1. Sustainability
  2. Materiality

MATERIALITY ANALYSIS

The purpose of the materiality analysis of impacts is to provide Pirelli's Stakeholders with an adequate representation of the Group's activities and the sustainability issues most relevant to the business. On an annual basis, Pirelli updates the materiality mapping of the Group's impacts on the economy, the environment, people and human rights, according to the methodologies provided by the applicable sustainability reporting standards. The findings, together with Stakeholder assessments and expectations, are considered in updating the Group's goals and strategies, in line with the UN Sustainable Development Goals (UN SDGs).

The Materiality Matrix is submitted in turn to Sustainability Strategic Committee, to the Board of Directors Committee and to the Board of Statutory Auditors, and then to the Board of Directors for approval and publication as integral part of the Annual Report 2023.

The matrix was updated in 2023, reconfirming the analysis published in 2022.

THE MATERIALITY MATRIX

The Matrix results from the match between Stakeholders’ priorities (vertical axes) and priorities attributed by Management (horizontal axes). The matrix includes evidence of the specific SDGs connected to the different material topics, on which Pirelli impacts though its sustainability strategies and plans.

THE PROCESS

A thorough Stakeholder Engagement process allowed the observation of the priorities assigned by the key Stakeholders relating to a panel of sustainability topics critical for the Auto parts sector, and therefore to compare these expectations with the importance of the same issues for the success of the business according to the experience and expectations of the Top Management.

Prioritization of relevant issues results from consultation with a panel of Company Stakeholders who were asked for feedback, which touched on all Regions of the world and included:

  • the major Original Equipment Customers;
  • more than 650 End Customers belonging to the most representative markets;
  • the most important Dealers;
  • numerous employees in the various countries where the Group is present;
  • several Pirelli Suppliers;
  • the leading Financial Analysts;
  • national and supranational institutions and public administrations;
  • Media specialists;
  • international and local NGOs present in the various Countries in which Pirelli has production activities;
  • Universities that have collaborations with the Group.

Available internal documents, such as company profile information, values, and the Group's sustainability plan, were analyzed in order to gain an in-depth understanding of the sustainability context in which the organization operates, as well as the Group's activities, business relationships, and stakeholders.

The analysis of the organization's context was then integrated with the Group's Enterprise Risk Management (ERM) function in consideration of the analysis and assessment of business risks.

This resulted in a list of the main impacts generated by the Company (perspective impact materiality), positive and negative, current and potential, related to the initiatives and objectives put in place by Pirelli aimed at mitigating them.

The identified impacts were subjected to Stakeholder and Senior Management assessment to determine their significance from the perspective of Impact Materiality, considering both magnitude (which includes the aspects of severity, extent and irretrievable character, the latter character only for negative impacts), and the likelihood of occurrence of the impacts, which determines the potential or actuality of the impact. The assessment was required considering residual impacts in the face of initiatives and objectives put in place by Pirelli to mitigate them.

In line with the requirements of the GRI Universal Standards 2021, the results obtained from the assessments were reprocessed, prioritizing the significance of impacts and related material themes. This process enabled the identification of the Group's material sustainability themes:

  • Climate Change and Greenhouse Gas Emissions Reduction;
  • Responsible Management of Natural Resources;
  • Biodiversity Protection;
  • Circular Economy;
  • Future Mobility;
  • Product Quality and Safety;
  • Product Environmental Sustainability;
  • Corporate Citizenship;
  • Human Rights;
  • Diversity, Equity and Inclusion;
  • Training and Development;
  • Occupational Health and Safety;
  • Stakeholder Satisfaction;
  • Talent Acquisition, Development and Retention;
  • Responsible Management of the Supply Chain;
  • Innovation;
  • Cybersecurity;
  • Business Ethics and Integrity;
  • Corporate Governance;
  • Financial Health.

Pirelli's Impact Materiality was submitted to and approved in order by the Strategic Sustainability Committee, then by the Board of Directors' Control, Risk, and Corporate Governance Committee, by the Board of Statutory Auditors, and by the Board of Directors with the approval of the present document in question

Finally, it should be noted that the consolidation of the materiality matrix at Group level tends, by its very nature, to deviate significantly from the materiality matrix consolidated by the Group’s Subsidiaries at country level. Elements of sustainability located in an area of minor materiality in the matrix at a Group level may be found to have major materiality for a number of Countries and specific Stakeholders who are more directly involved.

Last revised: 28 May 2024