executive summary - RENFE · index 4 08 executive summary index: index: chapter title in lower case...

executive summary

08 executive summary4

index:index

5chapter title in lower case

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A commitment to mobility and sustainability 07Contract-Programme between the National Government and the Public Corporation Renfe-Operadora 2006-2010 07 Achievements during 2008 10

Responsible and sustainable management at Renfe 13Management summary 18Renfe Activity Areas 21

The customer at the core of strategy 29Renfe’s commitment to innovation 30 Service of quality and excellence 32 Guarantee of comprehensive safety 37 Promoting the environment by train 38

Corporate Social Responsibility at the core of management 41 An accessible train 42 Sustainability: A new energy management culture 45 Responsible management of employees 53 The projects of ‘A train with values’ 61 Dialogue with interest groups 66

Annexes 71Profile, scope and coverage of the Report 71 Index of contents Global Reporting Initiative (GRI) 72 Integrated indicators from the Global Compact, GRI and United Nations Millennium Development Goals (MDGs) 85 Evaluation of the Annual Report 2008 according to the criteria of UIC Leaflet 330 87 Audit Declaration 88

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A commitment to mobility and sustainability

0.1. Contract-Programme between the Government and State-Owned Company

Renfe-Operadora 2006-2010

The Strategic Infrastructure and Transport Plan of the Government establishes the need to provide Renfe with a

Contract-Programme capable of meeting the challenge of deregulating the railway sector in the best conditions of com-

petitiveness and business and corporate efficiency. 2010 will be a milestone in railway history, when full deregulation of

railway transport takes effect in Spain. Up to that date, the future strategy of Renfe will be directed towards its leadership in the sector and business excellence.

The new Contract-Programme 2006-2010 establishes for Renfe a framework, sets the business goals for the company to reach, and its obligations and commitments to society and to the Gov-ernment up to 2010.

This framework for the relationship between the State and Renfe sets a railway transport policy that will permit better ser-vice and attention to the real mobility needs of people and

01Contract-Programme between the Government and State-Owned Company Renfe-Operadora

2006-2010

02Achievements during 2008


freight to be offered. It also determines the volume of public resources assigned to reach the agreed goals and establishes an economic framework for Renfe to provide its services in step with the implementation of new infrastructures.

The Contract-Programme gives Renfe the pertinent instruments to allow it to promote innovation and modernization of rolling stock, with an historic level of investment, improved systems of company management and innovation and training and adaptation of human resources to the new technological and competitive context. The Contract-Programme also includes im-provement to safety levels in the railway system and incorpo-rates aspects related to social and environmental conduct.

Up to 2010, Renfe will make total investments of 5,772 million Euros, of which 4,436 million Euros will be spent on the acquisi-tion of new trains and locomotives. When the new material comes into use, it will vastly increase the efficiency and quality of our ser-vice in a highly competitive market - Alta Velocidad and Mercan-cías y Logística Service - without compromising our commitment to public service through the Cercanías y Media Distancia Area.

The Spanish State is firmly behind the revolution in rail transport in Spain and makes a substantial contribution to Renfe’s invest-ment plan. It is developing a broad network of high-perfor-mance rail infrastructures and provides Renfe with part of the capital needed for the construction of a new storage terminal that will maximise the potential of the new network.

On completion of this Contract-Programme with the State, Ren-fe will reach business profitability, while maintaining the high levels of quality and efficiency of Cercanías y Media Distancia Area public services. To this end, the coming years will be a pe-riod of consolidation and rationalization of the action defined

in the Strategy Plan of Renfe-Operadora (such as redefinition of its commercial products, renovation and modernization of the fleet of trains with historic investments and the start of a new company management strategy).

In the area of Human Resources, Renfe is committed to main-taining or reducing the average size of its workforce. Renfe's Social Plan, agreed with national trade unions, establishes a Contract Program under which early retirement and redundancy initiatives are offset by the recruitment of new staff.

Safety is a basic principle in all of Renfe’s activities. The com-pany applies annual strategic action plans with separate provi-sions for workforce, technical and regulatory considerations.

At the end of the period covered by the Contract Program, the Admissible Risk Rate (ARR) – calculated as the number of ac-cidents per million kilometres travelled by Renfe trains – will have been cut by two thirds.

Renfe’s first commitment, to transport passengers and freight with maximum quality of service, is firmly accompanied by the its commitment to society, sustainability, culture and ethics.

Renfe’s commitment to Corporate Social Responsibility, known as "A Train with Values", is now incorporated into the strategic plans of the company and forms part of the Contract Program.

The government has committed to promoting the railway in Spain and this Contract-Programme permits Renfe to respond to the commitment, both in its relationship with the State, and with the business and corporate environment in which it oper-ates, while also promoting sustainability, social responsibility and internal practices of good governance.

9a commitment to mobility and sustainability


0.2. Achievements during 2008

Barcelona and Madrid brought closer

In 2008, Renfe arrived with new trains to new city destinations in Spain. One of the major achievements of the year was the inauguration on 20 February of the section of high-speed line between Tarragona and Barcelona, which completes the Ma-drid-Barcelona high-speed line and reduces the train journey time between these two cities to 2 hours and 38 minutes, on non-stop journeys. Until it was implemented, the air route of Barcelona to Madrid was the busiest in the world.

Development of the Accessibility Plan and inauguration of the Atendo Service

Renfe has implemented the Service of Assistance to Disabled People (Atendo), offering assistance to people with a disability and/or reduced mobility, available immediately, at all times and without prior notice in Spain’s 71 main stations. Another 26 stations continue to offer the special help service, available with 12 hours’ prior notice. In 2008, help was provided 110,722 times. Renfe also assigned 295 million Euros to adapting the train fleet, and made an additional investment of 10 million Euros to acquire 365 portable elevating platforms, ramps and complementary accessories. Moreover, Renfe has incorporated 456 accessible trains to its fleet since March 2004, with an in-vestment of more than 4,100 million Euros.

The most modern fleet in Europe

Renfe is in the process of renovating its fleet, with 560 new pas-senger trains planned to go into service in the period 2004-2010. In 2008 progress has been made in this area to make the Spanish fleet of trains the most modern in Europe in 2010, according to UNIFE (Union des Industries Ferroviaires Européennes), the orga-nization representing the European railway industry.

Energy Efficiency Plan: towards a new energy management culture

Renfe has presented the Bases for an Energy Efficiency Plan, to be implemented in the 2009-2011 period, with which it aims to optimize the train’s competitive advantage as the most sustain-able means of transport. The plan, which attempts to consolidate a new culture of financial and environmental management in the company, includes a range of actions linked to the processes of the purchase, sale and consumption of energy, in order to achieve realistic, quantifiable and visible results in the short and medium term. By the end of the plan annual savings are expected of 53 million euros and 115,000 tonnes of CO2 annually.

Safer trains

In 2008 Renfe surpassed the objective set as regards traffic safety in the Contract-Programme between the State and the company. The number of train accidents per million kilometres run was 0.026, compared to the goal set of 0.041.

Reduction of CO2 emissions: A year of records

Renfe reduced its emissions of CO2 en 2008, both in unit and absolute terms. This saving is even more significant bearing in mind the increase in High Speed service traffic recorded dur-ing the year. Thus, in accumulated terms, between 1990 and 2008 Renfe reduced its emissions for each Transport Unit by 43.74%, to arrive at the current value of 26 grammes of CO2. 2008 has been the year with the lowest total emissions of CO2 in the whole period, with a fall of 32.94% compared to emis-sions in 1990, despite the increase in traffic. Looking ahead to 2020, Renfe estimates that its emissions for unit transported (passenger-kilometre or tonne-kilometre) will be below 20 grammes of CO2.

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Greater investment in training

In order to promote the professional development of its em-ployees and to increase the company’s competitiveness, Renfe has invested 9.3 million Euros in training in 2008, 7.66% more than in the previous year.

An agreed Equality Opportunity Plan

Renfe is defining and preparing an Equality Opportunity Plan, in collaboration with workers’ representatives, to strengthen gender equality in the company. To negotiate it, the Equal Op-portunities Commission was set up in March 2008, with repre-sentatives from all areas of the company and the trade unions sitting on the General Works Committee.

More than two million Euros for “A train with values”

Renfe named 28 November “A train with values” day, a name that identifies its Corporate Social Responsibility strategy. On this day, the company pledged a Euro for each user travelling on any of the company’s trains. The result will permit Renfe to assign 2,020,000 Euros to social, cultural and environmental projects in 2009. One of the most noteworthy initiatives is the solidarity project, “A train with values for a better world”, which aims to gather funds for 12 development and cooperation proj-ects run by 12 of the main NGOs in the setting of the Millen-nium Development Goals. The initiative, which will extend to 2009, mainly helps disadvantaged groups in different African and Latin American countries.

a commitment to mobility and sustainability


Responsible and sustainable management at Renfe

The year 2008 represents the crossing of the equator in Renfe’s strategy for facing the fu-

ture of complete liberalisation of passenger and freight transport. During this year, planning car-

ried out continues to bear fruit. Opportunities for growth have been taken, the company continues to

be strengthened in the face of the liberalisation of competitors, management is being adapted to the new reorganisation and regulation of the sector, and busi-

ness restructuring has been supported to achieve profit-ability.

The Contract-Programme sets forth the mutual objec-tives, obligations commitments between the National

Government and Renfe, within the framework of its cor-porate purpose, general economic policy and transport

policies in particular, in line with EU regulations and Act

39/2003 of the railway sector. This Contract-Programme is part of the framework of the Government’s general pol-icy on transport included in the Strategic Infrastructure and Transport Plan (PEIT) approved by the Council of Ministers of 15 July 2005, and intends to set forth a rational, efficient and sustainable framework for the transport system in the medium and long term.

This management model upon which Renfe develops its busi-ness activities revolves around four Activity Areas which group together businesses that compete in similar markets, face the same changes, and require equivalent capabilities:

Cercanías y Media Distancia Services Activity Area

Its goal is to reinforce its position as the leading operator in public interest services.

01Management summary

02Renfe Activity Areas


Alta Velocidad-Larga Distancia Services Activity Area

Its management is marked by the coming into operation of the new infrastructures, the substantial investment effort made in rolling stock, and competition in a deregulated market.

Mercancías y Logística Services Activity Area

In a deregulated market, this area is committed to specialized management by sector markets and the development of new logistic services.

Fabricación y Mantenimiento Activity Area

Its goal is to transform maintenance activities and reach the highest levels of efficiency and quality.

The model is complemented by corporate areas whose work is applicable to the whole company:

• Presidencia.

• Secretaría General y del Consejo de Administración

• Dirección de Comunicación, Marca y Publicidad business unit

• Dirección General de Seguridad, Organización y Recursos Humanos business unit

• Dirección General Económico-Financiera y de Planificación business unit

• Dirección General de Desarrollo Estratégico business unit

This configuration is designed to provide a sufficient business platform in each area to ensure competitiveness and efficiency. The four areas of the new management model, together with the corporate areas, combine to form a shared management department, known as the Management Committee, which pro-vides support to the President in decision-making and the di-rection and management of the company as a whole.

Renfe has a number of governing bodies, which meet periodi-cally to determine the principal decisions taken by the company. The Board of Directors is the highest authority and is responsible for the overall organisation and management of the company. It is formed by the President of Renfe, who is also President of the Board of Directors, 18 members appointed by the Ministerio de Fomento, and a Secretary. Of the 18 members who compose the Board, three belong to the trade unions CCOO, UGT and SEMAF. All other members are publicly appointed.

15Responsible and sustainable management at Renfe

Dirección General de Seguridad, Organización y Recursos Humanos business unit

Dirección General Económico-Financiera y de Planificación business unit

Dirección de Comunicación, Marca y Publicidad business unit

Dirección General de Fabricación

y Mantenimiento business unit

Dirección General de Servicios

de Mercancías y Logística

business unit

Dirección General de Servicios de Cercanías

y Media Distancia business unit

Dirección General de Servicios de Alta Velocidad-Larga Distancia business unit

Secretaría General y del Consejo de Administración

Dirección General de Desarrollo Estratégico business unit

PRESIDENCIA

Management Committee (31 December 2008)


President

Mr. José Salgueiro Carmona

Members

Mr. Jesús Candil Gonzalo Mr. Miguel Ángel Cillero Sánchez Mr. Luis de Santiago Pérez Mr. Antonio del Campo Navarro Mr. Juan Jesús García Fraile Ms. Carmen Gil González Mr. Celso González González Mr. Manuel López Blázquez Mr. Aureliano López Heredia Mr. Santiago Menéndez de Luarca Navía-Osorio Mr. Carlos Ocaña y Pérez de Tudela Mr. José Mª Ramírez Loma Mr. Enrique Salvo Tierra Mr. José Damián Santiago Martín Mr. Ángel Torres Torres Mr. Ángel Roberto Villalba Álvarez Mr. Pascual Villate Ugarte Ms. Encarnación Vivanco Bustos

Secretary of the Board

Mr. José Luis Marroquín Mochales

Representative of the Ministerio de Economía y Hacienda

Mr. Gerardo Sánchez Revenga

The powers of the Board of Directors are defined in the Ren-fe Statute, approved by Royal Decree 2396 of 30 December 2004. Members of the Board of Directors who attend its ses-sions receive monetary compensation authorized by the Minis-tro de Economía y Hacienda, on the initiative of the Ministerio

Board of directors (31 December 2008)

de Fomento, in accordance with what is established in Royal Decree 462/2002, of 24 May, regarding service expenses.

Vision

To be the leading transport operator for quality and efficiency.

Mission

To provide passenger and freight services, guided by the principle of safety, undertaking its activity with the customer clearly in mind and with respect for criteria of quality, efficiency, profitability and innovation, striving to secure an increase in the market share held by the railway sector, and supported by a commitment to social re-sponsibility and the professional development of its human team.

Values

Related to achieving the corporate mission:

• Safety.• Customer guidance.• Competitiveness.• Quality.• Efficiency• Innovation-modernization.• Results driven.• Coordination between all parties in the railway system.

Related to the workforce:

• Professionalism.• Development of people.• Active communication.

Related to society:

• Commitment to the communities in which it operates.• Respect for the environment.• Social and ethical commitment. • Transparency and good corporate governance.

Goals

1. Sustained growth, measured as an increase in market share with respect to other means of transport, by attract-ing new markets, developing new products adapted to the mobility needs of passengers and the requirements of consignees, and identifying new business areas associated with the railway sector.

2. Operational excellence, through the provision of a safe, reli-able and high-quality transport service focused on customer needs, achieved by developing an innovative, agile and com-petitive company in which technology is a catalyst for con-tinuous improvement and effective knowledge management.

3. Financial viability and a focus on results, achieved through the use of criteria to ensure profitability, efficient resource

allocation, increased income and cost reduction, and the acceptance of these criteria into the general working cul-ture of Renfe.

4. Adaptation to the new market framework through a care-fully structured transition to the new model, by taking an active role in defining and implementing new relation-ships with Adif, regional authorities and the Government and exploiting the opportunities presented by the new in-stitutional framework.

5. Sustainability, by contributing to sustainable development and mobility, respecting the environment, fostering a bal-ance between different means of transport, and contributing to the improvement of transport links across the country.


PRINCIPAL PRODuCtS AND SERVICES

Alta Velocidad-Larga Distancia Area

Cercanías y Media Distancia Area

Mercancías y Logística Fabricación y Mantenimiento


‘A Train with Values’ is the name of Renfe's Corporate Social Responsibility (CSR) strategy. A train that goes beyond the com-pany’s own financial goals and opens the way to social, environ-mental, cultural and ethical considerations.

‘A Train with Values’ is, by its very nature, a transversal concept that includes the company’s day-to-day. It is a commitment to responsible and sustainable management that pervades all Ser-vice Areas, Corporate Areas and the Management Committee.

This strategy was defined and implemented in 2005, a year which was a turning point in the management of the previous Renfe, when Renfe was responsible for the transport depart-ment and Adif went on to manage infrastructures. The new Ren-fe elaborated a new strategic plan culminating in the Contract-Programme 2006-2010, which regulates the relations between the company and the State.

1.1. Management summary

Economic results summary

The gross operating result (EBITDA) reached 240,5 million euros, which means an increase of 103,5 million euros over the previous year's figure, due to a greater growth of revenue, 17%, when compared with operating expenses.

The analysis by Activity Areas proves that this improvement is mainly due to the area of Alta Velocidad-Larga Distancia, and partly due to the Fabricación y Mantenimiento area.

The EBITDA margin on revenue ratio improved notably over the previous year, growing from 6.4% in 2007 to 9.5% in 2008.

Revenue shows a 2,521.2 million euro growth which means an increase of 366.2 millions of euros (17%) over 2007, especially the traffic revenue heading (sale of tickets for the transport of passengers and freight, agreements with Regional Governments and compensation for the provision of public services), which reached 2,360.6 million euros, 18.9% over the previous year. This revenue represents 93.6% of Renfe’s total revenue.

Behaviour of traffic-related revenue during 2008 this has been highly variable depending on the corresponding Activity Area:

• In the case of the Activity Area of Cercanías y Media Dis-tancia, the general descent of metropolitan and inter-city mobility and the negative impact of different infrastructure construction work on the demand have decreased the total volume of transported passengers by 2.4% compared with the previous year. The increase in prices applied was 4% and, nevertheless, the amount of income for tickets was of 574.3 million euros, 2.9% over the year 2007.

