Governance tools

The governance of economic, environmental and social factors is also managed through a structured and coordinated system of tools that ensure consistency with the mission, values and strategies of Iren Group.

 

Code of Ethics

The Code of Ethics transposes the mission, vision and values of Iren Group into conduct standards for all employees and for all those who work with and for the Group. It is also the cornerstone of the organisational model aimed at preventing the crimes laid down by Italian Legislative Decree 231/2001, including corruption.

In December 2020, Iren’s Board of Directors approved the updating of the Code of Ethics, intending to keep it dynamically aligned with the Group’s organisational changes and regulatory developments, with particular regard to the Italian Legislative Decree 231/2001. The Code of Ethics also focuses on the need for sustainable development, considered fundamental by Iren Group, which believes that behaviours are becoming increasingly ethical and equitable starting from the pursuit of social, economic and environmental sustainability.

Iren Group strives to disseminate and promote awareness of the Code of Ethics to its employees and everyone who works for the Group. To this end, 535 employees were involved in training activities on the Code in 2020 and, following the update of the Code at the end of the year, specific training for employees and dissemination, for all recipients, through the widest channels available, including the websites of Group Companies, the Intranet, notice boards and the suppliers portal, is planned for 2021.

The Code of Ethics defines the general conduct criteria regarding respect for the Constitution, laws, regulations and ethical principles, human rights and personal dignity, respect for and protection of the market, competition, and industrial property, protection of personal data, the correct use of technology and the computer system and environmental protection. The Code also regulates the criteria of conduct in relations with shareholders and personnel – with particular reference to personnel policies, occupational health and safety, duties of employees, conflicts of interest and use of company assets – in relations with customers, suppliers, external collaborators, public institutions, judicial agencies, public supervisory authorities, political and trade union organisations. Other specific rules of conduct concern confidentiality, internal management and communication of information, rewards and benefits, management of promotional activities, sponsorships and contributions, aspects of accounting, taxation and internal controls, reporting and whistleblowing.

Observation of the content of the Code of Ethics by all those who work on behalf of Iren is of fundamental importance for the smooth operation, reliability and reputation of the Group.

Senior Executives and Managers of company bodies and department undertake to disseminate the knowledge and sharing of the rules of the Code of Ethics, to make employees and collaborators follow them, to encourage and protect reports of possible violations, and promptly report any acceptance, taking the immediate and essential corrective actions required by the situation.

With regard to the external parties to whom the Code is addressed, the Group undertakes to introduce contractual clauses and/or to obtain signed declarations that formalise the acknowledgement, acceptance and compliance with the principles set out in the Code. Explicit acceptance of the Code of Ethics is required by all suppliers from the offer stage, without the possibility of exceptions or amendments. Companies participating in the tenders are required to report any attempt to disturb, any irregularities or misrepresentation by any competitor or party involved, during the tender and/or when performing the contract, to the Iren Group company that calls for the tender, as well as any anomalous request or demand from Group employees or anyone who can influence the decisions of the tender or the contract and its execution.

The Code of Ethics requires all the Group’s employees and collaborators to report to the Supervisory Body or their superiors or Iren’s Internal Audit and Compliance Department, depending on their area of competence, any possible violation of the Code of Ethics or any request for infringement that has been addressed to them. Such reports can also be made anonymously with all the guarantees provided by the law on so-called Whistleblowing.

The Group Companies and the Supervisory Bodies shall ensure that those who have made the reports are not subjected to retaliation, discrimination or, in any case, penalisation, whether direct or indirect, for reasons connected directly or indirectly to the report, thus ensuring the appropriate confidentiality.

Iren ensures the verification of each notice of breach of the Code of Ethics, received pursuant to the methods and through the channels specified by the Code, the assessment of the facts and the application of appropriate sanctions in case of breaches. In particular, it is the responsibility of the Supervisory Body to monitor, within the scope of its competence, compliance with the Code of Ethics, with a view to guarding against the risk of committing the offences envisaged by Italian Legislative Decree 231/01 and formulate its own observations regarding alleged violations of the Code of Ethics of which it is aware, reporting any violations found to the competent company bodies.

