Carbon Disclosure Project 2010 Italy 60 Report

Transcription

1 Carbon Disclosure Project 2010 Italy 60 Report On behalf of 534 investors with assets of US$64 trillion Report written for Carbon Disclosure Project by: Carbon Disclosure Partner: Carbon Disclosure Project +44 (0)

2 Carbon Disclosure Project 2010

3 Carbon Disclosure Project 2010 This report and all of the public responses from corporations are available to download free of charge from CDP Members 2010 ABRAPP - Associação Brasileira das Entidades Fechadas de Previdência Complementar Aegon N.V. Netherlands Akbank T.A.. Allianz Global Investors AG ATP Group Aviva Investors AXA Group Banco Bradesco S.A. Bank of America Merrill Lynch BBVA BlackRock BP Investment Management Limited California Public Employees Retirement System California State Teachers Retirement System Calvert Group Catholic Super CCLA Investment Management Ltd Co-operative Asset Management Essex Investment Management, LLC Ethos Foundation Generation Investment Management HSBC Holdings plc ING KLP Insurance Legg Mason, Inc. The London Pensions Fund Authority Mergence Africa Investments (Pty) Limited Mitsubishi UFJ Financial Group (MUFG) Morgan Stanley National Australia Bank Limited Neuberger Berman Newton Investment Management Limited Nordea Investment Management Northwest and Ethical Investments LP PFA Pension Raiffeisen Schweiz RBS Group Robeco Rockefeller & Co. SRI Group Russell Investments Schroders Second Swedish National Pension Fund (AP2) Sompo Japan Insurance Inc. Standard Chartered PLC Sun Life Financial Inc. TD Asset Management Inc. TDAM USA Inc. The Wellcome Trust Zurich Cantonal Bank

4 Carbon Disclosure Project 2010 CDP Signatories financial institutions with assets of over US$64 trillion were signatories to the CDP 2010 information request dated February 1st, 2010, including: Aberdeen Asset Managers Aberdeen Immobilien KAG Active Earth Investment Management Acuity Investment Management Addenda Capital Inc. Advanced Investment Partners Advantage Asset Managers (Pty) Ltd AEGON Magyarország Befektetési Alapkezelo Zrt. Aegon N.V. AEGON-INDUSTRIAL Fund Management Co., Ltd Aeneas Capital Advisors AGF Management Limited AIG Asset Management Akbank T.A.S. Alberta Investment Management Corporation (AIMCo) Alberta Teachers Retirement Fund Alcyone Finance Allianz Global Investors AG Allianz Group Altshuler Shaham AMP Capital Investors AmpegaGerling Investment GmbH Amundi Asset Management ANBIMA - Brazilian Financial and Capital Markets Association APG Asset Management Aprionis ARIA (Australian Reward Investment Alliance) Arma Portföy Yönetimi A.S. ASB Community Trust ASM Administradora de Recursos S.A. ASN Bank Assicurazioni Generali Spa ATP Group Australia and New Zealand Banking Group Limited Australian Central Credit Union incorporating Savings & Loans Credit Union Australian Ethical Investment Limited AustralianSuper AVANA Invest GmbH Aviva Investors Aviva plc AvivaSA Emeklilik ve Hayat A.S. AXA Group Baillie Gifford & Co. Bakers Investment Group Banco Bradesco S.A. Banco de Crédito del Perú BCP Banco de Galicia y Buenos Aires S.A. Banco do Brazil Banco Santander Banco Santander (Brasil) Banesprev Fundo Banespa de Seguridade Social Banesto (Banco Español de Crédito S.A.) Bank of America Merrill Lynch Bank Sarasin & Co, Ltd Bank Vontobel Bankhaus Schelhammer & Schattera Kapitalanlagegesellschaft m.b.h. BANKINTER S.A. BankInvest Banque Degroof Barclays Group BBC Pension Trust Ltd BBVA Bedfordshire Pension Fund Beutel Goodman and Co. Ltd BioFinance Administração de Recursos de Terceiros Ltda BlackRock Blue Marble Capital Management Limited Blue Shield of California Group Blumenthal Foundation BMO Financial Group BNP Paribas Investment Partners BNY Mellon Boston Common Asset Management, LLC BP Investment Management Limited Brasilprev Seguros e Previdência S/A. British Columbia Investment Management Corporation (bcimc) BT Investment Management The Bullitt Foundation Busan Bank CAAT Pension Plan Cadiz Holdings Limited Caisse de dépôt et placement du Québec Caisse des Dépôts Caixa de Previdência dos Funcionários do Banco do Nordeste do Brasil (CAPEF) Caixa Econômica Federal Caixa Geral de Depósitos Caja de Ahorros de Valencia, Castellón y Valencia, BANCAJA Caja Navarra California Public Employees Retirement System California State Teachers Retirement System California State Treasurer Calvert Group Canada Pension Plan Investment Board Canadian Friends Service Committee (Quakers) CAPESESP Capital Innovations, LLC CARE Super Pty Ltd Carlson Investment Management Carmignac Gestion Catherine Donnelly Foundation Catholic Super Cbus Superannuation Fund CCLA Investment Management Ltd Celeste Funds Management Limited The Central Church Fund of Finland Central Finance Board of the Methodist Church Ceres, Inc. Cheyne Capital Management (UK) LLP Christian Super Christopher Reynolds Foundation CI Mutual Funds Signature Advisors CIBC Clean Yield Group, Inc. ClearBridge Advisors Climate Change Capital Group Ltd Close Brothers Group plc The Collins Foundation Colonial First State Global Asset Management Comite syndical national de retraite Bâtirente Commerzbank AG CommInsure Companhia de Seguros Aliança do Brasil Compton Foundation, Inc. Connecticut Retirement Plans and Trust Funds Co-operative Asset Management Co-operative Financial Services (CFS) The Co-operators Group Ltd Corston-Smith Asset Management Sdn. Bhd. Crédit Agricole S.A. Credit Suisse Daegu Bank Daiwa Securities Group Inc. The Daly Foundation de Pury Pictet Turrettini & Cie S.A. DekaBank Deutsche Girozentrale Deutsche Asset Management Deutsche Bank AG Deutsche Postbank Vermögensmanagement S.A., Luxemburg Development Bank of Japan Inc. Development Bank of the Philippines (DBP) Dexia Asset Management DnB NOR ASA Domini Social Investments LLC Dongbu Insurance Co., Ltd. DWS Investment GmbH Earth Capital Partners LLP East Sussex Pension Fund Ecclesiastical Investment Management Economus Instituto de Seguridade Social The Edward W. Hazen Foundation EEA Group Ltd Element Investment Managers ELETRA - Fundação Celg de Seguros e Previdência Environment Agency Active Pension Fund Epworth Investment Management Ltd Equilibrium Capital Group Erste Group Bank AG Essex Investment Management, LLC Ethos Foundation Eureko B.V.

5 CDP Sigantories 2010 Eurizon Capital SGR Evangelical Lutheran Church in Canada Pension Plan for Clergy and Lay Workers Evli Bank Plc F&C Management Ltd FAELCE - Fundação Coelce de Seguridade Social FASERN Fundação Cosern de Previdência Complementar Fédéris Gestion d Actifs FIDURA Capital Consult GmbH FIM Asset Management Ltd Financière de Champlain FIRA. - Banco de Mexico First Affirmative Financial Network First Swedish National Pension Fund (AP1) FirstRand Ltd. Five Oceans Asset Management Florida State Board of Administration (SBA) Folketrygdfondet Folksam Fondaction CSN Fondation de Luxembourg Fonds de Réserve pour les Retraites FRR Forward Management, LLC Fourth Swedish National Pension Fund, (AP4) Frankfurter Service Kapitalanlage-Gesellschaft mbh FRANKFURT-TRUST Investment Gesellschaft mbh Friends Provident Holdings (UK) Limited Front Street Capital Fukoku Capital Management, Inc. Fundação AMPLA de Seguridade Social - Brasiletros Fundação Atlântico de Seguridade Social Fundação Banrisul de Seguridade Social Fundação Codesc de Seguridade Social - FUSESC Fundação de Assistência e Previdência Social do BNDES - FAPES Fundação Forluminas de Seguridade Social Fundação Itaúsa Industrial Fundação Promon de Previdência Social Fundação São Francisco de Seguridade Social Fundação Vale do Rio Doce de Seguridade Social - VALIA FUNDIÁGUA - Fundação de Previdência da Companhia de Saneamento e Ambiental do Distrito Federal Futuregrowth Asset Management Gartmore Investment Management Limited Generali Deutschland Holding AG Generation Investment Management Genus Capital Management Gjensidige Forsikring GLG Partners LP GLS Gemeinschaftsbank eg, Germany Goldman Sachs & Co. GOOD GROWTH INSTITUT für globale Vermögensentwicklung mbh Governance for Owners LLP Government Employees Pension Fund ( GEPF ), Republic of South Africa Green Cay Asset Management Green Century Funds Groupe Investissement Responsable Inc. GROUPE OFI AM Grupo Banco Popular Gruppo Monte Paschi Guardian Ethical Management Inc Guardians of New Zealand Superannuation Guosen Securities Co., LTD. Hang Seng Bank HANSAINVEST Hanseatische Investment GmbH Harbourmaster Capital Harrington Investments, Inc The Hartford Financial Services Group, Inc. Hastings Funds Management Limited Hazel Capital LLP HDFC Bank Ltd Health Super Fund Henderson Global Investors Hermes Fund Managers HESTA Super Hospitals of Ontario Pension Plan (HOOPP) HSBC Global Asset Management (Deutschland) GmbH HSBC Holdings plc HSBC INKA Internationale Kapitalanlagegesellschaft mbh Hyundai Marine & Fire Insurance IDBI Bank Limited Illinois State Treasurer Ilmarinen Mutual Pension Insurance Company Impax Asset Management Ltd Industrial Bank Industrial Bank of Korea Industry Funds Management Infrastructure Development Finance Company Ltd. (IDFC) ING Insight Investment Management (Global) Ltd Instituto de Seguridade Social dos Correios e Telégrafos - Postalis Instituto Infraero de Seguridade Social - INFRAPREV Insurance Australia Group Investec Asset Management Irish Life Investment Managers Itaú Unibanco Banco Múltiplo S.A. J.P. Morgan Asset Management Janus Capital Group Inc. The Japan Research Institute, Limited Jarislowsky Fraser Limited The Joseph Rowntree Charitable Trust Jubitz Family Foundation Jupiter Asset Management K&H Investment Fund Management / K&H Befektetési Alapkezelo Zrt KB Asset Management KB Financial Group KB Kookmin Bank KBC Asset Management NV KCPS and Company KDB Asset Management Co., Ltd. Kennedy Associates Real Estate Counsel, LP KEPLER-FONDS Kapitalanlagegesellschaft m.b.h. KfW Bankengruppe KLP Insurance Korea Investment & Trust Management Korea Technology Finance Corporation KPA Pension Kyobo AXA Investment Managers La Banque Postale Asset Management La Financière Responsable Landsorganisationen i Sverige LBBW - Landesbank Baden-Württemberg LBBW Asset Management Investmentgesellschaft mbh LD Lønmodtagernes Dyrtidsfond Legal & General Group plc Legg Mason, Inc. Lend Lease Investment Management Light Green Advisors, LLC Living Planet Fund Management Company S.A. Local Authority Pension Fund Forum The Local Government Pensions Institution Local Government Super Lombard Odier Darier Hentsch & Cie The London Pensions Fund Authority Lothian Pension Fund Macif Gestion Macquarie Group Limited Magnolia Charitable Trust Maine State Treasurer Man Group plc Maple-Brown Abbott Limited Marc J. Lane Investment Management, Inc. Maryland State Treasurer Matrix Asset Management McLean Budden MEAG Munich Ergo Asset Management GmbH Meeschaert Gestion Privée Meiji Yasuda Life Insurance Company Merck Family Fund Mergence Africa Investments (Pty) Limited Meritas Mutual Funds MetallRente GmbH Metzler Investment GmbH MFS Investment Management Midas International Asset Management Miller/Howard Investments Mirae Asset Global Investments Co. Ltd. Mistra, The Swedish Foundation for Strategic Environmental Research Mitsubishi UFJ Financial Group (MUFG) Mitsui Sumitomo Insurance Co.,Ltd Mizuho Financial Group, Inc. Mn Services Monega Kapitalanlagegesellschaft mbh Morgan Stanley Motor Trades Association of Australia 5

