Industrie De Nora S.p.A. (DNR) Earnings Call Transcript & Summary

Now let's start from here. Welcome. Welcome to the first Sustainability Day by De Nora. Welcome to those in the audience here at the Museum of Science and Technology and to those who are following us via streaming. We can say that the Sustainability Day comes at a very sensitive time in the weekend in Barco, Azerbaijan. We have now only reached an agreement with the COP29, an agreement providing $300 billion a year in aid, supporting developing countries to deal with the effects of the climate crisis as well as to reduce the emissions. This agreement by the European Union and the United States has been defined as a success. It is a failure in itself for the developing countries. Not only that, when it's about COP29, we also have an agreement when it comes to the global carbon credit market and its roles under the auspices of the United Nations. Obviously, we will speak about these during the afternoon. And we will speak of all the things which have been presented this morning by the Ministry of Environment and Energy Security, what has been presented this morning when it comes to the national hydrogen strategy. Obviously, we will also see what we have in the background. It's a 2024, which is going to be the hottest year ever. Greenhouse gas emissions continue to rise. And in the last year, they have reached a new high. There is just one word to say, there is urgency, urgency to reduce emissions to accelerate on the path to decarbonization. De Nora has always done its part and continues to do so by putting his commitments in black and white. Now let's start once again. Now please welcome the CEO of De Nora, Paolo Dellachà; and Luca Oglialoro, CFO; Chiara Locati, Head of Relationship Investors. And the analysts of De Nora, please come up here. Please, Paolo Dellachà, I leave the floor.

Good morning. Good morning, all of you. I have to speak slowly and clearly. I hope I don't have to use glasses, but I'll try that. Welcome. Welcome to our first Sustainability Day by De Nora. It is a tremendous pleasure to see you here today. And I would also like to extend a warm welcome to all those who are connected via streaming from all our countries, Italy, Brazil, Germany, Japan, et cetera. Thank you so much for this participation and for your interest in a topic that today, now more than ever is critical to our future, sustainability. We decided to call this event to share with you our sustainability plan to 2030. It is a plan which we officially launched last December, about a year ago. We will tell you what goals we have set for ourselves on this journey, a journey which goes towards a more sustainable future. It is a journey that started formally with our sustainability plan. Yet its roots are much deeper in De Nora's history. Already our founder, Oronzio De Nora, with his forward-looking vision laid the foundations for a company that has always been able to combine technological innovation and respect for the environment. That is why we call ourselves sustainable by DNA. Why in this location? Let me explain why we chose this beautiful location for our event here today. Our partnership with the museum goes back to many years ago. Specifically, 1976, the engineer of De Nora wrote a letter to the Director of the museum, proposing the introduction of electrochemistry, considered a fundamental technology for the development of the world. De Nora provided a cell to produce chlor-alkali, a technology that has its roots in the past and has subsequently been continuously innovated by us. We are still worldwide leaders in this case. And our presence in this museum, which holds the history of innovation technology is symbolic. It represents De Nora's ongoing commitment to promoting innovation and sustainability. It's also a deep link with the past. When we have prepared this event, we have thought about what kind of image could best represent our sustainability commitment. For instance, a green environment, very clean nature, clean and safe water, renewable energies and also people working together in a safe and inclusive environments. All of these elements are part of our ESG commitments. But if you really want to understand what sustainability means to De Nora, we have to go back in time to the picture of Oronzio De Nora, as you can see, I think it will pop up. He is in his workshop busy looking for innovative solutions with a more sustainable future. There it is. Okay. So Oronzio De Nora, since his early years, he has believed in finding solutions to improve the efficiency and reduce the environmental impact of industries. For us, sustainability is a responsibility that starts in our DNA, as I've said, it is not limited to simply creating green technologies. It is a broader commitment encompassing the entire value chain from customers to suppliers through our operations as well. Obviously, as you can imagine. About sustainable value creation, de Nora firmly believes that caring for the environment and people is not just a goal, it is something we must do. And this accompanies our every step. The path to sustainable development is now set globally and cannot and should not know any backtracking. Although global political developments with their fluctuations, as we all know, it may affect the dynamics related to climate change and people's well-being and diversity. In any case, we are convinced that the path we are on must continue with determination to contribute to the goals set by the United Nations 2030 agenda. I think specifically about environmental impacts and climate change, it is now evident how global warming is accelerating the onset of extreme natural events. We are witnessing with concern, increasingly frequent and intense phenomenon even in Europe, as we have seen even an incident very, very recently. Forecasts confirm that 2024, as we have just seen, will be the hottest year on record since 1940 with average temperatures exceeding the famous 1.5 Celsius degree threshold set by the Paris agreement. Another key aspect in our vision of sustainability concerns the responsible use of our planet's scarce resources, such as water. Its Is clear that its sustainable use is crucial not only for human development, but also for the survival of future generations. Circular economy, resource optimization and responsible management of natural resources are central issues of our commitment every day. Therefore, what is our sustainability strategy? Our sustainability plan aims to have a positive impact on the entire value chain. It is not just about reducing the environmental impact of our activities, but about creating value at every level with our customers, our daily operations, our suppliers. Our efforts are aimed at becoming leaders in specific areas of sustainability that reflect our business model, as you can imagine, such as the green innovation and the circular economy. But beyond that, for us, the real strength is in people who are the beating heart of De Nora. We are committed to ensuring an inclusive and challenging work environment for everyone. Every individual should grow and contribute to the success of the group. Sustainability for us is not only an environmental issue, it is also about taking care of people and communities within which we operate. Let's now speak of green innovation and circular economy. At this event, we want to give you a glimpse into our commitment to sustainability, in particular, the area of green innovation. We have been developing technologies for the development of green hydrogen industry. Also, we have more technologies such as electrowinning that is the nonferrous metal refining, which provides 30% energy savings compared to traditional technologies. Other technologies are not so environmentally friendly. On top of that, we are exploring new opportunities in the recovery of strategic resources such as lithium. And we use our electrodes in advanced industrial processes. Water treatment to ensure responsible and sustainable water management is another key area of our efforts. Our technology tries to grant top water access as well as the industrial use water, keeping in mind the long-term goal of 0 liquid discharge. Circular economy is another crucial thing for us. Circularity of our electrodes through recoating and reactivation activities at the end of life allows us to significantly reduce the environmental impact of our products. On top of that, we are committed to developing a value chain that promotes the recycling and reuse of rare and critical materials such as noble metals, which we actually used a lot in our processes. Finally, let's speak about people, our people. Today, you will see many young faces on the stages testifying that people at the beating heart of De Nora. Our sustainability governance is inspired by international best practices, but it is also based on principles of business ethics. Governance is widespread. Every function and every plant globally speaking, is involved in the implementation of the sustainability plan, integrating daily business activities with sustainability goals. Before leaving the floor to our CFO, Luca Oglialoro, who will give us some guidance on the specific topic of corporate governance, I'd like to emphasize that our journey has just begun. The road will be long and challenging. Our commitment to sustainability is total. We will continue to work with determination to ensure a better future for all. Thank you again for being with us today.

Good morning, everyone. Welcome. As a company, we pursue economic growth that must be sustainable. Two concepts deeply embedded in our strategy. For us sustainability is not only an ethical value, operating responsibly, it actually is a fundamental lever of value creation. Therefore, it is important to be able to measure sustainability effectively, setting quantitative targets and measurable KPIs also in view of evolving regulations that require companies to clearly and comparably communicate to environmental, social and governance performances. The CSRT regulation, therefore, equalizes ESG communication with financial communication, helping investors, consumers and other stakeholders to make informed decisions, promoting greater corporate responsibility. On top of that, measuring and monitoring progress on the ESG enables companies to make informed decisions and allocate resources effectively. For this reason, given the absolute integration with financial dynamics in De Nora, the sustainability governance falls within the scope of the finance function. We thought of ESG governance with idea that to authentically integrate sustainability into corporate strategy, a deep and transversal involvement of all corporate functions is absolutely necessary. Therefore, we have created the ESG Accelerator lab. It is a facility that, in addition to being a laboratory of ideas, executes, coordinates and monitors the progress of the actions which are necessary to achieve the sustainability goals, which have been set. The ESG Accelerator Lab is a cross-functional team led by the Head of Investor Relations and the ESG, which includes members of the ESG team and representatives from other business functions, such as human resources, operations, R&D, procurement and legal. The lab operates under the guidance and monitoring of the ESG Steering Committee, a committee composed of 12 De Nora leaders, representing different areas of the group. They report directly to the CEO. And the committee sets sustainability strategies, ensuring that the group's performance is consistently aligned with global ESG goals. In our plan to 2030, we want to reduce emissions, develop clean technologies and further shift our revenue portfolio towards innovative natural resource management solutions. Sustainability is not only an environmental goal. It must be intertwined with our business model, our financial KPIs and our ability to create value through strategic investments in research and development, as well as technological innovation and operations optimization. The adoption of sustainable technologies not only improves the environment, also it has a positive impact on the economic value of the company. Sustainable and responsible companies are generally applied in this case. And we will have a greater value for all stakeholders. Thank you so much. I wish you a very happy Sustainability Day.

