Hera Spa

Governance roles

Reference: pages 93-99; committee table on page 270.

Hera Spa has a Board of Directors of 15 members, appointed on 27 April 2023 for three financial years (to the approval of the FY2025 accounts). 13 are non-executive and 11 are independent. Only the Executive Chairman and the CEO hold executive roles. Six directors are women, and there is no employee representative on the Board (page 93). Seven directors have proven sustainability expertise (page 94).

Committees (pages 96-98):

• The Executive Committee gives a prior opinion on the draft financial statements, including the sustainability statement.
• The Control and Risk Committee supports Board decisions on internal control and risk, including climate.
• The Remuneration Committee proposes executive pay and sustainability-linked targets.
• The Ethics and Sustainability Committee (four members, one external) monitors sustainability policies and reviews the statement before it goes to the Board.

The Board of Statutory Auditors checks that the statement is drawn up under the rules (page 96). On the management side, the Shared Value and Sustainability Department reports to the CEO, and the Central Strategy, Regulation and Risk Management Department reports to the Executive Chairman (page 95).

Information provided to the Board

Reference: pages 94-95, 98-99.

In 2025 the Board and the Board of Statutory Auditors held four in-depth sessions with plant visits to build sustainability knowledge: 25 June (Marche Multiservizi), 25 September (tariff regulation), 15 October (the energy commercial situation) and 17 December (main projects, including those financed by the national recovery plan) (page 94).

Board resolutions in 2025 on sustainability matters include adopting the Code of Conduct - Sustainability Pact with Suppliers (25 June) and approving an update to the Euro Medium-Term Notes Programme that allows green, sustainability-linked and blue bonds (17 December) (page 95).

The Ethics and Sustainability Committee reviewed the Sustainability Statement, including the double materiality results, before it reached the Board, and received six reports in 2025 (pages 98-99). The Enterprise Risk Management Report presented on 24 February 2026 included the findings of the 2025 climate change risk analysis (page 99). The Board also reviewed the main risks, including sustainability risks, several times during 2025 (page 99).

Integration of sustainability-related performance in incentive schemes

Reference: page 100; page 199.

Sustainability-linked pay for governing bodies covers the Executive Chairman and the CEO, in two parts (page 100):

• Short-term variable pay: a bonus of 50% of fixed annual pay, weighted EBITDA 20%, profit 20%, net debt 20%, CSV EBITDA 20% and customer satisfaction 20%.
• Deferred three-year pay: a target bonus of 120% of fixed pay, weighted EVA 33%, net debt/EBITDA 33% and CSV contribution 33%.

CSV EBITDA is the share of EBITDA from activities with measurable social and environmental benefit in three areas: carbon neutrality, resource regeneration, and resilience and innovation. At 100% achievement the ESG-linked part is Euro 85,280 of Euro 360,000 total variable pay, or 23.7% (page 100). The Remuneration Committee proposes the terms and the Board approves them (page 100).

For executives and middle managers, 42% of 2025 variable pay is linked to sustainability target projects: 19% to shared value areas (6% carbon neutrality, 6% resource regeneration, 7% resilience and innovation) and 23% to other sustainability areas (page 199).

Statement on due diligence

Reference: pages 100-103.

Hera describes an integrated due diligence approach covering governance, stakeholder involvement, impact assessment, action on incidents and monitoring (page 100). It cites the UN Guiding Principles on Business and Human Rights, the ILO Declaration and its eight core Conventions, the UN Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises and the EU Charter of Fundamental Rights. Two published documents carry the human rights detail: 'Hera's commitment for the respect of Human rights' and 'Due diligence process on Human rights in Hera Group' (pages 100-101).

A table maps the five core elements of due diligence to the sections of the statement and the disclosure requirements that cover them: integrating it into governance and strategy, involving stakeholders, identifying and assessing negative impacts, taking action, and tracking effectiveness. A background column lists the tools used, among them the Code of Ethics, the 231 Model, certified management systems, supplier qualification and the Ethics and Sustainability Committee (pages 101-103). The statement says it covers impacts in the upstream and downstream value chain based on the due diligence results (page 101).

Risk management and internal controls over sustainability reporting

Reference: pages 103-104; page 94.

Hera extended its internal control and risk management system to sustainability reporting (SCIRS). It builds on the financial reporting system and follows the COSO framework (page 103). The Board appointed an Officer in Charge of Sustainability Reporting on 14 May 2025 (page 94). That officer exchanges information with the Control and Risk Committee and the Board and keeps the Board of Statutory Auditors informed (page 103).

Scope is set on a risk basis using the double materiality results. Indicators are selected, and a company is included when its contribution to a Group indicator passes the same pre-set cut-off used for financial reporting. The report does not give the cut-off figure (pages 103-104). Entity-level controls are mapped to the five COSO components and 17 principles. Risk Control Matrices set out process-level controls for selected quantitative indicators. These are tested, and gaps get corrective actions with an owner, a deadline and a follow-up check (page 104). Data are recorded in a dedicated IT tool, validated by the responsible managers, who sign declarations on completeness and accuracy (page 104). Hera plans to extend the work to more processes and companies (page 104).

Strategy, business model and value chain

Reference: pages 90-93, 107; pages 29-31 (Directors' report, which the statement uses by reference).

Hera is a multi-utility with three service lines: energy (gas and electricity distribution and sales, district heating, public lighting, energy efficiency), water (supply, sewerage and treatment) and environmental services (waste collection, recycling, treatment, remediation). Smaller units cover telecoms (Herabit) and solar panel sales and installation (page 90). Regulated services reach 316 municipalities in five regions, and about 7.5 million people use at least one Hera service (page 90).

2025 volumes: 12.5 billion m3 of gas sold, 16.3 TWh of electricity, 285.9 million m3 of water, 7.6 million tonnes of waste treated. Customers: 1.9 million gas, 2.5 million electricity, 1.5 million water (page 90). The purpose, written into the Articles of Association in 2021, ties value for shareholders to carbon neutrality, resource regeneration and resilience (page 90).

The 2025-2029 Business Plan sets gross investment of 5.5 billion euro: 57% networks, 23% waste management and 19% energy (page 31). The statement points to the Directors' report for the full strategy and value chain description (page 91).

Interests and views of stakeholders

Reference: pages 102, 105, 107.

Hera groups stakeholders into workers, customers, shareholders and financiers, suppliers, the local community and public administration, with dialogue tools for each (page 107). 2025 examples: an employee survey with 89% participation; a residential customer survey of about 14,000 respondents plus 165,000 interviews on contact channels; 387 investor contacts; over 400 suppliers at the Growing Together convention and more than 90 one-to-one supplier meetings; 133 HeraLAB meetings since 2013 with 175 participants; over 100,000 pupils in school programs; and more than 4,500 relationships handled by Area Managers (page 107).

In the double materiality assessment, internal stakeholders take part directly, while external stakeholders are engaged indirectly through consultations and feedback mechanisms (page 102). Inputs included customer and employee survey results, HeraLAB interviews, dialogue with consumer associations and the Ethics and Sustainability Committee's report handling (page 105). Results were shared with the Ethics and Sustainability Committee (page 106).

Material impacts, risks and opportunities and their interaction with strategy and business model

Reference: pages 105-106; topic IRO tables on pages 109, 131, 145, 155, 160, 191, 212, 217, 224 and 241.

The 2025 assessment found 42 material impacts, six material risks (four climate-related) and five material opportunities (page 105). Hera concludes that all topics in the sector-agnostic ESRS are material: 24 sub-topics are material, 12 of them also along the value chain (page 105). Thirteen sub-topics were found not material: pollution of living organisms and food resources, substances of concern, substances of very high concern, microplastics, marine resources, direct drivers of biodiversity loss, impacts on species status, ecosystem services, civil and political rights of communities, rights of indigenous peoples, protection of whistleblowers, animal welfare, and active and passive corruption (page 105).

Each topical chapter lists its IROs by sub-topic with value chain position and time horizon, for example Scope 1 emissions from waste-to-energy plants and landfills (page 109), water network leaks (page 145) and workplace injuries (page 191). The climate, pollution and business conduct chapters report no material current financial impacts (pages 112, 132, 241). Hera omitted SBM-3 paragraph 48(e), expected financial effects, under the ESRS 1 Appendix C phase-in (page 108).

