External community

RELATIONS WITH INSTITUTIONS AND PUBLIC AUTHORITIES

Group companies maintain relationships with local, national and supranational authorities in a spirit of full and active cooperation and transparency that does not compromise their independence, economic targets or the values enshrined in this Code. (article 5 of the Ethical Code - Community).

In 2007, Relations with Institutions actively involved both the countries where the Pirelli Group has a well established presence and those where the Group’s presence is more recent.

In Romania and China, Pirelli, in line with its tradition of establishing firm roots in the countries where it operates, was involved in continuous dialogue over the year with institutions at national and regional level geared towards strengthening its local presence both from a business perspective (investments to enhance existing production sites) and in terms of the role played by the company within the local cultural framework, improving its potential whilst respecting specific cultural identities.

In 2007 the Group companies have maintained and strengthened a stable channel of dialogue and exchange with national and supranational partners (Governments, embassies, Parliaments, Public bodies, central and local authorities, and the European Commission).

Pirelli’s activities in included the identification and monitoring of legislative activities and the rules and procedures set out in specific European and national regulations. Dialogue has been strengthened with regional/national institutions, aimed at identifying funding opportunities for investment projects, scientific and technological research, as well as projects of a socio-economic nature (training/retraining programmes).

These relations with public authorities are based at all stages on the utmost transparency and veracity of the information conveyed (from the identification of funding sources to checks and inspections conducted by the funding institution), in the belief that ethical conduct in these relations should go hand in hand with the company’s success.

Involvement of the internal community with the external community

Children in Crisis: Pirelli Broadband and Pirelli Labs for the Congo

In October 2007, a school was inaugurated in the Congolese village of Bushushu that will provide over 450 children with access to secondary education.

Bushuhu

The Bushushu project supported by Pirelli Broadband Solutions and Pirelli Labs

The Bushushu Project, completed in just one year, was entirely funded by Pirelli Broadband Solutions and Pirelli Labs, also with the direct participation of employees, suppliers and customers. Children in Crisis Italy – a not for profit organisation committed to improving the lives of children who are the victims of conflict, poverty and disease – carried out the work together with the local NGO PEF-PAFU. In addition to the school, a mill has been built to grind cereals, providing a small business to help finance the school.

The two buildings, which represent a rebirth for the community of South Kivu, a region of the Democratic Republic of Congo that was the victim of an earthquake in 2004, are also intended to act as a foundation for the integration and peaceful coexistence of the various communities.

Inaugurations of the “My Time for Indonesia” schools

After around a year and a half of work, June 2007 saw the inauguration in Indonesia of the two senior schools reconstructed after the 2004 tsunami, thanks to the contribution of Pirelli and all the employees who donated almost 10 thousand hours of work during the “My Time for Indonesia” project.

The project involved two upper technical institutes: one in Banda Aceh - the provincial capital of the Island of Sumatra – capable of hosting 1,400 students, and the other within the province able to accommodate 400 students. The opening of the schools is the symbolic conclusion of a project, born from Pirelli Group’s desire to contribute to the reconstruction of an area that, on 26 December 2004, suffered enormous devastation and massive loss of life. The allocation of the funds was agreed with the local authorities, with whom an agreement was signed in April 2005.

The schools, in addition to providing education to future generations, also represent a landmark for the entire population in the reconstruction process.

Indonesia

Inauguration in Banda Aceh of the schools provided by the project “My time for Indonesia”

The amount of money needed to implement the project, around 500 thousand euro, was collected through the deduction of the number of hours that each employee decided to donate from their payslip, together with a contribution from the company. The collection of the funds and the construction work, which Pirelli employees were able to follow on the company intranet, were monitored by a Guarantee Committee for Italy (consisting of the Pirelli management, the Trade Union and a representative of Price Waterhouse Coopers) and a Guarantee Committee for Indonesia (made up of the Pirelli management, the Indonesian Minister for National Education and a representative of Deloitte).

