Sustainable Governance

For Pirelli, sustainable governance means integrating sustainability with the various aspects and precincts of company management. Among other things, this translates into the mapping, control and sustainable management of all risks associated with the company’s activities.

Fundamental principles - Mission, Vision, Brand Promise

Over the course of 135 years of history marked by changes in business, markets, people, political, economic and social contexts, Pirelli’s corporate identity has not changed. This identity is built around innovation, pursuit of excellence, internationalisation, social and environmental responsibility, and sustainable growth and creation of value.

The Group Mission is the following: “...Developing cutting-edge products in terms of quality, safety and respect for environmental and social sustainability, capable of satisfying the needs of our customers and all other stakeholders through the Group’s capacity for research and innovation and the skills of our human resources.”

The Group Vision considers in turn that “quality and excellence are distinctive components that can render Pirelli products exclusive and make the Group a benchmark for performance in a continually evolving global context.”

Integration of sustainability in the very essence of Pirelli is expressed through the Brand Promise, which states: “Our claim ‘Power is nothing without control’ is the essence of Pirelli’s products and action: high performance, research and innovation are combined with responsibility, safety, respect for the environment and sustainability.”

The Group’s Mission, Vision and Brand Promise are published in Group section of the Pirelli website (www.pirelli.com), which is accessible to the External Community.

Guiding principles - Model

The United Nations Global Compact is a voluntary initiative, proposed on 31 January 1999 at Davos by the then Secretary General, Kofi Annan, in an appeal to the World Economic Forum.

Specifically, the Global Compact asks businesses to implement and support, within their sphere of influence, ten basic principles in the areas of human rights, labour standards, the environment and the fight against corruption.

These involve universally shared values, as they derive from the Universal Declaration of Human Rights, the Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and the United Nations Convention against Corruption, to which Pirelli is firmly committed.

In October 2004, in a letter addressed to the Secretary General, Kofi Annan, Pirelli Group formally declared its adherence to the Global Compact and its commitment to observe and support its Ten Principles.

This letter, which is published in the Sustainability section of the Pirelli website (www.pirelli.com), is available to the External Community.

Sustainability documents

Values and Ethical Code of the Pirelli Group

To provide all the Group’s affiliates with cogent and uniform guidelines for the professional practices to be followed by those who work for the company, the Board of Directors of Pirelli & C. S.p.A. approved the Values and Ethical Code of the Pirelli Group.

The document outlines the general principles (transparency, fairness and honesty) that inspire the way it does business. It also lists the objectives and values underpinning the company’s activities that affect the main stakeholders with whom Pirelli regularly interacts.

Group suppliers are formally required to comply with the Group Ethical Code, by signing the “sustainability clauses” included in supply contracts and that are dealt with more extensively in a specific section elsewhere in this report.

The Ethical Code will be revised in 2009, to bring it into line with new market requirements involving sustainability and corporate governance. Consistently with the Group’s sustainable approach to operations, full implementation of the Code will be ensured by tying it to whistleblowing procedures.

The document has been translated into the various languages spoken inside the Group, and then distributed to all employees. The contents of this document, published in the Sustainability section of the Pirelli website (www.pirelli.com), are available to the External Community.

Pirelli Group policy on “Health, Safety, Environment and Social Responsibility”

By publishing its “Health, Safety, Environment and Social Responsibility Policy (HSE & CSR Policy),” signed by the Chairman in June 2004, Pirelli has implemented and reinforced guarantee inside the company that a proper balance would be maintained between sustainability and industrial development. The HSE & CSR Policy brings together in a single document the previous corporate policies on the environment and occupational safety in view of integrated sustainable operation.

The contents of the Policy respond to the desire to translate into a brief but substantial text the Group’s commitment to unwavering compliance with the principles set out in the “Universal Declaration of Human Rights,” the “International Labour Organisation Declaration on Fundamental Principles and Rights at Work,” and the ILO Conventions on forced labour and child labour, freedom of association, equal opportunity and occupational health and safety.