Description of the processes to identify and assess material impacts, risks and opportunities

Reference: pages 105-106; climate analysis pages 110-111.

The double materiality assessment was first set up in 2024 and updated in 2025. The Shared Value and Sustainability Department coordinates it with strategy and risk, quality and safety, procurement, local authority relations, communications, HR, investor relations and Hera Comm (page 105). Steps: review the internal and external context and the value chain, update the long list of impacts, risks and opportunities, assess materiality, then apply the Group's cut-offs to reach a short list (page 105).

Inputs include the ERM risk analysis, the opportunity analysis from the 2024-2028 Business Plan, the climate analysis first done in 2019 under TCFD and updated in 2025, surveys, HeraLAB interviews, press review, rating agency questionnaires, peer benchmarks, the Natura 2000 Directive and the E-PRTR Regulation (page 105). Impacts are scored for severity (magnitude, scale, irreversibility) and likelihood on a 1 to 4 scale, with severity ahead of likelihood for human rights impacts. Risks use the ERM scales, and the cut-off for risks is the risk appetite set by the Board (page 105). Pollution, biodiversity and water received a site-specific analysis (page 105), which for pollution gave a scope of 36 plants (page 106).

Disclosure requirements in ESRS covered by the undertaking's sustainability statement

Reference: pages 276-279 (content index); pages 270-275 (ESRS 2 Appendix B datapoints); pages 105, 108.

Hera prints a content index titled 'List of disclosure requirements included in the sustainability statement (ESRS 2, para. 56)' (page 276). It runs to page 279 and lists each DR of ESRS 2, E1 to E5, S1 to S4 and G1 against the section of the statement that covers it. It gives section names, not page numbers. The index marks E1-9, E2-6, E3-5, E4-6 and E5-6 'Phase-in' (pages 277-278), and for E1-8 it states that Hera does not apply internal carbon pricing (page 276).

Hera states that all ESRS topics, and therefore all disclosure requirements, were found material (page 105). It lists what it omitted under ESRS 1 Appendix C: SBM-3 paragraph 48(e), E1-9, E2-6, E3-5, E4-6, E5-6 and S1-7 for self-employed workers only (page 108). A second table lists the datapoints derived from SFDR, Pillar 3, the Benchmark Regulation and EU Climate Law, with a 'Relevance to Hera' column showing the section, 'Phase-in' or 'Not relevant' (pages 270-275).

Transition plan for climate change mitigation

Reference: pages 113-114; targets and results pages 115, 129-130.

Hera has a first Climate Transition Plan, approved by the Board of Directors as an integral part of company strategy (page 114). It aims at Net Zero by 2050: a cut of about 90% in Scope 1, Scope 2 and Scope 3 emissions from gas and electricity sales against 2019, with carbon removal for the residual emissions (page 113). The medium-term target, validated by the Science Based Targets initiative in 2021 at a 'well below 2°C' level, is a 37% cut by 2030: -28% Scope 1+2, -30% Scope 3 from gas sales and -50% carbon intensity of electricity sales (pages 113, 129).

Internal levers: carbon capture at several waste-to-energy plants, starting with Ferrara; 100% certified renewable electricity for internal use; and electrification and efficiency offers for customers, with renewable supply above 75% by 2050 (page 114). Residual emissions are expected from plants where capture is not possible, cogeneration and district heating plants, and gas network leaks (page 114). Taxonomy-aligned investment linked to the plan in the 2025-2029 Business Plan is about 1,331.4 million euro (page 114). Hera states it falls within the EU Paris-aligned benchmarks (page 114).

Identification of climate-related risks and scenario analysis

Back-filled from ESRS 2 IRO-1 and SBM-3, where this content is disclosed in the FY2025 report (pages 110-112). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

In 2025 Hera ran a Group-wide climate risk project with three work streams: scenario analysis, risk and opportunity assessment, and business responses (page 110). Transition: IEA Net Zero Emissions by 2050 with IPCC SSP1-RCP1.9. Physical: IPCC RCP 8.5. The scenarios span warming by 2100 from below 1.5°C to about 5-6°C (page 110).

Result: 16 physical risks and 3 opportunities, and 33 transition risks and 23 opportunities. Each has a time horizon, a severity score gross and net of mitigation, and a management approach (pages 110-111). Acute physical risk was analyzed for 54 own assets and 11 supplier sites, with exposure projected to 2030 and 2050 (page 111). Two transition risks are material before mitigation, both regulatory: EU ETS price rises with a wider asset scope, and tighter energy efficiency and emissions rules (pages 111-112). Flood and drought risks were reassessed as no longer material (page 111).

Resilience in relation to climate change

Back-filled from ESRS 2 SBM-3 and IRO-1, where this content is disclosed in the FY2025 report (pages 109-113, 121-124). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

Hera assessed each climate risk before and after mitigation. Before mitigation, one acute physical risk (a tornado hitting assets in the Bologna, Ferrara, Modena and Padua clusters) and one chronic risk (heat and strong winds cutting efficiency at waste-to-energy plants) are material. After mitigation they are not (page 111). Mitigation includes plant design standards, insurance for catastrophic events, cooling towers in place of air-cooled condensers where possible, and emergency repair measures (page 111). Only the EU ETS price risk stays material after mitigation, with carbon capture as a possible response (pages 110, 112).

Hera says it analyzed climate scenarios and assessed its business 'under different assumptions regarding future developments' (page 113). Resilience actions cover the electricity grid (69.1 km upgraded under the ARERA plan, 102.5% of plan), gas sensors and valves, sewers and pumping stations, and drought measures for water supply (pages 116, 121-124). For the material risks and opportunities, no material current financial impacts are reported (page 112).

Policies related to climate change mitigation and adaptation

Reference: pages 112-113.

Hera's reference points for climate are its purpose (Article 3 of the Articles of Association), the Code of Ethics, the shared value creation model and the Quality and Sustainability Policy, which the Board adopted in March 2022 (page 112). The Code commits Hera to Net Zero through a Climate Transition Plan, and the plan also serves as an internal policy that guides actions and targets (page 112).

Operational procedures sit in management systems under ISO 9001, ISO 14001 and ISO 50001. They reach suppliers through tender specifications and the Code of Conduct - Sustainability Pact, which carry requirements on emission reduction and energy efficiency (page 112). The policy covers mitigation and also adaptation, meaning resilient infrastructure and continuity of service in emergencies (page 113).

Hera updated several internal documents to strengthen climate governance, including the Group Risk Management Policy, which now refers to medium- to long-term climate scenarios, and the Management Control Planning guideline, which ties strategic planning to carbon neutrality (page 113). The Board is responsible for implementing the policy (page 113). It is communicated through company notices and the Group website (page 112).

Actions and resources in relation to climate change policies

Reference: pages 116-124.

Energy efficiency (pages 116-118): 857 interventions under the energy improvement plan saved about 27,000 toe by end 2025, or 8.8% of base-year consumption, above the 8.1% target for the year. 63.5% of 660,886 managed lighting points are LED. Taxonomy-eligible investment in energy performance was 16.8 million euro in 2025, with 52.2 million euro planned for 2025-2029.

Energy transition (pages 118-121): biomethane output was 10.7 million m3 (about 101.2 GWh). Photovoltaic capacity at Group sites reached 15.5 MW (4.2 MW in 2024). 6,702.1 GWh of renewable electricity, 52.5% of free-market sales, was supplied to customers. Grid hosting capacity is 1,584 MW. Eligible investment in biomethane, hydrogen and photovoltaics was 28.3 million euro in 2025, with 228.3 million euro planned.

Resilience (pages 121-124): the ARERA plan for the Modena grid reached 69.1 km (102.5% of plan), and 35 NexAction valves and 145 Sentinel sensors were installed in gas networks. Sewer and pumping station upgrades continue in Emilia-Romagna, Triveneto and Marche.

Targets related to climate change mitigation and adaptation

Reference: pages 114-116, 129-130.