6 Carbon Disclosure Project 2010 Superannuation Fund Pty Ltd Mutual Insurance Company Pension-Fennia Natcan Investment Management The Nathan Cummings Foundation National Australia Bank Limited National Bank of Canada National Bank of Kuwait National Grid Electricity Group of the Electricity Supply Pension Scheme National Grid UK Pension Scheme National Pensions Reserve Fund of Ireland National Union of Public and General Employees (NUPGE) Natixis Nedbank Limited Needmor Fund Nelson Capital Management, LLC Nest Sammelstiftung Neuberger Berman New Amsterdam Partners LLC New Jersey Division of Investment New Mexico State Treasurer New York City Employees Retirement System New York City Teachers Retirement System New York State Common Retirement Fund (NYSCRF) Newton Investment Management Limited NFU Mutual Insurance Society NGS Super NH-CA Asset Management Nikko Asset Management Co., Ltd. Nissay Asset Management Corporation NORD/LB Kapitalanlagegesellschaft AG Nordea Investment Management Norfolk Pension Fund Norges Bank Investment Management (NBIM) Norinchukin Zenkyouren Asset Management Co., Ltd North Carolina State Treasurer Northern Ireland Local Government Officers Superannuation Committee (NILGOSC) Northern Trust Northwest and Ethical Investments LP Oddo & Cie Old Mutual plc OMERS Administration Corporation Ontario Teachers Pension Plan OP Fund Management Company Ltd Oppenheim Fonds Trust GmbH Opplysningsvesenets fond (The Norwegian Church Endowment) OPSEU Pension Trust Oregon State Treasurer Orion Asset Management LLC OTP Fund Management Plc. Pax World Funds Pensioenfonds Vervoer Pension Fund for Danish Lawyers and Economists The Pension Plan For Employees of the Public Service Alliance of Canada Pension Protection Fund Pensionsmyndigheten PETROS - The Fundação Petrobras de Seguridade Social PFA Pension PGGM Phillips, Hager & North Investment Management Ltd. PhiTrust Active Investors Pictet Asset Management SA The Pinch Group Pioneer Alapkezelo Zrt. PKA Pluris Sustainable Investments SA Pohjola Asset Management Ltd Portfolio 21 Investments Portfolio Partners Porto Seguro S.A. PRECE Previdência Complementar The Presbyterian Church in Canada PREVI Caixa de Previdência dos Funcionários do Banco do Brasil PREVIG Sociedade de Previdência Complementar Principle Capital Partners Psagot Investment House Ltd PSP Investments Q Capital Partners Co. Ltd QBE Insurance Group Limited Rabobank Raiffeisen Schweiz Railpen Investments Rathbones / Rathbone Greenbank Investments RBS Group Real Grandeza Fundação de Previdência e Assistência Social Rei Super Resona Bank, Limited Reynders McVeigh Capital Management Rhode Island General Treasurer RLAM Robeco Robert Brooke Zevin Associates, Inc Rockefeller & Co. SRI Group Rose Foundation for Communities and the Environment Royal Bank of Canada RREEF Investment GmbH The Russell Family Foundation Russell Investments SAM Group Sampension KP Livsforsikring A/S Samsung Fire & Marine Insurance Samsung Life Insurance Sanlam Investment Management Santa Fé Portfolios Ltda Sauren Finanzdienstleistungen GmbH & Co. KG Schroders Scotiabank Scottish Widows Investment Partnership SEB SEB Asset Management AG Second Swedish National Pension Fund (AP2) Seligson & Co Fund Management Plc Sentinel Investments SERPROS Fundo Multipatrocinado Service Employees International Union Benefit Funds Seventh Swedish National Pension Fund (AP7) The Shiga Bank, Ltd. Shinhan Bank Shinhan BNP Paribas Investment Trust Management Co., Ltd Shinkin Asset Management Co., Ltd Siemens Kapitalanlagegesellschaft mbh Signet Capital Management Ltd SIRA Asset Management SMBC Friend Securities Co., LTD Smith Pierce, LLC SNS Asset Management Social(k) Sociedade Ibgeana de Assistência e Seguridade (SIAS) Solaris Investment Management Limited Sompo Japan Insurance Inc. Sopher Investment Management SPF Beheer bv Sprucegrove Investment Management Ltd Standard Bank Group Standard Chartered PLC Standard Life Investments State Street Corporation Storebrand ASA Strathclyde Pension Fund Stratus Group Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Card Company, Limited Sumitomo Mitsui Finance & Leasing Co., Ltd Sumitomo Mitsui Financial Group Sumitomo Trust & Banking 6

7 Foreword Paul Dickinson, Executive Chairman Carbon Disclosure Project Carbon management continues to rise as a strategic priority for many businesses. This is fuelled by opportunities to reduce energy costs; secure energy supply; protect the business from climate change risk and damaged reputation; as well as generating revenue and remaining competitive. Companies globally are seizing commercial carbon opportunities, often acting ahead of any policy requirements. The demand for primary corporate climate change data is growing it is now accessed through Bloomberg and Google Finance. It is also used by an increasing number of investment research providers and sell-side brokers to generate new insights into the impacts of climate change on the global industry and to highlight the associated opportunities. CDP has also launched two index products based on CDP data the FTSE CDP Carbon Strategy Index series and the Markit Carbon Disclosure Leadership Index. These products give investors exposure to companies better positioned in the transition to a low carbon economy. Key focus areas CDP has set three key focus areas for the immediate future. One is to work with companies and the users of its data to continue improving quality and comparability. Data that supports action is central to fulfilling CDP s mission. As part of this process, CDP is launching a new package, Reporter Services, exclusively for responding companies, to help them develop their carbon management strategies through increased data quality, deeper analysis and the sharing of best practice. Never forget that climate change is a global problem and requires a global solution. That is why CDP s second key focus is on globalizing all programs in the major economies in the coming years. Beyond CDP s Investor program, which sits at the heart of the initiative, CDP intends to grow its Supply Chain and Public Procurement programs, as well as CDP Water Disclosure, in order to maximize the fulfillment of CDP s mission. The third key focus is mitigation and emissions reduction. The number of companies within the Global 500 sample (FTSE Global Equity Series) reporting reduction targets has already increased fourfold since CDP s first reporting year. But this is just the first step. CDP remains committed to help advance emissions reductions and works with investors and industry to achieve this. Looking ahead It is through partnerships that we can achieve the largest impact. CDP is delighted to be working with local partners and report writers such as Banca Monte dei Paschi di Siena and PricewaterhouseCoopers Italy, its global advisor PricewaterhouseCoopers and its global sponsor Bank of America, as well as Accenture, Microsoft and SAP to accelerate its mission and highlight the huge opportunities for business to capitalize on the transition to a low carbon economy. These are exciting times for business, with significant changes coming to the way we produce and consume energy. New power from low or zero emissions sources is an urgent priority for climate change policy that simultaneously helps deliver energy security. New technologies such as smart grids, electric vehicles, alternative fuel sources, advanced telepresence videoconferencing, are showing a clear case for business growth with reduced emissions. The opportunities for business are enormous it is through the intelligent investment of capital into the right solutions, identified by the business community, that we will achieve the low carbon future we need. Paul Dickinson CEO, Crbon Disclosure Project 7

8 Carbon Disclosure Project 2010 Message from the CDP Italy Report Partner PwC Italy PwC Italy is proud to have supported the Investor Group on Climate Change for the first time this year in preparing the CDP 2010 report for Italy and to have contributed to providing institutional investors with a unique analysis of how the key corporate operators in the Italian environment respond to climate change due to the rise of greenhouse gas emissions and how they operate in carbon management, for a coming convergence towards a low-carbon future. Climate change is one of the greatest challenges of our time and information related to it has grown, year after year, increasingly important to meaningful analysis by the investment community. For the business community, as a matter of fact, there are not only risks but also several opportunities related to climate change, be they physical impacts or new challenges posed by developments in regulations and market trends. Climate change, indeed, is one of the few issues to capture the attention of regulators, who have become increasingly demanding and vigilant about disclosure; the CSR Trends 2010 survey, in which PwC participated, and which analysed the CSR reports of over 600 companies from all over the world, it emerged that official and public attention has been driving two trends: more meaningful and consistent carbon accounting, and more thorough discussion of reduction and mitigation strategies. The CDP plays a vital role in encouraging not only quantitative, but also qualitative disclosure of climate change risks and opportunities, as well as the responses being taken by business in managing them. Further, the CDP reports provide useful information which businesses can use to benchmark their responses to climate change against their peers. In this regard it is useful to note that, from the continuous discourse of PwC with companies from all over the world about the analysis of the existence of an information gap between businesses and markets, it emerged that only a minority of investors and analysts find annual financial statements appropriate in communicating the real corporate values, while even fewer are those investors who consider annual financial statements a proactive communication tool suitable to clearly illustrate the management of corporate assets and performance. Going back to a 2007 survey, for instance, finance executives reported widespread dissatisfaction (55% of the respondents were not satisfied) with management information, and although nonfinancial information was being incorporated into management reports, there were clear differences between the quality of financial and nonfinancial information, the responsibility for the quality of which is widely dispersed throughout the organization. Businesses therefore identify non-traditional indicators as a supplementary tool of corporate communications to investors, financial analysts and rating agencies, and the information analysed in this report goes precisely in this direction. A radical change in corporate reporting has long been underway: the goal is to develop a model for external and internal reporting that supports the complexity of the business, responds to the need to communicate with the key stakeholders and can be adapted to the future changes of the company. The achievement of company s financial targets is also related to Environmental, Social and Governance (ESG) strategies and factors, within which the strategies, targets and measures adopted to fight climate change play a role of considerable importance. Reporting, in all its facets, can deliver competitive advantages in a variety of ways, if it is done well. It can secure capital and credit, help win the war for talent, and build strong business relationships. But the challenge will be to do so in an increasingly complex business environment, with changing consumer tastes, heightened awareness of climate change and other external factors. All these factors interact to shift society s needs and its expectations of business. 8

9 Message from the CDP Italy Report Partner PwC has significant experience in reporting Non Financial Information, specifically in the ESG field, and PwC Sustainability & Climate Change team helps companies develop and implement strategies in response to this changing environment. Finally, we work with investors in developing approaches better to understand how climate change risks and opportunities may be impacting on the value of their investments. We thank those businesses in Italy that have responded to CDP 2010 and encourage the Italian business community to continue to support this important initiative. Paolo Bersani Partner Sustainability & Climate Change PwC Overview of CDP The Carbon Disclosure Project (CDP) is an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world. CDP furthers its mission to accelerate unified action on climate change by harnessing the collective power of corporations, investors and political leaders. In 2009, 2,500 organizations in some 60 countries around the world measured and disclosed their greenhouse gas emissions and climate change strategies through CDP, in order that they can set reduction targets and make performance improvements. In 2010, even more companies than ever before are reporting through CDP and managing their emissions. This data is made available for use by a wide audience including institutional investors, corporations, policymakers and their advisors, public sector organizations, government bodies, academics and the public. Climate change is not a problem that exists within national boundaries. That is why CDP harmonizes climate change data from organizations around the world and develops international carbon reporting standards. CDP operates the only global climate change reporting system on behalf of 534 institutional investors (holding US$64 trillion in assets under management) and some 60 purchasing organizations such as Dell, EADS, PepsiCo and Walmart. CDP was launched in 2000 to accelerate solutions to climate change by putting relevant information at the heart of business, policy and investment decisions. 9

