Sustainability in S nam 2012

1. Sustainability in Snam 2012

2. Agenda Snam Sustainability Environmental Protection Relations with Stakeholders People

3. Agenda Snam Sustainability Environmental Protection Relations with Stakeholders People

4. Policy of sustainable development Key Principles All Snam activities and processes are carried out with respect to: • implementation of sustainable development policy; • respect of human rights in all their facets; • evaluation of sustainability initiatives with rigorous approach using homogeneous criteria; • transparency of planning, execution and control of sustainability initiatives; • assurance that sustainability targets are well known at all levels; • clear and transparent communication to stakeholders.

5. GOVERNANCE OF SUSTAINABILITY CORPORATE STRATEGIC PLAN IMPROVEMENT ACTIVITIES AND INPUTS FOR SUBSEQUENT PLANNING CYCLE ANNUAL PLAN MONITORING SYSTEM AREAS FOR IMPROVEMENT ACTIVITIES (PROGRAMMES/PROJECTS) INDICATORS – KEY INDICATORS ANALYSIS AND REPORTING SUSTANAIBILITY REPORT REPORTS FOR SPECIFIC PURPOSES (E.G. INVESTORS) DIALOGUE WITH STAKEHOLDERS Snam Sustainability Model PLANNING COMMUNICATION CONTROLAND REPORTING MANAGEMENT

6. Sustainability Report Sustainability Report is published annually to communicate the company’s mission, strategy and results achieved in the environmental, social and economic dimension of the sustainability development Sustainability Report is one of the instruments to evaluate our progress and our areas for improvement Sustainability Report is approved by the Board of Director of Snam For 2011 Sustainability Report is different from the past: there is more disclosure and the report was checked directly by GRI according the A+ level

7. HSEQ Operating Model Snam Direction, control and services provider 4 Operating Companies (Snam Rete Gas, Stogit Italgas, GNL Italia) Management of HSEQ activities

8. In 2011 we continued to work on obtaining certification for the GNL Italia and Stogit employee health and safety management under the OHSAS 18001. We are well on time to complete certification process by the end of 2012 Management System of Snam Group The table outlines the certifications obtained for the management systems

9. Governance and Sustainability The corporate governance system is developed to create value for shareholders and takes into account the social relevance of the activities that the company carries out. The system considers safeguarding the environment, personal health and safety, protection of employees and equal opportunities, cooperation with local and national communities and, in general, the interests of all stakeholders, to be of fundamental and non-ignorable importance. Our corporate governance system is based on the guidelines set out in the Code of Conduct for Listed Companies drawn up by the Committee for Corporate Governance of Listed Companies, with recommendations made by CONSOB (National Commission for Listed Companies and the Stock Exchange) as well as, more generally, international best practices. In this regard, it’s noteworthy to remind that the corporate governance is a specific evaluation dimension considered by the most recognised Sustainability Indexes (Dow Jones Sustainability Index, FTSE4Good, STOXX), in which Snam has been included.

10. Governance and Sustainability During the meeting of 12 July 2011, Snam’s Board of Directors approved the new text of the Code of Ethics which clearly defines the values and responsibilities that the Company recognizes, accepts, shares and assumes, both internally and externally. The responsibility of Code Guarantor has been assigned to the Watch structure, to which the following may be submitted:   Requests for clarification or interpretation of the principles and content of the Code, Suggestions with regard to the implementation of the Code, Reports of Code violations either by direct or indirect detection. Reports, including anonymous ones, are managed by means of the “Reporting irregularities” Procedure, updated on 30 June 2010.

11. Governance and Sustainability The board of directors is composed by nine members: Salvatore Sardo (Chairman), Carlo Malacarne (CEO), Alessandro Bernini, Davide Croff, Roberto Lonzar, Massimo Mantovani, Elisabetta Oliveri, Renato Santini and Mario Stella Richter (directors). Directors Roberto Lonzar, Elisabetta Oliveri and Mario Stella Richter were elected on the basis of the list presented by several minority shareholders and the BOD met 9 times during 2011.

12. Governance and Sustainability Board of directors of Snam has established four committees: the Internal Control Committee, the Compensation Committee, the Nomination Committee and the Combined Independent Committee. The Internal Control Committee, which is made up of three non-executive independent directors advises and assists the board of directors with regard to the functions of overseeing the general performance of the company The Compensation Committee, which is made up of three non-executive directors, of whom two are independent, advises the board with regard to criteria for the compensation of the company's senior management. the Nomination Committee advises the board with regard to criteria for nominations The Combined Independent Management Committee is the collegial body in charge of the joint management of regulated activities in the areas of natural gas transportation, dispatch, distribution, storage and regasification.