Iren’s Corporate Social Responsibility and Local Committees Department has the task of promoting awareness, ensuring the updating, dissemination, interpretation and implementation of the provisions of the Code of Ethics. The Code of Ethics is available on the Group’s website in order to achieve maximum dissemination and understanding. Furthermore, to support ethical conduct and compliance with the law and Code of Ethics, Iren Group makes available information concerning laws, regulations and insights regarding quality, safety and environment to all stakeholders, both internal and external. This can be found on the Company’s website and Intranet.

In 2020, the Group received one report of a violation of the Code of Ethics which, after the preliminary investigation carried out, was not found to be justified.

 

Organisation model 231

Iren and the Group’s main Companies have adopted organisation, management and control Models pursuant to Italian Legislative Decree 231/2001 (Model 231), which configure a structured and organic system of control activities and procedures to prevent, where possible, conduct that could constitute the commission of the crimes covered under the Italian Legislative Decree 231/2001, which also include crimes related to corruption.

In 2020, the project continued to revise and update Models 231 maintained by the holding company and the main Group Companies to ensure that they are consistent over time with the organisational changes that have taken place and effectively introduce new criminal offences by the legislator.

The revision of the Models is carried out following a risk self-assessment methodology consisting of the identification and self-assessment being conducted by management (“risk owners”) in processes, sub-processes or activities at risk of 231-related crimes, also assessing potential risk, the control level and the remaining risk of each sensitive activity.

Management submitted the updated Models 231 to the Supervisory Bodies, approved by the Companies’ Boards of Directors and published on the Company Intranet, informing all employees that they are required to consult the Model and adopt behaviours that comply with its provisions.

The adequacy, effectiveness and suitability of the Model 231, of which the Code of Ethics is an integral part, is monitored by the Supervisory Body.

Each recipient of the Model 231 is required to report any breaches or suspected breaches of the Code of Ethics or the control principles outlined in the Model (so-called whistleblowing). For this purpose, the Group adopted a procedure for handling reports to the Supervisory Body of the Model 231 that governs how reports are communicated and regulates the tasks and verification activities performed by the person receiving the report. Reports are always handled (for some companies also through the “Comunica Whistleblowing” IT tool) in compliance with the confidentiality of the whistleblower’s identity and the principles and provisions of the Organisational Model 231. The Group promotes the whistleblowing procedures through specific training, also with a view to developing a positive corporate culture.

Any reports received from internal and external parties during the period about alleged breaches of the Model or Code of Ethics are discussed in the Supervisory Body’s half-yearly report to the BoD.

In 2020, a report was made to one of Iren Group’s Supervisory Bodies. The report was processed and managed in compliance with the provisions of the Procedure for the management of whistleblowing reports to the Supervisory Body of suspected breaches to the Organisational Model 231.

Supervisory Bodies

Iren and the main Group Companies established, with a resolution of the Board of Directors, the Supervisory Body (SB) according to Italian Legislative Decree 231/2001, tasked with monitoring the functioning and compliance of the Model and updating it, and with the objective of meeting the requirements of autonomy, independence, professionalism and continuity of action. The Supervisory Body is vested with the powers of initiative and control necessary to ensure effective and efficient supervision of the operation of and compliance with the Model under the provisions of art. 6 of Italian Legislative Decree 231/01. The Supervisory Body carries out, with the assistance of the competent Company Departments, checks on the areas of activity that are considered at risk under the Italian Legislative Decree 231/2001, and half-yearly reports to the Board of Directors on its activities and findings. When deemed necessary, the Supervisory Body gives suggestions aimed at improving the control system for activities and oversees their implementation. The assignment of these responsibilities to a body equipped with autonomous powers of initiative and control, together with the correct and effective performance of the same, are fundamental prerequisites for the exemption from liability provided for by Italian Legislative Decree 231/01.

Corruption prevention

In the performance of its activities, Iren Group Companies manage relations with the public administrations and with third parties, regulated by the principles established by the Code of Ethics and the Model 231, which provide the guidelines and codes of conduct that aim to prevent, insofar as possible, the commission of offences pursuant to the Decree. Company processes are also regulated by specific procedures defining roles, responsibilities and methods of control, establishing the traceability of processes and the clarity of authorisations to ensure transparency and honesty in company’s activities.

