FAQ Socially Responsible
PRINCIPLES, POLICIES AND STRATEGIES
In the transportation, distribution, storage and regasification of liquid natural gas and in the new businesses, Snam is committed to constantly improving the reliability and capacity of a service that is strategic to the country, and makes social responsibility and sustainable development an increasingly integral part of its corporate policies and practices. In line with this approach, Snam’s corporate systems and activities are based on principles of good governance in order to maximise value for shareholders and ensure total transparency in company management. The principles underlying Snam’s work in the field of sustainable development are: care for people; transparency; safety; moral integrity; environmental protection; technological innovation and service quality. Snam considers continual improvement in corporate and individual performance to be a crucial success factor for sustainable development of the company.
The company has always paid the utmost attention to issues of social responsibility and the local region, through a process that strives to constantly improve business culture in these areas. This direction can be defined by factors such as shared values and targets for sustainable development, the identification of key indicators for monitoring economic, social and environmental parameters, and the adoption of a clear and complete accounting system that can efficiently provide different categories of stakeholders with information. Equal importance is placed on absolute transparency of governance processes, on the professional growth and enhancement of employees, on local community involvement, and on building a constructive relationship with customers, suppliers and the authorities.
ne of the key factors of the Snam Group's reputation is the ability to conduct its business with loyalty, correctness, transparency, honesty and integrity; in compliance with the laws, regulations, international standards and guidelines, both national and foreign, that apply to Snam's business.
Snam has been active for several years in the fight against corruption, expressly prohibiting in its Code of Ethics "practices of corruption, illegitimate favors, collusive behavior, solicitations, direct and / or through third parties, of personal and career advantages for oneself or for others". The Code must be respected by all Snam people and is expressly accepted by all suppliers at the time of qualification.
In the meeting of 30 July 2013, Snam's Board of Directors approved the new text of Model 231, updated in relation to the new crimes of "corruption between private individuals", "undue inducement to give or promise benefits" and "use of citizens of third countries whose stay is irregular ", as well as the evolution of Snam's corporate and organizational structure.
Snam fights corruption both nationally and internationally, both in relations with public officials and with private individuals. The Anti-Corruption Guideline is an integral part of a broader business ethics control system aimed at ensuring compliance with both national and international anti-corruption regulations, including the UK Bribery Act, the U.S. Foreign Corrupt Practices Act and the best international standards. This not only in order to avoid significant sanctions and repercussions on the business, but also to protect Snam's reputation.
The Anti-Corruption Guideline is also adopted in compliance with the tenth principle of the Global Compact, an international initiative launched in 2000 by the United Nations to support ten universal principles relating to human rights, work, the environment and the fight against corruption. The Global Compact or "Global Pact" unites governments, businesses, United Nations agencies, labor and civil society organizations, with the aim of contributing to the creation of "a more inclusive and sustainable global economy" by introducing compliance within it. and the application of common values. By joining the Global Compact, Snam wanted to confirm and strengthen its commitment as a socially responsible business, helping to support and actively participate in the work of the Global Compact Network Italy.
The sustainability report is an integral part of the sustainability management model is, which enables Snam, on a yearly basis, to check the progress made, identify opportunities for improvement and strengthen its relationship and collaboration with all its stakeholders.
The 2020 sustainability report is composed of two parts: the first part is dedicated to the challenge posed by climate change and the role of Snam as the Country's decarbonization enabler. In particular, we represent the new Net Zero Carbon strategy that aims to achieve carbon neutrality with respect to scope 1 and scope 2 emissions by 2040, ahead of the European targets for 2050 and the ESG scorecard, the new tool that sets 22 three-year objectives that cover social, governance and environmental aspects by monitoring them annually. Ample space has been given to all the projects that contribute to achieve these objectives: the development of hydrogen and biomethane describing its possible applications in the technological and industrial field and highlighting Snam's commitment in these areas with reference to its business strategy and its recent acquisitions.
Part two of the document, organised according ESG (Environment, Social, Governance) areas of the ESG Scorecard, presents the sustainability information and performance in compliance with the “In accordance - Comprehensive” option of the CONSOLIDATED SET OF GRI SUSTAINABILITY REPORTING STANDARDS 2016 (GRI standards).
