Relations with institutions

Relations with the institutions are focused on the economic dimension (taxes and fees) and the social dimension (relations with local institutions, sector authorities, consumer associations and other civil representatives etc.), in line with current legislation and the Group’s Code of Ethics.

The economic value distributed in the year to public authorities in the form of taxes was € 147.8 million (approximately € 186.8 million in 2022). The tax rate for the year is equal to 31.1% (it was 37.5% in 2022).

The Tax Unit in the Parent Company’s Administration, Finance and Control Department, develops tax policy at Group level, monitors legislative changes, ensures periodic compliance and provides assistance and advice to the Acea SpA structures and the Group companies for the application of tax regulations. The Unit also prepares,

where appropriate, specific information on the subject for the Control and Risk Committee. While a specific internal tax policy has not been adopted, Acea is committed to improvement tax risk management, implementing a system to identify, analyse and measure risks, and organisational safeguards, followed by the assignment of a “target” risk level.

Acea interacts with the relevant Authorities in a cooperative and transparent manner and, in compliance with the relevant legislation, Acea produces a Country by Country Report147, which lists the in- formation on taxes paid in each jurisdiction in which the Company operates. According to the latest Country By County Report filed by Acea in 2023 with the Italian Revenue Agency covering 2022 data, 97% of the total amount is paid in Italy148 while the remaining 3% is paid in the Dominican Republic, Honduras and Peru, where the Company operates in the water sector to improve the service, with reference to certain technical and management aspects (see the chapter Water Company data sheets and overseas activities). Overseas activities refer to locally managed businesses and are not connected to delocalisations carried out to draw fiscal benefits from favourable jurisdictions. In fact, Acea has not defined a tax strategy and does not intend to establish any aggressive tax planning to gain a competitively advantageous position.

Acea regularly pays contributions and registration fees owed to public and private bodies, such as chambers of commerce, inde- pendent administrative authorities, industry associations and representative bodies. In 2023, the total amount of this item was approximately € 3.80 million (€ 3.25 million in 2022).

Partnerships with public institutions are aimed at carrying out initiatives with positive effects in the local region and the public’s quality of life (see the chapters Customers and the community, Personnel and Relations with the environment).

The Group's Code of Ethics dedicates a section to Relations with institutions, public administration, political parties, trade unions and associations, establishing that: “Acea actively and fully cooperates with independent Authorities, establishes relationships with the Public Administration in compliance with the reference regulatory provisions, as well as with the internal procedures, so as not to compromise its reputation and integrity, always operating with fairness, equity, transparency and traceability, avoiding collusive and corruptive attitudes and actions of improper influence. Acea does not contribute in any way to the financing of parties and trade unions or other organisations related to them, or of their representatives and candidates. Acea does not make contributions to organisations with which a conflict of interest may arise, such as trade unions, environmental or consumer protection associations"¹⁴⁹. Consistent with the standards outlined in its Code of Ethics, Acea did not contribute in any way to the financing of parties or other political organisations, trade unions, including with legal form as an association or foundation instrumental to them, nor to their representatives and candidates.
Additionally, in consideration of the important role it plays in the completion of major infrastructure works, in 2023 Acea signed a National Framework Protocol to support legality with the Ministry of the Interior, to strengthen cooperation on public safety and legality aspects, benefiting the social/economic fabric (see also Corporate Identity, Strategy and sustainability chapter).

The supervision of relations with institutional entities is defined by an organisational model that attributes competences and responsibilities to the corporate structures of reference. In particular, the Public Aairs & Business Development Department protects corporate interests and represents the Group’s positions in dialogue with Industry associations, Research centres, Standard-setting bodies and local, national and international public and private institutions and bodies. The General Council Function supports the Group Companies for legal aspects related to the activities, and handles communications with the Supervisory Authorities (Borsa [Italian stock exchange] and Consob [National Commission for Companies and the Stock Exchange]) and the Regulatory Function, in coordination with the relevant divisions established within the Group Companies, handles relations with the regulatory bodies in the relevant sectors, also to minimize exposure to regulatory risk. The Group’s operating companies, jointly with the Parent Company, manage the “technical and specialist” aspects of the managed services – water and electricity supply, public lighting and the environmental sector – including through interaction with administrative, regulatory and control bodies.

EMERGENCY MANAGEMENT PLANS

In synergy with public institutions, private parties and research bod- ies, Acea deals with initiatives and projects of an environmental and social nature aimed at protecting common assets. Acea is active in the prevention and management of critical events, and in the event of an emergency it provides support to the authorities responsible for public health, civil protection and public safety.

