sustainability report - feralpi...2017/10/01 · sustainability report part one structure 2 the...

YEARS 2015 AND 2016

SUSTAINABILITYREPORT

Group profile,Identity, mission and strategy

Sustainability Report PART ONE

IdenTITY, MIssIOn and sTraTeGYThe Feralpi Group was founded in Lonato in 1968, fruit of the intuition of a group of entrepreneurs from Brescia guided by Carlo Nicola Pasini who seized the opportunities to develop steel for construction in the Italy of the so-called “economic miracle” period. Exploitation of a favourable location and application of advanced electric arc furnace-based technologies were at the heart of its early success. In 1970, a rolling mill was inaugurated and three years later Acciaierie di Calvisano was founded.Thanks to the technology of the mini steel mill, the company has pursued environmental protection and occupational health and safety goals starting from the early years and was a precursor of the area’s evolution of industrial culture. In 1974, the first flue gas cleaning system was adopted.At the beginning of the ‘90s, Feralpi braved a demanding internationalisation programme to seize the opportunities found in the Eastern European markets. In 1992, a steel mill was purchased in Riesa, in a land of age-old iron and steel industry tradition, which was modernised and brought up to a competitive level with Italian capital and expertise.

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Feralpi remains faithful to its original view summed up by the motto of the founder Carlo Nicola Pasini: “Producing and growing through respect for man and the environment”, according to which industrial production should be guided by principles of sustainability in order to be a source of well-being for the people who participate in it.

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Sustainability ReportPART ONE

Feralpi’s Mission

In 2004, because of progressive geographic diversification, Feralpi had to adopt a new corporate group structure through the creation of a holding company in charge of co-ordinating the businesses. In the years that have followed the 2008 crisis, the company has adopted a long-term strategy based on constant growth of efficiency, diversification and integration downstream and along with it, has seized opportunities that the economic situation offered. In 2009, the company DE.FI.M. was purchased and was later re-named Nuova Defim, which afterwards purchased Orsogril. In 2013, Feralpi Algérie was founded to support development of the market in Algeria, which is the third most important after Germany and Italy. In 2015, 50% of Caleotto S.p.A. was purchased, which allowed market outlets to be diversified. In that same year sizeable equity investments were acquired in the downstream processing sector (Presider, Metallurgica Piemontese Lavorazioni). In 2016, the former Stefana plant in Nave was purchased, guaranteeing its employment, in addition to equity investments in smaller companies.

To help enhance the multiple uses of steel by diversifying production towards higher value added steels

To strengthen internal know-how through the acquisition of new skills downstream of the production chain

To keep the steel manufacturing tradition alive and competitive in the area through constant innovation, respect for the environment, and economic and social sustainability

To boost international operations so as to seize global market opportunities

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At production level, strategy is pursued through:

a) Development in the special steels segment,

b) further acquisition of downstream productions and processing with the aim of vertically integrating and diversifying the business, making the chain shorter in order to be closer to the end customer and quicker in fulfilling their requests,

c) The search for new markets abroad that are able to compensate for the persistent weakness of the Italian market,

Use of the best technology is reinforced by constant research, often in partnership with international external organisations.

Strategy

The construction steel sector is structurally characterised by a strongly cyclical pattern that demands operational flexibility and financial solidity. As a result, Feralpi gives priority to allocating its profits to reserves, in order to support development and the constant pursuit of innovation in three strategic areas: production efficiency, plant safety and environmental protection.

The four key words of Feralpi’s strategy are:

During the accounted two-year period, the Feralpi Group continued a complex project of reviewing the governance system in order to reinforce the Group’s integration at the various levels: production (process planning and control), management (introduction of SAP and progressive IT integration), procurement (increasing coordination in purchasing procedures) and sales (management of complex customer relations driven by the growing importance of made to order productions).

DivERSiFiCATiON and vERTiCAL iNTEGRATiON of its activities

iNTEGRATiON of the functions in an increasingly complex and diversified group

iNTERNATiONALiSATiON of activities and markets

iNNOvATiON as the main competitive factor

The Group confirms the long-term strategies adopted so far: diversification, use of the best available technologies, vital importance of investments in research and development, personnel training, environmental and workplace safety protection, and active assumption of corporate social responsibility, as a vision that unifies the various aspects.

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Feralpi operates in the steel industry and is also marginally engaged in other sectors, like ecology and the environment. In addition to the economic, financial and commercial risks typical of business activities and specifically described in the annual report (in accordance with article 2428, paragraph 2 point 6 bis of the Italian Civil Code), the company addresses and controls operational risks related to such issues as: safety of the workplace and the environment inside and outside production sites; handling of the material; waste treatment; changes in legislation; uncertainty concerning interpretation and application by supervisory authorities.Steel smelting plants require constant monitoring of air emissions through advanced systems for extracting and reducing fumes and the dust treatment resulting from this process. The steel smelting plants are classified as at risk of major accidents according to Italian Legislative Decree No. 334/99, as amended in the Italian legislation, because of the zinc oxide and lead compound concentrations in the dust.Potential risks and opportunities also include climate change and its possible consequences. Being fully recyclable, Feralpi products have a negligible environmental impact; however, the production process requires high energy consumption, and therefore its indirect impact on the environment is significant and may contribute to climate change. Although the possible financial impact of climate change on the company’s operations have not been estimated in quantitative terms, it may affect energy procurement costs. Management is aware of these implications and takes them into account when shaping the Group’s strategies, constantly in sight of energy savings.As described in the section dedicated to environmental policies, the company uses the best available technologies, conducts research to save energy and reuse production scrap, and adopts the circular economy approach. This strategy allows Feralpi to take advantage of opportunities that may arise.To ensure the execution of the social and environmental risk analysis and to develop an integrated strategy in these areas, Feralpi has established a Sustainability Committee, whose activities are described in the section dedicated to governance.