A novelty of 2020 is the presence of a reconciliation table with SASB Sustainability Accounting Standard Board standards) for the reference business sector "OIL & GAS – MIDSTREAM".
The table will allow the reader to find the information required by this standard in the Sustainability Report and the Annual Financial Report.
How has the financial world recognised Snam’s commitment to governance principles and corporate social responsibility?
The Snam stock is included in the main international stock market indices SRI (Sustainable and Responsible Investment), a recognition that guarantees investors greater transparency in communications to the market and greater comparability with the peers of the Group, as well as making the Company more visible to investors and the financial market as a whole.
Investors classified as ESG within Snam's shareholder base amounted to 245 which in September 2020 represented 34.1% of the total of Snam's institutional shareholders (Nasdaq analysis) and 13.8% of the total.
Sustainability has become critical across all sectors and Snam’s mission is to help develop an economic system based on progressive decarbonisation. Aware of its key role in the country's energy transition, Snam shares the objectives of the European Green Deal for a "Just Transition" that leaves no one behind and that does not only look at climate change but at the inclusion of workers and support for communities, guaranteeing social protection and respect for human rights. With this in mind, Snam has strengthened its business model, which was already based on values such as sustainable growth, transparency, diversity and protection of the environment and territories, integrating sustainability even further into its industrial strategy with an increasingly holistic approach.
As part of this, Snam has focused on further strengthening its system for defining and monitoring the sustainability KPIs, setting ambitious objectives in all ESG areas relevant to its business, and demonstrating these to stakeholders through the development of an ESG Scorecard.
Snam also aligned itself with the Paris objectives and substantiated its commitment for the future by defining a strategy to achieve carbon neutrality by 2040 thanks to a structured plan of action.
The sustainable development policy, which applies to all the Group’s companies, can be viewed at:
How does Snam face issues connected to the quality of global economic development and the increasing expectations of its stakeholders?
The goal of containing global warming well below 2 ° C requires the energy system to undertake an effective and sustainable path of deep decarbonisation in all sectors, while ensuring safe energy at the lowest cost for the consumer.
In this context, the national energy system cannot ignore the role that gas and related infrastructures play in achieving the targets for reducing emissions, promoting renewable energy sources and energy efficiency. In the energy transition, gas is able, on the one hand, to provide flexible, secure and diverse energy supply sources and on the other to support a process towards a low carbon economy at the lowest overall cost for the system, thanks also to the availability of an existing widespread infrastructure network, such as the Italian one. At the same time, it also promotes the decarbonisation of the same gas carrier through the development of renewable gases such as biomethane, hydrogen and synthetic gas.
The fundamental role of gas is evident not only by the latest demand trends in Italy, which position it in first place among the energy sources of the country with 35% of primary energy consumption; but also by the energy development scenarios that Snam and Terna have jointly processed in which substantial gas consumption is expected in 2030 and 2040.
Snam is at the forefront of these challenges by leveraging sustainable, safe and technologically advanced infrastructures, capable of transporting and storing natural gas, as well as increasing shares of renewable gases such as biomethane and hydrogen, and increasing investments in new activities such as sustainable mobility and energy efficiency.
HUMAN RESOURCES AND WORK STANDARDS
Encouraging the development of employees, developing their skills and abilities, acknowledging their merits, and defining responsibilities are the main aims of Snam’s development and management model. The main tools used in implementing this model are training, internal communication, a system aimed at guiding and assessing performance, and the evaluation of potential and individual skills. Their purpose is to assist personal growth, encouraging employees to participate and making them increasingly aware of and responsible for the company’s objectives and strategies, while also striving to create a positive working environment based on respect, loyalty, trust and collaboration and maintaining an open and constructive dialogue with employee representatives. Particular attention is paid to the human resources integrated management and development system which aims to encourage the development of employees in line with the envisaged evolution of the business. The objectives pursued are first and foremost directed at creating high quality training programmes that are in line with the needs of the various corporate areas and the specific fields of responsibility.
Snam builds its daily activities on principles upheld by international conventions and institutions concerning the protection of human rights, labour and trade union rights, health and the environment, the rejection of forced labour and child labour, as well as any form of discrimination. It also respects values and principles concerning fairness, transparency, energy efficiency and sustainable development. Corporate social responsibility has always characterised Snam’s operations and its relations with those parties concerned. Its Code of Conduct means that all activities are carried out in compliance with the law, in a climate of fair competition, decently, honestly, with integrity and good faith, and respecting the legitimate interests of customers, employees, stakeholders, commercial and financial partners and the communities where the company conducts its activities.