In particular, the Group companies ensure the highest levels of safety and continuity in the provision of managed services, in collaboration with public institutions. To this end, they have established organisational structures, procedures and tools that, in critical events (unavailability of central systems, breakdowns, adverse weather conditions, peak demand and network stress, etc.), are able to restore operating conditions of networks, plants and systems in a timely manner (see also the chapter on Protection of assets and management of internal risks in the section on The company as a stakeholder).

Each operating company has plans for managing emergencies and intervention procedures and, through the control centres, constantly monitors the status of networks and equipment – water and sewage, electricity and public lighting – in partnership with the Municipal and National Civil Protection and local authorities. Whenever an event aects the managed services (damage to plants and/or networks, water/energy crisis, etc.), the companies of the Group notify the competent bodies to facilitate the coordination of interventions.

Acea SpA has a procedure for the management of health and environmental emergencies having an impact on the population, for which it defines a risk level (low, medium and high) and consequently organises intervention teams.

The emergency management plan of Areti, which manages the distribution of electricity, deals with widespread breakdowns and unavailability of the grid. It defines the different states of activation (ordinary, alert, alarm and emergency), according to the operational and environmental conditions, the procedures for the activation (and subsequent reset) of the same states, the units involved and the respective roles, and the resource materials necessary for maintaining or restoring equipment. It also provides for the appointment of a Head of Emergency Management and an employee ded- icated to the management of safety, in specific cases. The detailed Operating Plans indicate methods for quickly managing the types of

disruption (such as flooding, fires, disruptions to the remote-control network, etc.) and procedures to be followed, for example, for restarting the electrical system in the event of a blackout of the National Transmission Grid (NTG) or re-establishing power for strategic users (such as parliament, the government, the State of Vatican City, etc.), the materials, equipment and resources to be involved depending on the case. The master plan and detailed operating plans are updated on a yearly basis and periodically improved on the basis of analyses of real cases. The effectiveness of procedures and the functionality of equipment are tested by means of drills. In addition, with a view to improving processes, the Company created a platform for the real-time acquisition and monitoring of weather events, in order to prevent potential risks from changes to the operating conditions of the electric grid.

Plans for the management of emergencies of the water companies define conditions that compromise the continuity and quality of the integrated water service, classify the emergency levels, describe the preventive and remedial measures for the types of unforeseen events (damage to the networks, pollution, water crisis and emer- gencies related to the sewerage and treatment service) and provide for the division of tasks among the areas involved (technical area and communications). These are shared with local institutions (such as Governmental Territorial Oces, Local Health Authorities, Area Management Agencies). In particular, the Acea Ato 2 Plan is updated in line with the Water Safety Plan guidelines and takes 25 critical scenarios into consideration, specifying the consequences, manoeuvres to be carried out on infrastructure, and the mitigation actions required for each of them. The Emergency Standing Committee is also operational, which meets periodically, proposes training activities, and establishes interventions in serious emergencies.

AdF collaborated with the Tuscan Water Authority on the updating of the Emergency Operating Plan for the drinking water crisis (EOP), aimed at monitoring and preventing water emergencies through the periodic reporting of critical issues found within the region, and providing support for operational decisions when an emergency arises. In the context of the critical issues outlines in the Plan, AdF has in place a Water Crisis Emergency Management Operating Procedure which establishes the sequence of activities to be carried out, the entities involved, measures to be taken, documents/databases to be consulted/updated/produced, and correspondence to be sent, for every expected level of severity.

For an organised and prompt approach to the emergencies that could occur on backbone pipelines and plants, AdF has prepared specific Disaster Recovery operating manuals, which act as guidelines in the event of damage and contain precise instructions on the manoeuvres to be carried out. For breakdowns on the main back- bones that serve the majority of the region, the manuals indicate the time frames, the instrument references, offsetting measures to reduce the disruption and the operations for reopening the flow, also allowing non-expert sta to manage the emergency.

The companies of the Group that manage waste treatment plants ensure the execution of a detailed routine maintenance plan to reduce plant downtime caused by faults or unexpected events and minimize unplanned non-routine maintenance work. Each site is also equipped with Emergency Plans that take into account the scenarios identified for endogenous and exogenous emergencies. These Plans examine aspects related to the safety of workers, ensuring their safety with specific behavioural and evacuation procedures, checked on a yearly basis, and aspects related to the protection of the environment, identifying the interventions aimed at limiting contamination of environmental media (air, water and soil). Permits by virtue of which the plants are managed also include communication requirements and methods for non-routine or emergency events to the competent bodies, in order to guarantee the maximum dissemination of information and, where appropriate, the coordination of the intervention.

