Snam | 2016

For the fourth year in a row, Etica Sgr voted at Snam’s general shareholders’ meeting, held on April 27th, 2016. Snam is an Italian company that specializes in the construction and integrated management of natural gas infrastructure.

Etica Sgr voted in favor of all agenda items except for the proposed distribution of net income. Overall, Etica Sgr was pleased with the general improvement in all of the company’s economic and financial results, as well as with the fact that the payout ratio was lower than the previous year. Nevertheless, the 2015 payout ratio was still not in line with Etica Sgr’s Guidelines on Active Shareholder Engagement, and for this reason Etica Sgr once again abstained.

For what concerns the election of the Board of Directors and Board of Statutory Auditors, Etica Sgr supported the list of candidates proposed by Assogestioni, who are Snam’s minority shareholders. Etica Sgr addressed the meeting again this year to express its strong appreciation for the good level of detail and disclosure demonstrated in the 2016 Remuneration Policy, which also features ESG indicators for the determination of variable pay. Examples of such indicators include improvement in the injury frequency rate and maintaining the company’s listing on two of the leading sustainability indices: DJSI and FTSE4GOOD.

Furthermore, Etica Sgr also highlighted the care Snam took in disclosing all aspects of its business in its Sustainability Report, which itself is more and more comprehensive and detailed. The report was also published before the date of the shareholders’ meeting, allowing shareholders to familiarize themselves with the company’s results and make more detailed observations.

In addition, Etica Sgr called attention to the excellent scores that Snam achieved in the CDP’s climate change program, while highlighting the company’s commitment to reporting on its Scope 3 emissions and supply chain.

Snam has demonstrated a strong commitment to issues concerning the respect of human rights and the selection and monitoring of suppliers. With this in mind, and in light of the launch of some recent projects which are strategic to the company – but which nonetheless involve some critical issues – Etica Sgr asked Snam if it was planning on adopting a system to assess the social and environmental sustainability of projects and strategic partners ex ante. This concern also relates to the company’s future industrial plan, which will be approved in July and which, among other things, will outline the potential spin-off of ItalGas. Lastly, on the subject of fighting corruption, the company was asked whether it had considered obtaining a certification of its “Legality Rating” from the Italian Competition Authority, seeing as how Snam’s Sustainability Report had set commendable objectives that were in line with best practices in the promotion of lawfulness and the prevention of corruption.