Thank you, Mr. Oglialoro. Thank you. We have heard the sustainability is part of De Nora's DNA. So let's listen to the sustainability plan of De Nora with Chiara Locati. Please, a big round of applause to her.

Thank you. Good morning, all of you. Welcome once again, and thank you for being here to this very first Sustainability Day here or connecting online. As Paolo has already said, sustainability is a crucial element of De Nora's DNA. And this is because of the great innovation spirit, which has always been central in the development of the group since the very beginning. De Nora, thanks to innovation, trying to meet the needs of clients and incoming markets has always followed specific environmental sustainability goals, for instance, a constant improvement in the energy efficiency of our electrodes and increase in the lifespan of our products. Also the implementation, as I've said, as our CEO has said, of new production models and circular models. At the same time, we can also say that taking care of people, cherishing them has always been an important part of De Nora's mindset, thus epitomizing principles and values of real sustainability. Starting from December 2023, the group prepared and approved its first sustainability plan we call an initiative set to 2030. In this case, we have an action plan. We have many initiatives and many quantitative goals, which we will at least partially see even today. When it comes to the group, we know that we are really committed to creating sustainable values and generating over time, positive impacts for the whole value chain. As Paolo has already said, what is our ambition when it comes to sustainability? De Nora as a global leader in the industry seeks to have a leadership role even in other areas of sustainability, which are extremely important for our business model, such as green innovation and secular economy. Let's quickly see what these pillars are when it comes to our sustainability strategy. Maybe you already know them because the plan has been already approved, and we have also spoken about this. First of all, we have the green innovation. It is the De Nora's commitment to improve, enhance the technological solutions we have to improve the operational efficiency and sustainability, but please pay attention. This is something we apply to all De Nora's products. Obviously, we had our priority products. When it comes to the business unit working with energy transition, we will talk to you about hydrogen-based solution. But this is something we also apply in other business units, for instance, the electrodes for producing chloralkali or also all the other technologies, which focus on cleaning water so that this water can be drank or be used in industrial applications. We also have the climate action in circular economy. Obviously, we have a handprint, but our positive contribution to preserve and protect the planet. Well, in this case, we have a different pillar, which represents our commitment to properly manage our activities, integrating as much as possible our footprint. And we do this with specific decarbonization plans, which we are implementing in all of our plants, which are in several parts of the globe. On top of that, we also try to foster specific initiatives based on circular economy. It goes without saying we also have other 2 pillars, which have been properly described our CEO. This is the people pillar because De Nora wants to create a working environment, which actually awards and supports the personal development of people, protecting their health, their mental and their physical health. We want this to be a very inclusive place because we are speaking of a great multinational company with people living, in different parts of the world in different corners of the world. Therefore, we know that the difference is actually a great asset, which must be protected at all costs. Last but not least, another pillar, which is about community engagement and sustainable supply chain. We want to have a positive relationship with local communities, especially connected to the countries and geographies where we work as well as developing a sustainable supply chain. This is something we recently started, and it's something on which we have a lot of work to do. All of this is following a strong governance, which seeks to be very transparent and which works according to very important ethical values. In the slide, you can also see that in the plan, we also want to achieve a positive impact with 10 selected sustainable development goals. Let's see how this strategy is organized, how this is going to work. We have around 50 initiatives, 48 of those you can see in the slide. We have 12 flagship initiatives, which are focusing on green innovation, climate action and circular economy. In most cases, these initiatives were already kick started a few months ago. Obviously, we did see more details. We also have 20 quick items. Please quick doesn't mean that it's something you can achieve very easily. In this case, these are initiatives that were already ongoing when we created the plan. Think about the human rights policy, the equity and inclusion policy, even the environmental emergency plan for our plants. In these 20 quick items, we also have greater disclosure goals connected to sustainability. This is once again for the sake of transparency to our stakeholders. But also as a way to enhance and understand where we have -- what we have done in specific cases. We also have 16 additional priority initiatives, which are about other pillars. And they have a transversal function that is the local communities, the governance and obviously, the people. These are the objectives, which we have in our plan. Green innovation. In this case, in our processes of R&D, we have a circular design guideline. There is a set guidelines to innovate further when it comes to products. In this case, we will take into consideration the environmental sustainability issues as well as the circular economy issues. This means that from the very beginning, our research, our products encompass sustainability goals. Starting from these guidelines, we are working with these very clear in mind. We are working towards so-called sustainability scorecard, so-called ID for our products in environmental interpretation. And these tools will help us to understand the positive and negative impact of our products even when it comes to the quantitative elements. These scores over time will be shared, obviously, with all stakeholders, thus becoming a debate tool as well as one more tool to our positive and negative things have been. In this case, we tried to -- we want to give a proper value to our tools by 2026, with the newer tools kick starting in 2025. When it comes to disclosure, we are working for several disclosures when it comes to our impact for our revenues and our R&D activities on specific SDGs. In this case, climate, use of sustainable materials and the water SDG. When it comes to the climate action stream, and I will try to speed things up because colleagues will say even more things, even more interesting. As an objective, we have decided to reduce our Scope 1 and Scope 2 emissions to reduce them by 50% for 2030 when it comes to the intensity of the Scope 3, that's why we will try to reduce them. And we want to use 100% of renewable energy by 2030. In this slide, you can also see that we have some intermediary objectives when it comes to the reduction of emissions and the use of renewable energy sources. That 100% of renewable energy objective, that goal takes us very close to the reduction of the Scope 1 and Scope 2 emissions. But this is not simply enough. On top of developing plans for producing energy, for instance, with the solar energy, we have specific facilities, which we have been implementing in our places all over the world. We have already started working with specific decarbonization goals for each single establishment and facility. And obviously, we will certify things when it comes to our plans with specific plans for the environmental impact. When it comes to the circular economy, next to development of [ final ] services for our clients with the proper usage of electrodes. In our plants, we also want to use noble metals. As you know, they do belong to what we do. And our CEO has said, these are materials which are raw materials, very expensive. They are very, very important when it comes to the refining part. And this is why we want to reduce at the same time, optimize these materials without having an impact on the operational efficiency of our products. We have 2 objectives. We want to reduce materials in the coating phases by 2026. We want to increase the recycled materials by 2030. Quickly, I will tell you what are the objectives of the other stream, please take a second. Now as for the people stream now, I would like to leave Graziano Marcuccio to tell you more in the second part of the presentation. He will tell you more about what we're doing. Now this year, we have implemented first D&I policy. We also have a new location policy. We can upgrade it and we also would like to use it in many, many more cases. We also have plenty of actions on diversity and people strategy. He will walk you through this. In terms of quantity, our targets aimed at maintaining, I mean, preserving our physical, but also the mental health of our staff. You can see here another objective in terms of percent of women. Now we are working on this. It will be here with us in the next month or so. But of course, this will concern, I mean the percent rate of women in the hiring processes. As for the SC supply chain, of course, we would like to [indiscernible] suppliers that have been, let's say, analyzed in terms of sustainability, which is what you can progressively see here. For these supplies, we also would like to engage all of our most important, let's say, highest risk customers considering our governance. We have plenty of policies, which is what we've implemented throughout the year. Now this is something I'm so happy to share with you. I'm sure you are familiar with this, but this is so important. Variable remuneration of our CEO and at least 10% of the variable remuneration of our key managers depends on the reaching or hitting sustainability targets, including implementing the sustainability plan I have mentioned. Now this turns into aligning all of our efforts deployed by the company but also by the management stakeholders' objectives, which is once again very important. So before giving the floor to Martina, let me tell you another, I mean, the last point. I'll go through the plant very quickly. I know it is so ambitious, so this cannot be done by an investor relator and sustainability partner with just a few staff. So of course, this plan is being held by, let's say, many colleagues. So [indiscernible] 7 heads. But of course, we also leverage 24 focal points and 12 in the central functions, 12 in all the plants around the globe. Then we also have 15 stream leaders, I mean 15 persons whose task is to implement specific streams of activities and objectives included in the plan. So, so many people working with us. And in 2024, we were very close to reaching almost all the targets we were supposed to hit. Let me take this opportunity to wholeheartedly thank all of my colleagues. Some of them are here. Some of them will be speaking, some of them are around the world. So they are following us via our screen. Anyway, thank you so much. So what we do is the consequence of a very big steady and strong team. Thank you so much.

