Letter to our stakeholders

Flavio CattaneoLuigi Roth

2012 was also a year of significant achievements for Terna, confirming the Group's capability to grow and produce excellent results for the eighth consecutive year. The milestones we reached have also been a source of considerable recognition for us: Terna received the prestigious "International Utility Award 2013" from the American Edison Electric Institute, an award which crowned us the best of the European companies in the sector in terms of Total Shareholder Return for the last three years. This award allows Terna, which already in 2010 had earned the same recognition for the 2007-2009 three-year period, to be at the top of the European electrical utilities classification during the 2007-2012 period. Our pride in this success is strengthened by the fact that, due to the role Terna plays in the electric system, it also has a positive impact on the country during a period of persistent and acute economic, political and social crisis.

Investments made from 2005 to today reached 6.5 billion euro, and in 2012 exceeded 1,200 million euro for the second consecutive year, a record level. A result which it was possible to achieve partly thanks to the constant, profuse commitment of everyone involved to identify localisation solutions compatible with the requirements of the territory whilst also respecting the environment. The grid development activity, which is carried out with a sense of responsibility and respect for stakeholders, allows us today to achieve several objectives simultaneously: provide the country with efficient transmission infrastructures in line with the requirements of the production system, create employment with over 150 sites open in Italy, and contribute to reducing the CO2 emissions of the electric system. All this with realisation costs always lower than the economic benefits generated for the system, and with constant attention to sustainability and safeguarding for future generations.

The Group reorganisation also contributed to the positive trend of 2012. It was implemented last year and enables a better focus on the strategic objective of supporting core business, aiming to create tangible benefits for the electric system and entrepreneurial development of unregulated activities. Our Strategic Plan sets out completion of the business model over the next few years through consolidating and developing the service activities in the fields of engineering, O&M and fibre optic housing. Shared principles and values were upheld during the reorganisation, including by the adoption of the Code of Ethics by all Group companies.  Responsible behaviour and a relationship of trust with the stakeholders are both the foundation and objectives of our business approach, as Terna's adhesion to the Global Compact and active participation in its Italian activities show.

Listening to the opinions of our stakeholders is a valuable and irreplaceable instrument in order to ensure our activities have clear direction. Among the many discussions held last year, those relative to the Grid Development Plan are the most noteworthy: the presentation organised by the Authority for Electricity and Gas with the sector operators and the meetings with the consumer associations requested by Terna were important opportunities for comparing and understanding the positions of the stakeholders, which help us to identify areas for further improvement. External stakeholders and employees were also involved in a survey that aimed to gather opinions and learn about expectations of Terna solidarity initiatives. 

On the internal front, we took care as always of the reinforcement of skills through high investment in training, only marginally and temporarily slowed down by the aforementioned organisational changes. In 2012, we inaugurated the new Campus, our company university established in an electricity station at the gates of Rome (in a building originally intended for maintenance), fully restructured and equipped with the latest technologies, allowing better organisation and use of training courses. The teaching positions are held by expert employees, guaranteeing continuous training oriented at the dissemination of the specific technical knowledge of Terna, fundamental during a phase of generational turnover. This turnover involves the insertion of young employees, including a growing component of female workers, with an increasing presence in managerial positions, and a renewal of skills which contributes to maintaining professional excellence.

The Sustainability Report we are presenting is in response to the decision, adopted eight years ago, to provide stakeholders with full and transparent information on Terna operations. In addition to the publication of the Report, this decision can also be seen in the constant quest for improvement. With regard to the reporting standards, we continue to apply the GRI guidelines, adopting any changes to them. We think it is worthwhile to present information to stakeholders that allows them to compare the performance of other companies, including those operating in other countries. To facilitate the interpretation of Terna's results, this year we are once again publishing comparative analyses with other companies for a few key indicators; as far as we are aware, this distinguishes our Sustainability Report from others on a national level.

However, every company has its particularities, whether in the business model or how it interacts with environmental and social issues. To better express these interactions, to allow more complete information to be offered to stakeholders, in 2011 we participated in the Pilot Program of the International Integrated Reporting Council, adhering to the criteria necessary to start coordinating content which last year was mainly focused on the Terna website. In this respect, we expect this project to lead to improved stakeholder communications, an objective already partly achieved with the 2012 Annual Financial Report and this Sustainability Report, implementing a gradual alignment process.

2012 was another year of successes, which the strategic objectives of the Group project forward into the coming years. Our continuous commitment to process improvement and the ability of creating value for the shareholders and all stakeholders, allows the whole Terna team to confidently face future challenges.

 

The Chairman

 Luigi Roth 

Luigi Roth

Chief Executive Officer

Flavio Cattaneo

Flavio Cattaneo