Company initiatives for the external community

Group companies encourage and, where necessary, provide support for social, cultural and educational initiatives geared towards promoting personal development and improving standards of living (Article 5 of the Ethical Code - Community).

“Pirelli Group supports and respects the protection of internationally proclaimed human rights” (Policy on Health, Safety, Environment and Social Responsibility).

The awareness of its role in promoting the civil and cultural progress of communities where it operates has been a cornerstone of Pirelli business culture for over 130 years. This is why the Group organises and backs social, cultural and educational initiatives by working with both public and private institutions, local authorities, associations and bodies in all countries where it operates.

This commitment is not only consistent with the principles expressed in the Code of Ethics and Group Corporate Social Responsibility Policy, but also forms an important part of Pirelli strategy of maintaining its role as an international company that is one of the most integrated and active within the communities where it operates. As a consequence, Pirelli has always been involved in social, artistic, educational, training, and sports initiatives. All these activities are carried out in association with partners with a proven track record, chosen on the basis of criteria designed to ensure their quality.

Solidarity

Produced by the Milan Institute for the Blind in partnership with Pirelli, Dialogue in the Dark is an exhibition set in an environment without any light, which invites sighted people to enter the world of the blind to experience the problems they face and appreciate the extraordinary skills developed as a result of their “disability”. Pirelli has worked with the Institute since the initiative’s launch in 2005, with excellent results in terms of interest from the public and schools.

The Group also maintains excellent relations with several of the most important Italian non-governmental organisations. Pirelli is one of the founders of Emergency, an independent, neutral and non-political humanitarian organisation, set up to provide free high quality medical-surgical assistance to the victims of civil wars, landmines and poverty throughout the world.

Pirelli also provides support at institutional level to the aforementioned Children in Crisis Italy, an Italian association that belongs to the international Children in Crisis network founded by the Duchess of York in 1993. Active in 13 countries around the world, it seeks to improve conditions for children who are the victims of conflict, poverty, disease and other situations of serious hardship. Still within the area of solidarity, the Group also supports the association Sempre Insieme per la Pace (together for peace), which is involved in humanitarian interventions at international level.

Pirelli also pursues its mission of supporting youth at local level in Milan, through its contribution to associations like the Fondazione Boccafogli - dedicated to winning over street youth by encouraging their artistic and expressive potential, or the Centro ausiliario per i problemi minorili committed to youth hardship, or the age old Milanese institution Fondazione Asilo Mariuccia dedicated to abandoned children.

In the area of health, Pirelli supports the Fondazione Benedetta d’Intino, which treats autism and perception disorders in children, the Fondazione Giancarla Vollaro and the Associazione Marco Semenza, working in the field of cancer research, and the Centro Dino Ferrari, specialising in the study of neuromuscular and neurodegenerative diseases.

Culture

Pirelli actively supports the promotion of the artistic heritage, talent and local resources of all the countries where it operates, through a model of active cooperation that combines the skills of its partners with its own expertise in the fields of technology, organisation and communication. Pirelli has long been an engine for cultural development in Milan, having set up its Pirelli Cultural Centre decades ago, whilst for over twenty years the Pirelli magazine has been an example of an internationally focused business culture.

The Group also has long standing and prestigious partnerships in the art world. The most recent – December 2007 – involves an agreement with the Milanese Design Museum Triennale di Milano to design and develop shared initiatives. The objective is to revive the relationship between business culture and design culture and the image in architecture, urban development, visual arts, graphics, design and communication. A strategic alliance between two of the most important historical institutions in Milan, joined by a bond that stretches as far back as the Fifties with the collaboration – in addition to the friendship and personal esteem – between the then chairman Alberto Pirelli and Gio Ponti, the leading character in the story of the Triennale, which was assigned the job of constructing the Pirelli Skyscraper.

