PIRELLI RE SUSTAINABILITY REPORT 2009 by wuyunyi

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									building the future




Sustainability Report
2009
                                 CONTENTS | SUSTAINABILITY REPORT 2009




CONTENTS



                                                                              1




                                      1. METHODOLOGY                      3
           2. PIRELLI RE AND SUSTAINABLE DEVELOPMENT                      5
                         3. ECONOMIC RESPONSIBILITY                      13
                    4. ENVIRONMENTAL RESPONSIBILITY                      29
                             5. SOCIAL RESPONSIBILITY                    51
                                                    6. TABLES            79
                            7. ASSURANCE STATEMENT                       81
                                              8. GLOSSARY                83
    SUSTAINABILITY REPORT 2009 |




2
                                                                        METHODOLOGY | SUSTAINABILITY REPORT 2009




1. METHODOLOGY


Pirelli RE’s sustainability report, now in its fifth edition, seeks to fully embody our philosophy of               3
integrating economic decisions with environmental and social choices, according to the “triple
bottom line” approach.

The report was written to comply with the Sustainability Reporting Guidelines of the Global
Reporting Initiative (GRI), and sustainable performance is analysed according to the Key
Performance Indicators (KPIs) developed on the basis of GRI’s G3 guidelines.

For the economic and social dimensions we have also used the “Principles of Social Reporting”
published by the Social Report Task Force of Italy’s Ministry of Labour and Social Policies.

The Group’s boundary for CSR reporting is the same as the scope of consolidation.

In this volume we have focused on the issues of greatest interest to the reader, bearing our
different stakeholders in mind and providing a down-to-earth look at Pirelli RE’s commitment
to responsibility. We do not make a show of our achievements, but report transparently on any
problems and discuss what has changed since our 2008 report.

The report also includes third-party certification.

For any further information on the contents of this volume, please use the contacts provided in
the “Sustainability” section at www.pirellire.com.
    SUSTAINABILITY REPORT 2009 |




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                 PIRELLI RE AND SUSTAINABLE DEVELOPMENT | SUSTAINABILITY REPORT 2009




PIRELLI RE AND SUSTAINABLE DEVELOPMENT

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                                         SUSTAINABILITY REPORT 2009 | PIRELLI RE AND SUSTAINABLE DEVELOPMENT




                                         2. PIRELLI RE AND SUSTAINABLE DEVELOPMENT


6                                        GROUP PROFILE

                                         Pirelli RE (Pirelli & C. Group), listed on the Milan Stock Exchange since 2002, is one of the leading
                                         asset managers in the real estate sector in Italy and the rest of Europe with operations in Italy,
                                         Germany and Poland.

                                         Pirelli RE grooms and manages property portfolios for third party investors, through a distinctive
                                         model based on the integration of specialized services (Agency and Property Management)
                                         instrumental to the Fund & Asset Management business.

                                         Assets under management (AUM) currently amount to around €16 billion1.

                                         Of the total, the property portfolio is worth €14.4 billion, and the remaining €1.6 billion consists
                                         of non-performing loans (in- and out-of-court recovery of problem loans on behalf of banks and
                                         investors).

                                         As for the geographical breakdown of properties, about €7.2 billion worth are located in Italy,
                                         most of them managed through real estate funds (approximately €5 billion) by the subsidiary Pirelli
                                         RE SGR—a leader in the domestic market with a market share of around 18%2.

                                         The rest of the portfolio is located in Germany (€7 billion) and in Poland (€0.2 billion in development
                                         projects).
    1. Market value, December 2009

    2. Pirelli RE calculations based     At the close of 2009, Pirelli RE had a workforce of 1,139 (1,097 employees and 42 temps): a
       on Assogestioni’s report “Fondi
       Immobiliari Italiani” (1st half   highly qualified staff, with in-depth interdisciplinary knowledge and an outstanding track record
       2009)                             matured on the international competitive stage.


                                         PRE STAKEHOLDERS AND THE COMPANY’S APPROACH

                                         Pirelli RE takes a multi-stakeholder approach, pursuing sustainable, lasting growth based as
                                         much as possible on the fair reconciliation of the interests and expectations of everyone who
                                         interacts with the company:

                                         -     Environment;
                                         -     Investors and lenders;
                                         -     Human resources;
                                         -     Customers;
                                         -     Vendors;
                                         -     Institutions;
                                         -     The external community.

                                         We have a multitude of activities, means of dialogue and projects of specific interest to the
                                         stakeholder categories listed above. They are discussed thoroughly in the relevant sections of
                                         this report.


                                         SUSTAINABLE GOVERNANCE

                                         For Pirelli RE, this is the integration of sustainability in the various aspects and areas of our work.
                                         It also translates into the mapping, control and sustainable management of business risks.
                                                         PIRELLI RE AND SUSTAINABLE DEVELOPMENT | SUSTAINABILITY REPORT 2009




MISSION                                                                                                                        7

“To be the real estate sector leader through innovation, sustainable quality and ongoing
development of expertise, thus creating value for the business, the environment and the
community.”

The strategic objectives are:
- to create innovative products and services which provide quality solutions to the needs of
   investors, users and the community;
- to become an aggregator in real estate management through specialized know-how;
- to create a sophisticated culture, thus contributing to the real estate sector’s structural
   evolution.

The Pirelli RE Group’s mission can be found on the corporate website, www.pirellire.com (“The
Company” section).

VISION

Pirelli RE follows the “Policy for health, safety, environment and social responsibility” issued by the
Pirelli Group in 2004. The following passage is taken from that document:

“Pirelli supports and respects the protection of internationally proclaimed human rights, is
committed to implementing the Ethical Codeapproved by the Board and is engaged in continuous
improvement of social, ethical, health and safety and environmental aspects. Pirelli considers the
protection of the integrity, health and welfare of its employees and of the environment as one of
the primary needs that is to be respected in organizing its activities.

Pirelli abides by the principle of ‘Sustainable Development’ and undertakes to put it into
practice”.

The full text of this policy has been published on the Pirelli Group’s website (www.pirelli.com)
under the heading “Sustainability”.

SUSTAINABILITY MODEL: THE UNITED NATIONS GLOBAL COMPACT

Pirelli RE’s Sustainability Model is based on the principles of the United Nations Global Compact,
which the Pirelli Group joined formally in October 2004. The Global Compact requires companies
to implement and support, within their sphere of influence, ten basic principles in the areas of
human rights, employment standards, environmental issues and the fight against corruption. The
principles enjoy universal consensus and are derived from the Universal Declaration of Human
Rights, the International Labour Organization’s Declaration on Fundamental Principles and
Rights at Work, the Rio Declaration on Environment and Development, and the United Nations
Convention Against Corruption.

CSR DOCUMENTS

The Values and Ethical Code

Pirelli RE bases its internal and external actions on the Pirelli Group’s Ethical Code, since running
a business ethically goes hand in hand with its success. The code was revised and expanded
at the end of 2009, and in 2010 will be distributed to all workers in their own languages. Like
the previous (2004) version, it will also be made available in the Corporate Social Responsibility
section of the corporate website www.pirellire.com.
    SUSTAINABILITY REPORT 2009 | PIRELLI RE AND SUSTAINABLE DEVELOPMENT




8   The Ethical Code contains the general principles (transparency, honesty and fairness) we follow
    in conducting our business affairs, and the objectives and values on which our activities are
    based, with specific reference to the stakeholders we interact with on an everyday basis.

    Policy for Health, Safety, Environment and Social Responsibility

    The policy approved by the Pirelli Group in June 2004 has further improved the balance between
    sustainability and economic growth at Pirelli RE.

    Pirelli RE considers the protection of the integrity, health and welfare of its employees and of
    the environment as one of the primary needs to be respected in operating its business, and
    embraces the concept of sustainable growth. It abides by the following and all other principles
    expressed in the policy:

    -     to manage its activities by adopting health, safety, environmental and social accountability
          management systems in compliance with international standards;
    -     to communicate and spread health, safety, environmental and social accountability information
          to the internal and external stakeholders, actively cooperating with national and international
          academic and legislative bodies;
     -    to use material resources responsibly, with a view to achieving sustainable growth that
          respects the environment and the rights of future generations;
    -     to ensure equal opportunity and freedom of association and to promote the development of
          each individual;
    -     to establish and maintain appropriate procedures to evaluate and select suppliers and
          subcontractors based on their commitments to social and environmental responsibility;
    -     to involve all levels of the organization and all Group employees, ensuring that responsibilities
          and operating procedures are precisely defined, appropriately communicated and duly
          followed.

    The above policy has been distributed to all workers and is available in the Corporate Social
    Responsibility section at www.pirellire.com.

    Equal Opportunities Statement

    Pirelli RE’s commitment to equal opportunities in the workplace is expressed in the “Pirelli Group
    Equal Opportunities Statement,” recently issued by the Pirelli Group.

    To enforce its equal opportunities stance, Pirelli RE has instituted the Internal Reporting and
    Compliance Procedure, which is described under “Equal Opportunities” in the Social Responsibility
    section of this report.

    The statement has been distributed to all workers and published in the “Sustainability” section of
    the Pirelli Group’s website, www.pirelli.com.
                                                      PIRELLI RE AND SUSTAINABLE DEVELOPMENT | SUSTAINABILITY REPORT 2009




TOOLS OF SUSTAINABILITY                                                                                                                                        9

CORPORATE GOVERNANCE

As a company listed on the Milan Stock Exchange and in keeping with the Pirelli Group’s
tradition of following best practices in corporate governance, Pirelli RE has worked hard to
devise an advanced system of corporate governance rules and to develop thorough, transparent
communications with its investors.

For 2009 the Pirelli Group has written a report on corporate governance and ownership structure
(“corporate governance report”)1 in accordance with Art. 123-bis of the Consolidated Finance                                1. “Corporate governance” is
                                                                                                                               defined as “the set of rules
Act, Art. 89-bis of the CONSOB regulations for issuers, and the instructions to the regulations                                mandated by law or voluntarily
                                                                                                                               adopted by a company in
for official markets operated by Borsa Italiana2.                                                                               order to make sure investors
                                                                                                                               are adequately protected by
                                                                                                                               those who run it.” Translated
The complete report is available at www.pirellire.com.                                                                         from Emilio Girino, Dizionario
                                                                                                                               della Finanza, Ipsoa 2005.

Since 2002, when it went public, Pirelli RE has followed the “Code of Conduct” issued by the                                2. Following the experimental
                                                                                                                               format       for      corporate
Committee for the Corporate Governance of Listed Companies3. Later, we fully implemented                                       governance reports, issued by
                                                                                                                               Borsa Italiana, pursuant to Art
the new Corporate Governance Code (March 2006 edition), announcing this change to the                                          124 bis of the Consolidated
market.                                                                                                                        Finance Act, Art. bis of the
                                                                                                                               CONSOB        regulations   for
                                                                                                                               issuers, and Art. IA.2.6 of
                                                                                                                               the Instructions to the Stock
As a whole, the implementation of corporate governance measures aims to foster integrity,                                      Exchange Regulations.
transparency and efficiency in the operation of our business, by improving relations between                                 3. Published in 1999 and updated
owners and managers and between majority and minority shareholders, since the protection of                                    in July 2002 and March 2006.
minority interests is central to the concept of corporate governance.

Likewise, we aim to ensure sustainable, long-term growth and development, in the interests of
all of our stakeholders.

Since 2004, Pirelli RE has approved a number of by-law amendments to encourage the more
active participation of all shareholders in business life and strategic decisions.

One such change extended the “preference list” voting system from the election of statutory
auditors to the election of directors, and another established rules for the orderly and effective
running of shareholders’ meetings.

On the subject of related party transactions, in 2007 we adopted stricter criteria and generally
tightened up the procedure, in place since July 2002.

The complete documentation can be consulted at www.pirellire.com.

For details on our entire corporate governance system, please see the Annual Report on the
Corporate Governance and the Ownership Structure, published with the 2009 Annual Report
and at www.pirellire.com.

In investor relations, Pirelli RE stands out for its treatment of and forms of communication with
minority shareholders, as further evidence of our drive for innovation and our proactive stance
in creating direct and ongoing dialogue.
     SUSTAINABILITY REPORT 2009 | PIRELLI RE AND SUSTAINABLE DEVELOPMENT




10
     ORGANIZATIONAL STRUCTURE

     The front line of CSR governance is the Corporate Social Responsibility Steering Committee,
     a high-level body appointed in early 2004 by the chairman of the Pirelli Group that guides and
     oversees CSR activities for the Group.

     CSR organization is thus comprised of an HSE&CSR Director and a CSR Manager for the Pirelli
     Group as a whole, the Division CSR Managers (one for each of the Group’s divisions), and the
     Company CSR Managers (one for each company in the Group).

     In 2005 the Pirelli Group also appointed an Equal Opportunities Steering Committee, a high-level
     body (of which Pirelli RE is a part) that guides and oversees the companies’ plans on the subject
     of EO. At the same time, it appointed a Group Equal Opportunities Manager to guide the practical
     implementation of the project throughout the Group, achieve a better organizational balance and
     monitor equal opportunities progress at all companies.

     The structure was then completed with the appointment of Country Equal Opportunities Managers,
     who guide and oversee compliance at the local level.

     Rules of Corporate Social Responsibility
     This document (issued on September 16th, 2006) describes and governs internal CSR procedures
     with a special emphasis on roles and responsibilities, planning and control, the production of the
     CSR Report, and CSR reporting to the community. The rules formally integrate CSR within the
     financial reporting structure, as stated in the phrase: “...The CSR planning and control cycle
     follows the bases and the calendar for Group reporting”.

     Management systems and standards of reference
     In accordance with the first principle of the Policy for Health, Safety, Environment and Social
     Responsibility, Pirelli RE uses specific management systems to improve the quality, efficacy and
     efficiency of its procedures, in an effort to further reduce their impact on employees’ health and
     safety and on the external environment.

     ISO 9001
     All of Pirelli RE’s service provider companies have set up a quality management system. Starting
     in 1999, they have had their systems certified according to ISO 9001.

     SA8000®
     In 2004, the Pirelli Group declared SA8000® to be the Group’s standard of reference for corporate
     social responsibility.

     CSR-DM system
     In 2007 the Pirelli Group worked on the “CSR-DM” (CSR Data Management) system, a computer-
     assisted means for the management and reckoning of CSR information. The system is used to
     gather and calculate the sustainability indices that make it possible to write this report.
                                                       PIRELLI RE AND SUSTAINABLE DEVELOPMENT | SUSTAINABILITY REPORT 2009




                                                                                                                             11
SUSTAINABILITY INDICES

Pirelli RE is part of the Axia investable universe with a rating of A++, one of the highest on the
scale published by Axia Financial Research.

The Pirelli Group as a whole is included in the Dow Jones Sustainability STOXX, Dow Jones
Sustainability World, FTSE Global and Europe, ASPI Eurozone, Axia Ethical Index, and Axia CSR
Index, and in the investable universe of the Axia Euro Ethical Index, Axia Euro CSR Index, and
Kempen/SNS Socially Responsible Universe.

In 2009, for the third year in a row, the Pirelli Group was declared World Sustainability Leader for
the auto parts and tyres sector by SAM Group (analysts for the Dow Jones Sustainability indices),
as well as a Gold Class Company and “Best Mover” in the Sustainability Yearbook published by
SAM Group and PwC.

In a survey conducted by Banca Sarasin (a private Swiss bank), Pirelli RE obtained a high rating
for its commitment to sustainability and was classified as one the top large, listed real estate
companies.

The survey was made of 167 real estate companies in 19 different countries based on a rating
system that assessed different aspects of their performance: the inclusion of sustainable criteria
in the company’s strategy, their application in the design, construction and management of the
building, the company’s governance and the prevention of conflicts of interest. The purpose of
the survey was to select the companies with the best performance in terms of sustainability in
order to single out potential investment opportunities for socially responsible investment funds.
     SUSTAINABILITY REPORT 2009 | PIRELLI RE AND SUSTAINABLE DEVELOPMENT




12
       ECONOMIC RESPONSIBILITY | SUSTAINABILITY REPORT 2009




ECONOMIC RESPONSIBILITY

                                                              13
     SUSTAINABILITY REPORT 2009 | ECONOMIC RESPONSIBILITY




     3. ECONOMIC RESPONSIBILITY


14

     “The company strives to contribute to the economic wellbeing and growth of communities where
     it is located by providing efficient and technologically advanced services.”

                                                                                        Ethical Code, Art. 5 - Community



     In 2009, with the real estate industry deep in crisis, Pirelli RE launched a turnaround process
     aiming to revise and simplify the business model and to move gradually away from a trading
     mentality and back toward the original core business. In other words, we plan to refocus on fund
     & asset management and services, with an approach geared toward the long-term management
     and grooming of our portfolio. A new management team, a fresh business model, and a plan to
     simplify the financial and corporate structure are the outcomes of this procedure. We now need
     to reposition ourselves by bolstering the services platform and making savings a top priority, in
     the interests of greater efficiency.

     We have also made some important business moves, such as partnerships with Intesa SanPaolo
     (now a 10% shareholder of Pirelli RE SGR) and Calyon SA (which now holds 20% of Pirelli &
     C. Real Estate Credit Servicing, manager of the loans portfolio), a sharper focus on the asset
     management sector in Germany through the buy-back of the 20% share of Pirelli RE Asset
     Management Deutschland previously sold to HSH Nordbank, and the disposal of non-strategic
     investments like the retail companies Upim and Rinascente. Lastly, to strengthen the capital
     structure, Pirelli RE successfully completed a capital increase of approximately €400 million in
     July 2009.

     VALUE ADDED

     Value added is the wealth produced during the period, construed as the difference between
     revenues generated and external costs incurred.

     Value added puts a monetary value on Pirelli RE’s relationships with its main stakeholders, shifting
     the focus to the socioeconomic system in which it operates (as summarized in the diagram
     below):


     CUSTOMERS                   REVENUES                                               COSTS           VENDORS




                                                 TOTAL VALUE ADDED


                                                                                                         External
         Personnel                Government                Lenders     Investors      Company
                                                                                                        Community


        Paychecks                     Taxes                 Interests   Dividends     Depreciation        Donations
       Severance pay                                                                   Provisions
        Retirement                                                                  Retained earnings
          benefits
       Social Security
                                                                      ECONOMIC RESPONSIBILITY | SUSTAINABILITY REPORT 2009




In 2009, Pirelli RE created €65.2 million in gross value added, excluding property writedowns for                                                              15
the year of €26.5 million. To remunerate stakeholders beyond this value added, the company
had to draw €62.2 million from its reserves.

