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2008 Sustainability Report


2008 Sustainability Report

Blu Barilla Pantone 280


BARILLA G. e R. Fratelli - SocietĂ  per Azioni Sole Shareholder Registered offices: Via Mantova 166 - 43122 Parma Share capital Euro 180,639,990.00 = issued and fully paid Parma Companies Register, tax code and VAT number 01654010345 Parma R.E.A. (Economic Administrative Reference) 169.146 VAT number 01654010345 Tel. +39 (0) 521 2621 Fax +39 (0) 521 262083 E-mail relazioniesterne@barilla.it www.gruppobarilla.it www.barillagroup.com

Prepared by Barilla Communications Department in collaboration with Fondaca

Sustainability Team Lamberto Prati - Communications Federica Avanzini - Business Development Italy Giorgio Beltrami - Research, Development and Quality Enrico Cademartiri - Research, Development and Quality Emanuela Isi - Number 1 Lucio Moschella - Human Capital Umberto Panizzi - Internal Auditing Filippo Romanini - Human Capital Luca Ruini - Supply Chain Julia Schwoerer - Marketing Roberto Soresini - Administration Alessandra Stasi - Human Capital Editorial coordination MS&L Italia Graphics Armando Chitolina Photography Barilla Archives Luca Rossi Marco Vasini Stefano Zardini Corbis Photolithography and printing Grafiche Step, Parma


Summary 4 - Chairman’s and Deputy Chairmen’s letter 5 - Chief Executive Officer’s letter 6 - Group Profile 9 - Our approach to reporting 11 - Nutrition 12 - Daily well-being 14 - Products for specific dietary needs 16 - Timeline and Objectives 19 - Supply chain 20 - Supplier partnerships 22 - Standards 24 - Timeline and Objectives 27 - Environment 28 - Reducing the Ecological Footprint 30 - Energy efficiency 32 - Management of water resources 34 - Timeline and Objectives 37 - Human Resources 38 - Care for and development of individuals 42 - Individual and widespread responsibility 44 - Timeline and Objectives 47 - People 48 - Safety and quality 50 - Communication 52 - Timeline and Objectives 55 - Community 56 - Development 58 - Education 60 - Timeline and Objectives 63 - Stakeholder 64 - Map of Barilla’s stakeholders 66 - Relations with stakeholders 69 - Innovative approach to reporting 71 - Timeline and Objectives 73 - Work continues 75 - Barilla Center for Food & Nutrition 77 - The joy of spending time together and gestures of love 79 - Barilla for Abruzzo 80 - Appendix: Table of challenges and commitments, Stakeholder recommendations - 2nd forum, Stakeholder recommendations - 1st forum, Table of performance indicators 88 - Bibliography


Chairman’s and Deputy Chairmen’s letter

Feed others as you would feed your own children Our father Pietro Barilla often quoted this phrase to express with simple eloquence his aspiration to help people live better, improve their wellbeing and increase their desire to eat well. For Pietro Barilla the concept of sustainability was founded on achieving business growth while continuously improving our products. Businesses embody the values, charisma, emotions and leadership qualities of the managers at their helm. This has always been the case for Barilla. The tendency to carry out our business responsibly, applying the principles of sustainability, was driven directly by

management. The corporate values and culture were passed down, sincerely and spontaneously, simply through example. Our mission today has not changed even though the definition of sustainability and responsibility has now been extended to encompass the awareness of the challenges that an enterprise must face heading towards the future and the quality and volume of knowledge that must be developed and conserved. Barilla is an Italian family business that views nutrition as a sociable, joyous occasion, full of flavor, affection and sharing and offers quality in the form of wholesome, safe products. Sustainability and social responsibility guide our business strategies towards the development of products and processes that focus on individual and environmental well-being. Barilla embodies the most authentic values from the Italian and Mediterranean diets, which represent the starting point for healthy eating habits, the respect for and protection of our planet’s natural resources and safeguarding the rights of future generations. This first Sustainability Report, which for us is still in the experimental stages, is the product of a journey of study and deep reflection. And this is only the beginning. It is an incentive to continue this journey with enthusiasm, allowing us to bond our work with our values, and our culture.

Guido Barilla, Chairman Luca Barilla, Deputy Chairman Paolo Barilla, Deputy Chairman

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Chief Executive Officer’s letter Our first Sustainability Report is published in close succession to our “Challenges, commitments and actions for a sustainable growth” report, in which we illustrated our specific and unique sustainability model and the commitments made to people, the community and the environment. This report is part of the same journey: it identifies and documents the values, culture, strategies and actions that, starting with our past, project us into the future. The seven key factors of our sustainable growth are associated with a series of performance indicators that demonstrate the results achieved. The real added value of this report derives from the advanced publication of concrete and measurable five-year targets, which we must work to and be accountable for. Our ideas and actions for a more sustainable future are not simply a statement of accounts. They are borne from the desire to communicate transparently the results that we expect to achieve. We are convinced that we are on the right track. Barilla has always focused on the Mediterranean diet, the nutritional model and habits that are considered by worldwide scientific research to be the most balanced: by that contributing to people’s health, the community and the protection of environmental resources. Sustainability also means the committed and effective interpretation of the role we play, our duty. Barilla will continue to intensify its work on ingredients, the supply chain, and the key products of the Mediterranean diet.

On a wider scale, our mission is to help people live better, longer, in a healthier environment. For this purpose we are working constantly to develop professional skills and abilities to manage and disseminate awareness, particularly where innovative and immediately applicable. Food today plays a central role and is of primary importance in international political, economic and social agendas. The whole food chain must be organized and governed by accessibility, sustainability and nutritional value, guaranteeing the quantity and quality of food produced and distributed. A multidimensional and cross-section approach involving different players, both public and private, is needed. We strongly wish to be part of this commitment, tackling the challenges facing us to prove we are competitive and sustainable.

Massimo Potenza, Chief Executive Officer

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It is the Group’s historic brand that identifies it as market leader in pasta in Italy and worldwide. Thanks to selected durum wheat and state of the art technology, it guarantees “al dente” pasta and ready-made sauces to millions of people around the world.

Founded in 1879 in Torre Annunziata, it offers traditional Neapolitan pasta shapes featuring the typical roughness from the pasta being extruded through bronze dies.

Established in 1927, it is the leader in pasta in Greece and embodies the values of the Greek pasta making tradition.

It has been one of Turkey’s major pasta producers since 1977.

Founded in 1952 and 1966, they are leaders in the Mexican pasta market.

Founded in 2007, this brand produces a wide range of functional foods (soft bread, diet bars, crackers and drinks). It has been designed to cater for people who take an active interest in their own health.

Established in 1975, it offers a varied range of simple, genuine bakery products for easy consumption both at home and away. It represents part of Italian food culture in everyday family life.

This classic pastry brand from Novara was founded in 1937 and produces a wide range of cakes and bakery produce.

A pioneer in sliced bread production, this company was set-up in 1925 and is Germany’s leading bread manufacturer.

Since it was established in 1963, Golden Toast has dominated the German toasting bread market and is currently expanding into the frozen breads business.

Founded in Sweden in 1919, it is the world’s largest producer of crispbreads, offering an extensive range of rye and wheat based products. It currently exports to more than 40 countries.

Established in France in 1970, it is the leading bread manufacturer and a key player in the breakfast and “morning goods” market.

Number 1 is a cutting-edge enterprise founded in 1997 in order to compete in the logistics field.

This is an international project launched in 2004 to develop and market Italian gastronomy as a unique element of world culinary heritage.

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Group profile

Barilla was founded in Parma in 1877

Barilla is the world leader in the pasta market, a European leader in ready-made sauces, the leader in Italian bakery products and leader in the Scandinavian crispbreads market

Barilla operates in the bakery, pasta and ready-made sauces markets

Barilla has 16,000 employees

Blu Barilla Pantone 280

Barilla owns Barilla markets more than 1,000 products in 125 countries to serve all moments of all the day

54 production facilities in 10 different countries, which manufacture 3 million tons of products each year

2008 turnover: Euro 4.5 billion

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Our approach to reporting Social responsibility has always been an integral part of our culture. Despite this our approach to sustainability and the related initiatives have always been hindered by our operating dimensions. Stakeholders have the right to access transparent information and we feel it is our duty to communicate publicly our commitments and the activities performed with regard to sustainability. We aim to do this through a report based on a system of indicators that measure the social and environmental impact of our activities. The current reporting methods and the desire to experiment with an innovative method led us to establish a partnership with “Active Citizenship Foundation” (FONDACA, a research and training organization that specializes in corporate sustainability). With the scientific support of FONDACA we have analyzed the reporting tools used by a number of other enterprises and identified a number of limitations in social reports. The principal findings comprise: an emphasis on conclusive results rather than prevention, the circularity, the deductive approach of the reports, the scarce involvement of stakeholders, the priority given to compliance with regulations and standards to the detriment of initiatives supporting social and environmental development, the penalization of excellent companies due to the elementary nature of the standards used and the absence of information on problematic situations. To surpass these limitations we want to experiment with an innovative approach to reporting the company’s citizenship activities. Our journey began with an assessment exercise. The most successful and innovative analysis phase was carried out through a series of meetings with the most important stakeholder categories. They participated in defining the corporate sustainability model through a global and systemic consulting process. This model was presented in the “Challenges, commitments, actions for a sustainable growth” report and comprises seven key challenges and fifteen commitments. Now this report defines a series of indicators to measure our performance and in particular the targets that we expect to achieve over the coming five years. Our report is a key instrument in the Group’s redirection that could provide an effective contribution to the renewal of our corporate culture and business approach. Our long-term objective is to make all areas within the company participate actively in the reporting process so that sustainability is reflected in our business strategies. The 2008 report relates to the companies owned by Barilla G. e R. Fratelli and does not include Lieken, the leading fresh bread business in Germany. This decision was made due to the process of change that is underway and the specific nature of the business that has characteristics and distinctive qualities that distinguish it from the other group activities in terms of the production supply chain, logistics and distribution.