In 2020, the Supervisory Body completed the project to update the parent company’s Model 231. This project included mapping processes and the self-assessment of activities at risk of 231-related crimes. The project identified processes and company areas “sensitive” to the potential risk of committing the offences indicated in the Decree within the activities carried out by the company. In particular, sensitive activities at risk of corruption were identified, for which suitable internal rules were provided to supplement the Code of Ethics (general control principles and specific conduct and control protocols), such as, but not limited to:

• the selection and formation of contractual relations with suppliers;
• consulting selection and management (public and private bodies);
• HR selection, recruitment and management, management of the bonus system;
• management of sponsorships, gifts and donations;
• support in the management of relationships with public bodies to attain or renew authorisations, licences and concessions for carrying out corporate activities;
• management of public grants, payments and contributions;
• support to Group companies in participating in tenders for the sale/award of public utility services.

The process mapping, risk self-assessment, preparation of the Model of Organisation, Management and Control, examination and approval of the document by the Board of Directors, its dissemination and relative training initiatives, are also training activities on anti-corruption for each of the parties involved in the various activities.

The audit activities concerning the issue of corruption fall into the context of broader audit activities regarding the internal control system of processes with a view to preventing the most significant risks.

As part of the audits carried out, the adequacy of the internal control system is assessed regarding the most significant risks; by way of example, in 2020, audits were carried out on the following processes: management of sponsorships, qualification of suppliers, management of declarations to the Customs and Monopolies Agency, management of research and innovation projects and related calls for tenders, management of Iren Local Committees.

With regard to communication and training on the offences of the Italian Legislative Decree 231/2001, which also includes policies and procedures for the prevention of corruption, the activity is diversified according to the roles and responsibilities of the recipients, with the aim of conveying knowledge and instructions on specific aspects of the Model 231 such to ensure the awareness and full understanding of the internal provisions to be complied with and the ethical standards that inspire their conduct.

The training activities of the parent company involve the members of the Board of Directors, First-Level Managers and Managers of the Business Units in specific classroom sessions.

The training for executives, junior managers and office workers is delivered through e-learning sessions that are updated and renewed periodically following changes to legislation. This enables all personnel to be reached quickly, with the possibility of target-based profiling and the attribution of the entire course or individual training modules depending on the previous training level of the individual person. The frequency and content of the training activities are designed to provide a full understanding of the Decree and awareness of the Model. Training is mandatory and controls are in place to verify participation and learning.

Based on the policy adopted, employee training activities were planned for the year, which saw 2,129 hours of training provided to 523 employees and will continue in 2021.

In 2020, the Group identified a training company, highly specialized in e-learning, intending to create by the first half of 2021 a new course, to be distributed to all employees (excluding blue collars) of the Group’s consolidated companies for asynchronous distance learning, with updated content concerning Models 231 and accompanied by interviews with Group employees. The course also includes a section dedicated to the updated contents of the Code of Ethics for all employees.

Reports on training are regularly sent to the Supervisory Bodies.

All employees are also provided with information, through a dedicated section of the Company Intranet, on their Company’s Model 231 and the Group Code of Ethics. Appropriate communications tools are employed to update employees on any changes to the Model and, in this context, it is noted that the Model itself outlines specific conduct and control protocols which must be complied with by all employees throughout their working activities.

In 2020, no confirmed instances of corruption were reported within Group Companies.

 

Protection of human rights

Attention to and respect of individuals are issues that Iren Group places at the heart of its growth and the sustainable development of the community and local area.

The Group operates mainly in Italy, where a complex system of laws contributes to preventing the risk of human rights violations. Nevertheless, the Group considers the UN Universal Declaration of Human Rights, the International Labour Conventions and Recommendations issued by the ILO (International Labour Organization) and the Earth Charter drawn up by the Earth Council, along with the principles of the UN Global Compact that Iren has adopted since 2020, and the UN Sustainable Development Goals, to be essential points in defining its values.