Specifically, in 2009 the company remunerated personnel by €94.7 million (the decrease on
2008 pertains to the group restructuring), lenders by €21.3 million, the Public Administration
by €10.6 million (in taxes), and the community—in the form of grants and donations—by €0.8
million.



                                                                2009*                2008**                 2007

DISTRIBUTION OF VALUE ADDED
                                                                 VA                     VA                   VA
(millions of euro)
                                                                                                                             *    Total gross value added for
TOTAL GROSS VALUE ADDED                                         65.2                  169.7                458.6                  2009 does not consider
                                                                                                                                  property writedowns of €31.4
                                                                                                                                  million.
A - To personnel***                                             (94.7)                (159.6)              (179.9)
                                                                                                                             **   2008 figures include €74.6
B - To the government****                                       (10.6)                  (4.5)               (37.8)                million   in  discontinued
                                                                                                                                  operations.
C - To lenders                                                  (21.3)                 (50.9)               (64.6)
                                                                                                                             *** Including temps.
D - To investors                                                  -                       -                (85.1)            **** Taxes in every form.

E - To the company*****                                         62.2                   47.7                 (87.1)           ***** Consolidated profit not paid
                                                                                                                                   out, plus amortization and
F - Donations                                                   (0.8)                   (2.4)                (4.1)                 depreciation.




In the table below, the grants and donations made by Pirelli RE in 2009 and 2008 are shown by
type. The downward trend stems from the difficult economic situation.




SECTOR                                           AMOUNT GIVEN          AMOUNT GIVEN               AMOUNT GIVEN
(millions of euro)                                  2009                  2008                       2007
Culture                                                0.4                     1.4                        2.8

Education                                              0.0                     0.5                        0.3

Research / Innovation                                  0.3                     0.1                        0.2

Charity / Volunteering                                 0.1                     0.3                        0.3

Sports                                                 0.1                     0.1                        0.3

Other                                                  0.0                     0.0                        0.1

Total                                                  0.8                     2.4                        4.1




See the “Social responsibility” chapter for a description of the company’s main grants and
donations.

Group companies do not “give contributions, advantages or other benefits to political parties or the
workers’ union organizations, or to their representatives or candidates, subject to applicable laws.”
(from the Ethical Code, Art. 5 - Community).
     SUSTAINABILITY REPORT 2009 | ECONOMIC RESPONSIBILITY




16   SHAREHOLDERS

     “The company is committed to ensuring equal treatment for all categories of shareholders,
     avoiding any preferential treatment. The reciprocal benefits that derive from belonging to a group
     of companies are pursued in accordance with the relevant legislation and the autonomous
     interests of each Group company as it seeks to create value.”
                                                                             Ethical Code, Art. 3 - Shareholders




     SHARE CAPITAL AND SHAREHOLDERS

     In 2009 Pirelli RE carried out a €399.3 million capital increase, as approved by the extraordinary
     shareholders’ meeting of April 17th, 2009.

     This decision is consistent with the 2009-2011 business plan, and aims to revitalize the company
     by enabling it to pursue its objectives and improve its debt/equity ratio with a more solid capital
     structure that reflects today’s market conditions.

     Concluded in July, the increase took place with the full subscription of all newly issued shares, so
     Pirelli RE’s share capital now amounts to €420,585,888.50 (841,171,777 ordinary shares of par
     value €0.50 each). With the capital structure thus reinforced, Pirelli RE’s debt/equity ratio is now
     0.7, compared with 2.4 last year.

     In connection with the capital increase, the
                                                              Pirelli & C.
     controlling shareholder Pirelli & C. S.p.A.              58%
     exercised all of its options and subscribed
     to 463,752,540 new ordinary shares of Pirelli
     RE, or around 58.07% of the shares offered,
     for a total of €231,876,270.00 and converted
     part of its financial receivable with Pirelli RE
     into share capital. Pirelli & C. therefore owns
     487,798,972 shares, amounting to 57.99% of
     the new share capital of Pirelli RE.
                                                             Retail
     Therefore, Pirelli & C. holds a stake of                12%
     n°     487,798,972       shares,  representing
                                                             Istitutional
     approximately 57.99% of the new share capital           30%
     of Pirelli RE. The rest of the capital increase
     subscribed to by the market (98.475% of the
     relevant share, amounting to €164.9 million)
     was used to further reduce financial debt,
     affording the flexibility needed to achieve the
     goals of the industrial plan.

     At December 31st, 2009 the company’s free float, excluding the interest held by Pirelli & C., came
     to about 42% of the total: 30% held by major institutional investors (Italian and international) and
     an estimated 12% by retail investors.
                                                                   ECONOMIC RESPONSIBILITY | SUSTAINABILITY REPORT 2009




SHARE PRICES AND CAPITALIZATION                                                                                                                    17

    Price at 12/31/09                                                                    € 0.61

    High for 2009                                                                        € 1.72

    Low for 2009                                                                         € 0.28

                                                                                                                          source: Reuters
    Stock market capitalization at 12/31/09                                              € 403.6 mln                      source: Consob website




The poor economy in 2009 was very damaging to real estate stock in general. Pirelli RE shares
lost about 17% for the year, underperforming the main indices of the Italian market.

INVESTOR RELATIONS

Pirelli RE strives to establish and maintain an ongoing dialogue with its shareholders and
institutional investors. The company pursues an active policy of communication with institutional
investors through its investor relations program.

Throughout the year, the Investor Relations department organizes presentations (live and via
conference call) when the group’s results come out or when other events take place requiring
direct communication with the market.

In 2009, investor relations activities included all of the following and more:

-      active participation in three conferences held by financial institutions;
-      four conference calls with investors and analysts, to discuss half-year and full-year
       performance;
-      20 roadshows in the main financial capitals (Milan, London, Paris, New York, Amsterdam,
       Brussels and Zurich).

A specific section dedicated to institutional and retail investors, can be found at www.pirellire.com
in the Investor Relations area (http://www.pirellire.com/investor_relations/Investor).

In this section you can find:

- the daily stock performance
- financial statements
- press releases
- presentations that the company makes to the financial community regarding its results
- information about the analysts and brokers that cover the stock along with reports about the
  company and its outlook.

Also available in the same section, complete reports on the company and its prospects.

At the end of 2009, there were eight brokers covering Pirelli RE stock, including three outside
Italy. The average target price indicated by the brokers in their last reports for 2009 was €0.68
per share.
                              SUSTAINABILITY REPORT 2009 | ECONOMIC RESPONSIBILITY




18                            ANALYSTS COVERAGE AT DECEMBER 31st, 2009

                               BROKER                     ANALYST                    DATE       RECOMMENDATION   TARGET PRICE PER
                                                                                                                 SHARE
                               Banca IMI                  Marta Caprini              06/09/09   HOLD             0.75

                               Centrobanca                Oriana Cardani             11/05/09   HOLD             0.54

                               Cheuvreux                  Francesca Ferragina        11/09/09   UNDERPERFORM     0.55

                               Equita                     Martino De Ambroggi        11/18/09   HOLD             0.68

                               Intermonte                 Alberto Villa              11/05/09   OUTPERFORM       0.75

                               JP Morgan                  Harm Meijer                11/25/09   HOLD             0.6

                               Kepler                     Alessandra Panella         08/24/09   BUY              0.89

  source: www.pirellire.com    Unicredit                  Pierluigi Amoruso          11/11/09   BUY              0.66



                              In 2009 the stock was covered by 8 brokers, 5 Italian and 3 foreign.

                              The analysts of these companies published reports in which they describe the company’s business
                              or comment on a particularly significant event that could impact the stock’s market performance.

                              These reports are published by the brokers every quarter, on average, normally when the company
                              announces its results unless particular events call for the publication of a specific report.

                              Investor relations activities in 2010 will be geared mainly toward seeking new institutional investors
                              in Italy and abroad. Meanwhile, existing shareholders and market analysts will continue to receive
                              the customary information and updates.
                                                                                        ECONOMIC RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                                   19




                                                                                                                                     REDESIGNING
                                                                                                                                 A BETTER FUTURE




A friend of FAI |                  Pirelli RE supported and participated in “The Architect’s Hand” (La mano
dell’architetto), an exhibition of drawings and sketches by the world’s foremost architects, organized by Fondo
Ambiente Italiano (FAI) at Villa Necchi Campiglio in Milan. FAI is Italy’s largest non-profit foundation, set up in
1974 to protect the country’s artistic and environmental heritage and return treasures of art and nature to the
community.
                                          SUSTAINABILITY REPORT 2009 | ECONOMIC RESPONSIBILITY




20                                        CUSTOMERS


                                          “The company pursues market excellence and competitiveness, offering customers a quality of
                                          service that effectively meets their requirements.”
                                                                                                                             Ethical Code, Art. 2 - Aims and Values



                                          “The company bases the excellence of its products and services on customer care and the
                                          readiness to meet customer needs. The aim is to offer immediate, expert response to the needs
                                          of customers, in keeping with the spirit of fairness, courtesy and co-operation.”
                                                                                                                                  Ethical Code, Art. 4 - Customers




                                          Pirelli RE operates according to a model that expressly integrates its two spheres of business:

                                          -      Investment: participation in the different real estate market segments, in which it invests in
                                                 partnership with some of the world’s largest financial institutions;

                                          -      Asset Management & Service Provider: the active strategic management of investments
                                                 and the provision of a full range of specialized real estate services to satisfy the market and
                                                 internal demand.

                                          What makes this model special is its ability to put the customer on a pedestal, in range of a full
                                          complement of services. The customer’s needs are examined through a global, synergistic vision
                                          of available services, to provide specialized support that will make the most of the customer’s
                                          assets and ensure they are managed to the latest standards.

                                          The table below shows Pirelli RE’s “customer dimension” in terms of revenues by region:



                                              REGION                                                                           2009         2008         2007
                                              (% OF TOTAL REVENUES)*
     * Consolidated revenues include
     income from service provision            ITALY                                                                           70.4%        64.8%        76.2%
     and asset management as well
     as the sale of properties through                                                           of which Service Platform    45.4%        42.8%        64.9%
     wholly-owned         subsidiaries.
     More specifically, in Poland
                                                                                                 of which Investment          25.0%        22.0%        11.3%
     a transaction worth over €60
     million was conducted in 2008,           GERMANY                                                                         27.3%        17.0%        14.1%
     which significantly altered the
     geographical     breakdown      of
                                                                                                 of which Service Platform    21.6%        16.7%        10.5%
     revenues with respect to 2009.                                                              of which Investment           5.7%         0.3%         3.6%

                                              POLAND                                                                           2.3%        18.2%         9.8%
                                                                                                 of which Service Platform     1.9%         1.9%         0.8%
                                                                                                 of which Investment           0.4%        16.3%         9.0%

                                              TOTAL                                                                           100%         100%         100%
                                                                                                 of which Service Platform    69.0%        61.4%        76.2%
                                                                                                 of which Investment          31.0%        38.6%        23.8%



                                          In the Fund & Asset Management business, almost all of our customers are investment funds
                                          and companies with portfolios of real estate and non-performing loans in which Pirelli RE holds
                                          minority shares.
                                                                  ECONOMIC RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                                         21
               MARKET VALUE DEC 2009 (1)                      MARKET VALUE DEC 2008(1)
                    € 16.0 billion                                 € 17.3 billion

 Real Estate                                    Real Estate
 14.4                                           15.4
                      of which:                                       of which:
                    affiliates 14.0                                 affiliates 15.0




NPL                                             NPL
1.6                                             1.9




                     OF WHICH:                                       OF WHICH:
                    REAL ESTATE                                     REAL ESTATE




Germany                                         Germany
49%                                             49%



                                                 Italy                                                            Italy
                                                50%                                                              50%      (1) AUM is expressed at
                                                                                                                              market value according to
                                                                                                                              independent      appraisals,
                                                                                                                              with the exception of non-
                                                                                                                              performing loans (shown at
                                                                                                                              book value).
Poland                                          Poland
1%                                              1%




As a service provider, the company supplies a full range of services relating to all phases of the
real estate cycle, to both third-party customers and Pirelli RE companies.

Operations, which follow the Group’s strategy of internationalization, concern private and public
customers and are handled either directly or through the franchise network.

In order to act as a full-fledged service provider for public customers (local and central government
offices), Pirelli RE Property has been certified by various compliance companies (such as Società
Organismi di Attestazione or SOA) to demonstrate its ability to handle the most challenging public
contracts.

Customers within the franchising network are affiliated agencies based in towns and cities across
Italy. The agencies are owned by independent real estate professionals who receive guidance and
support from Pirelli RE Agency.
                                          SUSTAINABILITY REPORT 2009 | ECONOMIC RESPONSIBILITY




22                                        As stated in the Ethical Code, our commitments to customer care are geared toward:

                                          -      the utmost transparency and integrity;
                                          -      high standards of service;
                                          -      a spirit of partnership;
                                          -      focus on customer satisfaction.

                                          The aim is to offer an immediate, expert response to the needs of customers, in keeping with the
                                          spirit of fairness, courtesy and co-operation.

                                          There are several ways in which we dialogue and interact with our customers:

                                          -      local sales units (direct and indirect), which report to the Sales and Marketing department;
                                          -      the business units that render customer services;
                                          -      the call centre;
                                          -      customer satisfaction surveys.

     *    Statistics refer to the         Of particular importance are our customer satisfaction surveys*, which give customers the chance
          customers of Italian
          companies only.                 to say what they think and rate their treatment by Pirelli RE.

                                          Until 2008 the surveys were given every six months to more than 210 of the Group’s customers,
                                          so that satisfaction could be monitored over time.

                                          From 2009, the new survey (currently in progress) will be given once a year to collect the opinions,
                                          comments and suggestions of about 100 customers.

                                          Details from the second half of 2008 are presented in the table below, as the 2009 results are not
                                          yet available:

                                              YEAR 2008                                           AGENCY        PROPERTY           TOTAL
                                              CUSTOMERS TARGETED                                     85             94              179

                                              CUSTOMERS INTERVIEWED                                  30             37               67




     **   The statistics refer only to        YEAR 2009 (**)                                      AGENCY        PROPERTY           TOTAL
          customers of Italian compa-
          nies.
                                              CUSTOMERS TARGETED                                     81           74(***)           155
     *** Includes 15 names of clients
         Pirelli RE Valuations & e-ser-       CUSTOMERS INTERVIEWED                              in progress    in progress      in progress
         vices.




                                          According to the surveying rules, 50% of the sample is interviewed face-to-face, and the other
                                          50% by phone.

                                          The surveys focus strongly on aspects of business-to-customer relations and on how customers
                                          would like us to improve or expand our service. The outcomes have been positive, with satisfaction
                                          levels close to 90%.
                                                                                            ECONOMIC RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                          PIRELLI RE: CUSTOMER SATISFACTION                                                                                        23

                    90%                                                           88.4%

                    88%                                                                                                    86.5%

                    86%                                                                     84.7%
% OF SATISFACTION




                                                                                                      84.0%
                                                       83.0%
                    84%
                                                                          82.7%                                    83.0%                83.0%
                    82%
                           79.8%    79.8%
                                                                  80.8%
                    80%

                    78%

                    76%                        76.1%


                    74%

                    72%

                    70%
                           1H       2H       1H     2H          1H     2H      1H          2H        1H        2H        1H          2H
                          2003     2003     2004   2004        2005   2005    2006        2006      2007      2007      2008        2008


Pirelli RE insists on providing an excellent, competitively priced service that meets the needs
and expectations not only of its own customers, but of all parties to the real estate transaction
(owners, buyers, tenants, investors, labour, etc.), according to its multi-stakeholder model.

Pirelli RE’s focus on quality service has been officialized in Quality Management Systems (QMS)
and in methods of appraising our work. At the moment, Pirelli RE Agency (both Institutional and
Franchising) and Pirelli RE Property Management have a certified quality management system.

Centralized coordination by the Quality & Processes Department ensures that all Group companies
that render services operate according to proper quality norms and satisfy internationally
recognized standards. The system is securely backed by internal methods of controlling and
reporting on process quality (which liaise with the company’s IT systems) and by the customer
satisfaction surveys.

RESULTS IN 2009

The 2009 survey is currently in progress, and initial results confirm satisfaction of close to 85%.
During the year, ISO 9001 certification was renewed at Pirelli RE Property, and Pirelli RE Agency
(both Institutional and Franchising) also maintained its certification.

OBJECTIVES FOR 2010

For 2010 we confirm our objectives of better-than-85% satisfaction among service provision
customers, of maintaining ISO 9001 certification at Pirelli RE Property, of renewing ISO 9001 at
Pirelli RE Agency (Institutional and Franchising), and of obtaining ISO 9001 at Pirelli RE Valuations
& e-Services.
     SUSTAINABILITY REPORT 2009 | ECONOMIC RESPONSIBILITY




24   VENDORS

     Pirelli RE’s sustainable approach to vendors is expressed by the Policy for Health, Safety,
     Environment and Social Responsibility, which formalizes our commitment to “establish and
     maintain appropriate procedures to evaluate and select suppliers and subcontractors based on
     their commitments to social and environmental responsibility”.

     Below we shall describe how CSR is integrated into the process of selecting and evaluating
     vendors and into our purchasing procedures.

     In Poland, Pirelli Pekao RE manages about a vendor portfolio of about 50 core suppliers. Due to
     the company’s size and the fact that purchasing is closely related to development projects and
     therefore do not generate steady workloads, it has not been necessary to set up a dedicated
     purchasing department.

      YEAR 2009                                                   ITALY                      GERMANY                 POLAND
      PURCHASING LINES                                 n° vendors         n° local   n° vendors   n° local   n° vendors   n° local
                                                                          vendors                 vendors                 vendors

      INFORMATION TECHNOLOGY                                35            100%          19         90%           5        100%

      WORKS                                                 44            100%           0         100%         10        100%

      MARKETING/EXTERNAL RELATION                           68             90%          15         99%          10        100%

      PROFESSIONAL SERVICES                                 304           100%          63         100%         15        100%

      SERVICE                                               329           100%          110        100%         10        100%

      TOTAL                                                 780                         207                     50


     VENDOR PORTFOLIO - ITALY

     Pirelli RE’s current vendor portfolio has 780 suppliers, about 200 of which account for 90% of
     the amount of the company’s purchases. These figures refer to the companies consolidated in
     Pirelli RE’s financial statements.