• In the Activity Area of Alta Velocidad-Larga Distancia, the volume of revenue for tickets grew 43.2% due to the in-crease of demand, which was of 23.9%, and of the average revenue per passenger-kilometre, which was 15.6%. All of this derived of the change in the commercial offer due to the inauguration of new high-speed lines in Valladolid and Mál-aga at the end of 2007 and Barcelona in February 2008.

• The Mercancías y Logística Area, to the contrary, saw a de-crease of activity of up to 11% of the volume of trans-ported tonnes. Nevertheless, the traffic revenue was merely situated at 3.6% below that of the previous year, thanks to improvements obtained in average payments, by train and per tonne-km.

The gross operating result (EBITDA) was 240.5 million Euros, meaning an improvement of 103.5 million Euros

compared to 2007

2008 2007VARIAtION

DIFFERENCE %

REVENUE

Passenger tickets and freight transport 1,940.59 1,622.03 318.56 19.6

Specific agreements with Regional Governments 40.02 37.67 2.35 6.3

Compensation for the Provision of Cercanías y Media Distancia Area Services 379.98 326.20 53.78 16.5

Traffic revenue 2,360.60 1,985.90 374.70 18.9

Rentals and fees 26.43 23.79 2.64 11.1

Profit on sale of fixed assets 4.87 7.33 -2.46 -33.6

Other revenue 62.77 47.55 15.22 32.0

Agreements with Adif 47.16 46.07 1.08 2.4

Work related to fixed assets 18.81 12.86 5.95 46.3

Miscellaneous revenue 160.04 137.60 22.44 16.3

Application of capital subsidies 0.61 0.67 -0.07 -9.8

Accrued subsidy related to the Human Resources Plan (redundancy procedure)

30.87 -30.87

+ TOTAL REVENUE 2,521.24 2,155.05 366.20 17.0

EXPENDITURE

Staff 761.76 731.60 30.16 4.1

Human Resources Plan (redundancy procedure) 0.84 34.22 -33.37 -97.5

Traction energy 245.54 233.75 11.79 5.0

Adif services and fees (except for traction energy) 439.02 334.25 104.78 31.3

Other Materials and Services 833.63 684.25 149.38 21.8

– TOTAL EXPENDITURE 2,280.80 2,018.07 262.73 13.0


CLOSING OF FINANCIAL YEAR 2008 / Results and management account(millions of Euros)


CLOSING OF FINANCIAL YEAR 2008 / Results and management account(millions of Euros)

2008 2007VARIAtION

DIFFERENCE %

=EARNINGS BEFORE AMORTIZATION, INTEREST AND TAXES (EBITDA)

240.45 136.98 103.47 75.5

– Variation in provisions for repairs 2.24 -2.24

– Amortization and removal of fixed assets 334.27 276.38 57.89 20.9

EARNINGS BEFORE INTEREST AND TAXES (EBIT) -93.82 -141.64 47.82 33.8

+/- Financial result -111.24 -97.30 -13.95 -14.3

+/- Results of previous financial years 27.99 27.99

+/- Exceptional results 0.00 4.09 -4.09

– Deferred taxation 0.18 0.18

= RESULTS OF THE FINANCIAL YEAR -177.25 -234.85 57.60 24.5

+ Loss offset 157.43 247.66 -90.23 -36.4

= RESULTS AFTER COMPENSATION FOR LOSSES -19.82 12.81 -32.63

Investment expenditure by type of asset(in thousands of euros)

tYPE OF ASSEt AMOuNt %

New rolling stock 978,551.4 79.4

Rolling stock modernization and improvement 102,872.8 8.3

New workshops and improvements 41,035.7 3.3

Installations at stations 25,130.3 2.0

Other investments 74,714.5 6.1

Financial Investments 10,739.0 0.9

Total 1,233,043.7 100.0

Balance sheet(millions of Euros)

ASSEtS 2007 % 2008 %

Fixed assets total 4,935.77 79.2 5,830.24 82.8

Non-current Debtors and other Fin. Inv. 27.33 0.4 20.91 0.3

Inventory 45.84 0.7 45.44 0.6

S/T Debtors and other Realizable assets pending payment 587.16 9.4 687.72 9.8

Treasury and other Equiv. Liquid Assets 631.23 10.1 457.21 6.5

S/T accruals 3.67 0.1 3.27 0.0

Total Assets 6,231.00 100.0 7,044.79 100.0

Balance sheet(millions of Euros)

NEt ASSEtS AND LIABILItIES 2007 % 2008 %

Equity 1,986.95 31.9 2,446.55 34.7

Subsidies, Donations and extra-company by Autonomous Community

7.423 0.1 7.00 0.1

L/T provisions 139.991 2.2 87.55 1.2

L/T creditors 2,623.01 42.1 3,007.35 42.7

S/T creditors 1,458.04 23.4 1,475.87 20.9

S/T accruals 15.59 0.3 20.47 0.3

Net Assets and Liabilities 6,231.00 100.0 7,044.79 100.0


1.2. Renfe Activity Areas

The management model that Renfe uses to carry out its busi-ness activities revolves around four Activity Areas which group together businesses that compete in similar markets, face the same changes, and require equivalent capabilities:

1.2.1. Cercanías y Media Distancia Area

The year 2008 has been characterised by a generalised de-scent of both metropolitan and inter-city mobility and by the inauguration of new stations and infrastructures which have allowed for launching new services.


1.2.2. Cercanías Metropolitanas of Barcelona

With the inauguration of the new Ave Madrid-Barcelona service, as of the month of February an agreement was established with the Alta Velocidad-Larga Distancia Activity Area for intermodal transport of passengers of Ave trains with Cercanías services. On the other hand, in the Barcelona Hub until May 10th were main-tained free trips on lines 2 Sur, 7 and 10, which were affected in 2007 by a suspension of service between Bellvitge and Sants.

1.2.3. Cercanías Metropolitanas of Madrid

In the Madrid Cercanías Business Area, on July 10th was inaugu-rated the commercial operations of the new Atocha-Chamartín tunnel crossing Sol and Nuevos Ministerios which doubled rail-way traffic capacity, offered a greater operational reliability, an improvement to the qualitative transport offer with fewer chang-es of trains (thus reducing congestion of the Atocha station), a shortening of travel times, an increase in frequency, as well as a wider offer of trains and seating. In addition, Nuevos Ministerios doubled its capacity and became the second most important met-ropolitan services station of Madrid, at which meet two tunnels and intermodal transport is shared with the Madrid Metro.

1.2.4. Cercanías Urbanas e Interurbanas Area

A great part of urban centres have been affected by the de-crease in mobility. Furthermore, in some of them the descent is even more noticeable, given the infrastructure works being carried out, like in Cádiz, Málaga and Valencia.

Commercial operation of the first line of the new Zaragoza hub began in June. It is 16 kilometres long and initially has five stations and 43 daily services. This service offers new possibilities for connecting with the services of Alta Veloci-dad, Larga y Media Distancia at the station of Delicias.

1.2.5. Alta Velocidad-Media Distancia

2008 saw the inauguration of new Avant services. These are Media Distancia services that permit large towns and cities to be connected by the Alta Velocidad network. On February 20th lines were inaugurated between Madrid-Segovia and between Málaga-Córdoba/Seville, and on April 28th between Lleida-Camp de Tarragona-Barcelona, and between Calatayud-Zara-goza, and Huesca and Tardienta with Zaragoza.

Cercanías y Media Distancia Services Activity Area

MAIN FIGuRES 2008 2007%

2008/2007

Ticket revenue 1.986,95 31,9 2.446,55

In millions of euros 574.253 558.207 2.9

Average takings (in Euros/P.K.) 0.050 0.049 2.1

Traffic 1.986,95 31,9 2.446,55

Passengers (in thousands) 476,490 488,024 -2.4

Passengers-kilometre (in millions) 11,583 11,500 0.7

Supply 1.986,95 31,9 2.446,55

Seats-kilometre (in millions) 34,210 32,346 5.8

Kilometres-train (in thousands) 98,601 95,146 3.6

Seats/train 347 340 2.1

Usage 1.986,95 31,9 2.446,55

% Use (P. K./K.O.) (1) 33.9 35.6 -1.7

Revenue/train km 5.824 5.867 -0.7

Passengers/train 117 121 -2.8

(1) The variation column shows the difference in percentage points in relation to the previous year.



1.2.6. Alta Velocidad-Larga Distancia Area

With the start of the operations of the Tarragona-Barcelona stretch the high-speed line Madrid-Barcelona has been com-pleted, which enabled offering directs AVE with a travel time of two hours and 38 minutes, equivalent to a reduction of one hour and 17 minutes with regards to the time of Alvia trains when the infrastructure was not yet in service.

In a first phase, as of the 20th of February, the Madrid-Barcelo-na offer was composed of 34 daily services which were gradu-ally increased until reaching 52 daily journeys.

New Ave trains between Málaga and Barcelona were also inaugu-rated, and between Seville and Barcelona, stopping at Madrid.

Finally, Altaria trains, which provided connections between Ma-drid-Logroño and Madrid-Pamplona/Irún, were replaced by new Alvia (S-120) services, improving travel times. The Alvia trains of the 120 series may circulate on both international gauge lines reaching speeds of up to 250 km/h, and on conventional lines reaching speeds of up to 220 km/h.

Activity Area of Alta Velocidad-Larga Distancia Services


2008/2007

Ticket revenue 1.986,95 31,9 2.446,55

In millions of euros 1,042.409 727.704 43.2

Average takings (in euros/P.K.) 0.099 0.086 15.6

Traffic 1.986,95 31,9 2.446,55

Passengers (in thousands) 23,256 18,596 25.1

Passengers-kilometre (in millions) 10,491 8,466 23.9

Supply 1.986,95 31,9 2.446,55

Seats-kilometre (in millions) 16,922 13,680 23.7

Kilometres-train (in thousands) 55,262 48,659 13.6

Seats/train 306 281 8.9

Usage 1.986,95 31,9 2.446,55

% Use (P. K./K.O.) (1) 62.0 61.9 0.1

Revenue/train km 18.863 14.955 26.1

Passengers/train 190 174 9.1

(1) The variation column shows the difference in percentage points in relation to the previous year.


1.2.7. Mercancías y Logística Services

The activity of the Mercancías y Logística Services Area has been strongly influenced by the general fall in economic activity begin-ning in the second quarter, the effects of which have intensified in later months as a result of the scope of the crisis which has af-fected the country's production-related sectors as well as services.

Different measures have been carried out to counteract this de-celeration. To this end, in November was inaugurated the new Internet-based, advance purchase sales channel for services of the Multicliente Intermodal Network for Freight, called ContainerClick. This system allows customers to reserve a place for a container on

the chosen train and day, with 30 days’ advanced notice, and con-tract complete door-to-door logistics and transport.

Meanwhile, in order to improve the offer of integrated services, the Railsider Logística Ferroviaria S.A. company was founded, in which Renfe holds 49% of the shares and the Algeposa group 51%. This is an integrated logistics operator with the main ob-jective of capturing traffic from the iron and steel sector.

As regards investments, new actions aimed at modernising and standardising the rolling stock fleet have been carried out, in-cluding the acquisition of 75 highly discounted platforms for the car sector.

Mercancías y Logística Services Activity Area


2008/2007

Traffic revenue 1.986,95 31,9 2.446,55

In millions of euros 323.931 336.123 -3.6

Average takings (in euros/T.K.) 0.033 0.032 4.4

Traffic 1.986,95 31,9 2.446,55

TEU (in thousands of equivalent units) 525 547 -4.0

Tonnes (in thousands) 22,012 24,737 -11.0

TEU-kilometre (in millions) 281 291 -3.2

Tonnes-kilometre (in millions) 9,737 10,547 -7.7

Supply 1.986,95 31,9 2.446,55

T. K. B. (millions) 24,739 26,347 -6.1

Kilometres-train (in thousands) 30,737 33,955 -9.5

TB/train 805 776 3.7

Usage 1.986,95 31,9 2.446,55

NTK/GTK (%) 39.4 40.0 -1.7

Revenue/train km 10.539 9.899 6.5

TN/train 317 311 2.0

1.2.8. Fabricación y Mantenimiento-Integria

The aim of Integria is to respond to Renfe's needs as a passen-ger and freight transport operator under principles of safety and therefore to adapt to the new strategy for growth and profitability initiated by the company as of its renovation of trains and loco-motives (in addition to its participatory role in their manufactur-ing), requiring modernisation from all points of view.

During 2008, Renfe Integria has continued developing its strat-egy for constituting mixed companies with each rolling stock manufacturer, with the two-fold goal of guaranteeing an in-crease in workload for its production centres and obtaining a high degree of technological know-how.


Renfe has now seven firms established with leading compa-nies in the sector: Tarvia, with Talgo; Nertus, with Siemens; Erion, with Vossloh; Actren, with CAF; Btren with Bombardier; Irvia with Alstom and Albatros Alcázar with Corporación Al-batros. In accordance with the corporate model followed to create them, Renfe has a 49% participation in each while the remaining 51% corresponds to each manufacturer. Renfe’s goal with these strategic alliances is to participate in 2010 in the maintenance of 79% of all railway equipment in ser-vice, whether exclusively (45%) or in collaboration with the manufacturers (34%).


The client at the core of strategy

01Renfe's belief

in innovation

02Quality and excellence

in service

03Guarantee of

comprehensive safety

04The train as promoter

of the environment

One of Renfe’s main objectives and of its Activity Areas is to offer a quality, efficient, comfortable

and punctual service. To this end, the company is immersed in an ambitious project to the renovate

its train fleet and place Spain at the cutting edge, putting it in line to be the railway company with the most modern fleet in Europe in 2010.

In addition to this renovation, Renfe is making a major effort to attend to the demands and needs of its clients and offer them a rail transport which meets their expectations. Within this framework are structured the company’s efforts to guar-antee universal access to all of its services by persons with disability by the year 2012 within its “A train with values” RSE strategy, as well as through a diversity of measures to offer passengers maximum safety.


2.1. Renfe’s commitment to innovation

Between 2004-2010, 564 new passenger trains will have been put into service, of which 265 are already operational. In the next two years, between 2009 and 2010, another 295 new passenger trains will be inaugurated, as well as 85 locomotives and 438 wagons for transporting freight, which yields a weekly reception ratio of three trains and one locomotive. This is why UNIFE (Union des Industries Ferroviaires Européennes), the organisation that represents the European railway industry, has stated that Spain's train fleet will be the most modern in Europe in 2010.

The result of this modernisation is already visible, but will be so even more in the next two years, especially with regards to the Cercanías y Media Distancia, Alta Velocidad and Larga Distancia and Mercancías y Logística services.

2.1.1. Alta Velocidad-Larga Distancia Area

The recent inauguration of high-speed lines in Barcelona, Mála-ga and Valladolid has allowed for initiating the launch of part of the new high-speed train fleet to operate exclusively on Union Internationale des Chemins de Fer (UIC) gauge lines.

Forty-two AVE trains have been incorporated to the service since 2004, to which must be added 28 new trains up to 2010, whereby Renfe will have 70 new AVE trains.

In parallel, the first 24 Ave trains to operate in Spain after the inauguration of the Madrid-Seville line in 1992 are being com-pletely renovated to extend their useful life after 16 years of excellent service. Then, the Ave fleet will be made up of 94 trains in 2010.

Also, a renovation of the night train transport offer will be en-abled with new units which, in addition to incorporating numer-ous comfort-related improvements, will also be capable of fully

30

exploiting the new high-speed infrastructures. Renfe will have, then, 10 new Trenhotel of variable gauge for overnight travel in journeys of over 900 kilometres.

Therefore, the new Trenhotel may be used on both high-speed and conventional lines. This versatility is already visible in con-nections between the centre and north of the Spanish mainland and between Galicia and Catalonia aboard 46 Alvia trains, put into service in 2004.

Along with the Alvia trains, the fleet of variable gauge trains will be increased by 29 Avant trains to broaden the versatility of Media Distancia services rendered by the high-speed lines.

2.1.2. Cercanías y Media Distancia Area

131 Civia trains have been brought into service since 2004, to which 96 more will be added in the next two years. These trains, along with many other advantages, give the company a new flexibility unknown in the history of the composition of its train fleet.

In 2010, 122 new trains will have been added to the Media Dis-tancia services. With all of this, the average age of the conven-tional train fleet will decrease to nine years, and consequently users of these services throughout Spain will perceive a notable improvement to quality, comfort and performance.

Along with these trains, in December of 2004 were put into service 20 Avant trains specifically designed for Alta Velocidad-Media Distancia services, and the inclusion in the service of another 13 latest-generation trains in the beginning of 2009 is planned.

In summary, for the period 2004-2010 in Spain there will have been put into service 564 new passenger trains for a total of 1,237 trains in 2010, with just over 45% being new.

2.1.3. Mercancías y Logística

Renfe has put into action a determined action topromote Mercancías y Logística services which are already competing in a liberalised market. The service is to be expanded with 100 new electrical locomotives. This renovation is accompa-nied by the remodelling of 28 diesel locomotives and the purchase of 438 new wagons and platforms.