10 Executive Summary The Carbon Disclosure Project is helping provide the transparency that investors and other stakeholders require to evaluate how companies are positioned to cope with Climate Change risks and opportunities. It also encourages companies to take steps towards managing their carbon emissions. The project thus provides an important complement to the EU Emissions Trading System, since more than 60% of European companies participating in CDP are not covered by the EU ETS Connie Hedegaard, European Commissioner for Climate Change Action In the ten years since the launch of the Carbon Disclosure Project (CDP), the quality and quantity of reporting on climate change have increased dramatically. CDP is now looking beyond disclosure to identify the companies that are taking active steps toward a lowcarbon economy. This year, CDP (backed by 534 institutional investors representing more than US$64 trillion of assets under management) sent questionnaires to more than 4,700 of the world s largest corporations, requesting information on greenhouse gas (GHG) emissions, on the significant risks and opportunities related to climate change and on the actions companies are taking to manage those risks and opportunities. The results are published in more than 20 geographies around the world and are freely available at This report, CDP 2010 Italy 60, provides detailed analysis of responses including 2009 data received from the 60 largest Italian businesses on the Italian stock exchange (largest by market capitalisation on the 31 December 2009, and referred to as Italy 60 throughout this report). Consistently, any reference to CDP 2009 within this report refers to 2008 data. The Italian companies that fall under the Global 500, the world s 500 largest publicly listed companies in the FTSE Global Equity Index Series, were rated by PwC s international network, while Italian companies that fall under Europe 300 (which represents the 300 largest European companies by market capitalisation) but not in the Global 500 were rated by Crédit Agricole Cheuvreux; all the remaining Italian companies not included in other reports were rated by PwC Italy, according to the methodology developed by CDP and PwC s international network, in application of the CDP 2010 Reporting Guidance. CDP 2010 was completed against an uncertain and diverse policy backdrop at a global and local level : the modest outcome from Copenhagen drew differing responses from national governments with uncertainty about a binding international agreement causing some countries to stall in their policy progress and others to push ahead. Despite policy uncertainty respondents have retained high levels of disclosure on climate change. Companies have also continued to view regulation posing opportunities as well as risks to their business and remain concerned about the significant physical risks presented by climate change. In the context of resource constraints driven by the global financial crisis, and competing priorities such as responding to other reporting obligations as e.g. the European Union Emissions Trading System (EU ETS), larger companies were, in general, more 10

11 Executive Summary able than small companies to engage the resources required to complete the CDP s questionnaire this year. Investors will be seeking more detail on all aspects of carbon management strategies in the future with an ever-increasing focus on carbon performance and not just disclosure. Both the CDP questionnaire distributed to companies and the reports at global or country level or by industrial sector focus on the issues more greatly affecting, directly or indirectly, companies economic and financial Table 1 Sub-Section Questions Content Sections of the questionnarie Governance Information about the highest level of responsibility for climate change within companies Risks Analysis of regulatory, physical and "other" risks, of their impact on value chain and business, financial implications and related action taken by companies Opportunities Analysis of regulatory, physical and "other" opportunities, of their impact on value chain and business, financial implications and related action taken by companies Strategy and targets How overall group business strategy links with actions taken on risks and opportunities and emissions reduction targets set Achievements Emission reduction activities and results Emissions trading Participation in any emission trading schemes Emission reporting parameters Specific information such as sources identified, GWP and emission factor applied Scope 1, 2 & 3 reporting Emissions for Scope 1, 2 & 3 and detailed analysis (e.g. by activities, by countries ) Uncertainty range and main sources of uncertainty in data Emissions intensity and history Emissions trend and emissions intensity measurement applied (e.g. financial or activity- related ) Communications Where information about companies response to climate change/ GHG emissions are published performance, in respect of climate change management: Governance; Risks and opportunities; Strategy; Emissions reporting; Communications. The table below presents the sections and sub-sections of the questionnaire, as well as a short summary of the main contents. While the percentage of CDP 2010 respondents remained the same as in CDP 2009 with 35%, in view of the enlargement of the Italian CDP Section Governance Risks and opportunities Strategy Emissions reporting Communications The work of the Carbon Disclosure Project is crucial to the success of global green business in the 21st century. Participants in the Carbon Disclosure Project know that the safest way of reducing climate risks is to reduce emissions. They know that taking early action makes good business sense. And they know the cost of inaction on climate change will dwarf any price tag for acting today. Ban Ki-moon, UN General Secretary 11

12 Carbon Disclosure Project 2010 Disclosure can spur innovation. The Carbon Disclosure Project collates data about the greenhouse gas emissions of many of the world s largest companies. The CDP has shown that internationally consistent disclosure not only helps to pinpoint risk but also generate opportunities. Financial Times sample from 40 to 60 companies that were asked to respond to the questionnaire, the absolute number of respondents increased from 18 to 21. As compared to CDP 2009 results, the level of in-depth examination and disclosure of the four themes above has undoubtedly improved. Clear evidence of that may be inferred from the following analysis of emission data: 33% of the Italy 60 companies have reported its Scope 1 and Scope 2 emissions, while 22% have reported Scope 3 emissions; if calculated on respondents alone, percentages rise to 95% and 62% respectively, marking a pronounced increase as compared to CDP 2009 (respectively 78%, 67% and 50% for Scope 1, 2 and 3 emissions). Besides, across all Italian respondents, 81% of those who disclosed emissions also had their emissions validated through an independent external verifier (equalling 28% for the Italy 60 companies), (Figure 1). Yet, global CDP 2010 Italy 60 results still lag far behind the overall Europe 300 results, which see levels of disclosure for Scope 1, 2 and 3 emissions at respectively 78%, 77% and 62%, while 57% of those who disclosed emissions also had their emissions validated through an independent external verifier, more than double the corresponding Italy s rates. Below follow the main analyses Figure 1 Disclosure level Italy 60 sample % Responding companies % Any portion of Scope 1 emissions independently verified 17 28% Disclosing Scope 1 emissions 20 33% Disclosing Scope 2 emissions 20 33% Disclosing any Scope 3 emissions 13 22% 12

13 Executive Summary relating to the four key areas of corporate climate change management described above. Risk and opportunities The percentage of respondents that identified regulatory and other risks increased from 67% in 2008 to 76% in 2009 (Figure 2); the total number of companies that identify opportunities in such areas increased, too (Figure 3). Based upon the reported data, it may be clearly inferred that most respondents retained (in the case of new respondents, developed) awareness of the implications of the evolving regulatory context and reputational and market-related issues for their business. Last, physical area-related risks were identified by the same number of companies as last year, although a larger number of companies received the CDP questionnaire in 2010; in addition, related opportunities were identified by fewer companies. Emissions reporting Total Scope 1, 2 and 3 emissions in 2009 equal metric tonnes of carbon dioxide equivalent (t CO 2 -e), marking a 162% rise as Figure 2 Respondents recognising risks associated with climate change Regulatory risks Physical risks Other significant risks % 25% 50% 75% 100% CDP 2010 CDP 2009 Figure 3 Respondents recognising opportunities associated with climate change Regulatory opportunities Physical opportunities 9 12 Other significant opportunities % 25% 50% 75% 100% CDP 2010 CDP

14 Carbon Disclosure Project 2010 compared to 2008 (Figure 4). Such rise is partly due to a larger Italy s sample, which entailed a greater number of respondents, but most of all the increase can be explained through a significant extension of the in-depth analysis of Scope 3 reporting, if compared to 2008: in fact, Scope 1 and 2 emissions only amount to t CO 2 -e in 2009, marking a 16% rise from the preceding year. The most carbon-intensive sectors, such as Energy, Utilities and Materials (all subject to the EU- ETS) account for 99% of overall emissions, while the tally of the emissions from the chief emitter for each sector (eni for Energy, Enel for Utilities and Italcementi for Materials) account for 92% of the overall emissions. For Italy, Scope 3 level emissions account for 44% of the total emissions, while on a global level as can be inferred from CDP 2010 Global 500 Report, this figure is as low as 39%. This seems to show that the main world companies boast more in-depth analysis and pay greater attention to Scope 3. It is worthwhile noting that the total emissions for the three above carbon-intensive sectors, referred to the respondents to CDP 2010 Global 500 Report, account for 85% of the total ( t CO 2 -e out of t CO 2 -e), revealing a more widespread involvement of global industrial sectors in emission data disclosure. Figure 4 Overall carbon emissions of the Italy 60 respondents (million t CO 2 -e) 161 Figure 5 5 (24%) 3 (14%) 42 Energy Utilities Materials Others Consumer Discretionary Industrials Telecommunications Services Financials Total respondents who have emission reduction targets CDP (76%) 11 (61%) CDP (39%) Total respondents who have action plans in place CDP 2010 CDP 2009 Performance The number of companies that disclosed emission targets in 2010 (16) increased from 2009 (7), as well as the number of companies declaring that emission reduction actions are in place this year (18 in 2010 as compared with 9 in 2009, see Figure 5). 18 (86%) 9 (50%) 9 (50%) 14

15 Executive Summary Strategy Climate change continues to be firmly on the Board agenda with 67% of respondents reporting to have a Board committee or executive body with such responsibility and the same numbers of respondents confirmed to be engaged with policy makers on possible responses to climate change including taxation, regulation and carbon trading. Furthermore, the share of companies that provide incentives for management of climate change issues, including the attainment of GHG targets is 57%. The Carbon Disclosure Leadership Index (CDLI) and the Carbon Performance Leadership Index (CPLI) What is new in the CDP 2010 Italy 60 Report is that respondents were assessed not only for their carbon disclosure (see Appendix of this Country Report for detailed scores), but also against a new indicator: the carbon performance. This indicator, which is quite new for all CDP 2010 Reports and was preceded by a pilot project at a global level in 2009, was set up to meet the growing investors expectation for topperforming companies in carbon management to be identified. The Carbon Performance Leadership Index (CPLI), launched this year by CDP, recognizes companies that are taking action to reduce global emissions by listing the companies with the highest performance scores. These carbon performance leaders have demonstrated commitment to strategy, governance, stakeholder communications and most of all, emissions reduction in their CDP responses. The CPLI complements the existing Carbon Disclosure Leadership Index (CDLI), which assesses the quality and completeness of companies reporting and carbon management. All carbon performance and disclosure scores can be found in the Appendix. Table 2 presents the Carbon Disclosure Score and Carbon Performance Band of all Italy 60 respondents. Companies belonging to the CDLI, which this year includes the top-scoring 30% of the Italy 60 respondents, (six companies in total), as well as companies belonging to the CPLI, which includes all companies that achieved a Carbon Performance Score in Band A (only one company), are both featured. As would be expected, the company which is in the top band for performance also leads on Table 2 Carbon Disclosure Score disclosure. Interestingly 5 of the 7 industry sectors to which responders belong are represented in this small group highlighting that companies are taking leading action on disclosure and performance across many areas of business, while just one sector was represented by a leading company in both the CPLI and CDLI. However, there may be a bias that in the Italy 60 sample only those companies have responded to CDP 2010 that have already established the monitoring and management of greenhouse gas emissions. Carbon Performance Score Sector eni 83 A Energy Terna 81 B Utilities A2A 81 C Utilities Fiat 80 B Consumer Discretionary Banca Monte dei Paschi di Siena Group CDP 2010 Italy 60 - CDLI and CPLI 79 B Financials Italcementi 78 B Materials Saipem 76 C Energy ACEA SpA 74 B Utilities Telecom Italia 70 B Telecommunication Services Generali 69 C Financials Unicredit Group 67 C Financials Intesa Sanpaolo S.p.A 66 B Financials Finmeccanica 64 C Industrials Hera 63 C Utilities Atlantia 53 B Industrials Snam Rete Gas 52 C Utilities Edison 45 - Utilities UBI Banca 43 - Financials Lottomatica 38 - Consumer Discretionary ENEL SpA 37 - Utilities Autogrill Spa 29 - Consumer Discretionary Note: companies highligthed in bold belong to the CDLI, while the one company highlighted in green belongs both to the CDLI and CPLI. 15

16 Carbon Disclosure Project 2010 Contents CDP Members and Signatories Foreword from Paul Dickinson, Chief Executive Officer Carbon Disclosure Project Message from the CDP Italy Report Partner, PwC Executive summary 1 The Italian context 2 Analysis of responses 3 The 2010 Carbon Disclosure Scores 4 The 2010 Carbon Performance Scores 5 Governance, Strategy and Emissions 6 Risks and Opportunities 7 Industry Perspectives: Sector Snapshots 8 Global key trends summary Appendix - Table of emissions, scores and sector information by company 16