RESPECTING AND DEVELOPING THE REGION
The criteria and the procedures adopted for locating, planning, constructing, managing and decommissioning the plant and its activities meet with the highest environmental and safety protection requirements. When developing gas pipeline networks (the most common and significant case) environmental impact, transport safety, and technical/economic feasibility are all considered for choosing a pipeline route from different alternatives in the planning stage. Based on what the planning stage reveals, techniques for digging are identified, as well as landfill repositioning. Ground consolidation and vegetation restoration operations are also planned. Geological and water profiles are used to ensure that the gas pipeline route will not interfere with existing equilibriums and that the gas pipeline is protected from unstable phenomena such as erosion, collapse or landslides.
Forming trusting, long-term relationships with all stakeholders and positioning itself to facilitate listening and debate are of fundamental importance to Snam, which acts openly and with transparency towards all key players and aims to maintain and build constructive dialogue both internally and externally.
These relations are based on a corporate culture that has always sought to express the values of sustainability and corporate responsibility in the best possible way, to make them an integral part of strategic thinking and corporate management: they help to prevent and manage risks and, at the same time, can create value for stakeholders by taking practical action.
From this starting point, Snam has begun a review of its value creation processes, both for the company itself and for its stakeholders, focusing on a new way of expressing sustainability, innovative and diffused that, with a proactive approach, can be an engine for value creation, responding to the Company’s development plans and the social and environmental requirements of the regions and communities in which it operates.
Snam co-operates with local and national authorities and participates actively with employees in labour groups, committees and commissions set up as part of national and European non-profit associations that conduct studies and research in the gas industry or in sectors of similar interest to those of the Company.
Collaborating with authorities, non-profit associations and institutions is an integral part of Snam’s sustainable development strategy and, based on the principle of inclusivity, the company aims to develop valuable and trustworthy relations with every stakeholder, acknowledging their right to be heard and committing to providing reports on the company’s activities and decisions made.
When developing relationships with all of its stakeholders, Snam considers compliance with the law, ethicality and transparency to be fundamental requirements, without which any type of collaboration would not be possible.
Another important aspect is that, in all of its relationships, Snam has taken inspiration from the general principles that form the basis of its operational activity, namely to:
- Ensure the diversity of opinions and political and cultural orientations
- Guarantee the clarity of goals and thus transparency in project management
- Recognise social, cultural and environmental trends that are representative of the region
- Ensure the long-term sustainability of projects
- Ensure planning ability and flexibility in identifying routes.
With this approach Snam continues all the activities of collaboration with schools and ONG also with the help of Fondazione Snam costituted in 2017.
HEALTH, SAFETY AND ENVIRONMENT
How is Snam’s HSE management system structured? How are skills and responsibilities attributed and shared out in the field of safety and the environment?
The commitment of the Snam group to ensuring the health and safety of its workers is embodied in the Health and Safety Policy, combining environment and quality. The responsibility for implementing the policy is shared by Snam’s HSEQ function, focusing the functions of coordination and general direction for the entire group, and the HSEQ structures in the individual companies that have the tasks of specific guidance, coordination and support for the respective operating units.
In its principles on prevention and safeguarding, the policy acknowledges the primary values shared by the business and by society. The protection of the health and safety of its workers has always been at the heart of the Company's attention, considering the nature of the activities carried out by its employees on site and the operations required, for example, in infrastructure construction. To properly monitor this issue, all company activities are governed by management systems certified according to ISO 45001 on health and safety at work and the adoption of good practices, promoted and shared with suppliers.
The Group's efforts have made it possible to maintain low injury rates, both for employees and contractors: in 2020, there were a total of 5 injuries (7 in 2019), of which 3 occurred to Snam Group employees (2 in 2019), all of which occurred in companies in the non-regulated sector (2 in Cubogas and 1 in Mieci), and 2 to contract suppliers (5 in 2019), of which one, unfortunately, was fatal.