New passenger trains 2004-20102004 - 2008 2009 - 2010

tOtAL 2004 - 2010

Cercanías 131 96 227

Conventional lines 21 101 122

Trenhotel 4 6 10

Variable gauge High-Speed 52 50 102

Alta Velocidad 62 41 103

Total 270 294 564

2008 Quality Award of the magazine “Ejecutivos”

The 19th edition of the “Ejecutivos” Award was conferred on Renfe in the ‘Quality’ category in recognition of the effort made in renewing the train fleet in order to meet customers' needs and expectations.

31the customer at the core of strategy 3131


2.2. Service of quality and excellence

Offering a punctual and quality transport service is one of Renfe’s main objectives, as is proven by the diverse initiatives pursued by the company along these lines.

Renfe wishes to promote this line of excellent in the manage-ment which since years ago considers the satisfaction of the needs and expectations of the clients within a process of ongo-ing improvement.

2.2.1. Punctuality commitment

One of Renfe´s fundamental aims is to achieve maximum punc-tuality in all of the transport services it offers. As proof of its commitment in this regards, the company’s economic compen-sation policies, in the case of delay, are amongst the most am-bitious in all of Europe and, in many cases, surpass correspond-ing legislative requirements.

2.2.2. Customer Service for Complaints

Renfe’s commitment to quality service and its determination to respond to the needs and expectations of its clients in the best

way possible is reflected in the company’s voluntary adhesion to the Consumer Arbitration System, a means made available by the Public Administrations to citizens for resolving with efficien-cy conflicts and complaints which arise in consumer relations.

When a client wishes to formalise a complaint or claim as re-gards the service received, Renfe makes available several chan-nels for doing so amongst which are the Complaints Book in accordance with the provisions of Chapter IV, Section V, Head-ing III of Royal Decree 2387/2004 of 30 December, Railway Regulations, and other common communications tools such as the Web, post or e-mail.

All complaints which the company receives are attended and responded to quickly and effectively.

During 2008, in general terms, the number of claims has de-creased. The Alta Velocidad-Larga Distancia Area has registered an increase in absolute numbers, explained by the inauguration of the line from Madrid to Barcelona, which has led to a consid-erable increase in the number of passengers.

Punctuality

2008 2007

Cercanías y Media Distancia Area 96.00 96.00

Madrid Cercanías 98.15 98.50

Barcelona Cercanías 92.47 91.70

Cercanías Urbanas e Interurbanas Area 97.50 98.06

Alta Velocidad-Media Distancia Area 99.03 99.50

Conventional Media Distancia Area 91.56 90.38

Alta Velocidad-Larga Distancia Area 86.84 80.83

Madrid-Seville/Málaga Ave 98.06 98.29

Madrid-Barcelona Ave 97.14 93.47

2.2.3. Quality through the customer’s eyes

Renfe’s different Activity Areas carry out quality studies amongst their clients throughout the year to obtain an evaluation of the service. Based on this data, a Unique Perceived Quality Ratio is drawn up to give an idea of the perception that users have of the company’s service.

33the customer at the core of strategy 3333

Number of claims in the Freight and Logistics Area 2006 2007 2008

Number of claims 243 113 98

Claims in the Area of Cercanías y Media Distancia 2006 2007 2008

Claims per 1,000 passengers 0.09 0.11 0.11

Claims in the Area of Alta Velocidad-Larga Distancia 2006 2007 2008

Claims per 1,000 passengers 2.05 2.57 2.64(*)

* Implementation of the Madrid to Barcelona Alta Velocidad line.

According to these indicators, users give Renfe a rating of 7.08 on a scale from 0 to 10. The most highly rated area is Renfe’s Alta Velocidad-Larga Distancia, with a perceived quality rating of 7.54. The next area is Cercanías y Media Distancia with a rating of 7.09, and the Mercancías y Logística area rated 6.71. This index also contemplates a quality survey of internal clients of Fabricación y Mantenimiento, rated at 5.87.


Compared with 2007,

Freight has notably improved -

by 12.4% - its quality results

Perceived Quality 2008 CERCANíAS Y MEDIA DIStANCIA AREA

ALtA VELOCIDAD- LARGA DIStANCIA AREA

FREIGHt AND LOGIStICS

Global Quality 7.09 7.54 6.71

2007 2008

Cercanías y Media Distancia Activity Area 7.09 7.09

Madrid Cercanías Metropolitanas Business Area 7.48 7.52

Barcelona Cercanías Metropolitanas Business Area 6.18 6.34

Cercanías Urbanas e Interurbanas Business Area 7.83 7.69

Conventional Media Distancia Business Area 6.58 6.49

Alta Velocidad Media Distancia Business Area 7.78 7.86

Alta Velocidad-Larga Distancia Activity Area 7.31 7.54

Northeast Corridor Business Area 7.61 7.96

South Corridor Business Area 7.63 7.94

East – Mediterranean Corridor Business Area 7.28 7.15

North Corridor Business Area 6.91 7.36

Transversal Business Area 6.48 6.45

Mercancías y Logística Area of Activity 5.97 6.71

Productive Services Business Area 5.97* 6.71

Iron and Steel Business Area 6.81 7.37

Bulk Business Area 5.58 6.70

Cars Business Area 6.06 6.45

Intermodal Business Area 5.42 6.41

Multiproduct Business Area 6.33 6.58

*Productive services is not a market area.

2.2.4. Dialogue and management with customers

Renfe maintains a continuous, fluid dialogue with its custom-ers, not only through quality studies and customer satisfaction surveys carried out periodically, but also through several estab-lished communications channels, which the company attempts to expand and improve each year in order to offer customers the best possible service.

Therefore, Renfe users have within reach a large variety of com-munications channels through which to dialogue with the com-pany and satisfy their need for receiving information, making suggestions and/or presenting complaints or carrying out tasks related with its service.

Amongst the most frequently used channels for dialogue with clients stands out the Virtual Customer Service Office on the website www.renfe.comand through which the client may pres-ent the matters of interest using the on-line form.

The same page details the main customer service telephone numbers which the company makes available to its clients:

• Information, reservations and sales: 902 24 02 02

• Reservations, sales and assistance requests for disabled passengers: 902 24 05 05

• International information: 902 24 34 02

• Information on Internet sales: 902 10 94 20

• Information on main stations: 902 43 23 43

• Change of Tarjeta Plus tickets: 902 11 00 55

The Cercanías Hubs have their own e-mail addresses for attend-ing to the needs of users of these areas:

• Asturias Hub: [email protected]

• Barcelona Hub: [email protected] / [email protected]

• Bilbao Hub: [email protected]

• Cadiz Hub: [email protected]

• Madrid Hub: [email protected]

• Málaga Hub: clienteMá[email protected]

• Murcia/Alicante Hub: [email protected]

• Santander Hub: [email protected]

• San Sebastian Hub: [email protected]

• Seville Hub: [email protected]

• Valencia Hub: [email protected]

• Zaragoza Hub: [email protected]

Likewise, clients of the Alta Velocidad-Larga Distancia service also have available an e-mail address [email protected] for sending their information requests.

Customers can ask for information in person at the Cercanías Network Customer Service Office. Stations without staff are be-ing communicated with Cercanías Information Centres by the installation of terminals, or via the ticket machines in places where these are available.

The Alta Velocidad-Larga Distancia service offers personalised assistance at Ave Customer Service Centres, open from 6.00 am to 12 midnight seven days a week in the stations of Madrid-Puerta de Atocha, Seville-Santa Justa, Córdoba, Málaga, Zaragoza-Delicias, Lleida-Pirineos, Camp de Tarragona and Barcelona-Sants Estació.

the customer at the core of strategy 35


Cercanías Customer Committees

Since 1993, the Dirección de Cercanías Urbanas e Interurba-nas business unit has periodically organised meetings of the Customer Committees from different hubs to gather informa-tion and direct views from regular users about different service-related aspects. The intention is to maintain dialogue to help to resolve conflicts or tensions deriving from the provision of service. In addition to surveys, quality audits and complaints forms, Renfe maintains this two-way, interactive channel for communications between Cercanías and its customers.

In 2008, five Customer Committee meetings were held at the hubs of Valencia (two annually), Seville, Málaga and Cadiz. The Barcelona Cercanías Customer Committee, established in 2007, has continued with the dialogue process between the company and users of that zone, which will help improve the service and attend passengers’ specific needs.

Renfe.com increases its visits

Users increasingly use Renfe’s on-line communications chan-nel, www.renfe.com. Between January and December 2008 the portal registered an average of 3,673,607 monthly visits, 40.7% more than the same period of 2007. During 2008, the number of unique navigators – computers from which the page is accessed – also increased to an average of 2,139,732, rep-resenting 35.82 % more than the same period of 2007, when the monthly average was 1,575,421 navigators.

In 2000, Renfe pioneered in Europe with the launch of an Inter-net-based ticket sales. Its goal was that 20% of ticket sales in 2010 would be made over the Web.

The Internet-based sale system gives customers access to pur-chase Renfe products. 2008 registered 5,421,944 tickets sales, more than double the 2007 figure. Total income obtained through the website amounted to 227 million Euros, 172% more than in 2007.

Renfe on YouTube

Renfe has launched a new channel for communications on You-Tube in addition to its web www.renfe.com as a new space for disseminating the company’s activity through a audiovisuals, offering its clients and the general public a vision of new traffic and services. Renfe thus becomes the first Spanish transport company with its own channel on YouTube, an initiative that puts faith in the future of new Internet tools and close two-way communication with its customers.

Renfe.mobi

Renfe has an innovative communications channel offering up-to-date information by mobile phone, PDA, BlackBerry or any other device with access to the Internet, on:

• Main general times for Alta Velocidad, Larga Distancia and Media Distancia services.

• Renfe Cercanías times.• News and Last Minute updates.• Suggestions for travelling with Renfe.

Internet sales

2006 2007 2008

Tickets 1,223,470 2,156,890 5,421,944

Revenue 45,966,674 E 83,529,686 E 227,977,455 E

Increase – 81% 172%

2.3. Guarantee of comprehensive safety

The full security of customers is a key factor in the activity of Renfe, as it is the basis of an efficient service of quality. Renfe was one of the first companies to consider comprehensive secu-rity, i.e. encompassing in one area of the company's manage-ment the security of people and goods, public safety and work-ers' health. Due to the nature of the company’s activities, traffic safety, both fundamental and strategic for a railway operator, is also added to the above.

2.3.1. Traffic safety

Traffic safety is part of Renfe’s corporate mission and is based on three key aspects: technology, the human factor and regu-lations.

Renfe places great importance on these three aspects and makes a significant investment in improvement of safety, specifically through the incorporation of new technologies into train safety systems, and in training programs and investment in technolo-gy classes, with centres distributed in the networks where Renfe is most active.

During 2008 Renfe has improved its goal relating to traffic safety in the Contract-Programme. The number of train acci-dents per million kilometres run by trains was 0.026, below the figure of 0.041 stipulated in the Contract-Programme.

2.3.2. Civil defence and citizen safety

In addition to traffic safety, Renfe is concerned with two funda-mental aspects:

a) Prevention of crime and antisocial behaviour that affect the personal safety and property of passengers, employees and the company’s property.

b) Civil defence.

In this area, the company carries out studies and evaluations of risks and designs plans and protocols to avoid or reduce these, as well as preventive and reactive measures. For this purpose, Renfe makes use of the different human, technical and organi-sational resources established in the strategic safety plan, which considers the programming of surveillance as well as invest-ments in technology and the structuring and programming of its own human resources.

Renfe also collaborates closely with security forces and corps to protect people and property, and supports and assists civil defence action.

The organisational combination of a central and a territorial structure for safety and civil defence activities allows Renfe to offer an adequate response at the location where risks or needs arise, using its own resources or with the participation and col-laboration of safety and/or civil defence personnel of the cor-responding Administration.

All preventive measures and actions are coordinated through the Control and Coordination Centre (Cecon), at which information on all kinds of incidents is received via different tools, services, institutions and persons around the country. This centre has sup-port provided by territorial control centres 24 hours a day.

In 2008, a series of training action on civil defence was pro-grammed, which registered 1,897 participations, and to which 10,294 hours were dedicated.

2.3.3. Increased investment in train safety

Renfe installed ERTMS equipment in 15 high-speed trains with a budget of 11.5 million Euros. Its objective is to complete fit-ting of the entire Renfe Ave fleet so that it can operate on all of Spain’s Alta Velocidad corridors. The ERTMS system is an in-ternational, standard system for managing railway traffic which reinforces safety by considerably reducing human error and no-tably minimising incidents.



Once this investment project has been completed, Renfe’s entire fleet of Alta Velocidad trains will be equipped with the ERTMS system and will be able to operate on any of the lines of this type throughout the country, in addition to notably increasing safety levels.

2.4. The train as promoter of the environment

As a transport company, Renfe has become a promoter of the en-vironment wherever it has railway stations, a manufacturing plant for its new models or when making purchases from its suppliers in order to make available the best services to its passengers.

Renfe directly employs 14,287 people, of which only 56 have a temporary contract, and promotes stability and personal and professional development.

The alliances which the company has established with the private industrial sector relating to maintenance in the Fabricación y Man-tenimiento Area is another example of how Renfe is commitment to this activity, and not merely as a transport company. In total, Renfe has already established seven firms with the leading companies in the sector. In accordance with the corporate model followed to create them, Renfe has a 49% share in each of them while the remaining 51% corresponds to each manufacturer.

Renfe’s goal with these strategic alliances is to partici-pate, by 2010, in the maintenance of 79% of all railway materials in service, whether exclusively (45%) or in collabora-tion with the manufacturers (34%).

The relationship that the company maintains with its suppliers also helps economic growth. Renfe currently has 1,324 active suppliers, and during 2008 registered a purchase volume in excess of 909 million Euros, favouring the sustainability of these companies.

2.4.1. Promoter of cities

The train has always been a promoter of the cities and towns through which it has passed. With the inauguration of the Ma-

drid-Seville Ave in 1992, Seville was the first Spanish city to see its image strengthened as a destination for tourism and busi-ness in an accessible and fast way.

The Spanish railway structure of Alta Velocidad services has con-tinued to promote cities in their demographic and economic growth as well as by being a unifying element for the popula-tion, infrastructures and activity.

The Madrid-Barcelona Alta Velocidad line has been completed by the putting the Tarragona-Barcelona stretch into service in February 2008. At the end of April, new Alta Velocidad-Media Distancia Avant services were inaugurated between Lleida, Camp de Tarragona and Barcelona, and those linking Zaragoza with Calatayud, Zaragoza with Huesca, Málaga with Córdoba and Seville, and Madrid with Segovia.

All of these cities, plus those which comprise the Alta Velocidad Madrid-Segovia-Valladolid corridor, and Avant services of To-ledo, Ciudad Real and Puertollano have seen their potential for development increased.

Cities which have AVE or Avant services have witness how the arrival of the high-speed train sparks great expectations for the socioeconomic growth of their territories. On a more local scale, the most immediate effect is the spatial impact of its physical implantation, which implies changes to the structure and func-tioning of urban space.

Locally, the arrival of high-speed service is perceived as a proj-ect which goes beyond the mere physical implantation of new infrastructures and the reorganisation of the railway system, and generates a series of opportunities, such as the chance to improve physical and functional structures of that space, and therefore increase its power of attraction. Furthermore, oppor-tunities are generated at local and regional levels, such as re-inforcing the role of the capital and positioning of the network within the territorial system, an improved image of the urban centre, new conditions for accessibility and mobility, and the restructuring and transformation of urban space.

One quantifiable aspect of this positive impact of the train on its surroundings is the expansion of its availability of seats for passenger transport. During 2008, Renfe transported 18.8 mil-lion passengers through its high-speed services. This figure rep-resents an increase of 61.7% in comparison with 2007; this means that last year 7.1 more million people took the train than in the preceding year.

The implementation of new services and fleet renovation are some of two of the causes of this spectacular increase, seen mostly in the Ave services (76.6%) and, in Avant, in the Alta Velocidad-Media Distancia Area trains (35.4%).

The previously mentioned new high-speed lines to Málaga, Val-ladolid and Barcelona have made the use of Ave services along these corridors shoot up. Thus, 6.35 million passengers trans-ported in 2007 have grown to 11.23 million in 2008, a total growth of 4.87 million passengers.

In 2008, 5.1 million persons travelled along the Madrid-Barcelo-na corridor, while 2.84 million used the train in 2007, signifying that passenger traffic along this corridor has increased by 82%. With regards to the southern corridor, 2.1 million people took the Madrid-Málaga Ave, twice as many as in 2007. In Valladolid, where high-speed was inexistent prior to the end of December 2007, over 530,000 passengers travelled by Ave in 2008.

The new high-speed lines have also brought savings in travel times on other connections, as the trains can change axle width at interchange points and, therefore, can run on both UIC gauge and conventional gauge.

The new Avant services have also been very well received. Dur-ing 2008, the Seville-Córdoba-Málaga Avant has transported 910,000 passengers, Madrid-Segovia 412,000 and Barcelona-Camp de Tarragona-Lleida 380,000.


Impact on the area

The implementation of Alta Velocidad services in urban areas generates a series of changes which impact on the image of the city and the surrounding area, even before the inauguration of the service. An aura of modernity and a more dynamic and inno-vative image are brought to cities where it is implemented. There-fore, policies for urban development are used, taking advantage of the new infrastructure as a powerful instrument capable of adapting the traditional image of the station to modern times and attracting new economic activity, residents and tourists.

