The relationship with the institutions

Relations with the institutions are focused on the economic dimension (taxes and fees) and the social dimension (relations with local institutions, sector authorities, consumer associations and other civil representatives etc.), in line with current legislation and the Group’s Code of Ethics.

In 2021 € 150.7 million (approx. € 134.6 million in 2020) was paid in taxes. The tax rate for the year is equal to 30% (it was 29.2% last year).

The Tax Management Unit in the Parent Company’s Administra- tion, Finance and Control Function, has the main function of devel- oping tax policy at the Group level, monitoring legislative changes and ensuring periodic compliance, managing – as key owners – the relative risks, which are assessed, managed and monitored within the wider ERM programme. The Unit also prepares, where appropriate, specific information on the subject for the Control and Risk Com- mittee. Acea interacts with the relevant tax system authorities in a collaborative and transparent manner and the updating of the main legal tax disputes is reported annually in the Consolidated Financial Statements, to which reference should be made. In compliance with the relevant legislation, Acea produces a Country by Country Report111, which lists the information on taxes paid in each jurisdiction in which the Company operates. According to the latest Country by County Report filed by Acea in 2021 with the Italian Revenue Agency covering 2020 data, 97% of the total amount is paid in Italy112 while the remaining 3% is paid in the Dominican Republic, Honduras and Peru, where the Company operates in the water sec- tor to improve the service, with reference to certain technical and management aspects (see the chapter Water Company data sheets and overseas activities). Overseas activities refer to locally managed businesses and are not connected to delocalisations carried out to draw fiscal benefits from favourable jurisdictions. In fact, Acea has not defined a tax strategy and does not intend to establish any ag- gressive tax planning to gain a competitively advantageous position. Acea regularly pays contributions and registration fees owed to public and private bodies, such as chambers of commerce, inde- pendent administrative authorities, industry associations and repre- sentative bodies. In 2021, the total amount of this item was approx- imately € 2.91 million (€ 2.63 million in 2020).

Partnerships with public institutions are aimed at carrying out in- itiatives with positive effects in the local region and the public’s quality of life (see the chapters Customers and the community, Personnel and Relations with the environment).

Article 17 of the Group’s Code of Ethics, devoted to relations with institutions, the public administration and political and trade union organisations, establishes that: “Acea cooperates actively and fully with the independent Authorities, establishes relations with the Public Administration by strictly observing the provisions of the law, applicable regulations, provisions contained in the Organisation and Management Model pursuant to Legislative Decree 231/01 and in internal procedures [...]. Acea does not contribute in any way to the financing of political parties, trade unions movements, committees or organisations [...] or their representatives and candidates [...] Acea does not make contri- butions to organisations with which a conflict of interest may arise [...] In any case, Acea’s personnel shall refrain from any behaviour aimed at exerting pressure (direct or indirect) on political and trade union rep- resentatives or representatives of associations in potential conflict of interest in order to obtain personal or corporate advantages”.

The supervision of relations with institutional entities is defined by an organisational model that attributes competences and respon- sibilities to the corporate structures of reference. In particular, the Institutional Relations Function protects corporate interests and represents the Group’s positions in dialogue with Industry associa- tions, Research centres, Standard-setting bodies and local, nation- al and international public and private institutions and bodies. The Legal Affairs Function supports the Group Companies for legal aspects related to the activities, the Corporate Affairs Function handles communications with the Supervisory Authorities (Borsa [Italian stock exchange] and Consob [National Commission for Companies and the Stock Exchange]) and the Regulatory Func- tion, in coordination with the relevant divisions established within the Group Companies, handles relations with the regulatory bodies in the relevant sectors, also to minimize exposure to regulatory risk. The Group’s operating companies, jointly with the Parent Compa- ny, manage the “technical and specialist” aspects of the managed services – water and electricity supply, public lighting and the envi- ronmental sector – including through interaction with administra- tive, regulatory and control bodies.