Finally, it should be noted that again in 2023 training courses were provided to employees of Group companies, dedicated to emergency management (see the paragraph, Protection of Occupational Health and Safety).

PROJECTS FOR THE INNOVATIVE AND SUSTAINABLE DEVELOPMENT OF THE AREA

In the water segment, Acea has adopted the Smart Water Company model which is characterised by responsible and sustainable management of water resources, thanks to the increasing digitalisation of the network.

During the year, some water companies, in agreement with local administrators, started or continued a programme of installation of Water Kiosks in the areas managed (see the chapter Customers, paragraph Quality Delivered in the Water Segment).
In 2023, with the aim of strengthening links with the community and raising citizen awareness of environmental issues, AdF worked to develop the Water Museum, a space dedicated to water resources, inaugurated at the end of 2022 in the Municipality of Castiglione d’Orcia, welcoming the citizens and students who visited during the year. Finally, with the aim of promoting the energy transition in the local area, AdF continued the process begun in the previous two years, dedicated to the concept of Renewable Energy Communi- ties (CER), implementing activities to develop one in the Municipality of Magliano in Tuscany (prov. GR).
In 2023, Gori, in cooperation with the Campania Region and the Campania Water Authority, continued to implement the Energy for the Sarno plan, intended to remove pollution from the river, and continued the Actions for Water programme, to restore the water network and began the Green Rebirth project, which aims to strengthen the treatment service in terms of the circular economy by transforming treatment plants to “green factories”, able to recovery energy and sludge and reuse purified waste water for irrigation and industrial purposes.
The Acea Group collaborates with ENEA, the Istituto Superiore di Sanità (ISS), the CNR and other organisations of scientific importance, with the objective of developing innovative solutions to industrial processes, in particular on the sustainable management of the waste cycle and the water resource and on the recovery of materials of value from residues of the combustion of waste.
Lastly, consistent with the protocol signed in 2022, Acea Ambiente signed continued its cooperation with the Metropolitan City of Tu- rin to verify the feasibility of reusing recycled polymers to create road surfaces, in line with the principles of circular economy and environmental sustainability.

In order to promote the innovative and sustainable development of the sectors of reference, the Group activates collaborations and partnerships with complementary companies or organisations operating in sectors similar to the businesses it manages and with in- novative players.

In 2023, with certain businesses and their representatives, Acea signed agreements to protect and reuse water resources (see the two boxes).

In 2023, Acea continued to participate in the Emerging Technology House (CTE) of Rome project, promoted by the Department of Economic Development, Tourism and Employment, to develop the smart city of the future, launching a call for tender to select start- ups with innovative project solutions, relative to emerging technologies or 5G networks in the following sectors: mobility, tourism services, commerce, training, work, environment and waste management, urban transformation and regeneration, social innovation, equal opportunity and well-being, cultural activities, urban security and cybersecurity.

AdF, additionally, became part of the consortia of companies involved in the European LIFE TURBINES project, focussed on generating electricity with aqueducts, making its own water net- work system in the Municipality of Scansano (prov. GR) available as the fourth case study and participating in the pilot project “Energy evaluation of IWS management”, implemented by ANEA and GSE, to support sustainability in the development of water infra- structure, taking advantage of existing production systems through energy eciency projects and the integration of renewable sources. Areti launched the TwinEU Project with Enel, Terna and RSE to create a “digital twin” of the electricity network.

In 2023, Acea was recognised for its Waidy® Management System (WMS), a technological platform developed in cooperation with NTT DATA Italia, which supports management of water resources throughout the life cycle, winning the ’iF DESIGN AWARD 2023, in the Service Design category.

The virtuous relationship with the local region is also expressed through the collaboration between Group companies, world of education and research (see Customers, section on Communication, events and solidarity, and Personnel, section on Development of human resources and communication).

In 2023, Acea Ato 2 partnered with RCS Academy Business School for its post-graduate master in Sustainability and Green Management, involving students in the development of the project “Water management, a strategic resource for our future: projections of water use during socio/economic events of significant im- pact”. As in previous years, it carried out the DifendiAMO Water educational project, aimed at primary and middle schools in the municipalities of Santa Marinella, Subiaco and Rignano Flaminio, with more than 500 children involved. Finally, in November Acea Ato 2 worked with the Metropolitan City of Rome on the training project for teachers from schools participating in the Green School programme.

Acea Ato 5 renewed its agreement with Università degli Studi di Cassino e del Lazio Meridionale to create cooperative synergies to develop the local area, utilising educational internships and research and study cooperative projects and launching the research doctorate “Public Administration and companies for local innovation and development” with a 3-year duration.