17 1 The Italian Context (Corrado Clini - Director General, Ministry for the Environment and Territory and Sea, Italy) Italy towards Kyoto commitment and 2020 targets Figure 6 Italy national emissions (million t CO 2 -e) In Italy stabilized the emissions at the 1990 level, and in the year 2012 the emissions will be in compliance with the Kyoto target Mton +17,5% Mton +13,5% 550 The emissions reduction trend is the combined effect of the national policies for improving the low carbon intensity of the Italian economy, as well as of the deep recession triggered by the global crisis. On the one side, the continuous trend in decoupling growth and Mton +6,5% Mton +3% Mton +12,2% 483 Mton Target Kyoto Figure 7 Italy energy consumption/energy intensity MegaTEP/Million % change: -21,1% CAGR*: -1,6% % change: -6,6% CAGR: -0,4% % change: 2,5% CAGR: 0,5% (BAU) % change: -11,8% CAGR: -0,84% Italian energy intensity Business As Usual (BAU) scenario * Compound Annual Growth Rate (CAGR) 17

18 Carbon Disclosure Project 2010 emission levels shows that the measures adopted after the Kyoto Protocol ratification have had a significant effect. On the other side, the recession is effective in changing the energy production and consumption systems, in improving the efficiency in the industrial processes, in promoting the phase out of the costly and high energy intensive processes. Today, Italy s carbon intensity is one of the lowest in the OECD countries, and it is the key driver of the National policies for addressing the Kyoto commitment and the 2020 targets. Nevertheless, in the commitment period a gap of about Mt CO 2 proportional to the Kyoto objective is still present. The industrial sector included in the Emissions Trading System (ETS) will meet the obligations under the Kyoto Protocol, while the non ETS sectors will face a gap, mostly because of the emissions from the transportation sector. The delay in the implementation of the Italian policies and programs, already adopted for the development of the infrastructures for the sustainable mobility of people and goods, is the most important barrier towards the compliance of Italy with the Kyoto Protocol. Looking at 2020 targets, the industrial sector will face the challenge of the improvement of energy efficiency as well as of the use of renewables in the production processes. The challenge will require innovation in the carbon management and in the technology investment strategies of the industrial sector. Figure 8 Italy national gap between emissions ETS and targets ETS (million t CO 2 -e) ,6 201, Emissions ETS Target ETS Emissions non ETS Target non ETS Figure 9 Italy national ETS emissions and ETS targets (million t CO 2 -e)

19 1 The Italian Context To this end, the Italian Government is in the process of identifying and designing the best costeffectiveness measures in order both to support the innovation and competitiveness of the industrial sector, in the framework of the national climate change strategy up to The measures will be directed towards a substantial long term perspective, in order to link the short term (2020) actions with the options to address the objective of achieving deep cuts in global greenhouse gas emissions to limit the increase of mean global temperatures at most to 2 C above pre-industrial levels. To meet the 2 C objective, according to the BLUE Map scenario in 2010 ENERGY TECHNOLOGY PERSPECTIVES (IEA ETP) the following tasks need to be done: global greenhouse gas emissions should peak by around 2020 and decline steadily towards the 50 per cent cut in carbon emissions by 2050; the investments (public and private) in clean technologies should rise from the present $165bn a year, to $750bn in 2030 and $1.6 trillion in 2050; renewables should account for 48% of power generation, nuclear 24% and plants equipped with carbon capture and storage 17%; the widespread use of nextgeneration of biofuels should replace gasoline and diesel; a huge improvement in energy efficiency should reduce the energy demand growing by just 32%, compared with 84 % under the BAU; the widespread introduction of electric, hybrid or fuel cells cars should account for at least 80% of all vehicles on the road; stable, long-term incentives such as feed-in tariffs, loan guarantees and tax credits must be introduced to encourage the adoption of low-carbon technologies, while market barriers such as planning obstacles, building codes and red tape must be cut. The 2050 perspective should be the framework for the strategies of the Italian government to encourage and increase the economy s ability to deliver low carbon green growth the investments of the private sector. In this context the Carbon Disclosure Project could be a partner both of the Government and the Italian private sector, for facilitating the dialogue and the joint research of the best solutions for using the short term obligations under the Kyoto Protocol and the 2020 package as an opportunity for the innovation and the competitiveness of the Italian economy in the global race of the decarbonization. 19

20 2 Analysis of responses 2.1 The Global Response Out of the 4700 companies worldwide which were asked to respond to the CDP 2010 questionnaire, 3050 did answer, so the overall response rate to the Investor CDP Program 2010 turned out to be 65%. The response rate for the different geographic and industry samples ranged from 84% for the Europe 300 to 8% for the Russia 50. The Italy 60 response rate was surpassed this year by 21 geographic and sectorial samples (out of thirtythree) including also all European countries, apart from France and Portugal, whose samples size has however doubled this year. The Italy response rate ranked 24th. Figure 10 Response rate by geography - comparison between CDP 2010 and CDP 2009 Europe 300 US Bonds 180 Global 500 South Africa 100 FTSE All - World 800 Brazil 80 Australia 100 US S&P 500 FTSE 350* Netherlands 50 Nordic 200 Germany 200 Switzerland 100 Latin America 50 Ireland 40* Global Electric Utilities New Zealand 50 Canada 200 Korea 200* Japan 500 Spain 85 Italy 60 Asia ex - JICK 135* Portugal 40* France 250* Emerging Markets 800 Global Transport 100 Turkey 50 Australia 200 ex 100 India 200 Central & Eastern Europe China 100 Russia * the size of samples changed from In 2009, samples were: UK FTSE 350, Ireland 45; Korea 100; Asia ex - JICK 100; Portugal 20; France

21 2 Analysis of responses 2.2 The local response The CDP 2010 Italy 60 response rate is 35%, corresponding to 21 respondents, the same performance as CDP 2009 but out of a greater number of companies invited, 60 instead of 40 in CDP 2009, suggesting that largecap Italian companies not only continued to engage with and support the CDP s questionnaire process, but, albeit from a quite low starting point, the overall number of respondents increased. Reasons for non-participation were generally linked to difficulties in responding to all the questionnaires received for ethycal indices, or for reporting obligations, such as EU ETS. Figure Composition of Italy 60 by number of companies per sector (%) Consumer Discretionary Consumer staples Energy Financials Health Care Industrials Materials Telecommunication Services Utilities Composition of Italy 60 respondents by number of companies by sector (%) These results suggest that in the context of resource constraints driven by the global financial crisis, larger companies in general placed a higher priority on completion of the CDP s information request this year, while smaller companies still placed a lower priority on responding Consumer Discretionary Energy Financials Industrials Materials Telecommunication Services In the Italy 60 sample for CDP 2010, which includes companies from different industry sectors identified using the Global Industry Classification Standards (GICS), the most represented sector is the Financials sector including 22 companies, followed by Consumer Discretionary, with 10 companies, and Utilities, with 8 companies. Of these three sectors, which together account for two thirds of the companies in the Italian sample, the Utilities sector featured the greatest response rate, 88%, while the Financials sector, with 23%, featured the lowest response rate (Figure 12). The Information Technology sector is not represented in the Italy Utilities 21

22 Carbon Disclosure Project 2010 sample, and no company from the Consumer Staples and Health Care sectors has responded to the questionnaire. Figure 12 Italy 60 response rate by industry sector (%) Utilities Telecommunication Services Materials Industrials Health Care 100 Financials Energy Consumer Staples 100 Consumer Discretionary Total Total AQ - Answered questionnarie NR - No response DP - Declined to participate AQnp - Answered questionnaire, not public access Number in brackets indicates total number of companies in the sector. Figure 13 Composition of Italy 60 and respondents by market capitalisation (%) Italy 60 Respondents Consumer Discretionary Financials Materials Consumer staples Health Care Telecommunication Services 22 Energy Industrials Utilities

23 2 Analysis of Responses This year five CDP 2009 nonrespondents submitted completed questionnaires together with three new companies not included in the CDP 2009 sample. Only one CDP 2009 respondent decided not to submit the questionnaire in 2010 (Table 3). Table 3 Respondents and non-respondents The six largest non-respondents New respondents in 2010 by market capitalisation* ACEA Luxottica Group Atlantia Mediobanca Edison Mediaset Fiat Banco Popolare Societa Cooperativa Generali Parmalat SpA Hera Mediolanum SpA Lottomatica Saipem Non-respondents in 2010 that respondend in 2009 Luxottica Group Mediobanca Mediaset Banco Popolare Societa Cooperativa Parmalat SpA Mediolanum SpA 23

24 3 The 2010 Carbon Disclosure Scores When the CDP first challenged the world s largest companies to measure and report their carbon emissions and integrate the long term costs of climate change into their risk assessments, few companies had the level of understanding or the quality of responses they have today. As the level of understanding of the issues has improved, so have the number of companies taking positive action to mitigate the risks of climate change. In recognition of this trend, CDP has introduced a performance component that complements its Carbon Disclosure Scores system to recognise companies that are taking action against climate change. The Carbon Disclosure Leadership Index (CDLI) is valuable for investors as it identifies leading CDP disclosures which will assist investors to understand companies carbon emissions and climate change exposures and how these may translate into investment outcomes. Carbon Disclosure scores have been assigned following a strict application of the CDP 2010 Rating Methodology (available at www. cdproject.net/en-us/respond/ Pages/CDP-Investors.aspx). Using this methodology, each company was awarded a disclosure rating. All companies with the minimum disclosure score of 50 also received the Performance score. The Carbon Disclosure Scores assess companies on the quality and completeness of their disclosures and consider factors including: Clear consideration of businessspecific risks and potential opportunities related to climate change; Good internal data management practices for understanding GHG emissions, including energy use. It is important to note that the carbon disclosure score is not a metric of a company s performance in relation to climate change management, because the score does not make any judgment about mitigation actions. A company s disclosure score is based solely on the information disclosed in the company s CDP response. 24

25 3 The 2010 Carbon Disclosure Scores Figure 14 What does a CDP carbon disclosure score represent? The Carbon disclosure score is normalised to a 100-point scale. Generally, companies scoring within a particular range suggest levels of commitment to, and experience of, carbon disclosure. Indicative descriptions of these levels are provided below for guidance only; investors should read individual company responses to understand the context for each business. High (>70) A higher score typically indicates one or more of the following. Strong understanding and management of company-specific exposure to climate-related risks and opportunities Strategic focus and commitment to understanding the business issues related to climate change, emenating from the top of the organisation Ability to measure and manage the company s carbon footprint Regular and relevant disclosure to key corporate stakeholders Midrange (50-70) A midrange score typically indicates one or more of the following. Growing maturity in understanding and managing company-specific risks and potential opportunities related to climate change Good evidence of ability to m easure and manage carbon footprint across global operations Commitment to the importance of transparency Low (<50) A lower score typically indicates one or more of the following. Realtively new commitment to understanding climate-related issues Limited ability to disclose known risks or potential opportunities related to climate change Limited ability to measure and manage the company s carbon footprint Possible reluctance to disclose certain requested information due to commercial sensitivity The CDLI includes the companies with the highest Carbon Disclosure Scores; to qualify for this leadership index, a company must respond to CDP using the Online Response System prior to the deadline and make its response available for public use. This year s CDLI includes the topscoring 30% of the Italy 60: six companies in total, represented in Table 4, alphabetically sorted by sector and company name. Table 4 Sector Consumer Discretionary Energy Financials Materials Utilities All the CDLI companies achieved a score higher than 70, which reflects a high level of understanding of climate change issues associated with a high level of reporting. These companies have provided disclosures indicating the highest level of understanding and management of company-specific exposure to climate-related risks and opportunities; the strongest strategic focus and commitment to understanding the business Carbon Disclosure Leadership Index Company Fiat Eni Banca Monte dei Paschi di Siena Group Italcementi A2A Terna issues related to climate change from the top of the organisation; an ability to measure and manage the company s carbon footprint; and the provision of regular and relevant disclosure to key corporate stakeholders. As the average of the Carbon Disclosure score amongst companies included in the CDLI is 80, here are some particular areas where companies in the CDLI outperform the Italy 60 overall: CDLI companies scored in the various sections on average 25 percentage points higher than the companies not included in CDLI; CDLI companies scored 49 percentage points higher than the companies not included in CDLI within Opportunities and 30 within Risks, Strategy and targets and Emissions intensity and history. 25