Expectations are even greater in intermediate cities that have, or will soon have, the new services, where it is understood that lower land prices, better quality of life and proximity to impor-tant markets may lead to new residential and business expan-sion. Thus, Renfe contributes towards changing the role played by the network on urban and regional systems and contributes new possibilities for competing and establishing relationships with other cities and regions.

New conditions for sustainable accessibility

The Alta Velocidad train is also a means of transport within a global system the passenger uses from point of origin to fi-nal destination. Therefore, the better articulated the transport chain is and the more complementary the different services and means used, the greater will be the economic, social and envi-ronmental benefits of accessibility. The key is to seek good artic-ulation of networks and means of transport, allowing exchange and promoting the complementarity of services, a concept that the European Union has named “co-modality”.

In 2008, 5.1 million persons travelled along the Madrid-Barcelona corridor, while 2.84 million used the train in 2007, signifying that passenger traffic along this corridor has increased by 82%

41

Transporting passengers and freight under the principle of safety, with a clear customer-focus,

with maximum quality, efficiency, profitability and innovation, and based on commitment to society and

employee development.

This is Renfe’s primary obligation and responsibility as a railway operator. The company opts for a corporate management model based on a firm commitment to

employee development, society and the environment, by means of a strategy that promotes sustainability, culture

and ethics and which pervades all of the company's levels and areas of activity.

The company’s RSE strategy has been based, since 2005, on the motto ‘A train with values’. A train that goes beyond the typical financial goals of a company, opening the way to social, environmental, cultural and ethical considerations. Around this train with valuesRenfe has chosen four pillars on which to align all of its Social Responsibility actions, which are expressed in four voluntary commitments:

• A commitment to society and accessibility.

• A commitment to culture, education and sport.

• A commitment to ethics and good corporate governance.

• A commitment to sustainability and environmental protection.

41

Corporate Social Responsibility at

the core of Management

01An accessible train

02New culture of

energy management

03Responsible management

of employees.

04The projects of

“A train with values”

05Dialogue with interest groups


Renfe, to guide all of its corporate actions and projects within the realm of its Social Responsibility, and for the purpose of consolidating itself – by 2010 – as one of Spain’s leading com-panies in this regard, launched an RSE Master Plan in 2007 to coincide fully with the broad operational guidelines set forth in the company's Strategic Plan and with its objectives.

In 2008, this Master Plan has been developed from the perspec-tive of responsible leadership, implying an integration of ethical, social and environmental commitment in the organisation’s deci-sion making, always considering its interest groups: customers, employees, society, suppliers and public administrations.

Renfe’s corporate values refer to sustainable growth, economic viability, the integration of new technologies and guaranteeing high levels of quality and safety. The main aim of this Plan is to set forth management guidelines that guarantee ethical prin-ciples and respect for people and the environment.

The company’s RSE Commission, made up of representatives of all corporate Activity Areas and corporate management, contin-ues to try to ensure compliance with these policies and to make progress with new projects.

3.1. An accessible train

Renfe’s main responsibility to society is to guarantee acces-sible, safe and quality transport for its passengers. Within this framework are structured the company's efforts to guarantee universal access to all of its services within its "A train with values" RSE strategy, as well as through other, diverse measures for offering its passengers maximum safety.

3.1.1. Renfe Accessibility Plan

Renfe is making the greatest effort to achieve full accessibility in its services by applying an ambitious plan initi-ated in 2007, which will guarantee access to all services by pas-sengers with any type of disability or reduced mobility.

To achieve this first-order goal, Renfe has invested 295 million Euros in the adaptation of its train fleet. Furthermore, an addi-tional investment of 10 million Euros will be made to purchase 365 portable elevating platforms, ramps and complementary accessories to permit disabled people to access trains.

Furthermore, within its RSE strategy, Renfe has practised re-sponsible purchasing in all of the processes related to the ac-quisition of trains. In the last five years, all material purchased by the company has been accessible by disabled persons. As of March 2004, the Ministerio de Fomento has incorporated 456 accessible trains into Renfe’s fleet, with an investment of over 4,100 million Euros.

The commitment to passengers with reduced mobility is not limited to having a totally accessible fleet, but also, to guaran-teeing mobility for all. Renfe has created a specialised service – subject to ongoing improvement – for assisting and accom-panying people.

To promote this plan and coordinate and monitor all advanc-es related to accessibility, Renfe created in 2007 a Dirección Ejecutiva de Desarrollo de la Accesibilidad business unit, which shares and agrees its effort with organisations representing dis-abled people.

Renfe and its interest groups

Understanding the interest groups to be all groupings that have a legitimate interest in the company, Renfe defined and prioritized its interest groups or stakeholders in a process to formulate its Corporate Social Responsibility Master Plan, in which members of the Management Committee and representatives of the different Activity Areas took an active part.

By priority they are employees, customers, Public Administrations, society and suppliers.

43corporate social responsibility at the core of management 4343

Within this framework, in November 2007, the Follow-up Commission on Services to Disabled Passengers was created, composed of Renfe, CERMI and the ONCE Foundation, through which all action is taken with the agreement of these entities, establishing a strategic alliance to promote and develop the Accessibility Plan and to spread its services.

Furthermore, the Agreement signed between Adif and Renfe to render Support Services to Disabled and Reduced Mobility Pas-sengers, retroactive to its entering into effect on July 1 2008, is for joint provision and financing of the Atendo Service of disability support.

The Accessibility Plan is a clear example of how guaranteeing transportation to all groups of citizens is the prime social re-sponsibility commitment of a company like Renfe.

3.1.2. Adaptation of the train fleet

To make Renfe’s train fleet completely accessible, an invest-ment of 295 million Euros has been made for its adaptation.

The company plans to adapt 480 trains, pre-empting and wid-ening the scope of the adaptations that are stipulated in Royal Decree 1544/2007 of 23 November. This adaptation affects trains of all categories, not just those in the first part of their useful life.

Alta Velocidad-Larga y Media Distancia

Ave trains, both Larga y Media Distancia, have spaces and ser-vices adapted for disabled and/or reduced mobility passengers.

Conventional Larga Distancia

Renfe's Accessibility Plan provides for the adaptation of 55 trains: 22 night trains and 33 day-time trains.

Conventional Media Distancia

The adaptation of 75 trains is foreseen, both electric and die-sel. In December 2008 award of tender was made for adapting

these 75 trains (31 of series 448, 23 of series 594 and 21 of series 598).

Cercanías

In Cercanías, given its structural complexity, Renfe is making ex-traordinary investment efforts both for the acquisition of new trains (all accessible) and for the adaptation of existing rolling stock.

At the end of 2008, the number of completely accessible Civia trains manufactured reached 142.

In addition to the purchase of these new Civia trains, up to 350 Cercanías series 446 and 447 trains will be adapted.


3.1.3. Improvement to support services for disabled passengers

Following one of the development lines of the Accessibility Plan, Renfe offers the Service of Assistance to Disabled People (the Atendo Service), which consists of specific professional assistance for passengers who require help during their train travel, and includes personalized services of accompaniment at the station and to get on and off the train.

The evolution of implementation of the service has been out-standing. This began with publication of the Guide to railway services for disabled passengers, offering a service of specific assistance, requiring 48 hours prior notice.

Between June and July 2008 the Atendo Service was imple-mented, offering permanent and immediate assistance (with-out the advance notice requirement) in all 71 main stations in Spain, while specific services remained available with prior notice of 12 hours at another 26 stations. In July 2008, the figure of 10,886 monthly assistances was reached, and in December 2008 this figure rose to 17,324, giving a total of 110,722 services of assistance provided to disabled persons and/or those with reduced mobility in 2008.

FigueresPort Bou

Santiago

M.Pta.Atocha

M.Chamartín

Ávila

Segovia

Toledo

Alcázar S.J.

C.Real

Puertollano

Córdoba

Linares-Baeza

Jaén

GranadaBobadilla

Málaga

Ronda

Cádiz

Jerez

Algeciras

Lebrija

Sevilla S.J.

Almería

Cartagena

MurciaAlacant T.

Villena

Albacete

Valencia Nord

Cuenca

Teruel

Castelló P.

L´Aldea Amposta

TortosaTarragona

TorredenbarraReus

Lleida Barcelona SantsBarcelona

Huesca

Zaragoza Delicias

Calatayud

Tudela deNavarra

Pamplona

Logroño

San Sebastián

Irún

Bilbao Abando

VitoriaMirandade Ebro

Burgos

Santander

Salamanca

Zamora

León

Valladolid Campo Grande

Palencia

Medina C.

Ponferrada

Oviedo

Lugo

Gijón

A Coruña

Ferrol

V. Arousa

Pontevedra

Vigo Ourense

Monforte Lemos

Cáceres

BadajozMérida

Huelva

Soria

Guadalajara-Yebes

Puente Genil-Herrera

AntequeraSta. Ana

Camp de Tarragona

San Fernando

CulleraGandía

La Palmadel Condado

M. AtochaCercanías

Mieres

Sagunt

Sahagún

Universidadde Rabanales

Villalba

Xátiva

Pto. de Sta. María

Bahía Sur

VinarósBenicarló

Girona

Flança

71 Immediate Assistance Stations

26 Help on Request Stations

97 ACCESSIBLE STATIONS:

Furthermore, on June 15th 2008 the Central Office for At-tention to Disabled Persons was founded, located at Madrid-Atocha Station, responsible for coordinating assistance ser-vices across all stations, informing on accessibility and railway services, processing client complaints and suggestions and managing incidents. This office is staffed 100% by disabled people, using communication systems adapted for different disabilities in order to be able to attend to all types of sugges-tions and requests.

3.1.4. Publication of the new Guide to railway services for disabled passengers

The improvement and extension of assistance services provided by Renfe and Adif to passengers with a disability or special needs on their train journeys has led the Ministerio de Fomento to the publish a new Guide to railway services for disabled passengers. The new version, launched in March 2008, details the increased number of accessible stations and routes, the widening of types of customers to whom the assistance service is provided and the reduction in the required period of notice for requesting it.

The new guide is an updated, enlarged version of that pub-lished in July 2007, including improvements incorporated in the service since its inauguration.

It includes the complete list of accessible departure and arrival points, with details of the type of assistance provided in each case and the system for requesting it.

The information contained in this guide is also available on the websites www.renfe.com and www.adif.es, and can be obtained by calling (+34) 902 24 05 05.

3.2. Sustainability: A new energy management culture

Renfe’s Corporate Social Responsibility strategy, called “A train with values”, has taken on a fourfold commitment to society:

social, cultural, ethical and to sustainability. The commitment to development and sustainable mobility is one of the main pil-lars of the company’s RSE, and is shown in a strong respect for the environment and for the surroundings in which it operates.

The contribution that the company can make to sustainability in Spain is fundamental. The train is the transport mode which generates the least emission of greenhouse effect gases and re-duces local atmospheric contamination of urban areas, since it uses, preferably, electricity as its traction energy, and uses this energy resource efficiently. It is a mode of transportation that is safe and leaves a minimal acoustic footprint. Furthermore, it takes up little territorial space to offer a very considerable transport offer.

Therefore, the main contribution Renfe makes to society in this realm is offering a quality service so that more people may choose the train as their means of transport for short, medium and long distances, and so that companies will transfer the main part of their logistics to the freight train.

However, the company goes beyond this firm dedication to service with its environmental policy, complemented by a decalogue that extends the regulations and voluntary commitments acquired to all of its subsidiaries, contractors and suppliers. The goal is to extend good environmental practises as far as possible.

As a result of this commitment to sustainability, and faced by the current financial situation defined by the recession, Renfe has made a deeper commitment to the culture of energy man-agement, which minimizes cost, optimizes energy use and pro-motes the use of renewable energies.

Certainly, sustainability is an important challenge to society and one of Renfe’s clearest commitments and competitive advantag-es, as is proven by the fact that the environmental commitment of ‘A train with values’ is included in its own Contract-Programme, the main document regulating obligations and services between Renfe and the State and, therefore, with the whole society.



3.2.1. New Energy Efficiency Plan

The efficient use of energy, both in homes and in businesses, is fundamental for the development of the country and its in-habitants. In Spain, transport is the sector that consumes most final energy, ahead of industry, which is an anomaly in the area of the European Union. Added to this problem is the current financial situation, defined by the recession, which demands costs savings.

For Spain, therefore, it is crucial to take action on energy ef-ficiency in the transport sector if it wishes to meet the Kyoto objectives. In this regard, with the responsibility of being the biggest consumer of electricity in the country, Renfe has worked in 2008 to prepare the bases for an Energy Efficiency Plan, to be carried out in 2009-2011, with the aim of optimizing the competitive advantage of the train as the most sustainable means of transport.

The project is conceived, moreover, as a tool to cope with the country’s economic recession and to improve the company’s own profitability, since energy is one of its main cost elements.

The content of the plan, prepared in line with state policies of saving energy, includes a range of actions linked to the pro-cesses of purchase, sale and consumption of energy, with which it intends to achieve results that are realistic, quantifiable and visible in the short and medium term.

This Plan is the continuation of the commitment established voluntarily by Renfe in 2006 to reduce the company’s specific energy consumption (consumption per unit of transport) by 9.1% at the end of the 2009 financial year, with the objective of, thereby, placing ourselves three years ahead of the proposal in the Strategy for Energy Saving and Efficiency in Spain (E4), which looks for a reduction in these percentages for the trans-port sector in 2012.

In order to face these challenges, Renfe is undertaking numerous savings initiatives. An important example is the optimization of electric energy, achieved thanks to economy driving and use of

the regenerative brake in Alta Velocidad trains and the majority of Cercanías units, as well as renovation of the Renfe Freight and Media Distancia fleet of locomotives and trains, using vehicles de-signed with criteria that are more respectful of the environment.

The company has also decided to innovate in the purchasing process to obtain energy at better prices and to be able to in-crease the use of energy from renewable sources.

It is also intended to install energy converters in the substations of conventional lines to make them reversible, permitting the transformation of direct and alternative current energy, thus making it possible to return energy to the general grid of the 446, 447, Civia, 450, 451, 252 and 253 series. The merging of the effort of Renfe and Adif favours this development.

Moreover, Renfe is concentrating its efforts on continuing to install solar panels in the workshops, to reduce unnecessary consumption, and to promote awareness among workers of the improvement of work processes.

Implementing these actions constitutes a powerful instrument for technological innovation and management in the interest of sustainability, profitability and competitiveness, both for the company and for the society for which the service is provided.

Measures that contribute towards energy efficiency include, im-portantly:

Regenerative braking system: returning energy to the grid

The Energy Saving and Efficiency Plan approved by the Govern-ment in August 2008 comprises 31 measures, including pro-motion of the development and use of regenerative brakes in Renfe’s electric trains. Traditionally, regenerative brakes allow the conversion of the kinetic energy of trains during braking into electric energy. The electric energy generated is used, in the first place, to power the vehicle’s auxiliary equipment. The excess energy is sent to the overhead supply line, where it is used to provide electric power to other nearby trains, producing a saving in energy consumption.

Regenerative brakes have been used in Renfe Cercanías trains since 1990, since when the fleet has been equipped with power systems that allow the use of this technology in the braking process. Currently, 496 Renfe Cercanías trains (167 of the 446 series, 183 of the 447 series, 24 of the 450 series, 12 of the 451 series and 131 Civia units) are returning electric energy to the overhead supply line.

The energy returned to the general grid by a high speed line with medium-high traffic density may be up to 10% of what is con-sumed initially. This technology is being used on Spanish high-speed lines and is available in high power locomotives and in the new high-speed series, powered by 25 kV alternating current.

Although electric consumption of High-Speed trains is currently close to 15% of Renfe’s total energy consumption for traction, it is forecast that after development of the PEIT, in 2020, the energy returned to the electric grid by the regenerative brake will be close to 300 GWh a year. Regenerative brakes are currently being used in the 100, 101, 102, 103, 104, 120 and 130 series and in series 252 locomotives running on UIC gauge, that is to say, in all equipment used in Ave, Alvia, and Altaria services.

Efficient driving

This makes intelligent use of the inertia of trains, i.e. of the accumulated kinetic energy and of the orography of terrain. On the Madrid-Seville route, between 35% and 54% of the journey is made without the train consuming energy.

The economy driving system came from an initiative by a group of Heads of Train on the Madrid-Seville Ave. From the summer of 2003, for two years, a group of Renfe workers carried out test-ing and analysis of speeds, distances, gradients and braking re-quirements on the route. The results were given in a Guide to Efficient Driving. As an example, Renfe has achieved a saving in energy consumption for traction in Ave trains of 9.5% on the Madrid-Seville route, thanks to application of this economy driv-ing. Moreover, the company is studying the extension in coming years of efficient driving to trains on all High-Speed lines.

3.2.2. Evolution of energy consumption

In 2008, Renfe progressed in achieving objectives related with energy efficiency, to which it had committed in 2004. Despite the drop in usage with lower occupation on trains due to the ef-fects of the crisis, this has meant that energy intensity reduction had fallen by 5.73% in 2008, as compared to 2004.



Over €2,500 million saved in external costs

In 2008, Renfe has generated a saving of 2,531.2 million euros in external costs, putting a figure on Renfe’s main contribution to sustainability, which is that it offers an alternative to other less sustainable means of transport and transport companies.

The high level of external costs of transport constitutes a threat both to the competitiveness of the sector and to sustainability. From the point of view of means of transport, cars cause 43% of external costs, trucks 34%, and civil aviation 14%, with the railway remaining below 2%. Renfe is aware of this and it is here where Renfe’s contribution to sustainability may be crucial.