This is also consistent with the commitments made upon acceptance of the principles set out in the United Nations Global Compact, which are reflected in turn in “The Values and Ethical Code of the Pirelli Group”, and in the Group Equal Opportunities Statement and in the consequent operating activities.

The Policy begins by affirming support and respect for human rights, which offer the essential inspiration for the company’s sustainable approach.

Group suppliers are formally required to comply with the Policy, by signing the “sustainability clauses” included in the supply contracts and that are dealt with in more detail in a specific section elsewhere in this report.

Like the Ethical Code of the Pirelli Group, the HSE&CSR Policy will be updated in 2009.

The document has been translated into the various languages spoken within the Group and distributed to all Pirelli employees.

The contents of HSE & CSR Policy, published in the Sustainability section of the Pirelli website (www.pirelli.com), are available to the External Community.

Pirelli Group Equal Opportunities Statement

Pirelli’s commitment to equal opportunity in the workplace is clearly set out in its Equal Opportunities Statement, signed by the Chairman.

The document clearly illustrates the Group’s approach to personal development in the management of diversity. Compliance with the principles and commitments set out in the Statement is guaranteed by local procedures for reporting and protection of equal opportunity in the workplace.

The Statement, which was distributed to all Group employees in their local languages at the end of 2006, has been published in the Sustainability section of the Pirelli website (www.pirelli.com), which is available to the External Community.

THE GROUP’S SUSTAINABILITY TOOLS

Corporate Governance

Pirelli assigns a key role to corporate governance, aware of its importance to value creation.

The Group is thus constantly committed to maintaining its corporate governance system in line with Italian and international best practices, and is always alert to implementing innovative solutions to add value to its own corporate governance system.

Pirelli has adopted the traditional management and control system based on the central role of the Board of Directors. The company’s governance model is based on fair practices for disclosure of the choices and processes followed in making business decisions; on an effective internal control system; on effective rules applicable to potential conflicts of interest and rigorous rules of conduct in carrying out transactions with related parties.

The other key features of the Pirelli governance system include:

  • a high level of transparency in its Corporate Governance system, with extensive evidence and description of the governance structure, with evidence of bi-annual updates and integrations contemplated for the corporate governance compared with the content of the Annual Report;
  • the presence in the board of a large number of Independent Directors, amounting to 55% of the Board of Directors and more than 65% of total non executive directors;
  • the important role given to minorities, which in case of submission of the lists elect 20% of the Board of Directors (currently 4 out of 20);
  • the establishment of a Committee for Internal Control and Corporate Governance and a Remuneration Committee solely made up of Independent Directors;
  • designation of a Lead Independent Director, who is assigned an active and effective role in coordinating the requests and contributions of independent directors. This officer has always guaranteed his regular attendance at all Board of Directors and Shareholders’ Meetings and at meetings of the Committee for Internal Control and Corporate Governance and the Organisational Model Supervisory Body, of which he is Chairman;
  • the Directors’ strong commitment to their mission, which is also reflected in their regular attendance of Board of Directors meetings;
  • periodic meetings of the independent directors and directors without executive authority - in the second case with top management of the Group - in order to improve their familiarity with the company’s actual operating conditions and facilitate their contribution to management;
  • the Board of Directors’ consolidated practice of reviewing its own performance, with the aid of an expert consulting firm.

For further details on the Pirelli Corporate Governance System, reference is made to the relevant section in the Annual Report.

The section dedicated to the company’s Corporate Governance System can also be accessed through the homepage of the website www.pirelli.com.

Internal Control and Risk Management Systems

The Internal Control System is comprised by the procedures and tools designed to offer reasonable assurances that the objectives of operating efficiency and effectiveness, the reliability of financial and operating information, compliance with laws and regulations and protection of company assets against possible fraud or attempted corruption be realised.

The Pirelli Group Internal Control System is set up in such a way as to ensure fair disclosure and adequate control of all activities, particularly in areas that are considered potentially at risk. This is the operating translation of the principles set out in the Group Ethical Code, and represents a collegial process intended to pursue fundamental business ethics: fairness, transparency and honesty.