Targets are set yearly through the five-year business plan, the budget and the balanced scorecards (page 114). The SBTi-validated 2030 targets, against 2019, are: -28% absolute Scope 1+2, 100% certified renewable electricity for internal use, -30% absolute Scope 3 from gas sales and -50% carbon intensity of electricity sales, together -37% for the scope covered, which is 86.5% of 2019 emissions (page 129). The long-term target is about -90% by 2050 (page 115).

Progress to 2025 against 2019: Scope 1+2 -24%, Scope 3 from gas sales -23%, carbon intensity of electricity sales -31%, and -18% overall (-16% when extra last-resort gas volumes are counted) (pages 129-130). The business plan forecast is -35% by 2029 (page 129). Other targets: a 10.3% cut in energy consumption by 2029 against 2013 (8.8% reached in 2025), 62% LED public lighting by 2029, 58% renewable electricity sold on the free market, 147 GWh of renewable gas, and more than 370 MW of photovoltaic capacity by 2029 (page 115). Resilience targets cover grid, gas and sewer works (page 116).

Energy consumption and mix

Reference: pages 124-126.

Energy consumption in MWh (page 125):

Fossil sources were 56.1% of the total in both years and renewables 43.9%. Total consumption rose 3.0%. All internal electricity use was covered by certified renewable sources (page 125). Energy intensity was 494 MWh per million euro of net revenue (477 in 2024), up 3.6%, on net revenue of 12,812 million euro (page 125). The Group generated 1,245.6 GWh of electricity and 912.1 GWh of heat in 2025 (page 126).

Gross Scopes 1, 2, 3 and Total GHG emissions

Reference: pages 127-130.

Emissions in kt CO2e (page 127):

Scope 3 is 90.9% of the total and fell 5.3%, mainly on lower gas sold to customers (page 128). Largest categories: use of products sold (5,201.2 kt, labeled category 11 in the table) and fuel and energy-related activities (5,144.0 kt) (page 127). From 2025 the inventory adds categories 1 and 2 (purchased goods and services, capital goods), with 2024 restated. 56% of those emissions use an average-based method with supplier data and 44% a spend-based method (page 128). Scope 1 includes plants under the EU ETS, 6.7% of Scope 1 (page 127). Intensity: 1,013 t CO2e per million euro of net revenue, market-based (page 130).

GHG removals and GHG mitigation projects financed through carbon credits

Reference: page 131.

Removals: Hera counts carbon absorbed by trees planted through its initiatives, such as ECO Alberi. From 2012 to 2025 it donated 24,610 trees, estimated to absorb 2,460 tonnes of CO2 a year (page 131).

Carbon credits: in 2025 the sales companies Hera Comm, EstEnergy and Etra Energia cancelled over 690,000 VCS credits for customers on gas plans that include offsetting, about 14% of Scope 3 emissions from those gas sales. By project: 19,488 credits for a hydroelectric plant in Brazil, 274,876 for a hydroelectric plant in India, 83,000 for a hydroelectric plant in Turkey and 312,748 for a photovoltaic plant in India. Hera has no plans to use credits from carbon sequestration projects. About 2.9 million credits are expected to be retired in 2026-2029, a forecast that may change with ETS2 from 2028 (page 131).

Net Zero: Hera expects residual emissions of about 10% of the 2019 target scope in 2050 and plans carbon dioxide removal technologies to neutralize them (page 131).

Internal carbon pricing

Reference: page 276 (content index).

The content index lists E1-8 and gives the answer in the 'paragraph of the sustainability statement' column: 'The Hera Group does not apply internal carbon pricing systems' (page 276). This is a nil answer. The climate chapter (pages 109-131) contains no internal carbon price. Hera's decision tools for climate are set out in the Climate Transition Plan, the business plan and the balanced scorecards (pages 113-114).

The one carbon price Hera reports is external: the EU ETS allowance price, which it flags as a material long-term risk, along with the possible expansion of the assets covered by the scheme (pages 109, 112).

Policies related to pollution

Reference: pages 132-133.

Hera's reference points for pollution are its purpose, the Code of Ethics, the shared value creation model and the Quality and Sustainability Policy adopted by the Board in March 2022 (page 132). The Code commits Hera to prevent and mitigate water, air and soil pollution. The Policy adds a commitment to cut environmental impact through design and best available technology and to monitor legal compliance closely (page 132).

Procedures run through management systems under ISO 14001 and the EMAS Regulation and reach suppliers through tender specifications and the Code of Conduct - Sustainability Pact. These cover lower air emissions, proper discharge management, waste reduction, careful use of hazardous substances and less microplastic pollution (page 132). Specific procedures prevent environmental offences under Legislative Decree 231/2001, and delegated managers carry responsibility for plant compliance (page 133). For drinking water, an annual Analytical Monitoring Plan follows Directive (EU) 2020/2184 (page 133). The Board is responsible for implementing the policy (page 133).

Actions and resources related to pollution

Reference: pages 134-142.

Water (pages 135-137): work finished on five wastewater treatment plants serving 76,500 population equivalent, and nine more serving 716,090 are under way. 11 of the 14 Rimini seawater protection interventions are complete. Hera runs 21 constructed wetland plants. Eligible capital expenditure in sewerage and treatment was 128.2 million euro in 2025.

Air (pages 137-140): eight of 11 waste-to-energy plants have dual reaction and filtration systems, and nine of 11 have dual flue gas monitoring. Hera operates 22 district heating systems, which in 2025 avoided about 15 tonnes of nitrogen oxides compared with conventional systems. 88.4% of its 4,172 vehicles meet Euro 5, Euro 6 or electric standards, and 680 public EV charging points are installed.

Soil (pages 141-142): 500 remediation projects were active or complete at end 2025, and 77% of land used for new infrastructure was reused rather than newly developed. Eligible investment in district heating, fleet and e-mobility was 52.0 million euro, and in land remediation 2.5 million euro (pages 140, 142).

Targets related to pollution

Reference: pages 133-134.

Targets are set yearly through the five-year plan, the budget and the balanced scorecards, and reported as 'what we said, what we have done, what we will do' (page 133).

Water (page 134): 100% of urban agglomerations above 2,000 population equivalent upgraded by 2027 (99.9% reached in 2025); all 178 agglomerations of 200 to 2,000 in Emilia-Romagna upgraded by 2027 (153 done); all 14 Rimini interventions by 2027 (11 done).

Air (page 134): 25.6 million m3 served by district heating by 2029; 76% of district heating energy from renewable, cogeneration and recovery sources by 2029 (53.7% in 2025, lower because of the Ferrara geothermal works and the Imola plant shutdown); 39% of the fleet electric or on diesel from renewable raw materials by 2029 (31.4% in 2025).

Soil (page 134): 1.5 million m2 of land reused in HeraTech projects by 2029; 870,000 m2 (76%) reused from 2018 to 2025.

Pollution of air, water and soil

Reference: pages 142-143; page 132.

Reporting follows the E-PRTR Regulation (EC) No 166/2006. Hera limited scope to 36 plants above the E-PRTR size limits: all ten waste-to-energy plants, two power plants above 50 MW (Bologna Fiera and Imola), 18 urban wastewater plants and six liquid waste plants (pages 132, 142). Pollutants are reported where they exceed the E-PRTR Annex 2 annual mass-flow limit.

Air: only the waste-to-energy plants in Bologna, Isernia and Trieste exceed an Annex 2 limit, for nitrogen oxides: 437,204 kg in 2025 against 437,827 kg in 2024, with a 100,000 kg annual limit (page 143).

Water: 23 of the 24 wastewater plants exceed the Annex 2 limit for at least one pollutant. The table covers 14 pollutants, from chlorides, nitrogen and total organic carbon to metals such as mercury and cadmium, with 2025 and 2024 totals and plant counts (pages 142-143).

Soil: no plant emits pollutants to soil (page 142). Hera says emissions are well below legal and permit limits (page 142). Emissions from the Enomondo biomass plant, a 50% owned company outside the consolidation scope, are also reported (pages 109, 137).

Substances of concern and substances of very high concern

Reference: pages 143-145.

Hera's double materiality assessment found these two sub-topics not material (page 105). It still reports amounts in the chapter, and the content index lists E2-5 (page 277).