Evolution of Renfe energy consumption for traction uses 2004-2008

2004 2005 2006 2007 2008 % VAR. 08/07 % VAR. 08/04

Millions of OTUs* 71,255.40 71,585.80 71,999.10 72,372.85 75,871.97 4.83 6.48

Millions of TUs 30,943.60 30,879.20 31,271.60 30,512.75 31,808.62 4.25 2.80

Occupation 43.4% 43.1% 43.4% 42.2% 41.9% -0.71% -3.46%

Occupation (%) SP** (2005-2009)

42.2% 42.6% 42.8% 42.5% -0.7%2005 Base

0.71%

Energy consumed 10,799.11 10,452.93 10,418.84 10,247.61 10,465.35 2.12 -3.09

Production energy intensity KJ/OTU

151.55 146.02 144.71 141.59 137.93-2.58 -8.99

KJ/OTU % (2004) 100 Base 96.35 95.48 93.43 91.01

Energy intensity KJ/TU 348.99 338.51 333.17 335.85 329.01-2.04 -5.73

KJ/TU % (2004) 100 Base 97.00 95.47 96.23 94.27

External costs avoided by Renfe in 2008(millions of Euros)

ACtIVItY CERCANíASMEDIA

DIStANCIA

CERCANíAS AND MEDIA DIStANCIA

SERVICES

ALtA VELOCIDAD-LARGA DIStANCIA

SERVICES

SERVICES OF FREIGHt

AND LOGIStICStOtAL

Million PKM 8,187 3,396 11,583 10,491 22,074

Million TKM 9,737 9,737

Total saving made 877.7 203.0 1,080.9 550.6 899.7 2,531.2

*OTU: Offered Transport Units

**SP: Renfe’s 2005-2009 Strategic Plan

Source: Renfe, prepared in-house

2008, Renfe’s lowest emissions year

During this year emissions of CO2 generated by Renfe’s trac-tion consumption was 833,209 tonnes, falling for the first time below 900,000 tonnes. This figure represents a reduction of 32.94% in absolute emission values for 1990, with 1,242,413 tonnes of CO2.

This achievement is even more important, taking into account that in 2008 Renfe registered the highest traffic in all of the period studied, with 31,809 million TUs, compared to 26,682 million TUs in 1990.

This fall in emissions is attributed to the changed composition of the national electricity mix, to improved energy efficiency in the railway operation and to diesel traction being substituted by electric energy. The fall in emissions attributable to Renfe (19.32%) represents a fall of 296,491.77 tonnes of CO2 in 2008 compared to 1990

Looking ahead to 2020, Renfe foresees that specific CO2 emis-sions will be under 20 g of CO2 /TU (19.96 g of CO2 /TU), which will imply an accumulated reduction in comparison with 1990 of 57.13%.

49corporate social responsibility at the core of management

2,250

2,400

2,550

2,500

2,450

2,300

2,350

2006

2,432.7

2007

2,464.1

2005

2,373.4

2008

2,531.2

Annual saving on external costs (millions of Euros)


3.2.3. Collaboration with Adif on environmental management and promoting sustainability

In 2008, in the framework of the Agreement between Renfe and Adif on Environmental Management and the Promotion of Sustainable Mobility, both companies have collaborated in work-groups on savings, energy efficiency and the use of renewable energies, management of noise and vibrations from the railway, action to be taken in case of railway accidents with environmental impact, and waste management in passenger stations.

An important result of this cooperation has been the signing of an Agreement on Action for Polluted Ground, for joint treatment of situations affecting ground in areas where the two companies interact, and the treatment of pollution in joint facilities and his-toric pollution of ground linked with the integrated company of Renfe. By this agreement, action was taken to decontaminate and control soil and groundwater outside the Orense Workshop.

3.2.4. Renfe joins the EcoTransIT consortium: technology at the service of the environment

Renfe has joined EcoTransIT, a web tool (www.ecotransit.org) that permits the environmental footprint of means of freight transport in Europe to be measured in a few minutes. It permits a compari-son of energy consumption, effect of greenhouse gases and com-bustion gases of freight transport by railway, truck, ship and plane, and even of intermodal combinations.

From the commercial viewpoint, EcoTransIT permits Renfe Mer-cancías y Logística to disseminate the environmental advan-tages of railway and intermodal freight transport compared to other less sustainable alternatives, and to share these with customers. For environmental management, the tool facilitates integrated management of greenhouse gas emissions from the lifecycle of a product or service, for example in an EMAS (Eco-Management and Audit Scheme).

25

30

35

50

40

45

2005

33.56

2006

30.49

2004

39.35

1990

46.56

2007

31.17

2008

26.19

CO2 Emissions per Transported Unit (1990-2008)g CO2 / TU

Source: Traffic and consumption from Renfe and emissions from WWF and REE (Electric Network of Spain)

51

3.2.5. Evaluation of environmental performance according to the criteria of UIC Leaflet 330

The key environmental management indicators (Key Perfor-mance Indicators –KPI–), defined in 2008 by the International Union of Railways (UIC) in its leaflet number 330, establish a new standard for environmental management and information in railway companies at world level. Renfe has taken part in preparing this document, being represented in the UIC’s Core Group on Environment, Energy and Sustainability (EES).

For further information: http://www.uic.org/etf/codex/codex-detail.php?langue_fiche=E&codeFiche=330

The existence of standardised indicators at world level permits evaluation of environmental management in railway compa-nies, and comparison of companies in the sector and with other means of transport.

The incorporation of this specific section in Renfe’s Environ-mental Report complies with the two principal objectives in Leaflet 330 of the UIC:

• To make available immediate comparability among rail-way companies of the main environmental management parameters.

• To promote via evaluation of these parameters, as stipu-lated in Leaflet 330 of the UIC, the continued improvement of their quality, reliability and traceability.

With the evaluation of these indicators, Renfe becomes the first railway company in the world to carry out an evaluation of its environmental performance in accordance with the UIC criteria found in its Leaflet 330.

The performance of these key environmental management indicators (KPI’s) in Renfe in 2008

corporate social responsibility at the core of management

INDICATOR VALUE OTHER REMARKS

1. Energy consumption

1.1 Final energy consumption (Energy Intensity)

1.1.a Specific final energy consumption of passenger transport

Electricity 0.0765 kWh/pkm

Diesel 0.0025 L diesel/pkm

1.1.b Specific final energy consumption of freight transport

Electricity 0.0469 kWh/tkm

Diesel 0.0031 L diesel/tkm

1.2 Primary Energy Consumption (Primary Energy Intensity)

1.2.a Specific primary energy consumption of passsenger transport

653.00 KJ/pkmThis indicator evaluates consumption in the whole chain of energy processing1.2.b Specific primary energy consumption

of freight transport464.01 KJ/tkm


INDICATOR VALUE OTHER REMARKS

2. Share of renewable energy

2.1 Share of renewable electric energy from total energy consumption 14,39%This indicator evaluates Renfe processes prior to final consumption

2.2 Share of bio-fuels as part of diesel fuel0% (Insignificant, only consumed in tests)

3. CO2 emissions

3.a Specific CO2 emissions from passenger transport 27.88 g CO2 /pkm

3.b Specific CO2 emissions from freight transport 21.15 g CO2 /tkm

4. Local air pollution

4.1 Exhaust NOx emissions

4.1.a Specific NOx emissions from passenger transport

0.128 g NOx/pkm

4.1.b Specific NOx emissions from freight transport

0.141 g NOx/tkm

4.2 Exhaust particles emissions

4.2.a Specific PM emissions from passenger transport

0.022 g PM/pkm

4.2.b Specific PM emissions from freight transport

0.021 g PM/tkm

5. Noise emission

5.1 Proportion of low-noise emission rolling stock (% according to formula weighted with wagon milleage)

94.93% for passenger services

57.91% for freight services

5.2 Proportion of infrastructure meeting national limits (% according to formula)

Not applicable to Renfe because it is a railway operator

6. Occupation of ground

6. Specific land take of rail infrastructure (passenger and/or freight) (km2/TU)

Not applicable to Renfe because it is a railway operator

The performance of these key environmental management indicators (KPI’s) in Renfe in 2008

3.3. Responsible management of employees

The people working in Renfe are one of the pillars of the com-pany and its principal asset. Aware of this, Renfe manages its human capital responsibly, promoting stability in employment and the professional development of its workers by training, and by commitment to work quality and equal opportunities.

3.3.1. Generator of over 14,200 jobs

Renfe employs more than 14,200 personas, the majority pro-viding service in the areas of Cercanías y Media Distancia, Alta Velocidad-Larga Distancia, Mercancías y Logística and Fabri-cación y Mantenimiento. The majority of the workers fall within the age range of 36 and 55 years. Most workers are in the pro-fessional category of engine driver, workshop operator, inspec-tor and middle management, and the majority are located in Madrid and Barcelona.


Renfe’s workforce

2007 20082006

14,51214,338

14,287


Renfe's model for hiring creates stable, quality employment, since this is the employment policy most suited to the develop-ment of the company and its workers. As a result, Renfe has a very low turnover rate.

Distribution by age

AGE 2006 2007 2008

Under 26 0.22% 0.72% 1.43%

From 26 to 35 0.70% 1.45% 2.75%

From 36 to 45 40.43% 33.11% 25.57%

From 46 to 55 50.47% 55.69% 60.75%

From 56 to 60 7.81% 8.60% 9.13%

Over 60 0.37% 0.43% 0.37%

Distribution of employees by job category in 2008

JOB CAtEGORY MEN WOMEN

Management structure 644 127

Support structure 569 170

Middle management 1,320 202

Drivers 4,824 49

Inspection 1,783 96

Information 487 203

Workshops (operational) 2,671 108

Administration staff 189 239

Others 483 123

Total 12,970 1,317

As an exception, temporary contracts can also established through agreements with the company's General Works Com-mittee, with the commitment that most of these contracts will become permanent.

Distribution of employees by Activity Area in 2008

ACtIVItY AREASNuMBER OF WORKERS

Cercanías Services and Media Distancia Services

5,523

Alta Velocidad-Larga Distancia Services

2,250

Freight and Logistics Services

1,970

Manufacturing and Maintenance

3,609

Corporate Bodies

935

Total 14,287

3.3.2. Commitment to excellence

Renfe's Human Resources Policy aims to provide the company as a whole with a series of management tools to achieve the objec-tives set in both the Strategic Plan and the Contract-Programme signed with the State. The main objective is to establish a frame-work to help the company grow in a profitable and sustainable manner through the personal development of its workers as well as organisational management.

Renfe's Human Resources Policy aims to:

• Promote and implement a results-oriented company culture focused on responsibility and professional performance of its tasks.

• Achieve operational excellence in terms that establish the strategy for the activity areas by organising and defining the appropriate work structure.

• Improve the quality, cost and efficiency of the Human Resources systems management processes.

• Satisfy the company’s quantitative and qualitative needs, both present and future, in relation to Human Resources, making compatible the interests of the organisation with those of its workers.

The Contract-Programme between Renfe and the State sets forth goals for the maximum average number of workers per year for the period of this contract, and budget goals both for labour expenses and the Downsizing Plan (Expediente de Regulación de Empleo).

The Strategic Plan, Contract-Programme and Employment Regulations, open to updates at the signing of each Collective Agreement, are public, and are made known to the workers through the Intranet and other communications tools used by Renfe.


2006 2007 2008

Men 2.61% 1.84% 1.15%

Women 1.29% 5.48% 5.87%

Human team turnover rate

2006 2007 2008

Indefinite-term or permanent contract 14,497 14,282 14,231

Temporary or fixed-term contract 15 56 56

Breakdown of workforce by type of contract

2006 2007 2008

Men 26.04 26.77 26.35

Women 24.7 23.4 22.4

Human team’s average length of service


3.3.3. Commitment to the professional development of its employees

Training in Renfe has the main objective of permitting greater professional development of its workers, as well as optimum performance of their corresponding tasks and improved in-dividual professional training to increase employability.

In 2008 a total of 1,110,571 training hours have been given, 34.5% more than in 2007, with an average of 53.94 hours per employee. Thus, there have been a total of 34,041 participations in training programmes, giving an average per worker of between two and three training pro-grammes annually, higher than in 2007. Training in 2008 cost 28,660,107.26 Euros, meaning an average investment of 646.15 Euros per employee.

14th Innovation projects competition

Within the framework of its Participation Systems, Renfe announces an annual contest in which the most innovative ideas are acknowledged and awarded, and the implication of the persons offering proposals for the optimisation of resources with regards to increasing the company's productivity and offering quality services is made public.

Three types of participation exist: GIMs (Innovation and Improvement Groups), EIMs (Innovation and Improvement Equipment) and IPs (Individual Proposals), and three Award categories: Management and Processes, Environment and Social Responsibility, as well as an Award to the best Individual Proposal.

In 2008 awards were granted to EIM INFORMA and EIM MERCURIO in the category of Management and Processes, to EIM INNOFRENO in Environment, to EIM ATENCIÓN in Social Responsibility, and the IP of José Arrebola was awarded best individual proposal.

Total training hours

YEAR HOuRS VARIAtION %

2006 532,081 +30.8%

2007 825,071 +55.2%

2008 1,110,571 +34.5%

Investment in training for internal personnel

YEAR INVEStMENt VARIAtION

2006 6,533,422 € +6,4%

2007 8,620,887 € +30%

2008 9,281,282 € +7,66%

Specific training programmes:

a) Future. Aimed at personnel in the management and sup-port structures, the training programme includes con-tents relating to cultural change, strategic planning and focussing on results.

b) Development of managers and middle managers. This programme develops and makes managers commit to a shared culture, enabling the management of training pro-grammes for professional development and preparing and forming the reserve of new managers to replace the old.

c) Team Building for Management Committees. Offers specific tools to provide new alternatives to members of the Management Committee, in order for them to manage their own teams.

d) Itínere. A programme aimed at middle management and teams, which provides the necessary knowledge to align the professional employee with the company's mission and strategy.

e) Assistant Management. A program aimed at profes-sionals who carry out functions of assistant management to develop assistant management skills.

f) Welcome programme. Aimed at new workers who join the company, to facilitate their adaptation and integration. In 2008, four training groups for 84 new Renfe employees were developed.

g) Training in Traffic Safety. Permits updating and re-cycling of qualifications and training relating to safety needed to carry out the functions of railway personnel.

h) Sales Training. Provides tools that help to implement the sales model and customer service identified in each busi-ness.

i) Interesa e-learning. Renfe has taken advantage of ex-pansion of the intranet, through the Interesa portal, to di-versify its training and widen contents to be more specific to Areas of Activity and participants.


Number of participations in training action by professional category

PROFESSIONAL GROuP2006 2007 2008

IN PERSON E-LEARNING IN PERSON E-LEARNING IN PERSON E-LEARNING

Support-management structure 2,107 187 2,632 321 2,126 550

Middle management and teams 3,192 431 4,230 473 3,300 544

Operations staff 16,375 599 19,287 694 23,551 628

Total 21,674 1,217 26,149 1,488 28,977 1,722

In 2008, four training groups for 84 new Renfe employees were carried out


Annual Training Programme

Renfe prepares an Annual Training Plan, available on the intra-net, which includes goals, itineraries, the detection of require-ments, evaluation systems, and all the training programs aimed at different groups. Programs designed within this Annual Train-ing Plan aim to guarantee maximum transparency and promote equal opportunities for employees.

Career Planning Programme

Renfe also offers a Career Planning programme, which aims to increase the efficiency of the company, enhance the profes-sional and personal development of its staff, increase motiva-tion and personal satisfaction among staff, and comply with the company's Human Resources present and future quality requirements.

3.3.4. Renfe promotes quality in employment

Helping to reconcile workers' personal and professional lives, promoting equality amongst them, fostering health and safety in employment, internal communications and the relationship between the company and its employees are some of the ways in which Renfe contributes to quality in employment and the satisfaction of its team.

Corporate benefits:

• Discounted ticket prices for non-work-related journeys.

• Up to three months of interest-free advance payments of the basic wage to meet special expenses, with repayment within 18 months maximum.

• Warranty coverage in the event of incapacity or death through a collective life and accident insurance policy.

• Complements to Social Security benefits in the case of temporary disability resulting from a common illness or

industrial accident, complementing these benefits by up to 90% of the contribution base as of the commencement of the situation.

• Benefits up to 90% of the worker’s salary for loss of pur-chasing power due to temporary incapacity resulting from a common work illness or accident in cases of lengthy sick leave.

• Basic health care through the Company Medical Service.

• Health and preventive medicine campaigns: anti-flu vac-cinations, gynaecological examinations, early detection of prostate cancer, etc.

• Drug addiction and alcoholism programmes, and aids to stop smoking.

• Aid independent of that offered by the State, compatible with any other granted by the State for the same reason, for children with mental disabilities.

Renfe also allows for guarantees for employment disability found in the Collective Agreement, as well as legal protection for employees in the case of accidents during the carrying out of their job tasks. Other measures included in the Agreement and which Renfe applies for the purpose of fostering concilia-tion are:

• Accumulation of maternity leave.

• Analysis of holiday leave preferences during assigned holi-day periods of workers with children and those bound by final divorce or separation rulings. All of this without alter-ing the percentage of workers available for each shift and work centre.

• Allocation of six days per year for personal matters without needing to justify them, in addition to those included in the standard holiday calendar.