Risks and opportunities arising from business activities, including social and environmental reputational risks

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sTruCTure

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The Group’s parent company is named Feralpi Holding S.p.A., with registered office in Brescia at 15 Via Aurelio Saffi, and head office at 11 Via Carlo Nicola Pasini, in Lonato del Garda, Brescia. With reference to the scope of the report adopted, which refers to the Group’s consolidated financial statements, Feralpi operates with production sites in four European Union countries (Italy, Germany, Czech Republic and Hungary), and with sales offices in Algeria.

For the purposes of this document, the Group’s structure is described in simplified form, mentioning only the subsidiaries. Information about the associates is contained in the report on operations accompanying the financial statements at 12.31.2016, to which reference is made.

The Group’s structure is divided into a core business, which focuses on metalworking activities, and a number of companies engaged in the management of equity investments in a variety of sectors, including environmental services. More specifically, the iron and steel business unit, coordinated by Feralpi Siderurgica S.p.A., which acts as a sub-holding company, is in turn divided into the Italian hub and the German hub, which comprises all companies located abroad and operating under the Feralpi Stahl brand (ESF Elbe-Stahlwerke Feralpi GmbH, headquartered in Riesa, Saxony).

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LEGE

ND

A Controllo

Partecipazione

Produzioni Siderurgiche

Lavorazioni a freddo - derivati

Commercio

Carpenteria metallica

Gestione Partecipazioni

Ambiente

Ittica

Altro

Finanza

COMPanY OrGanIsaTIOn CHarT2017

Control

Interest

Steel business

Cold drawn steel – downstream products

Trading

Metal structural work

LEGE

ND Equity Investment Management

Environment

Waste Disposal

Fish-Farming

Other

Finance

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GOvernanCe

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Feralpi Holding S.p.A. owns the operating companies, also through sub-holding companies on a cascading basis, and performs the control and coordination functions. The Group’s governing body is the Holding Company’s Board of Directors, elected by the Shareholders’ Meeting and composed of eight directors, among whom are elected the Chairman, vested with operational powers, the deputy chairman and the managing director. The Board, which meets every month, is the historical expression of a stable group of family shareholders, whose representatives serve in managerial positions and also hold most of the offices. Except for the independent director who is not a shareholder, the members of the Board are therefore selected among company managers on the basis of skills and experience gained at Feralpi, according to informal procedures based on the fiduciary relations between shareholders. Board members’ compensation, which during the reporting period did not change from the previous year, is based on the combination of three criteria: levels of responsibility, time dedicated to their duties, and expertise acquired.The Board of Directors draws up the group’s economic, social and environmental strategies, also by seeking out external opinions and specialised advice on the international market, assesses and approves the social and environmental initiatives proposed by the Sustainability Committee, and is the top body that receives the reports of critical issues coming from the activity performed by the Supervisory Board (SB) and the Sustainability Committee, each for its own responsibilities. In more general terms, the purpose of the activity developed within the Sustainability Committee is to support the Board of Directors in becoming knowledgeable of the social and environmental risk prevention themes.As for non-financial reporting, the Board examines the Sustainability Report every two years. The Report is the main document in which the Group’s environmental and social impacts are described and the relevant risks and opportunities are identified. The Group Chairman, who also chairs the Sustainability Committee, informs the Board of the committee’s activities, and the Board retains its powers regarding the decisions and guidelines concerning economic, social and environmental strategies. Following enactment of European Directive no. 95/2014/EU on the subject of non-financial reporting, the Feralpi Group is preparing a programme to switch to sustainability reporting on an annual basis starting from 2017.

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As required by law, the Shareholders’ Meeting appoints the three-member board of statutory auditors supported by a secretary. The Board of Directors appoints the Supervisory Board and the Sustainability Committee, led by the chairman of the Board of Directors of the Holding Company, who personally contributes to supplementing the proportions of the CSR (Corporate Social Responsibility) in the company’s mission. The strategic lines of Feralpi’s social and environmental policy are defined taking into account discussions with important stakeholders, such as personnel and the territory of reference, during periodic consultations and systematic opinion surveys.The remuneration of senior managers and executives (middle managers) includes incentives linked to business results and the achievement of specific objectives.

Feralpi adopted a Code of Ethics in conformity with Italian Legislative Decree no. 231/2001 that establishes the principles that should inspire the everyday conduct of all personnel and collaborators of the Feralpi Group when dealing with the stakeholders (http://www.feralpigroup.com/wp-content/uploads/2016/01/CODICE-ETICO-GRUPPO-2014-INGLESE.pdf). The Code of Ethics is subject to periodic revision following legislative developments. The Board of Directors of Feralpi Holding approved the latest revision on 27 February 2014 and afterwards extended it to all Group companies after Italian Law no. 190/2012 regarding “Provisions for preventing and combating corruption and illegal activities in Public Administration” went into effect.The Code of Ethics provides for anonymous and protected channels for the reporting of violations of the rules and principles contained therein. These guidelines guarantee the secrecy of the reporter’s identity and are addressed to the Supervisory Boards activated in the Group’s major companies.

