Climate Change Data

Environmental Metrics

Social Achievements

• Agreed with main trade unions the terms of the new supplementary labor agreement, based on performance-related incentive tools, some of which in the form of welfare.

Climate Goals & Targets

Environmental Challenges

• The Offshore segment, whose global market environment remains extremely depressed following the steep decline in oil prices.
• The difficult political and economic context and worsening regulatory environment of countries in which the Group operates, particularly for VARD’s activities in Brazil.
• The difficult political and economic context and worsening regulatory environment of countries in which the Group operates, particularly for VARD’s activities in Brazil.
• Many factors can influence production schedules, as well as capacity utilization, and so impact agreed vessel delivery dates with possible penalties payable by the Group.
• Deterioration in the financial situation of many clients in the Offshore sector could lead to the cancellation or the postponement of a large number of orders in the order book.
• The Group incurs significant upfront costs, assuming the risk of incurring such costs before receiving full payment of the price from its clients and thus having to finance the working capital absorbed by ships during construction.

Mitigation Strategies

• VARD’s actions to diversify into new sectors and new markets.
• In pursuing business opportunities in emerging markets, the Group safeguards itself by favoring commercial prospects that are supported by inter-governmental agreements or other forms of cooperation between States, as well as by establishing, within its own organization, appropriate safeguards to monitor the processes at risk.
• The Group manages its contracts through dedicated structures that control all aspects during the contract life cycle (design, procurement, construction, outfitting). Contracts with suppliers include the possibility of applying penalties for delays or hold-ups attributable to such suppliers.
• When acquiring shipbuilding orders, and where deemed necessary, the Group performs checks on the financial strength of its counterparties, including by obtaining information from leading credit rating agencies. Suppliers are subject to a strict qualification process, including evaluation of the potential risks associated with the counterparty concerned. As regards the financial aspect, the Group offers suppliers the opportunity to use instruments that facilitate their access to credit.
• To address the difficult situation in the offshore market, the subsidiary VARD is now working with clients and financial institutions to ensure delivery of not only vessels in the current order book but also those whose orders have been canceled. The subsidiary is also considering, where possible, all technical and commercial opportunities to reposition on the new markets served those vessels already built but whose orders have been cancelled.
• The Group’s objective is to maintain a more than sufficient level of committed and uncommitted credit lines and construction loans to guarantee coverage of the working capital needs generated by its operations.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Sustainability
• Environmental Impact Reduction
• Innovation
• Health and Safety
• Climate Change

Environmental Achievements

• Developed an efficient air sanitation system, "Safe Air"
• Started construction work on Zeus - Zero Emission Ultimate Ship

Social Achievements

• Implemented safety protocols against COVID-19, ensuring worker health and safety
• Created more than 500 direct jobs in Italy and 2,500 in the supplier network
• Employee satisfaction with prevention and safety policies at 91%

Governance Achievements

• Renewed participation in the United Nations Global Compact
• Received the MIKE award for future-oriented strategic approach and sustainability vision
• Awarded Oscar for Financial Statements for completeness and transparency

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic significantly impacted cruise and offshore oil & gas industries
• Loss of 20% of production hours at Italian sites due to pandemic
• Supply chain disruptions

Mitigation Strategies

• Renegotiated payment terms with customers to secure backlog
• Implemented extraordinary protocols and safety measures to resume production
• Diversification strategy into renewable energies and high-tech sectors
• Developed alternative sourcing strategies

Supply Chain Management

Responsible Procurement

• Suppliers’ Code of Ethics

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Sea level rise

Transition Risks

• Regulatory changes
• Market shifts
• Reputational risks

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: UNGC

Certifications: ISO 14001, ISO 45001, OHSAS 18001, SA 8000, ISO 27001:2013, ISO 9001:2015, AQAP 2110

Sustainable Products & Innovation

• Zeus - Zero Emission Ultimate Ship
• Safe Air system

Awards & Recognition

• MIKE award
• Oscar for Financial Statements

Environmental Metrics

ESG Focus Areas

• Governance and business integrity
• Climate change
• Sustainable supply chain
• Human rights
• Development and safeguarding of human resources
• Diversity and equal opportunity
• Health and safety in the workplace
• Customer satisfaction
• Product quality and safety
• Environmental management
• Environmental impact of products and services
• Local communities and relations with the local area
• Innovation, research and development
• Cyber security

Environmental Achievements

• Achieved a number of objectives in the 2018-2022 Sustainability Plan related to environmental sustainability (except for obtaining ISO 50001 certification, which was delayed due to the COVID-19 pandemic).
• Developed an ecological dredger with reduced environmental impact.
• Continued efforts to produce vessels with increased efficiency and lower emissions.
• VARD strengthened its position in the offshore renewable energy sector, receiving an order for four service operation vessels for the Dogger Bank wind farm.