     VENDOR PORTFOLIO - GERMANY

     Pirelli & C. Real Estate Deutschland’s current vendor portfolio has around 1,000 suppliers,
     some 200 of which account for 90% of the amount of the company’s purchases.

     RELATIONS WITH VENDORS AND CORPORATE POLICIES - ITALY

     Pirelli RE keeps a Vendors Register of all companies, freelance professionals, and consulting
     firms that serve the company, listing different criteria (sector, size, environmental/safety rating,
     etc.) depending on the size of the contract in question and the type of service required. The
     Vendors Register is managed by Pirelli RE’s Corporate Purchasing Department, with the help
     of a software program. The rules of use and information system of the Vendors Register have
     been defined according to the following guidelines:

     -     Standardized vendor selection and control procedures throughout Pirelli RE;
     -     Quality guarantees through the centralization of procedures for inclusion in the Vendors
           Register;
     -     Coverage of the entire vendor portfolio;
     -     Continuous quality monitoring for all procurement sources.
                                                                 ECONOMIC RESPONSIBILITY | SUSTAINABILITY REPORT 2009




Entry in the Vendors Register takes place in two phases:                                                                25
- Qualification
- Vendor Rating

Pirelli RE choice of vendors both in Italy and abroad is, however, always based on group
policies. Furthermore, the company seeks to respect human rights (even though it works in
countries that are defined as being at risk) and verifies that all vendors and contractors selected
comply with this conduct.

QUALIFICATION

The qualification phase consists of acquiring and evaluating, through a system of weights and
scores, the financial and technical data provided by the vendors themselves and by external rating
agencies. A potential supplier is qualified as a new vendor by submitting an online questionnaire
in the “Area Fornitori” section of Pirelli RE’s website.

The questionnaires are designed and revised by the Purchasing department according to the
need for regular confirmation of prerequisites. Certain criteria are monitored on an ongoing basis
by external rating agencies, and the results are incorporated at given intervals in the Vendors
Register.

The questionnaires are divided into two broad categories:
- “extensive” form
- “short” form

In both types of questionnaire, the “corporate social responsibility” section includes specific
questions to judge the vendor’s sustainability in the context of its company or business.

QUALIFICATION - GERMANY

The Qualification phase in Germany follows the same procedure approved for Italian companies,
except that the short-form questionnaire is not used. The “corporate social responsibility” section
includes specific questions to judge the vendor’s sustainability in the context of its company or
business.

VENDOR RATING - ITALY

The Rating phase is when Pirelli RE appraises its vendors on the basis of services actually
rendered. The rating is expressed by the technical units of Pirelli RE companies, which complete
checklists published in the Intranet section of the Vendors Register. The rating method uses
criteria similar to those employed in the qualification phase, through the assignment of weights
and scores to the checklist replies submitted by Pirelli RE’s technical units. The score received
by the vendor during the Rating phase is used as a basis for subsequent assignments or, if
necessary, for the vendor’s suspension from the Register if it scores below a certain limit.

For all types of vendor, the rating questionnaire asks specific questions designed to assess
their sustainability, with a particular emphasis on their compliance with the Ethical Code and
Organizational Model per Law 231 and with Pirelli RE’s Policy for Health, Safety, Environment and
Social Responsibility (“CSR Policy”).

Ratings are valid for one year. This gives the company the chance to verify maintenance of the
required standards.
     SUSTAINABILITY REPORT 2009 | ECONOMIC RESPONSIBILITY




26   VENDOR RATING - GERMANY

     Vendors in Germany are not currently subject to rating, but this is an objective for 2010, as
     described in greater detail below.

     PURCHASING STANDARDS

     Vendor management and transactions by Pirelli RE’s Purchasing department follow precise
     guidelines that apply throughout the group. The applicable documentation on these matters is
     summarized below:

     Manual of Purchasing Procedures
     Defines rules and principles to ensure homogeneity, coordination and quality in the purchase
     of goods and services. Describes the steps to be taken and the instruments to be used in the
     various phases of the buying process, from the purchase request through the purchase order.

     Vendors Register Manual
     Governs the entire handling of the Vendors Register. Defines rules and principles to ensure
     homogeneity, coordination and quality in the evaluation of suppliers by the units involved in this
     process.

     Standards and Operating Rules
     Complement the above manuals on specific topics and purchasing situations, with particular
     reference to the involvement of units/departments other than Purchasing. Knowledge-sharing of
     the above is ensured by publication of all of these documents on the Pirelli RE Intranet.

     SUSTAINABILITY CLAUSES - ITALY

     All orders and contracts issued by Pirelli RE’s Purchasing department include specific clauses
     concerning its policies in relation to the Ethical Code and the Policy for Health, Safety, Environment
     and Social Responsibility, as well as the Ethical Code and CSR Policy themselves. Acceptance of
     the order, demonstrated by the vendor’s signature or by implied agreement, requires the vendor
     to act in its own business in accordance with the Ethical Code and CSR Policy as above, and
     allows Pirelli RE to conduct audits to that effect.

     In 2009, as planned, the General Terms and Conditions and the specific clauses and policies
     referring to the Ethical Code and to Corporate Social Responsibility were revised according to the
     instructions of the Pirelli Group.

     SUSTAINABILITY CLAUSES - GERMANY

     All orders and contracts issued by the Purchasing department include specific clauses concerning
     the company’s policies in relation to the Policy for Health, Safety, Environment and Social
     Responsibility. Acceptance of the order, demonstrated by the vendor’s signature or by implied
     agreement, requires the vendor to act in its own business in accordance with the CSR Policy as
     above, and allows Pirelli RE Germany to conduct audits to that effect.

     VENDOR COMMUNICATIONS

     In the Area Fornitori section of Pirelli RE’s website, suppliers have access to a number of tools.
     This area is also used to announce Pirelli RE’s vendor initiatives.
                                                                                      ECONOMIC RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                             27




                                              A JOURNEY THROUGH THE MIND OF GREAT ARCHITECTS




Great Architects: a journey in the mind of… | Michele De Lucchi is the subject
of the tenth and final volume of the DVD series on architects realized by Interni magazine, in collaboration with
Pirelli RE. This fine example of cultural communication has provided a fresh interpretation of the thoughts and
the poetry of today’s star architects.
     SUSTAINABILITY REPORT 2009 | ECONOMIC RESPONSIBILITY




28   RESULTS IN 2009

     In 2009 we implemented an operating standard for consulting and professional services, to make
     sure these meet price and performance standards, while upholding the principle of role separation
     and the full traceability of the purchasing process.

     OBJECTIVES FOR 2010

     Italy: vendor rating will be introduced for professional consultants listed in the Vendors Register.

     Germany: acquisitions have made it necessary to streamline and consolidate the vendor portfolio,
     a process to be completed in 2010. Germany will also add vendor rating to its procedures.
          ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




ENVIRONMENTAL RESPONSIBILITY

                                                                      29
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




     4. ENVIRONMENTAL RESPONSIBILITY



30

     “The company believes in sustainable growth in the common interest of all stakeholders, both
     current and future. Their investment and business decisions therefore reflect respect for the
     environment and public health. Without prejudice to compliance with prevailing legislation, the
     company is aware of the importance of environmental issues when making choices, not least
     in the adoption of specific technologies and manufacturing methods—where this is technically
     feasible and economically viable—that allow for the reduction of the environmental impact of their
     operations, even beyond the minimum limits set by law.”
                                                                               Ethical Code, Art. 7 - Environment



     In its approach to the environment, Pirelli RE follows the principles stated in the Ethical Code and
     in the Pirelli Group’s Policy on Health, Safety, Environment and Social Responsibility.

     The policy adopted by Pirelli RE, approved by Pirelli & C S.p.A. in June 2004, has further improved
     the balance between sustainability and economic growth.

     Pirelli RE considers the protection of the integrity, health and welfare of its employees and of
     the environment as one of the primary needs to be respected in operating its business, and
     embraces the concept of sustainable growth. It abides by the following and all other principles
     expressed in the policy:

     -     to manage its activities by adopting health, safety, environmental and social accountability
           management systems in compliance with international standards;
     -     to communicate and spread health, safety, environmental and social accountability information
           to the internal and external stakeholders, actively cooperating with national and international
           academic and legislative bodies;
     -     to use material resources responsibly, with a view to achieving sustainable growth that
           respects the environment and the rights of future generations;
     -     to ensure equal opportunity and freedom of association and to promote the development of
           each individual;
     -     to establish and maintain appropriate procedures to evaluate and select suppliers and
           subcontractors based on their commitments to social and environmental responsibility;
     -     to involve all levels of the organization and all Group employees, ensuring that responsibilities
           and operating procedures are precisely defined, appropriately communicated and clearly
           understood.

     More specifically, Pirelli RE takes a three-pronged approach to environmental issues:

     -     by monitoring and reducing the environmental impact of its own operations;
     -     by recommending environmentally-friendly building management solutions to customers who
           own properties;
     -     by planning new constructions with an emphasis on social, economic and environmental
           sustainability, while pursuing maximum community development in terms of attractiveness
           and competitiveness on the global stage.
                                                                ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




ENVIRONMENTAL IMPACT MANAGEMENT                                                                                                                               31

Pirelli RE’s care in limiting the environmental impact of its own business leads it to focus on
energy conservation.

As a service company, PRE does not use raw materials and for this reason waste defined as
hazardous in the Basel Convention was not produced or disposed of. The energy consumption
refers to the business offices.

Pirelli RE does not own or manage land near or in protected areas and its offices are located in
large cities, therefore the activities do not have a material impact on the biodiversity of the aquatic
flora and fauna and their habitats.



TOTAL CONSUMPTION     MILAN     TORRE     ROME      NAPLES     TOTAL         MAIN           POLOND           TOTAL
2009                   HQ         U7      OFFICE    OFFICE     ITALY        GERMAN          WARSAW
                                MILAN                                       OFFICES
                                                                                                                            (1) (2) The drop in the building’s
WATER                 7,111      600       7,338     Office     15,049         3,005            346          18,400          consumption is due to the fact
                                                                                                                            that PRE now only occupies the
(M3)                    (3)       (1)                closed                                                                 first two floors as it relinquished
                                                                                                                            four floors of the office building.

ELECTRICITY           6,368      1,004     2,516     Office      9,889         2,369           1,490         13,748          (3) The figure does not include
(MWH)                              (2)               closed                                                                 3,897 m3 taken for construction
                                                                                                                            site HQ2.

                                                                                                                            (4) In these locations, the Com-
DISTRICT HEATING      8,460      N. A.     N. A.     Office      8,460         5,760            782          15,002
                                                                                                                            pany has a lease for part of the
(MWH)                             (4)       (4)      closed                                                                 property.




TOTAL CONSUMPTION     MILAN     TORRE     ROME      NAPLES     TOTAL         MAIN           POLAND           TOTAL
2008                   HQ         U7      OFFICE    OFFICE     ITALY        GERMAN          WARSAW
                                MILAN                                       OFFICES

WATER                 7,741      2,500     5,863     1,882     17,986         3,693            N. A.         21,679
(M3)

ELECTRICITY           6,750      4,320     3,002      652      14,724         3,323            N. A.         18,047
(MWH)

DISTRICT HEATING      9,540      1,577     N. A.      N. A.    11,117         3,046            N. A.         14,162
(MWH)                                       (4)        (4)




Pirelli RE does not use electricity or thermal energy that is generated directly in its offices in
Italy and abroad. The power is acquired from the public network. At the Milan headquarters
(Headquarter1 and as of the beginning of 2010 at Headquarter2, as well) a district heating system
is used (centralized heating is provided by a district heating plant that supplies hot and cold water
through a network of sub-services).
                                         SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




32
                                          CONSUMPTION/                    MILAN HQ          TORRE U7     ROME      NAPLES      TOTAL      MAIN     POLAND
                                          STATIONS                                           MILAN       OFFICE    OFFICE       ITALY    GERMAN    WARSAW
                                          2009                                                                               (AVERAGE)   OFFICES

                                          WATER                                12                25        15       Office       16          8         5
                                          (M3)                                                                      closed


                                          ELECTRICITY                          11                43        8        Office       13          6        22
                                          (MWH)                                                                     closed


                                          DISTRICT HEATING                     15              N. A.      N. A.     Office       10          16       12
                                          (MWH)                                                                     closed




                                          CONSUMPTION/                    MILAN HQ          TORRE U7     ROME      NAPLES      TOTAL      MAIN     POLAND
                                          STATIONS                                           MILAN       OFFICE    OFFICE       ITALY    GERMAN    WARSAW
                                          2008                                                                               (AVERAGE)   OFFICES

                                          WATER                                12                10        17        23         13          10      N. A.
                                          (M3)

                                          ELECTRICITY                          10                18        9          8         11          9       N. A.
                                          (MWH)

                                          DISTRICT HEATING                     14                6        N. A.     N. A.       8           8       N. A.
                                          (MWH)



                                         WATER RESOURCES

                                         The water used in the offices does not come from one specific source insofar as it comes from
                                         the public waterworks and, net any dispersion or miniscule stock, the volume of water used is
                                         almost equal to the amount of water delivered. The percentage of recycled water is irrelevant
                                         and, at any rate, only the public sewage system is used for discharges.

                                         WASTE PRODUCTION

                                         In addition to above should be added the monitoring of the quantity / type of special waste
                                         produced in the main offices of Pirelli RE in 2009.
                                         See in the following table (with column compared with 2008):


                                          SPECIAL WASTE              MILAN HQ           TORRE U7       ROME       NAPLES     TOTAL        MAIN     POLAND
                                          2009                                           MILAN         OFFICE     OFFICE     ITALY       GERMAN    WARSAW
                                                                                                                                         OFFICES
     (1) The increase in non hazardous
     waste is due to the fact that in
     September 2009 the Via Bissolati     NON HAZARDOUS                 6,725             1,055        13,420     Office      21,600       N. A.     N. A.
     office in Rome was closed and         (KG)                                                           (1)      closed
     the 8th and 9th floors of the Tor
     Marancia tower were emptied;
     subsequently 4 floors of the Tor
     Marancia were emptied.
                                          HAZARDOUS                      129                 0          570       Office       299         N. A.     N. A.
                                          (KG)                                                                    closed
                                                                      ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                                                     33
SPECIAL WASTE            MILAN HQ     TORRE U7     ROME      NAPLES           TOTAL             MAIN             POLAND
2008                                   MILAN       OFFICE    OFFICE           ITALY            GERMAN            WARSAW
                                                                                               OFFICES
                                                                                                                                  (2) The 2008 figure included the
                                                                                                                                  massive disposal of obsolete
NON HAZARDOUS             9,485         310         434      1,217            11,446             N. A.              N. A.         hardware at the Tor Marancia
(KG)                                                                                                                              office.



HAZARDOUS                  888           0         9,860     1,020            11,768             N. A.              N. A.
(KG)                                                 (2)




In 2009 31,585 kg of paper were recycled in the Milan HQ compared to 36,210 kg in 2008.
The disposal of all hazardous waste, waste of paper and plastic is managed through authorized
entities.

In 2009 there were no significant spills

GREENHOUSE GAS EMISSIONS

The C02 emissions related to the energy consumed are shown below. There were no other
significant indirect emissions of greenhouse gases.

The business carried out in the company’s offices does not even result in the emission of
substances that harm the ozone in any significant way, nor of significant amounts of nitric oxide
(No), sulphur (SO) or persistent organic pollutants.



2009                       MILAN HQ     TORRE U7    ROME       TOTAL           MAIN             POLAND              TOTAL
                                         MILAN      OFFICE     ITALY          GERMAN            WARSAW
                                                                              OFFICES                                             (1) For the calculation of emissions
                                                                                                                                  from the electricity purchase we
                                                                                                                                  used the GHG Protocol’s method
EMISSIONS OF CO 2                –            –       283      283               788              1,125             2,196         which considers the following fac-
FOR PURCHASE OF                                                                                                                   tors, expressed as grams of CO 2
                                                                                                                                  / kWh: for Italy 405, for Germany
ELECTRICITY FROM MIXED                                                                                                            349, for Poland 659.
SOURCES (1)
                                                                                                                                  (2) In calculating the emissions
                                                                                                                                  from cogeneration we used the
                                                                                                                                  coefficient of 250 grams of CO 2/
CO 2 EMISSION                1,030           70        –       1,100               –                 –              1,100         kWh,which is the average natural
FROM COGENERATION (2)                                                                                                             gas installations.




INITIATIVES TO REDUCE THE EMISSION OF GREENHOUSE GASES

In 2009 a number of initiatives were implemented that helped to reduce the emission of greenhouse
gases. The most significant ones are described below.

A new travel policy was adopted by the whole Pirelli RE Group which called for a reduction in
travel by single employees between the different group companies unless absolutely necessary
and the use of conference calls and video conferences for internal meetings.

Italy: the most important step taken involved the choice to use the cogeneration plant installed
by A2A in the Bicocca area.
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




34   This plant produces electricity and provides heat and air conditioning for the new buildings in the area.
     The district heating network distributes hot water that reaches a temperature of up to 95°c in the
     winter and cold water with a temperature of 5°c in the summer. The same tubes of the primary district
     heating plant, converted from hot to cold, are used for air conditioning in the spring/summer while hot
     water is distributed through a second network.
     This choice resulted in a noticeable drop in the emission of greenhouse gases insofar as the
     cogeneration plant provides thermal energy and electricity with an emission factor of 250 grams of
     CO2/kWh (the average for natural gas plants) versus a domestic average of 405 grams of CO2/kWh.

         REDUCING EMISSIONS OF TOTAL                                               HQ            TORRE U7
         INDIRECT GREENHOUSE GASES                                                MILAN           MILAN

         HEAT AND POWER PURCHASES                                                 4,119            279
         (MWH)

         EMISSIONS OF CO 2 FOR PURCHASE OF ELECTRICITY FROM MIXED SOURCES         1,668            113
         (TON)

         CO 2 EMISSIONS FROM COGENERATION                                         1,030             70
         (TON)

         REDUCTION                                                                 638              43



     INITIATIVES TO REDUCE THE BUSINESS’S ENVIRONMENTAL IMPACT

     An important step will be taken when Pirelli RE moves its headquarters to the new HQ2 building.
     This move will take place beginning in February 2010 and will result in significant energy savings.