Shareholders’ Meeting

Board of Statutory Auditors

independent auditor

Board of Directors

Supervisory Body

Sustainability Committee

THe GrOuP’s GOvernanCe sTruCTure

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PrInCIPLes OF THe COde OF eTHICs reFerrInG TO sTakeHOLders

MAiN PRiNCiPLES iN RELATiONS wiTh ALL

STAkEhOLDERS

RESPECT

IMPARTIALITy

TRUST

HONESTy

LOyALTy

SPECiFiC PRiNCiPLES ThAT GuiDE RELATiONS wiTh

EACh STAkEhOLDER

SHAREHOLDERS: TRuTh AND

TRANSPARENCyPERSONNEL:

DiLiGENCE AND PROFESSiONALiSM

SUPPLIERS AND CUSTOMERS:

COLLABORATiON

COMMUNITy: ENviRONMENTAL

PROTECTiON, SuSTAiNABLE

DEvELOPMENT

PUBLIC ADMINISTRATION: TRANSPARENCy

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3.1. . Supervisory Board (SB) activities

Three SBs operate within the Group: the SBs of Feralpi Holding and Feralpi Siderurgica are collegiate bodies composed of three members, while the SB of Acciaierie di Calvisano is a single-member body.The collegiate SBs consist of a Company employee acting as controller and two external members, among whom the Chairman is appointed. The Chairman of the Holding Company’s Supervisory Board is an external professional with specific legal expertise who provides updates on regulatory developments on an on-going basis not only to the parent company, but to all the associated companies as well. The Chairman of the SB of Feralpi Siderurgica has specific expertise on environmental and workplace safety issues. The SB of Acciaierie di Calvisano is composed of a single member selected from outside the company, with regulatory expertise in the environment and workplace safety. The expertise of the external members of the SBs provide the company with updated advice consistent with the principles set out in the Code and compliant with the economic, social and environmental legislation. The members of the SB remain in office for three years.In the course of the 2015-2016 period the SBs functioned on a continuous basis, providing recommendations and guidance to the respective Governing Bodies, while no actions or behaviours involving potential Company Code of Ethics violations were reported.In particular, the Supervisory Boards of Feralpi Holding and Feralpi Siderurgica held six meetings in 2015 and five in 2016, all duly recorded, as well as informal meetings and inspections carried out by individual members. The Supervisory Board of Acciaierie di Calvisano also performed six inspections both in 2015 and in 2016, all recorded.The members of the Supervisory Boards proactively collaborated on the process that will lead to the update of the respective Models in early 2017.Nuova Defim Orsogril also has an SB starting from 2016. In that same year, activities to introduce the 231 Model in FER-PAR and Feralpi Profilati Nave as well commenced.

ANTiTRuST COMPLiANCE PROGRAMME

Feralpi’s priority is to observe antitrust legislation as it is well aware that in this way its competitiveness on the market will increase.

Of all the business risks, antitrust is taking on more and more importance in everyday management of a business activity. Feralpi wants to turn the antitrust risk into an opportunity for growth, and for this reason it has drawn up a Programme for Compliance with the legislation and principles of the Antitrust law addressed to all Group employees and executives who represent the company in third-party relations, whether they are customers, suppliers, competitors, associations or consortia. The company has prepared an Antitrust Manual and an Operational Guide that contains all antitrust law principles and guidelines for the company’s employees exposed to antitrust risk. Furthermore, every year a training day managed by the Antitrust Compliance Officer is organised. The first training session for top management was already held on 16 September 2016. An annual Antitrust Audit is also planned starting from 2017.

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3.2. Activities of the Sustainability Committee

The Feralpi Group Sustainability Committee, formed in 2014, has carried out activities periodically during the two-year reported period. Thirteen departmental managers in Italy and Germany are committee members. The Committee plays a strategic role for Group Governance and reports directly to the Board of Directors, also by the personal participation of the Group Chairman. Its functions are to promote development of sustainability strategies. As proof of the importance Feralpi assigns to the CSR, all Sustainability Committee activity has been periodically reported to the Board of Directors starting from 2015, and the Board is responsible for assessing its opportunities and risks and for approving the lines proposed.During 2015, the Sustainability Committee was engaged in updating the materiality matrix, conducted in compliance with the GRI G4 guidelines. The Committee members have been involved both as part of a specific focus group which discussed the economic, social and environmental aspects most relevant to the company, and in the process for the approval of the new materiality matrix, which was presented and validated during the Committee meeting held on 28th October 2015.External consultants may participate on the Committee, which met seven times during the two-year period. At each meeting, the members are required to present specific initiatives in all areas relevant to the development of a Group CSR policy.The Sustainability Committee assists the Board of Directors in assessing the social and environmental risks arising from the Group’s activities. The assessment of these aspects during the reporting period led to no significant organisational changes. During 2015, the national and local newspapers reported a complaint on the grounds of infringement of the competition law in the iron and steel industry that involved a number of companies in the Brescia area, including Feralpi. In light of this circumstance, the Company decided to consider the specific GRI-G4 indicators belonging to the “Observance of competition protection legislation” aspect as material while awaiting the result of the investigation that is still open on the closing date of this document.The Committee played an important role in training, educating and updating management on CSR topics. In the various meetings of the 2015-2016 two-year period, it was constantly informed on the progress of the procedure to implement European Directive 95/2014/UE regarding introduction of non-financial reporting and on the impacts it might have on the Feralpi Group, even if it is not included in the scope of the report. The employee initiatives (Internal climate survey and WHP - Workplace Health Promotion project) and those supporting young people (Feralpi Bootcamp), the supplier initiatives (Symposium on social reporting topics and the EMAS Environmental Declaration), the projects associated with the environmental dimension (possible applications of circular economy, environmental and product certifications, Health and Safety Report) were also shared.

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Awards and recognitions:

Feralpi Siderurgica was finalist of the 2015 sixth edition of the Assiteca Award for the best risk management practices in Italian companies, with specific reference to the theme of innovative development of corporate welfare.