All of Snam’s training activity is characterised by an awareness of issues related to health, safety and the environment and the company has always paid special attention to promoting training schemes that aim to spread and develop skills and expertise in these areas. The main aim is to enable staff to operate effectively in the workplace, fully respecting health, safety and the environment, by participating in training programmes aimed at individual professional figures. The training model used is based on different training programmes and has provided training courses on safeguarding health and safety, protecting the environment, as well as environmental management systems, and existing and newly-introduced legislation.
For information and training activities, the Health Safety Environment and Quality function also defines and develops sufficient educational material, ensuring specialised support for any teachers. Along with the operational departments, it promotes specific meetings (in the sphere of internal communication) with heads of operational units and employee representatives for safety and the environment. For internal communication concerning Health, Safety and the Environment, the company’s intranet site has a specific area where employees can find company documents on this matter (legislation, manuals, statistics, reports, safety cards, management system documentation etc.). Professional technical training courses are also held for various tasks that, although not classified as safety and environmental protection training, provide vital skills for correctly and safely carrying out the task assigned. Among the many initiatives proposed by Snam to protect health and safety, of particular importance are those designed to spread a culture in which health protection, accident prevention and safety are the key elements in ensuring a safe working environment.
Snam4Safety is a project aimed at strengthening the safety culture and awareness of employees and contractors. In spite of the difficulties caused by the Covid-19 pandemic, the project continued in 2020, with the launch of a coaching activity for Operations Managers and Prevention and Protection Service Managers (ASPPs), with the support of DSS Sustainable Solutions Italy. This activity will continue in 2021.
The Snam group adopts specific certified management systems with the objective of ensuring that corporate processes and activities meet the required standards on worker health and safety, environmental protection and the quality of the services offered.
Also in 2020 Snam implemented all the activities necessary to extend the management system certifications to the new companies entering the scope of consolidation and to maintain and update other existing certifications, in accordance to the new standards (ISO 14001:15 and ISO 9001:15).
To check the effectiveness of the management systems, in 2020 248 audits were carried out: 240 audit concerning the various group companies (78 of them by an external team) and 8 audits concerning contractors working at sites, on health, safety and environment issues. The latter and the internal audits were partly carried out by the Snam internal team, composed of 55 auditors.
The main certifications of the Snam group can be found here https://www.snam.it/en/Sustainability/reporting_and_performance/certifications.html
Respecting an active corporate policy of prevention and with a view to constantly improving the safety and health of its employees, Snam is always committed to numerous activities and projects. The following activities, based on risk, are subject to regular health inspections
• Use of chemical agents
• Use of video display terminals
• Manual handling of loads
• Night work.
Health Watch is carried out by the appointed occupational physician who establishes relevant health protocols based on types of risk. Appropriate preventive treatment is provided to all employees who travel to countries out of the European Union for work. The appointed occupational physician and the Head of the Prevention and Protection Service carry out regular inspections of the workplace in order to evaluate any preventative action or improvements that may be necessary. Snam goes beyond its health inspection duties and also stands out because of its many institutions and schemes in support of workers, ranging from supplementary health care to prevention campaigns like the cancer prevention campaign (Early Diagnosis Plan) and influenza vaccinations. A broad scheme of opportunities that often involves family members and former employees too. All company buildings are designated “No smoking buildings” and smoking is not allowed in the workplace. For the management of the health emergency due to the spread of the Covid-19 virus, an inter-functional team, named Crisis Management, has been in place since its inception (February 2020). The team had the fundamental task of assessing the level of risk to which Snam workers could be exposed and defining the appropriate precautionary and containment measures to ensure not only the protection of workers' health in all operating conditions, but also the continuity of the service.
Snam, in addition to having implemented the shared Protocol for regulating measures to combat and contain the spread of the Covid-19 virus in the workplace, defined between the government and social partners, and integrated the Risk Assessment Documents considering the INAIL methodology on measures to contain contagion in the workplace, has:
• created a Health Protocol containing criteria and measures to protect the health and safety of workers at work,
which is constantly updated according to epidemiological developments and regulations;
• organised a constant and widespread information campaign towards all workers;
• set up the Committee for the application and verification of the rules provided for in the Protocol defined between the Government and the social partners.
Snam’s commitment to preventing climate change is evident in a challenging climate strategy aimed at achieving carbon neutrality by 2040. Snam's Net Zero Carbon strategy is solid and concrete and includes intermediate reduction targets of -50% by 2030 compared to 2018 values for all direct (Scope 1) and indirect energy (Scope 2) CO2eq emissions. There are also a methane emission reduction target of -45% by 2025 and a plan to increase the use of green electricity by 2030.