Well, okay, then let me now give the floor to Martina.

Garcia, thank you so much. I have already started. I mean many have been introduced by Chiara. Now some of those actions have already been implemented. Chiara told you about -- now many other actions are still going on to do this. Let me share with you a very [indiscernible] carrying out right now and thank you so much [indiscernible] which is what I get from all of my colleagues. I draw your attention on some of the points you can see here, and then my colleagues and the next speakers will give you insights. So it goes without saying that 2 of the most important is we have had throughout the year, the adoption of circular design guidelines together with the definition of a framework for the sustainability scorecards concerning our products. I'll be back on this in a minute. As for green innovation, that you can see here, I would focus on bullet #3. So all what we are doing in order to define, design and disclose the percent rate of income together with R&D investments. And of course, this has an impact -- a positive impact, I should say, to the sustainable development. So to do so without quantifying specific KPIs, for example, the quantity of electrodes we have used, the liters of water that we need to make our products. We will be able to disclose a percent rate of income contributing positively to SDGs at least by 50% and at least by 80% as full climate action. Let me once again start on the very last bullet. This year. We have adopted an in-house internal procedure in order to introduce our energy efficiency increase criteria plus CO2 emissions reduction when considering new investment flows. As for our ambitions, our decarbonization plans will be the main topic that I will face in a minute. Let me go back to Scope 3, which is the emissions along the entire value chain. To tell you that in 2024, we focused on the improvements of the calculation methodology. I'm sure we will continue with this effort in the next year or so, but it has given us targets through the SBTi's science-based target initiatives, and we're just waiting for the validation from SBTi. As for the circular economy-related initiatives, we're now trying to [indiscernible] reuse secondhand wooden packaging. There are some agreements with our customers because, of course, we want to recover a wood-based packaging after delivering products, but I have to say our plan [indiscernible] for new alternative solutions by using or with the use, I should say, of recyclable materials. Now as for the pillar concerning -- well, our people and local communities, as you can see here, we will talk about this in a few minutes. And then let me also talk about Pillar #4, which is the new policy on diversity, equity and inclusion, DE&I. Now this is part of comprehensive set of policies that the group decided to develop first and to adopt later throughout 2024. Now this is the support out of the, let's say, public commitment on all of those topics. As you can see here in this slide, I mean, there's a policy on human rights. There's another one for quality environment, health and safety, another one for the sustainability throughout the entire supply chain. Well, actually, all of this will be implemented within the [indiscernible] analysis that we carried out on the most important topic of conflict minerals. I mean all of the high-risk areas. And once again, human rights are at risk in those areas. Now before leaving the floor to the first round table or [indiscernible] of this event, let me share with you one quick word. [indiscernible] you that the badge you have is made of [indiscernible]. Now this means that the badge will [indiscernible] aromatic plant seeds. On the back, you can find the instructions so that you can reduce this badge so that you can plant the seeds. Point #2, all the plants you see here today come from Replant. Now Replant is the name of an association. It has been created by botanists and in they just wanted to put together a community made these people loving environment, taking care of the environment, and this is what they do. So they recover first and reuse later plants. Very last point before leaving. Because we are now celebrating our first sustainability day, we have planted 200 trees in collaboration with Treedom. And this is to thank you for your participation and attendance. Thank you so much for showing interest in the De Nora sustainability policy. So we would like all of you to take part. So attendees will receive one of the trees of the De Nora forest. So tomorrow, we will send you a link. So I mean well, if you want, you can receive your own tree. As soon as you accept the gift, you will also be visible on the De Nora's corporate profile and website. I hope you will enjoy this gift. Thank you so much for your time and attention.

Thank you so much, Martina. I'm sure we'll be back on these topics during our panels today. I really would like to thank the speakers. Thank you so much for sharing with us your strategies. I think time has come now for panel consisting in market trends on ESG. So [indiscernible] Partner and Associate Director, Climate and Sustainability, BCG. [indiscernible] Energy Transition, Hydrogen Chief Office, De Nora; [indiscernible] taking advantage of the streaming connection today. One is global De Nora Water Technology Chief Office, this is [indiscernible]. Okay, then great. So during this panel, let me go back to the main market trends in terms of ESG. And we will also go back to COP29, green hydrogen and water.

Okay. Now let me get into the second of the meeting. And can I start with Fabio. Fabio, what about the outcome of COP or COP29 in Barco, Azerbaijan? Some people say it was a failure. Some people say, it was a successful event.

You're right. I mean, there are, let's say, black and white opinions on the last COP29, as you said, just wrapped up in Barco, Azerbaijan. Well, I think it was a successful event and not a failure, and I'm sharing this with you because I'm also thinking of the entire context, I mean, the situation in which you COP took place. Well, especially or in particular, just a few days before COP29, U.S. election were held. So President Trump said they will leave the Paris Agreement. So of course, we couldn't expect disruptive agreements concerning -- I mean considering the outcome of the U.S. elections. And furthermore, one of the other, let's say, consequences of the COP Azerbaijan was invited -- I mean to organize this COP less than 1 year after the previous COP, which is something absolutely unprecedented. So local organizers had to negotiate so many very special agreements, especially because the COP had a fundamental objective considering, I mean, the time line from the Paris Agreement, I mean, renegotiating the agreement on CF, climate financing. Now the first agreements, very important one have been defined in Copenhagen many years ago, well, actually 15 years ago And the agreement had been signed totaling $100 billion. Now that number, I mean, just from Copenhagen to today, well, this is something that we've been able to do right now. So we moved from 0 to $100 billion, it has taken 15 years. COP29, that's an important agreement because now we move from $100 million to $300 million, it will take 10 years to do this. So again, I'm sure that this is a very, very important number, we would never have to forget. If you consider the general context, I mean, all of the financial flows required, if you really, really want to help developing countries, which is $1.3 trillion a year, well, of course, you may think that this is a very small number. Anyway, it is a major step forward. So it's a big amount of money. Hopefully, next COPs will build on it, and they will hopefully be able to bridge the gap. So we need to reach $1.3 trillion, which is what we need within 2035. But there was also another very important agreement at COP29, as we said at the very beginning of this meeting, this concerns Article 6 of the Paris Agreement, which is the one that regulates the carbon credit trading systems between different nations and also between nations on the one side and organizations or companies on the other. Now they discussed about this for many, many years, something like 10 years, and we've never been able to get to reach the objective. Well, in this COP, we've been able to find some rules to make all of this running in the next years or so, it will be possible to include in the participating nation is a decomponization plans, some contributions coming from the exchange of carbon credits between different countries. Now this is also very important as a step forward because developed countries will be able to invest in developing countries. And again, on the one side, we will be able to spend money to have effective investments, if you will, because they will be decarbonizing or neutralizing CO2 emissions. In those countries will actually, it is longer cheap to invest versus a developed country. Because, of course, the cost of the decarbonization after the first actions will increase. I mean, if you measure, for example, [indiscernible] CO2 of abated CO2, well, in the developed countries, I mean you have to pay more versus developing countries to do the same thing. Well, anyway, these are very positive sides of COP29. But you're right, it does have a negative side as a drawback. It has to do with the legacy from COP28. Now you remember COP28 concluded, I mean, [indiscernible] with an important statement. So transition away from fossil fuels that was made the striking, if you will, was pronounced. Exactly, you're right. It's very difficult to do this, but there was a strike in statement, especially in a country where oil and gas is, of course, one of the main contributors to do the GDP. Anyway, this kind of concept, the so-called transition away concept was not reconsidered in the final statement of COP29. And again, that was a negative agreements. So how will this be judged? Well, of course, we need to consider the evidence of the real facts from COP29. So carbon market supported by the UN will probably grow in terms of carbon credits that will be exchanged. So we'll be able to [indiscernible] KPIs, if you really want to measure or have to use is the one considering all the plants. In the next month -- so in 1 year, this is what we'll be doing [indiscernible] plants of every single country. Again, it goes without saying that especially developing countries will have to express their plans also on the basis of climate finance and the agreement that was reached right now at COP 29.

Right, so green hydrogen in GH. What about its current market, what do you think about GH for the future, including what has been presented this morning in terms of energy strategy? So our new national hydrogen strategy. Do you believe in this?