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Nutrition The strong link between health and diet goes back to ancient times but the science that studies this relationship, nutrition, is only now receiving the deserved level of recognition in the research world. The reasons for the growing interest of developed countries in this area are easily summarized in three trends: • the increase in the average age of the population (due to a drop in birth rate and people living longer); • the significant increase in metabolism syndromes and obesity, the latter commencing in infancy: this is considered an epidemic and Italy is one of the European countries with the highest number of overweight schoolchildren (and does not show signs of improvement); • the explosion of health care costs that leads institutions to be called upon to give full priority to initiatives to prevent illnesses through policies and activities focused on healthy eating. It would appear to be evident that the time has come to promote responsible food consumption on a worldwide level. To this end, a series of actions must be initiated that aim to consolidate and disseminate the adoption of a model that aspires to the Mediterranean diet that is widely recognized as one of the healthiest eating regimes and can also assist in the prevention of major chronic diseases. The link between diet and health has been the subject of wide and in-depth studies that have allowed us to acquire extensive evidence of the positive effects of a healthy diet. The moment has arrived to dedicate more resources to practicable development, in order to put to effective use the knowledge gained and achieve tangible benefits for everyone. Companies and institutions need to invest further both in the development of excellent food products in terms of quality, organoleptic quality, convenience and nutritional profile, and also in the planning and implementation of health education programs through all possible channels in order to help people adopt healthier lifestyles.

In order to fight diseases that arise from unhealthy eating habits, informative and cultural activities must be promoted in order to raise awareness levels and foster good habits. Leone Arsenio

Head of Diabetology and Metabolic Disorders Unit, University Hospital of Parma Second stakeholders’ forum

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Daily well-being Contribute to people’s health and well-being every day through our products by transforming high quality ingredients into safe, wholesome products that meet both basic and specific nutritional requirements and offer people everyday solutions that aspire to the Mediterranean diet.

75%

Eating habits and lifestyles have changed dramatically over the last few decades. The main dietary problems derive from an imbalance between lifestyles and eating habits. A different approach to eating is required to provide a more balanced approach to the nutritional requirements of each individual.

OF PRODUCTS ARE AMONG THOSE RECOMMENDED FOR DAILY USE BY NUTRITIONAL GUIDELINES

Our nutritional model Barilla is keen to respond to these requirements by offering products that cater for people’s changing needs. Pasta is one of the pillars of this nutritional model thanks to its contents and the balance between starch and protein. Other products such as sauces, breads and drinks are created and produced following traditional Italian recipes in order to satisfy people’s energy requirements.

the NUTRITIONAL MODEL BASED ON THE MEDITERrANEAN DIET > IS OUR CONSTANT REFERENCE POINT Raw materials We have always only used ingredients of the highest quality that tradition and scientific research have proven to be safe for both people and the environment. We are guided by precaution in the selection and use of raw materials: where the safety and health effects of an ingredient are not scientifically proven, we prefer not to use it. We have laid down guidelines for the selection of ingredients and the design of our products’ nutritional profile: • the selection and use of safe, wholesome, top quality ingredients; • the use of natural extracts and highly nutritious ingredients to improve products’ nutritional characteristics; • the adoption of production processes that preserve products’ qualitative characteristics; • not using hydrogenated fats; • not using GMO ingredients (Genetically Modified Organisms).

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Our product portfolio A review of our 2008 product portfolio showed that the majority of our products are amongst those recommended for daily consumption by recent nutritional guidelines. More than 75% of the products that we sell worldwide belong to the pasta, soft and dry breads, cereals and toasted breads and vegetable based sauces categories.

around 400 PRODUCTS (MORE THAN 30% OF TOTAL PRODUCTS) > HAVE NUTRITIONAL OR HEALTH CLAIMS We improve continuously the nutritional profile of our products, reducing the salt, sugar and saturated fat content while increasing for example the use of wholegrains that are naturally high in fiber and micronutrients. A detailed redesign exercise to reduce the saturated fat content of the Saccottini line was performed in 2008: breakfast pastries with fillings of chocolate cream, pastry cream and apricot jam. None of our products contain GMO’s in line with the principle of precaution. We banned the use of hydrogenated fats years ago. We follow specific policies regarding the limited use of chemical additives, in particular artificial colorings. Each time we acquire a new company, we devise plans to reformulate the products that do not meet our directives. These initiatives are currently focused on some of Harry’s products, the leading producer of breads and brioche in France. The success of these ongoing improvements is demonstrated by the fact that already 99% of our product portfolio is free from artificial colorants and none of them contain hydrogenated fats or oils. Good health programs We have been a member of the “Gaining Health” project promoted by the Italian Department of Health, since 2007. This initiative is aimed, on one hand at making healthy choices easier, supporting improvements in the nutritional profile of food products, and on the other sponsoring information campaigns that aim to change unhealthy lifestyles. Together with the Italian Association of Food Manufacturing Industries, we are committed to identifying areas of nutritional improvement with particular focus on the salt content of bread.

99%

Nutritional education In addition to direct investment on products, we believe that to contribute to people’s daily well-being, more complete and incisive information must be provided. Our products’ characteristics are communicated transparently and responsibly with particular focus on ingredients and nutritional values. We are also committed to illustrating their best use in terms of portions, recipes, when and how to eat them, in order to encourage consumption in line with healthy eating habits. We promote educational initiatives in collaboration with specialist public institutions that illustrate to school children the importance of healthy eating and physical exercise: we have supported 7 projects in the last 3 years.

OF PRODUCTS DO NOT HAVE ARTIFICIAL COLORANTS

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Nutrition


Products for specific dietary needs Contribute to people’s well-being by offering products that meet specific dietary needs.

49

Current changes in lifestyles and consumption behavior are fairly drastic and certain cases may call for nutritionally planned diets. For many people it is not always possible to eat the recommended amounts of certain foods that are perishable and not always readily available such as fresh fish, vegetables and fruit, or often require preparation times that do not fit in with daily life.

NEW PRODUCTS LAUNCHED

The Alixir product range The Alixir product range has been created for consumers who wish to maintain or enrich the nutritional content of their daily diet. These are specially formulated functional products designed to provide benefits that exceed normal daily requirements. The Alixir range provides a number of benefits across a wide range of products that supplement the normal diet. These benefits are communicated through “health claims”: they help control cholesterol, improve intestinal function, help slow down cellular ageing fighting off excess free radicals and help to boost the immune system. For each nutritional benefit we offer products to suit different needs (such as drinks, biscuits, crackers, cereal bars).

In FUTURE WE INTEND TO COMMIT EVEN FURTHER TO WORKING > ON AREAS OF NUTRITIONAL PLANNING This applies to everyday products and those that meet specific dietary needs. Products for specific dietary needs We already offer products with specific nutritional characteristics: • the wholewheat pasta range that is rich in fiber; • the Orizzonti range offering the flavor and nutrition of pulses and cereals; • the high protein content Pasta Plus range with Omega-3; • the Mulino Bianco Liberi per Natura bakery range with reduced fat, sugar and salt content; • the Mulino Bianco Grancereale range, rich in fibers and different types of wholegrain cereals; • the Wasa crispbread range, rich in fibers and wholegrain cereals. We have launched 49 new high cereal and wholewheat products across these ranges in recent years including 8 in 2008. The link between wholegrain cereal consumption and the prevention of widespread chronic diseases is widely recognized at epidemiological levels (Jacobs and others, 2007; Sahyoun and

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others, 2006; Jensen and others, 2004). All international guidelines recommend an increase in the consumption of wholegrain products. We have decided to expand our range of these products in order to offer our customers a wider choice. Nutrition Advisory Board We rely on the advice of a group of experts in identifying which health and wellbeing strategies to adopt: the Nutrition Advisory Board. The Board has the purpose of identifying emerging trends helping us to anticipate people’s needs. Moreover, it keeps us up to date on nutritional scientific progress, latest studies and important discoveries.

we CONTINUE TO EXTEND NUTRITIONAL RESEARCH ON OUR CORE > PRODUCTS: PASTA AND BREAD Nutrition Network In order to obtain direct scientific evidence of the metabolic impact of our products, we collaborate with universities and research centers both at home and abroad. Clinical trials are carried out with many of these on existing products and in the planning stage of new ones. In the last three years our efforts were concentrated on the Alixir product range and we invested Euro 4.6 million on nutrition worldwide. We carried out more than 60 new experimental studies and nutritional investigations to consolidate the scientific evidence already acquired, explore the preservation of nutrients using new manufacturing technology and check the recipes of products in the pipeline. Functional foods are not our only innovative aim. Research was carried out in 2008 on wholewheat versions of bakery and pasta products to assess their health benefits and a significant drop in total cholesterol and LDL levels in healthy subjects was noted after a three week diet based on wholewheat products.