EMERGENCY MANAGEMENT PLANS

In synergy with public institutions, private entities and research bodies, Acea carries out environmental and social initiatives and projects of an environmental and social nature aimed at protecting common assets; these projects are referred to and illustrated herein (see, for example, Relations with the environment or the chapter Customers, paragraph Quality delivered).

Acea is active in the prevention and management of critical events, and in the event of an emergency it provides support to the au- thorities responsible for public health, civil protection and public safety.

In particular, the Group companies ensure the highest levels of safety and continuity in the provision of managed services, in col- laboration with public institutions.

To this end, they have established procedures and tools that, in crit- ical events (unavailability of central systems, breakdowns, adverse weather conditions, peak demand and network stress, etc.), are able to restore operating conditions of networks, plants and systems in a timely manner (see also the chapter on Protection of assets and management of internal risks in the section on The company as a stakeholder).

Each operating company has plans for managing emergencies and intervention procedures and, through the control centres, con- stantly monitors the status of networks and equipment – water and sewage, electricity and public lighting – in partnership with the Municipal and National Civil Protection and Roma Capitale.

Whenever an event affects the managed services (damage to plants and/or networks, water/energy crisis, etc.), the companies of the Group notify the competent bodies to facilitate the coordination of interventions.

Acea SpA has a procedure for managing health and environmental emergencies with an impact on the population, for which it defines the level of risk (low, medium and high) and provides for the or- ganisation of intervention teams. The company also holds biosafety Trust certification for actions to prevent and control coronavirus and other viral infections.

Areti’s emergency management plan, the company that handles the distribution of electricity, deals with widespread breakdowns and unavailability of the grid. It defines the different states of activation (ordinary, alert, alarm and emergency), according to the operation- al and environmental conditions, the procedures for the activation (and subsequent reset) of the same states, the units involved and the respective roles, and the resource materials necessary for main- taining or restoring equipment. It also provides for the appointment of a Head of Emergency Management and an employee dedicated to the management of safety, in specific cases. The detailed Op- erating Plans indicate methods for quickly managing the types of disruption (such as flooding, fires, disruptions to the remote-con- trol network, etc.) and procedures to be followed, for example, for restarting the electrical system in the event of a blackout of the National Transmission Grid (NTG) or re-establishing power for strategic users (such as parliament, the government, the State of Vatican City, etc.), the materials, equipment and resources to be involved depending on the case. The master plan and detailed oper- ating plans are updated on a yearly basis and periodically improved on the basis of analyses of real cases. The effectiveness of procedures and the functionality of equipment are tested by means of drills. In addition, with a view to improving processes, the Company created a platform for the real-time acquisition and monitoring of weather events, in order to prevent potential risks from changes to the operating conditions of the electric grid.

Plans for the management of emergencies of the water companies define conditions that compromise the continuity and quality of the integrated water service, classify the emergency levels, describe the preventive and remedial measures for the types of unforeseen events (damage to the networks, pollution, water crisis and emergencies related to the sewerage and treatment service) and provide for the division of tasks among the areas involved (technical area and communications). These are shared with local institutions (such as Governmental Territorial Offices, Local Health Author- ities, Area Management Agencies). In particular, the Acea Ato 2 Plan was reviewed, consistent with the Water Safety Plan guide- lines, and takes 25 critical scenarios into consideration, specifying the consequences, manoeuvres and mitigation actions required for each of them. In 2021, the Company updated its Emergency Management Plan, also based on the procedures applicable under the pandemic conditions and in the light of organisational changes, and set up the Standing Emergency Committee which meets on a periodic basis to propose interventions and training activities, and to decide on actions in serious emergency conditions.

Acea Ato 5 continued its collaboration with ARPA Lazio for the "Environmental surveillance project of Sars-CoV-2 through urban wastewater in Italy".