Acea Infrastructure worked with the Department of Civil and Environmental Engineering at Università La Sapienza in Rome on the project, “How are our rivers?. Monitoring water quality in an ur- ban environment”, aimed at high school students with the aim of defining the qualitative characteristics of the Tiber River, through participatory monitoring campaigns and educational meetings. AdF moved forward with the activities outlined in the agreement signed with the Department of Physical, Earth and Environmental Sciences at the Università di Siena, in the context of the “Smart Artificial Cells For Remediation Of Envronmental Pollutants” project, to develop innovative technology to construct small artificial cells with enzymes able to degrade pollutants in a selective and efficient manner (including emergent pollutants) found in water systems. Additionally, the Company signed a research contract with LifeCARES Srl, a spin-o of the Department of Biotechnology, Chemistry and Pharmacy at the Università di Siena, for a study to determine the feasibility, in technical/economic terms, as well as the energy/environmental performance, of recovering algae from the Laguna of Orbetello for energy purposes. Finally, in the con- text of educational projects, AdF worked with high school students studying environmental biotechnology who visited the treatment plant in Siena and the analysis laboratory.

Gesesa again in 2023 continued its Plastic Free project, aimed at local high schools, donating water bottles and water dispensers, to reduce plastic use and organising a technical visit for students from Università del Sannio to the treatment plants in the Municipality of Benevento.

Gori, in 2023, developed an agreement with the Department of Earth and Environmental Sciences and Resources at Università Federico II in Naples, for the quantitative assessment of subterranean water in certain aquifers, to develop a water availability forecast model, with scientific support from the Department of Civil, Architectural and Environmental Engineering of Università Federico II in Naples and the Department of Civil and Mechanical Engineering of Università degli Studi di Cassino e del Lazio Me- ridionale to carry out the Water Actions programme. Finally, the Gori Educational project continued, also available to high schools, with organisation of guided tours to some of the treatment plants managed.

Areti began in 2023 the HEDGE IoT project, in cooperation with Università Roma Tre and the Municipality of Rome, to explore the technological infrastructure of Energy Communities for interaction with the electricity network with a view to flexibility, while further investigating the topic of combating energy poverty.

Orvieto Ambiente continued its collaboration with the Agricultural Department of Università della Tuscia, initially begun in 2021, to utilise quality compost in agriculture and activated, with Università del Sacro Cuore of Milan, a partnership for biomonitoring air quality through bees.

COMPARISON WITH THE REFERENCE CONTEXT

In addition to the collaborations with universities and the afore- mentioned partnerships, Acea participates in research centres, standard-setting bodies and industry associations, playing strategic roles, participating in projects of interest and contributing to studies related to the businesses in which it operates.

Acea participates in occasions for dialogue with the business world and the scientific community on issues of national and international importance and oers its own specialist contribution on the occa- sion of conferences, forums and workshops on topics linked to its managed companies, also presenting publications and works of technical-scientific relevance.

During the year, the Group participated in events including: Ecomondo, the most important trade fair for the green and circular economy in the Euro-Mediterranean area (see Relations with the environment).

On sustainability issues, Acea participates in networks of experts,

working groups, studies and sector research organised by the academic world, civil society, institutions and business entities. In- deed, the company is active as an associate in the Global Compact Network Italy Foundation, the representative body of the United Nations Global Compact in Italy, the Sustainability Makers - the Professional Network (formerly the CSR Manager Network), the national association that brings together the main Italian companies active in corporate social responsibility.

The company also participates in benchmark analyses on sustain- ability in Italian Utilities, like those carried out by the Utilitatis research centre and Top Utility.

147 The obligation arises for the Parent Company due to its control of Acea International, the vehicle company through which shares in the overseas companies are held. The data produced in the Country by Country Report are merged into the audited Consolidated Financial Statements.
148 The low amount of revenue, and consequently the taxes paid, in relation to the Group’s activities in foreign countries has led to the overseas companies being reported as non-material from an economic/financial point of view; in addition, the potential evolution of the sector and other strategic and representative criteria regarding the Group’s development and main impacts, have resulted in them not being included within the scope of the Consolidated Non-Financial Statement. The main data and information referring to these companies are however included in the Sustainability Report (see the chapter Water Company data sheets and overseas activities). Although the issue of GRI 207 – Tax was not included among the material issues identified with the involvement of stakeholders and therefore does not appear in the GRI Content Index, it is nevertheless mentioned here as testament to transparency and good accounting practice.
149 See the Code of Ethics, available on the website, page 20.