OPPORTUNITIES AND RISKS

[G4-2], [G4-14] Although, as we have repeatedly stressed, telecommunications can make a significant contribution to improving the environment and quality of life, at present, ICT services aimed, for example, at reducing energy consumption or tele-medicine, remain niche services. However, they are seeing positive growth rates and are likely to be widespread in the future. Telecom Italia’s laboratories have long been engaged in researching and developing these kinds of services, some of which are already being tested on the market. Thus customers already have a wide range of solutions available to them to cut energy consumption, reduce CO2 emissions, improve health services and bureaucracy, increase security for citizens.

Many of the social-environmental services offered by Telecom Italia are discussed in the chapters Digitisation, connectivity and social innovation (see Groups customers) and Environmental protection (see TIM eco-friendly). Furthermore, examples of the economic opportunities arising from sustainable management of the company’s activities are discussed in the Social and environmental impacts of operations and their economic aspects chapter of the Group’s Annual Financial Report. Listed below are the most common risks associated with the telecommunications sector which are classifiable as socio- environmental risks, accompanied by a quick summary of the mitigation actions implemented by Telecom Italia.

Social Risks

Beyond the risks common to any large company, associated with labour exploitation, which are meticulously avoided, within Telecom Italia, by a management system that starts with the Group Social Responsibility Policy available at telecomitalia. com and trade union agreements, and is based on detailed monitoring procedures that required the presence of workers’ representatives), the social risks most closely connected with the telecommunications business come from:

  • breaches of network security and privacy systems, with consequent access to personal and sensitive data, to mitigate which Telecom Italia has equipped itself with a specific organisational structure and skills to predict and combat such breaches; within this structure, a team is dedicated to seeking new e-security solutions (see Digitisation, connectivity and social innovation/R&D and innovative services, Research and innovation for e-security paragraph);
  • use of telecommunications services that causes harm to the mental and physical well-being of children or of anyone who lacks sufficient protection, which is mitigated by Telecom Italia through a series of actions described in the Digitisation, connectivity and social innovation/ Groups customers chapter, under Child protection;
  • discrimination of some subjects who, for geographical or social/cultural reasons, do not have access to Internet and to the benefits it brings with it. Telecom Italia implements digital inclusion by developing its infrastructure and spreading the digital culture (see Digital culture).

Environmental Risks

This area includes two types of risks:

  • the risks that external environmental conditions can pose for business continuity (for example, earthquakes can destroy telephone exchanges, the depletion of energy resources can create unsustainable costs for the Company etc.). These include risks determined by climate change, such as flooding caused by rising oceans and precipitation or increasing energy costs caused by rising temperatures;
  • potential damage caused to the environment by the Company’s activities.

The first type of risks, which is a threat to the operation of the company, is considered and monitored carefully by means of appropriate Business Continuity strategies and procedures (see The business continuity management system section of this chapter).

As regards the potential environmental damage caused by the Company, the delivery of telecommunications services does not pose serious risks, other than those associated with the supply chain:

  • the indirect risks arising from energy use - as Telecom Italia is not an energy producer, the only mitigation tools available to the Company are to optimise its energy consumption (discussed in the chapter Safeguarding the Environment) and to select suppliers (discussed in the Digitisation, connectivity and social innovation//Suppliers chapter). Note that, in particular, in 2014 and 2015 Telecom Italia consumed energy produced from renewable sources, certified by guarantees of origin;
  • the “sourcing” of these technologies, i.e. the purchase of technological products, the production of which can cause serious environmental damage, and the disposal of technological waste (by the Company’s suppliers). These aspects are governed by the Group Green Procurement policy available at telecomitalia.com and by the sustainable supply chain management system described in the Digitisation, connectivity and social innovation/Suppliers chapter of this report

Telecom Italia monitors the aforementioned types of risk using the tools it considers most appropriate for each type, briefly described in the Environmental Protection, Digitisation, connectivity and social innovation/Suppliers, Telecom Italia people chapters and in the Human Rights paragraph of this chapter. Precise targets have only been set for the types of risk for which these targets may actually be useful. In particular, targets have been set for:

  • new generation network coverage;
  • supplier sustainability;
  • reducing energy consumption

(see Digitisation, connectivity and social innovation/Suppliers and Appendix).