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, updated in 2022.
The economic value distributed in the year to public authorities in the form of taxes was € 186.8 million (approximately € 150.7 million in 2021). The tax rate for the year is equal to 37.6% (it was 30% in 2021).

The Tax Management 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. Acea interacts with the Authorities appointed in a collaborative and transparent manner and annually reports on updates to the main legal tax disputes in the Consolidated Financial Statement, to which reference should be made. In compliance with the relevant legislation, Acea produces a Country by Country Report¹⁴⁰, which lists the information on taxes paid in each jurisdiction in which the Company operates. According to the latest Country By County Report filed by Acea in 2022 with the Italian Revenue Agency covering 2021 data, 97% of the total amount is paid in Italy¹⁴¹ 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 companies 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, independent administrative authorities, industry associations and representative bodies. In 2022, the total amount of this item was approximately € 3.25 million (€ 2.91 million in 2021).

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 new edition of the Group’s Code of Ethics, approved in late 2022, devotes 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». In 2022, 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 of their representatives and candidates.
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 Institutional Relations Function protects corporate interests and local, national and international public and private institutions and bodies. The Legal Affairs Function supports the Group Companies for legal aspects related to the activities, the Corporate Affairs Function 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 entities and research bodies, Acea carries out environmental and social initiatives and projects aimed at protecting common heritage; these projects are referred to and illustrated herein (see, for example, Relations with the Environment or the chapter Customers).
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 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 affects 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 managing health and environmental emergencies with an impact on the population, for which it defines the level of risk (low, medium and high) and provides for the organisation of intervention teams. The company also holds Biosafety Trust certification for actions to prevent and control viral infections, including coronavirus.
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 dedicated 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 emergencies 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 Offices, 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, detailing all of 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 backbones that serve the majority of the region, the manuals indicate the time frames, the instrument references, offsetting measures to alleviate the disruption and the operations for reopening the flow, also allowing non-expert staff to manage the main steps in an 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.
In 2022, Acea Elabori further revised the Emergency Plans of the Grottarossa and EUR2 Centres, previously updated in 2021 with the inclusion of the measures to counter the spread of Covid-19, and implemented the management system for the prevention and control of infections by Biosafety Trust Certification (RINA).
Finally, it should be noted that during the year, a specific training course was dedicated to “emergency management” and aimed at employees of the Group companies (see paragraph 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).
Furthermore, AdF created and inaugurated the Museum of Water in the Municipality of Castiglione d’Orcia (SI), a space intended to enhance the connection between community and water resources, and to raise awareness among citizens of environmental issues. AdF also activated a course dedicated to Renewable Energy Communities, with the objective of promoting the territory’s energy transition, including through several conferences and public events, for example with the Union of Municipalities of the Val di Merse (SI) and with the Municipality of Abbadia San Salvatore (SI).
In 2022, in collaboration with the Campania Region and the Campania Water Authority, Gori continued with its plan to remove pollution from the hydrographic basin of the Sarno river, thanks to the Energie per il Sarno [Energy for the Sarno] project. In particular, energieperilsarno.it was launched during the year to engage with citizens. The website describes, in real time, the progress of the investment programme. Furthermore, in synergy with those same institutions, Gori launched the Azioni per l’acqua [Actions for Water] project, financed with NRRP funds and intended to protect the water resource and reduce leaks in the distribution networks.
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, in 2022, Acea Ambiente signed a memorandum of understanding with the Metropolitan City of Turin 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 innovative players. In 2022, Acea was a partner in the “Re-SHApCeA” call, promoted alongside EY, to identify innovative ideas in three areas: A new model for smart cities; infrastructure, buildings and networks, and a new workplace and workforce model. The call saw the involvement of 10 Acea mentors, who supported the start-ups in the presentation of their ideas, and led to the selection of 5 interesting start-ups.
Furthermore, Acea launched the “Green Hydrogen Tech Accelerator” initiative during the year, in collaboration with Open Innovation and Deloitte Officine Innovazione, to create a technological accelerator, aimed at Italian and international start-ups, and to identify innovative solutions for hydrogen-based technologies: from production and transportation, to storage and energy consumption. In this area, more than 260 start-ups were assessed and 5 were selected for in-depth technological meetings. Lastly, in collaboration with Open Innovation and ELIS, scouting events were launched for new technological solutions to be applied to waste-to-energy, treatment and bio-refineries.
Participation continued in the project Casa delle Tecnologie Emergenti [House of Emerging Technologies] in Rome, sponsored by the Department of Economic Development, Tourism and Employment, for the development of the smart city of the future. With reference to this initiative, in 2022, the following were launched: a call for the selection of start-ups with innovative design solutions, related to emerging technologies or 5G networks, to be developed in the sector of mobility or tourism, and the public notice for the selection of micro-businesses, small and medium enterprises to be admitted to the technological transfer.
During the year, Acea Elabori entered into new agreements with businesses active in the sectors of the circular economy, advanced plant and emissions abatement, including those with: NATURE 4.0, a project on the technological development and validation of environmental sensors; Smart Urban Cities and Smart Comp, which also involved the installation of a sensor calibration laboratory in Grottarossa; SRA and FKV, for the development of new analytical solutions in the field of measurements of volatile substances exhaled when breathing and for the determination of the content of “organic fluoride” in various environmental media, and FLIMSlab, for the development of a sensor platform used to determine microplastics in water.
Acea Innovation and Agile Academy (another Group company) signed a memorandum of understanding with the Consortium for the Protection of Morellino di Scansano, for the development of Renewable Energy Communities, the realisation of interventions in the field of electric mobility and economic/social studies and research on new technologies, environmental sustainability and the circular economy. AdF took part, as a partner, in the network that presented the European project LIFE Turbines for the decarbonisation of urban water networks.