The Net Carbon Zero strategy is mainly based on:
using natural gas as an energy source supporting decarbonization path. The use of natural gas instead of oil products or coal is one of the most beneficial and feasible ways of reducing carbon dioxide emissions (CO2) and can make a significant contribution to energy transition and to reach GHG emissions reduction target of the Country;
Progressive replacement of gas turbines with electric compressors in the compressor stations. In this way it's possible to eliminate CO2 combustion emissions and purchasing electric energy from renewable sources emission reset is guaranteed;
Gas natural emissions reduction by means of continuous monitoring, the introduction of Leak Detection and Repair (LDAR) programme, specialised gas recovery interventions nd equipment replacement.
using electricity from renewable sources, in 2020, Snam increased the consumption of electricity produced from renewable sources, which passed from 44% in 2019 to 49% in 2020.
promoting energy efficiency through the installation of photovoltaic panels in building construction and through the activities of TEP;
reduction of emissions related to company's buildings and the corporate fleet;
collaboration with suppliers and associates for the containment of indirect emissions (Scope 3);
offsetting of non-disposable emissions. The few remaining emissions will be reset with the purchase of certified carbon credits from select projects.
Additionally, the gas system could facilitate the options of decarbonisation and renewable consumption thanks to the introduction into the network of:
renewable gases, such as bio methane, bio syngas and "green" hydrogen, obtained from anaerobic digestion and biomass gasification technologies, electrolysis of renewable electricity;
low carbon natural gas and hydrogen, obtained from technologies that capture carbon and then store or reuse it (CCS/CCU).
Besides, Snam signed the Methane Guiding Principles, the guiding Principles that commit the company to further reduce methane emissions from the natural gas assets it operates. In signing to these principles Snam also agrees to encourage others across the natural gas value chain – from production to the final consumer – to do the same. Other signatories are: BP, Chevron, Eni, Equinor, ExxonMobil, Gazprom, Qatar Petroleum, Repsol, Shell, Total, Wintershall and Woodside.
Furthermore since novembre 2020 Snam adheres to the Oil and Gas Methane Partnership (OGMP) 2.0, and commits to reduce methane emissions from its activity by 45% in 2025 with respect to 2015 figures.
The OGMP is a multi-stakeholder voluntary initiative aimed at minimizing methane emissions in the oil and gas sector. Managed by UNEP, the United Nations Environment Programme, OGMP provides a protocol to help companies systematically and transparently manage their methane emissions from oil and gas operations and offers a credible platform to help member companies demonstrate their commitment to reduce emissions, to industry, civil society and governments.
Besides, Snam participates to Climate Disclosure Project (CDP) questionnaire, CDP beeing one of the world’s most important non-for-profit organization, which assesses companies’ transparency in the disclosure of information on climate change and greenhouse gas emissions, as well as in the management of water resources. In 2020, we entered in the A list of the CDP and in the A- list of the CSP Supply Chain.
RESEARCH AND DEVELOPMENT
Snam’s commitment to identifying new technologies for the safety, efficiency and environmental protection of the network and its plants is constantly growing, and conveys an ever greater attention to sustainability issues. This objective has also been pursued by developing important projects with international research groups, Italian universities and international gas transportation companies.
The objectives that Snam has set itself for the short, medium and long term require considerable effort and investment in innovation, in order to always find the best solution from both a technological and a operational point of view. To this end, the Group will invest approximately Euro 2 billion with the aim of accelerating Snam's innovative capacity to transform and manage its assets in order to seize the opportunities offered by the evolution of the energy system.
These resources will contribute to the development of initiatives related to research and development, digitalisation and innovation to increase the capacity for real-time data transmission and analysis. The most important experiment highlighting the advantages that digitalisation can bring to the energy system will be represented in 2021 by Snam's first "future" district, the Bologna "Flagship" District, which will be equipped with the most advanced technologies to measure results in terms of operational effectiveness, safety, integrity and reliability of assets.
Snam's innovation efforts are focused on three strategic areas:
• Energy efficiency and emission reduction in the core business;
• Digitalisation of the core business;
• Investments for the energy transition.
