Analysis of materiality
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Analysis of materiality

Analysis of materiality

The Global Reporting Initiative (GRI) and the Value Reporting Foundation (VRF) have repeatedly proposed materiality as a starting point to bring reporting in line with stakeholder expectations. SNAM is following the GRI standards of Global Reporting Institute, issued in 2016.

Double materiality

With the publication in March 2021 of the proposed Corporate Sustainability Reporting Directive (CSRD), Europe’s new non-financial reporting directive, a new approach to materiality has been introduced which calls for organisations to report on material issues from a dual perspective.

Materiality is the key element that reinforces Snam’s sustainability strategy by generating environmental, economic and social value for the company and stakeholders

Materiality is the principle according to which businesses must prepare their reports by including information on aspects that significantly impact their capacity to create value over time.

By following the principles of the GRI, which place particular emphasis on the principle of materiality, Snam immediately took advantage of the opportunity to lend greater focus to its reporting by updating the topics that have traditionally been part of its sustainability efforts. Snam follows the GRI standards which still keep focus on material aspects is key to the reinforcement of the corporate social responsibility strategy.

14 material topics resulted from the materiality analysis, one more respect to last year results. In particular, the “Sustainable Supply Chain” topic switched from being relevant to material.

The materiality analysis is conducted to identify the most significant topics for the Company and Stakeholders

Starting from the relevant issues arisen from the materiality analysis of the last year, in 2021 Snam initiated the process for their updating, by analyzing Snam's peers, industry standards, internal documentation, macro-trends, media, risks and the contribution of material issues to the targets of the Sustainable Development Goals. Also the directions provided by the Sustainability Accounting Standards Board (SASB), for the Extractives & Minerals Processing: Oil & Gas midstream" were taken into consideration in defining the important issues.


In order to identify the most relevant issues from the company’s point of view, Snam proceeded by analyzing the impact of and on Net Zero strategy and of ESG Scorecard and the relevance of the topics on the business strategy. The preliminary internal relevance of the issues identified in this way was then submitted to management, through direct interviews with the managers of each department, in order to analyze the perception of the issues from the company’s point of view. Each function, where appropriate, was allowed to update the relative scoring of these issues.

On the other hand, to define the most important issues from an external point of view, online surveys were conducted with all categories of stakeholders. Particularly more of 6,200 stakeholders where reached by questionnaires with a participation rate of about 28%. The following categories of stakeholders were considered for the online survey: Associations and communities, Shareholders, investors and the financial community, Business partners, Other operators and competitors, Media, Suppliers, Clients, Workers, Regulators and Institutions.


In order to establish active discussions and encourage dialogue and the exchange of perspectives between the company and its stakeholders, 5 in-depth workshops on materiality were also held involving specific categories of stakeholders, for a total of 121 participants including media, institutions, suppliers, customers and employees.
During these meetings, after a brief introduction on the evolution of Corporate Sustainability issues, Snam’s strategy was illustrated with particular reference to sustainability issues, and the set of issues to be assessed as part of the materiality analysis was presented. Participants were then able to interact, evaluating the topics in real time through the use of a tool that allowed to analyse and discuss the results directly during the meeting. In addition to last year, specific one-to-one interviews were conducted involving three NGOs and one benefit company as well. This engagement method allowed direct contact with stakeholders, from which new and interesting opinions emerged regarding the perception of Snam’s work relating to sustainability, as well as the relationship between the Group and the stakeholders interviewed, which we have also tried to integrate into our Sustainability Report.

The joint analysis of the internal and external relevance led to the identification of the priority and materiality areas. The materiality matrix has been validated by the management, the ESG Committee and the CEO.

Analysis of materiality

 

 

Fight against corruption: Adopt preventive measures and targeted policies, and promote partnerships aimed at combating corruption and crime in general and spreading a culture of legality.

Business integrity: Carry out activities with loyalty and fairness in compliance with the law, regulations, prescriptions and company provisions. Ensure a responsible approach to fiscal strategy and ensure the efficiency of corporate governance, with particular attention to the issues of remuneration and balanced participation in key corporate governance bodies.

Reliability of infrastructure, business continuity and cyber security: Ensure the reliability of infrastructures and services in order to prevent and/or mitigate potential situations that could compromise business continuity (e.g., emergencies, pandemic events). Manage cyber security with particular reference to potential cyber-attacks.