I have chosen this slide, so last week, I was at this important meeting in Brussels, that this was one of the most important slides. This is the typical diagram where you can see how new economies are created. This is the -- so we went through a hype. In the hype, we had huge expectations in terms of age for hydrogen. And all of this was adopted by the financial market. But actually I'm not really talking about a new industrial revolution. So what we want now is to get a new position with green hydrogen, so GH sort of setting aside FF, fossil fuels. I don't think this will happen overnight or we will take more than 2 years. So what I'm sure will happen, and of course, there will be the [indiscernible] if you will, a real strengthening. So the consolidation of this phase where we are today. And I'm sure that we will take sort of an industrial flavor instead of a financial one. We do have some indicators, for example, we have COP29. We have the trading of CO2. No free of charge CO2 allocations for Europe. And once again, this is going to support, I mean, hydrogen. We already have some countries around the world like India, for example, and India said, I cannot may fertilizers, so please do them with green hydrogen. So this is a sort of a hype on the market. So everyone is sort of sitting and waiting for President Trump. So maybe he will remove all of the regulations on hydrogen. But this won't happen because the economy is heavily depending on that kind of array. So the market will start off with surprises. Just look at the numbers. In Europe, would see something like plus 50% projects reaching FID versus last year. And the total is 2.5 gigawatts. This is a very positive outlook in my opinion in terms of consolidating opportunities. And once again, De Nora has huge opportunities right now because of this is the time where you really, really have the possibility, I mean, to emerge as a steady, solid organization really believing in this business. You believe you have right technology for this business. Also, we should do emerge, if you will, even if there are so many organizations and competitors. But once again, they have been established, but then they died 2 years later with stunning technologies, but unfortunately, those technologies turn out not to be effective. As for the strategy, well, I'm really positive because I mean I went through it this morning quickly in Italy, Germany and Spain. Now by the way, Germany has a very strong strategy about this because you know that the gas corridor goes through Germany. So they really depend on Nordics. As for Spain, we know that it is the fastest-growing country in Europe in terms of hydrogen because of its availability. And now we also have Italy. Now Italy has, let's say, promised a small number of gigawatts. Now I prefer to see a small number because this means that we will probably reach it. So maybe 50 gigawatts won't be doable within 2030. So we have a smaller number. I don't think this is a strategy. It's a snapshot of the SS situation. Anyway, we have so many different indicators, and what I expect now is tangible operating plan.

Now what is happening to the water market? What is your vision for the next years? I'm just repeating the question in English. What's your vision for the water market in the next years or so?

More how in view of the teams of today that we are talking about. So the team of what we believe that the team of water is very deeply intertwined with sustainability and ESG framework. Water at the end of the day is the fundamental resource for life and our development technological balance. How it plays today is different than how we see it. [indiscernible] footprint more and more. The third one that we see [indiscernible] freshwater ecosystem, these are rivers, lakes, wet lines, which are critical for our biodiversity. So in the event [indiscernible]. The second thing in the [indiscernible]. With regards to governance, we see corporate responsibility gaining a lot of [indiscernible] more and more to disclose water usage, [indiscernible]. These are key themes [indiscernible] this topic. This will actually drive innovative solutions in areas such as desalination, wastewater, [indiscernible] evolving in the future [indiscernible]. And within the circular economy, items like water reuse and recycle, this will become more and more central to reducing waste. Industries will need more and more to adopt closed-loop systems for water reuse, much more so than they're doing today. And the second item within the circular economy that we see evolving is going to be what is referred as net positive water impact. This is where companies actually are committing to returning more water from the ecosystem than they withdraw. And this is aligning with the sustainability goals that many of them are placing for themselves. The third item or the third topic for the future that we gain more and more attention or evolve to really evolve more is ESG investment trends. One of these is particularly, we already start seeing it, is water as a financial metric. We believe that more and more investors will actually increasingly evaluate company based on the water risk management and the contributions to water sustainability. This, again, will probably lead to either a higher adoption of technological advancements or actually innovations themselves, things like AI for resource optimization or IoT, the Internet of things for monitoring different events or different distribution systems. Many countries are already adopting that. But more and more in the future, this will be adopted. And fourth and final area that we see rolling over the future is on the global collaboration. Primarily, this is around transboundary water management. This is where shared water resources like rivers across national borders will require collaborative governance to prevent disputes and ensure sustainable usage in the future. So in summary, De Nora views water's important to life and economy, an essential focus for sustainability and ESG framework in general. Short term, there is addressing water risks and impact would be a priority. But longer-term strategies will hinge on innovation, resilience and resources equitable [indiscernible]. And I think that businesses will integrate more water things into their ESG strategies, which will actually drive meaningful change towards sustainable future. As I said, De Nora's future objectives -- strategic future objectives are taking into account all of the above and to drive a sustainable growth even for our company.

Now we'll keep talking about water. What about the possible steps forward in terms of water management at COP29?

Well, yes, that was one of the most, let's say, debated topics in COP29. Their economy in Azerbaijan is really based on the Caspian Sea. And the level of the Caspian Sea is going down, which is impacting on the GDP of Azerbaijan. So of course, the country wanted to promote discussions concerning water and water management. Now those discussions went well beyond the typical discussion on the Caspian Sea. And again, all these discussions took into account water on a global level, so all around the world. Now if you look at the global population, around 50% of the global population at least once a year is subject to water scarcity events on the one side. In other cases, well, this concerns the 2 billion people. And in some cases, we also have extreme water scarcity cases, so jeopardizing the life of these people. And on the other side, as we must have seen in the previous video, this is something that's increased in its frequency, the so-called extreme climate events. You've seen what happened in Northern Italy or in Valencia or some hours ago in Gaza. So this is what they talked about. As the previous speaker said, they have highlighted the link between water on the one side and on the other side, many other sustainability-related topics, so climate, biodiversity, and mainly other topics, for example, social sustainability and the decision made was a major one because it's been ratified by around 50 countries around the world, but this number is due to start, so signatories will increase their numbers. In the national determined contribution plans of every single country, not only would they have specific actions in order to do climate mitigation actions. So they will increase the renewable electricity, hydrogen adoption together with carbon capture technologies and so on and so forth. But there will also be actions on water, explicit. So De Nora once again from this point of view, enjoys a fantastic positioning, so that you can really leverage technological solutions so as to enhance indicators having to do with [indiscernible]. So this is going to be done, thanks to once again, mitigation plans, but including the national adaptation plans, NAPs, so new measures will have to be implemented so that the current ongoing climate change can be managed in the right way. So we need adaptation measures to be implemented, so that they may have an impact on extreme events, for example, preventing floods.

Can we say that mother nature gives us renewables, but of course, the technology will increase its effectiveness?

I do agree. I entirely agree when it comes to the national hydrogen strategy has been published today. And you can see many graphs, many charts, many articles, which you can see that the element of the hydrogen cost coming from the energy price, although renewable in Italy, it does represent 80% of the total hydrogen cost in Italy. It's not the same way in other countries. For instance, think about Saudi Arabia, Spain, Canada, U.S.A. as well. We have a lower percentage, and yet it is very, very important. To waste as less as we can with these renewable energies, which big scope break news. It's not free. You need very efficient energies. And this is what De Nora has been making and doing for, I wouldn't say, 100 years, but thousands of years for real. Paolo Dellachà said before that our DNA really is via the electrochemistry, which is a branch of sciences, which is trying to have incredible efficiency. And with this way, we can have high efficient energy markets. It means not wasting a single source of energy, which looks like it's for free, and it is not, means we can produce, manufacture hydrogen with our technology with a specific joint venture, which we have, which is based on our electrodes, which increases the consumption of renewable energy and thus, in turn, the energy.

So we cannot speak about the so-called PFAS. Where are they? Why is it important to speak about this?