CUSTOMERS AND SUPPLIERS
The customer care initiatives represent the consolidation of a path aimed at creating value for Snam and for the customer, increasing dialogue, engagement, discussion and interaction and ensuring increasingly effective management of the infrastructure to the benefit of the entire system. To this end, several stakeholder engagement initiatives (in particular workshops) were carried out in 2020 as well, despite the limitations imposed by the emergency situation caused by Covid-19, which made it necessary to revisit and reorganise them.
The central objective of the events was to listen to and discuss with customers the issues that are relevant to Snam and the market, as well as to discuss innovations and balancing operations, and to receive feedback on the updating
of IT systems. Such involvement activities are essential in order to pursue the constant improvement of the quality of the services offered.
Three Sales Workshops were held, one on the Ten-Year Plans and one on the Settlement, most of which were delivered digitally thanks to Snam's commitment to creating customer engagement events that maintained
interactivity with customers and offered an experience as similar as possible to an in-person event.
There were also activities focused on redesigning business process (e.g. for the 'Jarvis' platform), for which four co-design workshops were carried out. The meetings allowed Snam to understand customers' expectations of making the platforms used daily for gas trading, sales and balancing activities as responsive as possible to their needs, highlighting the importance of constructive and collaborative dialogue.
Above all, sustainable management of the supply chain for Snam means conducting transparent relations with suppliers and, once the supply relationship is under way, involving them in the quest for long-term performance with a view to mutual growth and value creation. Potential suppliers of goods and services to Snam must not only satisfy quality, price and reliability requirements, but also share enthusiasm for the sustainable innovation of processes and the search for ways to reduce impact on the environment and society throughout the supply chain.
Potential suppliers, especially of the most important goods, are therefore subjected to careful evaluation in order to determine whether they are likely to sustain the long-term relationship of trust, which is a distinctive aspect of Snam's partnerships.
During their relationship with the Company, suppliers are constantly monitored by way of audits, inspections and service assessments. This is not only to ensure that their commitment to the agreements with Snam never waivers, but also to respond to their requests for assistance. A company's conduct in terms of social and environmental responsibility is a key aspect of the serviceassessments.
In 2020, goods, works and services were purchased for a total value of Euro 1,832 million (+18% compared to 2019): 71% of these related to the public sector (Euro 1,302 million) and 29% to the private sector.
During the year, contracts were registered with 541 suppliers, of which 377 were categorised as Small and Medium-sized Enterprises - SMEs (69% of the total), and 1,338 procurement contracts (and their revisions) were concluded,
of which 61% were in favour of SMEs. The latter represent one of the main players in the Italian economy and, thanks to their flexibility, adaptability and widespread presence throughout the country, are particularly well suited to working with Snam to meet its needs (private-sector procurement by Italian SMEs accounts for 17% of the total).
The monitoring of their performance and the related audits, inspection visits and assessment processes are
the main instruments designed to protect the integrity of the supply chain sustainability and ensure that
the expected standards of quality and efficiency are maintained.
During the year, 877 feedbacks were collected, referring to the performance of 166 suppliers (+41%
compared to 2019), 371 contracts were analysed and, in line with the promotion of sustainable behaviour along
the supply chain, 3,815 checks were also carried out on the contributory regularity of 1,768 suppliers and
subcontractors, intercepting irregularities in 2.28% of cases (+1.3% compared to 2019).
To evaluate performance over time, Snam also uses a rating index (IR) which takes into consideration the
compliance with technical contractual requirements (Quality), the health-safety-environment (HSE)
requirements, the agreed delivery times (Level of service), the setting up of a good relationship with the customer
for the entire duration of the contract (Behaviour).
This assessment is periodically sent to suppliers in the form of an analytical judgement, so that a constructive
exchange can take place. In 2020, ratings showed an overall improvement, testifying to the effectiveness of
the sharing of know-how and best practices carried out by Snam along the entire supply chain.
Snam may restrict, suspend or even revoke the qualification of a supplier that fails to meet the agreed standards. The possible cases could include, for example: the failure to meet technical-organisational requirements, negative performance evaluation for it or its subcontractors and a non-compliance with the provisions about social security contribution regularity and with the rules laid out in the Snam Code of Ethics. During 2020, 13 measures were adopted within this scope.
27 May 2021 - 09:42 CEST