Economic performance and value generation: Foster the creation of shared medium- to long-term value for all stakeholders, through operational and financial efficiency and economically sustainable business management.

Innovation: Develop new technologies aimed at improving business efficiency and reducing environmental impacts. Exploit technological innovation (e.g., cloud, Al, etc.) for greater efficiency of operations and services offered, to digitise and optimise the monitoring and management of infrastructure and to easily integrate new green business opportunities.

Relations with authorities and quality of services: Ensure that customers receive a safe and reliable service over time, while respecting the principles of competition and equal treatment and access to infrastructure. Furthermore, promote constructive and transparent relations with regulatory authorities and institutions to develop satisfactory services for customers that are at the same time geared to market needs and demands.

Health and safety: Adopt practices and management systems to safeguard the health and safety of employees and third parties involved in company activities (e.g. supplier).

Human capital development and protection: Adopt talent attraction and retention policies, encouraging professional growth paths that enhance technical, managerial and organisational skills. Ensure work-life balance through a welfare plan that meets employees’ needs.

Diversity and Inclusion: Ensure an inclusive working environment, starting with the recruitment process, which encourages respect and value for the diversity of all, rejecting any discriminatory behaviour.

Relations with local communities: Involve local communities, developing project activities capable of effectively responding to stakeholder expectations and strengthening Snam’s acceptability and integration in the territory, supporting local populations even in times of economic crisis and uncertainty.

Relations with authorities and quality of services: Ensure that customers receive a safe and reliable service over time, in compliance with the principles of competition and equal treatment and access to infrastructure and promote constructive and transparent relationships with regulatory authorities and institutions, in order to develop satisfactory services for customers and at the same time oriented to the needs and demands of the market.

Sustainable supply chain: Adopt policies for selecting suppliers, contractors and commercial partners based on fair and transparent processes which set out the integration of sustainability criteria. Promote the development of social responsibility practices among suppliers, including through training and awareness raising activities, in order to improve reliability and safety, encourage the reduction of emissions and stimulate the development of innovative approaches to green business and the circular economy.

Climate Change: Promote decarbonisation strategies against climate change in order to reduce greenhouse gases and contribute to the achievement of carbon neutrality targets. Develop energy efficiency initiatives at Group sites and increase the use and production of energy from renewable sources.

Green Business: Accompany decarbonisation processes by integrating the new businesses of biomethane, hydrogen, sustainable mobility and energy efficiency into operations, assuming a strategic position in the value chain.

Territory and biodiversity protection: Safeguard the landscape heritage of the territories in which the Group’s plants or sites are located and promote the protection of biodiversity while carrying out the various activities.

The relevant issues are, however, important topics for the Company and therefore they are properly managed and supervised. In the 2021 materiality analysis, the relevant issues were:

Waste management, Water management, Employment, Brand reputation, Respect for human rights and Air protection.

Double materiality

With the publication in March 2021 of the proposed Corporate Sustainability Reporting Directive (CSRD), Europe’s new non-financial reporting directive, a new approach to materiality has been introduced which calls for organisations to report on material issues from a dual perspective, taking into account:

  • issues that reflect significant impacts on people and the environment, actual or potential, negative or positive, related to the organisation’s activities as well as its value chain, upstream and downstream (“impact materiality” or “inside-out perspective”);
  • sustainability risks and opportunities that may influence, positively or negatively, the development, performance and position of the organisation (in the short, medium or long term) and thus create or erode its corporate value (“financial materiality” or “outside-in perspective”).

Although the topic is constantly evolving, Snam has decided to proactively carry out an initial activity to identify material topics from a dual perspective.
In particular, in continuity with previous years, the assessment of material topics according to the inside-out perspective saw the involvement of the Group’s management and stakeholders in updating the materiality analysis. In order to map the risks and opportunities that could create or erode Snam’s corporate value (i.e., the outside-in perspective), an assessment was instead carried out by the Sustainability, Risk Management and Strategic Planning areas, in which the relevance, and therefore the economic and financial impact, of the occurrence of sustainability risks and opportunities for Snam from outside was assessed.
As the first year of application of this methodology, the results of the analysis for three material topics, (Climate change, Human capital development and protection, Infrastructure reliability and resilience, business continuity and cyber security), are presented below in the form of case studies, in which Snam’s external impacts and the risks and opportunities affecting the business are reported for each of them.

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updated
20 May 2022 - 12:32 CEST