26 Carbon Disclosure Project 2010 Like in many other CDP Reports, Italy 60 s CDLI includes companies not only from carbon-intensive sectors such as Energy, Utilities and Consumer Discretionary (Automotive), but also from non carbon-intensive sectors, e.g. Financials. In view of the number of the respondents and mean values of Carbon Disclosure Scores of Italian companies belonging to, respectively, Global 500 alone, Europe 300 and Italy 60 (Table 5), it is plausible to assume a correlation between market capitalisation level and Carbon Disclore Score performances. This correlation is confirmed by the fact that, out of the six companies belonging to the CDLI of the Italy 60 sample, two are also part of the Global 500 sample, i.e. eni and Fiat, and three are also included in the Europe 300 sample, i.e. A2A, Terna, Banca Monte dei Paschi di Siena Group. Figure Figure 16 Achievements Performance of the Carbon Disclosure Leadership Index (CDLI) vs Italy 60 Communications Emission reporting parameters Emission intensity and history Emissions trading Average Disclosure Score Italy 60 CDLI Average Disclosure Score Italy 60 Italy 60 Distribution of Disclosure Scores Governance Opportunities Risks Scope 1, 2 & 3 reporting (inc.energy level) Strategy and targets Companies exclusively in Italy 60 Italian companies exclusively in Euro 300 Italian companies exclusively in Global 500 CDLI Italy st quartile 2nd quartile 3rd quartile 4th quartile Table 5 Carbon Disclosure score by groups Average Companies Companies Carbon Disclosure in the of each specific score specific group group in CDLI CDLI Italy Italian companies exclusively in Global Italian companies exclusively in Euro Companies exclusively in Italy Italy

27 4 The 2010 Carbon Performance Scores In the ten years that CDP has monitored disclosure practices, corporate activity has advanced to a stage where analysis of performance can aid investors who want to identify leading companies in carbon management. In 2009, CDP piloted a performance component in an effort to respond to investor requests for this analysis. This year, all companies with sufficient disclosure received a performance score; the qualifying threshold to receive a performance score was a minimum disclosure score of 50. Disclosure scores lower than 50 do not necessarily indicate poor performance; rather, they indicate insufficient information to evaluate performance. While performance scoring is an instructive exercise for all stakeholders, CDP recognizes that this is a process that will evolve over time. CDP recommends investors review individual company disclosures in addition to performance rankings in order to gain the most comprehensive understanding of company performance. A listing of companies and their scores is included in the Appendix. Companies that did not qualify for a performance score appear in the Appendix with a dash in the Carbon Performance Score column. While clear indicators of good performance emerge from the results, there are several factors to consider when evaluating where a company is ranked in comparison to its peers. Carbon performance ranking is based solely on information disclosed in a company s CDP response. Any additional negative or positive actions that are not disclosed in a company s CDP response are not considered in the application of the performance score methodology; CDP performance results should be considered in conjunction with other carbon metrics to provide a more comprehensive picture of a company s performance on mitigating climate change; The relative weighting of performance indicators within the scoring methodology does not take into consideration certain sector-specific issues and challenges, such as customer expectations, regulatory requirements, or cost of doing business. It s important for investors to keep in mind that the CDP carbon performance score is not: An assessment of the extent to which a company s actions have reduced carbon intensity relative to other companies in its sector; An assessment of how material a company s actions are relative to the business or to climate mitigation; the score simply recognises evidence of forward action; A comprehensive measure of how green or low carbon a company is but, rather, an indicator of the extent to which a company is taking action to manage its impacts on, and from climate change. Carbon performance scores form the basis for determining the Carbon Performance Leadership Index (CPLI) - the companies with the highest performance scores. As with the CDLI, a company s response must be publicly available to be eligible for the CPLI. The descriptions on the following page explain the four performance bands that were used for categorizing respondents. They provide an illustrative example of the potential profiles of the companies that may be included in each band. The key indicators that identify the characteristics of 2010 s performance leaders are outlined in Figure 17 below. Investors are also encouraged to read individual company responses in order to gain further context for a company s carbon performance score. Care should be taken when comparing performance across companies. More information can be found at on the questionnaire, supporting methodology and guidance documents, as well as within individual company responses. 27

28 Carbon Disclosure Project 2010 Figure 17 What are the characteristics of carbon performance leadership in 2010 Strategy Integrate climate change risks and opportunities into overalll company strategy Establish GHG emissions reduction target Engage with policy makers on climate policy Governance Identify formal accountability for oversight and management Establish incentives for climate change related activities Stakeholder communications Communicate in mainstream reporting or other regulatory filings Verify emissions data through an external third party Achievements Implement energy or emissions reduction initiatives Achieve significant emissions reduction Capitalise on opportunities as a source of business value The CDP 2010 carbon performance bands The carbon performance score is given as a banded score. Indicative descriptions of the bands follow and are for guidance only. The drivers of any individual company score may vary across a number of different indicators. As such, investors should read individual company responses to understand the context for each business. Band A (Leading): Companies with carbon performance scores greater than 80 Companies in this band excel for overall performance relative to those in other bands indicating both higher degrees of maturity in their climate change initiatives and achievement of their objectives. Companies in this band demonstrate the following characteristics: Strategy: With the highest number of significant risks and opportunities identified, companies in this group were the most likely to demonstrate integration of their climate-related priorities into their overall business strategy. They frequently disclose targets aligned with those ambitions and emission reduction initiatives. Governance: These companies demonstrate the most structured and most defined climate change management mechanisms by frequently reporting formalized accountability, incentives and oversight from the board or executive level. Stakeholder communications:these companies also recognize the importance of providing transparent and quality disclosure for their stakeholders by taking steps to verify data and report climaterelated information in their external communications. Achievements: In support of their commitment to reduce emissions, these companies disclose the highest number of actions taken to reduce their emissions, and most report success in achieving emissions reduction. Band B (Fast following): Companies with carbon performance scores of 51 to 80 Companies in band B also recognize the importance of climate change and are quickly following in the footsteps of the leading companies. While the majority of companies in band B note climate change as a priority, their responses indicate that actions and initiatives may not be as established or as well integrated into the companies overall structures and strategies compared with those in band A. However, there may be a broad spectrum of performance maturity within this tier, because some seemingly higher-performing companies in this band may have provided limited information for certain key performance areas, thereby constraining the ability to fully evaluate them. Band C (On the journey): Companies with carbon performance scores of 21 to 50 Companies in band C indicate some activity on climate change. Most companies in this group identify at least one risk from climate change and accordingly exercise some degree of oversight to monitor the progress of their climate change initiatives.the levels of integration and maturity of those initiatives tend to vary according to disclosure of emissions reduction targets, implementation of emissions reduction activities, employee incentives and verification of emissions information. This group represents a variety of companies, including those that are new to taking action on climate change, those that do not have climate change objectives as strategic actions for the organization, and those that do not believe the agenda to be a shorter-term priority. Band D (Just starting): Companies with carbon performance scores of 20 or below Companies in this band recognize the importance of participating in CDP, and they have therefore achieved reasonable levels of disclosure (i.e., a carbon disclosure score >50). However, they have disclosed limited evidence of actions taken on mitigation or adaptation. Companies in this band may include those that believe that issues regarding climate change are not relevant to them and those that are just beginning to take action on climate change. As such, no further assertions can be made about their performance. 28

29 4 The 2010 Carbon Performance Scores The Carbon Performance Leadership Index (CPLI) shown in Table 6 includes the companies in Italy 60 which made their CDP responses public and achieved a Carbon Performance Score in Band A. Table 6 Carbon Performance Leadership Index Sector Company A lso in the CDLI? Energy Eni Overall, 16 companies out of 21 received the minimal required disclosure score to get a CPLI score. The breakdown by band (Figure 18) shows that one company scored in band A, eight in band B and the remaining seven in band C. Figure 18 Distribution of Performance Scores IItaly Companies exclusively in Italy Companies exclusively in Euro Italian companies exclusively in Global CDLI Italy % 20% 40% 60% 80% 100% D C B A 29

30 5 Governance, Strategy and Emissions The analysis of this chapter focuses on company strategies for reducing GHG emissions. Each sectorial split is always based on the Global Industry Classification Standard (GICS). Key to success in achieving emission reduction objectives, regardless of the actions taken, is often the fact that companies high level authorities were commitment to the deployment of strategies, with a view to influencing the decision-making process, relating to financial options, modifications at an operation level or employee s day-to-day management and behaviour. In fact, 67% of all 21 responding companies, when asked the first question in the CDP 2010 questionnaire, reported that the highest level of responsibility for climate change lies with a Board committee or other executive body (Figure 19). This percentage, although representing most respondents, is still significantly lower than the 84% featured in Global 500. Figure 19 Where is the highest level of responsibility for climate change within your company? (%) Other, lower level departments Board/Executive Board Board committee or other executive body There is no individual or committee with overall responsibility for climate change Committee appointed by the Board (mainly Sustanability/Comm.) Board of Directors and Sustanability Committee Individual Board Member CEO/Deputy CEO 30 CFO

31 5 Governance, Strategy and Emissions A range of different models of governance on climate change may be found: the most widespread solution was entrusting firstly the Board/Ececutive Board (29%, Figure 19), and, secondly, an Individual Board Member (21%), then a Committee appointed by the Board (mainly Sustainability Committee, 21%). The latest percentage show that sometimes climate change is dealt with as part of corporate social responsibility (CSR) and reviewed in a sustainability report or similar, Figure 20 Figure 21 separate from the company s main annual report. Nonetheless, as will be shown further in this report, (Figure 25), many respondents have adopted an integrated approach, dealing with climate change as they would deal with any other strategic challenge, and reporting the results (both internally and externally) alongside financial results. Fifty seven percent of respondents say they provide incentives for the management of Share of companies that provide incentives for management of climate change issues, including the attainment of greenhouse gas targets (%) 57 5 No Share of companies with a current emissions reduction target (%) Yes No response No, but we are developing one Yes No ICT can play a significant role in the fight against climate change through the promotion and diffusion of products and services which encourage behaviour that can reduce or eliminate the emissions of greenhouse gases generated by the transport of people and objects in the territory. In general, progress in ICT favours the replacement of traditional physical products and services with digital products and processes. For example: video and audio conferencing services avoid the need for the transport of people; TLC services facilitate and allow teleworking, reducing the consequences of the home-office commuting; on line invoicing and payments, in addition to saving paper and therefore the energy required to produce and transport it, eliminates the need for transport for making payments. telemedicine services reduce the need for doctor-patient meetings, limiting travel and, as a consequence, the emission of greenhouse gases; infomobility systems, using information obtained from mobile handsets, allows the optimisation of traffic flows, reducing travel times and the emission of greenhouse gases; systems for the monitoring and analysis of consumption allow the optimisation of the energy efficiency of offices and dwellings. Telecom Italia 76 31

32 Carbon Disclosure Project 2010 climate change issues (see Figure 20); still slightly lower than the 63% of companies in the Global 500 report that take this course to encourage the implementation of emissions reduction strategies. As shown in Figure 21, 76% of respondents have a current emissions reduction target, while 10% are in the process of Figure 22 % of responders indicating that their products and services help third parties to avoid GHG emissions 29 developing one. Furthermore, a number of companies are now taking a more active role in helping their customers or end consumers to reduce their own carbon emissions. This highlights the potential influence corporations have to drive change. 71% (15) of respondents already No Yes claim that they have goods or services that are designed specifically to do this (Figure 22). Engagement with policy makers is seen by the majority of Italy 60 respondents as an important aspect of strategy: 67% (14 out of 21, Figure 23) have made this choice, while the corresponding share of Global 500 firms is higher, at 80%, perhaps partly because larger firms have more resources to devote to government relations. However, firms with smaller budgets are still able to engage with policy makers, albeit mainly through industry associations. Engagement in this area is considered to be high in some of the sectors that are most exposed to regulatory risks (Materials) or to reputational risks (Financials) or that may benefit significantly from enhancing their role in 32 Figure Do you engage with policy makers on possible responses to climate change including taxation, regulation and carbon trading? (%) 67 No Yes Fiat was the world s first automaker to involve drivers in a virtuous process to reduce fuel consumption and emissions To use eco:drive, just insert a USB pen into the Blue & Me port and drive normally Once home, simply transfer the information onto a PC where the eco:drive software will provide an eco:index score that shows how efficiently you drive. It will also offer tips on how to adapt your driving style to reduce CO 2 emissions and economise on fuel. A little over a year after its launch, it has already made it possible to save more than 2,500 tonnes of CO 2. Fiat

