Sustainability Channel

Victory with zero emission

Pirelli Diablo Supercorsas have won the first international competition for electrically propelled motorcycles, organised by the International Motorcycle Federation (IMF). The victory was scored on 26 September at Italy’s Imola motor racing circuit, where over 70,000 spectators, who were there to watch the 12^th round in the World Superbike Championship, saw the e-Power race won by Tuscan rider Tommaso Betti on a bike he built himself, the Betti Moto.

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.

R&D: Tecnologia a sostegno della crescita

Pirelli today has one research centre in Italy and 8 application centres in the world. The R&D sector counts more than one thousand engineers, with more than 60% coming from countries other than Italy. The weight of the company’s investments will be maintained at around 3% of annual for the next three years, one of the highest levels in the sector. This will result in a total portfolio of over 4,500 patents, and a capacity to renew the portfolio of premium original equipment products in under four years and to have the full range of tyres produced without highly aromatic oils by 2013. The exchange of information and technology between the different tyre business sectors and the ongoing collaboration with important University research centres and leading car makers ensure the group has the technology to develop advanced products, tested with success in the main motorsports and transferred onto the road to serve specific client needs.

Through research, Pirelli has been able to develop over time products with low rolling resistence and with ever greater use of biomaterials. From the engineering standpoint, development times have been reduced significantly and thus product costs. In production processes, the application of avantgarde systems like Mirs (a robotic tyre production process exclusive to Pirelli) and the innovative compounds system Ccm (Continuous Compound Mixing System) allow the development of products through high quality systems that are also highly flexible. Pirelli is also at the cutting edge in the production of the Cyber Tyre, the intelligent tyre able to transfer information to the vehicle that is fundamental for driving stabilization and safety.

Continuous research and the continual development of these activities will allow the company to introduce technical innovations by 2015 that will be of key importance in the production and design of the tyres of the future. In this sense, Pirelli is working on the development of new materials derived from the application of nanotechnology, biomaterials and modified polymers and on innovative processes like new generation Mirs (next Mirs) and Ptsm which represents the evolution of the Ccm compounds system.

In particular, the car sector, in the period 2011-2015, will see:
      • the development of technological solutions focused on ‘green performance’ in the RDE;
      • the production of ad hoc products, differentiated on the basis of specific demand in the various geographic areas;
      • the development of the Pzero tyre product line as the top product in the Ultra-High Performance segment.
This will all be done through the application of sustainable solutions, also in engineering processes, the introduction of innovative reinforcing fibres in the development of tyres and the introduction of second generation of the Cyber Tyre.

In the moto sector, in the period 2011-2015, Pirelli foresees:
     • further availability of exclusive technologies;
     • faster product renewal aimed at anticipating the needs of consumers;
     • the strengthening of technological partnerships with the main motorcycle makers;
     • the use of experience in Motorsport as a technological driver of innovation and the development of the Cyber Tyre for this segment.
This will all result in a higher performing and safer product portfolio.

In the industrial sector, in conclusion, in the period 2011-2015, Pirelli foresees:
      • the development of products that will enable greater fuel savings and longer life (up to a million kilometres);
      • greater speed in product renewal;
      • the availability of high-tech production platforms in fast developing countries.
These results will be possible thanks to new steel cord materials and structures, the use of biomaterials and innovative reinforcing fibres, the registration of over 30 patents relative to structure, material and compounds innovation, new green solutions for trucks and the use of the Cyber Tyre also in this segment.