Letter to stakeholders

Prysmian published its first Environmental Report in 2010, confirming its understanding of the importance of combining focus on growth and results with business sustainability. This represented a fundamentally important step towards transparency and a desire to provide our stakeholders with clear and complete information about the Group's performance. And by way of demonstrating that we do not see sustainability as a constraint on our business but, on the contrary, as another driver of growth, we have intended to take another step forward.

In fact, the scope of the first Environmental Report has been extended to include an account of our ethical and socioeconomic performance, resulting in the production of a Sustainability Report inspired by the Global Reporting Initiative's internationally recognised G3 Guidelines for sustainability reporting. This has involved selecting a set of suitable indicators that provide an initial picture of Prysmian's performance in terms of Corporate Social Responsibility. This step represents the start of a new course of action aimed at improving our performance in this field, in line with the Group's public company nature.

The most important challenge currently being faced is our integration with the Draka Group, acquired at the start of 2011. This process will lead to the creation of a Group with 22,000 employees and 98 plants across 50 countries and will require a clear strategy for harmonising business practices and policies in order to build a shared system of values and objectives throughout the organisation. Integration will also involve the major task of verifying and enhancing industrial performance where environment and safety are concerned, by analysing the global impact of the Group's activities.

The performance figures for 2010 demonstrate how Prysmian has been able to achieve its stated health, safety and environment objectives. In particular, it has continued to implement Health and Safety Management Systems in order to obtain OHSAS 18001 certification, with another six plants certified in Italy, Malaysia and Indonesia during the year. Thanks to the extension of theoretical and practical training, the number of in-house qualified auditors increased in 2010. Furthermore, during the year all auditors took part in the "Advanced Auditing Techniques" training course.

As regards our environmental impact, the data collected during 2010 confirm a generally stable performance compared with the prior year, with improvements in certain areas. For example, total energy consumed by the "power cables" plants decreased on 2009, from 3.3 to 3.2 GJ. As far as water consumption is concerned, the optical fibre segment has reported a positive trend thanks to investments that have made fume reduction more efficient, considerably reducing the demand for water as a result. Lastly, better practices promoted at the Group's "power cables" plants have resulted in a significant reduction in the quantity of hazardous waste disposed of, both in absolute terms (from 4,373 to 3,899 tonnes) and in relation to production (from 5 to 4.1 per tonne produced).

The high level of attention to sustainability is obviously also reflected in research and development. Ever increasing energy has been devoted to promoting environmental product innovation, such as the development of the P-Laser cable, made entirely from recyclable materials. In this context a new project has been started to demonstrate that the environmental impact of producing P-Laser power cables is lower in terms of the quantity of equivalent CO2 emissions than for XLPE MV cables.

Prysmian recognises that the issue of CO2 emissions is one of the topics of most interest to its stakeholders. During 2010 we therefore initiated specific studies to quantify the carbon footprint of the Group's activities. Prysmian Câbles et Systèmes in France was particularly involved in this project, the results of which have led to the definition of specific goals and objectives for reducing CO2 emissions, along with an action plan for achieving them. Prysmian intends to carry on identifying projects and activities to be able to measure and improve its carbon footprint and energy efficiency.

The Sustainability Report devotes particular attention to Human Resources, reflecting the central role played by our employees within the Group. Prysmian supports numerous training programmes for employees at every level, promotes specific initiatives for new talents and encourages international mobility, viewed as one of the prime tools for developing Key People. The success of these strategies translates not only into the results achieved by the business, but also into the ability to retain resources, confirmed by a reduction in staff resignations in 2010 compared with the past.

Apart from all those initiatives directly linked to its operating activities, Prysmian recognises its social responsibility in countries where it has a commercial presence by supporting public interest projects. These initiatives vary in nature and extent and range from support for cultural and training schemes to building of infrastructure. Among the more important projects is the construction of a hydroelectric plant in Madunda, in southern Tanzania, to which we have donated technical support and material for the benefit of local inhabitants.

I wish to conclude this introduction to the first Sustainability Report by recalling the words of our Ethical Code: " Prysmian Group companies believe in sustainable, global growth in the common interest of all stakeholders, present and future".

Valerio Battista, Chief Executive Officer

Prysmian Sustainability Report 2010 - interactive version
Prysmian Sustainability Report 2010 - pdf version