Letter to our Stakeholders

RothFor Terna, 2011 was another year marked by good economic results, the seventh consecutive one at a time of economic turmoil both nationally and internationally. Particularly, in this last year, the difficult Italian situation has led to adopting extraordinary tax policy measures – such as the “Robin Hood Tax” – that have also significantly affected the Company’s accounts. We are therefore especially pleased to underline our capability of creating value that has allowed us, in 2011, to maintain the distribution of dividends at the same level of 2010. The shareholder return was only one of the positive results of our stable business approach based on solidity and versatility that aims at building lasting results also by focusing on sustainability and on all stakeholders: even in this area, our commitment has received growing recognition over time.

In 2011, investments in developing the electricity transmission grid, that continues to represent the principal crossroad of economic, environmental and social aspects of our operational activity, reached 1,229 million euro, surpassing 67 million euro invested in 2010. This is how Terna most significantly expresses its role as a useful company for the country: investments in electricity infrastructures improve the service’s quality and safety, with important consequences also regarding the potential of the economic system. We are therefore pleased to underline how some of the principal projects we implemented and are currently implementing – as for example the SA.PE.I. submarine cable inaugurated in 2011, and the Sorgente-Rizziconi and Montecorvino-Benevento power lines – regard Southern Italy and the Islands. The positive effects of developing the transmission grid include creating employment – in 2011, nearly 3,500 full time employees worked for contractors and sub-contractors in Terna’s building sites - and contributing to reducing CO2 emissions from the electricity service, deriving from increased grid efficiency and eliminating restrictions to renewable energy production.

Flavio CattaneoGrid development also represents the main area of Terna’s interaction with external stakeholders that is particularly expressed in presenting and approving the Development Plan, in coordination activities with the local governments and in collaboration agreements with leading environmentalist associations. In 2011, voluntary coordination activity continued with Regional Authorities and Local Bodies for identifying shared solutions for new infrastructure locations. The agreement with the WWF for sustainably developing the electricity grid led to implementing mitigation and enhancement works in three WWF Oases in Tuscany and in Sicily, that were completed and inaugurated during the past year. In December, Terna signed a Memorandum of Understanding with Legambiente for promoting energy sustainability. For the first time in 2011, the grid’s Development Plan was presented also to associations representing production categories and to consumer associations: it is important to point out in this respect that, as of 2005 to the present, Terna’s activities generated savings of 4 billion euro for the Italian electricity system.

In the new 2012-2016 Strategic Plan, investments for building new power lines will continue to play a central role for the Company’s growth and will increasingly focus on developing new activities. Among these, building storage systems is particularly important as they are functional to safely managing an electricity system that in the past few years has witnessed the rapid growth in number of electricity production plants from non-programmable renewable sources. Storage systems are an important element in building a smart grid where the transmission grid has a decisive role. In line with the guidelines of the Strategic Plan, in April of this year Terna adopted a new Group structure –illustrated within this Report - that intends to promote growth by fully enhancing people. The guidelines will also be applied to focusing on responsible management: our objective is that all the companies of the Group adopt the sustainability governance instruments implemented by the Parent Company, from the Code of Ethics to Model 231, starting in 2012.

Developing business requires maintaining high standards of professional capacity. For this purpose, training investments continued to be high also in 2011: 97% of personnel was involved in training activities that overall reached 51 average hours per capita, 2 more compared to 2010. The attention towards our people, that was also expressed in a survey on people satisfaction, will continue to be an important foundation of Terna’s sustainability; this will be just as important as stakeholder relations – particularly for grid development investments – as improving environmental performance that in 2011 registered a reduction of CO2 emissions and of the amount of SF6, leakage, and as supporting cultural and solidarity activities.

In presenting the Sustainability Report, we feel it is important to also underline our commitment towards complete and transparent information. This includes considering the new information requests of the G3.1 version of the GRI Reporting Guidelines, focusing on integrated reporting, confirmed by Terna’s participation in the Pilot Programme of the Integrated Reporting Council; this also implies online communication on sustainability issues enhanced by a dedicated section on electric and magnetic fields and last but not least, the inclusion into this Report of comparisons with other companies according to 7 sustainability indicators: as far as we know, this is a distinguishing characteristic of Terna’s Report. We hope that these will be useful to stakeholders, as they are internally, to better understand our environmental and social performance.




Firma Roth


Flavio Cattaneo

Firma Cattaneo