The fundamental principles of this system are the efficiency, cognizance and verifiability of company operations, the reliability of accounting and operating data, formal and also substantial compliance with laws and regulations, and conservation of company assets over time.

The Board of Directors is responsible for the Internal Control System, defining its guidelines and periodically auditing its adequacy and actual performance. It relies on the Internal Control committee and the Corporate Governance Committee, as well as the Internal Audit Department of Pirelli & C. S.p.A. to carry out these activities.

As part of its risk management activities, Pirelli identifies potential risks through the Control Risk Self Assessment (CRSA) process. Implementing the Management Plan, this process relies on methods of identifying and assessing risks by management at the individual affiliates located in different countries.

The CRSA method has been incorporated in the Planning and Control procedure as part of the Group’s administrative processes, in view of developing the management of corporate risks within the framework of that procedure. The aim was to “automate” its application so that the company’s various operating units can independently assess risks and adopt appropriate countermeasures together with elaboration of the annual Management Plan. This reflects the clearly high sensitivity to unknown factors tied to local operating and socioeconomic conditions.

All risks to company stability are monitored and assessed, such as meeting targets, protecting corporate assets, the reliability and integrity of information, corruption and the operating risks that are associated the specific company and/or the specific geographical location.

This activity takes a systematic approach in order to analyse existing controls and identify any improvements and reduce the risk profile.

Consequently, the CRSA activity is carried out in order to:

  • increase management’s attention, awareness and responsibility for risks;
  • provide a systematic approach to identifying and measuring the risks that might have a negative impact on strategic objectives;
  • prepare a profile that indicates how existing controls have reduced the current level of risk;
  • establish how risk can be further reduced through greater controls;
  • prepare realistic action plans to mitigate major risks;
  • obtain a risk profile that, as a key tool in the decision-making process, is used for change management;
  • provide a structured and disciplined risk assessment approach as part of the planning and control process.

Several tools are simultaneously used at the operating level for self-evaluation of risks and controls.

In an initial phase, the business unit managers and their direct subordinates identify the threats that can prejudice achievement of corporate objectives and the tangible and intangible resources that the risks can impact and their likelihood of occurring.

Subsequently, during a consolidation phase, redundancies are eliminated and classes of material risks that had not been initially identified are added.

Then a single list of risks is drafted and sent to management for assessment of the likelihood that the events occur and their impact on operations.

The risk portfolio, which is one of the principal outputs of the self-evaluation process, not only orients the formulation of strategies but also plays a major role in audits, both during definition of the annual plan and during audits themselves.

The identification of potential risks supports the internal control system in identifying realistic action plans for risk prevention. It likewise permits the analysis of shared crisis management operating strategies, by means of which insurance coverage is periodically adjusted as appropriate in accordance with specific internal policies.

Among the risks connected with individual geographic areas, the human rights assessment carried out at the corporate and sector levels merits special attention. This assessment is carried out for those countries where it is more likely that human rights be violated. These countries are the same as the “countries of concern” (according to the EIRIS classification for FTSE indices) where the Company has a presence.

This applies in particular to management of the chain of supply, which requires procedures, prevention and management that are addressed in a specific section elsewhere in this report.

Ad hoc assessments are also carried out before entering a specific market, in order to assess any political, financial and social risks, including those connected with respect of human rights. Once the Company sets up operations in such a market, this will enable it to better manage the gap between local practises and Company HR and social responsibility policies, which will be applied on a mandatory basis.

In order to monitor internal compliance with the human and labour rights set out in the SA8000® Standard (the benchmark tool used by Pirelli to manage social responsibility), the Group complements constant monitoring at the corporate level with independent audits by external consultants. Such audits enable the company to make complete and objective assessments of any departures from the principles set out in the standard.

In 2008 independent audits were carried out at Pirelli production plants and commercial locations in Turkey, Brazil, Venezuela, Argentina, Egypt, China, Romania, Colombia, Mexico and Chile (commercial offices only are located in the last three countries). Several plans for remedial measures were implemented in 2008 in consequence of these audits.