Lettera di Giò Ponti

A poster from the advertising campaign “Un viaggio sul sicuro - Cinturato Pirelli” (a safe journey - Pirelli Cinturato) and the letter from Gio Ponti

This partnership follows on from the Group support for the exhibition “100 Objects from the Italian Design Permanent Collection of the Triennale di Milano”, promoted by the Italian Embassy and the Cultural Institute of the Indian Embassy. A contribution to the spreading of that wonderful blend of culture and production that is industrial design, for which Milan has been, and continues to be, a global centre of excellence. One of the first initiatives (starting in 2008) is the exhibition Un viaggio, ma…, (a journey, but …), which accompanied the launch of the new Pirelli Cinturato at the Triennale (rebates and discounts are given to Group employees).

In April 2007, Pirelli signed an agreement with the Solomon R. Guggenheim Foundation of Venice, to become one of the small number of partner-companies that form part of the Intrapresae group and that, among other benefits, provides for free entry to all Pirelli employees and their families to the prestigious Palazzo Venier dei Leoni museum.

A decade ago Pirelli signed an agreement to provide corporate support to the Brera Art Gallery, the most ancient art collection in Milan and one of the most important in Europe. The Group assists in the restoration of the fifteenth century Venetian paintings in the XIV Hall. Following on from the Pala Pesaro by Giovanni Gerolamo Savoldo, it is now the turn of the L’adorazione dei Magi by Jacopo Palma il Vecchio. Pirelli’s involvement has enabled the development of an innovative device – designed by the architect Sottsass – through which the restoration can be performed in public, maintaining the paintings on view for the visitors.

Pirelli has long partnered the FAI – Fondo per l’Ambiente Italiano (the National Trust for Italy) in various initiatives including the organisation of courses on history of art for the public. The 2007/2008 season saw Pirelli and FAI involved – with the patronage of the Ministry for Cultural Heritage and Activities, the Lombardy Regional Authority, and the Provincial and Municipal Authorities of Milan – in a new edition of the I mercoledì dell’arte (art Wednesdays), a series of 29 lessons at the University of Milan. This edition, entitled Meeting Asia, provided hundreds of people with the opportunity to improve their knowledge of oriental art through to the contemporary.

Theatre and Music

Within the field of visual arts, Pirelli has a long standing association with the Fondazione Pierlombardo supporting the work of the Teatro Franco Parenti, one the most active, firmly rooted theatres in the Milanese cultural fabric. The significant role played by the Group has already been acknowledged with the naming of the theatre’s exhibition area for the work of young artists as the “Pirelli Hall”.

Another example of the focus on culture within the Milanese areas is the support for the theatre Piccolo Teatro di Milano on its seventieth anniversary. The joining of the theatre’s Group of Supporters was an almost inevitable “return to roots”: Pirelli was one of the founding partners in 1947 of the first public stable theatre in Italy. A relationship that was also reinforced by the participation – through the Silvio Tronchetti Provera Foundation – in the Galileo Project, aimed at using the theatre stage to encourage new generations to study scientific disciplines. In November 2007, over 900 students from Milanese senior schools watched The life of Galileo by Bertolt Brecht, brought to the stage in Italy for the first time since 1963 in the Piccolo Theatre. For the students it was an opportunity to record the spectacle and interview the actors, directors and spectators in view of the “Performing Galileo” competition, involving the reinterpretation of the play using the language and technology of multimedia youth culture. The work will be published and classified according to school level on the site www.performingalileo.net, produced by the Milan Polytechnic, and will then be judged by a jury chaired by Umberto Veronesi.

Moving from the theatre to music, in September 2007, Pirelli initiated its support for the MITO SettembreMusica, an international music festival, which last year for the first time involved Turin and Milan together in a packed programme of over 180 events of classical, contemporary, jazz, rock, pop and ethnic music, meetings, dedicated reviews and film projections. Still within the world of music, over the past three years Pirelli has sponsored “Per non dimenticare” (To not forget) – a concert organised by the Fondazione 8 Ottobre at the Scala Theatre every year in memory of the victims of the 2001 air accident at the Milan Linate airport.