The Feralpi Group won the “Best Friendly Stand” award at the fifth edition of Made in Steel, held 20-22nd May 2015 at Fiera Milano Rho. The award was given for “the power and elegance that proved to be of the same intensity as a new concept of welcome. A sense achieved by combining prestigious furnishings with the coffee bar area and seats and by using an advanced technology that lets the guest easily and virtually step into the world of Feralpi”.

On 25th May 2016, on the occasion of the XI European Electric Steelmaking Conference & Expo at the Cini Foundation in Venice, Feralpi Siderurgica received the 2015 Environment Award initiated by AIM, the Italian Metallurgy Association, owing to its contribution to the promotion of the environment and sustainability culture.

The “ASL: un ponte tra istruzione e formazione” [Local Health Authority: a bridge between education and training”] project presented by the “Luigi Cerebotani” Higher Education School of Lonato del Garda together with Feralpi Siderurgica obtained special mention in the 2016 National Award “Didattiva: didactics for school-work alternation”. The recognition was announced during the “Orientainsegnanti” event organised by the entrepreneurs’ association Assoimprenditori Alto Adige, held on 9th November 2016 in Bolzano.

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PART TwO

THE CHOICES AND THE COMMITMENTS

Sustainability Report PART TWO30

WORk AND WELFARE

THe GrOuP’sCsr POLICYFor some time Feralpi has been pursuing the economic, social and environmental sustainability objectives with a multi-stakeholder approach. It is spurred by its conviction that companies do not have to limit themselves to being efficient economic entities, but instead they should also play the role of aware social and cultural players. The company embraces the principles advocated by the Sodalitas Foundation, of which it is an active member. One specific feature of Feralpi’s social responsibility is attention to the young generations, local rooting and spreading the industrial culture and values tied to diligence and work.

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Csr OBjeCTIves OF THe FeraLPI GrOuP

ATTENTION TO THE ENVIRONMENT SAFETy

LOCAL DEVELOPMENT

PROjECTS

NEW GENERATIONS RESEARCH &

DEVELOPMENT

INNOVATION

Sustainability ReportPART TWO 31

Feralpi’s participation in industry association

Feralpi supports a dense web of relationships with national and international associations important for its business through the Group companies. The association fields are divided into four sectors:

- In representing interests of its category, all Italian Group companies are members of Confindustria [Italian Manufacturers’ Federation] through the steel segment association Federacciai, the trade union federation Federmeccanica and the local associations where the plants are located (Associazione Industriale Bresciana [Brescia Industrial Association] and Unione industriali di Como [Union of Manufacturing Firms of Como]). The Feralpi Group is a member of Ramet, a Consortium for Environmental Research for Metallurgy that studies and monitors the impact of production activities on work environments and the territory. The German subsidiaries are members of the federation of steel industries, Wirtschaftsvereinigung Stahl (the German counterpart of Federacciai), of the industrial association of Saxony, Industrieverein Sachsen Chemnitz and of the local association of enterprises Vereinigtes Wirtschaftsforum Riesa. Feralpi Stahl also joins Deutscher Ausschuss für Stahlbeton e.V., Berlin, the committee for the definition of German industry standards (DIN), for the improvement and dissemination of construction products. Feralpi Holding is also a member of Associazione italiana aziende familiari (Aidaf), whose mission is to protect and promote the family tradition of Italian entrepreneurship.

- As regards the scope of technical associations, Feralpi regularly cooperates with Riconversider, Federacciai’s consulting company engaged in business organization, technological innovation and management of funds provided by European and national laws, and with Unsider, an Italian steel standardisation body dedicated to the dissemination of knowledge of international standards. Feralpi Holding, together with other enterprises, has established the CSR Foundation - National Study Center for the control and management of corporate risks - whose goal is to foster the dissemination of a culture of safety. ESF is a member of FEhS-Institut Duisburg

(Institute for construction materials); is part of BDSV Bundesvereinigung Deuscher Stahlrecycling- und Entsorgungsunternehmen e.V. (Confederation of German Steel Recycling and Waste Management Companies) and of ESN Entsorgergemeinschaft der Deutschen Stahl - und NE-Metall-Recycling-Wirtschaft e V. ESF is also a member of the Berlin Council of Economics (Beirat der Wirtschaft Berlin) and of the Saxony Harbour and Traffic Association (Sächsischer Hafen- und Verkehrsverein e.V. Dresden)

- In the field of research, Feralpi Siderurgica is a member of the Italian Metallurgy Association, whose mission is the dissemination of the science and technology of materials and their applications, and of Sismic, a Technical association for the promotion of steels for seismic reinforced concrete, and of Ente nazionale italiano di unificazione (Italian National Standardization Body -UNI), an association that studies voluntary technical standards. Feralpi Siderurgica and Acciaierie di Calvisano are part of the REACH Ferrous Slag Consortium, which assists member companies in the Echa registration process. Echa is the European Union agency that promotes the safe use of chemicals and is responsible for the registration, evaluation, authorisation and restriction of chemicals based on their level of hazardousness and the risks involved.

- In the specific area of social responsibility development, since 2004 Feralpi Holding has been a member of CSR Manager Network Italy and Europe, an association of professionals and managers who deal with corporate social responsibility, for the purpose of disseminating the sustainability culture.

The Association promotes CSR practices in the international economic context by facilitating relationships between Italian and foreign CSR professionals, taking an active role in international networks and developing relationships with the world’s leading research centres. Feralpi Holding is a partner of the Institute for Business Values (Istituto per i valori d’impresa - ISVI), which promotes socially oriented business development, and a member of the Sodalitas Foundation, the largest Italian association for the dissemination of corporate social responsibility principles and practices.


THe FeraLPI GrOuP’s sTakeHOLdersThe Feralpi Group boasts a consolidated tradition of involving its major stakeholders, and this tradition has been recognised as a distinguishing trait of the company’s identity since its origins. Over the years the company has developed a progressive inclusion strategy that after starting from its two strategic stakeholders - personnel and the local communities - has been extended to the other stakeholders as well, particularly to the suppliers.