AdF collaborated with the Tuscan Water Authority on the up- dating of the Emergency Operating Plan for the drinking water crisis (EOP), aimed at monitoring and preventing water emergen- cies through the periodic reporting of critical issues found within the region, and providing support for operational decisions when an emergency arises. In the context of the critical issues outlines in the Plan, AdF has in place a Water Crisis Emergency Management Operating Procedure which, establishes the sequence of activities to be carried out, detailing all of the entities involved, measures to be taken, documents/databases to be consulted/updated/produced, and correspondence to be sent, for every expected level of severity. Together with other authorities such as the Province of Beneven- to, the Municipality of Benevento, EIC, the Region of Campania, ARPAC [Campania Regional Environmental Protection Agency] and local health authorities, etc., Gesesa is an active member of the technical panel to ensure that the local aquifer is safe from tetra- chloroethylene pollution.

The companies of the Group that manage waste treatment plants ensure the execution of a detailed routine maintenance plan to re- duce plant downtime caused by faults or unexpected events and minimize unplanned non-routine maintenance work. All the structures of each site are equipped with Emergency Plans that take into account the scenarios identified for endogenous and exogenous emergencies. These Plans examine aspects related to the safety of workers, ensuring their safety with specific behavioural and evac- uation procedures, checked on a yearly basis, and aspects related to the protection of the environment, identifying the emergency interventions in order to limit contamination of environmental me- dia (air, water and soil). Permits by virtue of which the plants are managed also include communication requirements and methods for non-routine or emergency events to the competent bodies, in order to guarantee the maximum dissemination of information and, where appropriate, the coordination of the intervention.

Acea Elabori has updated the Emergency Plans of the Grottarossa and EUR2 Centres with the inclusion of measures to counter the spread of Covid-19.

Finally, as already mentioned, in 2021 both Acea Elabori and Acea Energia received Biosafety Trust Certification by implementing an infection prevention and control management system and adapting their Emergency Plans.

In the water segment, Acea has adopted the Smart Water Company model which is characterised by responsible and sustainable management of water resources, thanks to the increasing digitalisation of the network.

In 2021, some water companies, in agreement with local adminis- trators, started or continued a review a programme of installation of Water Kiosks in the areas managed (see the chapter Customers, paragraph The quality delivered in the water segment).

In the smart city field, in line with its strategy for electric mobility and its plan to install electric columns, in 2021, Acea launched the e-mobility App which allows customers to recharge their electric vehicle at more than 10,000 enabled points in Italy, thanks to interoperability agreements signed with industry players (see the chapter Customers chapter, paragraph Customer care).

Acea also works with ENEA on projects aimed at sustainable man- agement of the waste and water cycle, with the objective of apply- ing innovative technologies and solutions to industrial projects (see Relations with the environment, Water segment).

Finally, as part of the implementation of the Lazio Region European Social Fund Operational Programme, Acea Elabori in collaboration with ENEA and the University of Cassino and Southern Lazio has launched an Industrial Research Doctorate to implement a sustainable management strategy for sludge from wastewater treatment, to limit its environmental impact, to limit its environmental impact.

In order to promote the innovative and sustainable development of the sectors of reference, Acea establishes collaborations and partnerships with complementary companies or organisations operating in sectors similar to the businesses it manages and with innovative players.

In 2021, Acea was a partner of the “Circular 4 Recovery” call for projects, promoted by Marzotto Venture Accelerator to select innovative projects aimed at creating eco-friendly development models and fostering the transition to a more sustainable economy. In particular, the call selects, awards and supports entrepreneuri- al projects aimed at the development of innovative technologies, solutions and services with a low environmental and social impact in the following 5 Key Focus Areas of the Circular Economy: Circular Bioeconomy, Circular Water Economy, Circular Energy Economy, New Circular Life Cycles, Circular City & Land.

7 proposals were examined further and feedback was provided.

