strategic Plan and the Sustainable Value Creation Plan of the Group. The Board approves the sustainability
targets of the group, including those related to the environment and health and safety and monitors the
performance of the group towards the targets.

EMISSION REDUCTION
TARGETS

*100% of supply chain GHG emissions. Categories covered: Capital goods; Purchased goods and services;
Upstream transportation and distribution; Waste generated in operations; Upstream leased assets (CDP
categories 1,2,4,5,8)

ENERGY

Italgas is dedicated to sustainability and delivering long-term positive impact, as outlined in our Sustainable
Value Creation Plan (SVCP). Our commitment to fighting climate change focuses on improving energy efficiency,
reducing energy consumption, and mitigating our environmental impact.  In doing so, Italgas set targets
related to energy: -27% of net energy consumption by 2028, -33% by 2030 (2020 baseline). The progress of this
goal is continuously evaluated through the monthly Sustainability Business Review process, established in 2021,
in which a detailed assessment of the main environmental KPIs – inclosing those related to energy, energy
efficiency, energy consumption reduction and energy management – is carried out. Italgas also leverages on green
energy purchase to reduce its carbon footprint.

As part of this process and in accordance with the requirements of the EN ISO 50001:2018 standard provided for in
the group’s HSEQE management system, the Group conducts periodical internal energy audits, supported by the
expertise of Geoside, the Group’s Energy Service Company (ESCo) specialized in energy efficiency, as well as
external energy audits carried out by an independent third party. Through these audits, the Group can analyze
energy consumption and efficiency based on solid data, identifying areas of significant energy use and
opportunities for improving energy performance across all energy uses (industrial, civil, vehicle fleet) while
enabling informed decision-making for the implementation of energy management programs and actions aimed to
reduce the amount of energy used.

Leveraging innovation and R&D efforts and investments, we continuously explore and implement cutting-edge
digital technologies to enhance sustainability programs and to decrease energy consumption. This includes the
development of advanced digital energy management systems, smart grid solutions, and innovative monitoring tools
that provide real-time data and predictive analytics to optimize energy use and reduce emissions such as the
“Savemixer” platform developed by Geoside. All those systems are in integral part of our Strategic plan
investments of €7.8bn to 2029. Our Innovation team also engaged in scouting for and implementing the best
technological solutions that support reduction in energy consumption such as substitution of cathodic protection
power supply units with better energy performing switching power supplies, installation of high-end batteries on
network plants to avoid loss of energy supply.

Finally, the group provides comprehensive training and awareness programs for employees, focusing on reducing
energy consumption and adopting energy-efficient behavioral measures. Training is provided to both the whole
group employees and to specific targeted employees that hold responsibility for decision-making involving energy
management and efficiency programs. In 2023 over 3.000 hours of training on sustainable energy and energy
management have been provided, involving over 1.700 employees.

ENERGY CONSUMPTION

*Including Greece from September 2022

GRI 302-1 ENERGY CONSUMED WITHIN THE ORGANIZATION

*Including Greece from September 2022

EMISSION

GRI 305-1 Direct (Scope 1) GHG emissions

GRI 305-2 Indirect (Scope 2) GHG emissions from energy consumption

GRI 305-3 Other indirect (Scope 3) GHG emissions

GRI 305-4 Intensity of GHG emissions

Details on consolidation method and operational boundaries are presented in the Integrated Annual Report 2023 at
page 17-18.

¹Data restated with respect to the 2019 Non-Financial Statement. For the value shown in the 2019
Consolidated Non-Financial Statement, please refer to the document published on the Group’s website at https://www.italgas.it/wp-content/uploads/sites/2/2021/07/Non-Financial-Statement-2019.pdf

²2019: Scope II location-based. 2020, 2021 and 2022: Scope II market-based

³2020 and 2021 Scope 3 GHG emissions were recalculated using the new methodology applied for 2022
values. For the values shown in the 2021 Consolidated Non-Financial Statement, please refer to the document
published on the Group’s website at https://www.italgas.it/wp-content/uploads/sites/2/2022/04/2021-Integrated-Annual-Report-format-PDF.pdf

⁴Calculated as Scope 1 and Scope 2 emissions / gas distributed.

Methane emissions

Gas leakage rate

*Volume of emissions of natural gas / volume of gas distributed

Including Greece from September 2022

Emissions considered in the calculation of the gas leakage rate are fugitive emissions and venting emissions.
Please note that venting emissions are residual (less than 1% of emissions considered for gas leakage rate).
There are no pneumatic or unburned emissions for Italgas Group, hence they are not included in the calculation
of the gas leakage rate.