Acknowledging the absolute value of the fundamental principles of the Constitution of the Italian Republic, Iren Group, in its own Code of Ethics, considers respect for the dignity of people and the condemnation of any discrimination – trade union, political, religious, racial, language or gender discrimination – as central, with the promotion of an inclusive culture at all levels. These principles, set out in the Code of Ethics and aimed at combating all violations of human rights, translate into the rejection of all forms of forced labour or employment of irregular staff, of negotiations or assignments that might violate or contradict the fundamental principles underlying the respect for human dignity, and in our commitment to not collaborate with partners that violate these principles, with particular reference to the exploitation of child labour and the protection of the primary guarantees of all workers.

At Iren Group, respect for human rights is always a fundamental prerequisite for correct business activity, which is reflected in our scrupulous compliance with the law and contract regulations, with the provisions of the Model 231 and the Code of Ethics, as well as in our constant discussion with Trade Unions and Stakeholders (via Local Committees) and in the suppliers’ management system. This issue is so integral to the company culture that all action areas and tools mentioned above are subject to constant update and improvement.

The Group has also adopted instruments to encourage accessibility and use of services, particularly for disabled people, more vulnerable categories and foreign language speakers.

Also in 2020, in the non-recurring operations aimed at the acquisition of companies/shares, the Group carried out, with the support of specifically appointed advisors, the appropriate due diligence activities aimed, among other things, at verifying the application of labour and occupational safety laws provided for by Italian legislation.

In order to share its ethical values and conduct principles with its stakeholders, the Group has prepared, in addition to the Code of Ethics, social standards on human rights and working conditions along the supply chain.

In 2020, a fourth analysis was carried out on suppliers through a questionnaire to ascertain the human rights policies adopted by companies that hold active contracts with the Group (see page 121 of the “Sustainability Report” for more details).

Of the 2,162 supplier companies that responded (38% of the total), 50% have human rights policies in place that fall, in order of priority, into the following areas:

• equal opportunities and equal treatment irrespective of race, gender, language, religion, nationality, political opinion, sexual orientation, social status, disability, age or other condition of the individual that is not connected to the requirements for carrying out their job;
• formal reporting systems that allow workers to report human rights breaches, ensuring the protection of the reporter’s identity;
• checking of the age of employees during the hiring process, including by recruitment companies;
• training to raise awareness and prevent discrimination;
• measures to integrate employees;
• formal control systems to ensure that the company does not request that its employees deposit money, identity documents or credit cards during the hiring process.

Furthermore, 15% of those who responded to the questionnaire stated that there is an employee within their organisation who is officially responsible for human rights issues. Finally, a single case of complaint or legal action for discriminatory practices was detected among the responding suppliers.

This survey is repeated regularly to maintain constant monitoring of the supply chain.

 

QSE certified system

Iren Group strives to offer its customers and residents service efficiency, effectiveness, economic convenience and high quality, operating with expertise and professionalism in full respect of the environment and safety, contributing to the well-being of its personnel and the community.

For this reason, the Group has developed an Integrated System (Quality, Safety and Environment – QSE), which is structured in such a way so as to adequately monitor all operating processes that influence the service levels with attention increasingly focused on the customer and on the basis of risk identification and governance as part of the ongoing analysis of the organisational context and the needs and expectations of the parties involved. The Certified System is actually a streamlined and flexible organisational model that adapts quickly to changes in customer expectations and needs and organisational changes within the Group, thereby ensuring continuous monitoring of the effectiveness and efficiency of the processes at the same time.

The values of Iren Group are applied and expressed in the QSE Policy, which is acknowledged and shared by all personnel, in the following basic principles of the Certified System.

 

Immagine

 

The Quality, Safety and Environment management systems are overseen for each first‐level Company by the Personnel, Organisation and Information Systems Department of Iren.

