6th CSR ONLINE AWARDS

DIGITAL DISRUPTION

AND THE FUTURE OF CSR #CSRawards

Milan, 27-28 May 2014

Domenico Negrini

Head of Sustainability,

Snam

Workshop:

ADAPTING TO G4 -

Company experience:

SNAM

snam.it

Materiality Analysis in Snam Lundquist CSR Online Awards Seminar Fondazione Cariplo, Milan

27 May 2014

Snam’s profile

• Towards the end of 2012 Cassa Depositi e Prestiti completed the closing of

the acquisition of 30% minus one share of the voting capital of Snam held by

Eni. Consequently to the sale, Snam was no longer subject to the control and

management and coordination of Eni.

• This is a significant milestone in the Company’s history and also enabled

Snam to consolidate its business development plans in Italy and Europe.

• Snam is an integrated Group, operating in the regulated gas sector in

Italy, active in the transportation, storage, regasification and local

distribution of natural gas.

Structure and

organization

Public reference

shareholder

3

Snam’s presence in Italy and the expansion towards Europe

• Snam is a strategic business for Italy

and has a key role in energy

supplying.

• To become a key player in the

european gas market as well, Snam

started far-back a project about

updating systems and rules that

regulate the access to transportation

network and has been investing in

strenghtening its own infrastructure.

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Sustainability in Snam: key milestones

2007

First Sustainability

Report

(according to GRI G3

guidelines),

approved by the Board in

conjunction

with the financial

statements.

New sustainability

structure

Snam enters

the Dow

Jones Sustainability

World Index

Snam joins the

Global

Compact

2009 2010 2011 2012 2014 2013

Launch of a project to

explore the

concept of Shared Value

2011 Sustainability

Report issued

with GRI G3 A+ and GRI

Application

Level Check

“Towards

Shared Value” document

published

The 2012 Sustainability

Report

achieves GRI G3.1 A+ and

GRI

Application Level Check

2013 Sustainability

Report prepared

with GRI G4 application level

and GRI

Materiality Matters Check

Sustainability Project Team

established

2006

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The 2009 Sustainability

Report

maintains the GRI G3 B+

application

level achieved for the first time

with the 2008

Annual Report

Sustainability in Snam: key milestones

Why did Snam immediately aim for GRI G4?

• The main focus of the G4 standard is on the

supply chain and governance, areas on

which Snam has always focused.

• The gap analysis performed with respect to

the points of disclosure and the indicators of

the G4 standard found no areas of

excessive criticality.

• The materiality analysis process was

already included in the sustainability

business model. With the stimulus of the G4

standard, Snam immediately launched an ad

hoc project to further structure the

process.

6

Sustainability in Snam: the model

• The model provides for the identification of competent corporate functions,

activities and projects to be implemented

• It’s a key to provide the establishment of common improvement objectives

7

Snam’s path towards materiality

In response to the new GRI G4 guidelines, which place greater focus on the reporting of

material topics, Snam initiated a project to update the topics that are historically part of its

areas of sustainability in order to focus on the most relevant ones.

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The materiality analysis process, involved the entire corporate management team

(direct reports of the Corporate CEO and the CEOs of the Operating Companies) and the

collection of feedback of the stakeholders , resulting in an informed choice of topics that

will strengthen Snam’s commitment to sustainability.

Snam’s path towards materiality

Identification of relevant topics

9

The analysis began by identifying the topics included in the main sustainability

guidelines (ISO 26000 and GRI-G4). These topics are generally considered to be

representative of the perspective outside the company, as identified in the context of multi-

stakeholder debate and discussion at an international level.

These topics were then put into context

with respect to the Utilities sector (the

sector to which all the main businesses of

Snam belong) by means of a benchmark

performed on the 2012 Sustainability

Reports (statements + websites) of the main

companies in the sector at an international

level and through the various questionnaires

of the rating agencies (e.g. SAM, for

admission to the Dow Jones Sustainability

Indexes, Oekom, etc.).

Snam’s path towards materiality

Identification of relevant topics

10

As part of the process to identify the relevant topics, internal topics developed as part of the

Corporate Sustainability Plan were also considered.

This first phase resulted in the

identification of a range of

relevant topics, which were then

aggregated into macro topics

on which the 4 subsequent

analyses were based.

Snam’s path towards materiality

11

1. Analyses of the industry scenario, public opinion and the pressures on the

company, which allow us to assess, on the one hand, the possible evolution of political,

economic and social phenomena at a global and local level that could affect SNAM’s short

and long-term strategies, and on the other, any additional topics, or strengthen topics

already identified through the analysis of press clippings, media, internet, etc.;

2. Analysis of feedback on the topics of external stakeholders (through engagement

instruments such as climate analysis, financial community road shows, customer

satisfaction initiatives, supplier questionnaires / workshops etc.), which allow Snam to

perform qualitative surveys in relation to key stakeholders’ perception of Snam’s image,

aimed at identifying opinions, concerns, ideas and observations with regard to sustainability

and governance;

Snam’s path towards materiality

12

3. Analysis of the perception of the topics from an internal perspective through

interviews with direct reports to the CEO of the Company and of the CEOs of subsidiaries.

4. Analysis of the Code of Ethics and the Policies adopted by Snam;

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Materiality analysis: representation of the topics

• For each material topic, a report was produced summarising the results of the analysis

from a dual perspective – internal and external (stakeholders).

The combined consideration of both internal and external aspects resulted in the

identification of priority areas and of an overall materiality for the company.

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Materiality analysis and G4 standard

• For the purposes of the

application of the G4 standard,

the results of the materiality

analysis were then compared

with the list of aspects

identified by the standard.

• As required by the G4 standard,

the areas impacted by the

various material aspects were

specified, both internally (i.e.

with respect to Snam’s different

business activities) and

externally.

Points for consideration

• Difficulty of representing some of the topics emerging from

the materiality analysis in relation to the list of material

aspects of the G4 standard.

• As the focus is on materiality at Group level, Snam had to

consider the weighting of the various businesses. It was

therefore necessary to exclude topics that could be

considered material for a sector.

• Difficulty of finding some data/information about the external

boundaries

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Snam’s path towards materiality: benefits

• Involvement within the company:

o participation of all business functions;

o shared reasoning on sustainability topics;

o opportunity to identify the changes taking place.

• Allows the evaluation of the company's strategic

positioning in respect of stakeholder expectations.

• Helps the company to assign priorities when defining

areas for improvement.

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6th CSR ONLINE AWARDS

DIGITAL DISRUPTION

AND THE FUTURE OF CSR #CSRawards

Milan, 27-28 May 2014