Organisational Structure

Governance of Sustainability is centred around the Corporate Social Responsibility Steering Committee. This high-level body was formed by the Chairman at the beginning of 2004 to guide the advancement of sustainability throughout Pirelli S.p.A. The CSR organisational structure is made up of a Group HSE & CSR Director, a Group CSR Manager, Sector CSR Managers (one for each sector of the Group) and Company CSR Managers (one for each Group affiliate).

In 2005, the Chairman appointed an Equal Opportunities Steering Committee, a high-level body to guide and supervise programmes for equal opportunities at the Company. At the same time, in order to steer the implementation of the Equal Opportunities Programme throughout the Company, and also to achieve greater organisational balance and to monitor the advancement of equal opportunities within all the affiliates, an Equal Opportunities Manager was appointed for the Group as a whole. Finally, each country has an Equal Opportunities Manager, who is responsible for guiding and supervising the advancement of equal opportunities at the local level.

Group Rules of Corporate Social Responsibility

The Rules of Corporate Social Responsibility (issued on 16 September 2006) set out and regulate the methods applied for internal management of activities associated with corporate social responsibility, with particular attention to the roles and responsibilities of the departments involved. These regulations also govern the planning and control processes, the process of drawing up this Sustainability Report and management of the dissemination of CSR information to the external community.

These rules specifically provide for the full integration of CSR in the Group’s financial reporting structure: “…The cycle of planning and control of CSR follows the Group’s reporting and planning calendar.”

Adopted management systems

To implement the first principle of the Health, Safety, Environment and Social Responsibility policy, Pirelli devotes significant resources to management systems. The Group utilises these tools to improve the quality, effectiveness and efficiency of its processes, in view of continuously reducing impact on the health of its employees, on safety conditions in the workplace and on the environment.

The adopted management systems for occupational health and safety (OHSAS 18001), environment (ISO 14001) and product quality (ISO 9001, ISO/TS 16949, ISO/IEC 17025) are extensively described in the specific sections dedicated to them elsewhere in this report.

The international SA8000® standard was adopted in 2004 as the benchmark for assessing the consistency of the Group’s conduct with the Sustainability principles set out in the standard.

In 2008 Pirelli commissioned independent audits at its plants and commercial locations in Turkey, Brazil, Venezuela, Argentina, Egypt, China, Romania, Colombia, Mexico and Chile (commercial offices only are located in the last three countries). Several plans for remedial measures were implemented in 2008 in consequence of these audits.

IT System for CSR information management

In 2008 Pirelli completed the “CSR-DM” (CSR Data Management) system. This is an IT system for the management of Group sustainability information. Created in 2007 to improve the efficiency of the process of contribution, validation, consolidation, analysis and management relating to sustainability, the system has been used to collect the data reported here.

Stock market indices and ethical finance

Pirelli has received major recognition for its commitment and the results achieved in the field of sustainability through its inclusion in some of the most prestigious international stock exchange indices for sustainability.

Dow Jones Sustainability Indices

Launched in 1999, the Dow Jones Sustainability Indices are the first global indices to track the financial performance of leading companies in terms of sustainability. Compiled on the basis of cooperative efforts between Dow Jones, STOXXLimited and SAM Group, they provide reliable and objective information in the form of benchmarks for managers of sustainable fund portfolios. Pirelli was selected for the Dow Jones Sustainability STOXX (DJSI STOXX) index for the first time in 2002, and has also been included for many years in the Dow Jones Sustainability World index.

In January 2009 Pirelli was named world sustainability leader in the “Autoparts and Tyres” Sector and Gold Class Company for the second year in a row by Sustainability Asset Management Group (SAM). This recognition was published in the prestigious Sustainability Yearbook 2009, published by SAM in collaboration with PricewaterhouseCoopers.

The Yearbook is the most complete and authoritative global benchmarking tool for sustainable finance specialists. Only 15% of the companies listed in 57 business sectors are included, following assessment by SAM of more than one thousand multinational companies.

FTSE Indices

Pirelli has been included in the FTSE Global and European STOXX indices since 2002. FTSE is an independent company, owned by The Financial Times and the London Stock Exchange.