     -      Winter heating: in light of the construction techniques and the ventilation system used the
            yearly heating needs for the whole building will total 470 MWh;

            The annual consumption of primary energy for winter heating at Headquarter 1 is 2,350
            MWht meaning that HQ2 will consume only about 20% of what HQ1 consumes even if the
            surface area is not that much smaller (11,800 sqm versus HQ1’s 14,077 sqm)

     -      Summer cooling: in light of the design choices and construction techniques used, the
            HQ2’s summer energy needs are estimated at around 286 MWh. HQ1’s consumption for
            air conditioning is estimated at around 1,354 MWh ; from this figure you can see that HQ2’s
            consumption will be only slightly more than 20% of HQ1’s.

     -      Lighting: the criteria that will be used for HQ2’s lighting system will make it possible to
            save 184 MWh with respect to the same system used at HQ1 where all the lights are on
            uninterruptedly for the entire day.

     -      Germany: focus on the use of trains for travel between the Hamburg, Hanover and Kiel
            offices. Green IT technologies will be used for printing.

     PENALTIES AND FINES

     No significant fines or non-monetary sanctions were levied against the company due to a lack of
     compliance with respect to environmental laws or regulations.
                                                                  ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




THE INTEGRATED APPROACH TO ECO-SUSTAINABILITY                                                                                                                      35

In 2007 Pirelli RE, a forerunner in the field of eco-sustainable construction, launched Ecobuilding:
the first integrated programme to be founded by a real estate company which capitalizes on a
history of innovation and which uses eco-sustainable criteria as part of all the real estate projects
in the different market segments – commercial, residential or industrial.

The approach, the culture and Pirelli RE’s modus operandi in terms of environmental sustainability
represent value added across the board, from the construction of new buildings to the management
of real estate assets and are indicative of a new inter-disciplinary approach to both the planning
of new, as well as the requalification of existing, buildings.

Today eco-sustainability not only represents a competitive factor but it represents the beginning
of a completely new phase in the real estate sector: as depicted in Scenari Immobiliari and by
the US Green Building Council1, growth of the sustainable real estate market is exponential, from
2% in 2005 to a forecasted 20%-25% in 2013; not only, it is estimated that the impact on the
entire industry is comparable to the introduction of electricity and running water in buildings at the                        1. Source: Scenari Immobiliari and
                                                                                                                              US Green Building Council
beginning of the 20th century.

If we consider that the residential and commercial buildings consume the greatest amount of
energy in Europe, more than 40%, it’s easier to understand the impact that the “ecological”
transformation of the real estate sector could have on communities.

For this reason Pirelli RE continued to make the most of this scenario in 2009: the unparalleled
technological advances (materials, technologies, processes involving renewable energy), the
regulatory changes – both in Europe and locally, the significant increase in demand for eco-
sustainable real estate. The latter represents an important cultural change which will result in
economic development and benefits for all the individuals involved in the process of real estate
enhancement (from the developer, to the investor, to the final user, the community) and which will
impact all the phases of a property’s life cycle.

These benefits are visible and quantifiable in many of the projects realized by Pirelli RE, as will
be shown later on: from the urban improvements and tax incentives for the developer, to the
savings in energy consumption and management charges, to increased well being (acoustic and
thermal comfort) for occupants. Less visible, but just as important, are the prospects for possible
recycling and disposal of the real estate asset to the extent that materials taken from one building
can be used in another, as well as the recycling rather than disposal of raw materials to the extent
they can be separated and assembled again.

All of this leads to applying the concept of sustainability not only to the real estate project itself but
also to the planning of the surrounding environment. Experience has shown that sustainable real
estate is not linked to buildings alone but also, and above all, to the surrounding area.

Pirelli RE, once again ahead of its times, has already completed or is in the process of completing
projects that take into consideration variables with a potential environmental impact such as the
use of a short supply chain for building materials (km 0) or the proximity to public transportation.

Examples that provide concrete evidence of Pirelli RE’s vision and journey from before the launch
of Ecobuilding (the Malaspina residential development project received the Kyoto Club award
for excellence in 2003) through today. Advanced expertise and a proven track record that the
company makes available to third party clients as part of a strategic real estate management
resource.
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




36   ECOBUILDING – SOLUTIONS AND TECHNOLOGY

     The solutions used in the programme make it possible to reach high standards of quality, eco-
     sustainability and energy conservation and anticipate legislative changes: important environmental
     benefits include the reduction of CO2 emissions, reduction in the amount of electricity needed for
     each building and an ever increasing use of renewable energy. The programme is focused on:
     energy efficiency; use of eco-compatible materials; use of renewable resources; living comfort.
     The main Ecobuilding solutions and technologies which, at this point, are part of all Pirelli RE’s
     development projects are described below:

     Open circuit and closed circuit geothermal waterbed systems
     The office buildings that are currently in the process of being constructed (with the exception of
     Headquarters 2 where thermal heating is used) have a heating and cooling system based on the
     use of water cooled hot water pumps which optimize the use of the waterbed located just a few
     meters below the surface. When it isn’t possible to use the waterbed directly the heat pumps are
     equipped with geothermal drills which exchange heat directly with the soil creating a hot or cold
     well depending on the season (please refer to the Polins and Lotto Nord Manifatture Tabacchi
     projects). If we consider the high performance levels (the heat pump’s return is around 500%), it
     is easy to understand why this type of system makes more energy sense then the traditional gas
     boiler. The hot water pump uses electricity but with a higher return: 1 kW of electricity produces
     circa 5 kW of thermal energy. The geothermal plant feeds the radiant heating and cooling systems
     and contributes to the generation of clean hot water.

     District heating and cooling
     Where district heating and cooling systems are available, Pirelli RE normally uses them as part
     of their heating and cooling devices which results in definite advantages in terms of energy
     conservation insofar as these distribution systems guarantee the least amount of thermal
     dispersion. Hooking up to a district heating network also makes it possible to:

     -     eliminate transport and handling of a hazardous substance like methane gas;
     -     improve air quality.

     Radiant panels
     In order for the geothermal hot water pump to reach high COP (Coefficient of Performance) levels
     it is necessary to use heating systems that make the most of water at low temperatures: during
     the winter the water in the radiant panels circulates at a temperature of between 30°C and 35°C
     with an average radiant heat of around 22°C.

     An additional advantage of the radiant system is the fact that the same system can be used during
     the summer for cooling systems. The system, in fact, associated with the waterbed hot water
     pump allows for free-cooling insofar as through the use of water with a circulating temperature
     of 16-18°C it is possible to eliminate the summer heat without any electricity costs (with the
     exception of what is needed for the dehumidifier).

     Active climate beams
     This system combines ventilation (initial exchange of external air) with cooling and heating functions
     and for this reason it uses less electricity than the traditional fan coil system. The system allows
     for an efficient thermal exchange which exploits the forced air convection while also ensuring
     uniform air distribution. Furthermore, as in the case of radiant systems, the water temperature is
     high during the cooling phase and low during the heating phase which facilitates free-cooling and
     free-heating strategies.
                                                                                 ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                                                 37

                              Supported by nature.




Our commitment to the environment.
Ecobuilding |         Pirelli RE views eco-sustainability as a competitive factor , key to a sector which, more than others, is in a position to contribute to the
energy conservation of the entire country. Through the Ecobuilding programme, Pirelli RE is moving forward with its commitment to continuously improving
the eco-compatible standards of buildings and to providing
top quality, energy efficient and environmentally friendly
products.
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




38   Controlled ventilation with heat recovery
     Good interior ventilation is synonymous with comfort and is feasible when good insulation is
     used. For this reason all the residential buildings are equipped with controlled ventilation and heat
     recovery systems (precisely a system which filters air, recovers heat from the filtered air and re-
     emits it into the living space) in order to reduce the energy needed to reheat incoming air.

     This type of system, in addition to guaranteeing good air quality, makes the building more energy
     efficient than those equipped with external insulation alone (savings of 20%).

     External insulation
     External insulation involves a system of external which helps to eliminate heat leaks. The system
     is EOTA (European Organization for Technical Approvals) certified and guarantees the maximum
     efficiency. In terms of energy conservation, use of this technology can result in energy savings of
     around 10% in like-for-like conditions.

     Doors and windows
     Thermal aluminum or wooden doors and windows with insulated Low E argon gas glass will be
     used in order to obtain an overall transmittance (glass plus frame) of 1.5 W/m2 K. A fixture with a
     low transmittance value limits the dispersion of heat through the weaker points of insulation.

     Renewable resources
     In order to comply with Ecobuilding standards, solutions using energy from renewable sources
     have been used:

     -     Geothermal waterbeds – Approximately 70% of the energy needed to run the heating,
           cooling and hot water systems is guaranteed by the use and subsequent re-use of geothermal
           waterbeds. This process is part of an important optimization of natural resources which helps
           to reduce the use of fossil fuel.

     -     Photovoltaic systems – Even before Conto Energia 2007 was in force, the architectural
           designs already provided for the fitting of the buildings and garage units with photovoltaic
           systems which use sunlight to produce energy. These systems partially compensate for the
           energy consumed each year by any heat pumps.

     -     Re-use of drinking water – Rainwater will also be harvested and will be used for the
           irrigation of the green areas.

     -     The use of photocatalytic paint, lthe ample green areas, the lack of CO2 emissions, along
           with all the other choices described contribute to high standards of living comfort, both inside
           and outside.
                                                          ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




A study done by US Green reveals the advantages of green buildings which are reflected in the                          39
increase in real estate value and returns:




    %      BENEFITS FOR TENANTS                   %        BENEFITS FOR INVESTORS

   -33%    ENVIRONMENTAL IMPACT                  +7.5%     VALUE OF THE REAL ESTATE


   -26%    ENERGY CONSUMPTION                    +6.7%     RETURN ON INVESTMENT


    -9%    OPERATING COSTS                         +3%     RENT INDEXING


  +3.5%    OCCUPANCY RATE


   +27%    SATISFACTION




                                              3.5%
                                              Increase
                                              in occupancy rate

   33%
   Reduction in the Greenhouse
   effect                          7.5%
                          Increase in real estate value Increase in tenant
                                                                               27%
                                                                               satisfaction



                26%
                Decline in energy consumption
                                                      9%
                                                      Drop in operating costs
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




40   PROJECTS DEVELOPED OR UNDER CONSTRUCTION

     In this Sustainability Report a few of Ecobuilding’s development projects are described, specifically
     in the residential and corporate sectors. As mentioned previously, this programme has been
     expanded to include other sectors and, at this point, is the foundation upon which all future projects
     promoted by Pirelli RE will be built. All of the projects are realized using innovative construction
     techniques which help to enhance energy conservation and improve living comfort.

     Pirelli Re evaluates and controls the impact of its new projects on the community ( for example,
     HQ 3M) offering its clients avant-garde environmental solutions, while for projects involving
     the recovery of buildings of historical/cultural importance ( for example, Manifattura Tabacchi)
     the company seeks to respect the existing architectural structures in accordance with the
     Superintendent of Fine Arts. Furthermore, Pirelli Re has an investment committee that monitors
     the new investment/disposal projects to ensure that they reach certain economic/financial
     objectives.




     Mikroklimazonenhaus            Ostrobramska                 HQ RCS               Bicocca Village Gate   Manifatture Milano
     RESIDENTIAL                    RESIDENTIAL                  OFFICE               RETAIL                 INDUSTRIAL
     GERMANY                        POLAND                       ITALY                ITALY                  ITALY



     2000             2003             2004             2005        2006       2007         2008         2009         2010




     Malaspina                      Edificio Tredici              HQ2 PIRELLI          HQ 3M                  Polins
     RESIDENTIAL                    OFFICE                       OFFICE               OFFICE                 INDUSTRIAL
     ITALY                          ITALY                        ITALY                ITALY                  ITALY
                                                                                                                               ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




ITALY | HEADQUARTERS 2 PROJECT, THE PIRELLI GROUP, MILAN                                                                                                                                                                                                                     41

The new project called Headquarters 2 involves a plan to expand the existing headquarters. The
building, which will rise in front of HQ1, has a gross floor area of 12,070 sqm, spread over five
floors above ground and two floors of underground parking. The building marks the beginning of
Pirelli Real Estate’s commitment to increasing energy efficiency and to environmental sustainability.
While the building permit request is dated 2005, HQ2’s energy needs are already far below the
legal limits both on a national and a regional level, which generally are more stringent (Legislative
Decree 311/2006, Regional Decree n 8/8745 of the Lombardy region). Recently, the Energy
Efficiency Certification process for the building was completed and the property was classified
Energy Efficiency Class B which means that the running costs related to energy consumption are
25% less than other new buildings built in the same period.


 PROJECT




                                                                                                                                                                        RENEWABLE SOURCES:




                                                                                                                                                                                                                     RENEWABLE SOURCES:
                               GEOTHERMAL SYSTEM




                                                                                                                                                                                             RENEWABLES: SOLAR
                                                                                        COLD BEAMS ACTIVE
                                                   DISTRICT HEATING,




                                                                                                                                                   QUALITY FIXTURES
                                                                                                            VENTILATION WITH
                                                                       RADIANT PANELS




                                                                                                            HEAT RECOVERY




                                                                                                                                                                        GROUNDWATER
                                                                                                                                   THERMAL COAT




                                                                                                                                                                                                                     WATER REUSE
                    REALIZED




                                                   COOLING




 TECHNOLOGY
 ADOPTED

 HQ                YES                                  X               X                                       X                   X               X
 MILAN




ENERGY CLASS - EPH CLIMACTIC ZONE E
Consumption category                                                                                                                              Scale
Low consumption
                                                                                                                                                  ≤3                  kWh/m3 year


                                                                                                                                                  ≤6                  kWh/m3 year


                                                                                                                                                  ≤ 11                kWh/m3 year

                                                                                                                                                                                                                 kWh/m3 year
                                                                                                                                                  ≤ 27                kWh/m3 year


                                                                                                                                                  ≤ 43                kWh/m3 year


                                                                                                                                                  ≤ 54                kWh/m3 year

                                                                                                                                                  ≤ 65                kWh/m3 year                                                         The building designed in 2005
                                                                                                                                                                                                                                          consumes 10.65 kWh/(m3 year)
                                                                                                                                                  > 65                kWh/m3 year
                                                                                                                                                                                                                                          versus an obligatory limit effective
                                                                                                                                                                                                                                          2010 of 11.74 kWh/(m3 year).
High consumption




ITALY | 3M HEADQUARTERS PROJECT, PIOLTELLO (MILAN)

3M’s new Italian headquarters consists of a building which is approximately 130 meters high and
22 meters wide covering a total area of 10,500 sqm with five floors above ground and one floor of
underground parking. The building was designed to face NE-SO, with the narrower part towards
the southern end. The choice reflects an analysis that was done of the environmental conditions,
the natural lighting and possible future development of the entire lot. The main inspiration behind
this building was the image of a single structure which unites both façade and roofing; the north
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




42   side of the building, therefore, looks opaque with a minimal brise soleil , while to the east and west
     there is angular movement and to the south the ring shaped protective brise soleil works as both
     a sun screen, helps to shade the IT areas and, finally, will act as a bearing wall for the photovoltaic
     plant of approximately 80 kWp.

     Not only do the state of the art technology used in the project ensure Energy Efficiency Class A
     certification, but the project was awarded first prize at the 2009 US Award in Architecture for the
     way in which the building blends with the surrounding area, its sustainability and the careful use
     of materials and colors.

     The project is the product of a systematic approach to all the factors that influence well being
     (ergonomics, quality of the lighting and acoustics, correct use of colors and materials). In other
     words the design of the 3M Headquarters features a balanced blend of usability and practicality,
     environmental friendliness and sound economics, testimony to the fact that quality need not have
     an excessive price tag. The property has obtained Class A according to the Energy Certificate
     (ACE) with a value of 5.16 kWh / (m³ per year).

     Date: 01.29.2010
     Protocol No.: 15175 - 000030/10 for energy needs equal to 5.16 kWh/m3h

      PROJECT




                                                                                                                                                                                 RENEWABLE SOURCES:




                                                                                                                                                                                                                          RENEWABLE SOURCES:
                                               GEOTHERMAL SYSTEM




                                                                                                                                                                                                      RENEWABLES: SOLAR
                                                                                                        COLD BEAMS ACTIVE
                                                                   DISTRICT HEATING,




                                                                                                                                                              QUALITY FIXTURES
                                                                                                                            VENTILATION WITH
                                                                                       RADIANT PANELS




                                                                                                                            HEAT RECOVERY




                                                                                                                                                                                 GROUNDWATER
                                                                                                                                               THERMAL COAT




                                                                                                                                                                                                                          WATER REUSE
                                   REALIZED




                                                                   COOLING




      TECHNOLOGY
      ADOPTED

      3M HQ                       YES           X                                                        X                      X               X              X                      X                X                       X
      PIOLTELLO




     ITALY | POLINS, PORTOGRUARO

     Polo Tecnologico is found inside Eastgate Park, a new centre for industry, logistics and small
     business in the process of being completed in the municipality of Portogruaro. The building
     spreads out over a single floor and has a gross floor area of approximately 400 sqm. It has a
     compact floor plan with a curved roof supported by a structure in glued laminated timber.

     A sun-blind has been placed on the south side of the building which touches the ground in order
     to regulate passive sun exposure. A few of these elements will be integrated into the photovoltaic
     panels; the energy produced will partially meet the building’s normal energy needs.

     The building is partially underground: on the north side the ground floor hides the voluminous
     IT room, while to the east and west part of the walls are underground as the land slants down
     toward the building’s foundation. The mass of land contributes to the walls’ thermal inertia.

     The building will be certified Energy Efficiency Class A as per the parameters established by the
     “Casa Clima” Agency in Bolzen.

     This result is achievable thanks only to the careful studies made during the building’s design
     phase: the choice of the location and exposures, determination of the geometric characteristics,
     the choice of materials and construction techniques, the systems’ layout.
                                                                                                                                 ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




This is accompanied by a meticulous construction phase: in order to issue the energy certificate                                                                                                                                      43
the “Casa Clima” Agency must verify how the building is constructed by subjecting it to the Blower-
Door-Test; the test verifies the building’s hermetic seal. If the construction has not been done
properly there will be heat dispersion resulting in greater consumption. In addition to the careful
attention paid to energy conservation, eco-sustainable materials were also used throughout the
project and it was, in fact, awarded “Casa Clima”’s “plus” classification.