Main certifications

In 2020, Iren acquired ISO 27001 certification for information security. In addition, Iren Smart Solutions is F-GAS certified, while Iren Mercato, already certified in accordance with the Certiquality Technical Document no. 66 regarding the sale of green energy, in 2020, also earned the ST TRAC_EE compliance certification for the tracking system of the characteristics of energy from renewable sources, which is a tool to provide customers with a guarantee of the origin of the “green” electricity sold. Finally, I.Blu and Studio Alfa have SA 8000 and IQNET SR 10 certifications respectively for Social Responsibility management.

All the audits carried out by the Certification Bodies at the Group Companies in 2020 were successfully completed, confirming the certifications held, and saw the renewal of BS OHSAS 18001 certifications expiring during the year with the transition to ISO 45001 certification, which replaced 18001 certification. During the year, the actions planned to achieve the defined objectives were also implemented:

• acquisition of QSE certifications by Acam Acque, Acam Ambiente and ReCos;
• acquisition of the RINA Compliance Certification for the tracking system of the characteristics of electricity from renewable sources, ST TRAC_EE document, by Iren Mercato;
• acquisition of ISO 9001, ISO 14001 and EMAS certifications for TRM, as well as maintenance of OHSAS 18001 certification;
• maintenance of QSE certifications for all Group Companies and ISO 50001 certification (energy efficiency) for Iren Energia and Iren Smart Solutions;
• maintenance of the Multi-site Accreditation for Iren Laboratori;
• maintenance of EMAS registrations for Iren Ambiente;
• maintenance of the certification for the sale of electricity produced solely from renewable sources, in compliance with the Certiquality Technical Document no. 66, by Iren Mercato;
• maintenance of ESCO (UNI 11352) and F-Gas Certifications of Iren Smart Solutions.

The achievement and maintenance of voluntary certificates evidence Iren Group’s commitment to environmental sustainability, particularly through the protection of the environment, the rational use of natural resources, full compliance with legislation, raising awareness amongst its customers and suppliers and service levels.

In order to ensure sustainable company growth based on the principle of continuous improvement, resources were employed for:

• the development of the production of energy from renewable sources or similar and district heating, together with the adoption of the best plant technologies to guarantee a reduced environmental impact;
• the improvement of the use of water resources, in terms of withdrawal, use, release and discharge;
• the renovation of the urban wastewater treatment systems and search for the best technologies in order to improve the quality of effluents and minimising odorous emissions;
• the correct management of obligations concerning special waste in the production, storage, transport and disposal and/or final recovery stages;
• the spread of information on the impacts on the external environment through specific publications, such as the Sustainability Report and Environmental Declarations.

From a management point of view, to reduce the environmental impact of activities, particular importance was given to:

• completion of the implementation of the new development method of the Environmental Analysis of sites, plants and processes at all Group companies with ISO 14001 certification;
• mapping of environmental obligations for Group Companies;
• monitoring environmental performance through the use of indicators for significant environmental aspects;
• analytically testing the impact on the environment, with particular reference to atmospheric emissions, air quality, water discharges, special waste, acoustic emissions and electromagnetic fields;
• conducting specific internal audits aimed at verifying the correct management of the environmental problems connected with company plants;
• fulfilling administrative obligations, with particular regard to the monitoring and control activities associated with the Integrated Environmental Authorisations (I.P.P.C. Directive) and the emission of greenhouse gases (Emission Trading System), for the plants concerned.

 

Legal compliance

The objective to develop the business in close contact with the local communities and areas is placed at the heart of Iren Group’s commitment to constantly combine development with respect for rules and regulations, protecting the environment and promoting the protection of natural resources based on principles of sustainable development.

In order to identify and implement the most appropriate action plan, the Regulatory Affairs Department draws up a quarterly regulatory framework. The document analyses the impact of the regulatory variables on the Group’s results. The Italian and international regulatory framework is constantly supervised and monitored through the following activities:

• reporting and analysis concerning the transposition of updates and the interpretation and application of relevant legislation;
• the coordination and direction of company departments assigned, either directly or indirectly, to comply with information obligations by sector authorities;
• the coordination and support of the company departments in managing the “antitrust risk” and the “regulatory risk”.