33 5 Governance, Strategy and Emissions reducing emissions in other sectors (Telecommunication Services). Instead, it is striking that the share of companies that engage with policy makers on possible responses to climate change of other sectors that are explicitly subject to regulatory risks, such as Energy and Utilities, only fall in the 50% to 71% range (Figure 24). Concerning the communication strategy and stakeholder engagement, it is interesting to note that 90% of Italy 60 respondents have published information about their response to climate change and/or GHG emissions elsewhere than in their CDP response. Furthermore, 71% of these, corresponding to 15 out of 21, publish information in both annual reports or other mainstream filings and voluntary communications such as CSR reports (Figure 25). Although this is a vast majority of Italy 60 respondents, this percentage is still far below that of Global 500 (93%) and Europe 300 (97%) respondents. Figure 24 Share of companies that engage with policy makers on possible responses to climate change, by sector (%) Telecommunication Services 100 Materials Financials 71 Utilities Industrials Energy Consumer Discretionary Figure Where do you publish information about your company s response to climate change/ghg emissions? (%) 10 No publication 19 Just voluntary communications such as CSR reports Both mainstream filing and voluntary communications Since 2007 Autostrade per l Italia has adopted a new calculation model aimed at estimating the emissions avoided as a result of Telepass system use by traffic passing through toll stations on Autostrade per l Italia s network. The results show a good impact for 2009, with a reduction of around 27,800 tonnes of CO 2. Atlantia 33

34 Carbon Disclosure Project 2010 Turning now to GHG emissions, Figure 26 provides an overview of the share of Italy 60 respondents that fed quantitative data regarding GHG emissions for Scope 1, 2 and 3: as compared to 2009, percentages of respondents that fed data for all Scopes have risen considerably, which shows a positive trend if considering the rising number of respondents. Nonetheless, as previously discussed in this Report, disclosure levels among respondents for all Scopes are still rather low and far from Europe 300 data, for instance. Figure 26 Disclosure level among respondents 2010 Italy 60 sample % Disclosing Scope 1 emissions 20 95% Disclosing Scope 2 emissions 20 95% Disclosing any Scope 3 emissions % 2009 Italy 60 sample % Disclosing Scope 1 emissions 14 78% Disclosing Scope 2 emissions 12 67% Disclosing any Scope 3 emissions 9 50% 34

35 5 Governance, Strategy and Emissions Box 1 outlines the definition of emissions and the different scopes. While the increase of the reporting of Scope 1 and 2 emissions may be justified by a greater number of respondents, the very significant rise of Scope 3 emissions shows a remarkable commitment to in-depth analysis of such emission sources. The importance of being aware of such emissions is proved by the total of Scope 3 emissions being greater than the sum of Scope 1 and 2 emissions, despite Scope 3 disclosure level among respondents is lower than that of Scope 1 and 2 (62% for Scope 3 as opposed to 95% for Scope 1 and 2). The same comment applies to the analysis of the data contained in the CDP Global 500 Report, where disclosed Scope 3 emissions outweigh Scope 1 and Scope 2 in most sectors, including Consumer Discretionary, Consumer Staples, Energy and Materials. However, it is important to note that the greatest share of Scope 3 emissions, as regards Italy 60, is related to the source, Use of sold goods and services from the Utilities sector and especially from the Energy sector, which eni belongs to. Furthermore, Figures 28 and 29 provide an overview of all Scopes emissions for the average company in each sector; although the notion of average company is hard to apply, given the small size of the sample and the presence of very Box 1: GHG Protocol emissions and scopes In this Report, the term GHG refers to the six greenhouse gases covered by the Kyoto Protocol carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF 6 ). Emissions are weighted by the global warming potential of each of these gases, and expressed in terms of CO 2 -equivalent (CO 2 -e), i.e. the global warming potential of one unit of carbon dioxide. The GHG Protocol defines three emissions scopes for accounting and reporting purposes ( Scope 1: direct GHG emissions from sources companies own or control, principally the result of the following types of activities undertaken by the company: o Generation of electricity, heat, or steam; o Physical or chemical processing; o Transportation of materials, products, waste, and employees; o Fugitive emissions from intentional or unintentional releases. Scope 2: indirect GHG emissions from the generation of purchased electricity, heat or steam consumed by the company. Scope 3: other indirect emissions due to the activities of the company, but from sources that it does not own or control, e.g.: o Extraction and production of purchased materials and fuels; o Transport-related activities; o Electricity-related activities not included in scope 2; o Leased assets, franchises, and outsourced; o Use of sold products and services; o Waste disposal. Scope 3 emissions, optional under the GHG Protocol, are much more difficult to monitor accurately, since this relies on a broad range of information from suppliers and customers, or on estimates. few large firms which dominate the averages, a few conclusions can be drawn: the main challenge for firms in the sectors Energy, Utilities and Materials (the only respondent for this sector is a cement factory), all carbon intensive sectors under EU ETS scheme, lies in controlling direct GHG emissions (Scope 1). In the other sectors, where Scope 2 emissions are much more significant than direct emissions, the main contribution to mitigating climate change is likely to come about through increased energy efficiency. 35

36 Carbon Disclosure Project 2010 Figure 27 Italy CDP 2010 global emissions (million t CO 2 -e) 248,697 Scope 1 213,293 Scope 2 9,500 8,367 Scope , Percentage of companies Total 2010 Total Figure 28 40,00 35,00 30,00 25,00 20,00 15,00 10,00 5,00 0,00 0,18 0,68 Consumer Discretionary Figure ,00 104,00 103,00 102,00 101,00 100,00 3,00 2,00 1,00 0,00 0,10 Consumer Discretionary Average company Scope 1 and 2 emissions, by sector (million t CO 2 -e) Energy 0,90 0,04 0,13 0,12 0,23 Financials Industrials 36,79 Materials 2,80 Scope 1 Scope 2 0,19 0,87 Telecommunication Services Average company Scope 3 emissions, by sector (million t CO 2 -e) 105,07 Energy 0,01 Financials 0,10 Industrials 0,59 Materials 0,04 Telecommunication Services ,78 Utilities Utilities 0,15 For cities, district heating provides a solution to air pollution problems by replacing home boilers (frequently fuelled with gas-oil or methane) and allows heat generation from high-efficiency production methods, renewable energies, or energy recovered for other production processes. Sources used for Hera s district heating comprise geothermic (13%), waste-toenergy (12%) and methane gas for cogeneration (17%). It is estimated that the installations managed by Hera led to primary energy savings equating to 13,097 tonnes of oil in In 2008, carbon dioxide avoided amounted at 56,598 tonnes of CO 2 equivalent. Hera Figure 30 shows the contribution of each sector to total Scope 1 emissions as disclosed, confirming that three sectors Energy, Utilities and Materials account for over 99% of Scope

37 5 Governance, Strategy and Emissions 1 and 3 emissions and over 50% of Scope 2. Regarding different types of Scope 3 emissions described in Box 1, their relevance in comparison with Scope 1 and 2 can vary significantly across companies. While for large direct emitters certain Scope 3 emissions, such as employee travel, can be very small in terms of the total percentage of their emissions, for smaller emitters these indirect emissions can present one of the greatest opportunities for achieving their overall emissions reduction objective. This underlines the greater importance for certain sectors to assess and manage properly their Scope 3 emissions. Referring to Italy 60, Figure 31 shows the number of companies within each sector that are tracking all the following different categories of Scope 3 emissions: Business travel & employee commuting; Distribution & logistic; Purchased goods & services; Use of sold goods and services; Waste generated in operations. Figure 30 Scope 1, 2, 3 emission by sectors (%) Scope 1 0,5 Utilities Energy Materials 14,8 Others 61,2 0,1 Consumer Discretionary 0,2 Industrials 0,1 Telecommunications Services 0,1 Financials 23,6 Scope 2 9,3 Utilities Energy 18,9 Materials 42,3 Others 21,3 Consumer Discretionary 4,8 Industrials 9,2 Telecommunications Services 7,0 Financials 29,5 Scope 3 0,7 0,3 2,6 Utilities The production from renewables sources allow to avoid GHG emissions coming from thermal generation. The avoided emissions from renewable energy are about 63 million tons, if also the contribution of nuclear generation is considered, the avoided emissions rises to about 100 million tons. Enel 96,5 Energy Materials Others 0,1 Consumer Discretionary 0,2 Industrials 37

38 Carbon Disclosure Project 2010 Business travel & employee commuting is the most widespreadly reported source by respondents, followed, respectively, by Purchased goods & services, Distribution & logistic, Waste generated in operations and Use of sold goods and services. The latest source accounts for 99% of Scope 3 emissions (Figure 32), while of the remaining 1%, 71% is relative to Purchased goods & services, 21% to Distribution & logistic and merely 8% to Business travel & employee commuting. The source Waste generated in operations accounts for a negligible amount of emissions if Figure 31 Number of companies in each sector reporting Scope 3 emissions per emissions type Waste generated in operations 2 Use of sold goods and services 1 1 Purchased goods and services Distribution & logistic Business travel & employee commuting Consumer Discretionary Energy Financials Industrials Materials Telecommunication Services Utilities Figure 32 Scope 3 emissions by source (%) 1 Use of sold goods and services Others 0,08 Business travel & employee commuting 0,21 Distibution & logistic 0,71 Purchased goods & services 99 38

39 5 Governance, Strategy and Emissions compared to the reported total. Although, as shown hereto, companies are generally showing significant improvements in the disclosure of their emissions or in the governance, and, as will be seen in the next chapter, even in the management of climate change risks and opportunities, it is suggested that for most companies there remain valuable opportunities for better understanding and reducing their Scope 3 emissions. Awareness of this significant subject will facilitate migration towards a lowcarbon economy. As a matter of fact, as to this topic, the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) fostered the development of a Scope 3 (Corporate Value Chain) Accounting and Reporting Standard, against which several major international companies from a range of different sectors and countries completed the road testing over the summer of 2010 ( New investment in the development of the Italian electricity grid would provide a reduction in CO 2 emissions throughout the electricity system (reduction in losses, improvements in the production mix, connecting new plants fuelled by renewable sources). The annual estimated reduction would be of 7.5 million tonnes of CO 2 -e comparing the plan final year to Terna As of year end, our Corporate and Investment Banking Strategic Business Area had a portfolio of 4 billion in loans for renewable energy projects, mainly in wind farms, photovoltaic, solar thermal and biomass installations. CreditExpress Energia is a credit line for financing energy-saving building renovations and photovoltaic installations. In 2009, in Italy, we made roughly 15 million in such loans. Unicredit Group 39

40 6 Risks and Opportunities A specific CDP questionnaire sections refers to risks and/or opportunities associated with climate change focusing on the main categories regulatory, physical and other, identified by respondents. Companies are asked to describe the ways in which the identified risks and/or opportunities could affect their business and value chain, the financial implications associated and any actions they have taken or plan to take in order to manage or adapt to the risks and/or exploit the opportunities identified. Answers to these questions provide valuable insights for risk managers and investors, concerning both materiality of this topic and the extent of carbon management contribution to business success in the mid and long run. Several companies identify opportunities as well as risks in all of the three areas, although for the Physical area more risks than opportunies have been identified (Table 7). Table 7 While the vast majority of risks and opportunities identified are said to have financial consequences, only few companies are able to disclose meaningful attempts to quantify these. This is perhaps not 40 Opportunity/risk ratio CDP 2010 CDP 2009 Regulatory 1,06 1,25 Physical 0,69 0,92 Other 1,13 1,25 surprising given the large degree of uncertainty in all the areas outlined above, including impending changes to the regulatory framework. Nevertheless, most of the respondents describe systematic arrangements for managing these risks and opportunities. Among the most frequently identified risks are those related to regulatory compliance, especially in sectors that have high GHG emissions or are energy-intensive; as a consequence of this category of risks, it was recognised that profits may change in connection to lots of factors such as, for instance, the cost of energy, raw materials and transport. An additional area in which we oversee carbon regulatory related risk is our supply chain, mainly for raw materials and logistic. Some categories of raw materials, i.e. metals, might be affected in a stronger way by carbon regulation. If it happened it is likely that they would transfer to clients (and Finmeccanica as well) part of the additional cost. Same considerations could be done for logistic suppliers; Finmeccanica Group Companies make obviously large use of these companies both for incoming products and for products that need to be delivered to clients. Finmeccanica the EU regulation introduces financial penalties for car manufacturers not compliant with their specific targets starting from 2012 (the penalty amounts a maximum of 95/g for each exceeding gram). Fiat has in place a process in order to constantly monitor the achievement of its target. No risk of penalties is being identified. Fiat Higher compliance costs may lead to the relocation of manufacturing assets in other regions subject to less stringent regulations or an increase of production by competitors from those regions (the so called carbon leakage ). The effects of regulatory risks at European level can result in more stringent emissions thresholds for the company s plants in Europe as well as loss of competitiveness towards competitors located in non- EU countries characterized by milder regulations or none regulations at all. Eni Furthermore, one of the key regulatory risks identified in several sectors is the need to purchase emissions allowances: Figure 33 provides an overview of the present situation.