In 2021 Acea signed specific agreements (MOUs) with foreign companies for the development of innovative technologies for the production of green hydrogen (SGH2, Innovathec and Omni). Collaborations also continued with private companies active in the green and circular economy, advanced plant engineering, inno- vative treatment for recycling and recovery of waste and reduc- tion of emissions. These include Nextesense, for the use of visible light lamps with sanitising action (BIOVITAE) in the purification of water and waste, Opus, for the creation of an analytical robot for the analysis of TSS in waste water, Raft, for the production of new technologies for the abatement of emissions, in particular odorous emissions, by means of photocatalysis and catalytic oxidation, and the Sersys Group, for the joint development of projects and col- laborations in the field of waste treatment and specialist analytical activities. Moreover, collaboration agreements were signed with new companies, including Absolute Energy, for the exploitation of an advanced waste shredding mill, Wasserchemie, for the develop- ment of a predictive model for optimising the use of filter masses, Uviblox, for the development of UV technology for abatement of odour emissions, Lod, for the development of an advanced online odour emission monitoring system using odour chemical finger- printing, and Nature 4.0, for the development of a new category of low-cost sensors for environmental monitoring and the creation of an electrochemical sensor calibration laboratory.

Acea is one of the companies that won the tender, together with TIM and Windtre, to collaborate for the next three years on the Casa delle Tecnologie Emergenti [House of Emerging Technologies] (CTE) in Rome: this will be the first permanent living lab, deployed in 2021, to develop the smart city of the future. The project is sponsored by the Department of Economic Development, Tourism and Employment, in cooperation with universities, research centres, companies and partners specialised in technological pro- gress.

In November 2021, in partnership with US software provider Ci- trix, Website and Codemotion, an Italian platform that supports the professional growth of developers, Acea launched "Innovate the way we work", a hackathon to search for solutions to be imple- mented on Digithall, the digital workplace.

Finally, with the aim of bringing together the protagonists of inno- vation to study new models of urban development, Acea organised the second edition of Innovation Day, entitled Builders of the Future (see box).

The virtuous relationship with the local region is also expressed through the collaboration between Group companies and the ed- ucational world of the new generation (see Customers, section on Communication, events and solidarity, and Personnel, section on Development of human resources and communication).

In 2021 Acea Ambiente signed an agreement with the University of Cassino to carry out the research project CO2 capture and en- vironmental impact mitigation in waste-to-energy plants and has carried out projects to educate people about sustainability and the circular economy, such as the Differenzio Anch'io [waste sorting] project.

In 2021, AdF involved a number of schools in the province of Grosseto in environmental education projects #bevisenzaplastica [drinkwithoutplastics] on the conscious use of water resources, dis- tributing 3,000 water bottles to school students and installing 14 water dispensers.

Gesesa has launched the "Plastic Free" project aimed at local insti- tutes and universities and donated water bottles and dispensers to the institutes to reduce the use of plastic in the area served and also donated the first water kiosk to the University of Sannio.

Collaborations with universities and research institutes are carried out within the framework of conventions and agreements.

To assess changes in the availability of water resources in the short and long term, in 2021 Acea Ato 2 initiated collaboration agree- ments with the CNR Institute for Water Research for the de- velopment of tools and instruments for forecasting the flow rates available for drinking water purposes in relation to short-term sce- narios (less than 1 year), and with the University of Catania for the prediction of the probability of satisfying the available water flows in the event of climate change in medium and long term scenarios (30, 50 years).

AdF has begun working with the Environmental Engineering De- partment of the University of Florence to study the concentration of microplastics in urban wastewater and sewage sludge.

Within the framework of the study, research and technical/scien- tific support agreement with the Department of Earth, Environmental and Resource Sciences of the Federico II University of Naples, GORI carried out a study on the sludge produced by the Area Nolana purification plant, with the aim of assessing the poten- tial for biogas production, and was involved in a study on emerging contaminants, recently conducted in collaboration with the University of Salerno and a group of researchers from the Water Research Institute of Bari.