Education & Culture

Bicocca Hangar

A fundamental instrument for Group relations with the local area and the community is the Bicocca Hangar, a site of over 15 thousand square metres that has been transformed by Pirelli RE into an institution devoted to arts and culture. With a strong focus on research and experimentation and capable of attracting creative arts and culture from all over the world, the Bicocca Hangar is an ideal location for bringing art and visitors together, geared towards active participation by the public. In 2007, its schedule included a wide variety of events promoting dialogue between leading figures in contemporary culture and various different types of audience. Two events worth mentioning were Not Afraid of the Dark – as part of the “Emergencies” project - and the Art for Business Forum.

Hangar Bicocca

The Bicocca Hangar

“Emergencies” is a programme of events, exhibitions, reviews and art projects on the issues surrounding humanitarian and social emergencies, intended to provide an opportunity for knowledge expansion and a series of encounters between the world of culture and socially conscious businesses.

Designed and managed by Bartolomeo Pietromarchi with the scientific direction by the Fondazione Adriano Olivetti, and promoted and supported by the Hangar Bicocca and The Family, “Emergencies” involves a series of initiatives in various sites in Milan including: Not Afraid of the Dark, an exhibition where internationally famous artists have proposed - through installations, performances and video projections – a reflection on controversial social and political issues. The Art for Business Forum is an initiative promoted by the Bicocca Hangar and Trivioquadrivio, in association with Pirelli RE and with the participation of numerous partner universities. Two days of encounters, round tables and workshops to explore the potential of art for business development and its tangible/intangible values. An excellent example of how culture has regained a central role and educational function.

The other communication initiatives promoted by Pirelli RE included the Great Architects: A journey in the mind of..., a series of DVDs produced in association with the magazine Interni, a journey into contemporary architectural culture, where leading architects describe their design research and their own personal way of working.

Education

IStarting from the academic year 2007-2008, the Group has set up two study grants of 10 thousand euro each for the final year students of the Liceo Classico “Carducci” (classics senior school) of Milan. Dedicated to the memory of Leopoldo Pirelli and his brother Giovanni, they are awarded to needy and deserving students due to enrol in a science and in a humanities degree course in a Milanese university.

The year 2007 will also be remembered for the five year framework agreement signed between Pirelli and the Turin Polytechnic that provides for the involvement of this academic institution in research in the tyre sector. The agreement envisages the cooperation between the polytechnic’s research facilities to develop production processes and Pirelli’s most advanced technology, from the next generation of the MIRS™ process to the CCM™ system and the “intelligent” Cyber Tyre. The Group also contributes to the funding of a professorship in Mechanical Engineering. The innovations generated by this cooperation will be developed in the Settimo Torinese industry and technology centre. Pirelli’s partnership with the academic world also involves Bicocca University of Milan. In 2007, through the CORIMAV (Consorzio Ricerca Materiali Avanzati – advanced materials research consortium), Pirelli funded three research doctorates in the Materials Science department. The objective is to promote the study of scientific and technological disciplines, especially those focused on the development of materials with potentially useful applications.

The Group also makes a teaching contribution to the department through its specialist researchers who provide tutoring to the PhD students.

The relationship with university and scientific world also underlies Pirelli’s partnership with the Silvio Tronchetti Provera Foundation, aimed at promoting research and the nurturing of talents in economics, science, technology, and management, through funding, awards, study grants and contributions to academic and scientific institutions. This takes place directly or in association with other parties, including a partnership with three academic institutions: the Milan Polytechnic, the Luigi Bocconi University and Bicocca University of Milan, whose chancellors sit on the Foundation’s board. In association with the Veronesi Foundation and the Cini Foundation, over the last three years the Silvio Tronchetti Provera Foundation has promoted The Future of Science in Venice, a series of conferences and debates on the subject of science attended by a number of Nobel Prize winners and world famous scientists and researchers.

