P. Nazzaro
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  • 1. The relationship with stakeholders Telecom Italia Group's experience Paolo Nazzaro Head of Group Sustainability Telecom Italia
  • 2. APPROACH Customers Suppliers Competitors Institutions The Environment The Community Human Resources Shareholders Image Identity Trust Reputation … Performance External Stakeholders Internal Stakeholders
  • 3. EVOLUTION 1997 - 1999 2000 - 2001 2002 - 2005
    • Charter of values
    • Socio-environmental report
    • ETNO
    • Sodalitas
    • CSR Europe
    • TIM’s code of ethics
    • TI Group’s code of ethics
    • Integration of sustainability reporting into the Group financial statement (TBL)
    • Global Compact (ONU)
    • Internal reporting system
    • Specific investment form for business projects subjected to the approval of the Group’s Investment Committee
    Sustainability Governance Involvement with other Organizations Reporting Charters and Codes 2006 - 2008
    • CSR policy regarding relations with employees
    • CSR policy regarding relations with suppliers
    • Inclusion of quantitative sustainability targets in the Group financial statement
    • European “Alliance” on CSR
    • Sustainability KPIs within the tableau de board
    • New model for sustainability planning
  • 4. CFO Reporting Planning & Programming Finance Planning & Controlling Group Sustainability Reporting Stakeholder Relations Development of Sustainability Projects Strategic Guidelines Process Review Relations with Rating Agencies Key People and Data Owners appointed within each BU/Department ORGANISATIONAL MODEL
  • 5.
    • Included in the Annual Report since 2003
    • Based on:
      • a set of KPI managed through a software platform used for other financial statement data
      • the procedures for data collection and management extended to the entire Group (Key People and Data Owners)
    • Includes strategy and targets
    • Certified by independent auditors
    • Telecom Italia has been ranked among the best 100 companies worldwide with reference to the quality of its Sustainability report in "The Global Reporters 2006 Survey of Corporate Sustainability Reporters" conducted by the specialised agency SustainAbility in co-operation with UNEP and the rating agency Standard & Poor's
  • 6. 2007 RESULTS VS 2007 TARGETS ► 76.5 77 % UMTS coverage DIGITAL DIVIDE ▲ 52 51 % IPTV coverage DIGITAL DIVIDE ► 94 94.5 % ADSL coverage DIGITAL DIVIDE ► 182 500 Tons of CO 2 not emitted Replacement of oil boilers with methane boilers ENVIRONMENT/ CO 2 emissions ▲ 1.901 1.000 Number of replaced vehicles Replacement of Euro3 vehicles with Euro4 vehicles ENVIRONMENT/ CO 2 emissions ▲ 45 40 % Purchased recycled paper ENVIRONMENT/Paper ▲ 75 70 Number of offices Corporate offices with over 100 employees with differentiated waste collection in place ENVIRONMENT/Waste ▲ 100 95 % SAR qualification ENVIRONMENT/ Electromagnetism ▲ 4.289 500 Number of additional cells with second carrier Reduction of emissions from UMTS cells ENVIRONMENT/ Electromagnetism ▲ 873 850 Bit/Joule Eco-efficiency indicator ENVIRONMENT/Energy ▲ 26.9 26.8 % EQUAL OPPORTUNITIES: women workers as compared to total staff HUMAN RESOURCES ▼ 3.7 ≤ 3.5 % HEALTH: sickness hours as compared to working hours HUMAN RESOURCES ▲ 30.6 29.3 Training hours per capita TRAINING HUMAN RESOURCES / The survey has not been carried out in 2007 ≥ 6.21 Mean level of satisfaction Employee SATISFACTION measured through the survey “Group Photo” HUMAN RESOURCES ▼ 13.1 18 % Percentage of TELEPHONE LINES activated through “Linea Pronta” (Ready access) CUSTOMERS ▲ 98 98 % Keeping the TECHNICIAN APPOINTMENT at the customer’s premises CUSTOMERS Target Status 2007 Final Balance 2007 Target 2007 Measurement unit Indicator Area
