Methodological note

Sustainability performance: Legislative decree no. 254/2016 and GRI standard

Acea has prepared and published the Group’s Sustainability Reports on a voluntary, annual basis, starting in 1999 (for the 1998 financial year), with the aim of integrating economic and financial information with the social and environmental aspects of its activities.
From the early years sustainability reporting has been carried out in conformity with the international reference Guidelines ¹, under constant development, and voluntarily submitted for audit and verification by a third party. Moreover, with the intention of providing the financial community and interested parties with a complete disclosure regarding Group performance, the publication times for the Sustainability Report have been aligned with those of the consolidated Sustainability Report as from 2011.
Since the 2017 edition, as is well known, the Sustainability Report has been published in compliance with Legislative Decree no. 254/2016 ², which transposed EU Directive 95/2014 into Italian law. Under the Decree, companies that meet the conditions set out in article 2 are required to publish information on sustainability performance in a non-financial statement – individual or consolidated – which, as stated in the Decree in article 3, paragraph 1: “...to an extent necessary for ensuring an understanding of the company’s activity, its performance, results and the impact it produces, relating to environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters, which are relevant given the activities and characteristics of the enterprise...” ³.
This Sustainability Report, for the year 2018, is the 21st published. It has been prepared in accordance with the GRI Standards (ed. 2016) ⁴: Comprehensive option and therefore called Acea Group’s 2018 Sustainability Report (consolidated non-financial declaration pursuant to Legislative Decree no. 254/2016, prepared in accordance with GRI standards), taking the form of an autonomous document, as permitted by the aforementioned Legislative Decree ⁵.

The Sustainability Report, enclosing a Summary Note, following its approval by the Board of Directors, is made available to the supervisory body and submitted for assurance by the statutory auditor, with which Acea has no joint interests or other connections, appointed with verifying the conformity thereof with Legislative Decree no. 254/2016 and its consistency with the implemented reporting Standards ⁶ (see Opinion Letter of the independent auditor).

The document is made available online on the institutional website at the same time as the Consolidated Financial Statements and distributed at the Shareholders’ Meeting.

1 - After the first years, in which other focuses were also referred to, starting with the 2003 Sustainability Report Acea opted for the guidelines issued by the Global Reporting Initiative (GRI), then in its 2002 edition, in the following years remaining in sync with all the developments, maintaining the highest level of “accordance” possible. Finally, starting with the 2017 Sustainability Report, which also complies with Legislative Decree no. 254/2016, Acea adopted the GRI Standard (ed. 2016), anticipating the requirements of the GRI by one year.
2 - It should also be noted that article 1, paragraph 1073, of the 2019 Budget Law introduces an amendment to Legislative Decree no. 254/2016, art. 3, paragraph 1, letter c, also prescribing the illustration of the methods for managing the main risks.
3 - Legislative Decree no. 254/2016, in particular articles 2, 3, paragraphs 1, 4.
4 - The Global Reporting Initiative (GRI), launched in England in 1997 by the Coalition for Environmentally Responsible Economies (CERES), became independent in 2002 as an official centre supporting the Unite Nations Environment Programme (UNEP) and works in collaboration with the United Nations Global Compact.
In 2016, when the previous version of the Guidelines for Sustainability Reporting (GRI-G4) were superseded and further developed, it published the GRI Standards – Consolidated set of GRI Sustainability reporting standards 2016 – available on the website www.globalreporting.org, requiring their adoption with respect to the 2018 financial year. Acea has anticipated such adoption, with the Comprehensive option, since the 2017 Sustainability Report.
5 Therefore, the Acea Group Sustainability Report 2018 is to be understood as a Consolidated disclosure of a non-financial nature (Legislative Decree no. 254/2016, art. 4 and art. 5, paragraph 3.b).

The classification of material topics into high, medium or low relevance, as well as being important from the strategic viewpoint, is functional to identifying the aspects to be reported with a higher or lower detail in the sustainability report and selecting the indicators provided under the reference Standards.

To prepare the Sustainability Report in accordance with the GRI Standards (ed. 2016): comprehensive option, in fact, it is necessary to illustrate the performance in light of:

• “Universal Standards”, which include the reporting principles (GRI 101: Foundation) and 56 general standards (GRI 102: General Disclosures);
• the aspects considered to be material (“material topics”) and related indicators, to be selected from among the 33 aspects envisaged in the Standard (“Topic-specific Standards”): GRI 200-Economic, GRI 300-Environmental, GRI 400-Social);
• the management approach (GRI 103: Management Approach) for each aspect deemed as material.