Finally, with the aim of bringing together the protagonists of innovation to study new models of urban development, Acea organised the third edition of Innovation Day (see info box).

Collaborations with Universities and Research institutes are carried out within the framework of conventions and agreements.
To assess changes in the availability of water resources in the short and long term, in 2022 Acea Ato 2 continued its collaboration with the CNR Institute for Water Research for the development of tools and instruments for forecasting the flow rates available for drinking water purposes in relation to short-term scenarios (less than 1 year), and the collaboration with the University of Catania for the prediction of the probability of satisfying the available water flows in the event of climate change in medium and long-term scenarios (30, 50 years). Furthermore, in terms of initiatives to protect and safeguard sources of supplies, it entered into a research agreement with La Sapienza University of Rome’s CERI Geological Risk Prevention and Control Research Centre, for the study of geological hazards, with the implementation of monitoring systems and the relative reporting for managerial purposes, at the Peschiera and La Capore Springs plants, some of the main supply sources managed. In 2022, AdF, alongside Agile Academy, signed a Collaboration Agreement with the Department of Biological, Geological and Environmental Sciences (BIGEA) at the University of Bologna aimed at carrying out studies, research and trials in the context of forecasting the availability of water resources, planning their use and managing the integrated water cycle. The company is also an industrial partner of the research doctorate “Smart Artificial Cells for Remediation of Environmental Pollutants” coordinated by the Department of Biotechnology, Chemistry and Pharmacy at the University of Siena, aimed at the development of a new technology for the treatment of emerging pollutants, such as pharmaceuticals, drugs, pesticides, and plant protection products, etc. (see also the box Research and innovation in the water area).
During the year, in collaboration with IRSA-CNR, Acea Elabori launched the BIOREF project for the development of biobased products obtained from organic, safe and low-impact waste.
Areti entered into a collaboration contract with RSE – Research on the Energy System for the evolution of electricity infrastructure, in line with the decarbonisation targets set by Agenda 2030, studying, in particular, the interactions of electric vehicle charging systems, on public land as well as private property, with the electricity distribution grid. The agreement is part of the Mission Innovation initiative, which sees Italy, in particular Areti and RSE, in support of the Ministry for the Environment and Energy Security, involved in the Green Powered Future Mission, a project aimed at promoting and financing the development of smart grids. The company continued its collaboration with the Department of Astronautical, Electrical

