Environmental sustainability: strategic factor for business development

Commitment to match growth in financial results with a reduction in the environmental impact of our activities has always been part of our mission, even when we were in the Pirelli Group. The publication of the Prysmian Group’s first environmental report represents a new step forward in the direction of transparency and accountability to our stakeholders. Business sustainability is an increasingly critical issue for every company and we intend to use this report to give an account of our work and results in this area, particularly to our customers and business partners, to the financial markets and our shareholders, to institutions, to the general public and anyone else having a relationship with Prysmian. With the aim of clearly stating the importance we place on environmental conservation and protection, we have prepared and adopted a formal policy, reproduced in this report, that summarises the principles that we undertake to observe in relation to the environment and health and safety. The Prysmian Group Ethical Code also addresses the environment, clearly affirming that “companies in the Prysmian Group believe in sustainable, global growth in the common interest of all stakeholders, present and future”. Lastly, in order to make such policies even more effective, Prysmian has become a promoter of the “Cable Manufacturers Environmental Code of Practice”, together with other companies in the sector belonging to the Europacable association.

Sustainability of production processes
Prysmian’s environmental commitment, which is described in this report, originates in its initial strategic and managerial decisions and runs through to definition and implementation of operational and production processes, with consequent constant improvements in the environmental performance of its products through innovation and Research & Development. With a view to optimising the environmental performance of product life cycle, Prysmian pays particular attention not only to the purchasing of raw materials, but also to the methods of transportation of materials and goods through to end product delivery to customers. For an industry Group like Prysmian, with 56 plants in 24 countries, a clear environmental policy is essential for the management of production processes. The Health, Safety and Environment department is in charge of directing, coordinating and controlling environment and safety policy and supports the Group in defining improvement objectives and related action plans, thus providing solutions to particularly complex issues. Thanks to the methods developed, Prysmian has made significant progress in improving the environmental impact of its industrial activities, particularly in terms of reducing energy and water consumption and of producing and consuming waste and solvents. The standards adopted by Prysmian (ISO 14001 for the environment and OHSAS 18001 for health and safety) are widely applied in the international sphere and have clearly and objectively qualified the Group’s commitment in regard to all its many stakeholders.

Focus on product innovation
Our product is used in a wide range of applications and can be said to be the backbone or nervous system of the two strategically important sectors of energy and telecommunications. Thanks to specific investments over the years and its 7 R&D centres employing some 400 experts, the Group has achieved significant results in terms of environmental product innovation, by designing cables that use fewer and fewer raw materials while providing the same or even better performance. Important results have also been obtained in the use of more environmentally-friendly raw materials: for example, Prysmian has extended the use in submarine cables of cross-linked polyethylene extruded insulation (XLPE) in place of traditional oil-impregnated paper insulation, thus minimising the consequences of any accidents that might occur for non-preventable causes over a cable’s long lifespan (40-60 years). In terms of cable screening, lead has been replaced in many cases by lighter more ecofriendly aluminium. Environmental product innovation also follows the imperative of adopting solutions that satisfy customer needs: this is the case, for example, of the innovative P-Laser cable, which apart from being produced entirely with eco-friendly materials, is easier to install and offers flexible, efficient and reliable performance.

More efficient and sustainable networks
Product and process innovations undoubtedly represent the bases of an effective environmental policy, but for a Group like ours the challenge also lies in overall technological innovation that we are able to offer our customers, particularly utilities and telecom companies, to allow them to expand and upgrade their power and communication networks. In fact, network infrastructure is of vital importance for ever more responsible use of energy resources. More extensive, efficient networks make it possible to achieve the desired separation of the geography of consumption from the geography of production, meaning that energy can be produced where cost and environmental impact are least, and can be transported to where demand is greatest. Such a consideration acquires even greater significance in view of the fact that renewable energy, particularly wind and solar power, is generated in places that are often far from where it is consumed and which are not connected to the principal transmission and distribution networks. Conscious of this opportunity and need, Prysmian has invested heavily in recent years in developing new technology, for example cables with extruded insulation to transport up to 500 kV in direct current. In fact, this type of system carries lower costs and can be used for both underground and submarine interconnections for transferring power to more isolated networks or those that are not easily linked.

I close this introduction to Prysmian’s first environmental report by giving an assurance of the same and greater commitment in the future, in the firm belief that a more sustainable business can contribute to generating better financial results.

Valerio Battista, Chief Executive Officer

Prysmian Environmental Report 2009