• Consideration of public holidays that fall on a Saturday ac-cording to the work calendar and that the worker can take in accordance with his/her needs.

• Leave or permission for personal reasons and needs (ill-ness, death or surgery of family members, among others).

3.3.5. Promoting equal opportunities

Renfe has a long history in the promotion of equal opportunities as is proven by its collaboration with the Programa Óptima since 1999, within the framework of which it has obtained the Cer-tificate of ‘Collaborating Entity in Gender Equal Opportunities’ granted by the Instituto de la Mujer.

Moreover, Renfe has incorporated a specific clause in its 1st Col-lective Agreement signed on February 25th 2008 which reflects the commitment of the entire organisation to continue to guar-antee the fundamental right to equal treatment and opportuni-ties in the company.

Furthermore, with the purpose of reinforcing equality within the company, Renfe is defining and elaborating an Equality Plan along with worker representatives. To negotiate it, the Equality Opportunities Commission was set up in March 2008, with rep-resentatives from all areas of the company and the trade unions sitting on the General Works Committee.

Renfe also has a Collaboration Agreement with the Ministerio de Trabajo on gender violence with the main objective of collaborat-ing in the execution of awareness-raising actions against gender violence.

Women are a minority in Renfe, since historically it has been men who have joined the company for jobs traditionally con-sidered to be masculine. Nevertheless, in recruitment in recent years the number of female workers in the company has been increased by active company policies for increasing the number of women in relation to the total.


2006

2007

2008

7.96%

8.52%

9.22%

92.04%

91.48%

90.78%

Evolution of workforce of men-women as a percentage

Men

Women

Men

Women

Men

Women


3.3.6. Fluid internal communication

Renfe promotes communications and offering information to its workers through different communication channels:

• En Punto. A monthly publication aimed atall of the compa-ny's workers, aiming to link and communicate to them a cor-porate project for the future, and to generate and strengthen the internal brand, transmit the new commercial role of the company as a rail operator in a competitive market, gener-ate an internal culture in line with the company's needs, and provide information on its management activities.

• ‘Renfe Interesa’. The company's portal, an internal com-munications tool of reference used to transmit, from a strategic perspective, how Renfe and its environment are managed. It gathers information on the company and con-tributes to increasing transparency about management, opening different paths to participation. It has an average of over 8,000 daily sessions.

• Corporate Conferences on Communication and Culture on organisation, operations and safety, among other issues.

Renfe continually evaluates the effectiveness of these tools with valuation surveys. In 2007, a valuation survey was carried out about the magazine En Punto. Surveys are also taken after all Corporate Conferences on Communication and Culture and the results are communicated to the employees.

3.3.7. Labour climate barometer

Renfe periodically carries out a labour climate survey. In 2008 the study was made using telephone interviews with 1,501 workers to learn of their perception of the company.

One of the aspects measured was staff valuation of information and communications received through the company’s communi-cations tools, and of their credibility. Results show that 62.9% of Renfe employees feel they are “well” or “very well” informed.

As regards the credibility of the information, 69.7% of workers give the maximum rating to credibility of the company's com-munication channels.

3.3.8. Promoting health and safety at work

Renfe considers workers' health and protection to be a primary objective in its activity. This is one of the pillars on which the company's commitment is built, with a view to improving the well-being and quality of life of employees.

Occupational health and safety is one of the key factors of Ren-fe's management system both in relation to its workforce and the different companies that work at its facilities.

To fulfil this obligation, Renfe has set up a series of systems aimed at the entire workforce, which are coordinated through the Occupational Hazard Prevention Plan, the prevention ser-vices and the Health and Safety Committees.

The most important measures related to occupational hazards are:

• A safety policy aimed particularly at those workers whose activity is linked with traffic. Renfe promotes the culture of work safety through initiatives like conferences, inspection campaigns and specific programmes.

• Risk prevention training given to the entire workforce. Throughout 2008, Renfe has offered training on the pre-vention of occupational hazards with a total of 2,021 par-ticipations and 17,634 lecture hours.

Vaccination and preventive measures campaigns are also carried out. In 2008, 4,298 medical examinations were made, 3,695 employees participated in different prevention campaigns, and 1,268 in vaccination campaigns.

3.4. Projects of ‘A train with values’

In deciding its RSE budget, Renfe uses a formula which involves the users. For each passenger who boards a Renfe train on 28 November, the day on which "A train of values" was inaugu-rated in 2005, the company donates one Euro to create of a monetary fund to support diverse Corporate Social Responsibil-ity actions in the following financial year.

The positive results on November 28th 2007 al-lowed Renfe to assign 2 million Euros to initiatives of a social, cultural and environmental nature in 2008. In total, 1.9 million people travelled with Renfe on that day, so the company decided to target 2 million Euros for the budget. The results of the same campaign on November 28 of 2008 will allow Renfe to allocate 2,020,000 Euros to initiatives of a social, cultural and environmental nature in 2009.

Renfe, aware that it cannot carry out its activities in isolation from the social surroundings in which it operates, within the framework of its RSE strategy, ‘A train with values’, supports the most disadvantaged groups through many collaborations with third-sector entities. During 2008, the bulk of collaborations in the social area had the objective of providing humanitarian aid, promoting health, supporting childhood and fighting against gender violence.

3.4.1. Most significant social projects

• Contracting services from the Gardens of Spain Foundation for conserving the gardens of Renfe’s Central Offices.

• Ayúdale a Caminar organisation for digitalising and cata-loguing the company’s historical photographic archive.

• Purchase of merchandising products made by the CAILU Special Employment Centre (Genus Foundation).

• Container transport on Renfe Freight of humanitarian aid for different NGOs.

• Collaborator of the Fundación de Ayuda contra la Droga-dicción (FAD).

• Patron of the Red Cross Foundation.

• Sponsor of the Spanish Multiple Sclerosis Association(AEDEM).

• Collaborator with the Ministerio de Igualdad to disseminate campaigns about violence against women.

• Official Transport Provider for Spanish Search and Rescue (SAR).



Within its RSE strategy ‘A train with values’, Renfe is committed to culture, education and sports as key elements of social co-hesion, contributing toward their improvement so that citizens will achieve a greater quality of life to better face the everyday challenges of our times.

3.4.2. Most significant cultural, educational and sports projects

• Protector Member of Madrid's Teatro Real.

• Sponsor of the Titirimundi International Festival of Puppet Theatre of Segovia.

• Sponsor of the Maestranza y Salas del Arenal Theatre in Seville.

• Sponsor of the Peak Season–Autumn Festival of Catalonia.

• Sponsor of Teatro Barakaldo.

• Sponsor of the Orfeó Catalá Foundation - Palau de la Músi-ca Catalana, in the architectural tours program.

• Official Transport Provider of Seville's European Film Festival.

• Official Transport Provider of Huesca's International Film Festival.

• Sponsor of the 53rd Seminci Valladolid International Film Week.

• Sponsor of Valencia's Mostra de Cine Film Festival.

• Sponsor of the Semana Negra-Gijón Association.

• Cervantes Train.

• Programme of Cercanías School Activities.

• Sponsor of the Train Awards, 'Camilo José Cela', for short stories, and 'Antonio Machado', for poetry, of the Spanish Railways Foundation.

• Associate Company of the Guggenheim Museum.

• Sponsor of the Seville International Contemporary Arts Bi-ennale (BIACS).

• Collaborator with the Group of World Heritage Cities.

• Collaborator of the 2nd Once Foundation Contemporary Art Biennale.

• Sponsor of the Cristóbal Gabarrón Foundation Interna-tional Prizes.

• Sponsor of the ‘Cartoonists for the freedom of the press’ exhibition by Reporteros Sin Fronteras.

• Sponsor of the research project ‘How to inform about in-fancy and violence’, of the Reina Sofía Centre.

• Protector Member of the Spanish Geographical Society.

• Sponsor of the Spanish Rugby Association’s programme for capturing new values.

• Renfe supports Spanish disabled athletes by sponsoring the sporting events of the Committee in and outside Spain, as with the recent Paralympics in Beijing.

3.4.3. Most significant sustainability and environmental projects

• Competition, “3rd Renfe Ave School Prize for Environmen-tal Research and Sustainable Development: The Train and Renewable Energy’.

• Sponsor and Official Transport Provider of the 9th National Environment Congress (CONAMA9).

• Collaborating Company with Expo Zaragoza 2008 and Sponsor of Spain’s Pavilion at the Expo.

• Environmental education programme of ‘The Nature Train’ of Madrid Cercanías.

• Stable cooperation with the WWF in matters related with transportation and greenhouse effect gases.

3.4.4. Commitment to ethics and good governance

Renfe and its commitment to transparency

As part of its commitment to ethics and good governance in the RSE strategy ‘A train with values’, Renfe upholds a firm commitment to responsible corporate management, follow-ing fundamental principles of transparency.

The railway company uses good corporate governance prac-tices as its reference and has assumed the United Nations Global Compact agreements (Global Compact), since it signed these in 2005.

Transparency is one of the main values guiding Renfe’s ac-tivity in relation with the society. The company proves this willingness through continued communications with interest groups, whether through habitual channels, the publication of its triple annual results Report for the second year in a row or its participation in forums and events.

With regards to advertising, as a member Autocontrol – a non-profit making association which works toward truthful, legal, honest and faithful advertising – since 2002, Renfe has made active efforts to be transparent in the information and ethics of advertising and sales practices related to its services. As a result, Renfe is committed to complying, in all of its commercial communications, with the Autocontrol Ad-vertising Code of Conduct based on the Advertising Practices Code of the International Chamber of Commerce.

The relationship maintained between Renfe and communi-cations media is also guided by this commitment to ethical conduct. With regards to the third sector, Renfe collaborates with the Fundación Lealtad.

All of these efforts for carrying out ethical and responsible management have been recognized, in terms of reputation, by Monitor Empresarial de Reputación Corporativa (Merco). Renfe's management in 2008 has raised the company 29 places in the ranking of “The 100 most reputable compa-nies in Spain” to stand at number 23. In the classification by sectors, Renfe heads the list of companies in the area of passenger transport.

‘A train with values for a better world’ Campaign

Renfe has inaugurated the solidarity project ‘A train with val-ues for a better world’ with the objective of raising funds for 12 development and cooperation projects carried out by 12 of the main NGOs within the framework of the Millennium Development Goals. Renfe participates in the financing and diffusion of this campaign as part of its Corporate Social Re-sponsibility strategy.



ProjectsTHE MILLENNIUM DEVELOPMENT GOALS TO WHICH THEY RESPOND

“Economic development in rural areas of Samegrelo (Georgia)”, by Action against Hunger .

GoAl: Refurbish community infrastructures and advance in reducing poverty in Europe.

GOAL 1 To eradicate extreme poverty and hunger.

“Education has the power to change lives”, by ACNUR (the UN Agency for Refugees, Spanish committee)

GoAl: For more than 100,000 Sudanese children from Darfur living as refugees in Chad to be able to complete their primary education in a safe environment.

GOAL 2 Achieve universal primary education.

“Ebiseera!!! Deciding my future with HIV/AIDS”, by AMREF Flying Doctors

GoAl: Prevent illness between sex workers and young people in general.

GOAL 6 Combat HIV/AIDS, malaria and other illnesses.

“Professional training and community development in El Salvador”, by Aid in Action.

GoAl: Set up a radio station to be an alternative communications medium and to contribute to professional and citizen training.


“Project aimed at women in order to fight against poverty in Niger”, by the Spanish Red Cross

GoAl: Improve the socio-economical conditions of 2,300 women in 17 communities of the Tahoua area, through agriculture and livestock activities.

GOAL 1 To eradicate extreme poverty and hunger.

GOAL 3 Promote gender equality and independence for women.

“Education in refugee camps in Africa”, by Entreculturas.

GoAl: Build schools and involve families and communities in the education of children and young people from the most vulnerable settlements.


“Supporting Sudanese refugees in Chad”, by Intermón Oxfam

Goal: Guarantee access to drinking water and sanitation and improve food safety in the Djabal and Goz Amer camps.

GOAL 1To eradicate extreme poverty and hunger.

“Peruvian women making a future”, by Manos Unidas

Goal: Increase the capture and marketing of fish among the rural communities of Santa Elena and Compuerta, in the Pacucha district.


GOAL 3Promote gender equality and independence for women.

GOAL 7 Achieve environmental sustainability.

THE 12 PROJECTS OF “A train with values for a better world”

‘A train with values for a better world’ has the support of great figures of Spanish sports, such as Raúl, Marcos Senna, Sergio Ramos, Carlos Jiménez, Juan José Hombrados, Federico Martín Bahamontes and Fernando Romay, and of the Spanish national rugby, handball, indoor football and basketball teams and sports club associations (ACB, Asobal and LNFS). The fed-erations of these sports will collaborate with Renfe in raising funds for the projects by organising “VIP rows” in different events in 2009. In addition, they have provided support by ap-pearing in promotional videos.

Personalities from culture and entertainment, like the Dúo Dinámico, Juan Luís Galiardo, Sara Baras, Pasión Vega, Miguel de the Cuadra Salcedo, Remedios Cervantes, Mar Regueras, Iker Lastras, Charo López, Rosa Montero, Guillermo Fesser, Andy y Lucas, Edurne, and Víctor Ullate have also expressed their ex-plicit support for this cause.

An original and powerful graphics approach, specially designed by the prestigious designer Manuel Estrada, is the thread that unifies the initiative for diffusion in all types of communication


THE 12 PROJECTS OF “A train with values for a better world”

PROJECTSTHE MILLENNIUM DEVELOPMENT GOALS TO WHICH THEY RESPOND

“Improving health services in Senegal, Angola and Mozambique”, by Médicos del Mundo

GoAl: Develop primary health care services by improving infrastructures, providing resources and professional training.

GOAL 4Reduce mortality among children under 5 years of age.

GOAL 5To improve maternal health.

GOAL 6Combat HIV/AIDS, malaria and other illnesses.

“Increasing food production in the Dominican Republic and Haiti”, by Solidaridad Internacional

GoAl: Support agriculture, livestock farming and local trade, as well as promoting the economic and business structure, and protecting the environment.

GOAL 1To eradicate extreme poverty and hunger.GOAL 3Promote gender equality and independence for women.GOAL 7Guarantee environmental sustainability.

“Care for infants in Haiti”, by Unicef

GoAl: Protect extremely vulnerable children, treat malnutrition and develop early infancy by enabling 10,000 parents.


GOAL 2Achieve universal primary education.

GOAL 4Reduce mortality among children under 5 years of age.


“Restoration of Doñana riverbanks”, by WWF

GoAl: Recover la Parrilla brook by introducing indigenous plants, removing invasive species and installing food and water deposits and perches for birds.

GOAL 7Guarantee environmental sustainability.


resources, such as calendars, wallets, agendas, Christmas cards and pamphlets. An SMS number will also be made available for those who wish to collaborate with the project simply by sending a mobile message: sending the word “valores” to the number 5453.

For Christmas 2008, the campaign was launched on November 27. A solidarity Christmas gift was put on sale at El Corte Inglés Department Stores: a toy freight train that “transports” the12 projects. The full amount of the sales will go to the projects of the 12 NGOs.

In 2009, a range of events and initiatives will provide the idea with continuity.

3.5. Dialogue with interest groups

One of the new features of Renfe’s 2008 Annual Report, com-pared with the previous year, is the consultation process with the transport company’s main interest groups. This is so that the main groups with which the company interacts can deepen their knowledge about its RSE, and the company can satisfy their needs and expectations. The goal of this dialogue is to evaluate the company’s RSE strategy, see how the ‘A train with values’ campaign is transmitted to and reaches society, and to receive criticism and suggestions about it, without forgetting aspects to improve the company and the identification of new challenges.

Over a dozen interest groups have participated to represent as-sociations, forums and foundations linked to Corporate Social Responsibility and Sustainability, as well as NGOs, users groups,

academics, companies and journalists, with the aim of gather-ing the points of view of the main groups that interact with Renfe. The interviews were based on a common questionnaire and were made in person, over the telephone or by e-mail.

The results of this process are shown in this Executive Summary and in the Social and Environmental Report, through the opin-ions of the different experts consulted.

The participants in the consultation process with interest groups were as follows:

• José Manuel Velasco, President of the Association of Direc-tors of Communication (Dircom).

• Ricard Riol, President of the Association for the Promotion of Public Transport.

• Pilar Villarino, Executive Director of the Spanish Committee of Representatives of Disabled People (Cermi):

• Juan Alfaro, General Secretary of the Excellence in Sustain-ability Club.

• Gonzalo Echagüe, President of the Conama Foundation.

• Germán Granda, General Director of Forética.

• Miguel Laloma and Ana Sáinz, consultant and general direc-tor, respectively, of the Company and Society Foundation.

• Alberto Castillo, Vice General Director of Servimedia.

• Marta de la Cuesta, vice-rector of the UNED’s Financial Plan-ning department.

• Antonio Lucio, general manager of the Mobility Foundation of Madrid City Council.

• Juan Manuel Jiménez, technical secretary of the Forum of Railway Companies for Sustainability and director of studies and programs of the Spanish Railways Foundation.

Award from the magazine "Dinero" to “RSE Management” 2008

The 13th edition of the Business Awards conferred by the magazine “Dinero” acknowledged Renfe as the most outstanding company in the area of Corporate Social Responsibility.