41 6 Risks and Opportunities Risk of excessive costs linked with underallocation due to strict EU reduction targets. Italcementi Figure 33 Participation in emissions trading schemes by sector Utilities 86% 14% Telecommunication Services 100% Materials 100% Industrials 50% 50% Financials 100% Energy 50% 50% Consumer Discretionary 33% 67% 0% 20% 40% 60% 80% 100% Yes No, we don't participate nor do we currently anticipate participating in any emissions trading scheme within the next two years The EU ETS accounts for most of the participation reported in Figure 33. In the present Phase 2 ( ) of the ETS, many participants have received all or nearly all the allowances they need free of charge (and indeed some have profited by selling surplus allowances), while in Phase 3 ( ), as the EU s overall cap on GHG emissions falls in line with commitments, free allowances are to be progressively replaced by auctions (for further information see Directive 2009/29/EC of the European Parliament and of the Council, of 23 April 2009, amending Directive 2003/87/ EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community). Some also point to the risk of price volatility. Few respondents also identify significant physical risks associated with climate change. These are less likely to be regarded as material, The volatility in CO 2 market observed during the first period of ETS, makes it quite impossible to foresee the future scenario from the economic impact point of view. ACEA though, in part because they are easier to insure against and to manage for instance, through diversified supply networks, which may help to avoid disruption caused by extreme weather events or longer-term trends such as rising sea levels. Dominant in the other category are reputational and market risks. Most respondents realize the need to communicate their contribution towards the reduction of GHG emissions externally, especially to customers and stakeholders. Many consider that a failure to do so would risk damaging key assets such as brands, with potentially material consequences for future sales, profitability and the cost of capital. Finmeccanica Group is well aware that reputational risks must be managed properly. Although our Company may not be highly exposed to risks related to climate change, stakeholders are very interested in the issue and in understanding how it is managed. Well aware of that, Finmeccanica is engaged in communicating and reporting through its Sustainability Report and, obviously, attending the CDP. Ad hoc information is also provided when required from stakeholders with particular interest in the climate change issues as, for instance, some investors. Finmeccanica 41

42 Carbon Disclosure Project 2010 We believe that the reputational risk associated with a failure to sufficiently anticipate and/or respond to public concern about the effects of climate change could be a potential risk for the insurance industry should the industry and/or individual insurance players decide against insuring against specific categories of climatechange related risk (for example because of capital adequacy requirements) or refuse to settle claims associated with climate change effects. Generali Some large-size firms regard good performance on climate change adaptation and mitigation as a source of competitive advantage, and consider themselves well placed to benefit from related specific initiatives, goods, services and latest developments in research and development (R&D). Enel is one of the major players in the global carbon market and we believe that this can offer us good opportunities to reduce our compliance costs. The opportunity provided by the flexibility mechanisms for acquiring CO 2 credits exists in particular in the CDM and JI market, where Enel has taken a leading role. Enel has acquired substantial experience in this sector and plans to take advantage of these opportunities in the long term, although there is currently a high degree of uncertainty on international climate change negotiations and the future of CDM or similar mechanisms. That is why Enel strongly supports the creation of a global carbon market giving a key role to the private sector. The development of renewable generation capacity is one of our strategic priorities and regulation supporting renewables can facilitate this. Incentive schemes such as green certificates and feed-in tariffs clearly provide business opportunities for Enel, which has recently set up a dedicated subsidiary (Enel Green Power) in charge of the renewable business worldwide. As regards energy efficiency regulation, Enel sees significant opportunities namely in the development of smart grids and smart metering. Enel also looks at the development of Carbon Capture and Storage technologies as a crucial element to make its generation mix compatible with the carbon neutrality objective. ENEL Climate change is generating new market opportunities, related to customers with new environmental consciousness. This is an opportunity that is foreseen to grow in the future. The capability to take this opportunity is a crucial factor for the success on the future automotive market. FGA (Fiat Group Automobiles) is ready to take this opportunity today and tomorrow. Our product range is the most ecological in Europe and our strategy never forgets the importance of the effectiveness of solutions we propose: we are aware that even the most promising technology will not have a great impact if it will not chosen by the market. For this reason every solution we introduce on the market is designed and launched thinking at its application on the majority of our models. We also work with customers, in order to raise their awareness on the role they have in reducing the CO 2 emissions during the use of the cars. Fiat 42

43 7 Industry Perspectives: Sector Snapshots This section presents an in-depth analysis conducive to depicting a general framework of the management of climate change-related issues, broken down by the following sectors featuring Italy 60 respondents: Consumer Discretionary; Consumer Staples; Energy; Financials; Health Care; Industrials; Materials; Telecommunication Services; Utilities. Some instances of such in-depth analysis include: Overall carbon emissions, average company Scope 1, 2 and 3 emissions; Scope 3 emissions per emissions type; Composition of Italy 60 by number of companies per sector and of Italy 60 respondents by number of companies per sector; Response rate by industry sector; Risks and opportunities identified. As looking across sectors enables identifying the peculiarities of each sector related to both the Italian and international scenario, the following pages present sector snapshots for the respondents, including: Response rate, larger non-respondents, respondents Carbon Disclosure score and Carbon Performance score; Carbon disclosure score breakdown for Sector versus Italy 60 overall, Italy 60 CDLI and the breakdown of the Global 500 same sector; Performance scorecard for Strategy, Governance and Stakeholder communications. Table 8 Global Industry Classification Standards sector map Sector Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecommunication Services Utilities Industry Group Energy Materials Capital Goods Commercial & Professional Services Transportation Automobiles & Components Consumer Durables & Apparel Consumer Services Media Retailing Food & Staples Retailing Food, Beverage & Tobacco Household & Personal Products Health Care Equipment & Services Pharmaceuticals, Biotechnology & Life Sciences Banks Diversified Financials Insurance Real Estate Software & Services Technology Hardware & Equipment Semiconductors & Semiconductor Equipment Telecommunication Services Utilities 43

44 Consumer Discretionary Italy 60 response rate: Consumer Discretionary overall 30% (3 out of 10) Largest non respondent 1 include: Luxottica Group, Pirelli, Mediaset Sector companies Carbon Disclosure score Carbon performance score Fiat 80 B Lottomatica 38 - Autogrill SpA 29 - Performance scorecard Italy 60 Italy 60 Consumer Discretionary Global 500 Consumer Discretionary Strategy Implementation of emissions reduction targets 76% 33% 55% 65% Global 500 Governance Board or executive-level oversight 67% 33% 70% 85% Monetary incentives 57% 33% 55% 49% Stakeholder communications Verification of emissions 81% 67% 52% 61% Disclosure of climate change information in mainstream filings or other external communications 71% 33% 67% 60% Carbon Disclosure score breakdown for Sector versus Global 500 Sector, Italy CDLI and Italy 60 overall Achievements Communications Emission reporting parameters Emission intensity and history Emissions trading Governance Disclosure score range Opportunities Risks Scope 1, 2 & 3 reporting (inc.energy level) Strategy and targets Italy 60 Consumer Discretionary Italy 60 Overall Italy 60 CDLI Global 500 Consumer Discretionary 44 1 Based on market capitalization data available form Borsa Italiana as of December 31, The 2010 Italy 60 Carbon Disclosure Leadership Index is an index of the top 30% companies with the highest disclosure scores in the Italy 60 index and is used here as a benchmark

45 Energy Italy 60 response rate: Energy overall 50% (2 out of 4) Largest non respondent 1 include: Erg SpA, Saras Sector companies Carbon Disclosure score Carbon performance score Eni 83 A Saipem 76 C Performance scorecard Italy 60 Italy 60 Energy Global 500 Energy Global 500 Strategy Implementation of emissions reduction targets 76% 50% 44% 65% Governance Board or executive-level oversight 67% 100% 89% 85% Monetary incentives 57% 100% 44% 49% Stakeholder communications Verification of emissions 81% 100% 61% 61% Disclosure of climate change information in mainstream filings or other external communications 71% 100% 53% 60% Carbon Disclosure score breakdown for Sector versus Global 500 Sector, Italy CDLI and Italy 60 overall Disclosure score range Achievements Communications Emission reporting parameters Emission intensity and history Emissions trading Governance Opportunities Risks Scope 1, 2 & 3 reporting (inc.energy level) Strategy and targets Italy 60 Energy Italy 60 CDLI Italy 60 Overall Global 500 Eenrgy 1 Based on market capitalization data available form Borsa Italiana as of December 31, The 2010 Italy 60 Carbon Disclosure Leadership Index is an index of the top 30% companies with the highest disclosure scores in the Italy 60 index and is used here as a benchmark 45

46 Financials Italy 60 response rate: Financials overall 23% (5 out of 23) Largest non respondent 1 include: Mediobanca, Banco Popolare Società Cooperativa, Mediolanum SpA Sector companies Carbon Disclosure score Carbon performance score Generali 69 C Unicredit Group 67 C Intesa Sanpaolo SpA 66 B UBI Banca 43 - Performance scorecard Italy 60 Italy 60 Financials Global 500 Financials Global 500 Strategy Implementation of emissions reduction targets 76% 100% 59% 65% Governance Board or executive-level oversight 67% 80% 85% 85% Monetary incentives 57% 20% 42% 49% Stakeholder communications Verification of emissions 81% 80% 52% 61% Disclosure of climate change information in mainstream filings or other external communications 71% 80% 56% 60% Carbon Disclosure score breakdown for Sector versus Global 500 Sector, Italy CDLI and Italy 60 overall Disclosure score range Achievements Communications Emission reporting parameters Emission intensity and history Emissions trading Governance Opportunities Risks Scope 1, 2 & 3 reporting (inc.energy level) Strategy and targets Italy 60 Financials Italy 60 CDLI Italy 60 Overall Global 500 Financials 46 1 Based on market capitalization data available form Borsa Italiana as of December 31, The 2010 Italy 60 Carbon Disclosure Leadership Index is an index of the top 30% companies with the highest disclosure scores in the Italy 60 index and is used here as a benchmark