Well, it's a topic of great importance, both in our industry, but in general. And I want to take a few minutes to go through some of the key fundamentals regarding this topic. So what are PFAS to start with? It's short for per- and polyfluoroalkyl substances. But more importantly, there is many types of these. There is over 9,000 types of PFAS. So that's the first complex issue around this topic. The second is it's a man-made group of chemicals that has been used since the 1950s in any consumer and manufacturing products. And they have a very strong chemical bond. And that's why they have been very prominent in the usage. And this chemical bond is very difficult to actually break down. Where are they found? Essentially everywhere and in everything that we use every day from nonstick waterproof coatings of pans -- pots and pans to pharmaceuticals, jet engines, firefighting foams, everywhere and in almost anything that we use. And there -- it's a set of chemicals that referred to as forever chemicals. Why they work forever? Again, because there is no natural process to degrade them. This means and an example that is used often is, if you take 500 milligrams of PFOS, which is one of the many types of PFAS, so essentially, just like a panadol pill, it would take 400 years to naturally break down. And that makes it forever. Therefore, it accumulates in the environment. It accumulates in our bodies. And that's why it becomes such a great importance. And that's why we refer to it as forever. So moving to the next slide. How do they get into the water? This slide is an illustration of the many, many ways that the PFAS chemicals can get into the water. From direct, which you see on the left upper side, which is basically from manufacturing waste water that comes off from the manufacturing sites Or the PFAS in the air that gets part of the manufacturing evaporations into the clouds and then it precipitates back to bodies of water. Irrigation, agriculture is another way. We use water to irrigate, water has PFAS. It goes into our water streams. Airports, military bases that use it very often. Some have stopped, but they've been used for many, many years for firefighting purposes. Landfills [indiscernible], everything that we use that has PFAS, as I mentioned earlier, ends up in a landfill, that landfill leaches PFAS right into the water tables and eventually from residential areas. Again, like I said, we use it in everything and everywhere in our daily life. So as we discard this, it goes straight into the streams as well. So it's very prevalent how the water gets -- how the PFAS chemical gets into water streams and bodies of water. So one would say, okay, so what? The next slide shows the basics of the so what? What is the impact of PFAS? Why do we care that is prevalent and it gets into the drinking water? First of all, it's pervasive in daily life, as we mentioned. But it's not restricted by geographical boundary. So this chemical has been used all across the world in many, many different products. So there is no geographical boundary to this. It's easily transferred. And the worst part is probably that it accumulates in organisms. Because we said it's so persistent and resilient when it builds up in the organism. So it has been found that inside organisms, actually, the concentration is higher than that found of the environment around where those organisms are. That is because of a phenomenon called bioaccumulation. It actually accumulates biologically inside organisms. We found that in some parts in the water, it's parts per trillion. When it gets into bloodstreams, it's parts per billion. So it really accumulates, and that makes it very difficult. And as a result of that, so far, research that has been done for the last number of years, 8 to 10 years, all 99% of humans are that have some type of PFAS in their bloodstream. And again, to answer the reason of so what, it has severe health concerns. It's been tied to a number of different things from reproductive issues to low birth to cancer, to kidney issues, liver issues, et cetera, et cetera. So it's -- for this reason, it has taken on a very great importance in our industry because it's a new contaminant that has only recently received so much attention. So what has been done as typically with this contaminant, it happens after the studies that have proven everything that I mentioned, there is regulations that comes into place. So what regulations has come into place? We've got, right now, the European Union and U.S. that have very strict regulations that have passed. In the U.S., actually, this April, the Environmental Protection Agency put regulations that are very, very strict, less than 10 parts per trillion of PFAS can be contained in water. And it has in part of the regulations, it says that by 2029, any water system or drinking water system or utility, if you will, that has more than 10 parts per trillion needs to have it removed or treated from the water for the residents that it serves. In Europe, they are not as strict at the moment. The regulation that is in place now, it calls for less than 500 parts per trillion. But as of next year, that is going to be dropped down to less than 100 parts per trillion. But there are some countries in Europe, Denmark, Sweden and Germany, in particular, are pushing very hard to get to regulations that are very close to what the U.S. has in place. So it's consistently evolving the regulations. And that's a big driver for the demand in treatment that will come up. It's important to note that wastewater regulation hasn't come into play yet. So for industries that use PFAS and have wastewater into their affluence, there is no regulation in place yet. There are guidelines that are being studied, and the regulation was supposed to pass this year, both in EU and also in the U.S., but it's expected to pass next year. So -- but many industries are not waiting for that. Many industries are going ahead and especially chemical industries are actually being very, very proactive. If we look at, therefore, the drivers, in the municipal, you have regulation as it typically is. These are the drivers for the demand for treatment or the demand of taking care of this issue. On the Industrial, actually, the drivers so far we have seen are 2. One is ESG policies. The ESG policies of these chemical companies, although there are no official regulations in place are actually driving activities proactively within the companies to look at this issue and resolve it. The second driver is water reuse, again, has to do with sustainability and ESG. If they want to reuse the water, they have to take care of the PFAS in order to be able to reuse it. So those are the 2 big drivers. As a result of this, specifically driving the ESG side as well, just to illustrate, in 2023, there were $11 billion -- over $11 billion of settlements between U.S. water systems and chemical companies, only in 2023. This is going -- the majority of this is going towards funding the water systems, the utilities to actually treat the water and have systems in place before 2029. So -- but there is many, many more that are in place that are pushing for this. All over the world, there is regulations that are being discussed or regulations that are being put in place. Last point that I want to make is how to treat this. There are 2 aspects about treating PFAS. One is the actual treatment itself. In other words, removing the PFAS from water. This has mature technologies that are used to remove it from water. But removing it from the water, remember where I started, it is a forever chemical, which means that it cannot be destructed naturally. So it can only be destructed by using technologies. And the second part of PFAS, therefore, is one to treat it. The second is how do we destruct it. And destruction technologies, there is a number of different technologies that are being developed. Some are a little bit more mature. Some are very speculative right now, but that is the big wave coming in is the destruction technologies for PFAS. De Nora direction strategically is to place itself in being able to both offer the treatment side, but also the destruction side. Because if we only offer the treatment side, we believe it's really not resolving the problem 100%. It is just moving it from one area to another. It is not destructing and getting rid of it completely. So that's in a synopsis, the issue with PFAS.

Thank you. Thank you so much to all of you. You've given us so much very useful information. Please thank you once again. Now let's leave some space to the De Nora's Technologies. And now I will call Davide Rovelli, Green Innovation Manager of De Nora; Alessandro Fiorucci, R&D Engineering Manager of De Nora; Alex Bettinardi, Global Product Director of De Nora Water Technologies. Please come up here on the stage. Big round of applause. We have already said that nature gives us renewable energies, but technology has that role to play when it comes to efficiency. Thank you. Thank you so much.

Good afternoon, everybody. Thanks for being here for people here and people connected online. And today, I am extremely pleased to be here to tell you about something which is my bread and butter. So I am going to tell you how De Nora works very hard to have low impact -- low environmental impact and technologies and how we go on with the innovation. We are going to specifically speak of the product sustainability in this case, which has already achieved very important results, as you can see in the bullet points of this very first slide. Please pay attention. These results are not born out of thin air. Last year already, we had started with a series of analysis, which led to specific life cycle assessment techniques, LCA, you will listen to me saying LCA a lot, which stands for life cycle assessments. For nontechnicians, LCA is a quantitative methodology following specific standards and patterns. And this is used to understand what the product environmental impact is. In this case, obviously, we need to remember the carbon footprint connected to specific products. And this is about the greenhouse gases, which are emitted. And LCA has been specifically focused on the carbon [ fly ]. Now at this point, why are we celebrating this objective, this result? Why is it important in our corporate reality? In this LCA, we have several roles. We have the purchase department, the operations department for data management, R&D for specific technical details of products and so on. Therefore, as you can imagine, having a common action is very important for a proper LCA. In the second bullet point of this slide, we can see that starting from this work, we are now about to conclude the first audit process for our verified carbon footprint technologies audited by third parties. Therefore, we can actually achieve the proper quality standard, which is not to be taken for granted. Another very important result which we have achieved and my colleagues have spoken about it before I -- before me, we are going to have our circular design guidelines that is the definition of guidelines to innovate product-wise, especially focusing on sustainability, environmental sustainability and circularity. On the graph, you can see the main concepts starting from the external circle, we can observe the different life cycle features of each product from the material selection to the manufacturing and the usage and also when it comes to the end of the life cycle, whereas in the more inner circles, we can see the 5 pillars of our guidelines, which can be applied to several phases of the product. Each pillar is connected to specific indicators, which we will see very shortly. Now I would like to underline another very crucial point. This same scheme is going to be used to also assess our R&D projects. It means that we will actually assess the successful implementation of our products. In a few words, we will be able to especially stress the importance of very virtuous technologies and techniques. Another important element is that to facilitate the adoption of these new concepts for the whole R&D department that is the colleagues who really developed the products, we have given all of them, no exception, a short training session and cause for the introduction and study of these new concepts. You can imagine how difficult it could be to convey new concepts, especially when we are speaking of such specialized professionals. Now let's hop on to the next slide to see what quantitative indicators we use for each and every one of the 5 guideline pillars. Starting from the top part, we have LCA studies. For instance, to see the carbon footprint of our products as well as energy efficiency improvements. We'll also assess the presence of dangerous or hazardous substances depending on the specific sector regulations. Also, we will consider the composition of our products. And in this case, even the critical aspect of the materials being used. On top of that, we will focus on the longevity of the products, and we will assess the durability index focusing as well on the possible reparability and similar elements at the end of the life cycle, we will try to understand how much of a product can be reused or recycled to close the circle. And now at this point, maybe you may wonder -- you may wonder about one thing, we have this whole process, how does it end? We have this called product scorecards, one of our flagship initiatives. This document includes all kinds of indicators, which will create a specific scorecard about the product sustainability. In this case, we see an example. As we have already said, we can give you LCA indicators information about the circularity, hazardous substances, possibility of reusing such products or some parts of it. In any case, I would like to stress on the right part of the slide, we can actually create a greater context, positive context coming from the usage of these products, for instance, the decarbonization of our energy transition products. The drinking water production with our water technology availability. And on the bottom part of the slide, we can actually stress our initiatives when it comes to social sustainability, but also prepared more technical documents, if necessary. To sum up, this is the kind of score card, which we have been developing internally. Thank you so much for your attention. I now leave the floor to my colleague Alessandro Fiorucci. Thank you for your attention.