This classification is given to buildings that stand out for the ecological building techniques used
and for the use of energy from renewable sources. A CasaClima “plus” building must satisfy the
following requirements:

•      Energy consumption for heating of less than 50 kWh/m2 per year. Heating is a key part of
       the ecological evaluation. The “plus” rating is given only to buildings that are part of the
       consumption categories Gold, A and B.

•      Heating with energy from renewable sources. The use of renewable energy lies at the foundation
       of sustainable energy. The heating system, therefore, must not be fuelled by fossil fuels.

•      Eco-compatible construction materials that are not harmful to one’s health must be used.

In a “CasaClima” home at least one of the following must be used:

-      photovoltaic panels;
-      solar collectors for hot water and heating;
-      rain water;
-      green roofs;
-      wood, clay or straw (in the construction).

The building has achieved:

- Class A Certification in accordance with the parameters of DLgs 192/311 with a value of 7838
    kWh / (m³ per year);

Date: 02/20/2010
Certificate Code: 0001_2010

- Energy performance certificate (ACE) in class A according to the parameters of Climate House
    with a value of 25 kWh / (m² year);

Date: 02/25/2010
Number: IT-2010 to 00,315 n



    PROJECT
                                                                                                                                                                       RENEWABLE SOURCES:




                                                                                                                                                                                                                RENEWABLE SOURCES:
                                 GEOTHERMAL SYSTEM




                                                                                                                                                                                            RENEWABLES: SOLAR
                                                                                          COLD BEAMS ACTIVE
                                                     DISTRICT HEATING,




                                                                                                                                                    QUALITY FIXTURES
                                                                                                              VENTILATION WITH
                                                                         RADIANT PANELS




                                                                                                              HEAT RECOVERY




                                                                                                                                                                       GROUNDWATER
                                                                                                                                     THERMAL COAT




                                                                                                                                                                                                                WATER REUSE
                      REALIZED




                                                     COOLING




    TECHNOLOGY
    ADOPTED

    POLINS           YES          X                                       X                                       X                   X              X                                       X
    PORTOGRUARO
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




44   ITALY | MANIFATTURE TABACCHI PROJECT, MILAN

     The former “Manifattura Tabacchi” in Milan is a vast and interesting building complex built in the
     20th century as part of a single project: an efficient series of architectural units to be used to meet
     the needs of a specific activity.

     This unique characteristic caused the local authorities to get involved and the building was
     declared a local monument meaning that the original structure was to be conserved along with the
     characteristics of the single buildings. The recovery project was developed around this “limitation”
     and focused on the enhancement of both the single units and the entire complex.

     With regard to the latter, the former Manifattura area is destined to become a high quality
     residential area complete with a large number of services that include everything from a pre-
     school to a subway stop.

     The ground circulation between the buildings will only be on foot making it possible for pedestrians
     to enjoy the original exteriors as well as the carefully planned green areas and the public squares
     that are linked together by pleasant urban paths. Vehicle access and parking will be underground,
     directly connected to the two main access roads (Viale Testi and Via Suzzani).

     Careful attention will be paid to the significant features of the existing buildings during the recovery
     process of the buildings, enriching them with the components and means that are a necessary
     part of current everyday life.

     The building facing Via Suzzani (Building 2) has great potential in this regard. The flats will all be
     equipped with unique loggias carved out of perimeter walls that run parallel to the existing walls.


     Particular attention will be paid to the weatherproofing and insulation of the roofs and exteriors.
     The apartments were designed with a view to achieve two main objectives:

     •     energy savings, precisely a significant reduction in the cost of winter heating and summer air
           conditioning with a consumption which is expected to be well below the legal limits;

     •     the construction of apartments with great living comfort.

     These objectives will be reached thanks to the use of advanced technologies chosen after applied
     research and a comparison of the most current trends in high quality residential construction that
     include:

     -     insulation to prevent heat loss: this will be done through the use of cavity wall insulation made
           out of wood chips which reach a density of 50 kg/m3 and which helps to prevent heat loss
           and improve acoustics;

     -     ventilated roofs: when used to build the roof this technique helps to improve the building’s
           safety, transpiration, isolation and ventilation resulting in significant energy conservation,
           easier maintenance and increased comfort during the summer and winter periods for the
           apartments found on the top floor;

     -     windows and doors in stratified argon gas glass with a low transmittance level which
           guarantees a high level of thermal isolation.

     The high level of energy performance and living comfort are also reached thanks to the use of
     advanced systems solutions such as:
                                                                                 ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                                                  45


                                                                                                                   Manifatture Tabacchi Project, Milan

Headquarters 3M, Pioltello (Milan)




          Headquarters 2, Pirelli Group, Milan                                                                     Malaspina Project - Lot 3, Pioltello (Milan)




                                                                                                                   The Szafarnia Project, Gdansk

                                     Mikroklimazonenhaus, Kronsberg (Hannover)
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




46   -      a geothermal plant which uses the water from the waterbeds as part of heating and cooling
            mechanisms: with this type of technology 70% of the power generated is assimilated through
            the use of renewable sources;

     -      the use of radiant floor panels which allow for a natural and effective exchange of heat.

     With regard to the project for the northern lot of Manifattura Tabacchi, the idea is to reconfigure
     the block bordered by Viale F. Testi to the east, Via Esperia to the north and Viale Suzzani to
     the west by building buildings along the three roadways resulting in a block which surrounds a
     large public park. The lot will have a residential GLA of approximately 17,000 sqm, while the
     ground floor will include a GLA of approximately 2,800 sqm for commercial and similar use. The
     corner tower and the existing smokestack, conserved and restored, represent two visual points
     of reference for both pedestrians meandering through the public spaces and drivers travelling
     along Viale F. Testi in their cars.

     Like Building 2 the goal for the northern lot of Manifattura Tabacchi is to limit the buildings’ energy
     consumption through the improvement of the insulation and the heating systems:

     -      reduce the consumption of fossil fuels through the use of renewable energy: installation of a
            system equipped with a heat pump and geothermal drills;

     -      improve the safety conditions, living comfort, eco-compatibility of the energy consumption
            through the use of radiant panel systems for heating and cooling and air treatment units for
            de-humidification;

     -      promote an adequate level of quality in terms of energy services, economic analyses, planning,
            installation, running and maintenance of the heating systems: use of automatic systems to
            control the running costs.

         PROJECT
                                                                                                                                                                                    RENEWABLE SOURCES:




                                                                                                                                                                                                                                RENEWABLE SOURCES:
                                                  GEOTHERMAL SYSTEM




                                                                                                                                                                                                            RENEWABLES: SOLAR
                                                                                                           COLD BEAMS ACTIVE
                                                                      DISTRICT HEATING,




                                                                                                                                                                 QUALITY FIXTURES
                                                                                                                               VENTILATION WITH
                                                                                          RADIANT PANELS




                                                                                                                               HEAT RECOVERY




                                                                                                                                                                                    GROUNDWATER
                                                                                                                                                  THERMAL COAT




                                                                                                                                                                                                                                WATER REUSE
                                    REALIZED




                                                                      COOLING




         TECHNOLOGY
         ADOPTED

         MANIFATTURE             Ongoing           X                                       X                                       X               X              X                      X                   X                       X
         TABACCHI
         MILANO


     An analysis of the impact on energy consumption of each technology used in terms of reaching
     the goal of achieving Class A certification follows.
     Consumption category                                                                                                                                                                            Scale


                                         Energy efficiency class in accordance with Legislative Decree 311 of January 2010                                                                               < 70            kWh/m2/year

                                Energy efficiency class obtained using external insulation and better insulation of the interior areas
                                subject to dispersion resulting in a savings in Eph (energy performance heating)                                                                           < 50/60                       kWh/m2/year
                                of approximately 40%
                         Energy efficiency class obtained using high performance fixtures resulting in a reduction in EPh
                         of approximately 30%
                                                                                                                                                                                                         < 50            kWh/m2/year


                     Energy efficiency class obtained using geothermal systems and controlled ventilations which results
                     in a further reduction of 30% and Class A certification
                                                                                                                                                                                                         < 30            kWh/m2/year
                                                                                                                               ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




GERMANY | MIKROKLIMAZONENHAUS, KRONSBERG, HANNOVER                                                                                                                                                                                 47

In Hannover, Pirelli RE paved the way for a different 21st century residential sector: a grand
environmental and socio-cultural project that makes it possible for the dreams of quality living
through the creation of micro-climactic environments to come true.

During the Hanover Expo BauBeCon had the chance to design moderate priced housing
featuring a series of residential and lifestyle solutions that reflected the motto “People - Nature -
Technology”.

135 apartments which reflect different lifestyle choices were built in Hanover’s Kronsberg district
on an area covering 9,083 sqm. The project managed to blend high tech with quality of life.

The know-how in terms of air conditioning, building materials and renewable energy combined
with the ability to conserve interior and exterior identity, the understanding of the city as a macro-
organism in a complex system of materials and energy flows all contributed to the materialization
of this unique project inside Hanover-Kronsberg.

At the centre of this innovative project is the development of a central micro-climactic environment
which protects the building’s facades from wind, bad weather, direct sunlight.

The interior walls absorb and reflect energy thus maintaining the room temperature constant even
at night. The wall and window insulation stands out for its outstanding quality.

Another clear symbol of the holistic “People - Nature - Technology” is the complex’s east/west
exposure which makes it possible for the sun to warm the eastern side of the apartments in the
morning while the west side benefits from the residual heat at the end of the day. In this way
nature takes the place of the periodic furnace blasts of heat.

In the same way, the harmonious, exterior landscape is also full of open spaces where residents
and visitors can amble around the complex.

The internal courtyard encloses a veritable forest, 50 meters wide and 100 meters long, which is
bordered by a plant filled arbor and which creates a unique sense of wholeness.




PROJECT
                                                                                                                                                                     RENEWABLE SOURCES:




                                                                                                                                                                                                              RENEWABLE SOURCES:
                               GEOTHERMAL SYSTEM




                                                                                                                                                                                          RENEWABLES: SOLAR
                                                                                        COLD BEAMS ACTIVE
                                                   DISTRICT HEATING,




                                                                                                                                                  QUALITY FIXTURES
                                                                                                            VENTILATION WITH
                                                                       RADIANT PANELS




                                                                                                            HEAT RECOVERY




                                                                                                                                                                     GROUNDWATER
                                                                                                                                   THERMAL COAT




                                                                                                                                                                                                              WATER REUSE
                    REALIZED




                                                   COOLING




TECHNOLOGY
ADOPTED

MIKROKLIMA-        YES                                  X                                                       X                   X              X
ZONANHAUS
HANNOVER
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




48   POLAND | THE SZAFARNIA PROJECT, GDANSK

     The Szafarnia residential complex, located in Gdansk, was completed in 2009. The complex
     has all the modern requisites for eco-friendly buildings. The architectural shape, the buildings’
     layout and the solutions used reflect its location in the historic area of Gdansk on the shores of
     the port.

     All of the building materials and technologies used, as well as the design and construction
     techniques, are environmentally friendly and designed to help protect the environment. During
     the design and construction phase all of the steps that needed to be taken in order to overcome
     or avoid architectural barriers were considered.

     The Szafarnia Project was approved by the Conservator of Monuments for the City of Gdansk.

     The buildings were subdivided in a way that all the day areas are located in the southern and
     western areas so that the sun can provide the residential apartments with maximum lighting, as
     well as significantly optimize the building’s energy efficiency. A welcoming garden was built inside
     which will further enhances the building’s environmental characteristics.

     The eco-friendly solutions used include various natural building materials. All the materials, building
     supplies and systems were certified and authorized by the Polish authorities.

     These include:

     Coverings, protherm brick, mineral wool:
     Natural materials were used for coverings: high quality ceramic tiles, natural wool and 25 cm
     thick ceramic sub-roof tiles were used for thermal heating. The use of these materials also made
     it possible for the exterior walls to reach a high level of thermal transmittance which contributes
     significantly to energy conservation. Frames, moldings and other façade details were designed in
     natural stone – gray sandstone. The roofs are covered with ceramic tiles.

     Wooden fixtures:
     Wooden fixtures were used for the windows (Maranti hardwood) which allows for high levels of
     acoustic comfort, fulfilling the requisites for acoustic isolation, and heat conservation.

     Exterior and interior doors:
     Acoustically isolated doors were used for the apartment entrances – Rw/45dB - with a thermal
     transmittance coefficient of Uk≤2,6W(m²K). The stairway and garage doors are equipped with
     automatic remote closing systems which makes it possible to limit the loss of heat in the building
     above all during the period when the heating units are on.

     Green areas:
     The interior garden is located on top of the garage which made it possible to expand the garden
     area and reutilize the green zones of the city’s heavily urbanized downtown area. The trash bins
     are equipped with recycling receptacles.

     Water, gas, heat, and power supply:
     The building’s water supply is guaranteed by a city well. Rainwater, after initial purification and
     treatment, is then fed into the city’s water system. Highly efficient and modern heating systems
     that are well insulated in order to reduce heat loss and, consequently, energy consumption
     have been installed. Heat is provided by the city’s district heating network which contributes to
     eliminating the building’s pollution.
                                                                             ENVIRONMENTAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                         49




                                                       E
                                                    UR
                                                F UT
                                            THE
                                         OF
                                     ON
                                   SI
                                 VI
                               N
                             EE
                          GR
                       W
                    NE
                   A




LAND |         Together with Aim (Associazione Interessi Metropolitani), Andreas Kipar and Giovanni
Sala along with their international team developed the strategic project Raggi Verdi (literally Green
Rays) which became key to the support of the city’s open spaces in the design of the city’s new PGT. At
the AedesLand Gallery in Berlin Pirelli RE is currently sponsoring the first stop of an itinerant show-
event which introduces the six projects that are part of Raggi Verdi and its new green vision of the future.
     SUSTAINABILITY REPORT 2009 | ENVIRONMENTAL RESPONSIBILITY




50   Solutions for fire safety and prevention:
     The buildings comply with all the fire prevention and safety requisites.



      PROJECT




                                                                                                                                                                                 RENEWABLE SOURCES:




                                                                                                                                                                                                                          RENEWABLE SOURCES:
                                               GEOTHERMAL SYSTEM




                                                                                                                                                                                                      RENEWABLES: SOLAR
                                                                                                        COLD BEAMS ACTIVE
                                                                   DISTRICT HEATING,




                                                                                                                                                              QUALITY FIXTURES
                                                                                                                            VENTILATION WITH
                                                                                       RADIANT PANELS




                                                                                                                            HEAT RECOVERY




                                                                                                                                                                                 GROUNDWATER
                                                                                                                                               THERMAL COAT




                                                                                                                                                                                                                          WATER REUSE
                                   REALIZED




                                                                   COOLING
      TECHNOLOGY
      ADOPTED

      SZAFARNIA                   YES                                   X                                                                       X                                                                              X
      GDAŃSK
      SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




SOCIAL RESPONSIBILITY

                                                           51
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




     5. SOCIAL RESPONSIBILITY


52

     “The company recognizes the central importance of human resources in the belief that the key
     to the success of any business is the professional contribution of the people that work for it, in
     a climate of fairness and mutual trust.

     The company shall safeguard health and safety in the workplace and considers respect for
     workers’ rights as fundamental to the business. Working relationships are managed with a
     view to guaranteeing equal opportunities and promoting the personal development of each
     employee.”
                                                                                                                Ethical Code, Art. 6 - Human Resources



     INTERNAL COMMUNITY
     DESCRIPTION
     OF THE WORKFORCE
                                                                                             2.990
                                                                                    3000                                                                       2009
     Pirelli RE had a workforce of 1,139
                                                                                                                                                               2008
     in 2009: 1,097 employees and 42
     temps. The decrease of 419 with                                                2500                                                                       2007
                                                                                                                                  2.211
     respect to the previous year is due
     to the Group’s restructuring. It also                                          2000
                                                          HEADCOUNT




     relates to Pirelli RE’s change in
     strategy, with a greater focus on the                                                         1.558
                                                                                    1500
     core business. In that context, the                                                                                             1.241
                                                                                                         1.139
     sale of the two urban development
                                                                                                                                          922
     and insurance companies in Germany                                             1000
     and of the investment in Pirelli RE
                                                                                                                                                522
     Integrated     Facility  Management                                             500
     reduced the headcount by around                                                                             223
                                                                                                                       143
                                                                                                                             90                       89 85        85 42
     1,300. The turnover rate (close to                                                                                                                       34
                                                                                       0
     35%) has limited meaning for Pirelli
     RE given the profound restructuring                                                      Total   Executives Middle      Blue collar                       Temps
     process underway.                                                                      workforce           management/
                                                                                                                white collar



     CHANGE IN BREAKDOWN OF THE                                                      100                                                                       2009
     WORKFORCE BY CATEGORY                                                                                                                                     2008
                                                                                                                             85% 84.5%
                                                                                                                                                               2007
                                                                                      80
                                                          HEADCOUNT AS % OF TOTAL




     In 2009 there was a 1.3-point decrease                                                                       75.1%

     in the percentage of executives and
     0.5-point decrease for white collar                                              60
     employees, but an increase of 1.5
     points in the percentage of blue collar
     workers.                                                                         40



                                                                                      20                                                  17%
                                                                                                  9.2%
                                                                                           7.5%          7.9%
                                                                                                                                                6% 7.6%

                                                                                       0
                                                                                            Executives                   Middle              Blue collar
                                                                                                                       management/
                                                                                                                       white collar
                                                                                                                             SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                                                                                                     53

        AVERAGE SENIORITY BY                                                                   15                                                                           2009
        CATEGORY                                                                                                                                           12.90
                                                                                                                                                                   12.92    2008
                                                                                                                                                                            2007
        Average seniority increased in                                                         12
        2009 for executives and white



                                                                            NUMBER OF YEARS
        collar workers, as a result of the
                                                                                                 9
        restructuring and the consequent                                                                                                     7.64
        turnover, which radically changed                                                                                             6.94
                                                                                                                     6.15
        the mix in Italy and the Group’s other                                                   6    5.65 5.66
        countries.
                                                                                                                               3.87                   3.65
        The average seniority of blue collar                                                     3
        workers also went up, and is very
        high abroad.
                                                                                                 0
                                                                                                       Avg. seniority Avg. seniority  Avg. seniority
                                                                                                        Executives Middle management/     Blue
                                                                                                                       White collar      collars




        GEOGRAPHICAL DISTRIBUTION

        Much of the workforce is based at our Milan and Rome locations (35% and 8.7%, respectively).