Inflows: Hera used or purchased 26,476 tonnes of substances of concern in 2025 (21,333 in 2024), split by hazard class (page 144). Largest classes: carcinogenic category 2, 9,997 t (diesel fuel); skin sensitizers, 6,189 t (process reagents and gas odorizers); chronic aquatic hazard, 5,920 t. Carcinogenic category 1A and 1B was 653 t, mainly petrol and laboratory reagents. Hera did not purchase or use any substances of very high concern in its operations or production (page 144). Scope is substances used directly by Group companies, not suppliers, and quantities purchased stand in where use data are missing (page 144).

Outflows: the report states that no substances of concern used in production processes leave plants as monitored emissions above permitted limits (page 144). It gives no tonnage for amounts leaving facilities as emissions or in products.

Policies related to water and marine resources

Reference: page 146.

Hera's reference points are its purpose, the shared value creation model, the Code of Ethics and the Quality and Sustainability Policy (page 146). The shared value approach covers sustainable water management (drinking water quality through Water Safety Plans and returning treated water at a quality that keeps the ecological status of water bodies), the transition to a circular economy (cutting network losses and internal use, reusing wastewater) and resilience and adaptation to drought and floods (page 146).

Hera follows the Consolidated Environment Act and Directive 2000/60/EC, and applies water safety management plans under Legislative Decree 18/2023 (page 146). It expects the new Wastewater Directive (2024/3019) to bring micropollutant treatment and lower nitrogen and phosphorus limits (page 146). Hera signed the UN CEO Water Mandate in 2019 and joined the Impronta Etica Water Pledge in 2024 (page 146). The Board is responsible for implementing the policy (page 146).

Actions and resources related to water and marine resources

Reference: pages 147-153.

Own use (page 148): internal water consumption is down 27.9% against 2017, through wastewater and rainwater reuse and fewer losses in district heating networks.

Customers (page 148): the Water Consumption Diary reaches over 380,000 domestic customers (43.9%).

Safety plans (page 149): Water Safety Plans cover 76.5% of end users.

Network losses (pages 149-150): percentage losses fell to 29.3% (31.0% in 2024) and linear losses to 7.8 m3/km/day (8.4). 64.1% of the network (22,762 km) had active leak detection, 68.6% is district-metered and 86.2% is under predictive maintenance. Eligible water supply capital expenditure was 200.2 million euro in 2025.

Resilience (pages 151-153): interconnections, new wells and a 50 million euro Castel Bolognese supply project, a near-real-time drought dashboard (Resilient dashboard), and aqueduct master plans. Water supplied by tanker fell to 53.6 thousand m3 (78.5 in 2024) (page 153).

Targets related to water and marine resources

Reference: page 147.

Targets (against what Hera said it would do in the 2024 statement):

• Internal water consumption: -26.5% by 2029 against 2017. Achieved so far: -27.9% by 2025.
• Water Consumption Diary: 500,000 customers by 2029, 57% of the total. 380,000 domestic customers by 2025 (43.9%).
• Network losses: linear water losses cut 12% by 2029 against 2024 (8.4 m3/km/day). 2025 result: 7.8 m3/km/day.
• Water Safety Plans: a higher share of customers covered, against the EU requirement of 100% by 2029. 76.5% of users served at 2025.
• Resilience: predictive maintenance on 30,700 km of network and district metering on 29,200 km by 2029 (the report states these as 99% and 82% of the network). At 2025, 30,600 km (86.2%) and 24,300 km (68.6%) were covered.

Targets are set yearly through the five-year plan, the budget and the balanced scorecards (page 147).

Water consumption

Reference: pages 153-155.

High water stress was identified by province using the WRI Aqueduct 'Water Stress' indicator. High-stress provinces are Bologna, Ferrara, Forlì-Cesena, Pesaro-Urbino, Ravenna and Rimini. Modena, Padua and Trieste are low or moderate. Every province has at least one water body below good ecological status, so the whole operating area counts as water risk (pages 153-154).

Water withdrawn (page 154): 4,776 thousand m3 in 2025 (4,707 in 2024), all in water-stressed areas; 3,065 thousand m3 in high-stress areas (3,391). Sources: water supply network 72%, groundwater 18%, surface water 10%. Recycled and reused water was 7,118 thousand m3, 1.5 times withdrawals, and 3,928 thousand m3 in high-stress areas. Discharges were 388.6 million m3, and Hera treats consumption as zero.

Water supplied to the network (page 155): 409,073 thousand m3, of which groundwater 52.0%, surface water 40.1% and springs 7.9%. Hera reports no stored water (page 154).

Transition plan on biodiversity and ecosystems

Reference: pages 155-157; page 106.

Hera maps E4-1 in its content index to the description of material impacts and to 'Actions and resources' (page 277). The chapter does not present a stand-alone biodiversity transition plan. It states that E4 is relevant only at site level (page 106).

The one material E4 impact is a potential medium-term negative impact on biodiversity from plants located in or next to protected areas (page 155). Hera screened plants within or near Natura 2000 sites (Sites of Community Importance, Special Areas of Conservation, Special Protection Areas) and used the assessments from permit procedures, including screening and impact assessments under Presidential Decree 357/1997 (pages 155-156). Between 2011 and 2025, impact assessment procedures were started for projects at more than 35 facilities. 11 of those plants are inside the Natura 2000 network and nine, including closed landfills, are adjacent (page 157). Hera says its approach so far gives assurance of no significant impacts on Natura 2000 sites (page 157).

Policies related to biodiversity and ecosystems

Reference: page 156.

Hera's reference points are its purpose, the Code of Ethics, the Shared Value Creation Model and the Quality and Sustainability Policy. The Code commits Hera to environmental policies, actions and management systems that lower the risk of harm to biodiversity and ecosystems (page 156).

The approach rests on the Birds Directive (2009/147/EC) and the Habitats Directive, which set up the Natura 2000 network, and on Presidential Decree 357/97 as amended. It applies the national VINCA guidelines of 28 November 2019 and regional rules for impact assessment, with ongoing monitoring where needed to avoid harm to habitats of conservation interest (page 156). The Board is responsible for implementing the policy (page 156).

Actions and resources related to biodiversity and ecosystems

Reference: pages 156-158.

Impact screening (page 157): whenever a new project or plant change could disturb a Natura 2000 site, Hera starts an impact screening, and the competent authority then decides whether an appropriate assessment is needed. Where it sets conditions, Hera develops mitigation or compensation measures.

Capiamo bee biomonitoring (page 157): since 2020 Herambiente uses bees as bioindicators. In 2025 the project grew from three sites (Pozzilli, Sant'Agata Bolognese, Serravalle Pistoiese) to include the Padua and Bologna waste-to-energy plants and the Cordenons landfill, with three colonies at each new site.

Energy Parks (pages 157-158): at Faenza, a 14 MW agrivoltaic plant on about 27 hectares with a 15-hectare Urban Forest, including 26,000 plants by the Miyawaki method, with works started at the end of August 2025. At Bologna, a 14 MW agrivoltaic plant on about 28 hectares with a 21.5-hectare Urban Forest; permits are due by the first half of 2027. The University of Bologna drew up a biodiversity monitoring plan for Faenza (page 158).

Targets related to biodiversity and ecosystems

Reference: page 156.

Hera sets no biodiversity targets. The chapter says the Group 'has not set any specific targets relating to biodiversity and ecosystems' at present (page 156). It adds that Hera continuously monitors its activities and applies protection measures, which are described in the Actions and resources section (pages 156-158). The content index lists E4-4 under 'Hera's commitment (targets and results)' and 'Actions and resources' (page 277).

Impact metrics related to biodiversity and ecosystems change

Reference: pages 158-159.

The metrics are a table of the Group's main plants and plant units that were assessed under VINCA procedures between 2011 and 2019 and received requirements that remain in force (page 158). The table gives each site, area in hectares and distance from the Natura 2000 site. Examples: the Ravenna 2.6 km compartment (90 ha, adjacent to the San Vitale Pine Forest site), the Baiona Ecological Centre and Cà Ponticelle platform (0.1 km), Finale Emilia landfill (24 ha, 1.6 km) and Cordenons landfill (18 ha, adjacent) (page 159).