13. Governance and Sustainability Snam is committed to do its business with loyalty, fairness, transparency, honesty and integrity, and in accordance with the national and international laws, regulations, standards and guidelines that apply to its business. In this context, Snam has emphasised the issue of the fight against corruption, and the Board of directors has adopted "Anti-Corruption Guidelines" In this area, it has also changed its organisational structure with the establishment of the Anti-Corruption Legal Support Unit.

14. Agenda Snam Sustainability Environmental Protection Relations with Stakeholders People

15. Environmental protection: our main committments Protection of biodiversity: re-establish the landscape and fullyrestore the biological functionality of the planted areas affected by the laying down of pipelines Air and climate protection:reduce the atmospheric emissions of nitrogen oxides and of natural gas Waste Management*:optimizewaste produced both by the restoration of some contaminated areas following industrial activity (distribution business) and by drilling wells (storage) *Waste management represents a significant issue after the acquisition of Italgas and Stogit 15

16. Protection of nature and biodiversity Our infrastructure is distributed throughout almost the entire country. Our activities run into territory with different morphological features. As a consequence, we design and implement suitable measures to safeguard and to restore the environment, in order to recover its original value. Our objective is to restore not only the biological functionality but, above all, the role of habitat for fauna with specific features of biodiversity. Gas pipeline under construction Gas pipeline after restoration In 2011 the Company restored about 235 km along pipelines and reforested about 43 km of woods. In addition, the Company continued environmental monitoring on about 1,065 km of pipelines to verify the re-naturalisation of the areas affected by our work, by comparing environmental conditions after restoration. 16

17. Climate Change GHG emissions related to Snam Rete Gas activities are carbon dioxide (CO2) and methane (CH4), the main component of natural gas. CO2 is produced during combustion and is directly related to fuel consumption. Natural gas emissions originate either from the normal operation of plants or from atmosphere discharges of transportation and distribution networks, during maintenance operations and as a consequence of accidents. 17

18. Climate Change GHG reduction – main initiatives Use of fuel with low carbon dioxidecontent Snam uses mainly natural gas as fuel in compressor stations (about the 99% of the total). Energy consumption being equal, carbon dioxide emissions from natural gas combustion are 25-30% lower than emissions from oil products combustion and 40-50% lower than emissions from coal combustion • Reduction of energy consumption - main initiatives • Use of high efficiency gas turbines • Use of advanced IT systems to optimize, in terms of operating and energy efficiency, the functionality of natural gas transport and storage activities • Use of photovoltaic plants Reductionof natural gas (CH4) emissions • In-line recompression of gas during pipeline construction and maintainance activity • Replacement of pneumatic gas equipment with electric ones • Replacement of cast-iron pipelines in distribution activity 18

19. Climate Change In 2011, replacement of pneumatic equipment and natural gas in-line operations during the laying down of new pipelines, allowed to recover about 4.4 million cubic meters of gas. 19

20. Air Protection In recent years, several existing turbines have been retrofitted and new ones have been installed with low-emission combustion systems, in order to reduce nitrogen oxides emissions. In the coming future, installation of low-emission combustion turbines will be increased significantly in Stogit compression stations. 20

21. Agenda Snam Sustainability Environmental Protection Relations with Stakeholders People

22. Stakeholder’s strategy The company's approach to sustainability is first aimed at identifying all players with whom it interacts and who can impact, or be affected by, the organisation's activities and, moreover, at understanding the interests and relevant issues for each of these with the aim of getting them involved. With this approach, we decided to strengthen our process of Stakeholder Engagement with the mapping of our stakeholders. After this step several initiatives toward various stakeholder were started such as Social Impact Assessment projects, stakeholder satisfaction surveys, engagement with ONP’s etc.

23. Stakeholder - Suppliers Snam Rete Gas has a centralized system of supply for goods and services, managed by the “Supply Chain” department. • Supply process is based on rules and procedures of transparency, fairness and without any discrimination. • Our suppliers are requested to respect the rules of 231 Model and Code of Ethics of Snam that ensures high standard of work safety, health protection and workers’ right. • From January 2011 we promote the Global Compact initiative in all the contractual agreements with our suppliers • The high level of transparency, as well as privacy, is guaranteed by electronic systems of negotiation. • The event Suppliers’ day for sustainability was organized to disseminate sustainability principles towards suppliers • In 2011 our suppliers were around 2,000 with a total amount of goods and services provided of 1.69 billion euro.