        The remainder is concentrated in Naples, Palermo, Catania, and Bari (mostly for the NPL
        business), or abroad (47.5%, including 4.7% in Poland, 14.5% in Kiel and 10% in Hamburg).




                          50                                                                                                                                                2009
                                                                                                                     42.1%                                                  2008
                                                                                                             39.9%
                               39%                                                                                                                                          2007
HEADCOUNT AS % OF TOTAL




                          40         35%
                                           35.1%



                          30
                                                                      25%



                          20                                                                         16.7%

                                                   13%
                                                         11%                                                                                                                        * despite not active on the
                                                               8.7%                           8.7%                                                                                  Dutch market, the Company
                          10                                                7%                                                                                                      maintains an administrative of-
                                                                                                                                      5% 5.7%       4.7%                            fice in Amsterdam, functional to
                                                                                                                                                                                    its management activities in Italy
                                                                                                                                                                   0.1% 0.7% 0.8%   and Germany
                           0

                                 Milan               Rome             Rest of Italy                     Germany                              Poland          The Netherlands*
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




54   PIRELLI RE IN ITALY
                                                                                          Open-ended
                                                                                          98%


     TYPE OF CONTRACT
     (headcount as % of total)

     In Italy, 98% of Pirelli RE employees are
     on open-ended (permanent) contracts.

     This marks a 3-point increase with
     respect to 2008.
                                                                                          Temps
                                                                                          1%
                                                                                          Fixed-term
                                                                                          1%

     GENDER BREAKDOWN
     BY CATEGORY

     The gender split shows that women                                              100                                                                                 W
     constitute a minority of executives (but                                                               16%         15%
                                                                                                                                   21%                                  M
     six percent more of the total than in
     2008), and the majority of white collar                                               80
     and middle management employees.
                                                                      % WOMEN / MEN




                                                                                                                                               56%
                                                                                                                                                       60%
                                                                                                                                                                  61%
                                                                                           60
     In the latter category, women make up
     61% of the total: 14% of the category is                                                               84%         85%
     comprised of female middle managers                                                                                           79%
                                                                                           40
     and 47% of female white collar staff.

     The remaining 39% consists of male                                                    20                                                  44%
                                                                                                                                                       40%
     middle managers (19%) and male white                                                                                                                         39%

     collar workers (20%).
                                                                                               0
                                                                                                                   Middle management/
                                                                                                             Executives
                                                                                                                       white collar
                                                                                                   2007 2008 2009 2007 2008 2009
     WORKFORCE BY LEVEL
     OF EDUCATION

                                                                                          60                                                                      2009
     This graph, showing the educational                                                                   55%
                                                                                                                  56%
     qualifications of the Group’s workforce,                                                                                                                      2008
     shows that the percentage of university                                              50                                                                      2007
                                                                                                   46.1%
                                                          HEADCOUNT AS % OF TOTAL




                                                                                                                                  45%
     graduates and technical school                                                                                       43.9%          44%

     graduates is unchanged since 2008.                                                   40

     The most commonly held degrees at
     Pirelli RE are in economics, engineering,                                            30
     law and architecture.
                                                                                          20

                                                                                                                                                 10%
                                                                                          10

                                                                                                                                                       0%    0%
                                                                                           0
                                                                                                    University                Technical              Other
                                                                                                    graduates                  school
                                                                             SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




PIRELLI RE ABROAD                                                                                                                   55




INTERNATIONAL WORKFORCE
(headcount as % of total)                                                                                     The Netherlands
                                                                                                                          2%
Pirelli RE’s foreign workforce is most
numerous in Germany, followed by Poland
                                                                                                                           Poland
and the Netherlands.
                                                                                                                             10%


                                           Germany
                                           88%




GENDER BREAKDOWN
BY CATEGORY ABROAD

According to a breakdown by gender               100                                                                   W
                                                                    10%     12%
and position, at international locations                                             13%                               M
women make up a slight majority of
middle managers and white collar                           80
                                                                                              57%       55%      56%
workers, while men dominate the other
                                           % WOMEN / MEN




two categories.
                                                           60

Almost all blue collar workers are based
                                                                    90%     88%      87%
in Germany, where they carry out                           40
maintenance work on the properties
managed.
                                                                                              43%       45%      44%
                                                           20



                                                            0
                                                                     Executives Middle management/
                                                                                    white collar
                                                                2007 2008 2009 2007 2008 2009
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




56   HUMAN RESOURCE POLICIES

     Pirelli Re hires individuals who reside in its principal places of business. More in detail, in Italy there
     are three resources of foreign nationality, 9 in Germany, 1 in Poland and 8 in the Netherlands. The
     percentage of senior management hired from the local community are: Italy 1.18%, Germany 2%
     Poland 1.96% Netherlands 89%. Furthermore, the company declares to have complied with all
     the norms and regulations relative to the rights of physically challenged workers.

     Each year the company implements staff management programs. In 2009, due to the
     restructuring process underway, no performance evaluations were made. Pirelli RE also provides
     outplacement services to resources leaving the group through a company specialized in career
     transition assistance.

     Salary review
     Salary review policies are managed centrally by Pirelli RE. Each year, a salary plan is set that defines
     bonuses for white collar workers and middle management and assigns merit raises to employees
     who have taken on greater responsibilities/autonomy and/or improved their qualifications and
     managerial skills. Due to the restructuring process implemented in 2009 no salary adjustments
     were made. A series of benefits, however, are made available to Pirelli RE employees:

     - Insurance (FAS, PREVIP)
     - Company car
     - Company cellular phones
     - Meal tickets/company cafeteria

     Incentive system
     Because of the major restructuring that occurred in 2009, no bonuses were set up or paid under
     Management by Objectives (MBO) and Long-term Incentive (LTI) plans.

     Retention plan
     No new retention plan was formalized in 2009, although benefits were distributed under the plans
     set up in prior years.


     RECRUITING & SELECTION

     In 2006 we introduced an advanced new program to manage the personnel search process,
     which has optimized the recruiting phase and ensured an open channel of communication with
     job candidates. Connected to the “Work with Us” section of our website, the program allows
     candidates to apply for an opening and to revise or cancel their applications at any time. The
     company, in turn, benefits from an up-to-date database of CVs.

     Executive search firms are used for the recruitment of experienced professionals and managers
     whom the company is unable to recruit on its own. The selection phase is centralized, and
     managed internally from start to finish.

     It follows the Assessment method, based first on in-basket tests and group dynamics and then
     on individual interviews. Applicants receiving positive assessments are hired via a training and
     orientation process, often preceded by an internship.
                                                                       SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




TALENT ATTRACTION AND EMPLOYER BRANDING                                                                                     57

In 2009, Pirelli RE continued to nurture its ties to Italy’s major academic institutions. The agreements
involve line managers who give presentations forming part and parcel of the training process.

Along with Career Days, these are important “employer branding” initiatives: opportunities to
meet with large numbers of recent graduates or graduating seniors who want to learn about the
company and what it offers from a closer, more personal perspective.

In 2009 Pirelli RE took part in the Global Village project, sponsored by the Italian government
and developed in collaboration with Cegos Search and La Sapienza University in Rome. Global
Village is an orientation event aimed at facilitating contact and dialogue between companies and
young graduates.

Pirelli RE took the opportunity to tell its story and describe its present, provide an orientation
service to participants, and consider the qualifications of potential candidates.

In November, Pirelli RE was present for “Le Giornate per gli Architetti”, organized by the Milan
Polytechnic. At this event we explained why Pirelli RE is a good match for architects and took an
employer branding approach consistent with the aims of professional orientation, in particular by
offering tools to help Polytechnic students and graduates understand the different jobs for which
architects are suited.

TRAINING & DEVELOPMENT

In 2009 there was a significant decrease in training activities in keeping with the policy of reducing
costs.

The first graph below compares training days by qualification in 2009 and previous years. The
dramatic reduction reflects the fact that courses were only held where strictly necessary and for
staff filling critical roles. Specifically, the average hours of training per year per employee were in
2009: Executives 1.16 h, Middle Management 0.23 h, White Collar 0.37 h


The second graph below shows the number of participants in 2009 in three categories of training:

Managerial skills
The purpose of these initiatives is to improve and develop the managerial skills of acknowledged
importance in today’s climate.

Professional knowledge (internal courses)
To learn more about the technical aspects of our business.

Professional knowledge (external courses)
Ad hoc courses on specific topics with an emphasis on technical progress and new laws.
            SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




                                                                                                                                                     White collar
                                                                                                                                           Middle management
                                                                                                                                                      Executives
                      800                                                                                          10
                                                                                                                                                               9

58                    700                         636 627




                                                                                     NUMBER OF PARTICIPANTS 2009
                                     626
                                                                                                                    8
                      600
     NUMBER OF DAYS




                                                                                                                                              6
                      500                                                                                           6
                               423

                      400
                                                                                                                             4
                                                                                                                    4
                      300                                                                                                                             3   3

                      200                                                                                                        2
                                                                                                                    2
                                                                                                                         1                1
                      100                                           76   65
                                           13                                 36.5
                                                             14
                        0                                                                                           0
                               Managerial         Professional      Professional
                                 skills            knowledge      knowledge (ext.)                                      Managerial   Professional     Professional
                               07 08 09            07 08 09          07 08 09                                             skills      knowledge     knowledge (ext.)


            The following courses were also held in 2009:

            HEALTH & SAFETY IN THE OFFICE
            Attended by all employees, this course describes the legislation on preventing risks for VDT
            operators. The first part was held in July 2009 (82% passed the course) and the second will
            take place in January 2010. Each part ends with a self-evaluation test to make sure the basic
            concepts have been assimilated.

            CORPORATE RESPONSIBILITY
            This is an online course, for all employees, that gives an overview of the 2001 law on corporate
            liability and on the steps companies must take to avoid or reduce their exposure (Legislative Decree
            231). It was held in two parts, the first explaining the legal aspects and the second describing
            the structure and content of the compliance models adopted by the Pirelli RE Group. The course
            ended with a self-evaluation test to make sure the basic concepts had been assimilated (84%
            passed the course).

            ANTI-MONEY LAUNDERING
            An anti-money laundering (AML) course was designed this year for all of the Group’s financial
            intermediaries, such as Pirelli RE SGR and Pirelli RE Credit Servicing (the latter as a registered
            company under Art. 107 of the Consolidated Banking Act), and for all non-financial companies
            that act as real estate and credit brokers, such as Pirelli RE Agency and Pirelli RE Finance. It will
            be held in 2010 and will offer a complete understanding of AML, explaining exactly what money
            laundering is and what companies are obliged to do by law.

            During the year, two projects were created ad hoc for companies with a strong need to develop
            critical competencies in the core business:

            •           For Pirelli RE Agency, the project involves mapping competencies and developing/training
                        resources to identify staff with the greatest commercial potential; allocate personnel wisely
                        among the different “product” lines; and help employees become stronger salespeople while
                        broadening their sphere of action.

            •           For Pirelli RE Credit Servicing, the new project aims to strengthen and develop and key role
                        of the NPL business. The position of loan manager has been defined and expanded, the skills
                        and capacities of current staff members have been mapped, and in 2010 the resulting gap
                        will be used as the basis for a training and development plan.
                                                                                           SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                                59




                                                                                                      HELPING SPREAD A CULTURE
                                                                                                                       OF PEACE




EMERGENCY | For the first time, Pirelli RE hosts the traditional Christmas market of Emergency, the
Italian association that provides medical and surgical care to civilian victims of war. It was a generous Christmas
on the ground floor of a Milan property owned by Fondo Tecla, which is managed by Pirelli RE SGR. Proceeds
from the market go to the Maternity Centre in Anabah, Afghanistan, where for six years Emergency’s doctors
have been giving free, specialized care to women and babies.
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




60   DIVERSITY MANAGEMENT

     As in previous years, in 2009 the Pirelli Group focused on valuing diversity and spreading an
     inclusive working climate, which takes advantage of personal differences in order to boost the
     company’s chance of success and its ability to meet the challenges brought its way by the
     market.

     Counting on people of different nationalities, for example, is a competitive advantage for a
     company like Pirelli, which has always made internationalism its calling card. Likewise, making
     sure that gender and other differences are not only respected but truly valued throughout the
     Group is crucial for the healthy, competitive growth of the business.

     This inclusive approach has been energized by the Pirelli Group’s commitment to spreading an
     “equal opportunity culture”. Since 2005, that effort has been fully honoured in the “Group Equal
     Opportunities Project” and the “Group Equal Opportunities Statement”. The latter was signed
     by the chairman and distributed along with the Project objectives to all employees in their local
     language and to the community by way of www.pirelli.com.

     Specific actions support the productive use of diversity, both inside and outside Pirelli.

     For example, Pirelli has long supported the professional growth of its managers by way of
     international postings that help develop the creative and leadership potential stemming from
     multicultural experience and participation in other professional settings (see the section on
     international mobility).

     The real degree of equal opportunity and multicultural dialogue, and the perception of diversity
     (gender, religion, race, etc.), are monitored centrally by way of KPIs and regular opinion surveys
     conducted throughout the Group. The new survey will be launched in 2010, while in 2009 the
     actions suggested by the outcome of the previous (2008) survey were put into place. Analysis of
     the equal opportunity and diversity indicators from the 2008 survey revealed no problem areas,
     and were in fact highly positive, e.g. for the Romanian plants where women make up an especially
     large share of the workforce.

     To monitor compliance with the Group’s equal opportunity principles from the moment a new
     employee is recruited, in 2008 the Italian units introduced a control mechanism by which every
     candidate interviewed is asked to fill in an anonymous question card. In 2009, 97% of candidates
     perceived total compliance with EO principles during the recruitment process.
     In terms of training, long accepted as an indispensable tool for changing the way people think
     about diversity, specific “diversity management” modules have been created and put to use.
     Sustainability and equal opportunity principles are also included in “Pirelli’s Way: Joining the
     Group”, a course for new recruits.

     In late 2009, a workshop was held for the human resources department in order to help HR staff
     assist new mothers returning to work.
     Affiliates, too, are monitored to ensure respect for cultural diversity: a variety of clearly labelled foods
     is offered in company lunchrooms as a courtesy to those with religious restrictions; multilingual
     bookstores are available at plants; and multilingual welcome kits are given to employees arriving
     at Pirelli locations in countries other than their own. Perks to help with the life/work balance, such
     as on-site daycare and subsidized holiday camps for employees’ children, complete a decidedly
     proactive range of offerings.

     But Pirelli’s efforts extend well beyond its own walls. Since 2007 the Group has belonged to the
     European Alliance for CSR, an initiative sponsored by the European Commission to encourage the
                                                                     SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




spread and exchange of best sustainability practices among companies. Pirelli’s participation is                          61
based on the strong conviction that social value is created by sharing experiences with the entire
community, and especially with other businesses that take a serious approach to the subject of
equal opportunity and diversity management and wish to govern the matter from within.

Pirelli takes part in the CSR Laboratories offered by the Alliance, coordinated in Italy by Fondazione
Sodalitas, on whose executive committee Pirelli has a seat.

The Multiculturalism Laboratory in 2009 produced the toolkit “Multiculturalism, enterprise value:
a comparison of programmes and experiences” (La multiculturalità, un valore per l’impresa:
Esperienze e programmi a confronto). Designed as a stimulus for a better working environment, it
was presented in Milan on October 27th during the conference “Diversity Management, enterprise
value” (Diversity Management: un valore per l’azienda) by Pirelli, the other companies that co-
authored the work, and the Italian office for the prevention of racial discrimination (UNAR).

Starting with a general overview of the multicultural scenario, the document presents best company
practices from various perspectives: strategies and organizational processes, human resources,
business areas (customer relations, product development, supplier management), etc.

In 2008, the “Equal Opportunities” laboratory produced a toolkit on practicing gender parity in
careers, which was presented at the CSR Marketplace in 2007 and again on June 19th, 2008 in
Brussels, during CSR Europe’s General Assembly.

In 2009 Pirelli and other members of Sodalitas worked on a charter for equal opportunities and
equality in the workplace, presented in Milan on October 5th and sponsored by Fondazione
Sodalitas, the Italian association of family businesses (AIAF), the association of women
entrepreneurs and executives (AIDDA), Impronta Etica, the Christian entrepreneurs’ and
executives’ union (UCID), and the Ufficio Nazionale Consigliera di Parità with the participation of
the Ministry of Labour, Health and Social Policies and the Ministry for Equal Opportunities.

The charter serves as a guide for the companies that wish to sign it and contains, instead of a
list of do’s and don’ts, a few general planning commitments based on the principles and key
elements of effective programmes for change. The charter and the commitments it requires of
participating companies are available at www.cartapariopportunita.it/contenuti/home.aspx.

In 2009 Pirelli continued to participate in the Diversity Management Working Group set up by SDA
Bocconi, which monitors corporate activities and trends in diversity management practices.

A breakdown of the workforce by gender shows that at December 31st, 2009, women filled 20%
of Pirelli RE’s executive (dirigente) positions (versus 15% in 2008). Most of the Group’s female
executives are based in Italy; there are two in Poland and none in Germany or the Netherlands.

Middle management (quadro) positions are filled 42% by women (no change since 2008), all of
whom are located in Italy as this category does not exist in the other countries.

As for white collar (impiegato) positions, women account for 70% in Italy, 57% in Germany, 48%
in Poland and 50% in the Netherlands, with no significant changes on the previous year.

The other key aspect of equal opportunity that under the EO Project must be constantly monitored
and guaranteed is employee compensation. As reported in our 2007 and 2008 reports, pay
packages for men and women are essentially equal at every level of human resources (executives,
middle management and white collar staff).
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




62   In this regard, as in 2007 and 2009, we confirm that the salaries of the men and women employed
     is largely the same at all levels (managers, middle managers and white collars). The average
     salaries broken down by gender, position held and country in 2009 are shown below.




