3

4.6Revenue

billion euros 3.2Gas sold

billion m3

4Population served

million

8,219

Workforce

58%Public shareholders6.3

Waste treated

million tons

298Water sold

million m3

Hera Group, some important information for 2013:

HeraLAB: new model for involving stakeholders

3

>On 21 May 2013, during presentation of the Sustainability Report, Hera launched a new model for involving stakeholders to strengthen supervision of the district and support the construction of our Sustainability Report.

>The new model calls for the institution of Local multi-stakeholder boards in each of the districts where Hera operates, called

HERALAB(Local Advisory Board or LABoratories for the district)

>HERALAB is a structured channel for dialogue with local stakeholders on issues related to sustainability of the services offered locally, and reported on annually by the Group. This dialogue will integrate with activity already ongoing, improving the capacity of listening and therefore of focused response for the district.

The mission of the LAB

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>The LAB, standing for Local Advisory Board, but also an abbreviation of LABoratory for the district, is a local multi-stakeholder advisory board, set up in each of the districts where Hera operates.

>The remit of the LAB is to put forward proposals every year for involving stakeholders and initiatives, also followed through in collaboration with other parties, to promote and improve the sustainability of services provided by Hera.

>For Hera, the LAB is: >a space for communication, spreading and promotion of results achieved

and future goals in the individual districts, in the three dimensions of sustainability: economic, social and environmental;

>a tool for listening to the needs and expectations of local stakeholders regarding the services provided by Hera;

>a workshop of ideas to promote initiatives in the district for involving stakeholders and initiatives that aim, more in general, at improving the sustainability of services provided by Hera and at creating shared value;

>a committee for monitoring the effectiveness of initiatives proposed by the LAB, approved and set up by Hera.

LAB Regulations

The idea of the HeraLAB has been translated into Regulations that describe in detail its purposes and how it should work.

The Regulations have been drawn up together with all those at Hera who have the task of supervising this new tool and they will be shared with the LAB members for their approval during the first meeting.

The Ravenna and Imola-Faenza LABs approved the Regulations during the first LAB meeting.

What power do they have?

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>The LAB is a proactive advisory body. It therefore has the faculty of drawing up proposals, contained in a Plan of Local Initiatives, which become executive only after approval by Hera.

>Hera could therefore decide to only accept some of the initiatives proposed by the LAB, ensuring adequate information regarding the criteria used and reasons for the decision is given to the LAB and any external parties

>The LAB must annually draw up a proposal of initiatives for involving stakeholders, or, more in general, for promoting and improving the sustainability of services provided by Hera, which must be included in a Plan of local initiatives.

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How many are there and how long do they last?

>There will be one LAB for each of the 7 Hera districts in Emilia Romagna. Expansion of the LABs into AcegasAPS districts will be evaluated.

>The LABs last 3 years.

>During 2013: experimentation in the districts of Ravenna and Imola-Faenza.

How many times do they meet?

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The LAB meets from a minimum of 4 to a maximum of 6 times a year. Each session is valid if there at least 50% of the members are present.

LAB members are appointed without pay. Hera gives each participant an attendance fee of €100 for each LAB meeting. These attendance fees will go to form a fund that every year will be donated to sustainability initiatives/projects promoted by local public bodies or no-profit organisation chosen by the LAB, or to increase the number of trees to be planted in the municipalities adhering to the Hera campaign "Gift a tree to your city". This attendance fee will also be paid for any sub working groups set up within or across LABs.

The stages along the LAB path

#1 Awareness: The LAB is called on to share issues that are important for the district, for which it will be asked to propose initiatives.

#2 Planning: Based on these important issues and taking into consideration the set format, participants are invited to formulate ideas to promote initiatives for involving stakeholders and initiatives that aim to improve the sustainability of services provided by Hera.

#3 Development: Every year, the LAB develops a Plan for local initiatives (a maximum of 6 initiatives) and evaluates them according to 4 criteria (relevance, scope, measurability and sharing).

#4 Implementation: Hera returns the results of the evaluation of the various proposals formulated by the LABs according to 3 criteria (transfer potential, exemplarity and innovation, quality assessment of expected costs/benefits, coherence and level of synergy)

Who takes part in the LAB?

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The LAB is made up of 7 to 12 members selected by Hera and appointed by the Board of Directors.

Members are selected by Hera with complete autonomy and discretion, based on two criteria seen as priorities:

1.the ability to help in achieving the LAB mission;2.representation of the different categories of Hera stakeholders, with the aim of setting up a board that is a balanced representation of the largest possible number of categories

Based on these criteria, Hera evaluates people on their history, experience and awareness of the district and not on their institutional role. The nomination is personal and cannot, therefore, be assigned or transferred. It is valid for three years, the same as the duration of each LAB.

 

Progress made by the two LABs

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>During the #1 meeting, each LAB identified relevant issues for its reference district. The issues were systematised in a framework of materiality that expresses the level of interest and conflict.

>The issues identified by the LAB with the materiality matrix represent a benchmark, not only for work by the LAB at subsequent meetings, but also for construction of the Sustainability Report.

>During the #2 meeting, LAB participants proposed a series of initiatives, relative to the relevant issues identified at the previous meeting, which Hera could adopt.

>The Ravenna LAB identified 14 initiatives, the Imola LAB 11, plus the subgroup set up for issue of district heating, which proposed 2 initiatives.

>During subsequent meetings, the initiatives were evaluated by the LAB (#3 meeting) and by Hera (#4 meeting) according to a set of defined, shared criteria. This process led to approval, in both the LABS, of 6 initiatives.

Relevant issues defined by the Ravenna LAB

late

nt

em

erg

ing

stru

cture

d

latent emerging

chro

nic

structured chronic Interest

Con

flic

t

Water services

and rates

Renewable energies and energy efficiency

Separate waste

collection

Understanding of bills

Attention to weak

users

late

nt

em

erg

ing

stru

cture

d

latent emerging

chro

nic

structured chronic Interest

Con

flic

t

3

1

26

4

Understanding of bills and commercial offers

District Heating

Separate waste collection - waste prevention - environmental education

Attention to weak users: families and small businesses

Water rates for social uses

7

The role of suppliers

5

Renewable energies and energy efficiency

Relevant issues defined by the Imola-Faenza LAB

HeraLAB results reporting

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>An initiative for involving stakeholders like HeraLAB requires a transparent reporting method and adequate level of accountability.

HeraLAB results reporting

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>From 21 May 2013, a dedicated section is online on the HeraLAB website (www.heralab.gruppohera.it). This is the primary reporting tool for work by the LABs, providing general information about the initiative and where the following information will be published regarding each LAB activated:

HeraLAB results reporting

14

>LAB member profiles…

HeraLAB results reporting

14

>calendar of meetings and relative minutes;

HeraLAB results reporting

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>Plan for local initiatives proposed by the LAB to Hera>initiatives approved by Hera and results achieved.

HeraLAB results reporting

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>contacts for communication with area managers and LAB members

HeraLAB results reporting

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> there is also a reserved access area for LAB members with all the materials presented, minutes of the meetings and all useful documents for work by the LAB.

> there is also a reserved access area for LAB members with all the materials presented, minutes of the meetings and all useful documents for work by the LAB.