In order to be able to select the “material topics” from among those envisaged under GRI Standards, consideration ⁸ was given to both their correlation to Acea’s highly significant topics and meaning thereof conferred by the international Standards, in some cases tracing them back to the corporate context and in others establishing their lack of pertinence ⁹.

Following the assessments described above, 25 Topic-specific standards were identified out of a total of 33, as consistent with Acea material topics of high significance (see Table no. 1), although not always exhaustive in the widest sense of the meaning ¹⁰, which is more widely covered in the document where appropriate.

Furthermore, among all the indicators included in the “topic-specific standards” considered as “material”, only 4 were considered as not pertinent and excluded from the analysis. Only one Acea material topic of high relevance is not correlated to the Topic-specific standards, this being the Consolidation of elements of sustainability in corporate governance, which however, is fully consistent with the general standards dedicated to aspects of governance (GRI 102: General Disclosures).

Lastly, also regarding Acea material topics of medium significance present in the report on a less descriptive basis, consistencies were found, albeit not highlighted in the table, with both the “material Topic-specific standards” and the “general standards” (GRI 102: General Disclosures).

TABLE NO. 1 - CONSISTENCY WITH GRI “MATERIAL TOPIC-SPECIFIC STANDARDS” AND ACEA “MATERIAL TOPICS” OF HIGH SIGNIFICANCE

NB: The economic, environmental and social “material aspects” were identified amongst all those provided for under the GRI standards (Topic-specific Standards). 
When indicators are placed in brackets next to an aspect this means that only the indicators shown in the table will be considered material, or, where not specified, all the indicators related to the aspect are material (also see the GRI standard content index). For Acea material topics as identified in the table by a number, reference should be made to the figure illustrating the materiality matrix (Chart no. 1).

8 - It is important to consider that both the Topic-specific GRI standards — each of which includes a description of the management approach (Disclosure Management Approach) and a number of indicators — and Acea material topics both refer to contents that are far more complex and detailed than their brief name may suggest which, given their level of detail, cannot be presented at this time. See the GRI Standards — Consolidated set of GRI Sustainability reporting standards 2016 — in the website www.globalreporting.org.
9 - This led, for example, to the exclusion of topic-specific standards related to Presence on the Market and Human Rights which, according to the meaning given to them by the GRI, are more pertinent to multinational enterprises and not suited to the reality of the Group’s most significant operations.
10 - It is also important to note that some Acea material topics, already correlated to specific aspects of the GRI standards, are also consistent with some of the 56 general
standards (GRI 102: General Disclosures).

The principle of materiality was also applied to the definition of the “report scope”, as envisaged both by the standards adopted for reporting and by Legislative Decree no. 254/2016. The latter, in fact, under art. 4, states: “To an extent necessary for ensuring an understanding of the group’s activity, its performance, results and the impact it produces, the consolidated declaration includes data about the parent company, its fully consolidated subsidiary companies and covers the topics pursuant to article 3, paragraph 1”.

To identify the companies to be included in the report’s scope, the same approach was used as for the previous edition.

First of all, the adequacy of the criteria of strategic materiality/ significance – identified last year – was reconsidered and confirmed in order to identify the companies that ensure an understanding of the Group’s activities and its performance, taking into account the main business areas, the region where these activities are mainly carried out and the main impacts generated.

TABLE NO. 2 - COMPANIES INCLUDED IN THE PARENT COMPANY’S FULL CONSOLIDATION AREA (2018)

These criteria ¹¹ include quantitative elements (such as the weight of turnover on the consolidated revenues, value of energy consumption expressed in TOE, etc.) and qualitative elements (companies having a relevant and current role in the Acea qualifying companies or an essential role respect to the services they provide; companies present in the territorial area in which almost all of the turnover is generated, the majority of the stakeholders is present and a large part of the managed assets is located). They were applied to the Companies included in the scope of consolidation of the Parent Company 2018 ¹² (see table no. 2) resulting in a scope proposal that, having heard the opinion of the Head of the Legal and Corporate Function of the Parent Company and the CFO, was shared with Top Management and communicated to the Ethics and Sustainability Committee.

The companies that are representative for the purposes of disclosing the 2018 non-financial information (in accordance with Legislative Decree no. 254/2016 and the GRI Standard) and therefore included in the scope of reporting ¹³, were the same as in the previous edition of the document (see table no. 3).