Thank you so much, Davide. Thank you so much. Good afternoon, everybody. The objective of this speech is going to be to -- go from general broad lines to more specific examples. I think that Lorenzo has already mentioned some of the things I'm going to stress. De Nora creates technologies to improve energy efficiency and energy savings. This is something we all know. The crucial know-how is the electrodes and the development, which has a direct impact, either on the energy consumption or the line of the whole process. Therefore, we have a greater efficiency in the final client production. I do represent the engineering department. And I can tell you that the solutions, we actually create the engineered solutions we create want to achieve the same goal. Therefore, regardless of the fact we are speaking of a stack, a process or a system. We always want to create processes in which electrodes can work at the best, giving a greater return to the operational state of the final clients. As Davide has already said, our vision goes beyond it. It's much more than a traditional vision. The Dragonfly system, from this point of view can be an example of the process, which Davide has already mentioned. Let's try and watch a video to really understand what this is all about. [Presentation]

As you can see, this is basically a turnkey system. So in terms of feeding, electrical power, it can give you hydrogen and oxygen well under pressure. So -- because once again, this is based on electrolyzers. Once again, we have plenty of utilities on board the system. You can see some of them are behind me. You can see [indiscernible] then you can see nitrogen mineralized water. And on board, you will find all what you need to operate it correctly. As for the development project, well, at least at the very beginning, was a so-called traditional project. So we have assessed all the components and the parts required. We carried out an impact assessment on the initial investment, but also on energy use during the operation of the system. So once again, the second portion is really, really very heavy and important, if you will, on this kind of unit. Now apart from this kind of assessment, we also have developed an internal analysis. And we also have convinced, I mean, students at the Polytechnic, so the Polytechnic school here in Milan to present sort of an in-depth study on this system. Now in order to start the analysis, the team, of course, had to go through the bill of materials and the assembly team. This is product #1, so Dragonfly. And thanks to this switch, I mean, we have recreated I mean, the electrodes and this a very high level of detail available. So this is what we have done. So for the following components, we went through all of the components to be purchased, their impact, and we have analyzed metal or even plastic components. So in some cases, the information was not available. So we had to use, I mean, the data you can find in the literature. So that was a big effort. So we've been able to do a sort of a sub footprint for the system. And we also went through detailed analysis. Of course, I'm now talking about the very first prototype, if you will. So this is it. Alex, I'm sure, will tell you more about another product.

Good evening, everyone. Let me go back to water and water treatment. I will present to you one of the latest products on the market CECHLO. Now it's basically a high concentration generator. I will tell you that this product is a sustainable response to some challenges and needs into the water treatment industry today. So these challenges come from various sectors. Now the pandemic has completely changed the perception on the supply chain. This is what also happened for water treatment. Maybe you remember some plants running out of oxygen during COVID, but also systems without disinfectant. So they were not able to disinfect water and distribute water in compliance with the standards required. So let's say, those managing water cleaning systems are looking for independent energy supply. Now we also have regulatory frameworks. Marco talked about PFAS, P-F-A-S. Now this kind of bodies want to protect users and the environment. So every single year, they update the treatment standards of waters by reducing the limits of the so-called emerging contaminants like PFAS, P-F-A-S. I'm sure you heard about pharmaceutical micropollutants. We also have disinfection byproducts. Every single disinfectant, unfortunately, if abundant, goes through a natural degradation system. This means producing unfortunately, byproducts. Unfortunately, they are harmful. We also have another key topic, which is sustainability. So when we talk about water, this seems to be taken for granted, but it is not for those managing water treatment centers. Now the approach is being changed. So we have the public opinion, the local communities reacting. So they're really working in terms of ESG, they put them into their long-term plans. The last point is safety and security. Centers or plants managers don't want to deal with dangerous hazardous chemical products. So they want to have equipment and machines, which are as automatic as possible. So they don't require any interface with the operator. This product, once again, CECHLO is the answer to all of these needs. Before telling you why in detail, I'd like to share with you a video. Now this video has been especially conceived in order to launch this product in North America presented at the WEFTEC in New Orleans in the U.S. WEFTEC is the most important event for water treatment on a global level. [Presentation]

Now as you must have seen, there's something similar with the Dragonfly that we've seen before in terms of the layout. So CECHLO is a plug-and-play system, and it is also skill mounted because the water treatment world is now moving towards decentralized systems. So what we wanted was an easy to deliver, easy to install, easy-to-use plant. CECHLO gives us answers to all of those challenges and/or needs. So basically, it is an on-site, on demand, a high concentration chloride generator. Now this means that operators or managers don't have to purchase, carry, manage and store chlorine. This has a positive impact in terms of sustainability and CO2 emissions, thus totally removing road transportation systems, thus dramatically reducing the energy required for the production of this disinfectant. Maybe you've seen in the video that -- let me go back -- okay, just one second. So maybe you've seen this in the video, but CECHLO also produces a fresh chlorine solution. Now fresh means that it is not degraded. So no disinfection-related byproducts. And last but not least, operating costs. Now this is a plant that just requires water, salt and energy. And this energy may also come from renewable sources or clean sources like GH, green hydrogen. So it has a positive impact on the operating costs. If you are a little bit more curious or a little bit more technical, this diagram tells you how it all works. So from left to right, well, basically, we create a mix made of water and salt. Now the water is produced by the plant itself, by the way. And we create a sort of a product. So the brine goes through the electrolyzer that we have designed, of course, with De Nora electrodes. Now the electrolyzer will generate chlorine, CL2 in terms of gas and then NAOH, so hydrogen as a byproduct. So potentially, it can be reused to generate energy. This means that the plant is almost self-sustainable. Chlorine in terms of gas is then transferred to the so-called hyperreactor. So it's a reactor converting it into its liquid form and the solution is a 12.5% solution. Before wrapping up, I'd like to share with you a second video. Now this is a technology that we've just launched, but I have to say many customers are adopting it. The video you will see, in my opinion, shows the main installation. This is from Hong Kong and Hong Kong chose CECHLO to replay disinfection technologies, let's say, traditional technologies, which are not complying with safety, security, quality and sustainability. [Presentation]

Thank you so much. Thank you for the 3 speakers of this panel. Thank you so much with that plenty of food for thought. So we talked about the important impact of technologies. Now we need De Nora strategy to minimize the environmental impact and the importance of circular economy. So let's start with Filippo Ronzani, Innovation Manager, De Nora; Peter Damiano, Managing Director of De Nora, Italy and De Nora Italy Hydrogen Technology. Oh, please, don't be shy, big, big rounds of applause, Chiara Locati and Christian Urgeghe, Chief Technology Officer, De Nora. Okay. Then so we will now be talking about the commitment of De Nora on [indiscernible] mining environmental impact. So Filippo, can you tell us about the decarbonization strategy from De Nora?

Thank you so much. Now it's a big challenge. And it is a big challenge because we have 13 plants around the world in very diverse areas of the world with different political drivers. So we don't want to invent something completely new. We cannot do this. We just want to change something that already exists. It's a big challenge because for us, it's a great learning and innovation opportunity. We are highly motivated. So we have 13 plants around the globe. Our approach was to select the most important plants. This is our so-called primary focus. We have plants in Brazil, U.S., Germany, China and Japan. In 2022, they generated 90% of all of the Scope 1 and Scope 2 De Nora's emissions. So we need decarbonization systems for those plants. We decided to start the ball rolling in a simple way in our Ohio site, accounting for 25% of our emissions. We launched a pilot project and we will leverage in this project to develop the detailed plans for the other sites as well. We used a very practical pragmatic approach. This is the typical American philosophy. So we haven't looked for grant solutions, spending, well, too much money and too much time without knowing what the result would be. But rather with our experts, we went inside the site. We carried out the analysis of the layout and the energy flows. And we've identified possible areas to improve energy efficient, reducing consumption, cutting on emissions. So at the end of this pathway, we've been able to identify around 15 initiatives, 1-5. In the next 5 years, if implemented, they may lead to a 30% reduction of energy consumption of the Ohio site. We will save CO2 up to 10,000 tonnes within 2030, of course. Now that was an incredible success, not just because of the quality of the actions identified, but also especially because we've created new skills. And our colleagues were talking about the focus that De Nora has on people. Well, our engineers are so -- I mean, highly skilled in managing operating plants. They are becoming experts. Also in decarbonization. We've created new skills. They will be used for the Ohio sites and many other existing sites, but also for the future sites that we will probably build in the future. So to wrap up this part of the pilot. Let me tell you, it was -- I mean, we had fun. My colleagues were sitting around the table and at the same time, visiting the plant with a different point of view. So this is a huge engagement, whole commitment. This is a key driver to get a good decarbonization package. To wrap up, I also would like to update you on our own initiatives. Now we need to build 14 PV installations. Today, 5 are up and running. So we have renewable energy and the projects will be done all the way to April next year. So within the end of the year, we produce 2.5 gigawatts of renewable electricity. At the end of the construction of all the other PV plants, the total capacity will be 7.5 gigawatts a year. Okay. This means it is 20% of our electricity consumption. Our baseline is 20%, 22%. So yes, you're right. It's a challenge. And I'm sure this is the right pathway. I'm sure we will be reaching the objectives Chiara and Martina just talked about.