47 Industrials Italy 60 response rate: Industrials overall 29% (2 out of 7) Largest non respondent 1 include: Prysmian, SIAS, CIR SpA Sector companies Carbon Disclosure score Carbon performance score Finmeccanica 64 C Atlantia 53 B Performance scorecard Italy 60 Italy 60 Industrials Global 500 Industrials Global 500 Strategy Implementation of emissions reduction targets 76% 100% 69% 65% Governance Board or executive-level oversight 67% 50% 90% 85% Monetary incentives 57% 50% 50% 49% Stakeholder communications Verification of emissions 81% 50% 71% 61% Disclosure of climate change information in mainstream filings or other external communications 71% 100% 71% 60% Carbon Disclosure score breakdown for Sector versus Global 500 Sector, Italy CDLI and Italy 60 overall Disclosure score range Achievements Communications Emission reporting parameters Emission intensity and history Emissions trading Governance Opportunities Risks Scope 1, 2 & 3 reporting (inc.energy level) Strategy and targets 20 Italy 60 Industrials Italy 60 CDLI Italy 60 Overall Global 500 Industrials 1 Based on market capitalization data available form Borsa Italiana as of December 31, The 2010 Italy 60 Carbon Disclosure Leadership Index is an index of the top 30% companies with the highest disclosure scores in the Italy 60 index and is used here as a benchmark 47

48 Materials Italy 60 response rate: Materials overall 33% (1 out of 3) Largest non respondent 1 include: Buzzi Unicem, Italmobiliare Sector companies Carbon Disclosure score Carbon performance score Italcementi 78 B Performance scorecard Italy 60 Italy 60 Materials Global 500 Materials Global 500 Strategy Implementation of emissions reduction targets 76% 100% 57% 65% Governance Board or executive-level oversight 67% 100% 97% 85% Monetary incentives 57% 100% 47% 49% Stakeholder communications Verification of emissions 81% 100% 76% 61% Disclosure of climate change information in mainstream filings or other external communications 71% 100% 74% 60% Carbon Disclosure score breakdown for Sector versus Global 500 Sector, Italy CDLI and Italy 60 overall Disclosure score range Achievements Communications Emission reporting parameters Emission intensity and history Emissions trading Governance Opportunities Risks Scope 1, 2 & 3 reporting (inc.energy level) Strategy and targets Italy 60 Materials 3 Italy 60 Overall Italy 60 CDLI Global 500 Materials 1 Based on market capitalization data available form Borsa Italiana as of December 31, The 2010 Italy 60 Carbon Disclosure Leadership Index is an index of the top 30% companies with the highest disclosure scores in the Italy 60 index and is used here as a benchmark 3 In case of a single respondent, the Carbon Disclosure score has been considered instead of the score breakdown 48

49 Telecommunication Services Italy 60 response rate: Telecommunication Services overall 50% (1 out of 2) Largest non respondent 1 include: Fastweb Sector companies Carbon Disclosure score Carbon performance score Telecom Italia 70 B Performance scorecard Italy 60 Italy 60 Telecommunication Services Global 500 Telecommunication Services Strategy Implementation of emissions reduction targets 76% 100% 68% 65% Global 500 Governance Board or executive-level oversight 67% 100% 91% 85% Monetary incentives 57% 100% 36% 49% Stakeholder communications Verification of emissions 81% 100% 41% 61% Disclosure of climate change information in mainstream filings or other external communications 71% 100% 50% 60% Carbon Disclosure score breakdown for Sector versus Global 500 Sector, Italy CDLI and Italy 60 overall Disclosure score range Achievements Communications Emission reporting parameters Emission intensity and history Emissions trading Governance Opportunities Risks Scope 1, 2 & 3 reporting (inc.energy level) Strategy and targets Italy 60 Telecommunication Services 3 Italy 60 CDLI Italy 60 Overalll Global 500 Telecommunication Services 1 Based on market capitalization data available form Borsa Italiana as of December 31, The 2010 Italy 60 Carbon Disclosure Leadership Index is an index of the top 30% companies with the highest disclosure scores in the Italy 60 index and is used here as a benchmark 3 In case of a single respondent, the Carbon Disclosure score has been considered instead of the score breakdown 49

50 Utilities Italy 60 response rate: Utilities overall 88% (7 out of 8) Largest non respondent 1 include: Iride SpA Sector companies Carbon Disclosure score Carbon performance score A2A 81 C Terna 81 B ACEA SpA 74 B Hera 63 C Snam Rete Gas 52 C Edison 45 - ENEL SpA 37 - Performance scorecard Italy 60 Italy 60 Utilities Global 500 Utilities Global 500 Strategy Implementation of emissions reduction targets 76% 71% 86% 65% Governance Board or executive-level oversight 67% 57% 90% 85% Monetary incentives 57% 71% 76% 49% Stakeholder communications Verification of emissions 81% 86% 86% 61% Disclosure of climate change information in mainstream filings or other external communications 71% 57% 72% 60% Carbon Disclosure score breakdown for Sector versus Global 500 Sector, Italy CDLI and Italy 60 overall Disclosure score range Achievements Communications Emission reporting parameters Emission intensity and history Emissions trading Governance Opportunities Risks Scope 1, 2 & 3 reporting (inc.energy level) Strategy and targets 50 Italy 60 Utilities Italy 60 CDLI Italy 60 Overall Global 500 Utilities 1 Based on market capitalization data available form Borsa Italiana as of December 31, The 2010 Italy 60 Carbon Disclosure Leadership Index is an index of the top 30% companies with the highest disclosure scores in the Italy 60 index and is used here as a benchmark

51 8 Global key trends summary This table outlines some of the key findings from CDP 2010 by geography or industry data-set. Sample: geography / number of companies % of sample answering CDP % of responders with Board or other executive level responsibility for climate change % of responders with management incentives % of responders with emissions reduction targets % of responders taking actions to reduce emissions % of responders indicating that their products and services help third parties to avoid GHG emissions % of responders seeing regulatory risks % of responders seeing regulatory opportunities % of responders engaging policymakers on climate issues to encourage mitigation or adaptation % of responders reporting the company s response to climate change in mainstream annual filings / CSR reports % of responders independently verifying any portion of Scope 1 emissions data % of responders independently verifying any portion of Scope 2 emissions data Asia ex-jick 135 * Australia US Bonds Brazil Canada Central & Eastern Europe China Emerging Markets Europe FTSE All-World France Germany Global Global Electric Utilities Global Transport India Ireland Italy Japan Korea Latin America Netherlands New Zealand Nordic Portugal Russia South Africa Spain Switzerland Turkey UK FTSE US S&P Notes The key trends table provides a snapshot of response trends based on headline data. The numbers in this table are based on the online responses submitted to CDP as of 14 July They may therefore differ from numbers in the rest of the report which are based on the number of companies which responded by the deadline. For some samples the number of companies included in the table may be lower than the original sample size due to takeovers, mergers, and acquisitions. Includes offline responses to the CDP 2010 questionnaire & indirect answers submitted by parent companies. All other key trend indicators are based on direct & online company responses only. *Asia excluding Japan, India, China and Korea. 51

52 Appendix Table of emissions, scores and sector information by company Scope 1 Scope 2 Grid Scope 3 Company Sector 2010 Carbon Carbon Total Response Status 1 Disclosure Score Performance Band emissions 2 Average 3 A2A Utilities AQ 81 C ACEA SpA Utilities AQ 74 B * 500 Ansaldo STS Industrials NR Atlantia Industrials AQ 53 B Autogrill Spa Consumer AQ 29 - Discretionary Azimut Holding Financials NR Banca Carige Financials NR Banca Monte dei Paschi di Siena Group Banca Popolare dell'emilia Romagna Banca Popolare di Milano Banca Popolare di Sondrio Banco Popolare Societa Cooperativa Benetton 52 Financials AQ 79 B * Financials Financials Financials Financials Consumer Discretionary NR NR NR NR NR Beni Stabili Spa Financials NR Bulgari Consumer Discretionary NR Buzzi Unicem Materials DP Campari Group Cattolica Assicurazioni Consumer Staples Financials NR NR CIR SpA Industrials NR Credito Bergamasco Financials NR Credito Emiliano Financials NR Credito Valtellinese Financials NR Danieli & Co Industrials NR Diasorin Spa Health Care NR Edison Utilities AQ ENEL SpA Utilities AQ Eni Energy AQ 83 A * ERG S.p.A Energy NR Exor Financials NR

53 Appendix Company Sector 2010 Response Status 1 Fastweb Telecommunication NR Services Fiat Consumer Discretionary Carbon Disclosure Score Carbon Performance Band Total Scope 1 Scope 2 Grid Scope 3 emissions 2 Average 3 AQ 80 B Finmeccanica Industrials AQ 64 C Fondiaria-Sai Financials NR Generali Financials AQ 69 C Geox Consumer Discretionary NR Hera Utilities AQ 63 C Intesa Sanpaolo S.p.A Iride SpA Utilities NR Financials AQ 66 B Italcementi Materials AQ 78 B Italmobiliare Materials DP Lottomatica Luxottica Group Mediaset Consumer Discretionary Consumer Discretionary Consumer Discretionary AQ NR NR Mediobanca Financials NR Mediolanum Spa Financials NR Milano Assicurazioni Financials NR Parmalat Spa Pirelli Consumer Staples Consumer Discretionary NR NR Prysmian Industrials NR Recordati Spa Health Care NR Saipem Energy AQ 76 C Saras Energy NR SIAS Industrials NR Snam Rete Gas Utilities AQ 52 C Telecom Italia Telecommunication Services AQ 70 B Terna Utilities AQ 81 B * TOD'S Consumer Discretionary NR UBI Banca Financials AQ Unicredit Group Financials AQ 67 C * Unipol Financials NR 1 Key: AQ - Answered questionnaire; DP - Declined to participate; - NR - No rescponse 2 Scopes 1 and 2 grid averaged reported emissions 3 Where there is a * in this column, the company did provide detail in relation to its contractual scope 2 emissions. Please refer to the company s response. 53

54 Carbon Disclosure Project 2010 Notes 54

55

56 GDP Contacts Paul Simpson Chief Executive Officer Sue Howells Head of Global Operations Zoe Tcholak-Antitch Head of Investor CDP Caspar von Blomberg Managing Director, CDP Europe Diana Guzman Director Southern Europe Daniel Turner Head of Disclosure Carbon Disclosure Project 40 Bowling Green Lane London EC1R 0NE United Kingdom Tel: + 44 (0) /5667 Fax: + 44 (0) Report Writer Contacts Paolo Bersani Partner PwC [email protected] Marco Montanini Manager PwC [email protected] Tel: PricewaterhouseCoopers SpA Via Monte Rosa, Milan Italy CDP Italy Partner Banca Monte dei Paschi di Siena SpA Piazza Salimbeni, Siena [email protected] CDP Board of Trustees Chair: Robert Napier The Met Office Christoph Schroeder TVM Capital Martin Wise Relationship Capital Partners Alan Brown Schroders James Cameron Climate Change Capital Takejiro Sueyoshi Chris Page Rockefeller Philanthropy Advisors Jeremy Smith Berkeley Energy Tessa Tennant The Ice Organisation Important Notice The contents of this report may be used by anyone providing acknowledgement is given to Carbon Disclosure Project. This does not represent a license to repackage or resell any of the data reported to CDP and presented in this report. If you intend to do this, you need to obtain express permission from CDP before doing so. PwC and CDP prepared the data and analysis in this report based on responses to the CDP 2010 information request. PwC and CDP do not guarantee the accuracy or completeness of this information. PwC and CDP make no representation or warranty, express or implied, and accept no liability of any kind in relation to the report including concerning the fairness, accuracy, or completeness of the information and opinions contained herein. All opinions expressed herein by CDP and/or PwC are based on their judgment at the time of this report and are subject to change without notice due to economic, political, industry and firm-specific factors. Guest commentaries where included in this report reflect the views of their respective authors. PwC and CDP and their affiliated member firms or companies, or their respective shareholders, members, partners, principals, directors, officers and/or employees, may have a position in the securities discussed herein. The securities mentioned in this document may not be eligible for sale in some states or countries, nor suitable for all types of investors; their value and the income they produce may fluctuate and/or be adversely affected by exchange rates. PricewaterhouseCoopers and PwC refer to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL). Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm s professional judgment or bind another member firm or PwCIL in any way. Carbon Disclosure Project and CDP refers to Carbon Disclosure Project, a United Kingdom company limited by guarantee, registered as a United Kingdom charity number Carbon Disclosure Project.