All VINCA assessments were favorable, finding no significant impact. Authorities imposed requirements such as targeted biodiversity monitoring, periodic covering of waste and non-lethal control of opportunistic species at operating landfills, no grass mowing in spring to protect nesting species, and planting native species (page 159). Over the past three years Hera Spa, Marche Multiservizi and AcegasApsAmga completed no VINCA projects with instructions, except the Ravenna wastewater plant, whose requirement lapsed in 2025 (page 159).

Policies related to resource use and circular economy

Reference: pages 160-162.

Hera's reference points are its purpose, the Code of Ethics, the shared value creation model and the Quality and Sustainability Policy (page 160). The Code commits Hera to limit resource use, cut waste and raise recycling and recovery. The shared value approach covers reuse, recycling and recovery (separate collection, industrial waste recovery, recycled plastic including closed-loop models), wastewater reuse, and biogas, biofuel and compost production (page 160).

Operations follow a documentation system under the AFNOR XP X30-901:2018 circular economy standard for Hera Spa and AcegasApsAmga, and the waste-derived biofuel chain holds ISCC EU certification (page 161). Hera has signed the Ellen MacArthur Foundation New Plastics Economy Global Commitment since 2018, renewed in 2025 (page 161). In procurement, a predictive supplier rating gives up to 55 of 100 points for ESG maturity, tenders score socio-environmental aspects, and the Code of Conduct - Sustainability Pact is a condition for supplier listing (pages 161-162). The Board is responsible for implementing the policy (page 162).

Actions and resources related to resource use and circular economy

Reference: pages 163-175.

Wastewater reuse (pages 163-164): 43.0 million m3 reusable and reused in 2025 (11.8% of treated wastewater), under agreements with regional authorities and land reclamation consortia.

Separate collection (pages 164-166): 75.8% in 2025, with the pay-as-you-throw tariff in 39 municipalities. 1.6% of urban waste goes to landfill after pretreatment.

Plants (pages 166-167, 175): Herambiente invested 50 million euro in circular economy plants in 2025. Ten plant projects are complete or in commissioning and 19 are under construction, including a rigid plastics plant in Modena and carbon fibre recovery in Imola. The FIB3R plant processed 37.3 tonnes of composite waste into 17.9 tonnes of recycled carbon fibre.

Internal circularity (page 169): 156.1 thousand tonnes of water treatment sludge, none sent to landfill; 95.7% of 272,000 tonnes of waste-to-energy slag recovered.

Industrial customers (pages 167-168): Herambiente Servizi Industriali handled 1,969.6 thousand tonnes, 58% recovered. Eligible investment in the circular economy was 151.9 million euro in 2025 (page 170).

Targets related to resource use and circular economy

Reference: page 162.

Targets for 2029, with progress in 2025 (page 162):

• Wastewater reuse: 14.5% reusable and reused by 2029; 12% by 2025 (stable on 2024).
• Separate collection: 78% of 2 million tonnes of urban waste by 2029; 75.8% in 2025 (74.3% in 2024).
• Packaging recycling: 75% by 2029; the latest figure is 71% in 2024, with 2025 data due in the 'Tracking Waste' report.
• Recycled plastic (Aliplast): 146,000 tonnes by 2029, +145% on 2017; 97,100 tonnes in 2025, +63%.
• Plants: commission the Modena rigid plastics plant and the second Imola carbon fibre line in 2026, and the Novara LDPE line in 2027.
• Procurement: circular data now cover 66% of directly purchased goods volume (57% in 2024) and 54% of outsourced works. A 2026 initiative with main suppliers targets Scope 3 emissions and circular projects.

Targets are set yearly through the plan, the budget and the balanced scorecards (page 162).

Resource inflows

Reference: pages 170-174.

Hera started this reporting in 2024 and widens it in phases: 2025 adds works contracts, and services were judged negligible after a qualitative review (page 170). Data cover 20 Group companies, over 95% of goods and works procurement cost, and suppliers answered with a response rate above 90% (pages 170-171). Coverage is 66% of goods purchased and 54% of works, or 59% of total value (page 171).

Relevant materials purchased total about 1,231,000 tonnes (508,000 t goods, 723,000 t works). Reused or recycled components and materials are about 297,000 tonnes, 24% of the weight (page 171). Bio-based materials from sustainable supply chains are about 2,000 tonnes, 0.2% of weight (page 172). By cluster: Aliplast waste inputs 82% recycled content, construction materials 3%, chemicals 19%, fuels 26%, waste containers 33%, pipes and fittings 42%, works 20% (page 171). The overall recycled share fell from 42% for goods in 2024 to 30% in 2025, mainly because construction materials with low recycled content now carry more weight (page 171).

Resource outflows

Reference: pages 174-175.

Recycled plastic: Aliplast, the Group's plastic recycler, sold 119.1 thousand tonnes of plastic products in 2025, up 19%. Product types were PE 38%, PET 54% and other polymer granules and flakes 8%. The recycled plastic in products sold was 97.1 thousand tonnes, up 63% on the 2017 baseline. Its range is certified for food contact in Europe (page 174).

Compost: 38,000 tonnes of mixed compost soil improver (with or without sludge), up 13%, and about 6,500 tonnes of green compost, up 50%. 89.1% of the mixed compost went to extensive agriculture and fruit growing (page 175).

Energy carriers: biomethane output was 10.7 million m3 (page 118).

Carbon fibre: the FIB3R plant in Imola, opened in March 2025, produced 17.9 tonnes of recycled carbon fibre. A University of Bologna life-cycle analysis found 95% less energy and 92% less CO2 per kilogram than virgin fibre (page 175).

Waste

Reference: pages 176-177.

The Group generated 2,645.6 thousand tonnes of waste in 2025 (2,619.8 in 2024) (page 176).

Of the waste to disposal, landfill was 89.3 kt hazardous and 281.7 kt non-hazardous, and most of the rest went to physical-chemical or biological treatment and incineration (page 176). 14% of total waste goes to landfill, 10% to waste-to-energy or incineration and 32% to other disposal, mainly treatment plants (page 176). The 2024 figures are aligned with the 2025 method, which counts only substances defined as waste by Legislative Decree 152/2006 (page 176). Herambiente and its subsidiaries generated 2,392,300 tonnes, 87% non-hazardous (page 177).

Policies related to own workforce

Reference: pages 192-194.

Hera's reference points are its purpose, the Code of Ethics, the shared value creation model, the Quality and Sustainability Policy, its remuneration and people development policies, a Gender Balance Policy, and protocols and agreements with trade unions (page 193). The Code builds on the ILO Declaration and its eight core Conventions, the Universal Declaration of Human Rights, the OECD Guidelines and the EU Charter. Hera opposes all forms of discrimination and protects its people from harassment and violence (page 193).

On health and safety, the Policy aims to prevent accidents and occupational disease and to involve workers and their representatives. The Safety Culture project has run since 2019, with safety leadership training for managers since 2021 (pages 193-194). Gender balance has a Diversity Manager since 2011 and UNI/PDR 125:2022 certification since 2023 (page 192). The Good Work Pact signed with the unions in 2024 sets five pillars: health and safety, integrated supply chains, equality and inclusion, well-being and development, and sustainability and shared value (page 194). The Board and the Personnel and Organisation Department are responsible for implementing the policy (page 194). All Group employees are covered (page 194).

Taking action on material impacts on own workforce

Reference: pages 196-202.

Skills (pages 196-197): programs for digital (Her@futura), energy and environmental (ecoHERA) skills. In 2025, 70% of the relevant workforce reached digital proficiency and 51% and 54% reached energy and green proficiency. A series of four 'Words as a Common Space' sessions and a gender-based violence program ran under the diversity plan, and a #Riparto initiative supports women returning from maternity leave.

Development and pay (pages 198-200): a leadership model, a yearly development process, a smart working model with more than 4,000 people, 349 internal transfers meeting 42.6% of staffing needs, and the Hextra welfare scheme with over 9,000 members and about 8 million euro used.

Health and safety (pages 201-202): the Safety Culture project, the Ferrara Training Center, the 'Uomo a terra' lone-worker alert app, over 300 variable-message panels on network vehicles, 35 defibrillators, and a harassment risk assessment since 2023.

