Main risks

With reference to Snam activities in Italy, the main risks managed by the Company are detailed below:

Regulatory and legislative risk. Definition and updating of a regulatory framework in Italy and in the countries of interest that presents penalising parameters, in particular with regard to criteria for determining tariffs; significant change in regulations and/or case law.

Macroeconomic and geo-political risk. Risks associated with political, social and economic instability in natural gas supplier countries

Risks related to climate change. Reinforcement of the regulatory framework for greenhouse gas emissions; Change of scenarios with impact on the demand for natural gas and transported volumes; increase in the severity of extreme atmospheric phenomena, with impacts on continuity and quality of service; negative perception of the companies that operate in the fossil fuel sector by public opinion.

- Possible violation of rules and regulations, with particular reference to Legislative Decree 231/2001 which provides for the company's liability for malfeasances committed by management or by third parties in relation to certain cases (corruption, fraud, health and safety of workers, environment);
- maintaining an adequate reputational profile for suppliers and subcontractors;
- non-alignment of corporate governance and/or the internal control and risk system with regulations and/or best practices.

- Retaining gas storage concessions;
- delay to the progress of programmes involving the construction of large transportation and storage infrastructure;
- breakages or damages to pipelines/ installations also upon exogenous events, which can cause malfunction and unexpected service interruption;
- computer threats (Cybersecurity)

- Medium- and long-term debt rating downgrade;
- changes in the interest rate; exchange rate changes;
- inability to raise new funds (funding liquidity risk) or to liquidate assets on the market;
- default;
- receivables.

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12 May 2020 - 11:09 CEST