  • 7. 2008 TARGETS 81 70.6 % HSDPA Coverage DIGITAL DIVIDE 81 76.5 % UMTS Coverage DIGITAL DIVIDE 54 52 % IPTV Coverage DIGITAL DIVIDE 96 94 % ADSL Coverage DIGITAL DIVIDE 10 16 % Increase of audits on Suppliers with reference to Ethics and Sustainability SUPPLIERS 2,700 1,951 Tons of CO 2 not emitted Replacement of Euro3 vehicles with Euro4 vehicles ENVIRONMENT 200 182 Tons of CO 2 not emitted Replacement of 15 oil boilers with new generators/heat pumps ENVIRONMENT 60 45 % Recycled PAPER purchased ENVIRONMENT 3 7.6 % PAPER consumption reduction ENVIRONMENT 100 75 Number of offices Other corporate offices to be equipped for differentiated waste collection ENVIRONMENT 40 0 % SAR qualification Bolivia ENVIRONMENT 25 0 % SAR qualification Brazil ENVIRONMENT 100 100 % SAR qualification Italy ENVIRONMENT 600 4,289 Number of additional cells with second carrier Reduction of power emission from UMTS cells ENVIRONMENT 1,950,000 0 Kvar/h ENERGY SAVING due to the optimisation of the electrical efficiency of 50 substations through power factor correction ENVIRONMENT 3,000,000 0 kWh ENERGY SAVING by the use of low-consumption lighting systems (10 buildings) ENVIRONMENT 1,130 873 Bit/Joule Eco-efficiency indicator ENVIRONMENT 85 84.3 % TRAINING– Italian companies: coverage (no. of people taking part at least once in training over the total population) HUMAN RESOURCES 30.5 30 Training hours per capita TRAINING– Italian companies HUMAN RESOURCES 98 98 % Keeping the TECHNICIAN APPOINTMENT at the customer’s premises CUSTOMERS 2008 Target Year end 2007 Measurement unit Indicator Area
  • 8.
    • Statistical surveys
      • Conducted on large customer samples, they are related to service assessment, TLC needs and expectations not yet met. The results of the surveys are presented to the top management and taken into account during services planning
    • Focus groups
      • On specific issues (i.e. services which are going to be launched on the market) in order to finetune services and to assess their usability and market acceptance
      • On general issues (i.e. broadband, sustainability), usually before launching statistical sample surveys
  • 9.
    • TI Group actively co-operates with all the Italian Consumer Associations operating at national level (and with the most important ones at regional level) through meetings aimed at:
      • guaranteeing customers’rights with regard to the Group’s new products and services;
      • presenting the main projects of organizational development possibly affecting customers (for instance the re-organization of certain customer care services or information on the possibility of enabling/disabling non geographic phone numbers through an appropriate PIN)
    • Direct result of Telecom Italia’s collaboration with the Consumer Associations is its conciliation procedure. Based on the “parity” model, this procedure is entirely free of charge for the customer and allows the 18 signatory national associations to play an active role in the resolution of disputes with customers
    • The Group is a founding member of the Consumers’ Forum, where consumer associations, companies and research institutes meet and exchange their views on issues related to consumerism (conferences, joint training initiatives, ...)
  • 10.
    • Online survey on supplier satisfaction involving the most important 580 suppliers (about 200 of which participated the survey). The questionnaire included 28 questions in order to assess supplier interaction with the Purchasing department in all the steps of purchasing process. The recorded score was 7/10
    • Development of an e-community in order to improve interaction among suppliers, in particular with reference to sustainability social and environmental issues, as well as energy saving and health & safety. This is aimed at:
      • integrating the best practices adopted on specific issues
      • publishing the achievements in terms of initiatives carried out and environmental/social certifications obtained
      • staging e-voting campaigns on the different sustainability initiatives in order to emphasize them
    SUPPLIERS The start-up of this initiative involved about 10 companies devoted to maintenance works on the telephone network and gave rise to a shared document
  • 11.