60

NEW EXPERIMENTAL STUDIES

we ARE CONSTANTLY COMMITTED TO THE DEVELOPMENT > AND SUPPORT OF SCIENTIFIC KNOWLEDGE Publications and conventions Much of our research work is published in internationally recognized scientific journals and is available to the public (Jenkins and others, 2008; Candela and others, 2008; Mengheri and others 2008). We are increasingly committed to attending events aimed at sharing scientific knowledge, firstly to communicate our projects and initiatives, and also through sponsorships. These have included national conventions held by the Italian Enterprise of Human Nutrition and a series of meetings regarding children’s nutrition. Our researchers actively participate in the work of ILSI (International Life Science Institute), which brings together leading worldwide enterprises and academia and independent experts for the precompetitive scientific comparison of issues relating to nutrition and food safety. We also take part in: • the Italian platform of the European project “Food for Life”, in which the priority areas of research and investment in various sectors of the agro-food industry are defined in conjunction with government bodies; • the EU financed European project “Healthgrain”, in which for the first time all of the constituent nutritional components of the most important cereals, their effect on people and the possibility of applying them in a nutritional context, have been studied on such a wide scale. This project is being undertaken thanks to the joint work of prestigious European research centers and Barilla’s skill in transforming cereals to food products.

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Nutrition


Timeline of key events 2008 2007 2006 2006 2005 2003 1995 1989 1985 1975 1960 1938 1937

Launch of second generation of wholewheat pasta Launch of Alixir range Launch of Orizzonti range Launch of Liberi per Natura bakery products Launch of Pasta Plus Hydrogenated fats eliminated completely from Mulino Bianco products Launch of Essere bakery products Launch of Grancereale Launch of first generation of wholewheat pasta Launch of first wholewheat bakery products: breadsticks and biscuits Launch of DIEBA range (Barilla Dietetics) Launch of gluten pasta (rich in protein) Launch of Fosfina pasta (rich in phosphorus)

Objectives to be achieved by 2014 Daily well-being

1

Execute a plan to improve continuously our products’ nutritional profile in line with recent international guidelines. More specifically, reformulate 80 existing products to: reduce the content of salt, sugar and saturated fats and increase wholewheat cereals and fibers.

2

Create natural, wholesome products using safe, high quality ingredients. In particular eliminate the use of artificial colorants and hydrogenated fats and oils from all products.

Products for specific dietary needs

3

Launch 60 new products worldwide that satisfy specific nutritional needs. This will focus on products with specific nutritional claims, health products and wholewheat based products (containing more than 25%) and fruit and vegetable based products (containing more than 20%).

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Supply chain The growing shortage in renewable resources such as agricultural land, fresh water and forest land, is to a large extent the cause of poverty, migration and more generally social and political instability. This phenomenon is linked to environmental damage, climate change and the excessive exploitation of resources due to an increase in demand and their unequal distribution. Every possible solution has to include a more efficient use of agricultural resources and investment aimed at maximising accessibility to them. The sustainability of the supply chain is a fundamental priority on which companies in the food sector must take action, requiring them to take steps towards adapting to new situations. This is the only way to avoid threatening the survival of the company in the market place. More specifically, long-term sustainability largely depends on the ability to procure raw materials using methods that do not compromise their future availability despite shortages and increasing evidence of the existence of oligopolies in relation to supplies. This implies that companies in the food industry need to create an independent, integrated system that links and qualifies partners in the supply chain; this is of particular interest to customers, consumers and all other stakeholders who believe in the economic, social and environmental sustainability of the industries in which they operate. Management of such a complex process requires implementation of a control system based on the selection of the best and most reliable suppliers, supported by systems able to guarantee continuous improvements in supplies. This is the only way of ensuring raw materials are safe and of the highest quality and safeguarding the sustainability of the whole supply chain.

A path marked by transparency, mutual trusting relationships and recognition of the appropriate added value, represent the foundations on which the future of the supply chain is based. Costantino Vaia

General Manager of Tomato Casalasco Consortium (Italy) First stakeholders’ forum

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Supplier partnerships Encourage partnership, or at least close cooperation, with suppliers in strategic networks.

Barilla purchases 2,030 raw materials and 1,880 packaging materials from 980 suppliers worldwide. We control 80 raw materials’ supply chains and 5 packaging materials’ chains in total. Supplier relationships Our relationships with suppliers of raw material and services are fundamental to us. Through mutual collaboration we aim to manufacture safer and superior products through a continuous improvement. The relationship with our suppliers is of particular importance in those supply chains that are strategic for economic, quality and product safety reasons or where specific problem areas exist such as environmental or social issues.

30%

OF DURUM WHEAT PURCHASED IN ITALY IS SOURCED FROM “Barilla integrated SUPPLY CHAIN”

BARILLA STRATEGIC SUPPLY CHAINS The most important supply chains are durum wheat, soft wheat and tomatoes. These represent strategic raw materials because semolina, flour and tomato products are the main ingredients in pasta, bakery products and sauces. We play a prominent role in the worldwide durum wheat market, the European soft wheat market and the Italian tomato market. BARILLA “INTEGRATED SUPPLY CHAIN” MODEL We have created what may be considered an “Integrated Supply Chain” model, in which we have established partnerships with various players that operate at different chain stages starting from the research programmes in collaboration with enterprises specialising in seed selection. Our aim is to create and select, using traditional methods, dedicated varieties suited to specific pedoclimatic conditions that meet the production requirements of the farmers and Barilla’s quality standards (e.g. Zenit, Svevo, Normanno and Aureo for durum wheat in the Mediterranean and Scarpariello for tomato crops in Emilia Romagna). The developed seeds are multiplied and supplied to agricultural producers as part of a cultivation agreement with Barilla. Three agreements have been entered into: the first with the Emilia Romagna Region, manufacturing organisations, farming consortium and cooperatives for the production of high quality durum wheat in Emilia Romagna, a second with the SIGRAD Consortium (Società Interprofessionale Grano Duro) in relation to production and trials in the durum wheat industry in the Central and Southern part of Italy (Puglia, Marche and Tuscany) and finally the

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agreement with the Interprovincial Association of Fruit and Vegetable Producers (AINPO) for the supply of tomatoes in the provinces of Parma and Piacenza. Further results arising from industry research relate to a number of recently finalised projects including those to forecast agronomic yields and quality before harvest (DELPHI) and food safety (SINSIAF, Integrated System for food safety management in the durum wheat industry - MIUR Project n. 12792 National Operating Plan 2000-2006). Through the first project, in collaboration with the National Research Council (CNR-IBIMET in Florence) it is possible to apply a deterministic model to identify the yields and protein content in the main durum wheat farming areas in Italy, several weeks before harvest. The second project anticipated many of the food safety issues that were later to become the subject of European Regulation, through implementation of innovative technology in the area of prevention, analysis and management of contaminants at various stages in the supply chain.

70%

partnerships results In 2008, 30% of the durum wheat requirement in Italy was satisfied using these integrated supply chain partnerships. This amounted to 20% in Greece and 10% in Turkey, where this model was only recently introduced. With regard to the supply of tomatoes, the integrated supply chain model accounted for approximately 20% of requirements in Italy as the Scarpariello variety is only used in certain sauces at present.

OF PALM OIL IS PROCURED FROM PLANTATIONS IN MALAYSIA AND Papua New Guinea

supply chains WITH CSR ISSUES Some supply chains are critical as they present environmental and social sustainability issues. The main Barilla supply chains with CSR issues are palm oil and cocoa derivatives. These are complex markets where the basic raw materials are produced in developing countries: Indonesia, Malaysia, and Papua New Guinea (for palm trees from which oil is extracted from the fruit) and the Ivory Coast, Ghana and Cameroon (for cocoa plantations). The major risks surrounding the cultivation of palm oil relate to deforestation that causes significant damage linked to global warming (the CO² cycle) and the loss of biodiversities. Cocoa production largely gives rise to social issues involving working conditions in the plantations and the initial manufacturing processes that take place locally (e.g. wages, safety and child labour). Our response In these situations we follow our commitment to social responsibility by identifying high profile suppliers that are able to guarantee (thanks to the sharing of objectives and a strong local presence) supply methods in line with the principles of sustainability. From 2008, 90% of our palm oil requirements come from suppliers that are members of the RSPO (Roundtable for Sustainable Palm Oil), an international organisation that defines regulations to safeguard the environment in the production areas and certifies their implementation. Moreover, 70% of these requirements is guaranteed by oil produced in Malaysia and Papua New Guinea. These countries offer greater guarantees in respect of these regulations. Also commencing in 2008, 80% of our cocoa based ingredients is sourced from suppliers that are members of the ICCO (International Cocoa Organization) and the WCF (World Cocoa Foundation). The first organisation, which consists of either cocoa producer countries and cocoa user countries, defines and controls jointly the various standards (including guarantees regarding working conditions), while the second promotes socio-economic development projects in the developing countries. In 2008 we checked 50% of the African cocoa processors used by our suppliers: all of the processors visited conform to the Barilla Code of Conduct prepared in accordance with the principles established under the SA8000 certification.

80%

OF COCOA IS PURCHASED FROM SUPPLIERS WHO ARE MEMBERS OF THE ICCO and WCF

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Supply chain


Standards Continuously improve the safety and quality of supplies and finalise sustainability standards to form the basis of all supplier relationships.

These standards represent the common language used in dealings with suppliers that translate to quality: this language guarantees total understanding and allows the goal of continuous improvement to be pursued. The standards are a key element of the management and control system that has been implemented to govern and guarantee sustainability of the procurement process.

