The creation of value through sustainability
For Pirelli, sustainability and corporate governance lead and contribute to the achievement of the Industrial Plan’s goals and to value creation. In particular, between 2011 and 2013, Pirelli will launch a new action plan of environmental, social and economic sustainability as estimated by Marco Tronchetti Provera, chairman of Pirelli & C. SpA, during the Industrial Plan 2011-2013.
In its production systems, Pirelli will continue to increase the use of raw materials with low environmental impact and processes that will bring by 2015 a reduction of 35% in the consumption of water and 15% in energy, with a cut in CO2 emissions of 15% against 2009 data. This roadmap defining and controlling the Group’s energy policy will also be supported from 2011 by the full operation of the new technology hub at Settimo Torinese, the world’s most eco- efficient tyre factory which will also be a model for Pirelli’s other production facilities.
On the social front, existing plans for safety in the workplace will be further enhanced through programmes, reviewed each year, of prevention and training in the plants, while in the human resources area will introduce policies to increase the management of equal opportunities and favour better quality of work-life balance. Sustainable management will be extended to the supply chain also through audits conducted by independent external bodies that will verify that suppliers meet the standards required by the Group. In the context of relationships with local and international communities, cooperation with government and non-government authorities will be strengthened with a view to sharing sustainable development initiatives, as was done in the case of the UN refugee commission cooperation projects.
This year, for the fourth consecutive time, Pirelli was confirmed world sustainability leader in the ‘Auto Parts and Tyre’ sector of the Dow Jones Sustainability Stoxx and Dow Jones Sustainability World indices. The areas of excellence recognized were corporate governance, code of conduct and self-regulation, quality of working environment, sustainability of the ‘supply chain’ and the development of human capital.
As a consequence, Pirelli is today widely held in the portfolios of socially responsible investors in Europe and North America (approximately 6.0% of the market float).
Corporate Governance’s principles
Pirelli’s corporate governance is based on three elements:
• the centrality of the Board of Directors in defining strategic direction and the supervision of management;
• an effective risk management process;
• a top management compensation policy strongly linked to value creation in the long term.
The central role of the corporate governante was confirmed during the Industrial Plan 2011-2013.
With regard to risk management, Pirelli has seen to it that the governance of risks that could interfere with or jeopardize the achievement of the company’s objectives is treated as an integral part of the industrial plan development process contributing, for example, to the definition of targets.
Finally, the incentive plans involve all group managers and are closely linked to medium/long term objectives. Over 35% of managers’ compensation is variable and of this over 70% is connected to the achievement of financial targets in the 2011-2013 industrial plan.
Categories: Sustainability