and Energy Engineering (DIAEE) of the University of Rome La Sapienza to conduct studies and research in the relevant areas. Lastly, Areti became a partner of the Linux Foundation for Energy (LFE), an open source foundation focused on the energy systems sector, which exploits the best solutions to scale, modernise and digitally transform the energy systems sector. Thanks to its collaboration with the Foundation, Areti launched the implementation of the Advanced Distribution Management System (ADMS) for the management of the electricity distribution grid, using as a reference the architecture designed for the Service-based Open-source Grid automation platform for Network Operation of the future (SOGNO) that LFE is developing.
Lastly, Deco launched a collaboration with the Department of Engineering and Geology at the Università Gabriele D’Annunzio di Chieti for the monitoring of inclinometer measurements and stability studies on land and river banks.
The virtuous relationship with the local region is also expressed through the collaboration between Group companies and the educational world of the new generation (see Customers, section on Communication, events and solidarity, and Personnel, section on Development of human resources and communication).
In 2022, Acea Ato 2 offered its support to the Liceo Orazio in Rome, organising training events on water management, and renewed the Difendiamo l’acqua [Let’s Defend Water] initiative, with events aimed at primary and lower secondary schools in the municipalities of Gallicano nel Lazio, Guidonia Montecelio, Castel Gandolfo, Lariano, and Nemi.
AdF organised environmental education activities, with visits to springs and events at schools, and distributed over 2,500 bottles to students.
Deco carried out the educational project Un goal per il futuro. Fai vincere la sostenibilità [One goal for the future. Victory for sustainability], aimed at primary and lower secondary schools in the Abruzzo Region, to promote the knowledge and dissemination of the culture of sustainability. The young people were asked to write a report on their choice of at least one of 17 Sustainable Development Goals. The papers were evaluated by Deco’s Sustainability Team, which selected and awarded the three best reports.
Gesesa continued the “Plastic Free” project aimed at local institutes and universities and donated water bottles and dispensers to reduce the use of plastic.

COMPARISON WITH THE REFERENCE CONTEXT

In addition to the collaborations with universities and the aforementioned 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 offers its own specialist contribution on the occasion of conferences, forums and workshops on topics linked to its managed companies, also presenting publications and works of technical-scientific relevance.
In 2022 Areti published in the international journal The European Physical Journal - Special Topics: Complex Urban Systems, the article Analytical fault impact-model for the electrical grid, which presented the analytical mathematical model designed and developed by the company to calculate the impact of faults on the electrical grid.
During the year, the Group participated in events including: Ecomondo, the biggest trade fair for the green and circular economy in the Euro-Mediterranean region; the FORUM PA, a national event on innovation designed to create collaboration between central and local administrations and companies active in the territories around the objectives of Italy’s National Recovery and Resilience Plan (NRRP); SMAU Milano 2022, the exhibition for CSR and social innovation, and Maker Faire Rome, the European event for innovation (see info box).
Furthermore, Acea took part in important events on innovation, such as Gli Stati Generali delle Città Intelligenti [The General States of Smart Cities] organised by Blum for the City Vision event in Padua; the Utility Day at the Forum D’Assago; the Scaleup Summit of Mind the Bridge in San Francisco and the conference of the Start-up Intelligence Observatory by PoliMi, Imprese e startup nella transizione: innovazione digitale per un futuro sostenibile [Businesses and start-ups in the transition: digital innovation for a sustainable future].
Gesesa and Gori attended the Green Med Symposium, an event dedicated to the green economy and the ecological and digital transition (see the box Acea Innovation Day 2022: a tour of “People, Territories and Experiences through the Ecological and Digital Transition”). Gori took part in the Giffoni Film Festival, speaking during the masterclass dedicated to water sustainability and answering questions from the young participants, and in the Climate Smart Utilities Recognition Programme in Copenhagen, during which it explained its vision, strategies and programmes for managing climate change.

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. Indeed, 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.
Acea’s participation in Utilitalia, the federation that brings together the multi-utilities of water, environment, energy and gas, is also expressed through its participation in technical panels and topical working groups. In 2022, Acea took part in initiatives organised by the federation on antitrust, data breaches, EU regulations on sustainable finance, and the Taxonomy.
The company also participates in benchmark analyses on sustainability in Italian Utilities, like those carried out by the Utilitatis research centre and Top Utility.

140 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.
141 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 companies 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.