Acea Elabori has signed several collaboration agreements with dif- ferent Universities: the Department of Pharmacy of the Federico II University of Naples for the development and use of sensors and biosensors in the environmental field for the online determination of chemical species, particularly metals, drug residues, endocrine disruptors, PFAS and other chemicals of emerging concern (CECs) in wastewater and post-treatment water; the Department of Civil and Environmental Engineering, University of Florence for the development and validation of innovative technological solutions for the advanced monitoring of solid, liquid and gaseous effluents from wastewater and waste treatment plants, including odorigenic emissions and greenhouse gases; the National Interuniversity Consortium for Materials Science and Technology for the design of innovative materials and the development of new technologies for the production and recycling of materials with a view to a circular and sustainable economy; the CERI Research Centre "Prediction, Prevention and Control of Geological Risks" of the University of Rome La Sapienza for the development of models for hazard anal- ysis on a large scale in relation to geological instability processes, to assess the risk exposure of structures and infrastructures the Department of Astronautical, Electrical and Energy Engineering of the University of Rome La Sapienza, Faculty of Civil and Industrial Engineering for the development of 4.0 sensors to optimise the operation and safety of integrated water sites; and finally with the Marche Politecnico University for the development and field vali- dation of methods for calculating and critically analysing the carbon footprint of integrated water services and waste treatment.

In the energy field, Areti actively participated in the meetings of the Milan Politecnico's Drone Observatory during which it presented the G.I.M.M.I. project. project, whose high level compared to sim- ilar projects on the national scene was appreciated.

COMPARISON WITH THE REFERENCE CONTEXT

Acea participates in Research Centres, Standard-setting Bodies and Industry Associations, acting as sponsor or contributing to studies in the businesses in which it operates.

Acea participates in occasions for dialogue with the business world and the scientific community on issues of national and interna- tional importance and offers its own specialist contribution on the occasion of thematic conferences, forums and workshops on topics linked to its managed companies, also presenting publications and works of technical-scientific relevance.

To this end, in 2021 the Group participated in events and organised numerous initiatives (see Customers and the community, paragraph on Communication, events and solidarity; Strategy and sustainabili- ty in corporate Identity and the section on Relations with the envi- ronment), including the third edition of the Acea Sustainability Day during which institutions and companies discussed the challenges and opportunities for a fair and sustainable ecological transition, Ecomondo the most important green and circular economy fair in the Euro-Mediterranean area, the Forum PA, the largest national event on innovation, to create and strengthen connections between all the players operating in central and local administrations, tech- nology companies, and territories around the missions, objectives, and actions of the National Recovery and Resilience Plan (PNRR), SMAU Milan 2021 and the European event on innovation Maker Faire Rome (see box).

On sustainability issues, Acea participates in networks of experts, working groups, studies and sector research organised by the academic world, civil society, institutions or business entities. In- deed, the company is active as an associate in the Global Compact Network Italy Foundation, the representative body of the United Nations Global Compact in Italy, the Sustainability Makers - the Professional Network (formerly the CSR Manager Network), the national association that brings together the main Italian companies active in corporate social responsibility.

Acea’s participation in Utilitalia, the federation that brings together the multi-utilities of water, environment, energy and gas, is also ex- pressed through its participation in technical panels and topical work- ing groups. In particular, in 2021, Acea participated in the following working groups within the context of Utilitalia’s Transition plan: Fi- nance, Accountability, Corporate Mission and Sustainable Success. The company also participates in benchmark analyses on sustain- ability in Italian Utilities, like those carried out by the Utilitatis re- search centre and Top Utility.

¹¹¹TheobligationarisesfortheParentCompanyduetoitscontrolofAceaInternational,thevehiclecompanythroughwhichsharesintheoverseascompaniesareheld.Thedata produced in the Country by Country Report are merged into the audited Consolidated Financial Statements.
¹¹²The low amount of revenue, and consequently the taxes paid, in relation to the Group’s activities in foreign countries has led to the overseas companies being reported as non-material from an economic/financial point of view; in addition, the potential evolution of the sector and other strategic and representative criteria regarding the Group’s development and main impacts, have resulted in them not being included within the scope of the Consolidated Non-Financial Statement. The main data and information refer- ring to these companies are however included in the Sustainability Report (see the chapter Water Company data sheets and overseas activities). Although the issue introduced by GRI 207, on Taxes, was not included among the material issues with the involvement of stakeholders and managers, and therefore does not appear in the GRI Content Index, it is in any case mentioned here as testament to transparency and good accounting practice.