Letter to the stakeholders

In 2022, we saw significant social, geopolitical and economic events, which made the reference context very challenging. During these particular events, Acea sought to accelerate its sustainable development even further by implementing major ESG initiatives.

To cite a few examples, in the water segment, we achieved a 6% reduction in water volume lost compared to 2021 (14% compared to 2020), of the total electricity sold to customers on the free market 42% was green energy, we increased the production of quality compost by 31% compared to the previous year, we focused on training for our people, delivering around 208,400 hours of training, and Acea SpA was the first Italian multiutility company to achieve UNI/PdR 125:2002 certification for gender equality.

The drive towards a future of sustainable success is expressed fully in the updated edition of the Group’s Code of Ethics — approved by the Acea SpA Board of Directors in November 2022 — which cites sustainability, responsibility to stakeholders, and environmental protection as three of its main values and principles.

These value references only take on their full meaning when they are applied to corporate management in practice, and it is not by chance that the same Code outlines them in reference to investment planning, the performance of activities to achieve sustainable success, in short, the effective integration of social and environmental aspects into corporate growth strategies. After over a century of operation, Acea has demonstrated its ability to grow and constantly evolve while keeping pace with rapidly changing requirements, providing essential quality in- frastructure to promote the changing environment and to be sustainable. For example, today, the processes of digitalisation and the frontiers of innovation are two industry-wide drivers. Digitalisation and computerisation have had and are having a significant impact on all activities, be it the remote management of infrastructure, which optimises processes and makes it possible to quickly catch the need for intervention, speeding up the intervention itself, or the transformation of customer contact channels, now advanced and exacting, or even how employees do their jobs. Innovation and research allow us to explore new possibilities and operating methods and encourage the evolution of the busi- nesses we manage. Just think of the previously unimagined opportunities that the circular economy is opening up, and we must act quickly and proactively to accelerate the ecological transition for the transformation not only of businesses in Italy, but economies around the world.

Currently, research applied to our operating situation allows us to use drones to inspect networks or sophisticated artificial intelligence tools to implement predictive models on water availability, for example. This also includes the “smartification” of energy infrastructure, which is increasingly more important for developing flexible networks and “energy communities”. The Group company that oversees electricity distribution, Areti, alongside RSE (Ricerca sul Sistema Energetico, Energy System Research), is supporting the Italian Ministry for the Eco- logical Transition in its GreenPowered Future Mission to develop smart grids. Applied research allow us to perform highly advanced analyses on emerging organic micropollutants in water, identify secondary raw materials, and explore new possibilities for reuse. Over the past year, the companies in the Environment Segment, involved in the circular economy, received two EMAS awards for cutting-edge research and exper- imental projects, one of which, for example, studied the reuse of fly ash and bottom ash, which are wastes products of the waste-to-energy process. The potential spaces for further evolution are therefore expanding.

Our definition of sustainable success does not overlook the preservation of the natural environment, the increased ability to adapt to and predict the climate change already happening, and the commitment to mitigating its future effects, nor does it overlook social inclusivity. For us, this means offering essential services of increasing quality, advanced infrastructure to accompany growth in the regions where we operate, and a clear commitment to health and safety, job stability, the importance of continuous training, engagement of talent and new generations, plus contribution to individual and collective well-being. These basic principles will guide the Group's future developments.