Along with developing communication and collaboration activities with its stakeholders, Feralpi has systematically and progressively introduced the following tools:

1. preparation of the Sustainability Report every two years, starting from 2004;

2. the taking of a Corporate climate survey every two years, starting from 2005, which has been progressively extended to all major international Group Companies;

3. a survey of Public opinion of the citizens of Riesa, Saxony, concerning the activities, presence and impact of the Feralpi Stahl plants in the area;

4. formation of the Sustainability Committee, which since 2014 proposes the strategic decisions on frequency, content and methods for involving stakeholders, based on their importance, to the Board of Directors.

The involvement of stakeholders and the ensuing commitments, at times mutually agreed upon with the company, have been identified over the years on the basis of an opportunity-cost analysis, partly through the periodic monitoring of opinions expressed by the stakeholders and partly through institutional dialogue with their representatives (local administrative authorities and trade union representatives).

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THe FeraLPI GrOuP’ssTakeHOLders

PuBLIC auTHOrITIesTrade assOCIaTIOns

LOCaL COMMunITIesTerTIarY seCTOr 1

suPPLIers CusTOMers

PersOnneL

1 non-profit organisations, non-government organisations, artistic and cultural organisations, sport clubs, foundations.

sHareHOLders

COMPanY


STAkEhOLDER COSTS OPPORTuNiTiES TOOLS OF DiALOGuE

ShAREhOLDERS Need to reinvest the generated resources to ensure the company’s competitiveness and to postpone shareholders’ remuneration.

Small and stable group of historical shareholders interested the company’s long-term growth.

Communication through company bodies and frequent informal meetings between directors and shareholders.

PERSONNEL Corporate commitment to protecting employment and development of initiatives in support of safety, training and corporate welfare.

Motivation, personal loyalty; increased technical and management know-how to ensure growth in expertise; reduced risks through high occupational safety performances.

The periodical VerdeFeralpi, biennial Company Climate Survey, preparation of kiosks and notice boards, company Intranet, dedicated website section.

SuPPLiERS Supply chain control; significant disparities in environmental and social awareness between suppliers; costs of monitoring and controlling materials in order to ensure high standards of quality.

Targeted involvement of the most sensitive suppliers and sharing of initiatives regarding environmental protection. Growth potential for CSR through cooperation on projects carried out on a partnership basis.

Initiative addressed to the major suppliers concerning CSR, circulation of the periodical VerdeFeralpi, dedicated website section, trade shows.

CuSTOMERS The persistent weakness of the domestic long rolled section market compels Feralpi to compensate for the lack of orders by identifying new special steel market outlets abroad and downstream of the production chain.

Development of the foreign markets; acquisition of equity investments in activities downstream of production capable of diversifying the range of customers and of ensuring stability of production upstream.

Customer satisfaction, circulation of the periodical VerdeFeralpi, dedicated website section, trade shows.

LOCAL COMMuNiTiES

The company deems it necessary to regularly attend to relations with the local communities and recognise their needs through dialogue with the local administrators, applying public opinion methodologies and by participating in groups on the web.

Cooperation with the territory and local visibility reinforce the positive image of the company with the local communities and bolster the relationship of trust with representatives of the local governments in all regions where there are Feralpi plants.

Circulation of the periodical VerdeFeralpi, biennial Public opinion survey on residents of the city of Riesa.

PuBLiCAuThORiTiES

Rising costs generated by the constant introduction of bureaucratic obligations, the complexity of taxation and regulatory uncertainties.

Strengthening of the Group’s positive reputation by collaborating with public technical bodies in the environmental field and professional training.

Company website and targeted distribution of the periodical VerdeFeralpi to local administrators.

Identification of opportunity-costs associated with each stakeholder


THe FeraLPI GrOuP’ssTakeHOLders

PrOCess and PrOduCT InnOvaTIOn

> CusTOMers> suPPLIers> InsTITuTIOns> eMPLOYees> PuBLIC adMInIsTraTIOns

CuLTuraL aCTIvITIes

> TerrITOrY> eMPLOYees> InsTITuTIOns> TerTIarY seCTOr> PuBLIC adMInIsTraTIOns

COMPanY WeLFare aCTIvITY

> eMPLOYees> YOunG PeOPLe> InsTITuTIOns> PuBLIC adMInIsTraTIOns

sPOrT sPOnsOrsHIPs and Perks

> TerrITOrY> YOunG PeOPLe> InsTITuTIOns> TerTIarY seCTOr> MedIa

TraInInG / eduCaTIOnaL

aCTIvITIes

> YOunG PeOPLe> eMPLOYees> InsTITuTIOns> TerrITOrY

MedIa reLaTIOns

> TerrITOrY> eMPLOYees> InsTITuTIOns> CusTOMers/suPPLIers> Banks

> CusTOMers> suPPLIers> InsTITuTIOns> eMPLOYees> PuBLIC adMInIsTraTIOns

Trade sHOWs, WOrksHOPs, evenTs


sTakeHOLderenGaGeMenTSince constant listening to and dialogue with all stakeholders are considered strategic, over the years the company has developed communication and consultation channels that are an established tradition in business practices.The main external communication channel is the portal www.feralpigroup.com, which in 2016 was totally updated, enriched with multimedia content and made even more easily accessible by all types of devices and browsers. The company website is organised into dedicated areas with restricted access for every significant stakeholder (customers, suppliers, partners, employees) and highlights the sustainability theme starting from the homepage.