1.35

Quality and FOOD safety of supplies The Barilla system used for some time now to guarantee the supplies quality and food safety have been based on: • Technical Specifications that establish the hygiene-sanitary, chemical-physical and organoleptic property requirements of raw materials or purchased finished products; • Supply Quality Specifications, which outline further requirements in the areas of quality and hygiene-sanitary; • Cultivation and Storage Rules that are not limited to the definition of supply specifications but for significant raw materials, such as durum wheat, are also involved in supplier production through a process of quality co-planning. The standards system is subject to continuous improvement and allows the concepts of finished product and supply quality to be developed with the suppliers.

MILLION TONS OF DURUM WHEAT USED

Supplier selection and evaluation The protocol and criteria used in supplier selection, qualification and evaluation are a longstanding tradition within the company. Supplier selection is a rigorous process that uses internally developed tools, such as the Supplier Qualification and Evaluation Process, and international methods such as those of the BRC (British Retail Consortium) and IFS (International Food Standard). The BRC and IFS are among the most internationally widespread systems that operators in the food industry adopt in checking the quality of their suppliers in order to guarantee consumer safety.

we MONITOR AND EVALUATE CONSTANTLY THE WORK > OF OUR SUPPLIERS THROUGH THE “SUPPLIER QUALIFICATION

AND EVALUATION SYSTEM”

The quality of supplies and level of service offered is evaluated continuously using this system, which allows better focus on the procurement of raw materials and packaging materials.

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Supply sustainability We recently commenced the process of defining standards specifically dedicated to sustainability. We started in 2006 to ask our suppliers to carry out self-assessments on the key areas of social responsibility and environmental impact. The Code of Conduct (which reflects the requirements of standard SA8000) has been implemented since 2001. We have adopted objectives aimed at the most critical supply chains in terms of sustainability (palm oil and cocoa based products) since 2008. We are also convinced that a sustainable approach also requires us to oversee early stage of strategic supply chains due to the fact that in 2008, we used 1.35 million tons of durum wheat and 750 thousand tons of soft wheat and rye in the production of almost 1,000 different products that we sell. In order to evaluate the impact of this in terms of environmental sustainability, we evaluated the farming activity most important elements. As shown in the figure below, 7 different factors were taken into consideration: arable soil, water, carbon dioxide, sunlight, chemical components (nitrogen, phosphorus and potassium), labour and genetic resources (seeds). Agricultural Production Input

DNA (genetic resources/seeds)

Arable soil

Scarce resources

H²O

Excess resources Concentrated resources Abundant resources Expensive resources

Labour

Fertilisers N-P-K

CO²

Solar energy

There is a worldwide shortage of a number of these resources, such as arable soil and water; on the other hand there is an excess of others among which carbon dioxide. Fertilisers and genetic resources although not scarce tend to be concentrated in the hands of a very limited number of suppliers.

> action MUST BE TAKEN ON THE CEREAL SUPPLY CHAIN Our actions We are aware of the fact that we are not able to intervene directly in all of the above factors. Despite this we have identified areas that allow us to make our supply chains more sustainable. The first course of action will be to review the durum wheat Cultivation Regulations, updating both the guidelines on fertilisation and the production methods. In future, we intend to measure the environmental impact of the key raw materials’ supply chains, improve standards and commence projects that are agreed with the suppliers along the various stages of the supply chain.

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Supply chain


Timeline of key events 2008 2007 2006 2005 2005 2004 2002 1996 1994 1994 1993

Start of strategic action on the palm oil supply chain Start of supplier self-certification process on environmental, ethical and social issues Agreement with the Emilia Romagna Region (Italy) and the farming world to develop the cultivation of durum wheat in the Region Cultivation agreement with the Interprovincial Fruit and Vegetable Producers Association relating to tomatoes in the provinces of Parma and Piacenza (Italy) Implemented Scarpariello, a new variety of tomato Commenced strategic action on cocoa supply chain Created Normanno, a new variety of durum wheat Created Svevo, a new variety of durum wheat First Wheat Cultivation and Storage Rules issued First Raw Materials Supply Quality Specifications issued Created Zenit, a new variety of durum wheat

Objectives to be achieved by 2014 Supplier partnerships

1

Extend controls over the key agricultural raw materials supply chains including the availability and quality of arable soil, water requirements, fertilisers and the impact on climate change.

2

Readdress the genetic improvement programs and develop cultivation practices, quality and food safety objectives, with environmental improvement targets, such as soil fertility defence, eutrophication, water consumption and carbon dioxide emissions reduction.

3

Increase by 20% the amount of durum wheat procured under cultivation contracts.

4

Extend the model to forecast durum wheat crops (DELPHI) to the Mediterranean basin.

STANDARDs

5

Measure the environmental impact of the strategic supply chains in terms of Carbon Footprint, Water Footprint and Ecological Footprint.

6

Define environmental impacts standards and commence improvement projects in conjunction with suppliers throughout all stages of the supply chain.

7

Satisfy 100% of palm oil demand using suppliers that are a member of RSPO and that mainly originate from Malaysia or Papua New Guinea.

8

Purchase cocoa from suppliers who are members of ICCO and the WCF that have African processing facilities in line with the Code of Conduct and have been audited positively.

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24


Environment The environmental issue is talked about in increasingly dramatic terms. The days of the media still presenting the views of those who played down the problem are over and it is much more difficult to be optimistic. The awareness that if current development does not change drastically, there will be a limit to the earth being able to provide decent living standards to its inhabitants, is becoming more widespread. Recent data is extremely alarming: on one hand nonrenewable natural resources are running out (including fossil fuels); on the other increasingly limited resources are competed from food production (human and animal) and energy uses, such as arable soil (in rapid decrease) and water, demand for which has more than doubled in the last century. The most worrying issue is the level of CO² emissions to the atmosphere that are produced by man made activities and play a significant role in climate change: according to experts we must reduce these by 90% by 2050, while at present we produce 3% more each year. Forecasts indicate that without a drastic reduction, the average temperature of the earth will increase by 4 degrees over the next 50 years. This would have catastrophic effects on agriculture (and consequently on food safety) and water supplies, changing our world to the point that it will not be able to sustain life as we know it today. The solution to such a complex issue requires a collective commitment that includes not only national and global institutions but also citizens and companies. Companies must find new ways of operating that are effectively sustainable particularly in terms of emissions and resources (both energy and water): to ensure survival of their businesses.

Social and environmental responsibility represents two sides of the same coin. One should not ask “how much will it cost”, but rather “what is the price if we don’t do it”, and in particular what new opportunities arise by taking part in the creation of the green economy. Marco Fratoddi

Managing Director of The New Ecology Second stakeholder forum

27


Reducing the Ecological Footprint The Ecological Footprint will be reduced through two priority commitments: • reduce greenhouse gas emissions (GHG) along the supply chain in line with the Kyoto Protocol targets; • minimise other environmental impacts along the supply chain, with particular attention to packaging materials in terms of reduction and recycling.

In evaluating our Ecological Footprint - the extension of land and sea Barilla needs to produce the resources it consumes and to treat the waste it generates - we concentrated on two aspects: decreasing greenhouse gas emissions generated along the entire supply chain (with particular attention to CO² emissions - Carbon Footprint - considered the principal global warming cause) and minimizing packaging materials environmental impact.

Carbon Footprint of Barilla pasta with only durum wheat semolina 500

454

Reduction of greenhouse gas emissions In order to assess our impact in terms of CO² equivalent (Global Warming Potential) and define objectives, back in 2000 we carried out a LCA (Life Cycle Assessment), which quantifies the resources used and environmental emissions of a product or process from the initial stages through to its disposal. Through the LCA we measured the emissions generated in the different stages of the production chain: from cultivation of the raw materials to final product consumption.

Grams of CO² Biological Fossil 166 67

a

b

c

41

54

d

e

f

-1 -78

Life Cycle Assessment of semolina pasta Specifically we carried out a study on pasta with only durum wheat semolina to evaluate the emissions generated during the durum wheat cultivation and mill phase, pasta production, transport, packaging production and cooking the product for consumption. In order to calculate the emissions, both direct emissions (fossil CO²) and those naturally absorbed by cereals and plants during growth (biological CO²) were taken into consideration. From this study it emerged that the cultivation stage of durum wheat is significant in terms of emissions. On the other hand the volume of carbon dioxide consumed by the plant during its growth is the same as that emitted during the other production phases. Cooking of the pasta is the most significance stage although it is dependent on consumer habits (the quantity of water used and cooking times). The manufacturing of packaging and transport contribute the least to greenhouse gas emissions (less than 5% each). Based on this data we decided to develop projects to update the durum wheat cultivation rules, taking into account the effects on climate change and identifying how we could revisit the products’ ideal cooking time and water needed.

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Data for 500g of Barilla semolina pasta produced in Italy and packaged in carton: a. cultivation b. milling c. pasta production d. transport e. packaging f. home cooking

More information on www.environdec.com (“search for EPDs” + “Food products and beverages”)

28


Ecological Footprint of Barilla pasta with only durum wheat semolina

6,2 m²

75% Crop Land 24% Energy Land 1% Forest Data expressed in global m² of land for 500g of Barilla pasta with only durum wheat semolina produced in Italy and packaged in carton.