24. Stakeholder - Customers In 2011 we carried out all the requests for new connection at delivery and redelivery point from our costumers

25. Stakeholder – Italian Electricty & Gas Authority Establishes tariffs for the regulated activities Sets Codes, that define the conditions for accessing and providing services Snam, as a fullyregulated company, has the Regulatory Body asone of the main stakeholder AEEG Regulatory frameworks are very clear, stable and transparent (4 years regulatory period)

26. Stakeholder – Community & Territory Snam relationship with Government Authorities, Regions and local institutions, principally tied to the submission of applications for the necessary permits related to new pipelines and plants, has always been characterised by maximum collaboration. Our approach: oriented to give all the relevant information about our initiatives aimed at encouraging the partecipation not only of managers and officers of the institutions, but also of all stakeholders directly and indirectly involved (farming associations, citizens, etc.)

27. Stakeholder – Community & Territory In order to strengthen the relationship with the area in which we work, in accordance with our sustainable growth policy, Snam has undertaken a series of educational initiatives in some Italian schools. The programme, called “All down underground”, is designed for primary and secondary school children. In order to make the children feel involved and encourage their participation, suitable tools for communicating the best environmental practice identified were adopted: informative brochures , videos , a videogame, which enable you to play at “laying gas pipelines” in respect of nature and gadgets. The mascot of “All down underground” is a friendly tree called riprisTino, Tino to his friends, who accompanies the children on their educational journey. By the end of 2011 we realized 9 events with schools

28. Stakeholder – Shareholders & Investors One to one meetings with investors Roadshows InvestorRelations area of website Snam Conference call and presentation to financial community • Online publications: • Financial Markets Review • News&Facts Seminars and conferences on utilities Financial reports Member of • Dow Jones Sustainability World Index • FTSE4Good Indexes • ECPI Ethical Indexes

29. Agenda Snam Today Snam Sustainability Way Environmental Protection Relations with Stakeholders People

30. Social dimension – investments in people Key Principles • Ensure that people are actively and responsibly informed and involved • Foster a positive working environment • Ensure workers’ safety • Protect workers’ health through inspection programs • Develop and consolidate the managerial and professional skills program • Attract and retain qualified people within the company

31. “energie” program: building the integration “energie” program is a project through which Snam, Snam Rete Gas, Italgas, Stogit and GNL Italia have combined forces, histories and different professional cultures to reach a common goal The aim of the project was to find the best practices among the four companies and identify possible synergies. Now we are a common group linked by an intranet called ”energie” • 6,112 employees • Synergies found with special regard to the maintenance internalization in Stogit, management organization, geographic organization distribution

32. Selection process Snam attracts and selects skilled people, interested in working in a competitive and diversified sector like the energy one. The transparency of the selection process is assured by the adoption of the criteria of objectivity, traceability and responsibility(without any form of discrimination). The candidates are evaluated on the basis of the following parameters: • type of diploma or degree • final year results • regularity of attendance • age • computing skills • areas of specialization • previous professional experience

33. Management and development model We aim at helping our people to grow, by increasing their skills consistently with the business development strategy, and ensuring that the company's distinctive know-how is maintained. • targeted training • sharing of information • performance assessment system • assessment of individual skills

34. People’s wellbeing Welfare Project attempts to identify and develop better services to make it easier to combine professional and private life. Family and children, health and time saving are the areas which the project is focused on. "Eni nursery school" • a pre-school structure for around 140 children up to the age of 6 • a structure of pedagogical and architectural excellence for employees' children in San Donato Milanese.

35. Health & Safety System Snam will continue to invest in people safety Main results: More than 187,100 hours of training provided in 2011 Continued activities in the three-year “Objective Safety” programme Reduction respect to 2010 values of 37,5% in the Employee injury frequency rate and of 40% in the Employee injury severity rate with no fatal accident Objectives: OHSAS 18001 certification of Stogit and GNL Italia by 2012

36. CULTURE “Safety Objective”: the project Reduce the number of accidents through an integrated method Increase the involvement of people Co-ordinate the activities of all the involved units COMMITMENT SAFETY TROPHY & ZERO ACCIDENTS AWARD PROCESSES, PRACTICES & REGULATION ORGANIZATION ASSESSMENT INDUSTRIAL RELATIONS INFORMATION, COMMUNICATION & TRAINING REPORTING • Knowledge • Skills • Behaviours