                      ITALY

            150,000                      129,470                                                                                                 Men
                                                          114,950                                                                              Women
            120,000
     EURO




             90,000

             60,000                                                          50,794             47,618
                                                                                                                  30,995          30,038
             30,000

                 0
                                                 Executives                  Middle management                         White collar




                      GERMANY

                                        192,527                                                                                                  Men
            200,000
                                                                                                                                               Women
            150,000
     EURO




            100,000
                                                                                                                  51,093
             50,000                                                          27,335                                               34,969
                                                                                                18,503

                 0
                                                 Executives                           Blue collar                      White collar




                      POLAND

             80,000                     71,203                      74,282                                                                       Men
             70,000                                                                                                                            Women
             60,000
             50,000
     EURO




             40,000                                                                                      33,710
             30,000                                                                                                                   19,275
             20,000
             10,000
                  0
                                                     Executives                                                   White collar




     In 2009 no incidents of alleged discriminatory practices or related actions were reported. No
     operations in which the freedom of association and collective bargaining were at significant risk
     or with a high risk of the use of child labour or forced/compulsory labour were found.
                                                                         SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




EMPLOYEE RELATIONS                                                                                                            63

INTERNAL COMMUNICATION

An integral part of our corporate culture and human resources policy is a well designed system
for communicating with the different branches of our in-house population. In 2009 we developed
a specific communications plan with innovative projects to support the company’s turnaround.

The aims were twofold:

1. to encourage more direct dialogue between management and employees;
2. to inform workers more directly of changes in the company and its business model.

We believe that these initiatives have been extremely useful in easing the process of change.

Knowledge management
Knowledge sharing within Pirelli RE is fundamental for enhancing team spirit by getting people
involved in the company’s goals.

The intranet is a centralized management tool and the most frequently used to transmit content,
instruments and plans throughout the Group. Knowledge management activities include the
following:

-   E-learning or training on-line;
-   Videoconferences:
-   Manuals stored on the intranet for the sharing of technical content;
-   Newsletter: a publication all employees receive by email on the various initiatives involving
    Group companies, plus tidbits, games and fun.

The Intranet is also where employees gain access to the special rates and benefits offered under
the Group’s agreements or sponsorship deals with other entities.

In addition, the following “off-line” initiatives entail direct personal interaction:

-   Road Show: conferences to discuss figures and strategies;
-   Committees: periodic meetings between company/business unit heads on results, objectives,
    and important decisions;
-   Institutional and ad hoc training;
-   Executive Management Meeting: a periodic encounter with management to share Group
    results, strategies and objectives;
-   Employee Meeting: for the first time this year, Pirelli RE organized a conference for the entire
    employee population to share goals, strategies and results and to discuss the changes taking
    place as a result of repositioning the core business. Held at Pirelli RE’s headquarters in Milan,
    the event was attended by all Italian and international units via live web streaming that reached
    a thousand employees in 20 locations and in four languages;
-   Coffee with the CEO: on a rotating basis, the CEO meets with about 20 employees at a
    time from all business units and all levels of service. In this informal setting, the parties get
    to know one another and have the chance to speak directly about business strategies and
    objectives.
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




64   EMPLOYEE RELATIONS AND CORPORATE INITIATIVES

     Participation and team building, two of the Group’s core values, are the principles behind these
     initiatives designed to benefit employees. In 2009, along with the many standard perks offered
     by Pirelli RE employers (subsidized vacations for employees’ children, scholarships, vaccination
     campaigns, and special agreements with commercial enterprises and healthcare clinics), the
     Group continued to offer some newer initiatives to improve morale and worker retention. One of
     these is Family Day: for an entire afternoon, employees can invite family and friends to Bicocca to
     visit the workplace in a different light, including games and recreational activities.

     Industrial relations
     The PRE Group’s relations with the labour unions are based on constructive dialogue, fairness,
     and respect for individual roles. Dealings and negotiations with the unions take place through
     the appropriate channels, as mandated by laws, national labour contracts and/or in-house
     employment agreements. To counter the effects of the crisis, which has hit the real estate sector
     especially hard, industrial relations at Pirelli RE have addressed the staff streamlining process as
     well as structural measures in connection with business acquisitions and disposals. Both areas
     involved extensive communication efforts and talks with workers and their unions.

     The European Works Council
     The Pirelli Group European Works Council (EWC) was formed in 1998, under a union agreement
     signed with representatives of the Group’s European workers for the purpose of better informing
     and consulting employees in companies which operate at the EU level. Pirelli RE participates in
     the Council as a member of the Pirelli Group. The Council holds ordinary meetings once a year.
     At the last meeting in 2009, the Real Estate Group presented its business model, explained how
     it has grown in recent years, and described possible future developments in Italy and elsewhere
     in Europe. With regard to compliance with legal and contractual provisions on overtime and days
     off, the Pirelli RE Group respects all laws and contractual terms regarding overtime and days off
     work. There are no significant restrictions on workers’ right to take all of their holiday time. Time off
     is normally scheduled by agreement between the company and the worker, the aim being to allow
     full enjoyment of all holidays/days off accrued.

     Unionization
     An estimated 10% of Pirelli RE employees belong to a union. In Italy all employees (equal to
     53.9% of the total employees) are covered by a category national collective work contract. In
     Poland and the Netherlands (equal to 5.5%) no collective work contract is adhered to, while
     specific real estate sector contracts are used by the German affiliates (equal to 40.6%).

     If the corporate structure should change (mergers, spin-offs, etc.), the parties to the transaction
     must advise the company union representatives and the category unions that are part of the
     collective work contracts as to the intention to dispose of the company, or a part of it, at least 25
     days before the transaction is finalized.

     Please note there are no formal agreements with the relative unions regarding health and safety.

     Unionization Disputes
     There were essentially no conflicts in 2009.

     Supplementary pension plans
     Pirelli RE employees benefit from supplementary pension plans, which have been negotiated into
     the collective contract. Plans are of the defined contribution variety.

     Supplementary healthcare plans
     All employees, regardless of category, benefit from supplementary healthcare under defined
                                                                                        SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                             65




        THEATRE AS A BRIDGE BETWEEN THE PAST
        AND THE FUTURE




FONDAZIONE PAOLO GRASSI | Conference held to mark the 90th anniversary of the
birth of the co-founder of Milan’s Piccolo Teatro. Organized by Fondazione Paolo Grassi - La Voce della Cultura
and supported by Pirelli RE. Discussion focused on the genesis of the Piccolo Teatro project as an asset and a
public service, through the reconstruction of the theatre’s history and institutions.
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




66   contribution plans, by which the company pays a fixed amount or a percentage of the worker’s
     salary into an insurance scheme or fund set up on the employees’ behalf.

     HEALTH, SAFETY AND HYGIENE
     Pirelli RE’s duties under the Policy for Health, Safety, Environment and Social Responsibility,
     described in the introductory chapter, include the following:
     - to manage its activities by adopting health, safety, environmental and social accountability
         management systems in compliance with international standards;
     - to promote the use of cutting-edge technologies to achieve excellence in the protection of its
         employees’ health;
     - to judge the risks of professional injury or illness in order to eliminate or reduce them, at the
         very least in accordance with legal standards;
     - to involve all levels of the organization and all Group employees, ensuring that responsibilities
         and operating procedures are precisely defined, appropriately communicated and clearly
         understood.

     The Safety unit serves all companies in the Pirelli RE Group and works to protect:
     - People: in terms of health, accident prevention and industrial hygiene;
     - Properties: fire prevention, plant & system safety and environmental hygiene;
     - Construction sites and minor assignments: safety in the workplace, prevention of under-the-
         table hiring and tax evasion by contractors and subcontractors;
     - The company: corporate liability pursuant to Legislative Decree 231/2001 and its correlations
         with the Consolidated Safety Act (Legislative Decree 81/2008).

     In 2009, partly in relation to the gradual enactment of some corrections to the Consolidated
     Safety Act, a series of measures were launched to ensure compliance with the new legislation.

     On the intranet, accessible to all employees, we published a summary of all that has changed in
     the law; we also continued our awareness campaign for safety officers (initiated in 2007), with a
     particular focus on the companies whose operations carry greatest risk (information, training, and
     the written designation of safety officers even where not required by law).

     By making safety officers more aware of the issues, given their role and physical presence in
     the workplace, the level of accident prevention and safety is likely to see further improvement.
     Information seminars have been held at two Group companies in order to extend this campaign
     to executives.

     In 2009 the first part of the course Health and Safety was held which was passed by 82% of the
     participants.

     In 2009 the TUTORAGGIO e CERTIFICAZIONE (tutoring and safety) program was developed for
     all the real estate funds managed by Pirelli RE SGR.
     Each property in the different funds was mapped and assessed based on 27 safety and
     environmental parameters in order to:

     -     verify that the property had complied with fire, safety, environmental (asbestos, PCB,
           hazardous cooling substances found in the HVAC systems, underground fuel oil tanks)
           standards, proceed with energy efficiency certification;
     -     plan any needed improvements over time;
     -     assign a sort of RATING or qualitative standard, which are in the process of being finalized, to
           the building.
                                                                     SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




Prevention and Protection Unit                                                                                            67
All Pirelli RE Group companies are served by a single prevention and protection officer. The Prevention
and Protection Unit continued throughout 2009 to support, inform, and constructively monitor the
local operating units. We believe that the best results will be achieved over time by spreading a true
mindset of prevention and safety in the workplace, and by educating the people involved:

-   Executives;
-   Safety managers;
-   Officers;
-   Workers in general.

More in detail, in Germany an external company periodically checks the working environment and
evaluates any specific professional needs. Employees are also given eye examinations and the
safety of pregnant employees is monitored by dedicated personnel.

Extensive, interdisciplinary rules and regulations, supported by tools, procedures and standards
applicable at the more basic level, must become more and more “everyday” to allow concrete
and effective action in pursuit of:
- prevention and protection;
- compliance with laws in constant flux;
- the true involvement of resources at every level: the worker, the safety officer, the safety
    manager, the employer, and the Prevention and Protection unit;
- bona fide support for operational staff.

Liability prevention
At the end of 2008, Pirelli RE added an internal verification outline to its Organizational Model
pursuant to Legislative Decree 231/2001 (Italy’s corporate liability law). The other Group
companies affected by the law have already done likewise in 2009. The model is a framework for
due compliance with laws and for the promotion of worker health and safety.

In 2009, specific safety indicators were monitored by the supervisory boards of three companies,
and in 2010 the monitoring will be extended to the rest of the Group. The internal control system
provides for two levels of oversight:
- the head of the Prevention and Protection Unit is responsible for level 1;
- the safety manager is responsible for level 2.

All the internal divisions are monitored for risks linked to corruption. In 2009 no episodes of
corruption were flagged/confirmed/subject to disciplinary action. In accordance with the
company’s Organizational Model pursuant to Legislative Decree 231/2001 each quarter all the
company’s staff functions are checked.

No episodes of corruption were found and, therefore, no actions were taken in this regard.

84% of Pirelli RE’s employees at 31st of December 2009 has completed and passed the
Section 231 training course on anti-corruption policies and organizational procedures.

Please note that during the year 2009 have not been imposed and paid significant fines
outright non-compliance with laws and regulations, including those related to supply and use
of products or services of the group and there were no substantiated complaints regarding
breaches of customer privacy and losses of customer data.
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




68   Flu shots
     Once again in 2009, all employees were offered a free vaccination against influenza.

     H1N1 prevention
     To prevent the spread of the H1N1 virus, an information campaign was organized for the entire
     staff of every unit, and dispensers with disinfectant gel were set up in entryways, meeting rooms,
     toilets, etc.

     Information
     Kits containing job- and risk-specific brochures have now been delivered to all Group employees.
     A “safety” section has been added to the intranet site, accessible to all employees and containing
     numerous means of information, prevention and protection—some of them highly inventive—
     geared specifically to labourers, safety officers and technical personnel. The site has the following
     sections:

     -     Information and training: contains risk fact sheets for all jobs at Pirelli RE, work in disused
           areas, and the coordination of works at buildings and construction sites. Also contains a
           “safe driving” manual;
     -     Work procedures;
     -     Safety in construction;
     -     Safety at building sites;
     -     Management and safety of properties (also contains a fire prevention manual for building
           operators);
     -     Operating standards for technical staff (discusses various at-risk situations and the hazards
           of drinking alcoholic beverages on the job);
     -     Equipment information (advice on purchasing, safety hazards, prevention and protection,
           user instructions, and IPDs for the use of equipment);
     -     Technical standards (including an asbestos page, drawn up internally to render it as applicable
           as possible to the Group);
     -     Safety news: the latest on legislative changes in the field of safety, accident prevention,
           industrial hygiene and property management.

     In 2007 the number of information, prevention and protection instruments stored on the “safety
     site” increased from 60 to around 100.

     By the end of 2008 the number of instruments rose from about 100 to about 120, all of them
     fully adapted in 2009 to the new laws introduced by the Consolidated Safety Act. Specifically,
     the management and control system regarding safety at construction sites was overhauled to
     include first- and second-line controls protecting the safety of all people involved, in particular the
     construction workers employed by the various contractors.

     All employees whose job descriptions include certain hazardous duties received a personal email
     with specific information documents on the following topics:

     -     visits to construction sites;
     -     inspection of plants & systems;
     -     visits to industrial and/or disused areas;
     -     use of motor vehicles on the job.
                                        SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                              69




COFFEE
WITH THE
CEO
Employees in all business units and
all levels meet in rotation the CEO:                    EMPLOYEE
an informal opportunity to meet and
discuss company strategies and goals.
                                                         MEETING
                                                                      For the first time in
                                                                 the history of Pirelli RE,
                                                                         about a thousand
                                                               employees from 20 offices
                                                                in Italy and abroad were
                                                               connected simultaneously
                                                                  via web streaming, in 4
                                                                      different languages,
                                                               to share strategies, results
                                                                      and next steps with
                                                                     the Top Management
                                                                   during a time of major
                                                               changes for the company.
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




70   SAFETY TRAINING

     In 2005-2006 we launched a one-off training campaign for a considerable number of Pirelli RE
     employees, on specific topics including asbestos and electrical hazards. In 2007, after a broad
     reorganization, the training needs of existing employees and new hires (mostly blue collar workers)
     were reassessed. Human Resources also began a specific mapping project for the various kinds
     of training provided. The effects of these initiatives materialized in 2008.

     In connection with an overhaul taking place at Pirelli RE and with the enactment of the Consolidated
     Safety Act in the last quarter of 2008, a new training plan has been devised that was implemented
     in 2009. The plan includes the following training sessions:

     -     a self-training (intranet) seminar on the new Consolidated Safety Act, for all employees (part 1);
     -     training sessions for designated safety personnel;
     -     training sessions for fund managers.

     In 2009 all employees, including executives, took the first module of the on-line seminar on the
     Consolidated Safety Act (mandatory self-training with final test). The second module (also mandatory
     and ending with a test) will be given in the first half of 2010 and will address the management of
     emergencies in the workplace and risks/procedures associated with pregnancy and breastfeeding.

     Lastly, in 2010 a customized professional advancement programme will be launched on the needs
     of the different Group companies, including special purpose vehicles. The programme will include
     the module on the new construction site management and monitoring system (S.G.C.S.C.).

     In Poland the employer is required to provide each new employ with at least eight hours of
     training with regard to safety, health and work ethics.

     This training must be organized by specialized companies duly authorized to offer this type of
     service.

     Pirelli Pekao RE complies with this legal obligation by organizing training courses for each newly
     hired employee in accordance with current norms and regulations. Personnel with specific
     responsibilities (basically middle and top managers) are also required to take refresher courses
     every five years.

     More in detail, in Germany an external company periodically checks the working environment and
     evaluates any specific professional needs. Employees are also given eye examinations and the
     safety of pregnant employees is monitored by dedicated personnel.

     Safety at Construction Sites (large construction/repair sites)
     With regard to the management and control of the safety of all the “open” construction sites
     (requalification, extraordinary property maintenance, construction of new buildings by Pirelli
     RE SGR and Pirelli RE – various vehicle companies) a control system (first and second level)
     was developed and implemented which, in addition to the prevention of under-the-table hiring,
     establishes indices for the construction sites which make it possible to assess performance
     during each visit to the site that include:

     -     construction site safety index
     -     construction manager (CM) ( the contractor’s representative at the construction site) performance
           index
     -     certified safety professional (CSP) performance index
     -     safety coordinator (SC) performance index
                                                                                  SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




These indexes are periodically sent to the supervisory bodies 231 of Pirelli RE SGR and                                                71
Pirelli RE. In 2009 the control system was redesigned and turned into a construction site
management and monitoring system (S.G.C.S.C.), split into modules that contain all of
the forms necessary for the optimum management of sites and for meeting the obligations
required of all parties, including in Pirelli RE’s capacity as general contractor. The system can
be viewed on the intranet.

Prevention of illegal employment and tax evasion by contractors/subcontractors
Institution of a procedure for identifying and monitoring “on site” workers and tradespeople
and making sure businesses operating at our sites have proof of legal hiring practices.

Accidents
The customary three-year accident statistics were prepared for each company in the Pirelli
RE Group in accordance with UNI 7249. For the period 2007 – 2009, accident data in
comparison with total hours worked and work days lost are as follows:

         ITALY                                 GERMANY                                POLAND
 YEAR     HOURS            NO.         DAYS    HOURS          NO.         DAYS LOST    HOURS            NO.              DAYS
          WORKED        ACCIDENTS      LOST    WORKED      ACCIDENTS                   WORKED        ACCIDENTS           LOST
                         ON THE                             ON THE                                    ON THE
                           JOB                                JOB                                       JOB


 2007    2,591,819         10          1,001      ND          ND             ND           ND              ND              ND

 2008    1,289,589         4            38     1,001,238       -              -        135,591              -               -

 2009     977,293          1            6      812,005         -              -        115,405             1               38




       ACCIDENT RATES (ITALIAN OPERATIONS)

                 0.39           0.39                                                                  Frequency rate (IF)
0.40
                                                                                                         Severity rate (Ig)
0.35
                                                    0.31
0.30

0.25

0.20

0.15
                                                                                              0.10
0.10

0.05                                                               0.03
                                                                                                                0.01
0.00
                        2007                               2008                                       2009
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




72          ACCIDENTS RATES (TOTAL FOR THE PIRELLI RE GROUP)
                         0.39              0.39                                         Frequency rate (IF)
     0.40
                                                                                          Severity rate (Ig)
     0.35

     0.30

     0.25

     0.20
                                                          0.16
     0.15
                                                                                 0.11
     0.10

     0.05                                                               0.02                   0.02
     0.00
                                 2007                            2008                   2009




     Starting in 2008, accident statistics for Pirelli RE Integrated Facility Management are no longer
     reported. To counteract the high number of accidents in 2006, the following measures have been
     taken:
     - awareness initiatives for Pirelli RE Facility managers and safety officers (prevention campaign
         for personnel);
     - distribution of the “safe driving” manual to help prevent auto accidents (between home and
         the workplace or other);
     - twice-yearly accident analysis;
     - classification and analysis of individual events;
     - on-site inspection of all accident sites by the Prevention and Protection unit.