Analysis of the Ecological Footprint In order to assess in full our environmental impact, as the company’s principal raw materials are cereals, we decided to analyse not only the emissions of carbon dioxide (Carbon Footprint), but also to use the Ecological Footprint indicator (www.ecologicalfootprint.org). The first exercise was carried out on the production of Barilla pasta with only durum wheat semolina produced in Italy that scored an overall Ecological Footprint of 6.2 m² per 500g: • 75% Crop Land, the area of land required in the cultivation stages of durum wheat; • 24% Energy Land, for the absorption of CO² generated along the supply chain; • 1% Forest, for the production of virgin paper used in the primary packaging. Similar results apply to all shapes of durum wheat semolina pasta. Pasta and bakery facilities and the environment Since 2003 we have developed an Environmental Management System (EMS) in our factories that is based on the most widespread standard (UNI EN ISO 14001:2004). This has allowed us to control and reduce the environmental impact of production. In 2008, 57% of our total facilities, representing 73% of total Group production, adopted an Environmental Management System certified by an independent third party (Det Norske Veritas). Furthermore, our factories use Best Available Techniques (BAT) and efficient and sustainable, planning, construction, and maintenance methods in order to safeguard the environment. Packaging Packaging plays an extremely important role: it protects the product during transport and guarantees its safe storage. Discussions on environmental factors often turn to packaging of consumer goods and their disposal. The incidence of packaging on the product has increased due to new eating habits (more lunches outside home, higher demand for service, etc.) and the demographic evolution of families that tend to be fewer in number. As we are aware of the fact that the environmental impact of convenience goods is immediately associated with packaging and their disposal, for many years now we have invested in projects to optimize the efficiency and minimize the environmental impact of packaging. We have won two Packaging Oscars: for Gocciole Pavesi in 2004 and Saccottino Mulino Bianco in 2006.

Impact of the ISO module Crackers example Between 18 and 21 packets in each retail pack

Reduction of the environmental impact of packaging Where in 1997 our aim was to maximise the number of kilos transported by filling the pallets, while limiting the volume of materials used to make the packaging, from 2007 onwards we have been able to take into account the environmental impact during the planning and development stages by using the LCA tool. The product and its packaging are conceived simultaneously in order to maximise efficiency in terms of both usage and sustainability. We have progressively eliminated non ecocompatible components (ink, printing and other materials) and we privilege the use of uniform packaging materials that are easier to recycle. With regard to the packaging of pasta, studies were performed using boxes in recycled carton, virgin carton and polypropylene film; for the Campagnole (biscuits), a paper based and propylene based film were compared. It was discovered among other things that paper based packaging has a lower CO² impact when the biological CO² element is also considered. The LCA studies resulted in a 17% reduction in the weight of the Gocciole Pavesi biscuit packaging. Barilla was the first brand to introduce environmental labels and disclaimers on packaging to assist the consumer in choosing the correct bin in which to recycle.

Results (on an annual basis) 27 tons less corrugated cardboard used 141 fewer lorries used to distribute the same product volumes

PAP

29

Environment


Energy efficiency Develop products and processes as energetically efficient as possible along the whole supply chain, reducing, where opportunity arises, the dependence on fossil fuels such as oil and coal.

Our commitment is to develop products and processes along the entire supply chain that are as efficient as possible in terms of energy use, reducing, where the opportunity arises, the use of fossil fuels such as oil and coal. Numerous projects have been developed over the years with this aim in mind, in particular the Energy Saving Project, the progressive reduction of fossil fuels used in Sweden and the construction of cogeneration plants. Barilla Energy Saving Project (ESP) This is a project developed in the Italian bakeries to improve plant management efficiency in the factories of the bakery business. The Energy Saving Project gave rise to a decrease in the consumption of electricity and thermal energy of 9% and 3% respectively over a two-year period. The ESP project resulted in the following work: • installation of variable speed air compressors; • installation of high performance water type condenser refrigerator groups; • installation of boiler and oven fumes heat recyclers; • high performance electrical engines; • installation of inverter pumps and ventilators; • energy saving light bulbs fitted. Progressive reduction of fossil fuels in Sweden The progressive reduction in the use of fossil fuels in the Filipstad factory in Sweden has led to a 65% fall in consumption per unit of finished product and a significantly higher fall in CO² emissions by the factory. Cogeneration plants The cogeneration plant for the combined production of heat and power became operative in Pedrignano (PR) at the end of 2008. The plant uses methane gas to produce heat and power that are fully reused in the production cycle. This results in a significant reduction in the emissions of CO² equivalent. Furthermore, construction of a trigeneration plant (producing power, heat and cooling) commenced at the Caserta facilities in 2008.

Energy consumption per unit of finished product (GJ/ton) 3.38

2006

Energy consumption TRENDs These projects have resulted in a decrease in the energy consumption of the bakeries and pasta factories. The graph shows the energy consumption (electrical power and natural gas) of our factories throughout the world in the three-year period 2006-2008. Production

Barilla Sustainability Report

30

3.24

3.22

2007

2008

Year

Total energy consumption (Mln of GJ)

2006

4.8

2007

4.7

2008

4.7


Fuels for electricity production

1.46

0.451

0.450

0.461

2006

2007

2008

Barilla plant

GHG

CO ²

GHG

CO ²

GHG

Electricity production

Natural gas production

The GWP used calculates the emissions of CO² equivalent generated by the entire energy chain, from the extraction of the fuels and their transport, through to direct use or use in the production of electrical energy. This indicator differs from that normally used in the Emissions Trading calculations that consider only CO² emissions and not CO² equivalent generated directly by production plants and power plants. The purpose of this indicator is to allow Barilla to make the best choices when acquiring energy from producers that employ technology with the lowest environmental impact.

GWP (millions of tons of CO² eq) and finished product (millions of tons) 1.43

CO ²

Global Warming Potential (GWP) of the energy supply chain Global Warming Potential - GWP is the indicator used to express CO² emissions. GWP is measured by mass of CO² equivalent, converting the emissions of various gases to CO² emissions based on factors fixed by the IPCC (Intergovernmental Panel on Climate Change).

GHG

The coefficients used to determine CO² equivalent emissions associated with electrical energy consumption, were calculated using the Ecoinvent database and reports of the International Energy Agency (IEA). Ecoinvent issues emissions data for each technology used in electrical conversion for a number of countries, while the IEA provide information on the energy mix represented by an analysis of the different technologies used by country. The Ecoinvent data relate to energy production for 2004 and the IEA data to production in 2008. The conversion coefficients used for the calculation were defined by the Intergovernmental Panel on Climate Change (IPCC) in 2007 (source PAS 2050).

increased by 4% while energy consumption remained constant allowing a 5% fall in energy consumption for each ton of finished product. We have achieved decoupling between the growth in volumes and energy consumption. Lower energy consumption also contributes to decreased emissions of carbon dioxide, one of the main gases that cause the greenhouse effect.

CO ²

CO² equivalent

1.40

CO² Emissions The graph shows carbon dioxide emissions of the Barilla factories throughout the world measured in GWP for the three-year period 2006-2008. A decoupling effect has also been achieved here between the growth in volumes and CO² equivalent emissions. Production increased by 4% while emissions increased by only 2%.

—— CO² eq (Mln ton) —— —— FP (Mln ton) ——

reduction of energy consumption The aim to decrease energy consumption over the next five years will be achieved through the following: • development and expansion of the Energy Saving Project to all Group factories; • full operation of cogeneration plants and installation in other factories. As the energy mix has a significant influence on carbon dioxide emissions, in addition to the above initiatives Barilla has decided to consider using energy that reduces the dependence on fossil fuels; in particular all electrical energy required in future for the production of Mulino Bianco products will possess special certificates (RECS) certifying that they are generated from renewable sources.

What are RECS? The RECS (Renewable Energy Certificate System) is an international instrument created to stimulate the use of renewable energy. A certificate is issued for each MWh of electrical energy produced from renewable sources. In acquiring these certificates companies may certify that the energy used derives from renewable sources. For further details please visit: www.recs.org.

31

Environment


Management of water resources Rationalise the use of water supplies used in the supply chain.

-20%

Worldwide demand for water has increased in the last century at more than double the population’s growth rate. Agriculture and breeding account for 70% of this demand. The cultivation of durum wheat, which has taken place for centuries in the Mediterranean basin, is one of the least demanding in terms of water consumption explaining why it is widespread in areas where this resource is less abundant and therefore more precious. Barilla is currently the major consumer of durum wheat worldwide. We are committed to reducing water consumption in the production process and throughout the strategic supply chain while employing traditional cultivation methods and satisfying current market demand.

REDUCTION IN WATER CONSUMPTION IN THE BAKERIES AND PASTA FACTORIES THROUGHOUT THE WORLD

Reduction in water consumption in Italy In the past we focused on projects to rationalise the use of water in our pasta factories and bakeries. More specifically, the pasta factories and bakeries in Italy reduced total water consumption by 30% in the period 2005-2008. The key changes employed were: • recovery of water from the depuration plant (Cremona); • recovery of open circuit cooling water (Castiglione delle Stiviere and Parma); • reduction of leaks in the water system (Novara).

Total water consumption (millions of m³) 3.7 3.3

2006

2007

2008

Water consumption on finished products (m³/ton)

Reduction in water consumption throughout the world The first graph shows the trend in water consumption in Barilla’s factories in the period 2006-2008, which shows a 17% fall in water consumption. The second graph illustrates water consumption compared to finished products (m³/ton) in Barilla’s factories throughout the world: an even greater decrease of 20% was recorded in 2006-2008 due to the fact that production volumes increased by 4%.

