MATERIALITY ANALYSIS

    At the end of 2018, Pirelli initiated the process of updating the materiality matrix prepared in 2016.

    The materiality matrix stems from thorough Stakeholder Engagement activities that led to comparing the expectations of key Stakeholders on a panel of sustainability issues with the importance that they have for the success of the business according to the experience and expectations of the Top Management.

    Given the complexity and the international extent of corporate Stakeholders and the variety of their expectations, the panel of Stakeholders of the Company from which feedback was requested included:

    • the biggest original equipment customers;
    • more than 700 end customers belonging to the most representative markets;
    • the most important dealers;
    • numerous employees in the various countries where the Group is present;
    • several Group suppliers;
    • the leading financial analysts;
    • national and supranational institutions and public administrations;
    • international and local NGOs present in the various Countries in which Pirelli has production activities;
    • universities that have collaborations with the Group.

    Stakeholders have been involved through a request for prioritisation of action on a selection of ESG issues (Environmental, Social, Governance) relevant for the development of the Company. The issues have been preselected considering the relative presence in the materiality matrix of Automobiles and Auto parts producers, the relevance of the same for the Auto Components sector according to primary research and sustainable finance entities, risks and opportunities arising from regulatory developments, from the expectations of communities, governmental and non-governmental institutions, and financial markets. For this reason it is specified that all the ESG elements pre-identified through the aforementioned analysis are material and relevant for the development of Pirelli, with greater or lesser priority as evidenced by the position of the different elements within the matrix defined according to the results of the Stakeholder and Management interview process.

    The topics submitted for evaluation by Stakeholders are the following:

    • Occupational Health and Safety;
    • Employees Well-being & Work-life Balance;
    • Training and Development;
    • Diversity and Equal Opportunities;
    • Labour Relations Management;
    • Community Engagement;
    • Responsible Procurement;
    • Human Rights;
    • Customer Satisfaction;
    • Product Quality and Safety;
    • Product Environmental Sustainability (Impacts of the product on the environment: energy efficiency, mileage, weight reduction etc.);
    • Renewable Materials*;
    • Responsible Use of Natural Resources (energy and water efficiency, waste for recovery);
    • Climate Change and Greenhouse Gas Emissions Management;
    • End of Life Tyre Recovery and Recycling;
    • Legal & Regulatory Compliance;
    • Business Ethics and Integrity;
    • Corporate Governance;
    • Financial Health;
    • Road Safety Initiatives.

    The priorities expressed by Pirelli and Stakeholders on the above issues have been represented in a materiality matrix showing, on the vertical axis, the expectations of several external and internal Stakeholders, while on the horizontal one, the importance that the Management attributes to individual business success factors. The result of such consolidation was presented and approved at the Sustainability Steering Committee held in February 2019 and is outlined below.

    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.

    The expectations expressed by the Stakeholders involved in defining the materiality matrix are considered as priorities in the definition of the Group Sustainability strategies.

    *OECD defines “Renewable Natural Resources” as natural resources that, after exploitation, can return to their previous stock levels by natural processes of growth or replenishment

    Last revised: 11 Jun 2019