DECLARATIONS

José Manuel Velasco, president of the Association of Directors of Communication (Dircom): “Transport's great challenge is to reduce greenhouse gas emissions. The train has a great opportunity in this terrain.”

Ricard Riol, president of the Association to Promote Public Transport:“After the crisis in Cercanías caused by the Barcelona Ave works, a change has occurred in Renfe towards users, to the point where a Customer Committee is now convened for dialogue”.

Pilar Villarino, Executive Director of the Spanish Committee of Disabled People’s Representatives (Cermi): “Renfe’s CSR policy is of great importance for the social sector of disability, since it is a company directly linked to transport, permitting the disability sector to progress towards full inclusion in society”.

Juan Alfaro, general secretary of the Excellence in Sustainability Club: “We place special value on Renfe initiatives aligned with its business objective and with its Strategic Plan, but above all, we value any action taken towards greater and better accessibility for all, both for its physical results and for its promotion of social integration and cohesion”.

Gonzalo Echagüe, president of the Conama Foundation: “I value the analysis of the environmental impact of Renfe and its activities, as well as its goal of decreasing emissions that may be associated with its activity”.

Germán Granda, General Director of Forética.“I value very positively the ‘A train with values’ campaign as a strategy. Although it began with a focus on social action, it has evolved to have a wider concept of all the arguments that a corporate responsibility strategy should embrace”.

Ana Sainz, director general of the Company and Society Foundation:“Renfe’s RSE commission shows that social action taken by the company is deeply connected to its management. The Train with Values is tangible evidence that its social action is a reality linked to its strategy. One of its successes has been in placing its passengers at the centre of the activity, through accessibility to its trains and raising awareness by informing them of the tasks being performed by social organizations”.

Alberto Castillo, Vice General Director of Servimedia:“Renfe’s transmission of its sustainability vision to its chain of suppliers, demanding a similar commitment and compliance with environmental regulations, is very positive”.

Marta de la Cuesta, vice-rector of the UNED’s Financial Planning department:“Renfe’s main environmental challenge is to attract more customers with innovative strategies and affordable prices and to increase the use of public transport. That is the key, along with it being a less polluting means of transport with better energy consumption thanks to innovation and efficiency”.

Antonio Lucio, general manager of the Mobility Foundation of Madrid City Council: “One of the outstanding initiatives developed by Renfe, is the work to make a quantified and broken-down estimate of savings in greenhouse gas emissions contributed by the company in meeting Spanish mobility needs”.

Juan Manuel Jiménez, technical secretary of the Forum of Railway Companies for Sustainability and director of studies and programs of the Spanish Railways Foundation.“Renfe’s effort to transmit to society ‘the sustainable value of the railway’, in comparison with the other means of transport, is important”.


3.5.1. Main conclusions of the dialogue process

‘A train with values’ well-known and respected

All who take part in the dialogue process with interest groups know Renfe’s ‘A train with values’ RSE strategy and, generally, value it very positively, although they may consider that it could go beyond social and environmental action.

The communication campaign used to promote the strategy has also been significant, but it should be remembered that the action taken must be well communicated and consistent with the business.

Many people also appreciate a major company involving itself in projects linked to social, environmental and cultural issues, and at the same time that are connected with the business of the company.

The great amount of action taken by the company is also nota-ble. Some comments suggest a need for clarification of Renfe’s aims and how it wishes to be perceived by society, but it should be remembered that ‘A train with values’ is not an annual proj-ect, but that it is part of a business plan.

Expectations met

In general, all representatives of interest groups say that Renfe’s RSE strategy meets their expectations.

The associations, forums and foundations linked to the field of Corporate Social Responsibility (RSE) and Sustainability applaud the fact that Renfe considers RSE as part of its business strategy and has systematized its actions. They affirm that this strategy reflects the maturity of its RSE stance, taking account not only of economic, but also of social and environmental aspects. How-ever, they consider that it could have been used not only for social action, but also to disseminate policies of accessibility, equality and reconciliation, and to go more deeply into environment in its strategy.

As a means of communication specializing in social information, Renfe’s information strategy is seen as adequate and transparent, while also reminding passengers of the importance the company’s commitment to social and environmental issues.

Accessibility, a reality

The groups affected by disability, as well as the other interest groups, recognise Renfe’s commitment and the efforts it is making to achieve full accessibility to its services by apply-ing an ambitious plan, initiated in 2007 and which by 2012 will permit access to be guaranteed to all services by all pas-sengers with any type of disability or reduced mobility.

CERMI is pleased to recognise that the company’s policy is progressing towards full social inclusion through standardi-sation. The associations, forums and foundations linked to the field of Corporate Social Responsibility (RSE) and Sus-tainability confirm that accessibility and security are priori-ties for Renfe, as are the environment and reduction of emis-sions of CO2, using more efficient trains.

Environmental awareness

As a railway company, Renfe does not neglect its commitment to caring for the environment in its transport activity. Aware of this, the interest groups highlight the analysis of environmental impact carried of its activities that the company itself carries out with efficiency, incorporating energy value ratings. They also place value on the goal the company has set itself to decrease emissions that may be associated with its activity.

As well as the measures taken on environmental issues, all the ac-tivities concerning improvement of energy efficiency and innovation are very important.

It is also recommended to make a complementary effort in com-munication, to show the importance of sustainable mobility in Spain, not only in the area of railways, but for a sustainable policy and economy in general.

Renfe Annual Report

Experts have reminded Renfe that one of the problems of its annual reports is that, in general, they continue to be very long, and although they include a great deal of information are diffi-cult to assimilate as a whole. Therefore, they recommend that it becomes a more lively instrument to help the company to relate with its interest groups in its daily activities.

Renfe’s work to offer an account of its annual activities is val-ued. Interest groups state that the report is easy to read and of-fers a global and sufficient view of the company’s RSE strategy. However, they would like to see indicators of the level of fulfil-ment of the strategic lines in its different areas.

It is recommended that Renfe add to its report the goals and tar-gets for coming years, show if these have been reached or not, and explain why. Therefore, ideally it should report every year on each of the areas to see how RSE policies are being applied, and also to show that Renfe has a high standard of information.

Special importance is also placed on Renfe having initiated a process of dialogue with interest groups, which it is encouraged to maintain regularly, and on the report containing each year information on the opinion of interest groups about the compa-ny’s activities, as well as on social action being more integrated into the company’s control panel.

An interesting idea is also given about how the company might disseminate the RSE Report outside conventional circles. The interest groups suggest that a video be made with a summary of action taken to be shown on the screens on trains. They also propose the Report be available to everyone in CD format, as it is on the web.

Challenges facing the transport sector

Many of the interest groups affirm that one of the great chal-lenges facing transport is to increase its commitment to the en-vironment. Specifically, Renfe must make a great effort towards accessibility, energy efficiency, contributing to reducing emis-sions and other measures for slowing down climate change,

sustainable mobility and social cohesion in the regions that it connects. Of course, it must also strengthen the other areas of RSE, principally those relating to society, diversity, accessibility, responsible purchasing, human resources and transparency.

Renfe is also recommended to get involved in a more general policy of sustainability, relating to other infrastructure compa-nies, like Adif and Aena, as well as its own activities.


SUMMARY TABLE OF RENFE’S CHALLENGES BY INTEREST GROUPS

Attempt to incorporate a more global sustainability into a policy relating both to Renfe and to other infrastructure companies like Adif and Aena.

Step up efforts to communicate what mobility means for a policy and a sustainable economy.

Renfe must give the lead on public transport accessibility policies and continue to make progress to achieve full accessibility in rail transport.

Although it has a high standard of information, it would be useful to report on progress in fulfilling RSE policies.

Strengthen the brand image to avoid Ave – thanks to its development – and Renfe from being seen as two different companies, when they are in fact the same company.

It must, on its account, continue to improve its standards of information, customer care and accessibility.

Renfe must consolidate its leadership in the area of energy efficiency and reduction of greenhouse gases, especially by the implementation of systems of management and innovation.


01Profile, scope and coverage

of the Report

02Index of contents Global

Reporting Initiative (GRI)

03 Integrated indicators from the

Global Compact, GRI and United Nations Millennium Development

Goals (MDGs)

4.1. Profile, scope and coverage of the Report

The Renfe 2008 Executive Summary includes the or-ganization’s main action on economic, environmental

and social issues in the 2008 financial year, with fuller detail given in the other parts of the Annual Report (En-

vironmental Report, Financial and Activity Report and Corporate Social Report). Renfe thus aims to show its per-formance in terms of the three-pronged sustainable de-

velopment goal: economy, environment and society, and to give a public account of itself an its main interest groups.

The Report summarises the positive and negative aspects of Renfe's activities during the 2008 financial year and provides information and data for comparison with the two previous years for most data. The previous Report was published in 2007 with the title “Renfe 2007 Annual Report”. There have been no relevant changes in the company to make it necessary to change the expression of the information in said report or in the previous one.

Annexes

04Evaluation of the Annual

Report 2008 according to the criteria of UIC Leaflet 330

05Audit declaration


With the aim of facilitating a balanced and reasonable pre-sentation of Renfe's commitment, the report has adhered as closely as possible to the guide for the drawing-up of G3 sus-tainability reports Global Reporting Initiative (GRI), adhering to the following principles:

Materiality. The information provided in this report is intended to cover all of the indicators stipulated in the G3 Guidelines. Materiality is determined by the analysis of the company’s activity - passenger and freight transport -, its impact on the interest groups, its interaction with the environment and the analysis of the risks and opportunities of the trends that are affecting the organisation, and that may influence matters of sustainability.

Thoroughness. The publication accurately covers those indica-tors and material aspects required so that the interest groups can assess Renfe’s performance over the course of 2008.

Comparability. The information is given in a format that enables the comparison and analysis of Renfe’s development over time.

Accuracy and clarity. The information given is accurate and detailed so that the different interest groups can assess Renfe's performance.

4.2. Index of contents Global Reporting Initiative (GRI)

This report was written according to the methodology of the Global Reporting Initiative GRI (G3). This is an internationally accepted guide for drawing up Sustainability/Social Responsi-bility Reports. It is intended to provide support to organisations and associated collectives in the implementation and under-standing of initiatives aimed at fostering sustainable develop-ment. The methodology incorporates a series of principles and indicators relating to the financial, social and environmental aspects of company activity that should be used as the basis for the structure of the report.

Frequency. Renfe submits its reports every year pursuant to a periodical calendar, in such a way that interest groups can take decisions based on adequate information. The last report pub-lished was for the financial year 2007.

Reliability. Reliability. For any further information, or que-ries, please contact, the Dirección de RSE and/or Dirección de Calidad y Desarrollo Sostenible business units at the following e-mail address:

[email protected]

[email protected]

This executive summary, along with the other parts of the Renfe Annual Report, also respond to the indicators required by the Progress Report that all organizations belonging to the Spanish Global Compact Network, including Renfe, must present.

73Annexes

1. STRATEGY AND ANALYSIS

1.1. Institutional declaration. 7, 8

1.2. Description of the principal impacts, risks and opportunities. 7, 8

2. PROFILE OF THE ORGANIzATION

2.1. Name of the organisation. 13

2.2. Principal brands, products and/or services. 13, 17-18

2.3. Operational structure of the organisation, including the principal divisions, operational bodies, subsidiaries and joint businesses (joint ventures).

21-27

2.4. Location of the organization’s head office. See Note 1

2.5. Countries and locations in which the organisation conducts significant activities or actions specifically related to the aspects of sustainability discussed in the report.

See Note 2

2.6. Nature of property and legal constitution. 13

2.7. Markets served (including geographical breakdown, the sectors supplied, and the types of customers/beneficiaries). 18-27; See also page 27-32 of the Corporate Social Report

2.8. Dimensions of the reported organisation (including the total workforce, volume of sales or net income, total training, and the quantity of product or service delivered).

20-21, 53

2.9. Significant changes during the period covered by the report in the dimensions, structure and property of the organisation.

See Note 3

2.10. Awards and prizes received during the period covered by the report. 31, 66; See also page 34-35 of the Corporate Social Report

GRI INDICATORS


3. REPORT PARAMETERS

REPORT PROFILE

3.1. Period covered by the information contained in the report. 71-72

3.2. Date of the most recent previous report. 71-72

3.3. Distribution cycle of reports (annual, biannual, etc.). 71-72

3.4. Whom to contact with questions about the report or its content. 71-72

SCOPE AND COVERAGE OF THE REPORT

3.5. Definition process for report content. 41-42

3.6. Coverage of the report. 71-72

3.7. Indicate existence of limits of the scope or coverage of the report. 71-72

3.8. Information about shared businesses (joint ventures), subsidiaries, rented facilities, subcontracted activities and other bodies that may have a significant bearing on the comparison between periods and/or organisations.

27

3.9. Data measurement techniques and calculation methodologies, including the estimation hypotheses and techniques used when compiling indicators and other information in the report.

71-72

3.10. Description of the possible effects of reconfiguring information from previous reports, and the reasons for doing so. 71-72

3.11. Significant changes with respect to previous reports in the scope, areas covered, or methods of assessment applied. 71-72

GRI CONTENT INDEX

3.12. Table indicating where to locate the basic content of the report. 62-71

AUDITING

3.13. Current policy and practices for requesting external auditing of the report. 88

GRI INDICATORS

75Annexes

4. GOVERNANCE, COMMITMENTS AND PARTICIPATION OF INTEREST GROUPS

GOVERNANCE

4.1. Governance structure of the organisation. 14-16

4.2. Indicate whether the President holds an executive role. 14; See also Note 4

4.3. Number of members of the highest governing body who are independent or non-executive. See Note 5

4.4. Procedures available to shareholders and employees for making recommendations and communicating indicators to the highest governing body.

14; See also pages 57 and 58 of the Corporate Social Report

4.5. The link between the salary structure for members of the highest governing body and company executives and the performance of the organisation.

16

4.6. Procedures in place for preventing conflicts of interest in the highest governing body. See pages 11-13, 87-88 of the Corporate Social Report

4.7. Procedure for determining the level of training and experience required of members of the highest governing body to establish the social, environmental and financial strategy of the organisation.

See pages 11-13, 87-88 of the Corporate Social Report

4.8. Mission statement and description of the values transmitted within the company, codes of conduct, and policies related to financial, environmental and social activities and the status of implementation.

16-18

4.9. Procedures applied by the highest governing body for monitoring the identification and management of the financial, environmental and social action taken by the company, including the associated risks and opportunities and the degree of adherence to or compliance with international standards, codes of conduct and principles.

38-39; 41-42

4.10. Procedures for evaluating the performance of the highest governing body, focusing particularly on financial, environmental and social actions.

38-39; 41-42 See also pages 11-13 of the Corporate Social Report

COMMITMENTS TO OUTSIDE INITIATIVES

4.11. Description of how the company has adopted a precautionary approach or principle. 14; 41-42

4.12. Social, environmental and financial principles or programmes carried out externally, as well as any other initiative approved by the company.

61-63

4.13. Main associations to which the company belongs and/or national and international bodies that the company supports. See page 13 of the Corporate Social Report


4. GOVERNANCE, COMMITMENTS AND PARTICIPATION OF INTEREST GROUPS

PARTICIPATION OF INTEREST GROUPS

4.14. List of the interest groups associated with the organisation. 41-42

4.15. Basis for identifying and selecting the interest groups to which the company is committed. 41-42

4.16. Approaches taken to include interest groups, including the frequency of their participation by interest group type and category.

41-42

4.17. Main concerns and aspects of interest that have arisen through the participation of interest groups in company activity, and their incorporation into the preparation of the report.

68-69

FINANCIAL PERFORMANCE INDICATORS

Management focus 13-18

ASPECT: FINANCIAL PERFORMANCE

EC1 (P) Direct value generated and distributed. 18-21; See also pages 112-117 of the Financial and Activity Report

EC2 (P) Financial consequences and other risks and opportunities for the activities of the organisation arising from climate change.

44-47 See also pages 11-14 of the Environmental Report

EC3 (P) Degree of coverage of the organisation's obligations to corporate benefit programmes. 58-59

EC4 (P) Significant funding received from governments. See page 132 of the Financial and Activity Report

ASPECT: MARkET PRESENCE

EC5 (A) Range of relations between the standard starting salary and the local minimum wage in places where significant operations are carried out.

See Note 6

EC6 (P) Policy, practices and promotion of expenditure corresponding to local suppliers in places where significant operations are carried out.

38-39

EC7 (P) Local hiring procedures and proportion of executives from the local community, in places where significant operations are carried out.

See pages 45-48 of the Corporate Social Report

GRI INDICATORS

77Annexes

FINANCIAL PERFORMANCE INDICATORS

ASPECT: INDIRECT ECONOMIC IMPACTS

EC8 (P) Development and impact of investments in infrastructures and services rendered chiefly for the public benefit through commercial commitments, free legal aid or in kind.

See pages 126-131 of the Financial Report

EC9 (A) Understanding and description of any significant indirect economic impacts, including their scope. 38-39. See Note 7

ENVIRONMENTAL PERFORMANCE INDICATORS


ASPECT: MATERIALS

EN1 (P) Materials used, by weight or volume. See page 61-62 of the Environmental Report

EN2 (P) Percentage of assessed materials used. See Note 8

ASPECT: ENERGY

EN3 (P) Direct energy consumption, by primary energy source. 47-48

EN4 (P) Indirect energy consumption, by primary energy source. See page 39-42 of the Environmental Report

EN5 (A) Energy saved due to conservation and efficiency improvements. 45-48; See also pages 11-17; 36-42 of the Environmental Report

EN6 (A) Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives.