2.61

2.32 2.10

2006

2007

WE ARE COMMITTED TO REDUCING WATER CONSUMPTION > IN OUR PRODUCTION PROCESSES AND ALONG THE STRATEGIC supply CHAIN

Barilla Sustainability Report

3.0

32

2008


What is the Water Footprint This is a similar concept to the Ecological Footprint, it expresses the renewable water sources consumed by an individual, nation or business. The water footprint of a product is the volume (m3) of freshwater, measured over the full supply chain. We calculated the Water Footprint of our products as the sum of blue water resources (surface and ground water) and green water resources (rainwater stored in the soil as soil moisture). The latter represents rainwater returned directly to the atmosphere from Barilla crop growing activities rather than replenishing the waterbeds that act as natural reservoirs. For further information please visit: www.waterfootprint.org, www.waterneutral.org.

Rationalisation of water consumption along the production chain In 2008, Barilla began to assess the impact of the consumption of water resources across the entire production chain: from the production of raw materials to product consumption. This started from the key raw material, durum wheat, calculating the Water Footprint of semolina pasta.

Water Footprint Litres of water on kilos produced 5.000

4,000

3,000

2,000

1,000

15,500

3,400

1,800

1,400

700

red meat

rice

pulses

PASTA

fruit

The graph compares the Water Footprint of a number of products: red meat, rice, pulses, durum wheat semolina pasta and fruit.

> PASTA PRODUCTION REQUIRES LIMITED WATER CONSUMPTION In order to rationalise the use of water resources in the entire production chain, Barilla intends to implement the following short/medium-term objectives: • measure the impact of the business processes on water resources using the Water Footprint methodology; • readdress genetic improvement based on conventional techniques taking into account the resistance to water stress conditions; • revisit the areas of raw material procurement taking into consideration the impact on water resources; • continue working to reduce the use of water in the industrial processes; • consider using the Water Footprint concept in packaging development; • optimise water used to cook pasta at end consumer level.

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Environment


Timeline of key events 2008 First studies to calculate the Ecological Footprint and Water Footprint of pasta 2008 Certification of the Environmental Management System of the Bolu (Turkey) pasta factory 2007 Created LCA tool to develop sustainable packaging 2007 Cogeneration plant in Pedrignano (Italy) becomes operational 2006 Certification completed on the Environmental Management Systems of all Barilla factories in Italy 2006 Oscar for Packaging awarded to Saccottino Mulino Bianco 2005 Energy Saving Project launched 2004 Oscar for Packaging awarded to Gocciole Pavesi 2004 LCA study on packaging, transport and first bakery products (Campagnole) 2003 Certification of Environmental Management System of first Italian factory (Ascoli Piceno) 2002 Barilla Environmental Policy formalised 2000 Certification of the Environmental Management System of the Filipstad (Sweden) factory 2000 First LCA (Life Cycle Assessment) study on semolina pasta 1997 Sustainable packaging policy formalised 1996 First steps to reducing environmental impact linked to packaging of rusks 1994 First packaging rationalisation projects

Objectives to be achieved by 2014 Reduction of the Ecological Footprint

1

Develop and apply the Ecological Footprint calculation to all Barilla products, fixing global targets.

Reduce the Carbon Footprint of Barilla products by 15% (compared to 2008 values).

2

Reduce the direct and indirect Energy Global Warming Potential (GWP) by 30% (compared to 2008 values).

3

Increase the percentage of recyclable packaging on the market to 95% of total packaging (compared to 2008 values).

4

Energy efficiency

5

Reduce the total energy consumption per finished product by 10% (compared to 2008 values).

Water resources management

6

Develop and apply the Water Footprint calculation to Barilla products, fixing targets.

7

Reduce the water consumption of finished products by 30% (compared to 2008 values).

Barilla Sustainability Report

34


Human Resources The subject of social responsibility cannot be approached without first having demonstrated that the same principles have been applied within the company’s human resources function as a fundamental starting point in the path to sustainability. Any enterprise that aims to prove its commitment to responsibility must first of all guarantee the effective management of its human resources, expressing a high regard not only for those who are already part of the company but also potential future employees. The ethical management of employees does not only relate to the issues of child labour and working conditions in the third world, the areas on which the mass media and public attention generally focus, but also encompasses people care and development in general. This obviously requires significant financial and managerial investment. The success of any company depends on the skills, motivation and commitment of its personnel over and above even that of its products, brands and manufacturing facilities or its advertising and promotions, finance and marketing. If these conditions are not in place all other efforts made within the company may be made in vain, placing its survival at risk. The responsibility to create a sustainable working environment is a constant commitment, on one hand to ensure social capital is safeguarded and strengthened by implementing systems that cater for the needs of employees throughout their working life and on the other develop an intellectual asset base aimed at continuous skills development.

Individuals (both employees and consumers) must take first place as they represent the most important element of corporate responsibility. Luca Pieroni

Barilla First stakeholder forum

37


Care for and development of individuals Promote employees’ integration and their skills and competencies, by developing national and international programs that find the best ways to advance their welfare and ensure their health and safety.

“Barilla People” represent our most important resource. Every day 9,500 people work in our organisations throughout the world (the 6,500 Lieken employees have not been counted as this company is not currently included in the report). Distribution of employees within Barilla G. e R. Fratelli 4,715

1,545 545 356 229 69

No rw ay

M ex ico

Gr ee ce

Tu rk ey

Sp ain

Ge rm an y

St at es

Sw ed en

Un ite d

Ru ss ia

Fr an ce

Ita ly

121

47

16

13

10

10

19

Au str ali a Re st of wo rld

262

Br az il

361

Be ne l Sw ux itz er lan d

389

Po lan d

882

The growth and success of our business is dependent on its people. Today we still quote the words of Pietro Barilla: “People prevail above everything. Without them you cannot contemplate carrying out a plan, whatever it’s nature. Only through collaborations - with specialists in every field - a plan may be executed and finalised”. The awareness that Barilla People are its main resource represents a major commitment and responsibility for us. This corresponds to continuous investment in their wellbeing and development. We have always aimed at human resources excellence, at every level. We are convinced that only through continued improvement in the working and leadership skills of Barilla People we can acquire effective strength and distinctive characteristics and guarantee business success on an international scale. Leadership development, talent scouting, training, assessment and career development represent a systematic and integrated commitment, through which the Human Resources department supports the organisation in achieving its objective of maximising the true assets of the company.

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The Barilla leadership model The new Barilla Leadership Model was launched in 2008. We have an extensive cultural and human heritage that is demonstrated through the actions of Barilla People on whom our success and growth depend. Our distinguishing values are intellectual curiosity, passion, trust, integrity and courage. The Leadership Model, which is anchored on Barilla’s culture and values and inspires to the business strategy, groups the distinctive corporate conduct of Barilla People.Taking into consideration the various roles within the company, we have analysed this conduct into three categories: Groupwide, Management and Visionary. This model is incremental. Groupwide comprises the basic leadership skills for new employees and professionals. Management encompasses the leadership skills required for those in roles of average complexity, who manage one or more individuals, or those in highly specialised roles. Visionary consists of the leadership skills for those who hold highly-complex corporate positions. Taking inspiration from the new Barilla Leadership Model, we have created a skills development model. This is a manual aimed at all personnel that includes useful and innovative recommendations: ideas from the world of cinema, suggested reading, useful websites, guided discussion aids and courses of action to facilitate continued selfimprovement. Talent scouting Our aim is to attract and develop individuals with leadership talent who can make a difference and lead change. We promote growth from within the enterprise. The main path of entry to the company is through internship, a 6 month training programme with the objective of acquiring extensive experience in a specific business area.

47% OF THOSE TAKEN ON FOR INTERNSHIP WERE OFFERED > PERMANENT CONTRACTS IN 2008 Performance management All of our managers take part in an annual Performance Management process, the starting point being the overall business objectives that are analysed into individual objectives assigned from the Managing Director downwards based on the strategic aims for the year. Managers and employees meet during the year to compare objectives, leadership and working skills. A technical and managerial training plan is defined that accompanies the growth of individuals in the various roles to ensure they are equipped to take on more responsibility. In order to achieve growth within the company, career development is managed by the Human Resources department and driven by top management. The professional path entails the progressive development of the skills required to achieve growth in a particular business area, encouraging cross-department experience and, given increased Group expansion, international secondments. Training The Barilla Laboratory for Food Culture (LAB) was incorporated into the Human Resources function in 2006 with the purpose of managing all corporate training activities in conjunction with the system to develop business skills. The LAB is a training centre with a highly multidisciplinary approach that aims to raise the technical and leadership profiles of our employees but also assist in interpreting the food world with a critical and innovative eye. Seminars and meetings open to all employees covering a range of topics were held every month in 2008 with the participation of qualified experts across widespread subject areas, some far from the food world. Our national and international training programmes, aimed at all employee levels and covering both managerial and technical aspects, are updated continuously. A corporate awareness process is undertaken with particular focus on corporate identity,

39

Human Resources


the business processes and key specialist areas and individual leadership development. In Italy, 32% of managers and 42% of middle management attended at least one training programme in 2008. One-off courses and initiatives are also organised to develop the skills necessary to lead the business towards its current and future objectives. Barilla America was awarded the Corporate University Best in Class (CUBIC) in October 2008, taking third place among the most promising Learning Centres. Expenditure on training activities in Italy amounted to Euro 1.7 million. Caring for our people We have always been committed to caring for our people. A Supplementary Health Fund was established in our Parma headquarters in 1947. This is an apportioned fund, financed by both the company and employees to cover the medical expenses of employees and their families. The Fund is governed by a board of directors that consists of both employees and members appointed by top management. An expansion plan to cover all employees in Italy commenced in 2008 based on the terms of the 2007 Group Supplementary Agreement. The number of employees who will benefit from this fund will increase from 2,000 to 4,800. This represents the first, important step in a wider plan to relaunch welfare over the coming years. Expenditure on these activities amounted to approximately 4% of total employee costs in 2008. 67% of employees in Italy are covered by the supplementary pension plan (Alifond).