The FTSE4Good Series indices were created by FTSE to measure the performance of companies in terms of their observance of internationally recognised standards of social responsibility, and to facilitate investment in these companies.

ASPI Index

Pirelli has been included since the beginning of 2005 in the ASPI EUROZONE ® (Advanced Sustainable Performance Indices) index, which includes the 120 best-performing companies in terms of sustainability on the basis of CSR ratings issued by Vigeo, a social and environmental rating agency. The ASPI survey pool is comprised by the companies included in the DJ EURO STOXX SM index.

In an important Vigeo assessment, whose results were published in Italy in September 2008, the Company was recognised as a leader in its sector for its policies and practises, especially in the fields of “Human Rights,” “Environment,” and “Customers and Vendors” (which the Vigeo model considers to be some the areas with the greatest risks/opportunities), for which Pirelli received the highest score. Its score for human rights was far higher than the sector average. Vigeo has also given Pirelli high marks in the environment category, reflecting the Group’s environmental management systems. Appreciation was also expressed for the Group’s equal opportunities and product safety policies and transparency in regard to Board of Directors compensation.

AXIA Indices

Pirelli has been included in the Axia Ethical Index since 2004 (the year when the index was created) and in the Axia Csr Index since 2005 (the year it was created). Pirelli is also included in the Axia Euro Ethical Index and Axia Euro Csr Index.

The Axia indices interact with the major international platforms for financial operators and encompass international best practices in corporate social responsibility for a range of companies selected from those with the highest capitalisation for the S&P MIB and Eurostoxx60 indices. Pirelli’s current rating is A+++, which is the highest obtainable in the “ethical class”.

KEMPEN Indices

Pirelli has held “Pass Status” since 2003 in the entire Kempen Capital Management “SNS Socially Responsible Investing Universe” with continually improving ratings. The investing universe includes companies listed in Europe that prove they have adopted the highest standards in terms of ethical, environmental, and human resource standards.

Scs Consulting Accountability Rating

Scs Consulting, a management consultancy, presented its Accountability Rating for the first time in Italy in December 2008. This tool was designed to measure the capacity of firms to respond and their transparency to interlocutors on significant management aspects, particularly strategy, governance and management systems, capacity to engage stakeholders and the impact of their core business on the competitive environment.

Scs assessed the companies listed on the S&P/MIB index, which is the principal Italian stock market index, and its ranking put Pirelli in the top ten.

Principal institutional commitments

Pirelli’s adherence to the United Nations Global Compact has already been mentioned above.

Membership in the European Alliance for CSR

Pirelli’s participation in the European Alliance, formalised in 2007, is based on its full acceptance of the role of sustainability as a strategic and competitive way to manage a company. So far, Pirelli’s participation in the initiative promoted by the European Commission to encourage the spread and exchange of the best sustainability practises amongst businesses, has been expressed through its active participation in the Alliance’s European Laboratories, coordinated in Italy by the Sodalitas Foundation (where Pirelli has a seat on the Steering Committee).

The Equal Opportunities Workshop produced a toolkit entitled “Practising Gender Equality in Careers” prepared by Pirelli together with IBM Italia, L’Oreal, Telecom Italia, Poste Italiane, Roche Diagnostics and Indesit Company on occasion of the European Equal Opportunities Year (2007). This toolkit, presented in Brussels on 19 June 2008 at the CSR Europe General Meeting, took a year to complete and encompasses all the best practises for management of gender diversity. These practises are described in terms of key operating procedures and are aimed at businesses that have decided to draw inspiration from existing best practises.

Since 2008 Pirelli has also participated in the Italian Workshop on “Managing Multiculturalism” at work, which will produce a management manual in 2009 based on existing best practises for multicultural management.

Chairmanship of ETRMA - European Tyre and Rubber Manufacturers Association

Francesco Gori, CEO and General Manager of Pirelli Tyre, is serving his second consecutive term after being re-elected Chairman of ETRMA (European Tyre and Rubber Manufacturers’ Association) in October 2008, promising continued focus on three priority themes - environmental protection, road safety and greater competitiveness.