Progress is tracked against the targets under S1-5 and the accident indicators under S1-14 (pages 195, 210).

Targets related to own workforce

Reference: pages 194-195.

Targets are set yearly through the five-year plan, the budget and the balanced scorecards, with a 'what we said, what we did, what we will do' table (page 194). Targets for 2029 and progress in 2025 (page 195):

• Training hours: an average of 27 hours per person in 2029; 30 hours delivered in 2025.
• Skills: 85% of the relevant workforce at digital proficiency and 58% at green and energy proficiency by 2029; 70% digital and 51% and 54% energy and green in 2025.
• Accident frequency rate: 9.3 by 2029; 9.8 in 2025 for accidents above three days of absence (9.5 in 2024).
• Internal mobility: 42% of staffing needs in 2026; 42.6% in 2025.
• Gender balance: follow the UNI/PDR 125 strategic plan; four inclusive language sessions held in 2025.
• Safety culture: more training and awareness events, including virtual reality; 90% of the 334 planned variable-message panels installed.

The targets are tied to the policy areas of job creation and new skills, skills management, development, welfare, and health and safety (page 194).

Characteristics of the undertaking's employees

Reference: pages 202-203.

At 31 December 2025 the Group had 10,456 workers: 10,144 permanent, 312 fixed-term, including 31 on agency contracts. Of them 2,959 are women and 7,497 men (page 203). Permanent employees by category: 158 managers, 632 middle managers, 5,672 white-collar and 3,682 blue-collar. Total employees were 10,425 (page 202).

By place of work: Emilia-Romagna 6,520 (62.4%), Triveneto 2,524 (24.1%), Marche 680 (6.5%), other Italian regions 562 (5.4%) and abroad 170 (1.6%) (page 202). Full-time employees number 10,051 and part-time 405, of whom 338 are women (page 203).

In 2025 there were 773 new hires and 550 departures among permanent employees: 224 retirements, 236 voluntary departures, 27 dismissals, 12 deaths and 51 other. The turnover rate for permanent employees was 5.5% (pages 202-203). Average age is 46.4 years and average length of service 13.6 years (page 203). Headcount is at year end, and the figures cover permanent and non-permanent employees (page 202).

Characteristics of non-employee workers

Reference: pages 202-203; page 108.

Hera applied the ESRS 1 Appendix C phase-in to this DR for self-employed workers only (page 108). The content index lists S1-7 under 'Workers' (page 278), and non-employee workers who are not self-employed are reported.

At year end there were 31 workers on staff leasing (agency) contracts, 14 women and 17 men, down from 47 in 2024 (pages 202-203). The average over the year was 56 non-employee workers, about 0.5% of the average workforce of 10,477.2, all employed under other flexible arrangements through staff leasing (page 203). Hera says it aims to limit flexible arrangements to urgent situations such as seasonality, temporary peaks and replacing absent workers, and treats these workers as a priority recruitment pool for permanent roles (page 203). No figure is given for self-employed workers.

Collective bargaining coverage and social dialogue

Reference: pages 203-205.

Coverage: 100% of Hera Group employees are covered by national collective bargaining agreements, except in Poland where employment is set by national law. All employees are covered by worker representatives (page 205).

Union membership: 3,321 permanent employees, 32% of the total (33% in 2024), excluding AresGas, which employs 1% of the workforce (page 204).

Social dialogue in 2025: the three main national agreements were renewed: electricity (11 February), gas-water (8 May) and environmental services (9 December) (page 204). Group agreements followed the Good Work Pact of 2024: on rest for on-call night staff (28 March), on aligning second-level contracts for acquired companies (22 September), on the 2025-2027 performance bonus and the 2026-2028 flexible welfare package (30 June), and the new Procurement Protocol (page 203). Joint committees on safety and training, single-operator safety, market area roles and remote work were launched (page 203). The report also lists the national general strikes of 2025 (pages 204-205).

Diversity metrics

Reference: pages 205-206.

Board: six of the 15 directors are women (page 93).

Top management and middle managers (page 206): women are 22.2% of managers (23.1% in 2024) and 37.2% of middle managers (36.5%), or 34.2% of the two groups together (33.8%). Women are 35.7% of executive-level roles including managerial office staff, 44.4% of white-collar staff and 2.5% of blue-collar workers. Women make up 28.3% of all staff, unchanged.

Age (page 206): under 30, 7.8%; 30 to 50, 50.1%; over 50, 42.1% (4,404 people).

Career moves (page 200): 1,145 career advancements in 2025, 27.8% involving women, or 43.1% when manual workers are excluded. 31% of new middle managers and executives are women (page 205).

Hera kept its UNI/PDR 125:2022 gender balance certification for its 11 largest companies (page 206).

Adequate wages

Reference: page 205.

The content index files S1-10 under 'Remuneration' (page 278). The chapter gives the position for employees based abroad and relies on national collective agreements for Italy (pages 205, 203).

For employees abroad Hera says it ensures salaries 'in line with local regulations' and adequate against the applicable minimum wage (page 205). In Bulgaria, AresGas employees are paid above the minimum wage set under Article 244 of the Labour Code. In France and Spain, Aliplast employees' pay follows the national collective agreements for recovery industries, with qualification levels matched to duties. In Poland, pay meets the Minimum Wage Act of 10 October 2002 as updated by decree (page 205). In Italy, 100% of employees are covered by national collective agreements (page 205).

The report does not state a percentage of employees paid below an adequate wage benchmark.

Social protection

Reference: page 207.

Through public programs and schemes provided by law, 'all Hera Group employees are covered by social protection' against loss of income due to illness, unemployment, accidents, parental leave and retirement, in Italy and at companies abroad (page 207).

Beyond that, at end 2025 6,420 employees, 63% of the workforce, were enrolled in pension funds. The main funds are Pegaso for gas-water and electricity agreements, Previambiente for the Federambiente agreement and Previndai for managers. Balanced sub-fund returns in 2025 were 3.9% (Pegaso), 4.5% (Previambiente) and 6.9% (Previndai) (page 207). Supplementary health care is provided by funds that depend on the applicable national agreement (FASIE, the electricity CRAEM funds, FASDA, Faschim, and FASI with Poste Assicura for managers). Insurance for premature death applies under the electricity agreement, and for death and permanent disability under the gas-water agreement (page 207).

Persons with disabilities

Reference: page 206.

Hera applies Italian Law 68/1999, which sets a quota for hiring people from protected categories. Where a company cannot meet the quota because of the nature of its activity, it can seek partial exemption of up to 60% by paying 39.21 euro per unworked day per unfilled position into the regional fund. Hera uses this option, with Group companies paying provinces where their share of disabled workers is below the quota (page 206).

At end 2025 the Group employed 375 people from protected categories (376 in the summary table, 3.7% of the workforce, 383 in 2024). Of these, 328 (3.19% of the workforce) were employed as persons with disabilities under Article 3 of the law and 47 (0.46%) under Article 18 (page 206). Hera also reports 88 employees with benefits for their own disability under Law 104, 17 fewer than in the previous year (page 207).

Training and skills development metrics

Reference: pages 208-209.

Training hours: 307,867 hours in 2025 (292,329 in 2024). Quality, safety and environment took 108,289 hours, technical and professional 100,119, corporate and managerial 33,876, ethical values and culture 25,601, information systems 24,526 and sales and market 15,454 (page 208). The 2025 figures exclude seven companies with 1.2% of employees (page 208).

Average hours per employee: 29.8 (30.1 in 2024), above the Group target of 26.3. By category: managers 47.6, middle managers 48.0, white-collar 27.5, blue-collar 29.6. By gender: men 30.8, women 27.2 (page 209). 52% of hours were classroom and 27% digital (page 209).

Performance reviews: 90.4% of men and 90.1% of women received a regular performance appraisal, based on a table at 31 January 2025 (page 209). The text gives 85% of the 10,241 employees at 31 December 2024 (page 209). The development process now covers manual workers as well (page 198).

Health and safety metrics

Reference: pages 210-211; page 92.

