Letter to our stakeholders

Dear Readers,

We faced a challenging market scenario this last year, with gross electricity demand in Italy declining slightly compared to the previous year and natural gas demand remaining weak, while recovering by 5.2%. Due to climatic conditions, the hydro-electric power generated in 2016 was modest, whereas the positive trend in the other renewable sources continued, driven by the increase in wind power generated, which more than offset the slight drop in photovoltaic power generated.

Within this scenario, in 2016 we continued to create sustainable value with our assets by managing both of our lines of business flexibly and efficiently. Our strong operating results are proof that our company remains highly resilient.

Today the energy sector presents both new opportunities and challenges: power generation is more diversified and renewable; the market is increasingly de-centralised, committed to reducing carbon emissions and focused on digital innovation; and end customers have become informed participants who aim to save on energy costs by making use of all of the tools at their disposal to optimise their consumption. This profound transformation forms the backdrop for CAP 2030, the development plan adopted by EDF, of which Edison is a part. Drawing on this source of inspiration, during the year Edison focused on its own business strategy, centred on three key drivers: forming increasingly close relationships with its end customers and local communities; concentrating on low-carbon power generation, with an emphasis on renewables and efficient, flexible gas generation; and developing a portfolio of hydrocarbon projects, both exploiting production in the Mediterranean basin and contributing to supply security by developing new routes and negotiating flexible, competitive natural gas importation contracts.

Building a sustainable energy future together is the essence of Edison's restyled brand: rising to the challenges posed by the United Nations Sustainable Development Guidelines (SDGs), which will inform the global agenda from today until 2030. A new vision and a new mission, a new position that focuses on the customer and sees sustainability as an integral part of the business, a driver for creating value, thanks to an approach based on constructive dialogue with stakeholders.

Edison's task is to put its ability to innovate and skills at its customers' disposal, supporting them in their daily activities and needs by creating intelligent energy solutions capable of optimising the benefits of sustainable energy.
Edison strives to be a key player in the Italian energy industry, taking an active role in the consolidation of the retail market and energy efficiency. Through Fenice, which it acquired during the year, Edison will also offer energy and environmental services, particularly to industrial businesses. The company is keeping step with the goal of reducing the reliance on carbon set at the international level by generating essentially all of its electrical power from natural gas and renewable sources, managed in synergy with E2i with regard to the wind power component, and by emphasising energy efficiency, an area on which Edison has decided to focus in order to combine development with a rational use of energy.
Edison works alongside its industrial customers to help them remain competitive, providing diversified solutions that range from energy optimisation to onsite energy generation and consulting, management and training.

To understand and rise to the challenges posed by a complex society, now more than ever before Edison must promote diversity by making the best use of its human capital and thus meeting the needs of today's new market in an innovative, effective manner by always focusing on individuals. To face this period of change, Edison has created a new unit, the Transformation Team, which works alongside the Executive Committee, which it supports with the reorganisation process by developing projects capable of triggering true, concrete change in the company's management style and operational model.

In this edition of the Sustainability Report, Edison has sought to rethink its approach to reporting and transparency towards its stakeholders by adopting an innovative working process involving the new Sustainability Network beginning with the document planning phase. The Network is a group that brings together people with specific skills from the various areas of the company with the aim of improving and expanding its sustainability profile.

As mentioned, there is a tendency towards increasing synergy between sustainability and business, and the Sustainability Report has evolved to best represent this trend, by describing performances related to key (material) issues for business areas and the main non-financial results achieved.

Our goal is to maintain our commitment to contribute to achieving the United Nations Sustainable Development Goals, in accordance with the Ten Principles of the U.N. Global Compact. We intend to do so using an open, innovative and inclusive approach that optimises the company's role in society by combining the production of goods, services and technologies with the promotion of a culture and values closely tied to the community's needs.

Marc Benayoun
Marc Benayoun