So with your help, can we have some details on the projects here in Italy.

We have a new industrial district in De Nora. It is being built in Cernusco sul Naviglio. So once again, this is on the electrodes and water technologies. This is emerging businesses with the first Italian gigafactory. Now the gigafactory is part of an initiative and important projects with funds coming from the European Union to create the European hydrogen center. It is funded -- also thanks to the so-called PNRR funds. So this is what we're going to produce. As for the De Nora's traditional business, we will produce electrodes parts and technologies for the most important industrial electrochemical processes around the world. As for water technologies, we will produce water treatment plants, as we said before. In the gigafactory, we will produce components, parts for electrolyzers, for water electrolyzers and for fuel cells and modular and container-based systems for alkali systems. Now this plant will be cutting edge. It will give a new identity to De Nora because this plant can be replicated. It is modular and it is, if you will, the lighthouse for the future plants. It will be very innovative and highly sustainable. So this is today's light motive. Sustainable in terms of words. But when we talk about sustainability. We need to talk about the concrete simple concepts, something that consumers can really understand. So we need to talk about using just a few materials, materials have to be recycled, low energy impact, reducing CO2. This is what we have used during the development of the project. We carried out an LCA, a life cycle assessment. We saw, if you will, the total so the complete life cycle of the whole plant, including raw materials and the energy to be used. We decided to build this plant in a former derelict industrial site. So this is an urban regeneration of an abandoned derelict site. We decided to demolish all the previous old industrial buildings. We transformed all of this into material or construction material that we have reused for the foundations. This is what we've done over 40,000 square meters. It's a huge area. So it has had a positive impact. Just a couple of numbers. Getting rid of all of the demolished materials would have meant having 2,800 trucks transporting debris. Then we had to recover the CO2 emitted by the trucks, which is 1,600 trees working, so to say, for 1 year. Well, we have avoided this, and we haven't reused material. We should have repurchased the material, spending money. And then we also had to spend for CO2 credits anyway. This is what we have avoided. It is sustainable and environmentally friendly as a project. So we're trying to use renewable energy. It will also be user-friendly because of new smart initiatives. This is something very interesting in my opinion. For example, the facades of the plant will be painted with photocatalytic material to activate photochemical reactions. They will be able to clean -- I mean, to remove pollutants from the air, degrading the organic and nonorganic substances in the air. It will clean the air. There is more than this. We thought of environmental impact, but also climate change. We also carried out a study on hydraulics. All the rainwater on our plant will be managed by the plant itself. We will have tanks especially conceived in order to store rainwater that will be used to -- I mean for irrigation purposes, but also for the flushes of the toilets. We will also have a bio-lake. So this project also means -- full resting the area. So that was a derelict area now well actually in the future, the plant will be very modern. So it will be environmentally friendly with plenty of green areas all around the plant itself, but also on the top, I mean, on the roof of the plant itself. So we are implementing plenty of sustainability principles. We want to create the ideal workplace. We want to have, let's say, a low CO2 emission mobility. De Nora decided to make the plant close to an underground station so that people can commute to work without use of the car, so they can really take the train. And we also have a beautiful bypath connecting the plant to Milan. We're also thinking of social impact, and we're working with the local municipality to involve the community, if you will, inside the plant. And this will have a major impact in terms of new jobs. So thanks to the plant, but also thanks to the creation of the indirect business all around De Nora. Okay. Just a couple of figures to wrap up. So we got all of the permits. We've celebrated, I mean, the so-called first stone back in June. We will complete the plant in mid-2026. First production lines can start at the beginning of 2026.

Well, then it's great. We are looking forward, I mean, to visit it. Eduardo, can we talk about supply chain?

Good afternoon. Our approach was getting focused on a sustainable strategy. We want to create value for a local community. The gigafactory plant, I mean, demolition and then all the way to the berth, if you will, all of this has been done by local suppliers. We chose them, thanks to what they do in terms of environmental protection. So all suppliers are certified. So they comply with ESG parameters. The strategy for the Dragonfly supply chain. So this is one of the products we mentioned before. Well, it is also based on the same system. I mean most suppliers, you can see here some numbers in the slide. So suppliers are Italian and very close to Cernusco so the outskirts of Milan. This means helping the environment. There will be low emissions because of just a few transportation needs. We can also create returnable packaging strategies with a reduction of pollution because of packaging. So we are developing, if you will, new technologies for local suppliers. For local communities, we will create new infrastructures and new jobs. This is our new supply chain strategy. So we are assessing the ESG rating of our suppliers. Okay, we need the next slide. Here we go. This is to understand their governance practices. Now this kind of basis will help us understand which suppliers are also sustainable. Next step will be even more proactive. We will identify suppliers that may be a risk for De Nora's sustainability. So of course, we have to comply with environmental regulations, but we also have to consider possible breaches of human rights or unethical work practices. We also identified those suppliers requiring urgent need or help. In the future, we will integrate ESG parameters when assessing suppliers. So we will have a cost, quality and timing criteria. Suppliers also have to show they are in compliance with our own sustainability standards. Sustainability won't be an additional criteria. It will be one of the key pieces of the business assessment. The suppliers ecosystem has to be aligned to our long-term objectives to minimize risks, but also to maximize shared value. We also need to integrate ESG into the selection and assessment phases of our suppliers. This means that we will improve our resilience, but we will also create partnerships with our suppliers based on shared values. This will also help our suppliers stay competitive. In a context where you have more and more investors and consumers paying attention to ESG, well, this kind of company, in my opinion, is doing the right thing, but also creating a competitive advantage on the market. Last pillar, but not least at all, is circular economy. For us, this is a strategic need. We need to reuse resources and a key step towards this pillar is represented by recycling our strategic raw materials. We will reduce our environmental impact, but also and especially reaching the targets we have. We have plenty of internal actions that we are implementing to be leaders in this area, including a procedure to comply with the new European regulations on recycling. Now recycling, and this is my last point, is not a technical process. It's a declaration of responsibility. So innovation plus transparency means transforming waste into opportunities, creating a new standard for sustainable business.

Thank you, Eduardo. You touched upon circular economy, which is fundamental for De Nora. Isn't it?

I wanted to talk about the circular model, but maybe I have to, I mean, explain some of our products. So we have some pictures. Now on the left, you see here we go an electrode, and this is our competitive advantage for our customers for coating. This is hydrogen-based coating. The coating is a catalyst. So it contains a catalyst that reduces energy during the processes of our business partners. In water technologies, we have tripled the productivity of our partners. And so basically, they reduced the CapEx used. We got important energy savings at the same time. And working holistically with them, we created more services. So once again, this is good for circular economy. So what I'm telling you is something you can apply to this product here, but also to many other products. In the central picture, you can see the large-scale electrodes. This is 3 square meters bottom right on the blue frame. This is in Frankfurt, in our production line. In Frankfurt, the installed base is 5.5 gigawatts of water electrolysis products. You can see that our electrodes can be very big, so large scale, so to say. Last picture, you see a cell element, which is the main component of the electrolyzer. We call it cell element or cell unit. This is during a laser welding system. So to build an electrolyzer, we need from 70 to some hundreds of those cells stacked close to each other. This is what original equipment manufacturers do. And then, of course, when assembled, they represent the beating heart of our plants. Now this is the life cycle of our products. Once again, this is the typical life cycle system that's in our DNA. This is water electrolysis. If you slightly change it, all the products follow the same cycle, for example, including Dragonfly. So once again, all of them are into this philosophy. This is from cradle to grave model. So we start from raw materials. So here we go, bottom left. De Nora prepares coatings. So chemical mixes, they contain the catalyst and they are applied on substrates and with automatic proprietary processes to create electrodes. So this is what you've seen before, by the way. The electrode needs other, let's say, mechanical structures. Anyway, electrodes are assembled in the cell element that you've seen before. These elements are sent to the OEM so that they are assembled. You can see the electrolyzer making hydrogen. So every single cell or electrolyzer maker has specific know-how. We need synergies here between different technologies, and you can see the best results. This is what we have developed in detail, but we really, really have worked a lot, I mean, to create or build rather the winning model. So our customers use electrolyzers for years. Typical SCA is 8 years. They are then disassembled. And Filippo said, we have plants around the world. So we minimize road transport, and we receive those elements for the so-called second life. So maintenance or renewal. Recoating is the name of one of our processes, and we have the same performances. We have a very short, let's say, downtime. Customers can restart a new cycle. At the end of the cycle. And by the way, sometimes this is 30 years. You can say that the electrolyzer is depleted. Sometimes we introduce changes on the products. This is what we do together with our business partners, so we can even improve the product during its life cycle. We created a dismantling and recycling system at the end of the life cycle. So once again, parts we cannot reuse are recycled. And once again, we have raw materials for the recycled.

