Letter of Introduction

The year 2009 was a particularly difficult year for our Company. In fact, the Financial Year ended without any dividends being distributed due to both internal and external factors. This derived, on the one hand, from trends on the deregulated energy market (production and sale), increased funds earmarked in view of careful appreciation in tax-related risks deriving from previous Financial Years and the considerable amount paid by Acea, like other “former municipal companies”, to recover State benefits linked to the socalled “tax moratory” and, on the other, from effects of the trend in the country’s economy.

The year 2009 should however be considered in terms of the prospects for lasting growth of the Group and therefore undoubtedly positive: in fact, Acea celebrated one hundred years of activity in 2009, which represented an occasion to strengthen its innate values in the knowledge of the contribution made by the Company with its 100-year long history of industry, development and respect throughout the Roman territory and to highlight its involvement in community life.

Over the year, we carried out actions in important areas of corporate life, analyzing and renewing the main operational processes in need of improvement in terms of performance and encouraging an increase in developments underway by way of recovering the company’s profitability.

Corporate governance underwent extensive reorganization leading to approval of a new macro-level organization for the Parent Company according to industrial areas in order to reinforce its role as leader of the entire Group while improving its system of in-house regulations and preparing new and updated policies, for example with respect to Quality, where there is an increased need for integrated responsibility from economic, social and environmental viewpoints and with respect to Protection in order to safeguard both the material and immaterial assets of the Company.

Investments considerably increased with respect to the previous Financial Year (+24%) and particularly concerned Energy Networks and Energy and the Environment (Waste-To-Energy facilities), which highlight the Company’s motivation concerning growth and development in business through an industrial project in line with the principles of sustainable development. Confident in the existence of positive specific implications between corporate social responsibility and safety management, particular attention was paid to the safety of workers through monitoring the reliability of the company’s system for safety in the workplace in both the Parent Company and the main operational companies and increasing specific training activities. Training for Human Resources - essential to ensuring improved skills - involved 483 training courses in 2009 (+34% with respect to the previous year). Considerable commitment from human resources and organizational efficiency from the Company in the Energy and Water sectors led to objective improvements in technical and commercial service performances, which were also positively received by customers, as demonstrated by specific Customer Satisfaction Surveys. Furthermore, a number of channels providing contact with customers were also developed to further improve corporate performance.

Commitment to limiting impact on the environment led to decreased direct and indirect energy consumption, a considerable increase, over the last three years, in the indicator concerning territorial protection (expressed in terms of the ratio between kilometres of high-voltage underground and overhead lines) and preservation of the limited levels of specific CO2 emissions into the atmosphere, also due to modern combined-cycle generation facilities. With regard to the above, Acea was reported as the best Utility Company in Europe in the latest report published by the Carbon Disclosure Project, an accredited international project responsible for assessing the economic and environmental performances of companies by comparing the specific CO2 emissions and corporate turnover. The Company’s responsibility towards the environment is also demonstrated through specific initiatives implemented to support biodiversity and the care taken in safeguarding sources and is further highlighted by the prospects for development of new businesses involving environmental topics. In 2009, energy produced by renewable sources already increased considerably (around +42%), especially from wind (+ 64% with respect to the previous year), and commitment in the area concerning waste revaluation also increased (environmental services, production of WDF and compost, Waste-To-Energy): throughout the year, around 97,000 tons of pulper and 77,600 tons of WDF were transformed from Waste-To-Energy and thereby benefitted the territory thanks to considerable reduction in waste sent to dumps (around 25% of the amount burned in facilities). More specifically, the Waste-To-Energy Facility in San Vittore in the Lazio region plays a leading role in solid urban waste treatment and will become a reference point for Waste- To-Energy transformation of dried mud deriving from purification of urban wastewater. In fact, in 2009 San Vittore del Lazio was given the PIMBY Award – Please In My Back Yard – for the expansion of the Waste to Energy Facility managed by Acea Group company “EALL”, thereby indicating Acea as a virtuous company in terms of providing accurate information and environmental communication and involving those that represent territorial interests.

The systems for qualifying suppliers adopted by the Group are under constant development and help to ensure high quality in the services provided. The important economic effect that the Company has on the local economy is also important to note, with 92% of the overall amount of work contracted in 2009 going to companies from Central Italy.

The Group’s specific commitment in terms of sustainability performance, demonstrated through this Twelfth Edition Report, is paid increasing attention outside the Company, which continues to receive excellent reviews from those responsible for analyzing Ethical Finance. Furthermore, in 2009 Acea was one of the four Italian companies to receive the “CEEP-CSR Label” for 2009-2010 for its commitment to social and environmental responsibility, an important award promoted by the European Commission. Finally, in 2009 Acea renewed its formal compliance with the principles of Global Compact, considering these fully in line with its corporate values. The Company is thereby continuing under the prospect of a revival, without overlooking the well-defined direction concerning integrated corporate responsibility.



Chief executive officer                                      Chairman