    • In co-operation with the second Naples University and the National Agency for Environment Protection and Technical Services (APAT) Telecom Italia launched a project meant to improve the energy efficiency of TLC equipment
    • Together with the most important TLC players Telecom Italia took part in the drafting of a Code of Conduct aimed at the reduction of energy consumption, promoted by the European Commission through the Joint Research Centre
    • Engagement with some of the main Environmental Associations has started in order to discuss Telecom Italia’s environmental strategy
  • 12.
    • Employee satisfaction survey: it involves all employees with regard to satisfaction, motivation, corporate processes, manager-employee relation
    • Surveys on issues of general interest (sustainability, mobility, and so on)
    • Instant polls: online single-question surveys. Since June 2007, 9 surveys have been conducted yielding approximately 30,000 answers
    • “ The Lighthouse” project carries out initiatives in order to know employees’ opinions on selected issues, to test new products/services and to receive suggestions for innovation and improvement. So far, 8 initiatives have been carried out, involving 2,000 participants
  • 13.
    • “ Listening” project: a sample constituted by a few hundred employees from operative departments is interviewed on how to improve process efficiency, staff integration and training. The outcomes of the survey are analysed and communicated to all interested staff, which is also updated on the state-of-the-art of the initiatives through a newsletter. Started in 2002, this initiative involves employees working on the same processes in different areas.
    • “ I am” Project: a sample constituted by a few hundred employees from operative departments is interviewed on how to improve the well-being in the workplace (parking, air conditioning systems, lights, and so on)
  • 14.
    • the National Environment Committee and the eight Regional Environment Committees, which inform and coordinate policies relative to health and safety in the workplace and promote health surveys and scientific researches
    • the renewal, in the last weeks, of an agreement between the Group and the Unions on staff training, aimed at the safeguard and development of staff professional skills. The agreement provides for the renewal of a joint “Guidance Committee” in order to:
      • steering and assessing the contents of training programs
      • planning further developments
      • monitoring and assessing scheduled activities
    TRADE UNIONS TI Group actively co-operates with trade unions not only for the drawing up and the renewal of the corporate collective bargaining agreement but it is also involved in working groups and joint commissions. Particularly significant are:
  • 15.
    • “ Web as a friend”, an information campaign meant to educate young people, parents and teachers to a safe navigation of the Internet (Italian Parents Movement, Telecom Italia, Microsoft, Postal and Communication Police, Poste Italiane, under the patronage of the Ministry for Family Policies, the Ministry of Communications and the Ministry of the Interior)
    • “ Adult and Youth literacy ”, in partnership with the ONG “Pastoral da criança”, an educational program developed in some regions of the north east and south of Brazil, having the highest rate of social exclusion in the country
    • “ Fundraising through SMS and solidarity calls ” in favour of non-profit associations (Telethon, AIRC, AISM, and so on) to support specif projects for the community
    • The “Filippide” project, in partnership with CONI, CNR and Ospedale Bambin Gesù, aimed at the social inclusion of autistic young people through sports practice
    NO-PROFIT ASSOCIATIONS AND NGOs TI Group actively co-operates with the UN Global Compact, through its local networks and international working-groups, and with the International Labour Organization Many initiatives in favour of the Community are designed and realised in partnership with Institutions and Non Governmental Organisations. Within the initiatives carried out:
  • 16.
    • Co-operation with competitors (national associations)
      • TI Group is a member of sectorial federations and association (Confindustria Servizi Innovativi, Asstel, Assoelettrica, Distretto dell’Audiovisivo e dell’ICT) in order to exchange views on business development, regulations, and so on
      • Roaming and site-sharing agreements. TI Group signed:
      • - with Vodafone Italia an agreement that involves sharing the mobile network access sites with reference to passive infrastructures (poles and masts, electrical and air conditioning systems, civil infrastructures)
      • - with 3 Italia an agreement on national roaming, enabling “3” customers to use also the Telecom Italia mobile network , which covers the whole Italian country
      • Telecom Italia Media takes part in the DGTVì, the Association for the development of the Terrestrial Digital broadcasting in Italy to which Rai, Mediaset, Radio and Television Federation, Aeranti-Corallo and D-free also take part
    • Co-operation with competitors (international associations)
    • TI Group co-operates with several organisations and/or associations among which:
      • European Telecommunications Network Operators’ Association (ETNO), gathering the main European telecommunications operators, aims at developing a dialogue with European Institutions on telecommunications issues; Telecom Italia chairs the working-group “Sustainability”.