     These actions contributed to a decrease in accidents in 2007, 2008 and 2009.

     The Prevention and Protection unit also handles reports of hazardous situations by employees
     and workers’ safety representatives. It deals with all written reports and telephone calls within
     24 hours of their receipt. A separate file is kept for all documentation attesting to the measures
     taken.

     In 2010, the Safety unit—in collaboration with Pirelli RE Property’s call centre—created a monitoring
     system for notifications received from tenants about specific safety issues.

     No Smoking Company
     In keeping with Pirelli Group policy, which as always aims to protect the health of its workers,
     smoking has been prohibited at all Pirelli RE locations since 2004 in all countries where the Group
     operates. The main locations have certified smoking rooms. Reports of violations are handled
     on the basis of applicable procedures, with the participation of the company’s human resource
     managers.

     Main objectives for 2010
     - focus by the Safety unit on top management awareness and training;
     - rearrangement of the Prevention and Protection Unit, including in terms of resources or
        portions of resources allocated to individual companies;
                                                                          SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




-      implementation of level 2 controls with particular regard for construction sites;                                       73
-      improvement of audits and controls regarding compliance with service, construction or
       catering contracts. The monitoring system will be implemented in SAP.

COMMUNITY RELATIONS

VALUES AND ACTIONS

Pirelli RE continued to support community relations and different entities, institutions and associations, in
keeping with the company’s values and past commitments, albeit with more limited financial resources.

Pirelli RE believes, in fact, that during these years of international economic crisis, the company
must redefine its commitment to the community and the region, above all through a greater
integration of social awareness in its core business. When a company is active in a sector like
real estate, which has a significant social impact, it is even more important to focus on community
projects and local sustainability.

Businesses must contribute to social well being and to the citizens’ quality of life, making its
know-how and project related expertise available with a view to increase community interaction.

The company, as mentioned, continued to support particularly worthy initiatives and long term
partnerships including through innovative ways of collaborating (for example, granting non profit
organizations use of its space for specific events free of charge).

In 2009 Pirelli Re invested and was involved in initiatives promoting the development of
infrastructure and services “for the public good” principally in the following areas:

    SECTOR (MILLIONS OF EURO)                                                                CONTRIBUTION 2009
    SOCIAL WELL BEING AND SPORT                                                                          0.1

    LAND AND ENVIRONMENT                                                                                 0.3

    ART AND CULTURE                                                                                      0.4

    EDUCATION                                                                                            0.1

    TOTAL                                                                                                0.8



As part of its commitment to community relations, in addition to supporting pure medical research
projects such as the Association for the Fight Against Thrombosis and cardiovascular diseases
(ALT onlus) and the scholarships funded for melanoma research programmes (IMI/IEO), Pirelli
RE also works with non-profit organizations and foundations on important projects involving in-
home care and services relating to housing needs for the homeless. In this regard we would like
to mention the support given to the multi-purpose centre promoted by the Amici di Edoardo
Associazione and the Exodus Foundation’s La Casa di Carlotta project which offers rehabilitation
services to drug addicted mothers who live in the shelter with their children.

In terms of sports, of note is the historic sponsorship (in 2009 for € 50 thousands) of the CBC
Corbetta BasketSchool: thanks to the support of Pirelli RE and the enthusiasm of the technical
staff, the basketball team gave birth to a proper school which today has more than 300 students.

Pirelli RE, in keeping with its own mission, has also sustained a number of initiatives focused
on local environmental protection and conservation of the artistic heritage in collaboration with
associations such as:

the Metropolitan Promotional Association (AIM or Associazione Interessi Metropolitani), which
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




74   supports Milan’s cultural, social and economic development; the Association of Abandoned Urban
     Areas (AUDIS or (Associazione delle Aree Urbane Dimesse), which is involved in urban renewal
     and re-launching cities; Civita which protects a number of Italy’s cultural and environmental assets.
     Of particular note is the donation made to FAI, one of the most important private foundations
     involved in the protection and enhancement of Italy’s artistic and environmental heritage focused
     on the restoration and recovery of valuable historic, artistic and natural assets.

     Pirelli RE also supported the exhibit dedicated to Raggi Verdi promoted by LAND in collaboration
     with AIM and held in Berlin; the exhibit illustrates Milan’s eco-sustainable project which consists
     in 8 “green paths” that connect the city centre with the different parks and gardens found in the
     metropolitan area.

     In the field of the arts of note are the activities sponsored in collaboration with the Piccolo Teatro,
     in particular the Masterclass project, while Pirelli RE is a founding member of the Hangar Bicocca
     Foundation, founded to promote contemporary art, as we will see later on. In 2009 Pirelli RE
     donated € 320 thousand to Hangar Bicocca, a considerable amount that is testimony to the
     company’s desire to indirectly create a cultural district within the Bicocca in order to enhance and
     promote the quarter’s local identity.

     Pirelli RE also sponsored Milan’s Expo 2015 candidacy (contribution of € 124 thousand).

     With regard to professional training Pirelli RE, along with prestigious institutions like the BEST
     Department of Milan’s Politecnico and the financial daily Il Sole 24Ore, contributed to the
     publication of a collection called “Real Estate”. The purpose of the collection is to provide the
     real estate sector with cultural and professional tools capable of meeting the vast needs for
     knowledge and personal growth.

     As an example, a few of the initiatives supported by Pirelli RE in 2009 are described below:


     ITALY

     Great Architects: A journey in the mind of...
     The DVD collection dedicated to the stars of contemporary architecture and their thoughts,
     philosophy, as well as the poetry that is so much a part of their work came to a close with the 10th
     DVD on Michele De Lucchi, realized by Interni magazine in collaboration with Pirelli RE. Michele
     De Lucchi is the mastermind of several works in Italy, Japan and Germany and in his professional
     career, dedicated largely to the world of industry, the architect and designer from Ferrara acts as
     a mediator between business, consumer, culture and innovation.

     FAI – The Architect’s Hand
     As part of its enduring partnership with FAI – Fondo per l’Ambiente Italiano, this year Pirelli
     RE sponsored “The Architect’s Hand” (La mano dell’architetto), an exhibit of approximately
     400 drawings and sketches by the world’s foremost architects. The names involved included
     Renzo Piano, Mario Botta, Massimiliano Fuksas, Richard Meier, and Domenique Perrault. The
     great freedom granted in the choice of materials to submit made it possible to gather a great
     variety of documents, an excellent summary of what is the universal language of drawing. Pirelli
     RE actively participated in the exhibit as the first sketches submitted by Gregotti Associati
     International srl were for its HQ in Bicocca, known also as the “Cooling Tower “ (Torre di
     Raffreddamento). The show was held at Villa Necchi Campiglio, Triennale Bovisa and the
     headquarters of the magazine Abitare. At the end of the show the drawings were put up for
     auction as part of a fund raising event.
                                                                                           SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




                                                                                                                                                75




                                                                                        WHER
                                                                                             E LIGH
                                                                                                    T CRE
                                                                                                         ATES T
                                                                                                               HE
                                                                                                           ILLUS
                                                                                                               ION O
                                                                                                                    F FOR
                                                                                                                         M




Hangar Bicocca | As part of its efforts to foster relations with the region and the community Pirelli RE
has supported Hangar Bicocca , a dynamic centre focused on the promotion and dissemination of contemporary
art, from its inception. The show dedicated to Anthony McCall’s extraordinary light sculptures where installations,
video and performance blend together and enter into a dialogue with the Hangar’s industrial space was particularly
noteworthy, as well as a great success with the public.
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




76   Hangar Bicocca
     Hangar Bicocca plays an important role in Pirelli RE’s relationship with the community and the
     surrounding area. Hangar Bicocca is a dynamic centre where production, documentation,
     exhibitions and promotion of contemporary art are used to explore and experiment the cross
     disciplinary qualities of all the arts – visual and performing – and other fields of contemporary
     consciousness.

     The project began when a vast industrial complex which belonged to the Ansaldo Group, where
     train engine coils were made, was transformed into a contemporary art space. The first step toward
     the building’s new “identity” consisted in the direct involvement of internationally acclaimed artists
     interested in meeting the challenge of a site specific project as part of a dialogue with a visually
     impressive space.

     The first of these was Anselm Kiefer – who in September 2004 installed the monumental permanent
     work “Seven Celestial Towers” (Sette Palazzi Celesti) – followed by Mark Wallinger and Marina
     Abramovic.

     The most significant collective shows held at Hangar Bicocca include “Start@Hangar”, 2006 and,
     in 2007, “Collateral”, “When Art Looks at Film” (Quando l’Arte guarda il Cinema), “Not Afraid of the
     Dark” and “Urban Manners” which featured 15 contemporary artists from India.

     The shows held in 2008 included: a one man show of a young Italian artist named Daniele Puppi
     called Fatica 16; Antarctica, a show of an Italian-Argentinean duet Lucy+Jorge Orta; and an
     important retrospective of Alfredo Jaar, organized in collaboration with the Province of Milan and
     which was part of a public project in Milan developed by the artist.

     The shows held in 2009 include: “Breath, vertical works” by Anthony McCall and “Outside the
     Centre” (Fuori Centro), a collective show of ten Italian artists, coordinated by the artistic director
     Chiara Bertola; parallel literary, theatrical and musical events were also organized that included
     performances by Tiziano Scarpa, Motus and Teatro i, Cameron Jamie and Keiji Haino.

     In 2008 Hangar Bicocca was transformed into a Foundation, a privately held non-profit organization
     whose founding partners are, to date, Pirelli RE, the Milan Chamber of Commerce and the Region
     of Lombardy.

     MBA Group and AON Insurance Brokers also contributed to the Foundation as active patrons.


     POLAND

     In 2008 Pirelli Pekao RE made a donation to the historic church of San Carlo Borromeo, Bishop
     of Milan, found in Milan. The church was built in the 19th century in Italian Renaissance style
     with some of the motifs typically found in Italy’s largest basilicas. The donation was given in
     order to guarantee restoration works and general maintenance of the church so that its ancient
     appearance and monumental design might be preserved.


     GERMANY

     Pirelli RE confirmed its commitment to assisting the children and youths of Hanover, inviting
     children of tenants to spend a week’s vacation at local farms; it also financed the social services
     centre found in the children’s shelter NaDu, a key part of an extensive assistance programme.
                                                                     SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




As it has been doing since 2001, in 2009 Pirelli RE also supported the shelter for children in                            77
Hanover’s Sahlkamp district. Here the young residents who come from all over the world find a
place where they can play together and where dedicated personnel are ready to help them repair
bicycles, skateboards, etc. and teach them the basic principles of “doing-it-yourself”.

In Kiel, Pirelli RE continued to support the social assistance provided by the Youth Centre of
Mettenhof which is focused on the battle against discrimination and various risks to which the
youths are exposed by helping them in their search for jobs and internships, as well as with
interpersonal problems related to drug abuse and violence. In this way Pirelli RE persevered in its
commitment to the Kiel Mettenhof for the eleventh year in a row.




In 2009 Pirelli RE did not carry out any cause-related marketing, precisely those activities involving
the sale or use of its own real estate in order to raise funds for non- profit organizations while also
promoting the company’s products and/or services.
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




78   INSTITUTIONAL RELATIONS
     “Group companies maintain relationships with local, national and supranational authorities in a spirit of full
     and active co-operation and transparency that does not compromise their independence, economic targets
     and the values contained in this Code”.
                                                                                        Ethical Code, Art. 5 - Community




     The dialogue on which institutional relations are based stems from the belief that ethical conduct
     in business and in these relationships goes hand in hand with a company’s success.

     In 2006 Pirelli RE instituted a Public and Economic Affairs Department designed to maintain and
     develop stable relations with foreign and domestic governments, parliaments, public entities,
     local and central administrations; to represent the company’s businesses and interests in a spirit
     of maximum transparency and truthfulness of the information shared. This helps prevent errors in
     technical-economic valuations, undue bias in favor of the company and conflicts of interest.

     As of 2009 this task is performed by Pirelli & C., Pirelli RE’s parent company.

     The activities of the Public and Economic Affairs Department are helping to increase the company’s
     visibility and credibility with the central and local authorities, as well as enhance the relationships
     that the corporate divisions, as part of their operations, have with local and central institutions.

     Since 2006 institutional relations have also involved countries where Pirelli RE has recently
     arrived, Germany and Poland. In these countries efforts were geared toward integrating Pirelli
     RE within the local system, from both a business and a social point of view. With regard to the
     methods used to further strengthen the company’s internal control, the group’s Italian companies
     have adopted an Organizational Model designed to ensure compliance with local law (Legislative
     Decree 231/2001) regarding the company’s responsibility for crimes committed by its employees
     benefiting the company itself.

     The correct implementation and compliance with the Organizational Model is monitored by a
     specific supervisory body in each of the group’s Italian companies which conduct four annual
     audits of the quarterly figures. Furthermore, a revision of the Organizational Model itself is now
     underway in order to be in line with amendments that are expected to be made to Legislative
     Decree 231.

     In 2009 Pirelli Re, in collaboration with Asso Immobiliare, contributed to the development of
     norms and regulations regarding the energy efficiency of buildings which provide buyers and
     sellers with incentives for adhering to certain environmental impact standards.

     Lastly we remind that in 2009 the company did not receive significant funding from public
     institutions.
                                                  TABLES
                                     SOCIAL RESPONSIBILITY | SUSTAINABILITY REPORT 2009




6. TABLES


                                                                                          79

PERFORMANCE INDICATORS
AREAS                      INDICATORS                                         PAGE
ECONOMICS                EC1core                                                 15
                         EC2 core                                                31
                         EC3 core                                                66
                         EC4 core                                                78
                         EC6 core                                                24
                         EC7 core                                                56
                         EC8 core                                                73
                         EC9 add.                                                74
ENVIRONMENTAL            EN1 core                Indicator not applicable be-
                                                cause there is no use of raw
                                                             materials (p. 31)
                         EN2 core                                      See above
                         EN3 core                                                31
                         EN4 core                                                31
                         EN5 add                                             33/35
                         EN6 add                                             36/50
                         EN7 add.                                            36/50
                         EN8 core                                            31/32
                         EN9 add.                                            31/32
                         EN11 core                                               31
                         EN12 core                    Indicator not applicable
                                                because Pirelli RE does not
                                                manage or own, protected
                                                       areas or adjacent land.
                                                    ; activities carried out by
                                                Pirelli RE have no impact on
                                                the state of conservation of
                                                           biodiversity (p. 31).
                         EN16 core                                           33/34
                         EN17 core                                           33/34
                         EN18 add.                                           33/34
                         EN19 core                                           33/34
                         EN20 core                                           33/34
                         EN21 core                                               32
                         EN22 core                                               33
                         EN23 core                                               33
                         EN24 add.                                               31
                         EN26 core                                               34
                         EN27 core                 Indicator not applicable
                                              because Pirelli RE is a service
                                                                   company
                         EN28 core                                               34
LABOR POLICIES           LA1 core                                            52/55
                         LA2 core                                                52
                         LA3 add.                                                56
                                  TABLES
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




80    PERFORMANCE INDICATORS
      AREAS                                                INDICATORS   PAGE
                                                          LA4 core        64
                                                          LA5 core        64
                                                          LA7 core      71/72
                                                          LA8 core      70/71
                                                          LA9 add.        64
                                                          LA10 core       57
                                                          LA11 core     56/57
                                                          LA12 add.       57
                                                          LA13 core     56/57
                                                          LA14 core       62
      HUMAN RIGHTS                                        HR1 core        25
                                                          HR2 core        25
                                                          HR4 core        62
                                                          HR5 core        62
                                                          HR6 core        62
                                                          HR7 core        62
      SOCIAL                                              SO1 core        40
                                                          SO2 core        67
                                                          SO3 core        68
                                                          SO4 core        67
                                                          SO5 core        78
                                                          SO7 add.        68
                                                          SO8 core        68
      PRODUCTS RESPONSIBILITY                             PR1 core        66
                                                          PR3 core        68
                                                          PR5 core      22/23
                                                          PR6 core        77
                                                          PR8 add         68
                                                          PR9 core        68
                         ASSURANCE STATEMENT | SUSTAINABILITY REPORT 2009
                          SOCIAL RESPONSIBILITY




7. ASSURANCE STATEMENT


                                                                            81
                                  ASSURANCE STATEMENT
     SUSTAINABILITY REPORT 2009 | SOCIAL RESPONSIBILITY




82
                                                                         GLOSSARY | SUSTAINABILITY REPORT 2009




8. GLOSSARY


AIM:         Associazione Interessi Metropolitani (Metropolitan Promotional Association)                         83

AUDIS:       Associazione delle Aree Urbane Dimesse (Association of Abandoned Urban Areas)

Brise Soleil: External horizontally or vertically louvered shades in with metal or wooden frames
              normally placed on the exterior. They are pleasing to the eye as they are normally
              lightweight and transparent.

CO2:         Carbon monoxide

COP:         Coefficient of Performance

EOTA:        European Organization for Technical Approvals

EWC:         European Works Council

GLA:         Gross lettable area

GBC:         Green Building Challenge

HSE:         Health, Safety and Environmental

LTI:         Long Term Incentives

MBO:         Management by objectives

M 3:         Cubic meters

MCC:         Managing Growing Complexity

MWH:         Megawatt/hour

NPL:         Non Performing Loan

PE:          Performance evaluation

QCS:         Quality control systems
     SUSTAINABILITY REPORT 2009 |




84
Gerardo Benuzzi, Pirelli RE’s Financial Reporting
Officer, attests – pursuant to para. 2, article 154-
bis of the Uniform Finance Act (Decree 58/1998)
– that the accounting information as reported
in this Sustainability Report corresponds to
the underlying documentary records, books of
account and accounting entries.
Pirelli & C. Real Estate S.p.A.
Subject to direction and coordination by Pirelli & C. S.p.A.
Registered office:
Viale Piero e Alberto Pirelli, 25 - 20126 Milan
Tax Code and Number of Registration with the Milan
Company Register n 02473170153
R.E.A. Milan 589396
Share capital Euro 420,585,888.50 fully paid in

www.pirellire.com

								
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