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Traffic was high during the period under review, in terms of both number of sessions and page views. The dynamics also show that peaks higher than 600 sessions in only one day were reached. The high percentage of new sessions, meaning users who accessed the Group website for the first time, implies attainment of a better indexing than in the past. This is also the result of continuous updating of the website pages in its various sections, particularly that of the news. The fact that 23.3% are mobile phone accesses also means that the website (developed on a responsive platform) meets the growing need for information of mobile users who require a quick to reach and easy to navigate website.

HIGHLIGHTs OF THe www.feralpigroup.comPOrTaL

55,981sessions/visits

58.88%new sessions

(estimated percentage of the first visits)

2.48pages/session

(average number of pages viewed during one session)33,716

users

138,990page views

(total number of pages viewed)

* data from 04.01.2016 to 12.31.2016

58.90%RETURNING

VISITOR

41.10%NEW VISITOR


The company periodical verdeFeralpi was created in 2005 by several employees on their own initiative, and it keeps all personnel and the major customers and suppliers informed. In 2015, when the periodical celebrated its tenth anniversary, VerdeFeralpi’s structure and graphic design were renovated and its content became richer.At the same time, circulation of the company’s house organ was extended in both the paper and digital versions. Written in both Italian and German, the paper magazine was distributed by ordinary post to over 3,000 recipients in Italy and Germany. The reference target comprises internal stakeholders (employees, collaborators) and external stakeholders (customers, suppliers, public entities). During the period from 1st April 2016 (when the new Feralpi Group website went online) to 31st December 2016, the VerdeFeralpi page (browsable and downloadable) recorded 843 views. To meet the specific needs to communicate with young people on the topic of professional training, apprenticeship and employment prospects in the Feralpi Stahl Group, the company launched the Feralpi Echo paper containing news and updates, and edited by the personnel department of the Riesa plant.

Migration to the new employee portal, HR Infinity Feralpi, took effect for the Italian companies starting from january 2016, at the same time the new salary processing software was introduced.This portal lets each collaborator consult their salary statements of the last two-year period and the relevant income tax statements issued by the company, as well as general company announcements, measures and instructions, and it contains a section dedicated to the company system of arrangements.Compared to the previous Share/HR portal, it is a true evolution since:- it is, for all practical purposes, part of the salary processing

suite the Group uses and will permit computerised management of the permit request/authorisation flow;

- it can be integrated with the on-line Zucchetti platform for managing flexible benefits being introduced to the Feralpi Group.

To ensure that even those who do not have an Internet connection and PC can access the portal, work stations where pay statements and other important documents for the worker can be printed are being installed in all major plants in Italy.

The Company Climate Survey, conducted every two years and now at its sixth edition, is a compilation of the opinions of all Group workers on quality, safety and interpersonal relations at the workplace topics, company services, Group environmental policies and local social issues.In Germany, Feralpi Stahl’s management periodically intervenes with public bodies, advisory committees and local decision-makers on matters concerning sector regulations, production issues and, in general, relationships with local communities. The mayor and City Council of Riesa, the government of Saxony and the Saxony department of the environment and agriculture (SMUL) are institutional interlocutors with which the company has been able to build up a dialogue based on reliability and mutual esteem.During the reported two-year period, Feralpi Stahl kept its promises to periodically inform the public on the emissions in the areas adjacent to the plants, and reported all measurements taken by the BUND Sachsen association from july 2015 until june 2016.


Feralpi Stahl commissions an Opinion Survey amongst residents of the town of Riesa every two years in order to monitor the trend of opinions of the citizens on the company’s economic and social role in the surrounding region and their opinions on its decisions taken on the subjects of environmental protection, employment support and support given to local well-being.

The customer satisfaction survey, taken every three years, applies a quali-quantitative approach and monitors the opinions of the most important customers.

The external communication activity is carried out through several events organised directly by the Group or events that the Group takes part in throughout Italy through its subsidiaries and investee companies.The activity linked to sustainability topics has been particularly intensive. Especially noteworthy were the conference “Green Act: what are the prospects? Measures to stimulate the green economy in order to restore competitiveness to Italy’s economy in the European framework” (Milan, Bocconi University, 18 May 2015), the conference “Last Call to Europe” organised by Sodalitas Foundation (19 june 2015), and participation in the 36th National Conference of AIM entitled “Metallurgical industry, circular economy and sustainability” (Parma, 21 - 23 September 2016). Feralpi also took part in the ITALIAN BUSINESS & SDGs Annual Forum of the Global Compact Network Italy (Venice, 26 September 2016), in the Socialis Observatory “Corporate social responsibility. Going towards implementation of Directive 95/2014: the results of the “public consultation” (Rome, 26 September 2016) and support given to the CSR and Social Innovation event (Bocconi University, Milan, 4 and 5 October 2016).

Together with other primary companies in the sector, Feralpi Siderurgica took part in the managerial steering group set up by the IEFE - Bocconi University Green Economy Observatory and contributed to the development of the Green Economy and knowledge in the field of sustainable economy. Feralpi Siderurgica provides support in identifying and monitoring the most significant changes in the industry, and in particular in intermediate and consumer markets, to promote the development of sustainable products, offer a laboratory where innovative tools can be tested, interpret the regulatory changes and create a setting for comparison and exchange of good practices.