All accidents (page 210): 213 accidents in 2025 (212 in 2024), a lost-time injury frequency rate (LTIFR) of 12.3 (12.5) per million hours on 17,254,709 hours worked. No fatalities. One accident had serious consequences (more than six months' absence), against two in 2024. Days lost were 5,535 (5,017) and the severity index was 0.3.

Accidents above three days of absence (page 210): 167 accidents (160), LTIFR 9.8 (9.5), of which 39 commuting accidents. The frequency rate for operational staff was 23.3, and 26.0 in environmental services against 19.3 in network services (page 210). The Group's LTIFR of 12.3 compares with 18 for Italian utilities in Utilitalia's report (page 210).

Other (page 211): 1,368 near misses (1,208), 32 occupational illness reports (26), 28 of them musculoskeletal. ISO 45001 covers 25 companies and 87% of workers (page 92). The statement also gives the status of legal proceedings on four accidents between 2020 and 2023, one of which ended in acquittal in November 2025 (page 211).

Work-life balance metrics

Reference: pages 207, 199, 203.

Leave taken in 2025 (page 207): 109 women took maternity leave and 203 men took paternity leave, 312 in total. Optional parental leave was taken by 518 people, 300 women and 218 men (573 in 2024). All employees who took compulsory leave have returned to work. Figures exclude AresGas, with 1.2% of employees. All employees can take parental leave when the legal conditions are met.

Family care (page 207): 1,114 employees are potential beneficiaries of Law 104 leave for family members (11% of the workforce), and 116,271 hours of leave were taken in 2025.

Flexibility (page 199): more than 4,000 employees take part in smart working. From November 2024 remote work is scheduled monthly instead of weekly, with extra days for parents of children up to age one and for temporary mobility limits. The supplementary agreement adds seven days of leave before a child's first birthday, two before age three and one paid day for the first day of primary school (page 207).

Compensation metrics (pay gap and total compensation)

Reference: page 205.

Pay ratio: the ratio of the total remuneration of the highest-paid employee to the median employee remuneration was 18.8 in 2025. Total remuneration includes gross salary, notional short-term and long-term variable pay at 100% of targets, sales-linked variable pay and the notional performance bonus (page 205).

Gender pay gap by job category (page 205): managers 15.3% (15.5% in 2024), middle managers 3.5% (3.3%), white-collar 7.2% (7.9%) and blue-collar 6.6% (2.2%). Across all employees the average hourly pay gap is -4.4%, in favor of women, because of the large share of men in manual roles. This compares with -9.8% for the utilities sector (Job Pricing Observatory). Hera calls this a raw figure and gives an adjusted gap of 3.45% in favor of men at Group level, excluding foreign companies and several other subsidiaries: 1.8% for executives, 4% for middle managers and office staff and zero for manual workers (page 205).

Incidents, complaints and severe human rights impacts

Reference: pages 211, 98-99, 244.

Hera states that in 2025 'there were no incidents of work-related discrimination' and that no serious human rights incidents were reported by the Ethics and Sustainability Committee, the Supervisory Board, trade unions or in the legal sphere (page 211).

Reports in the year: the Ethics and Sustainability Committee received six reports in all (three from employees). In one employee case it found harassment by an employee of a client company's supplier toward a Herambiente employee, which the reporting party classed as not serious, and noted the corrective measures taken (page 98). In another case it found conduct by an employee toward a colleague that did not comply with the Code of Ethics and noted the measures taken (page 98). The Supervisory Board received eight whistleblowing reports, none leading to a finding of offences (page 244). The report does not give amounts of fines or compensation for these matters.

Policies related to value chain workers

Reference: pages 212-213.

Hera's reference documents are its purpose, the Code of Ethics, the Shared Value Creation Model, the Quality and Sustainability Policy, the Code of Conduct - Sustainability Pact with Hera Group suppliers and the Procurement Protocol with the national trade unions (page 212). The Code of Conduct was co-designed with a representative group of suppliers and approved in 2025. Suppliers must sign it to be on the supplier list, and it is part of the contract. Suppliers must apply it through their own value chain (page 213). Requirements cover child and forced labor, fair pay, working hours, non-discrimination, protection from violence and harassment, freedom of association, and health and safety (page 213).

On 22 September 2025 Hera signed a new Procurement Protocol with the national unions, replacing the 2016 one. It adds stronger social clauses, rules on collective agreements to combat wage dumping, digital check-lists and a ban on sub-subcontracting (page 213). Management systems follow ISO 9001, ISO 14001, ISO 45001, ISO 37001 and SA 8000 (page 213). The Board is responsible for implementing the policy (page 213).

Taking action on material impacts on value chain workers

Reference: pages 215-217.

Accident monitoring (pages 215-216): 775 suppliers (544 in 2024) reported accident data, covering 890.1 million euro of contracts, 77% of the value of services and works contracts. 232 accidents were reported, with a lost-time injury frequency rate of 15.2 (16.6) on 15,245,271 hours, one with serious consequences and no deaths. The severity rate was 0.38. For works the frequency rate was 14.8, and for environmental services 17.0.

Social inclusion (page 216): environmental services spent about 94 million euro with 56 social cooperatives and consortia, and 1,000 disadvantaged people were placed in employment, 814 of them in Emilia-Romagna.

Procurement terms (pages 216-217): an employment guarantee clause went into the 15 most significant tenders, and the standard specifications keep the clauses requiring authorization for agency workers and banning ancillary work vouchers.

In 2025, no serious human rights incidents involving value chain workers were reported, and no very serious non-conformities were recorded under Hera's supplier management system (page 217). Audits are covered under S2-5 (page 214).

Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

Reference: page 214.

Targets are set yearly through the five-year plan, the budget and the balanced scorecards (page 214). Progress in 2025 against what Hera said it would do (page 214):

• Supplier accidents: analyze all accidents reported by service and works suppliers. Done: 775 suppliers, 77% of contract value, 232 accidents, frequency rate 15.2.
• Social inclusion: keep promoting employment of disadvantaged people in environmental services. Done: 1,000 people placed through social cooperatives.
• Employment guarantee clause: keep including it in contracts for emergency network work. Done: 15 of the most significant tenders.
• Supplier audits: keep auditing the most critical suppliers. Done: 53 audits or inspection visits.
• Sustainability in awards: keep a significant score in tenders. Average sustainability score 32 of 100.
• Supplier capability: support ESG maturity through 2028. 76 suppliers in the growth program and 500+ in the Supplier Sustainability School.
• Code of conduct: approved and published in 2025.

The same list carries forward to 2026 (page 214).

Policies related to affected communities

Reference: pages 220-221.

Hera's reference points are its purpose, the Code of Ethics, the shared value creation model and the Quality and Sustainability Policy (page 220). The Code sets out commitments to local communities: building trust through listening and attention to concerns, running information and consultation initiatives with extra attention to communities near current and future plants, and contributing to the ecological transition of the areas served with local partners (page 220).

The shared value approach covers the transition to a circular economy, including partnerships with communities to reduce waste, and employment and new skills, including school and university links and environmental education (page 220). The Central Department for Relations with Local Authorities keeps contact with local authorities, and HeraLAB multi-stakeholder meetings, running since 2013, give a structured channel for dialogue (page 220). Sponsorship and donations follow a set procedure with quality and consistency criteria, and Hera reports the amounts each year (page 221). The Board is responsible for implementing the policy (page 221).

Taking action on material impacts on affected communities

Reference: pages 221-224.

Sponsorships and donations (pages 221-222): more than 230 initiatives supported with 3.3 million euro, 81% spent locally, across culture, sport and environment. Donations came to 675 thousand euro, 86% local. The HeraSolidale fund-raising for five organizations chosen by employees raised about 344 thousand euro between September 2023 and December 2025 (page 200).

Waste reduction (page 222): CiboAmico has donated almost 168,000 meals (about 13,000 in 2025). FarmacoAmico has sent about 700,000 medicine packs for reuse (more than 90,000 in 2025) through 267 pharmacies. Cambia il Finale has avoided more than 7,800 tonnes of waste, over 1,000 t in 2025.

Education (pages 222-224): Hera Educational developed 82 school-to-work programs, and HerAcademy works with universities and business schools. Environmental education reached 100,243 pupils and 7,377 teachers in 1,252 schools in 2025, and plant tours drew 2,711 visitors (page 224).