While the Group confirms its institutional commitment to the Association, which has represented the continental tyre and rubber product industry before European Union institutions and other international organisations since 2006, the programme of activities to raise awareness for road safety continues. A year after the signing of the European Road Safety Charter, which represents a commitment to halve the number of highway accident deaths by 2010, ETRMA launched a European Safe Driving Campaign in 2008. It has offered an educational quiz for everyone, but especially an opportunity for drivers who want to measure their own knowledge of the “Golden Rules of Safety” that everyone should know and apply.

WBCSD - World Business Council for Sustainable Development

Pirelli actively participated in the WBCSD - World Business Council for Sustainable Development once again in 2008. Headquartered in Geneva, this is an association of about 200 international companies based in over 30 countries that have made a voluntary commitment to unite economic growth with sustainable development.

Pirelli Tyre is a member of the Tire Industry Project Group, the project launched in 2006 to identify the potential impact on health and the environment of the materials associated with the manufacture and use of tyres. Sixteen months after research work began, the heads of leading world tyre manufacturers that belong to the group met in Tokyo on 12 June. This important event offered an update on programme progress and outlined major new approaches to study.

Participation in the Kyoto Club and the energy efficiency conference

Pirelli was one of five Italian companies invited to attend the roundtable on Energy Efficiency, the Main Priority, a conference held on 11 September by the Kyoto Club and hosted by the city of Milan. This roundtable was part of the programme for raising awareness and providing information and training in the fields of energy efficiency, use of renewable energy sources and sustainable mobility promoted by the Kyoto Club to achieve the greenhouse gas emission reduction targets set in the Kyoto Protocol. Formed in 1998, the Club is a non-profit organisation comprised by businesses, institutions, associations and local government authorities committed to stimulating proposals and policies for action in the energy and environmental sector.

One of its members is Pirelli Ambiente Renewable Energy, the Pirelli Ambiente company that operates in the renewable energy source sector and, in particular, waste-to-energy activities through the production of quality fuel, developed and patented with the contribution of Pirelli Labs and Pirelli Real Estate.

Collaboration agreements with universities and public authorities for joint research projects

The Group signed a collaboration agreement with the Region of Piedmont, Province Turin, City of Settimo Torinese and the Turin Polytechnic for development of research and innovation programmes to develop the new Pirelli industrial centre in the territory of Settimo. In particular, this agreement calls for introducing cutting-edge technologies on which Pirelli is focusing its tyre research activities at the Settimo Torinese industrial centre. A major part of this project will be carried out in collaboration with the Turin Polytechnic. This will include the new generation MIRS, a substantial evolution in the robotised tyre manufacturing process that guarantees uniform product quality, TSM (Twin Screw Mixing), a new process of mixing materials at high standards of quality and reliability, and the Cyber Tyre, the future “smart tyre” equipped with sensors that can transmit useful information for driving and controlling vehicles.

The Pirelli Group and the Milan Polytechnic have signed an agreement to create a professor’s chair and fund five scholarships for doctoral degrees over the course of ten years on the Chemical Foundations of Rubber and Compound Technology. The new professor’s chair is intended to pursue study of innovative materials and the application of nanotechnology to development of new generation tyres.

The Fondazione Silvio Tronchetti Provera foundation and the Shandong University in Jinan (China) have signed a research agreement for the study of a new generation of “green tyres.” The university researchers will work with the Group’s R&D Department in China to create tyres with low rolling resistance, in order to reduce fuel consumption. This project is part of the research and development activities pursued by the Group for some time now to develop increasingly eco-compatible tyres.

Agreement with the Niguarda Ca’ Granda Hospital in Milan for a cooperation project with the Slatina Hospital

Intended to further the continuing education of Romanian physicians and nurses at the Milan hospital, the three-year medical cooperation programme between the Niguarda Ca’ Granda Hospital and the Slatina Hospital financed by the Pirelli Group engaged the participation of 25 Romanian physicians and nurses in its first year of activity. They received a total of 300 hours of training in the Emergency Medicine, Emergency Surgery, Intensive Care, Resuscitation and Emergency Gynaecology Departments at Niguarda.