Initiatives focused on merely technical aspects were not lacking, such as participation in the New Trends in Tall Buildings Conference organised by the Milan Institute of Technology (9 April 2015) and support given to the “Day dedicated to occupational health and safety”, in collaboration with AIM, the Italian Metallurgy Association, and the Lecco Institute of Technology (Lecco and Como, june 2016).Of the training events for the younger generation, mention is to be made of the company tour part of the ERASMUS+ project (Lonato del Garda, 26 September 2016) and participation in the SME WEEk - LET’S GET INDUSTRIALISED (Brescia, 7-12 November 2016).The Group also decided to be present at two trade shows in Algeria, Batimatec (Algiers, SAFEX Exhibition Centre, 3-7 May 2015) and in Italy at “Made in Steel” (Milan, Rho, Fiera Milano, 20-22 May 2015).The 2015 Milan Expo was held in 2015 (1 May - 31 October 2015). The Feralpi Group was one of the key players in building the Tree of Life in the Italy Pavilion by supporting the Orgoglio Brescia Consortium. The Feralpi Group’s steel played the starring role at the 2015 Milan Expo, also thanks to the products of Nuova Defim Orsogril, which supplied the cor-ten steel grids for Brazil’s Pavilion, the pressed grating for a terrace of the Chinese Pavilion and the electrowelded mesh for the vertical gardens covering the technical rooms.Many other initiatives crossing through a variety of themes complete the range of external events, such as participation at the conference organised by AIB (Associazione Industriale Brescia - Brescia Industrial Association) and ATS Brescia entitled “The WHP (Workplace Health Promotion) in Brescia, periodic round table discussion for member companies” (Brescia, 23 September 2016) and SUPERNOVA (Brescia, 1 and 2 October 2016). During October 2016, Feralpi was one of the key players of the National Family-Run Companies Conference (Taormina, 1 October 2016) and an event to inaugurate the second DI.MA. plant was organised (Brescia, 7 October 2016). Feralpi Siderurgica hosted the 5th CERISMAS Management Forum the following month (4 November 2016).


sTakeHOLder enGaGeMenT OBjeCTIves and PrOGraMMes

Stakeholder engagement objectives and programmes are periodically proposed at Sustainability Committee meetings. The committee’s task is to monitor them and support the departments to which they are dedicated in the Group companies. In recent years, Feralpi has singled out four long-term lines of commitment: promoting health in the workplace, developing company welfare, the technical training programmes and involving the supply chain in the environmental protection practices. The last paragraph of the chapter is dedicated to Feralpi’s presence in the web discussion groups, a phenomenon sure to gain increasing influence in forming public opinion, even on the local level.

4

% valuesFeralpi holding

FeralpiSiderurgica

Acciaierie di Calvisano

Nuova Defim Orsogril

FER-PARFeralpi Stahl

Total

Participated 29.7 17.9 8.7 9.1 4.5 3.4 10.5

Is familiar with them 48.1 52.1 52.2 36.4 38.6 28.1 41.2

Has heard about them

11.1 15.6 26.1 38.9 41.0 39.1 29.1

Is not familiar with them

7.4 12.1 11.6 14.3 11.4 27.7 16.9

does not indicate them

3.7 2.3 1.4 1.3 4.5 1.7 2.3

Total respondents 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source: 2017 Company Climate Survey

Table 1 - Levels of employees’ awareness of and participation in CSR programmes


In addition to these four lines intended to be pursued in the future years as well, Feralpi has developed cultural initiatives involving local communities. Indeed, this type of involvement for a Group that operates at the international level is also achieved with the encouragement of international relations between the Local Governments and the residents of the two towns where the Group’s most strategic plants are located: Lonato del Garda and Riesa, in Saxony. Feralpi encouraged twinning the two towns in 2012 and has afterwards backed collaboration initiatives between them. In 2016, Feralpi sponsored twinning the Choir of the Lonato Basilica with the konzertchor of Riesa, and on 24th April 2016 they gave a vocal concert together at the church in Riesa-Gröba.

The local synergies are a driving force able to trigger and encourage the march of training for the young generation. I am proud because we have the confirmation of having companies in our area that are willing to invest in education, even technical.

Roberto Tardani, Mayor of Lonato del Garda, 2015.

“ “

Feralpi believes in integrating theoretical training with practical experience when preparing the best expertise for industry. This is why it continuously cooperates with the schools, universities and local governments to organise school-work alternation programmes. Consistent with this policy, Feralpi participated in the creation of the new instrumental chemistry laboratory named after Carlo Nicola Pasini at the Cerebotani Higher Education School of Lonato del Garda, in collaboration with the province of Brescia, the Municipality of Lonato del Garda, the School and other companies that contributed to the project.


4.1. Development of the occupational health promotion programmes

Attention continued to be concentrated on personnel in 2015-2016. Following the initiatives to further improve working conditions undertaken during the previous two-year period with the “Zero Injury” programme, Feralpi renewed its cooperation with the Lombardy Region in the European workplace health Promotion (WHP) programme.

The whP Project (Workplace Health Promotion), which promotes health in the workplace, is an European initiative to support companies that want to invest in the health and well-being of their employees. Several Regions and Institutions have implemented the initiative in Italy, led by the temporary associations ATS in collaboration with Confindustria. Through its WHP network, the Lombardy Region drew up a “WHP Manual” that provides companies with “good practices” to commence activities that promote health.

Feralpi embraced the network with a number of three-year initiatives aimed at promoting health in the workplace. The programmes to improve nutrition in the canteens involved the contractors. The programme to encourage smokers to quit the habit adopted a totally psychological method and drew in a work group seriously disposed to quit smoking. The early results confirmed the soundness of the approach for a considerable number of participants. Three editions of the course were organised. Two were for the employees of Feralpi Holding, Feralpi Siderurgica and Acciaierie di Calvisano and one was for the personnel of Nuova Defim Orsogril. Twenty-four out of a total of 35 participants quit smoking. What’s more, 14 Feralpi Siderurgica employees quit smoking voluntarily during the reported two-year period. As for the encouragement of physical activity, a yoga course was launched, in addition to the organisation of several company walks, with 15 registrants in 2015 and 10 in 2016. Other initiatives started in the project concerned personal well-being and family-work balance, the fight against alcoholism and drug addiction, road safety and sustainable mobility, and health education.