No serious human rights incidents involving communities were reported (page 224).

Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

Reference: page 221.

Targets are set yearly through the five-year plan, the budget and the balanced scorecards, tied to dialogue with stakeholders (page 221). The 2025 target was to keep listening to and involving stakeholders on carbon neutrality and to launch HeraLAB in two areas. Hera reports that HeraLAB confirmed its focus on carbon neutrality, finishing the Ravenna LAB and carrying out the Forlì-Cesena LAB (page 221).

For 2026 Hera plans to (page 221):

• set up two working groups, one for the 'Education on the Rational Use of Energy' project from the Ravenna LAB and one to assess the feasibility of 'Towards a Thermal Community' from the Forlì-Cesena LAB;
• design the fourth edition of HeraLAB to respond better to local needs and strengthen it as a space for dialogue and networking.

The targets are qualitative. No numerical community target is given in this section (page 221).

Policies related to consumers and end-users

Reference: page 227.

Hera's reference points are its purpose, the Code of Ethics, the Shared Value Creation Model and the Quality and Sustainability Policy (page 227). The Code sets commitments on fair treatment, quality, continuity and safety of services, clear and truthful information, fairness in contracts, out-of-court dispute resolution, confidentiality of personal data and care for vulnerable customers. Hera selects sales agencies on these principles and monitors their conduct (page 227).

The shared value approach in this area covers payment instalments, social bonuses, agreements with local authorities to prevent supply disconnections, per capita water tariffs and the Leakage Fund (page 227). Hera Comm's commercial policies stress transparency and controls on commercial conduct, and contract renewal terms are offered only at expiry with advance notice under the Code of Business Conduct. Regulated services follow regulator charters and quality standards (page 227). For privacy, Hera applies 'security by design' under documented guidelines, active monitoring and staff training (page 227). The Board is responsible for implementing the policy (page 227).

Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions

Reference: pages 229-240.

Customers in difficulty (pages 229-231): 256,620 instalment plans worth 187.2 million euro. Memoranda with 164 municipalities help avoid disconnections, and 80% of suspensions were avoided. Hera paid 502,464 gas and electricity bonuses worth 91.2 million euro, 137,266 water bonuses worth 19.1 million euro, and 15,710 customers received 15.1 million euro from the Leakage Fund.

Service quality (pages 232-236): 85.5% of electricity meters are second-generation, and over 255,000 smart water meters are installed. Gas emergency crews arrived within 60 minutes in 96.2% of calls, against a 90% obligation.

Conduct and data (pages 237-240): about 3,000 sales agency non-compliance cases were sanctioned. A new NIS2-driven cybersecurity program, an AI policy and a modular ISO 22301 project support continuity and data protection. Privacy complaints dropped to 37 from 143.

No serious human rights incidents involving customers were reported in 2025 (page 240). Effectiveness is tracked through the targets under S4-5 and the satisfaction indicators (pages 225, 228).

Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

Reference: page 228.

Targets are set yearly through the five-year plan, the budget and the balanced scorecards (page 227). Targets for 2029 and 2026, with 2025 progress (page 228):

• Customers in difficulty: keep instalment plans and concessions; renew expiring memoranda with municipalities. 164 municipalities have an active memorandum (143 in 2024).
• Meters: 91% second-generation electricity meters by 2029 (85.5% at end 2025); 98% electronic, remotely read gas meters and 29% NexMeter by 2029 (93.9% remotely readable and 15.6% NexMeter in 2025); 33% smart water meters by 2029 (15.8% in 2025).
• Gas emergencies: stay well above the regulator's requirement. 96.2% within 60 minutes in 2025.
• Cybersecurity: keep raising capability, with the new ICT incident process from 2026.
• Contact channels: an average wait of 10 minutes at branches and 95% success at the call center in 2026 (8 minutes and 94.5% in 2025).

Business conduct policies and corporate culture

Reference: pages 241-242; pages 91, 244.

Hera's corporate culture rests on its purpose, mission, values and operating principles in the Code of Ethics, plus the Quality and Sustainability Policy (page 241). Since 2007 the Code has been reviewed every three years with all employees and the unions. The seventh version was approved by the Board in February 2026 (page 91). It builds on the ILO Declaration, the Universal Declaration of Human Rights, the OECD Guidelines and the EU Charter (page 242).

The Board appoints the Ethics and Sustainability Committee to carry out and spread the Code. The Boards of Hera Spa and the main subsidiaries have adopted the 231 Model. Three Group companies, including Hera Spa since 2019, hold ISO 37001 anti-bribery certification (page 242). A leadership model in use since 2010 feeds the balanced scorecard (page 242).

In 2025, 2,939 hours of business conduct training reached 2,376 employees through AlfabEtico sessions for new permanent employees and inclusion and gender balance modules (pages 244-245). Whistleblower protection and animal welfare were assessed as not material (page 105), but whistleblowing confidentiality measures are described (page 244).

Targets related to business conduct

Back-filled from the business conduct chapter, where targets fall under MDR-T rather than a numbered disclosure requirement. G1-3 became a standalone DR only in the 2025/2026 ESRS.

The business conduct chapter (pages 241-254) states no quantified target. It has no 'what we said, what we did, what we will do' table. It gives a commitment of zero tolerance of corruption and fraud (page 242).

Effectiveness is tracked in the absence of a target. Hera says it uses 'regular audits, whistleblowing channels and reports to the Board of Directors' to verify and communicate the effectiveness of its anti-corruption measures (page 103). Internal Auditing runs a three-year audit plan with a specific focus on fraud and corruption risks, and its 2025 audits found no incidents (page 243). The Supervisory Board reviews audit findings and monitors the risk (page 243). For suppliers, 100% of significant suppliers are assessed each year, and results are tracked as non-conformities and ratings (pages 249-250).

Incidents of corruption or bribery

Reference: pages 243-244; page 98.

In 2025 the Internal Auditing Department's analyses 'did not identify any incidents of fraud or corruption', nor issues related to 231 offences (page 243). The Supervisory Board received eight whistleblowing reports, mainly on supplier management, customer sales, personnel management and health and safety, and none led to the identification of 231 offences or other offences (page 244). The Ethics and Sustainability Committee found no non-compliant conduct in the areas of corruption, conflicts of interest, money laundering and insider trading (page 98).

The statement adds that in 2025 there were no convictions for violations of anti-corruption laws (page 244).

Active and passive corruption was assessed as not material under the double materiality assessment, but Hera chose to include the disclosure for completeness and comparability with earlier years (page 241).

Political influence and lobbying activities

Reference: pages 253-254.

Hera did not make any direct or indirect contributions to political parties, organizations with political aims or political initiatives in 2025, in line with its Code of Ethics and 231 Protocol (page 254).

It takes part in sector associations, among them Utilitalia, Confservizi in Emilia-Romagna, Veneto and Marche, Confindustria, AIRU, Fise Assoambiente, Eurits and the Global Compact Network Foundation (page 253). Its advocacy with institutions focuses on sustainable development: strengthening local authority relations, the energy transition and decarbonization, the circular economy, water efficiency and resilience with affordable tariffs, support for technologies that serve the public interest, and guiding the regulator ARERA toward balancing efficiency, service access and the financial sustainability of services (pages 253-254).

On the Board, 3 of 15 directors held positions in public administration or regulatory authorities in the two years before their appointment (page 254). Hera does not give lobbying spend or a transparency register entry.

Payment practices

Reference: page 253.

Hera pays supplier invoices under two main terms: 30 days from invoice date for urban waste supplies under contracts awarded within the Public Procurement Code, and 60 days from invoice or payment certificate for special sectors (water, energy, including generation from urban waste) and contracts outside the Code. Other terms can be agreed, and in most cases are below 30 days (page 253).

The weighted average payment time for a supplier invoice paid in 2025 is around 48 days from the invoice date. Invoices paid within 60 days account for about 87% of total payables due and paid in the year (page 253). No legal proceedings are pending with suppliers over late payments (page 253).

The report gives no breakdown by supplier size, such as small and medium-sized enterprises.