45-48; See also pages 11-17; 36-42 of the Environmental Report

EN7 (A) Initiatives to reduce indirect energy consumption and reductions achieved. 45-48; See also pages 11-17; 36-42 of the Environmental Report



ASPECT: wATER

EN8 (P) Total water captured by source. See page 59-61 of the Environmental Report

EN9 (A) Water sources significantly affected by withdrawal of water. See Note 9

EN10 (A) Percentage and total volume of recycled and reused water. See Note 10

ASPECT: BIODIVERSITY

EN11 (P) Description of land adjacent to, or located in, protected natural areas and unprotected areas of high biodiversity. Indicate the location and size of unprotected land of high biodiversity owned, leased or managed.

See page 68-71 of the Environmental Report

EN12 (P) Description of the most significant impacts of activities, products, and services on biodiversity in protected open spaces or in unprotected areas of high biodiversity.

See page 68-71 of the Environmental Report

EN13 (A) Protected or restored habitats. See Note 11

EN14 (A) Current and projected strategies and actions for managing impact on biodiversity. See pages 68-76 of the Environmental Report

EN15 (A) Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations (by level of threat).

See Note 12

ASPECT: EMISSIONS, EFFLUENTS AND wASTE

EN16 (P) Total direct and indirect greenhouse gas emissions by weight. 49-50

EN17 (P) Other indirect greenhouse gas emissions by weight. See pages 55-59 of the Environmental Report

EN18 (A) Initiatives to reduce greenhouse gas emissions and reductions achieved. 45-50; See also pages 43-59 of the Environmental Report

GRI INDICATORS

79Annexes


EN19 (P) Emissions of ozone-depleting substances by weight. See Note 13

EN20 (P) NO, SO and other significant atmospheric emissions by type and weight. See pages 55-59 of the Environmental Report

EN21 (P) Total waste water discharge by type and destination. See page 61 of the Environmental Report

EN22 (P) Total weight of waste managed by type and treatment method. See pages 62-64 of the Environmental Report

EN23 (P) Total number and volume of significant accidental spills. See pages 66-68 of the Environmental Report

EN24 (A) Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annexes I, II, III and VIII, and percentage of transport waste shipped internationally.

See Note 14

EN25 (A) Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the water spills and runoff derived from the activities of the reporting organisation.

See Note 12

ASPECT: PRODUCTS AND SERVICES

EN26 (P) Initiatives to mitigate the environmental impacts of products and services, and the extent to which this impact is reduced.

See pages 11-17 of the Environmental Report

EN27 (P) Percentage of products sold and packing material reclaimed at the end of their useful life, by product category.

See Note 15

ASPECT: REGULATORY COMPLIANCE

EN28 (P) Monetary value of the most significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.

See Note 16

ASPECT: TRANSPORT

EN29 (A) Significant environmental impacts of transporting products and other goods and materials used for the organisation’s operations, and staff transport.

See Note 12

ASPECT: GENERAL

EN30 (A) Total environmental expenditure and investment by type. See page 29 of the Environmental Report


SOCIAL PERFORMANCE INDICATORS: WORK PRACTICES AND TEACHING WORK

Management focus 55

ASPECT: EMPLOYMENT

LA1 (P) Breakdown of workforce by employment type, by contract and by region. 53-54

LA2 (P) Total number of employees and average turnover, by age group, gender and region. 53-54, See Note 17

LA3 (A) Social benefits for full-time employees, not offered to temporary or half-time employees, broken down by main activity.

58-59

ASPECT: COMPANY/wORkER RELATIONS

LA4 (P) Percentage of employees covered by a collective bargaining agreement. See page 55 of the Corporate Social Report

LA5 (P) Minimum period(s) for advance notice relating to organisational changes, including whether these notices are specified in the collective agreements.

See Note 18

ASPECT: OCCUPATIONAL HEALTH AND SAFETY

LA6 (A) Percentage of the total number of workers who are represented on joint employer-worker health and safety committees, set up monitor and provide advice on occupational health and safety programmes.

See page 61 of the Corporate Social Report

LA7 (P) Absenteeism rates, work-related illnesses, days lost and number of work-related fatalities, by region. See page 62 of the Corporate Social Report

LA8 (P) Education, training, advice and risk prevention and control programmes related to serious illnesses, for workers, their families, and members of the public.


LA9 (A) Health and safety matters covered by formal agreements with trade unions. See pages 61-62 of the Corporate Social Report

ASPECT: TRAINING AND EDUCATION

LA10 (P) Average hours of annual training per employee, by employee category. 56

LA11 (A) Skill management and continuous training programmes that strengthen worker employability and help employees to manage the final stages of their careers.

57-58

GRI INDICATORS

81Annexes

SOCIAL PERFORMANCE INDICATORS: WORK PRACTICES AND TEACHING WORK

LA12 (A) Percentage of employees who undergo regular performance and professional development assessments. See pages 53-54 of the Corporate Social Report

ASPECT: DIVERSITY AND EqUAL OPPORTUNITIES

LA13 (P) Composition of corporate governing bodies and workforce, by gender, age group, minority group and other diversity indicators.

15-16

LA14 (P) Base salary of men compared with that of women, broken down by professional category. See Note 19

SOCIAL PERFORMANCE INDICATORS: HUMAN RIGHTS


ASPECT: INVESTMENT AND SUPPLY PRACTICES

HR1 (P) Percentage and number of significant investment agreements that incorporate Human Rights clauses or have been assessed for their impact in this area.


HR2 (P) Percentage of main distributors and contractors who have been assessed for their impact in the area of Human Rights, and subsequent measures adopted.

See pages 65-67, 88-89 of the Corporate Social Report

HR3 (A) Total hours spent training employees on policies and procedures related to Human Rights issues relevant to their activities, including the percentage of trained workers.

See Note 20

ASPECT: NON-DISCRIMINATION

HR4 (P) Total number of discrimination incidents and measures adopted. See Note 21

ASPECT: RIGHT OF FREE ASSOCIATION AND COLLECTIVE AGREEMENTS

HR5 (P) Company's activities in which the right to free association and to join collective agreements may involve significant risks and measures taken to affirm these rights.

See Note 22

ASPECT: CHILD EXPLOITATION

HR6 (P) Identified activities that involve a potential risk of child exploitation incidents and measures adopted to help eradicate this.

See Note 23

ASPECT: FORCED LABOUR

HR7 (P) Activities identified as involving a significant risk of causing forced or non-consensual labour incidents and the measures adopted to help eradicate this.

See Note 24


SOCIAL PERFORMANCE INDICATORS: HUMAN RIGHTS

ASPECT: SAFETY PRACTICES

HR8 (A) Percentage of workers trained in company policies and procedures related to Human Rights issues relevant to their activities.

See Note 20

ASPECT: RIGHTS OF INDIGENOUS PEOPLES

HR9 (A) Total number of incidents related to breaches of rights of indigenous peoples and measures adopted. See Note 25

SOCIAL PERFORMANCE INDICATORS: SOCIETY

Management focus 41-42; 61

ASPECT: THE COMMUNITY

SO1 (P) Nature, scope and effectiveness of programmes and practices for evaluating and managing the impact of operations on communities (including company input, transaction and output).

61-63

ASPECT: CORRUPTION

SO2 (P) Percentage and total number of business units analysed in terms of corruption risk. See Note 26

SO3 (P) Percentage of employees trained in the organization’s anti-corruption policies and procedures. See Note 26

SO4 (P) Measures adopted in response to corruption incidents. See Note 27

ASPECT: PUBLIC POLICY

SO5 (P) Stance on public policies, participation in carrying them out, and involvement in lobbying. 14

SO6 (A) Total value of financial and cash donations to political parties or related institutions, by country. See Note 28

ASPECT: BEHAVIOUR OF UNFAIR COMPETITION

SO7 (A) Total number of measures taken due to causes related to monopolistic and unfair competition practices, and the results of these.

See Note 29


SO8 (P) Monetary value of significant penalties and fines and total number of non-monetary sanctions for non-compliance with laws and regulations.

See Note 30

GRI INDICATORS

83Annexes

SOCIAL PERFORMANCE INDICATORS: PRODUCT RESPONSIBILITY

Management focus 29, 30

ASPECT: CUSTOMER HEALTH AND SAFETY

PR1 (P) Phases in the life cycle of products and services during which customer health and safety impacts are assessed for subsequent improvement, and percentage of significant product and service categories subject to these assessment procedures.

37, 38

PR2 (A) Total number of incidents resulting from breach of legal regulations or voluntary codes relating to impact of products and services on health and safety during their life cycle, distributed in accordance with the type of result of such incidents.

See Note 31

ASPECT: PRODUCT AND SERVICE LABELLING

PR3 (P) Types of information about products and services required by current procedures, and percentage of products and services subject to such requirements.

35-36

PR-4 (A) Total number of breaches of regulations or voluntary codes relating to information and labelling of products and services, distributed in accordance with the type of result of such incidents.

See Note 32

PR5 (A) Customer satisfaction measures, including the results of customer satisfaction studies. 32-34

ASPECT: MARkETING COMMUNICATIONS

PR6 (P) Programmes for compliance with laws or adhesion to voluntary standards and codes of conduct mentioned in marketing communications, including advertising, other promotional activities, and sponsorship.

63

PR7 (A) Total number of incidents resulting from breach of regulations relating to marketing communications, including advertising, other promotional activities and sponsorships, distributed in accordance with the type of result of such incidents.

See Note 33

ASPECT: CUSTOMER PRIVACY

PR8 (A) Total number of well founded claims relating to privacy and leaking of the customer’s personal data. 32, 33


PR9 (P) Cost of significant fines due to breach of regulations in relation to the supply and use of the company's products and services.

See Note 34


Note 1: The address of Renfe’s head office is Avenida de Pío XII, 110, 28036 Madrid.

Note 2: Renfe conducts significant activities in Spain.

Note 3: There have been no significant changes.

Note 4: The President of Renfe holds an executive post.

Note 5: Since Renfe is a state-owned company, this figure is not, for the moment, applicable. Issues relating to the Board of Directors and its powers are regulated by Articles 8 and 9 of the Renfe Statute.

Note 6: The starting salary in Renfe is stipulated in the company’s Collective Bargaining Agreement.

Note 7: Renfe's status as a state-owned company, attached to the Ministerio de Fomento, confers public status to the entirety of its actions.

Note 8: Renfe has not included this data in 2008 as the quantities are insignificant.

Note 9: The capture of water in Renfe does not significantly affect any source of water.

Note 10: Renfe has not included the amount of water recycled and reused in 2008 as the quantities are insignificant.

Note 11: Renfe has not carried out any restoration of protected habitats in 2008.

Note 12: There are no significant impacts in this regard.

Note 13: The quantity of ozone-depleting substances emitted by Renfe was not significant in 2008.

Note 14: Renfe does not transport waste of this type.

Note 15: Renfe’s activity centres on offering a service of transport for passengers and freight, therefore this indicator does not apply to the company.

Note 16: No such fines were recorded.

Note 17: Renfe does not count turnover by criteria of age, region and job category, therefore it cannot provide information in this regard.

Note 18: Processes of forced mobility that may arise within the company are communicated with minimum notice 30 days, as set out in article 326 of the Renfe's Employment Regulations.

Note 19: There are no gender-based wage differences, therefore the ratio is 1.

Note 20: No specific Human Rights training is given.

Note 21: No incidents of discrimination have been recorded.

Note 22: There are no risks involved in the right to free association or to join collective agreements.

Note 23: There is no child exploitation risk.

Note 24: There is no risk of forced or non-consensual labour.

Note 25: Renfe mainly operates in Spain where there is no risk of breach of rights of indigenous peoples.

Note 26: Renfe is subject to public contracting regulations (all of those on excluded sectors and part of the general regulations, which are applied to the Public Sector – Art. 49.1 of the Public Sector Contracts Law–) meaning that it may not contract companies or professionals that have been disqualified from contracting. In addition, Renfe staff are subject to a strict incompatibility scheme, in accordance with the provisions made in Article 21 of the company Statute. Application of the aforementioned regulations is a guarantee to avoiding corruption.

Note 27: No incidents of this type have been recorded.

Note 28: Renfe does not make financial or cash contributions to political parties due to the nature of its activities and its legal constitution.

Note 29: The company’s nature prevents the existence of causes related to monopolistic and unfair competition practices.

Note 30: No significant fines were recorded in this sense.




Note 34: No significant fines of this type were recorded.

NOTES

85Annexes

4.3. Integrated indicators from the Global Compact, GRI and United Nations Millennium Development Goals

PRINCIPLES OF THE GLOBAL COMPACT GRI INDICATORS MILLENNIUM DEVELOPMENT GOALS

HUMAN RIGHTS

Principle 1. Companies should support and respect the protection of internationally recognised fundamental Human Rights, within their sphere of influence.

4.12, 4.13, HR1-9, LA4, LA13, LA14, SO1




GOAL 4To bring down infant mortality rates.


GOAL 6Combat HIV/AIDS, malaria and other illnesses.

GOAL 7Guarantee environmental sustainability.

GOAL 8Promote a world development association.

Principle 2. Companies must ensure that their companies are not party to any infringement of Human Rights.

HR1-2, HR8

EMPLOYMENT

Principle 3. Companies must support freedom of affiliation and effectively recognises the right of collective bargaining.

HR5, LA4,LA5 GOAL 2Achieve universal primary education.


Principle 4. Companies must support the eradication of all forced or coerced labour.

HR1-3, HR7

Principle 5. Companies should support theeradication of child labour.

HR1-3, HR6

Principle 6. Companies must support the abolition of discriminatory practices in employment and the workplace.

HR1-4, LA13,LA14

INTEGRATED INDICATORS FROM THE GLOBAL COMPACT, GRI AND UNITED NATIONS MILLENNIUM DEVELOPMENT GOALS


INTEGRATED INDICATORS FROM THE GLOBAL COMPACT, GRI AND UNITED NATIONS MILLENNIUM DEVELOPMENT GOALS

PRINCIPLES OF THE GLOBAL COMPACT GRI INDICATORS MILLENNIUM DEVELOPMENT GOALS

ENVIRONMENT

Principle 7. Companies should maintain a preventive focus that favours the Environment.

EN6, EN18, EC-2 GOAL 7Guarantee environmental sustainability.

Principle 8. Companies encourage initiatives to promote greater environmental responsibility.

EN1-29, PR3-4

Principle 9. Companies should encourage the development and spread of technologies that respect the environment.

EN2, EN5-7, EN10, EN18, EN26-27

FIGHT AGAINST CORRUPTION

Principle 10. Companies should workagainst corruption in all its forms,including extortion and bribery.

SO2-6

8787Annexes

4.4. Evaluation of the Annual Report 2008 according to the criteria of UIC Leaflet 330

UIC Leaflet 330 evaluates the level of KPIs according to criteria of data quality and processing. The evaluation by Renfe for 2008 is the following:

In overall terms, Renfe shows a good level in the quality and processing of its KPIs, although there is room for improvement, especially in the direct and detailed measurement of its environmental indicators.

DATA CATEGORISATION: SIMPLE LEVEL Some data is measured (e.g. energy consumption, polluting emissions) while other data is estimated (e.g. distribution of freight and passengers).

Met

hodo

logy

DATA AGGREGATION: SIMPLE LEVEL Data has been disaggregated in units of passenger and freight traffic, without separating the different passenger services.

DATA COLLECTION CYCLES: ADVANCED LEVEL The data is collected annually, when making the Renfe Annual Report.

DATA COLLECTION PROCEDURES: SIMPLE LEVELThe data is collected annually in a standard form, without any specific procedure for collection.

qUALITY CONTROL (DATA AND PROCEDURES): ADVANCED LEVEL The 2008 Renfe Environmental Report, checked both internally and externally, is certified in the validation document.

INDICATOR 1: ENERGY CONSUMPTION: BASIC LEVELEstimate calculations of the distribution of electric consumption between Freight and Passenger services. Data on efficiency in electric production taken from UIC Leaflet 330.

Indi

cato

rs

INDICATOR 2: SHARE OF RENEwABLE ENERGY: SIMPLE LEVEL Data on the percentage of renewables in the mix of Autonomous Regions where Renfe provides services.

INDICATOR 3: CO2 EMISSIONS: SIMPLE-ADVANCED LEVEL Spanish Power Grid and WWF data with the unit emission factor of the Spanish mainland system.

INDICATOR 4: LOCAL AIR POLLUTION: BASIC LEVEL Average data on emissions from the Spanish mainland electric mix and from Eurostat for emissions from diesel.

INDICATOR 5: NOISE EXPOSURE: BASIC LEVEL Data of estimated kilometres for freight wagons and actual kilometres for passenger trains.

GLOBAL VALUATION

Advanced Simple Basic


4.5. Audit declaration

Published by

Dirección de Comunicación, Marca y Publicidad

Renfe

Coordination and writing

Media Responsable, S. L.

Photographs

Miguel Ángel Patier

Design and layout

División de Impresión, S. L.

Translation

LioNBRIDGE

Legal deposit

M-44184-2009

Printed by

Global Diseña, S. L.

Paper print: Covers: 300 gm Heaven and 150 gm Interior Creator Silk

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