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Telecom Italia, TLC leader in sustainability

10/03/2016 - 09:00 AM

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Interview with Ferdinando Bonifacio who oversees relations with sustainability rating agencies under Telecom Italia Corporate Shared Value

For the 13th year in a row, we have been listed in the Dow Jones Sustainability Indexes World (DJSI World) and Europe (DJSI Europe) – this year as an 'Industry leader' for telecommunications. We are the only Italian company to obtain this recognition in our sector, reflecting our firm commitment as a sustainable company.
Our inclusion in the Dow Jones comes in addition to our positioning as a leading company worldwide for sustainability performance in the FTSE4Good index series.
But what does being listed in sustainability indexes mean for a large company? We spoke with Ferdinando Bonifacio who oversees relations with sustainability rating agencies under Telecom Italia Corporate Shared Value, and asked him to tell us what the Dow Jones is and what his job involves.
1. First of all, can you explain how the assessment system of the Dow Jones Sustainability Index works?
To be eligible for the Dow Jones sustainability indexes, companies must undergo an integrated assessment on economic, environmental and social issues: in the sustainability world we talk about ‘ESG (Environmental, Social, Governance) factors’. This assessment is carried out with a strong focus on long-term value for shareholders.
It covers over 100 qualitative and quantitative questions, which vary depending on the companies' sector.
In terms of economic factors, the company's overall 'governance' is examined considering, for example, innovation management, the supply chain, risk management and, of course, company policies and practices. 
The environmental assessments include, among others, environmental management systems, climate change strategy and environmental parameter performance (energy consumption, emissions, water and waste management).
Lastly, the social aspects focus on staff management in terms of human capital development and the ability to attract talent without overlooking issues of welfare and health and safety. This section also covers aspects such as the company's impact on the community in which it operates, digital inclusion or stakeholder engagement.
Each of the three areas analysed has a specific weight when calculating the final score. To be admitted to the Dow Jones, companies compete within their respective industry: this year only nine companies from the telecommunications sector were admitted to the Dow Jones World index.

...to be included in the ... index ...it is essential for a company to have a robust long-term sustainability strategy, as well as a series of initiatives to materialise this strategy.

Ferdinando Bonifacio

2. What are the most highly regarded aspects in these company assessments?
To be an industry leader, or at least to be included in the World or Europe index – as is the case of Telecom Italia for 13 years in a row – it is essential for a company to have a robust long-term sustainability strategy, as well as a series of initiatives to materialise this strategy. This aspect is highly regarded in the analysts' assessment.
For example, a part of this year's questionnaire had a stronger focus on human rights, which was undoubtedly very positive for Telecom Italia, which has performed due diligence on this issue, released a new policy last year, and organised an online training course for employees, as mentioned in our Sustainability Report.
It is definitely very rewarding for a company to be geared towards managing the issues under examination, i.e. setting out a policy, pursuing programmes in line with the policy and, in turn, having a monitoring and assessment system in place with very clear indicators in order to set goals.
3. Why is it so important for a company to be positioned in the Dow Jones World and Europe indexes? What does it represent and what values does it evoke when you're recognised as an Industry Leader?
As I was saying, being part of the index is an acknowledgement of the direction the company is taking towards sustainability, especially in a very competitive sector such as telecommunications, which requires high scores in order to be admitted.
As a result, socially responsible investors are encouraged to include companies that are eligible for sustainability indexes – such as the Dow Jones and FTSE4Good – in their portfolios, or at least to consider this information when making investment decisions.
Ultimately, being recognised as an Industry Leader and being included in the indexes for many years in a row definitely has a positive impact on a company's visibility and reputation.

...being part of the index is an acknowledgement of the direction the company is taking towards sustainability...

Ferdinando Bonifacio

Over 100 persons from all over the company involved every year for the information and response strategies for the Dow Jones questionnaire

4.  In practice, what do you do from day to day to ensure Telecom Italia's ongoing inclusion in the Dow Jones? Besides you, how many people and which departments are involved?
I operate on two fronts: with sustainability analysts and within the company. I have to explain and demonstrate the value of our economic, social and environmental initiatives to the analysts, as I mentioned before.
This activity is accompanied by the more delicate and strategic task of getting to grips with the latest trends on sustainability issues and incorporating them within the company so it can make assessments and intervene in any areas for improvement.
During the phase of gathering information and setting out response strategies for the Dow Jones (which happens in the spring and lasts for about two months), I interact with more than 100 colleagues from almost all company areas: the broad scope of the topics covered – often very different from one other – means that almost the entire company is involved. This is perhaps the most stimulating aspect of my work, as it gives me great cross-cutting insight into what is happening at Telecom Italia.
5. Is Dow Jones changing over time? Does it reflect ongoing social and cultural developments? If so, how?
The development of industrial sectors – combined with international social trends – means that the areas of interest for sustainability analysts change over the years. In turn, we see a change too in the aspects that are evaluated and the information required to be included in all sustainability indexes, not only for the Dow Jones.
This year, for example, the main changes concerned the identification and assessment of materiality, as well as the stronger focus on companies' commitment to human rights in line with the UN guiding principles on 'Business and Human Rights'.
6. Do you think the Dow Jones is an opportunity for self-assessment and potential improvement for businesses, regardless of whether they are listed in the index?
Definitely. On one hand, being part of a prestigious sustainability index such as the Dow Jones provides the recognition we mentioned earlier; on the other, I think it's important for a company to undergo a sustainability assessment, not only as a questionnaire to be included in an index, but also as an opportunity to assess their commitment to sustainability issues and see if it corresponds to what specialised industry analysts are looking for.
This comparison can be a starting point for identifying areas for improvement and working to stay in line with best practices at international level.
Dow Jones Sustainability World Index

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