The cooperation programme envisages engaging the participation of about 70 physicians and nurses from the Slatina Hospital over the course of three years, through participation at theoretical and practical courses on Emergency Medicine, Emergency Surgery, Intensive Care, Resuscitation, Gynaecology and Hospital Epidemiology.

The agreement is one of the social programmes undertaken by Pirelli in support of the community of Slatina, where the Group has built a large industrial centre dedicated to the production of high performance tyres for the Central and East European markets.

Participation in the 20th National Quality Campaign

logo_20NCQ.jpg

This year Pirelli participated in the 20th edition of the National Quality Campaign, an annual initiative sponsored in Italy by the Galgano Group. It aims to promote the strategic role of quality in our national economic system.

Launched back in 1989 by the three big quality associations Japanese Union of Scientists and Engineers (JUSE), American Society for Quality Control, now the American Society for Quality (ASQ) and the European Organization for Quality (EOQ), since 1995 the National Campaign has been part of the European Quality Week, which the European Union launched by inviting Member States to hold a series of promotional initiatives during the month of November to spread awareness of the following issue: quality as focus on the customer, innovation and competitiveness, added value that permits the elimination of waste and improvement of productivity, and a strategic key to building success.

These were the themes in 2008. During this campaign, sponsored by the President of the Republic of Italy and key ministries, an ad has been published in leading Italian newspapers and a series of conferences are being organised in various Italian cities to emphasise the importance of quality and the development of a new quality-oriented culture.

Principal awards received

In 2008, the Pirelli Group received numerous awards and expressions of preference by consumers around the world, thereby taking a leading position in surveys and comparative studies carried out by respected specialised magazines and prestigious companies specialising in brand analysis. The common denominator of these awards is the recognised reliability of the Pirelli Group and its products.

Research institutes also recognised the Group’s technological innovations. Ratings of the Group prepared by the analysts of the most prestigious indices of sustainable finance at the global level kept climbing, as discussed in detail elsewhere in this chapter. In particular, the Group was recognised for its leadership in global sustainability in the “Autoparts and Tyres” Sector and as a Gold Class Company by Sustainability Asset Management Group (SAM) for the second year in a row.

Some of the principal forms of recognition received by the Group in 2008 are illustrated below. News for 2009 are also included here, as they are considered significant events occurring before publication of this report.

Pirelli one of the 100 most respected and reliable companies in the world

This is what was said in the 2008 edition of The Global Pulse Project, sponsored by the Reputation Institute of New York. The special ranking published in July considers more than a thousand companies in 27 countries according to a system that measures the public’s degree of trust, admiration, esteem and respect. The annual survey is compiled from interviews of more than 30,000 consumers. The results of the study are published annually by Forbes.

Pirelli is one of the 10 most famous Italian brands in the world

This was announced by an Italian ranking prepared for the first time by Interbrand, the biggest brand consultancy firm that specialises in analytical, strategic and creative disciplines for brand creation, management and assessment in order to maximise a brand’s economic value. In the midst of a market downturn, the Company has received this major international recognition, which not only confirms its investments in the brand, but also major prospects for growth in its core business and fashion.

The scorecard for Pirelli says: “Strong focus by the Group on its core business of making tyres, characterised by a consistent message at the global level (“power is nothing without control”), the brand seems to be sustaining its price-mix growth policy with success. In a sector where environmental sustainability is now a requirement rather than a choice, Pirelli’s challenge will be to capitalise on the branding of its investments in eco-tyres, without diluting its performance image”.

Pirelli Tyre is the “Tire Maker of the Year,” winning the “Tire Technology International Award 2009” for the creation of innovative materials and environmental benefits

The “Tire Technology Expo” was held on 18 February 2009 in Hamburg. This is the world’s most important show and conference dedicated to the tyre industry, which hands out the prestigious “Tire Technology Awards for Innovation and Excellence” every year. The jury of international authorities on tyre manufacturing and research named Pirelli Tyre “Manufacturer of the Year”.

