Human rights governance

The Pirelli Group pursues and supports the respect of human rights affirmed in international venues. These values have always been firmly anchored in corporate management. Human Rights Governance is fully integrated in the Sustainable Management System adopted by Pirelli, which is based on the United Nations Global Compact, of which the Company has been an active member since 2004 – as well as a member of the Steering Committee of Global Compact Lead – the ISO26000 guidelines and the provisions of the SA8000® Standard.

The commitment of Pirelli to Human Rights is specifically addressed in “The Pirelli Group Values and Ethical Code”, approved by the Board of Directors, and in detail, in the “Social Responsibility Policy for Occupational Health, Safety and Rights, and Environment”, signed by the Chairman and which provides that “The Group’s sustainable development strategies pursue various objectives, including continuous improvement in the environmental and occupational health and safety conditions affected by its own activities, in firm compliance with and support of 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. ”, added to all the commitments made by Pirelli in this regard, including reference to each of the ILO Core Labour Standards and its extension to the supply chain.

The “Equal Opportunities Statement”, also signed by the Chairman, is dedicated to the Group commitment to equal opportunities and non-discrimination.

Any human rights violation may be reported to the Company by using the Whistleblowing Procedure. A paragraph of this report is dedicated to the Procedure, which details the reports received and to which reference is made for further information. Of these reports, none received in 2014, in any case, involved alleged violations of human rights or the ILO Core Labour Standards, with specific reference to forced and child labour, freedom of association and collective bargaining and non-discrimination.

All of the aforementioned documents have been distributed to employees in their local language. They are also an integral part of the contract clauses on sustainability applied to Group suppliers, as well as being published on the Pirelli website in the languages spoken by Pirelli employees and principal suppliers. Continuing the theme of Human Rights Governance, Pirelli acts on the recommendations contained in the “Guiding Principles for Business and Human Rights: Implementing the United Nations Protect, Respect and Remedy Framework” of 2011, which reflect in concrete business activity the three pillars “Protect, Respect and Remedy” identified in 2008 in the “Framework for Business and Human Rights” by Professor John Ruggie, UN Special Representative for Companies and Human Rights. Moreover, human rights are included in the materiality matrix of sustainability factors for Group strategies. The matrix published in this report consolidates the opinions of all categories of Company stakeholders, including employees, suppliers, institutions and dozens of NGOs present in the countries where the Company operates. The human rights management processes are handled by the Pirelli Sustainability & Risk Governance Department, which acts in concert with the affected and responsible functions, and in reference to both the internal and external communities.

Before investing in a specific market, ad hoc assessments are conducted of any political, financial, environmental and social risks, including those related to the respect of human and labour rights. The context inside and outside the company is monitored in those countries where Pirelli does operate, in view of preventing negative impacts on human rights in the ambit of the sphere of corporate influence, and if so, remedying them.

In terms of materiality in the corporate value chain, the respect of human rights assumes particular importance in the human resources and the supply chain areas.

The management of human rights in the context of the supply chain is outlined in the paragraph on Pirelli suppliers in this report, to which reference is made for further details. The management of human and labour rights in the Internal Community at Pirelli is instead outlined in the paragraph on “Compliance with statutory and contractual obligations governing overtime, time off, association and negotiation, equal opportunities and non-discrimination, bans on child and forced labour”, to which reference is made for related details. Both management areas, for suppliers and employees, are overseen using training tools and monitoring established a number of years ago. In terms of training on the Pirelli Model, the attention of new recruits is brought to the Group Policies on sustainability and on the related commitments, as expressed through the “Ethical Code”, the “Code of Conduct”, the “Equal Opportunities Statement”, the “Social Responsibility Policy for Health, Safety and Rights, and Environment”. In addition to this Pirelli complies with and upholds the contents of the “Universal Declaration of Human Rights”, the International Labour Organisation’s “Declaration on Fundamental Principles and Rights at Work”, the “Rio Declaration on Environment and Development” and the United Nations “Convention against Corruption”, as well as the provisions of Standard SA8000®, including the ban on forced labour and child labour, proceeds to free bargaining, equal opportunities and non-discrimination. All of these issues are also the subject of training courses for all Sustainability and Purchasing Group managers.

Following the training project for strategic suppliers provided via e-learning in 2012, 2013 and 2014 Pirelli extended the same sessions to all Security service providers of the Group. The training initiative was related to elements of employment law, human rights, respect for the environment and business ethics.

Together with constant coordination and monitoring at the corporate level, compliance with Pirelli human rights and labour rights requirements and environmental sustainability issues and business ethics rules is assessed in periodic audits commissioned by Pirelli to specialised independent firms, as well as through Audits performed by the Pirelli Internal Audit Department.

Audit activities conducted in 2014 both with reference to Pirelli facilities and at Suppliers are extensively covered in this report, as part of the aforementioned paragraphs "Our Suppliers" and "Compliance with statutory and contractual obligations governing overtime, time off, association and negotiation, equal opportunities and non-discrimination, bans on child and forced labour".

Reference is made to the paragraph "Our Suppliers" of this report also with regard to Pirelli's focus on the issue "Conflict Minerals", in which the Company is active with in-depth due diligence.