Christian, Eduardo, Peter, Filippo, thank you so much. So sustainability requires people working in De Nora, but also not working in De Nora. This is what CEO said, for De Nora, the real strength is people because sustainability does not just mean environment, but also taking care of people and communities. So I need Graziano Marcuccio, Chief People, Social Organization and happiness De Nora. Okay. So we have an informal chat. What about the name? So you changed the name of HR. What does this mean?

Now I am the last hurdle between me, our guests and the buffet. So human resources, no, it doesn't work in our company. It doesn't represent, if you will, the right idea. So human resources, as if these resources can have a foreseeable or, if you will, predictable yield, well, no way. Human resources produce something so small or even something so big. Sometimes the self-destruction of the company. So it depends on whether or not you activate it. So we talked about well, activation before. So we have built our people strategy on people. The first cycle started 1 year ago. And this is based on people engagement. And by the way, many speakers mentioned this kind of engagement. To do so, we have to be people, organization, social communication and happiness. And we look for happiness once again. So this is something that makes me very happy. So these are also included into the founding principles of the American Constitutional Charter. So superior. It's too long. It's an acronym. Let's say that the first 3 letters mean S is sustainability, B, productivity and E is engagement, okay? So activating -- okay, I will skip all the other letters, of course, to cut the story short. We sort of let people understand that they have an idea themselves, surprising for people. So we have updated our employee value proposition, open surprising parts. The company has been created many, many years ago. Now we welcome scientific discovery. This is the best version of ourselves so that we can create the organization around the uniqueness of each of us. We need to understand the environment around us to be the best person we can become.

Can we have some numbers from De Nora?

Well, thank you for the question. Just the most important number is last year, for the first time, we tried to get the Great Place to Work certification. We've been, let's say, approved and not many Italian companies succeeded. This year, we have reapplied successfully. We have improved the 5 verticals, if you will, the 5 matrices, identifying people satisfaction. and we have received great news, especially in the engineers and workers category. We are in the top 10 companies in Italy, well, actually #7. So when you discover that your project is not just an idea. This is not just a certification. But when it comes to workers, we are in the top 10 in Italy. And well, this means the project is not an elite project. The project wishes to include everyone. Your workers are happier than employees and employees are happier than managers. This means that this is the right thing to do. What about the DE&I? Well, we need another -- I mean, certification. It is to say, freshly baked. Two months ago, we got the gender equality certification. Some thousands of Italian companies reached the certification. You may think this is many companies, but if you consider the huge number of Italian companies, well, this is only 0.2% of Italian organizations, 0.2%. So once again, we are not followers. We are not early adopters, but we are right at the very frontier of those companies that even if the budget is not very big versus, I mean, big corporations, we managed to do this. Now you know that certification is a target. It is not the starting point. So what do we have at the starting point? Well, rediscovering people, looking for happiness and balance. This is based on 2 pillars, which is our, let's say, the reasons why we wanted to be certified. So once again, a great place to work. This is also something that makes us very proud. We have a set of policies coming from the past. So top flexibility because De Nora is a fantastic place where to make your dreams come true. But maybe it takes too much from you. It gets into your blood, into your mind. And maybe people spend too many hours there. So what can we do as employees? Well, every single employee can work from home. So flexibility, the so-called hours bank, additional permit days for special needs, parental leave, so this is both for mothers and fathers in compliance with the law, and we do more than the law. So we have the possibility to organize our time better so that we can reach professional dreams while not forgetting personal private needs. Now we also have the management of our wishes and desires for the future. And so every single person, at least once a year, will talk to managers or HR managers on what they expect from their career. So managers can help people do this. So this process brings you back to the center of all of our policies. So we need to consider the projects we all have. But of course, managers have to be ready to support people in order to discover the best version of yourself. This means education. We have plenty of training courses, and it has to do with DE&I. The name of the project is include or inclusive leadership. Now we just don't want to talk about inclusion or leadership. What we believe in is the credibility. So the holistic system designed to make all of the processes credible. So how can I say it is credible? Well, we have removed the undermining elements, sometimes undermining leadership. Managers are in the room. The trainer says, are you happy? And someone says, it's nice, but did you talk to my boss about this? Our answer is yes because, of course, we need the CEO and CFO sitting in the room learning about inclusive leadership. Now I know we do have barriers, but I'm talking about active listening, direct feedback, boosting feedback, inspirational leaders, not just transactional leaders. Managers are great at their skills. But of course, they also have to bring results home. So once again, they have to remember they are developing people. So inclusive leadership means asking questions and not just giving answers. So this will make us future-proof. So C levels, then the rest of the managers of the headquarters in Italy, then you will involve 100% of group leaders and managers and even group leaders around the world. There would be active listening, so messages from the headquarters, but also messages from the local areas. We also need to consider the culture of every single country and the name of the project once again is included. We can say that sustainability means many agreements, many things. Well, yes. Let me think about one specific topic De Nora is offering to local communities. Let me tell you, we have just one light motive, which is the support to [ sciences ] and STEMS, S-T-E-M-S. Back in 1973, our founder got the -- well, most important prize we have in our city because he helped local students. So this is something that was done 50 years ago or at least 50 years ago, and it has never disappeared. So the partnerships with universities have become even stronger. In Italy, we reached 6 partnerships with so-called technical high schools. We also cooperate with 10 universities here in Milan, but also in other areas. Now there's a sort of deindustrialization in Italy. People are pessimistic. We have brain drain and well, very bad demographics actually. So we need to counteract all of this. We need to support students. We want to support technical high schools, vocational schools or training centers. I think that we do this for the community, for the local territories and for our young talents. It was great to see that we have created, I mean, BCTO. These are the former, if you will, learning by doing or, let's say, vocational training. Now we just wanted to explain the way we work to young talents. We offer psychological but also general assessments so that young people can really choose the best skills and the best schools. One day, students will get their graduation, and they may apply for De Nora. And a few years ago, the city of Milan gave us a wonderful gift. So in Ortica, which is one of the neighborhoods here in Milan, the name of the street where we are, I mean the road is -- bears the name of our founder. This makes us so proud.

People at the center, thank you so much, Gassiano. May I have a CEO, Paolo Dellachà big, big hand, please.

So the pathway has been defined. Okay. Yes, just a few words to wrap up. I hope you understood. And if you haven't no buffet, no drinks that we started our trip to sustainable future. So every single day will be a key step to reach sustainability because it takes time. And our objective is to be a source of inspiration for the entire industry in all the actions we carry out to have a positive impact on our planet and future generations. This is what my colleagues told you. Now once again, thank you for being here. Also would like to thank my colleagues. So the future of sustainability concerns all of us. You play -- you all play a fundamental role. Please do cooperate with us. Take all the opportunities to improve together because a positive change is possible only if this is faced together. That was a deep change, embracing -- by the way, not easy. It embraces every single aspect of our operation, but we are not alone. Every single step is fed by commitment. People are working with us, for us every single day. De Nora thinks, we can be one of the keys to take up global challenges. We want to be inclusive. I really would like to thank some people. My colleagues here who organized the event, it's wonderful. Thank you so much. A big, big hand. Thank you. So we really would like to thank Lorenzo Galli, the Director of the Museum; Giovanni Greppi Innovation Manager here. I really would like to thank Elisa Piazza. Thank you so much. A wonderful job, and thank you so much for spending a couple of hours with us.

Thank you so much. Bye-bye. Enjoy the rest of the evening. Bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]