70

ENVIRONMENTAL AND SAFETY AUDITS

Diversity The inclusion of different gender, cultures, ideas and ages is, and will become, an increasingly important business requirement and in future will represent a managerial philosophy. The company’s Code of Ethics that was drawn up in 2005 and issued to all employees, examines and underlines the importance of equal opportunities. Increasingly more women are being employed in managerial positions. Currently 25% of managers in Italy are female. A higher number of women also means satisfying different needs. For this purpose, we have introduced flexible working conditions in order to facilitate the reconciliation of work and private life. This comprises part time contracts and flexible working hours that are available in most countries. In Italy we introduced part time before relevant legislation existed and 4% of total employees are part time. In the United States we offer the possibility to take a half-day off each week, working 9 hours per day in the remaining 4 days. In Sweden, parents with young children may arrive later and leave earlier, making up working hours from home.

> WE SUPPORT EMPLOYEES WITH FAMILIES In Italy, we contribute to nursery and infant school fees. To promote education, we have a scholarship scheme in place for the children of employees in Italy to study abroad for an entire school year. Cultural diversity is also taking on increasing importance within the Group. Our factory in Castiglione delle Stiviere employs 35 different nationalities. We will continue our efforts to identify new forms of diversity management.

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Trade union relations Over the years we have developed an effective communications system with both local and national Trade Unions, based on dialogue and comparison aimed at achieving and maintaining corporate growth and competitiveness, while at the same time obtaining the right balance between the needs of the business and those of our employees. On a European level we have been working with the European Business Council (CAE - Comitato Aziendale Europeo), which meets annually and provides an information and consulting forum between the business and workers’ representatives in the various countries in which we own production facilities. This mutual quest to reach an agreement is confirmed by the fact that in Italy only 40 cases of litigation were recorded in 2008 out of a total 4,715 employees. 39% of total employees in Italy are trade union members. Safety at work Whatever the circumstances, any accident represents the failure of one or more organisational processes linked to safety at work. We have implemented three specific steps in this area: • diagnosis of the prevention culture, in order to understand the importance given to prevention by managers, the causes of accidents, the accident circumstances, prevention support given by the company, the relationship and integration between prevention and the other organisational functions; • training for trainers, to equip them with the skills required to hold courses on the most effective safety prevention measures; • workers staff training, whereby all individuals responsible were involved in discussing their active role in order to guarantee safety at work. Barilla Environment and Safety Management System In 2008 the Barilla Environmental, Health and Safety Integrated Management System Model was implemented, according to the requirements of both ISO 14001 (Environment) and the British Standard Occupational Health and Safety Management System 18001 (Health & Safety). All managerial and organisational tools developed during these years have been incorporated in the system in order to guarantee the correct and continuous application of the prevention programmes and to ensure health and safety at work.

Accident Frequency Index 29

28

24 2006

2007

Number of accidents Hours worked by employees

2008

Certifications At the end of 2008 four of our manufacturing facilities had been certified by Det Norske Veritas in compliance with British Standard 18001. These are the biscuit factory in Castiglione delle Stiviere (Italy) and the three pasta making factories: Foggia (Italy), Thiva (Greece) and Bolu (Turkey). This certification will be extended to all of our bakeries and pasta making factories over the next few years. Environmental and safety audits are performed at all of our production sites every year. 70 audits were performed in Italy and overseas in 2008.

* 1,000,000

Accident Criticality Index 0.97

0.97

2007

2008

0.87 2006

Days absence ......due to accidents...... Hours worked by employees

The results of prevention In the second half of 2008 the number of accidents involving employees fell by 17% compared to the previous year with a 15% drop in the Frequency Index (FI). The Gravity Index remained stable in 2008 but fell significantly in 2009.

* 1,000

41

Human Resources


Individual and widespread responsibility Promote and strengthen a culture of individual responsibility in which individuals take charge of their own role.

The fact that Barilla People represent “the� main resource is a responsibility not only for the company but also the employees themselves. Our people are expected to contribute wholeheartedly on an individual scale in order to become the central figures in their position. The people and values Responsibility has many implications including respect for corporate values. Four generations are currently at the helm of our Group. This guarantees a strong sense of identity based on human and professional leadership styles consisting of correct behaviour and the balance between respect for individuals and acting in the company’s interests. Following the growth period in the nineties and numerous acquisitions, we realised that we could no longer rely exclusively on the tacit dissemination of our work ethic. The Barilla Code of Ethics was devised and communicated to employees in 2005 (http://www. barillagroup.com/corporate/it/home/chisiamo/gruppo-Barilla/corporate-governance.html). This is a fundamental corporate document. All individuals who join our company must comply with this document. A Supervisory Board was also set up in order to monitor implementation of the Code of Ethics. In Italy this board is also required to oversee implementation of the requirements of Legislative Decree 231/2001, which introduced the concept of internal controls as a tool to prevent crimes being committed within the company. The Supervisory Board was required to act in only a few cases in 2008: 3 times for breach of the Code of Ethics and 2 times for conflict of interest. Reorganisation A corporate reorganisation plan commenced in February 2008 in order to face both the current market difficulties and to prepare for future challenges. This resulted in the definition of a new organisation and operational structure. The company was reorganised into three operational areas: the Business Units, the Market Units and the Process Units. The Business Units are responsible for the strategic development of the brand portfolio and the product categories across the various moments of consumption, defining growth objectives and business profitability. The Market Units promote the corporate brand portfolio and product categories in the various markets and ensure the development and profitability of customers and sales channels, defining growth objectives and market profitability levels. The Process Units are responsible for the processes that link the Market and Business Units, guaranteeing effective and efficient operations and defining global objectives, goals and strategies. The new organisation structure highlighted the need to redefine roles. This requires an extensive review of the roles assigned to each individual and in many cases a new definition of tasks and priorities.

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Corporate Governance The corporate governance structure of Barilla Holding S.p.A., the consolidating entity of all group companies under its direct or indirect control, comprised the following corporate bodies in 2008, the reference year for this Sustainability Report: Board of Directors, Executive Committee, Board of Statutory Auditors and the Accounting Control Body. The governance structure is supported by the internal control system and the Organisation, Management and Control Model prepared in compliance with Legislative Decree 231/2001 (hereinafter the “Model”). The Model encompasses the Code of Ethics that defines a set of principles and values that are the result of a strong, well established corporate culture, which Barilla identifies with and requires that the directors, statutory auditors, employees, collaborators, consultants, suppliers and customers adhere to. The Board of Directors is vested with the widest powers and is responsible for the management of the business and assessing the adequacy of the organisation, administration and accounting structure. The Board of Directors comprises six directors of which 4 are executive, 1 non-executive and 1 independent. The Board has set up an Executive Committee that consists of four members who are responsible for strategic and finance management. The company carries out direction and coordination activities, as defined under article 2497 of the Italian Civil Code, in respect of the Group companies Barilla Iniziative and Barilla G. e R. Fratelli. In order to evaluate the effective and correct implementation of the Model, the Board of Directors appointed a Supervisory Body, which is composed of the heads of Group Legal and Corporate Affairs and Group Internal Audit, and an external member who is a self-employed professional. The Board of Statutory Auditors oversees compliance with the law and the articles of association, and compliance with principles of correct administration. The members are appointed for a three year term and may be reappointed. PricewaterhouseCoopers S.p.A. has been engaged to perform the control of the accounting records. The Group organisation structure was based on two operational sub-holdings: Barilla G. e R. Fratelli Società per Azioni, and Lieken AG. The GranMilano sub-holding also operated in the Group until its sale to third parties in July 2008. The corporate governance structure of Barilla G. e R. Fratelli Società per Azioni mirrors that of Barilla Holding S.p.A., consisting of a Board of Directors, Board of Statutory Auditors and an Accounting Control Body. The Board of Directors comprised ten directors of which 5 were executive, 3 non-executive and 2 independent. The two independent directors were representatives of the minority shareholder Gafina S.p.a., a long-standing associate of the Barilla family. The Executive Committee consists of 7 members of which 4 executive, 1 non-executive and 2 independent. With regard to the methods available to the shareholders and employees to submit suggestions to the highest governing body, both majority and minority shareholders are able to interact directly with the Board through the internal representatives. Within the corporate governance structure and more specifically in relation to the implementation of the Code of Ethics, employees are able to raise matters and suggestions with the Supervisory Body. The Supervisory Body reports its actions to the Board of Directors on a regular basis. The corporate governance structure of Barilla Iniziative S.r.l. (previously Finba Iniziative S.r.l.) consisted of the following corporate bodies: the Board of Directors and the Board of Statutory Auditors. The Board of Directors is vested with the widest powers and is responsible for the management of the business and assessing the adequacy of the organisation, administration and accounting structure. The Board of Directors comprises five directors of which 4 are executive and 1 non-executive.