  • 17.
    • I n December 2007 a “Memorandum of Understanding” has been signed by the Ministry of Communications, Infratel Italia and Telecom Italia with the aim of reducing, and eliminating in perspective, the digital divide, thus favouring the development of broadband infrastructures over the whole national territory
    • In collaboration with the appropriate authorities, and in particular with the postal Police, some “Abuse Desks” have been set up, aimed at preventing abuses on the Group’s networks, and in particular the diffusion of juvenile pornography
    • Telecom Italia takes part to the Pan European Industry Group, gathering many internet and mobile European operators. Under the patronage of the European Commission, the Pan European Industry Group has launched an initiative in order to help teachers to prevent illegal use of internet and mobiles
    INSTITUTIONS The relations between the Group and Ministries and Regulatory Authorities are based on co-operation and dialogue. Here are some examples:
  • 18.
    • Involvement of a large number of human resources in completing questionnaires and updating profiles (over 70 resources involved)
    • Communication to the top levels of management of the ratings received and structured follow up meetings
    • Support to analysts in interpreting data and news reported by the press (conference calls and meetings)
    • Updating analysts about the technicalities of Italian law (i.e. compensation, staff levels, environmental regulations)
    • Open dialogue on the possibility of including additional assessment parameters (i.e. career advancement, technological innovation)
  • 19.
      • Dow Jones Sustainability Indexes
        • World (DJSI World)
        • STOXX (DJSI STOXX)
      • FTSE4Good
        • Global, the first 100 companies by market capitalization are included in the FTSE4Good Global 100 - tradable index.
        • Europe, the first 50 companies by market capitalization are included in the FTSE4Good Europe 50 - tradable index.
        • Environmental Leaders Europe, including 40 companies selected within the FTSE4Good Europe on the basis of results achieved in the field of environment protection
      • ESI (Ethibel Sustainability Performance Index)
        • Excellence Europe
        • Excellence global
        • Pioneer global
      • ASPI (Advanced Sustainable Performance Index)
      • ECPI (E.Capital Partners Indexes)
        • Ethical Global
        • Ethical Euro
        • Ethical EMU
        • ECPI Global TOP 30
      • Axia Ethical e AXIA Euro Ethical Axia
      • KLD Sustainability Indexes
        • Global
        • Global ex US
        • Europe
  • 20.
    • Shareholder identification is carried out twice a year to analyse the positions of SRI investors at national and international level.
    • The opinions of shareholders and potential investors are surveyed through:
    • Roadshows (CFO – Investor Relations – Group Sustainability) in the most important European financial markets
    • One-to-one meetings, group meetings and conference calls
    • Investor Days
    • Shareholder Club
    • Dedicated contacts via e-mail
      • ( [email_address] , [email_address] )
  • 21. TI is among the top 20 companies chosen by the managers of “Green Social and Ethical” funds, according to the ranking by Vigeo Italia, holding the 18th position in the intersectorial classification, and second position in the TLC sector. TI IN SRI INVESTORS CHOICES
  • 22.
    • The management may not have clear targets to achieve. Possibility of pursuing one’s own interest and easy alibi for possible failures
    • Who are the stakeholders and what’s a stake? (Environment?)
    • Silent stakeholders
    • Degree of representativeness of associations/organizations
    • Maturity of stakeholders (and of firms)
    • Stakeholders are considered by Freeman himself as groups with different and possibly conflictual interests. Trade-off criteria are not clarified
    • Legal and statutory boundaries for board directors who may decide to pursue other stakeholders’ interests only. The current legislation safeguards shareholders’ interests