The promotion of occupational health and safety at the Riesa plant led to several initiatives that are in included in the company agreements. A health club dealing with risks due to addiction and with the evaluation of the danger of psychological stress was formed. A system for managing occupational safety (AMS) was started in collaboration with the Wood and Metalworking Industry Association (BGHM) in order to obtain the SmS (Sicher mit System) mark of quality. A Head of fire-fighting safety was trained and the personnel performed practical fire drills in collaboration with the Riesa fire brigade.The Personnel’s Health Day was organised at the ESF – Elbe-Stahlwerke Feralpi plant in Riesa. All employees had the possibility to learn about many health and accident protection topics and to receive flu vaccinations during the six-hour days on 10th November 2015 and 10th October 2016. Participating in the two editions were the AOk Sickness fund, offering eye tests; the Wood and Metalworking Industry Association, offering personal skin care checks; and IBS-Ilona Bachmann Service (workwear), which offered a foot scan examination.

Continuation of the whP project in Feralpi Group’s companies in italy:

2014 Promotion of a proper diet and to quit smoking

2015Promotion of physical activity, personal and social well-being and family-work balance

2016Road safety and sustainable mobility, fight against alcoholism and drug addiction


4.2. Developments of the Feralpi Bootcamp programme

The Feralpi Bootcamp programme that started in 2014 pursues the object of supporting professional training of young people locally with innovative activities. Three guiding intervention principles were followed during the two-year period: one dedicated to professional guidance, another to school-work alternation experiences, and another to higher training courses.

As regards guidance, the initiative “FerPlay, Life is Teamwork” for employees’ children aged 15 to 19 took place in September 2016. The goal was to demonstrate the similarities between sports activities and company activities starting from a basic element of success of both: be able to work together by sharing capabilities and resources.With regard to School-Work Alternation, a training course for students of the last two years of secondary schools lasting eight weeks was held. It was divided into three distinct phases and entailed three internships of two, four and another four weeks. In addition to being partnered in the field, the initiative comprised 110 hours of classroom training provided by company technicians, suppliers of services and technological partners of Feralpi. The first phase commenced in 2015 at Feralpi Siderurgica, and involved ten students of the Cerebotani Higher Education School of Lonato del Garda. The second, started in 2016, involved 14 students of the Cerebotani Higher Education School and the Don Milani Higher Education School of Montichiari, who carried out the internship at Feralpi Siderurgica and Acciaierie of Calvisano. As far as higher education is concerned, two “Higher Technical Education and Training” (Istruzione e Formazione Tecnica Superiore - IFTS) courses lasting 960 hours each were held. In these initiatives scheduled in the two-year periods 2014-2015 and 2015-2016, the Feralpi Group collaborated with the best training institutes in the area. A third IFTS course will be held in 2017 at the Lonato, Calvisano and Nave plants. Feralpi Sider+,

the ideal continuation of the 2015-2016 IFTS course, was started in September 2016. The course lasted 128 hours and is of interest to 16 IFTS specialised workers and technical secondary school graduates.

One of the activities addressed to the families of its employees following the vocational guidance project “Make the right choice!” started in 2014 for young people aged 18 to 29 is an initiative the Group organised on 23 December 2015 for the


4.3. Initiatives to involve the supply chain

Special attention was paid to the initiatives to involve suppliers in the CSR themes during the reported two-year period. On 23rd

june 2015, Feralpi Siderurgica organised a day to present the Group sustainability policies to a panel of important suppliers (16 participants), selected based on an assessment of their potential sensitivity to the theme. The day, during which Feralpi explained the attainment of the EMAS (Eco-Management and Audit Scheme) environmental declaration by the Lonato plant, was symbolic of the foothold for proper application of the GRI-G4 indicators regarding the monitoring of Feralpi’s supply chain and a helpful basis for future partnership initiatives with the suppliers. The next initiative satisfaction survey, with a 93.7% response rate, showed that most of the participants would be willing to voluntarily support over-compliance practices proposed by Feralpi as part of CSR.

4.4. Initiatives aimed at forming opinion on the web

In collaboration with Ramet – a Consortium for the study and monitoring of the impacts of the production activities on the work environments and territory - Feralpi joined the geo-referenced website Qcumber (www.q-cumber.org), which promotes sustainability through the voluntary collaboration and networked sharing of information and reports gathered over the territory regarding the quality of the surrounding environment, also by circulating subjective experiences and reports of critical issues and potentials that are made public on the web in real time. In Feralpi’s opinion, Qcumber is an opportunity to learn of facts, observations and opinions on the environment expressed at the local level and to step in to increase its undertaking and spread its informed position whenever necessary.

Feralpi participates in local Technical Scientific Committees (TSCs) and Technical Professional Panels (TPPs) and is actively involved in the definition of the training profiles relating to higher technical education and training courses (istruzione e Formazione Tecnica Superiore - iFTS) in the province of Brescia.

families of the Lonato and Calvisano personnel, specially focused on the children attending the last three years of elementary school: “The Savings Tree”. The purpose of the day organised in collaboration with the “Foundation for Financial and Savings Education” was to simply and immediately convey to children the value of earning through work, the role money plays in ensuring the well-being of the individual and of the community and the need to use it and save it while avoiding excess, also through a company tour.A day dedicated to the children or relatives of employees (for ages 3 to 12) was organised at Nuova Defim Orsogril together with the National Firemen’s Association. Games were offered with the aim of making children aware of and knowledgeable of the safety theme. The title of the day, held on 19 November 2016, explained the initiative all on its own: “Pompieropoli” (“Firemen’s City”).

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