This choice was justified by research as a key factor in Pirelli’s activity in 2008, characterised by the creation of innovative materials, environmental benefits and the establishment of partnerships with research institutes like the Fondazione Silvio Tronchetti Provera and Shandong University in China.

Pirelli the best tyre maker of the year in China

In December 2008, Pirelli won the prize “Best Tyre Maker of the Year” at the China Auto Service Golden Finger Awards, winning the consensus of experts, technicians, journalists and web users. This recognised the Company’s long commitment to top quality tyres and high performance, which have become standard equipment on the world’s best cars. Presented by Auto Driving & Service Magazine (one of the most authoritative car magazines in China) and Sohu Auto Channel, the China Auto Service Golden Finger Awards and Golden Wrench Awards are among the most influential and best-known awards in the car industry.

Pirelli best investor in the Gorj District, Romania

In December Pirelli & C. Eco Technology was elected “Best Investor of the Year” in the Gorj District of Romania. This was the decision of Antena 1, Romania’s top national commercial television broadcaster, which created the prize in 2008 with other organisations.

Pirelli Eco Technology ended the year on a positive note. On 5 December this Group company, which is committed to reducing air pollution, celebrated the first Feelpure particulate filter produced at the Bumbesti-Jiu plant, in the historic region of Oltenia.

The winner is Pirelli Labs!

On 9 May 2008 the CNR (Consiglio Nazionale delle Ricerche - Italian National Research Council) awarded the Oscar Masi Prize for Industrial Innovation to Pirelli Labs. They won the 2007 competition, whose theme was the application of nanotechnologies, with the “tunable laser” one of the world’s most innovative solutions for the creation of a universal source in long-distance fibre optic telecommunication systems, which is covered by 14 international patents.

The Swiss prefer Pirelli tyres

Gli_svizzer_ipreferiscono.jpg

For the third year in a row, Pirelli won in the “Best Brand” tyre category, the most popular competition for readers of Auto Illustrierte, a prestigious independent car magazine published in Switzerland.

The “Best Tuning Cars & Best Brands 2008” prizes by the readers of AI were awarded in Basel on 13 November, as usual, during the most important and most visited German Swiss car show, the Auto Zürich Car Show.

American drivers recommend Pirelli

Pirelli received a score that was 22 points above average in the Original Equipment Tire Customer Satisfaction Study 2008, an annual survey conducted by the California research institute J.D. Power and Associates that measures car driver satisfaction on original equipment (OE) tyres during the first two years after car purchase. Satisfaction with the OE is measured on the basis of five basic factors: durability, traction, design, driving pleasure and handling. The survey compared the products of 14 manufacturers.

Customer satisfaction is the most important factor in deciding to buy the same brand when tyres have to be replaced, or recommending them to friends and relatives. Here again, while the industry average is 32%, Pirelli ranked 38%.

The Cinturato P6 tyre is ranged number 1 in France for safety

In the test organised by the French magazine L’Auto-Journal and published in its 11 September issue, four models of ecological tyres that were market leaders were ranked according to stopping distance at different speeds, within the speed limits imposed by motor vehicle codes. The Pirelli Cinturato P6 tyre beat its competitors with 22 points.

Pirelli is the favourite brand of SportAuto readers

Dritti al cuore degli automobilisti tedeschi.jpg

Performance and emotions: for the readers of SportAuto, a leading German magazine in the sports car sector, Pirelli is the top brand for “sportsmanship and emotion”. This is what was reported in the survey that the specialised publication conducts every year amongst its readers to get their opinions and reward the brand that satisfied them the most.

In its comparison of the most important tyre makers, Pirelli stood out for safety and dynamic handling, distinguishing itself for its sure grip on curves, stability at high speed, safety in wet conditions and excellent performance while braking. The Pirelli brand received high scores in many areas, including its sporty look and the results of different evaluation tests. “The ‘Best Brand’ prize is a major incentive for the future for us. We are going to work hard to hold on to this title”, said Michael Borchert, Pirelli Marketing and Sales Executive in Germany.

Other awards received from outside organisations for sustainable performance in 2008 are mentioned in the sections below, where they are discussed in the specific subsections.

Dimensione economica apertura.jpg