Social Achievements

• Signed an important trade union agreement on tenders.
• Signed a sustainability-linked construction loan with Intesa Sanpaolo and Cassa Depositi e Prestiti.
• Signed a letter of intent with Comau for the development of robotic solutions for steel welding, improving worker safety.
• Signed an agreement with the Government for the creation of nurseries at company sites.
• Renewed collaboration with the Sandro Pertini Higher Education Institute.
• Inaugurated a renovated preschool in Monfalcone.

Governance Achievements

• Maintained the Corporate Governance system and risk management in line with international best practices.
• Implemented the International Ship and Port Facility Security Code (ISPS Code).
• Adopted preventative measures and policies to prevent corruption.
• Defined the tax strategy.
• Implemented an external stakeholder engagement program.
• Achieved ISO 37001 certification for its Management Systems for the prevention of corruption.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic.
• The war in Ukraine exacerbated an already challenging economic situation.
• Climate change risks (physical and transition risks).

Mitigation Strategies

• Implemented risk mitigation controls and measures to address the COVID-19 pandemic.
• Implemented reverse factoring agreements to support suppliers' access to credit.
• Developed an integrated strategy combining business growth with social and environmental sustainability.
• Implemented Enterprise Risk Management (ERM) processes to manage sustainability risks.
• Developed a climate change scenario analysis in compliance with TCFD principles.

Supply Chain Management

Supplier Audits: 52 audit visits in 2021, 32 sustainability audits

Responsible Procurement

• Suppliers’ Code of Ethics
• Sustainability audit checklists
• Reverse factoring agreements

Climate-Related Risks & Opportunities

Physical Risks

• Catastrophic events (storms, floods, earthquakes, fires, heat waves)

Transition Risks

• Technological transition risks

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, TCFD, UNGC

Certifications: ISO 9001, ISO 37001, ISO 45001, ISO 27001, SA 8000

UN Sustainable Development Goals

• 8 SDGs

The Sustainability Plan contributes to the achievement of 8 UN SDGs.

Sustainable Products & Innovation

• Eco-sustainable ships and infrastructure
• Hydrogen-powered cruise ship
• Fuel cell-powered naval unit (Zeus)

Awards & Recognition

• CDP A- rating
• V.E 'Advanced' range
• Green Star 2021
• Universum Most Attractive Employers award
• SCA Excellence in Safety Award
• SCA Improvement in Safety Award

Environmental Metrics

ESG Focus Areas

• Governance and responsible and ethical management of our business
• Social sustainability
• Environmental sustainability and climate change

Environmental Achievements

• Greenhouse gas (GHG) emissions from Scope 1 and 2 increased by only 1%
• Water withdrawal reduced by 5%
• Energy consumption reduced by 2%
• Less waste produced compared to the previous year

Social Achievements

• 80% increase in economic resources deployed for training, significantly increasing average training hours per capita (24.7 hours per capita, +19% compared to 2021)
• Adoption of a new performance appraisal tool involving an increasing number of employees (84% in 2022 vs 80% in 2021)
• 17% of employees hired in 2022 were female, bringing the total female representation to 15%

Governance Achievements

• Maintained A- CDP (ex-Carbon Disclosure Project) Climate Change rating for the third consecutive year
• Improved Sustainalytics score by 2.4 points, from 19.7 to 17.3 (0 best / > 40 worst), compared to 2021
• Strengthened sustainability governance with the appointment of a new Board of Directors, 50% of whom possess ESG expertise
• Of the 40 sustainability audits carried out in 2022 at strategic suppliers, none detected any nonconformity

Climate Goals & Targets

Environmental Challenges

• Increase in work-related injuries during 2022, in conjunction with further growth in production volumes
• Lower share of waste being recovered (84% compared to 87% in 2021)

Mitigation Strategies

• Commitment to zero accidents will be addressed with even more determination
• Actions to mitigate impacts on biodiversity by 2027
• Maintaining the portion of waste sent for recycling between 80-90% every year

Supply Chain Management

Supplier Audits: 40 audits in 2022

Responsible Procurement

• Suppliers’ Code of Ethics
• Sustainability audits
• Training course on sustainability and responsible procurement principles