The Group concentrates its activities on the active and proactive monitoring of regulatory developments relevant to all the business sectors in which it operates, participating in consultations, hearings before Chambers (both directly and through the trade associations it subscribes to) and promoting direct meetings with the authorities involved. In particular, the topics observed in the various sectors are summarised below:

• energy business – market reform/updating (capacity market, MSD revision and expansion, adjustments on imbalances), regulation of district heating, reform of the Energy Efficiency Certificates mechanism, hydroelectric concessions for large-scale diversions, incentives for energy efficiency programmes, regulation of energy communities, development of projects involving hydrogen technology;
• market business – reform of protected market, revision of sale components (electricity and gas), reform of gas balancing, transport and settlement, regasification (combined capacity and storage auctions, tariffs for the actual recognition of costs incurred and revenue coverage factor);
• environment business – urban waste collection tariff regulation, transparency regulation, provisions on urban waste collection service levels, support for incentives for renewable sources and biomethane, monitoring of the legislative framework of reference (Italian Ministerial Decree on sewage sludge, Italian Ministerial Decree on biomethane, implementation of EU Directive on the circular economy with particular reference to the waste assimilation criteria, shared responsibility of the producer, the reform of consortium system and the restructuring of skills), service tenders;
• networks business – concerning all network services (water, gas and electricity distribution) tariff regulation for cost coverage and technical and commercial/contractual quality regulation, smart meters and their technological evolutions, non-payment, resilience, safety obligations, tenders for service assignment; specific to electricity and gas distribution: smart grid, network code and national equalisation.

The following topics were monitored across all Business Units: unbundling and compliance, Remit implementation (regulation on the integrity and transparency of wholesale energy markets), the implementation of the Directive and regulation governing market abuse and the procedures of the anti-trust authority (AGCM).

Furthermore, the Legal Affairs Department studies provisions related to the sectors in which the Group operates, provides support and legal advice to all the structures of the parent company and Business Units and participates in working groups on the topics that involve the parent company or Business Units.

 

Codes of Conduct

Iren has long adopted the Corporate Governance Code for Listed Companies recommendations (July 2018 edition) prepared by the Italian Committee for Corporate Governance.

In December 2020, the Board of Directors resolved to adopt the new Code (called the “Corporate Governance Code”), approved by the Italian Committee for Corporate Governance on 31 January 2020, and approved a document highlighting the Iren’s governance solutions concerning the provisions of the new Code.

The Company will implement the Code’s recommendations as of 1 January 2021, disclosing them to the market in the 2021 Report on Corporate Governance and Ownership Structure.

Iren Group operates in full compliance with the Code of Business Conduct for the sale of electricity and natural gas and, in general, with the standards issued by ARERA (the Italian Regulatory Authority for Energy, Networks and Environment).

Furthermore, in the management of activities, the service charters regulate the action to achieve high quality and efficiency standards in terms of continuity and customer relations.

In 2021, Iren signed the Joint Conciliation protocol with 19 National Consumer Associations on behalf of Iren Mercato, Ireti, Iren Acqua, Iren Acqua Tigullio. In February 2018, the Iren Joint Conciliation Body was recognised by ARERA (Regulatory Authority for Energy, Networks and Environment) as an ADR (Alternative Dispute Resolution) Body, and was extended, in early 2019, to the customers of Atena Trading and Acam Acque. In 2020, the Iren Joint Conciliation Body continued its activities, providing – in collaboration with other ADR Bodies of the main utilities and multi-utilities in the energy and water sector – refresher courses for conciliators of Consumer Associations and training courses for new conciliators of the same, on the energy and water sector.

As for the ARERA conciliation service for the Single Buyer, which is compulsory from July 2019 for Ireti, they confirmed in 2020 that most of the Group’s other water operators (Iren Acqua, Iren Acqua Tigullio, Acam Acque) were willing to adopt all conciliation requests received through the service.

During the year, the service, activated by Iren Mercato in the last quarter of 2019 and dedicated to reports from consumer associations, was also consolidated, structured through a dedicated email box, a dedicated number and the possibility of setting up meetings at the counters for specific practices; in particular, periodic meetings were held with the territorial offices of the associations for the analysis of the reports received.