Fleet fuel efficiency data 

Italgas’ fleet only operates in Europe

GHG emissions per megawatt-hr 

Indirect Greenhouse Gas Emissions (Scope 2)

Nitrogen oxides (NO_x), sulfur oxides (SO_x) and other significant air emissions

SOx and COV emissions are considered null in all reported years, as they are not significant

GRI 305-5 Reduction of GHG emissions

¹The 2020 figure refers to the site on Largo Regio Parco 11 only

Scope 3 – Emissions classification

COVERAGE BY MANAGEMENT SYSTEM

WATER

Compliance with water quality/quantity permits, standards and regulations

WASTE

Italgas Group is committed to sustainable waste management through comprehensive programs and action plans that
enhance waste performance, reduce waste generation, and promote recycling. Our environmental department
periodically assesses and analyzes processes and activities to evaluate and minimize waste generation and
monitors performance towards targets. These waste audits help identify areas for improvement and to implement
effective waste management practices. In addition, during 2024, Italgas performed specific environmental audit activities on final destination management plants in order to evaluate and analyse the environmental authorization and verify that treatment lines are compliant.

Over the years the Group has distinguished itself for its unique approach on innovation and digitization
investments, also with an effort to minimize waste. At the forefront of Italgas Group’s innovation efforts are
the design and development of a new H2 ready smart meter Nimbus which widespread installation will drive
significant investments over the coming years.

The new smart meters were designed and developed with an effort to minimize waste. 85% of the Smart Meter is made
recycled materials, including a sustainable recycled polycarbonate casing; and it is smaller, easier to
transport and install, contributing significantly to a circular economy system. Further, extending its operating
lifetime to 15 years – double that of existing meters – it reduces by 50% the expected substitution rate.
Additionally, we focus on qualifying suppliers whose products have the longest possible life cycles, thereby
extending the end-of-life period of our equipmente and significantly reducing overall waste.  Italgas
set a target to minimize waste that is related to the installation of new smart meter: “50% of all active smart
meters designed according to «Design for environment» criteria in lieu of GPRS meters by 2028”.

Furthermore, the Group widespread focus on innovation include a collaborative R&D program with the
Politechnic of Turin to develop a more recyclable battery for smart meters. In addition to this, we are
investing on the development of innovative back-filling material for excavation works, facilitating reuse and
avoiding waste production.

Moreover, in 2024, Italgas started a partnership with the Italian consortium for electronic waste.

This agreement allows Italgas to manage the waste of the replacement of smart meters for domestic use, in a dedicated chain with the aim to recover all the materials/items (metal, plastic, batteries etc.) that are contained into the Smart Meter.

In line with these efforts, Italgas Group conducts annual waste reduction training for its employees across all
sites. These training sessions focus not only on administrative and mandatory topics, but are designed to raise
awareness on waste hierarchy, to guide on effective waste reduction and recovery rate maximization, trends and
innovative projects.

Moreover, to ensure waste is effectively recovered and reused, we select transporters and destination plants that
manage waste in a sustainable way in order to integrate recycling programs to reduce waste sent to landfill. To
reinforce this, we have introduced a clause requiring waste management contractors to disclose to Italgas the
main categories of waste produced.

Finally, our effort of waste diversion from landfill (specifically regarding waste generated from the
substitution of smart meters) is certified by an independent accredited certification company, monitored by the
Ministry of Environment, thus highlighting our efforts to maximize sustainable waste management.

During 2024, the Italgas Group did not receive any significant sanctions for breaching environmental laws and regulations, just like in the two previous years.

TCFD RECOMMENDATIONS 

SOCIAL COST OF CARBON

Social cost of carbon represents the the impact evaluation methodology to assess the external impact to
affected stakeholders with regard to the issue “Energy transition and fight against climate change”. Ouput KPI
(tons of CO2 avoided by ESCo activity) was assessed through a social cost of carbon, resulting in a total
positive impact of approx. 1,332,484 euros.

Carbon pricing

Even though not subject to ETS scheme, Italgas Group has integrated an internal carbon price as a core element to
address business strategy, decision making process and prepare to address climate change related issues. The
internal carbon price is monitored as an actual and perspective value over the Strategic Plan period (latest
Strategic Plan 2023-2029).

Italgas CO2 emission reduction targets are publicly disclosed and are a tool to meet Italgas stakeholders’
expectations and to show our strategy and commitment to achieve a net zero carbon business by 2050 (please
see Strategic Plan 23-29, slide 35)

Also, CO2 is a driver to change internal behavior, namely it is used for internal communication strategy to
address employees’ behaviors (also during awareness and training campaigns) and to improve economic and
sustainability sensitivity of employees and spread Heat and cooling best practices in the
offices.