Climate-Related Risks & Opportunities

Physical Risks

• Catastrophic events affecting the supply chain
• Extreme weather phenomena damaging assets or causing production stoppages

Transition Risks

• Technological transition risks (long lead times, high costs, inefficiencies, low quality)

Opportunities

• Development of energy-efficient products and services
• Seizing opportunities in the fast-moving offshore wind industry

Reporting Standards

Frameworks Used: GRI Standards 2021, UN Global Compact

Certifications: ISO 45001, ISO 50001, ISO 37001, ISO 27001, SA 8000

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Fincantieri has identified 9 SDGs as relevant to its business.

Sustainable Products & Innovation

• Low-carbon ships
• Ships powered by renewable fuels
• Electrically-powered ships
• Hybrid ships

Awards & Recognition

• A- CDP Climate Change rating
• Improved Sustainalytics score
• Top Employers Italia 2022
• Special Award for the 2021 Consolidated Non-Financial statement
• Universum 'Most Attractive Employers in Italy'
• Shipbuilders Council of America Safety Excellence Award

Environmental Metrics

ESG Focus Areas

• Governance
• Environmental Sustainability
• Social Sustainability

Environmental Achievements

• Scope 1 and Scope 2 greenhouse gas (GHG) emissions decreased by 4%
• Electricity consumption decreased by 3% compared to 2022
• 3% increase in overall waste production, but a 3% increase in waste sent for recovery, with hazardous waste recovery increasing by 38%
• Launched the first cruise ship powered mainly by LNG and delivered several small/medium-sized vessels equipped with electric batteries

Social Achievements

• Delivered more than 789,000 hours of training, with a 50.5% increase in training hours per capita compared to 2022
• Achieved 75% overall employee engagement (up 3 percentage points from 2022)
• Achieved 34% female participation in the ‘Talent’ acceleration program (exceeding the 25% target)
• Decreased the frequency rate for work-related injuries by 19%
• Opened a second company crèche
• Launched a new organizational model ('Work for Future') based on smart working
• First Group in the Italian shipbuilding sector to be awarded the Gender Equality Certification by Rina

Governance Achievements

• Completed alignment with the Task Force on Climate-related Financial Disclosures (TCFD)
• 100% of employees (senior and middle managers) received variable remuneration linked to ESG targets
• Signed ‘green’ finance products amounting to over €2 billion
• Conducted 49 ESG audits at strategic suppliers, with none falling short of expectations

Climate Goals & Targets

Environmental Challenges

• A fatal accident occurred in 2023 to an employee of a company operating in Fincantieri's shipyards
• Supply chain disruptions due to commodity price changes and geopolitical factors
• Climate change risks (physical and transition)
• Cybersecurity threats

Mitigation Strategies

• Launched the 'Safety On Board' campaign to reinforce safety culture
• Developed supplier assessment program with ESG scoring and audits
• Implemented an integrated Enterprise Risk Management (ERM) – Project Risk Management (PRM) model
• Implemented a comprehensive cyber security transformation program including centralized security platforms, awareness campaigns, and incident response

Supply Chain Management

Supplier Audits: 49 sustainability audits in 2023

Responsible Procurement

• Suppliers’ Code of Ethics
• ESG assessment program
• Conflict Minerals Policy
• ESG-linked reverse factoring

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Rising sea levels
• Reduced water availability

Transition Risks

• Regulatory changes
• Market shifts
• Changes in commodity prices

Opportunities

• Development of energy-efficient products
• Growth in offshore wind and hydrogen technologies

Reporting Standards

Frameworks Used: GRI, TCFD

Certifications: ISO 50001, ISO 14001, ISO 45001, UNI/PdR 125:2022

UN Sustainable Development Goals

• Goal 7
• Goal 9
• Goal 11
• Goal 12
• Goal 13
• Goal 17

Fincantieri has identified 9 SDGs as relevant to its business and in line with its strategic guidelines.

Sustainable Products & Innovation

• Low-carbon ships
• Ships powered by renewable fuels
• Electrically-powered ships
• Hybrid ships

Awards & Recognition

• A- rating from CDP
• 'Advance' rating from Moody's
• Inclusion in the ESG Top Rated Companies List 2024 by Sustainalytics
• 'Top Employer Italy 2024' certification
• UNI/PdR 125:2022 certification on gender equality
• AA rating in Brand Finance Italy 100 – 2023