Following on from the relationship between scientific knowledge and human life in 2005 and evolution in 2006, in 2007 The Future of Science focused on environmental issues, from energy supply to climate change and the sustainability of our development model.

Sport

Pirelli has been involved for over a century not just in two and four wheel motor sports competitions, but also in other fields (cycling, athletics and tennis), a testimony to its wide ranging commitment to sport in its many different forms.

Soccer

The Group’s commitment to soccer is known the world over through its sponsorship in Italy of Inter Milan F.C. and other top class teams including Palmeiras in Brazil, Peñarol in Uruguay, Velez Sarsfield in Argentina, and Basel in Switzerland. Its commitment, however, goes beyond professional soccer.

Pirelli is involved in the promotion of sports culture, which means the promotion of responsible and ethical social interaction also among young people.

This was the spirit behind the launch in 2007 of the project “Leoni di Potrero - Calcio per tutti” (lions of Potrero – soccer for everyone), a free training centre supported by Pirelli & C. in association with the Inter Milan soccer players Esteban Cambiasso and Javier Zanetti, aimed at children between 5 and 12 years of age. The objective is to take part in the development of the young students, fostering positive values such as friendship, loyalty, fidelity, respect and tolerance. A way to teach the concept of integration to children from different social classes, working to prevent negative situations like isolation and loneliness.

Potrero

The soccer school “Leoni di Potrero” (Potrero lions) supported by Pirelli in association with the Inter Milan soccer players Zanetti e Cambiasso

Sea sports

Pirelli’s involvement in this area also spans over almost forty years. In spring 2007, the 38th edition of the Pirelli Coppa Carlo Negri Regattas was held in the waters of Santa Margherita Ligure, with several boats taking part once again from “Matti per la Vela” (mad about sailing), a major therapeutic and rehabilitation project supported by Pirelli RE that uses sailing as a tool in addressing youth hardship, social exclusion, drug addiction and disabilities.

Coppa Carlo Negri

An edition of the Pirelli Coppa Carlo Negri Regattas

As for the activities involving the internal community, this report also includes a focus on the initiatives undertaken by Pirelli in Romania in favour of the external community.

Focus on Romania

In 2007, Pirelli signed an agreement with the Niguarda Cà Granda Hospital of Milan and the Slatina Hospital for the professional training of Romanian medical and nursing staff at the Milanese hospital.

The three year training programme will involve around 70 doctors and nurses from the Romanian hospital, who will take part in theoretical and practical courses on emergency medicine, emergency surgery, intensive care, reanimation, emergency gynaecology and hospital epidemiology at the Niguarda Hospital. Over the three year period, several medical directors from Niguarda will go to Slatina to assess the implementation of the new technologies and procedures within the Emergency Ward and the Emergency Department.

Pirelli has allocated 500 thousand euro to the project over the three years, including the donation of modern diagnostic and emergency intervention medical equipment to the Slatina Hospital.

As regards the younger members of the community, Pirelli, in association with Inter Milan FC and the Associazione Comunità Nuova Onlus, has set up a new “Intercampus” in Slatina. The project uses the game of soccer as an educational and social networking tool for the youth of the Slatina community, providing them with a fun and effective opportunity for growth and interaction.

Comunità Nuova has been assigned the task of handling the social interaction and educational aspects together with the organisation of recreational and study related activities for children. Inter Milan FC, on the other hand, through its Intercampus has been given the job of engaging the youngsters by providing them with top class sporting and training programme.

Altalena a Slatina

Pirelli works with the Slatina hospital to improve the public health of the local population

Intercampus is backed by the Mayor of Slatina and the Ministry for Youth and supported by the Slatina college of physical education, and the main public and private voluntary associations.