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Human Resources


Timeline of key events 2008 2006 2006 2004 2001 2001 2000 1998 1995 1991 1989 1980 1973 1971 1962 1955 1947

New Leadership Model WAVE project for career monitoring and development implemented Barilla Laboratory for Food Culture (Barilla LAB) launched The second Best Employee Survey carried out Integrated System of Human Resources Management was established (Excellence Contribution Model) The first Best Employee Survey carried out First steps to implementing prevention culture Training programme established Introduction of MBO (Management By Objectives) linked to the evaluation of behaviour and performance Barilla People, an internal communication tool, launched A variable objectives remuneration system introduced (PPO) before being incorporated into national labour contracts for this sector Evaluation of the potential, definition of high potential and continuous training of management Introduced reimbursement of university membership and high and middle school fees. Awards granted for attaining university degrees or high school diplomas Contribution towards nursery and infant school fees introduced Internal Solidarity Unemployment Fund established to replace the Mutual Aid Fund Work safety committees set up Mutual Aid Fund established

Objectives to be achieved by 2014 People care and development

1

Increase the current investment in People Care by 20%.

2

Increase the number of training days, from the current average of 2 to 5 per employee.

3

Reduce the number of days absence due to accidents at work by 50% (the long-term target is nil critical accidents).

Individual and widespread responsibility

4

Extend the concept of widespread responsibility through training on the Code of Ethics and corporate responsibility.

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People The current economic situation in the fast-moving consumer goods industry is marked by low growth, strong price pressure, increased contractual power of distribution companies and less effective traditional advertising. This leads companies to focus on the short and immediate term (favoring the use of marketing, discounts and promotions) and with regard to demand results in a wide fragmentation in consumption and creates a general feeling of confusion amongst families. In this climate, the role of responsible companies is to foster trust, not only through their products but also firm commitments aimed at improving quality of life in particular by encouraging sustainable lifestyles and consumption. This role as communicators of culture and eating behavior means considering the company as a public service provider. Consumers must be viewed as people in the true sense of the word. As people are on the increasing search for loyalty from big brands, based on respect for their legitimate expectations, in order to gain their trust companies must invest time in listening to them in order to reduce the distance between them and the market and make them feel more secure. If we do not listen we cannot grasp and interpret correctly the emotions, needs and desires that we aim to satisfy when we develop a product. It is increasingly evident that a more appropriate use of new communication tools should be made that, on one had increases consumer product awareness and significantly reduces information asymmetry at the time of purchase and consumption, and on the other stimulates the active participation in the product planning process and more generally in brand management. As trust is not only based on the consumption experience (which still represents a fundamental condition), but through all interaction with the product, brand and company representatives, the relationship with the market must be founded on total transparency and respect. In summary, companies keep their promise only by demonstrating their constant commitment to making the planet a better place for everyone.

Consumers should receive educational information which encourages cultural growth and allows them to make more informed choices, buying less but better. Paolo Gazza

Director of Interprovincial Association of Fruit and Vegetable Producers First stakeholder forum

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Safety and quality Produce healthier and greater quality foods, providing the consumer with information about the safety of raw materials used and the manufacturing systems adopted.

Product quality and safety are vital elements of every company in the food industry’s commitment to sustainability. To this end we guarantee a special commitment to the millions of people who choose our products every day that goes beyond any regulatory requirements. This commitment is aimed at satisfying their expectations and managing risk relating to the raw material and packaging procurement process and product manufacturing and distribution. Raw materials We can only achieve maximum product safety and quality if safe, high quality raw materials are employed in highly technological and hygienic manufacturing and distribution processes. Supply Quality Specifications, which establish the organoleptic, chemical-physical and hygiene qualities and the point of origin of each of the 300 types of raw materials and 50 types of packaging materials used are defined as part of the supply contracts. The conditions set by us are often more restrictive than those required by law. The suppliers’ adherence to these specifications is guaranteed by 200 people that carry out periodic on-site inspections on the operating methods and perform checks on the supplies. We collect and analyze samples from each batch delivery to a manufacturing facility or the mill. The materials are only accepted if they pass the analysis stage. We analyzed 47,500 batches in 2008 and 96% complied in full to our standards. With regard to those that did not meet the standards we commence analysis and improvement procedures in order to resolve the issue together and avoid it being repeated. 

Food Safety Supply Chain Project The Food Safety Supply Chain Project is aimed at improving the safety level of supplies (raw materials and packaging materials). Different strategies have been adopted, depending on the importance and volume of the materials used, to deal with the highly complex processes we manage. The project aims to maximize development of specific food safety skills, define new supply chain management rules and establish an international network of experts and analysis laboratories. 450 training days (training on the job) involving 12 people were dedicated to this in 2008. Euro 1 million was invested in this project.

> 2,300,000 HENS LAY EGGS EXCLUSIVELY FOR BARILLA

A fully planned and controlled supply chain is in place for complex raw materials such as eggs. The hens of our exclusive suppliers are raised in controlled environments in which the temperature, light, and air flow are monitored and are provided with additive free vegetable based feed that is sourced according to strict supply standards. The eggs that are shelled within 48 hours of being laid are delivered to our production facilities within 16 hours of pasteurization. Only three days pass between the egg being laid and its use in the production process. Our factories Barilla operates in 25 factories and 9 mills located in 10 countries. Each of these facilities was planned and constructed and are currently maintained in accordance with GMP (Good

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Manufacturing Practices): more than 600 hygiene-sanitary operating regulations, the correct and full observance of which is checked continuously. In order to avoid contamination, the analysis of risk and critical control points (HACCP, Hazard Analysis Critical Control Point) is updated continuously for each production facility.

the WHEAT PURCHASED BY BARILLA IN ONE YEAR CORRESPONDS > TO A TRAIN 1,400KM LONG

Cleaning The cleanliness of our plants and properties is fundamental to product safety. Although this is normally outsourced to third parties this area is subject to strict control. After passing the selection process, the cleaning companies are trained and must adopt our rigid procedures. We check their work before starting each of the 179 production lines. Certifications Each year we certify that the Food Quality and Safety Management Systems adopted in all of our factories and mills conform to highest international standards through assessment by qualified experts (ISO 9001 for the Quality System and BRC/IFS for Food Safety).

Consumer Contact Satisfying people’s needs is fundamental to us. Consumer contact took place through the following channels in 2008: 38% questions relating to promotional initiatives, 16% product surveys (requests about products), 8% nutritional questions and 38% reasons for dissatisfaction. A freephone number is not available in all of the 125 countries in which our products are sold. One of our future targets is to extend the ways in which we can listen and reply to the people of all the countries in which we operate.

Product controls All finished products are subjected to a series of organoleptic (including tasting), microbiological and chemical-physical controls in order to check quality before being distributed for consumption. We analyzed 87,400 batches in 2008, of which 92% were fully compliant. The batches that do not pass selection have small defects that for most products relate to visual imperfections that do not meet Barilla’s standards of excellence. The most common cases are problems with shape, cooking or packaging. Controls on distribution In order to guarantee that our products are delivered adopting the same quality and hygiene standards as the factories in which they were manufactured, we also manage the distribution process in more than 125 countries. We require application of our GDP (Good Distribution Practices) and perform regular inspections using internal and external experts. Analyses are performed on the structural and managerial features of all warehouses (at our factories and distributors). We check that the levels of cleanliness, humidity and temperature at our distributors’ facilities are suitable for product storage and that there is no risk of contamination with other products stored in the warehouses.

> cONTROLS TAKE PLACE EVERY 15 SECONDS Traceability and retraceability We have devised a fully automated traceability and retraceability system that is in operation in all of our factories and is used to: • match raw material and packaging material batches used with the source supplier and the finished product in which they were incorporated; • identify the customer to whom each finished product batch was delivered. Where problems arise we can act immediately both to identify the origin of the problem and resolve it and to safeguard consumers in the event of serious defects. We invested Euro 28 million on prevention and control activities in 2008, which are fundamental to guaranteeing product quality and safety. We involved the entire organization in developing the appropriate level of skills throughout the whole group.

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People


Communication Communicate fully and transparently, being careful to avoid encouraging excess or inappropriate use of our products compared to basic dietary needs dictated by healthy eating principles, especially where advertising is directed at children.

Our principles Barilla has always maintained high communication standards that far exceed compliance with basic regulatory requirements. In addition to following current national guidelines, we have established a series of principles to which we aspire continuously and consistently. The two cornerstones are: • the qualities attributed to products must always have been verified scientifically; • advertising, where the medium used allows, must contain messages relating to brief, simple rules for a healthy lifestyle that should accompany the product’s consumption. We also try to use different communication tools that complement each other and that allow us not only to inform people but to stimulate interaction with the public by providing explanations and requesting feedback.

tHROUGH ITS 12 BRANDS, BARILLA SELLS MORE THAN > 1,000 PRODUCTS COVERING EVERY EATING OCCASION Packaging Packaging plays a fundamental role in the communication process that goes beyond normal marketing objectives. The package plays a primary role: consumers are in direct contact with this tool on a daily basis and it should assist them in making their choice. At the same time it must be clear, transparent and informative. Our objective therefore is to offer as much support as possible, from nutritional advice through to cooking instructions and how to dispose of the packaging. In particular it is important to us that we encourage people to adopt healthy, balanced eating habits. The nutritional table (in line with national regulations in each country) illustrates the calorie and protein content of carbohydrates and sugar. In 41% of cases we indicate the ideal portion size, in 25% we give advice to achieve a healthy lifestyle or balanced diet and in 84% suggestions on preparation and consumption. Traditional advertising The second communication tool is traditional advertising through television, radio or the press. Where advertising aimed at children is concerned, we always encourage them to eat

dETAILED NUTRITIONAL TABLES ARE PRINTED ON 85% > OF OUR PACKAGING

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in moderation and where possible our adverts involve play situations or open air activities. Emphasis is placed on the mother’s role in controlling the child’s diet and serving their food. Internet Internet is taking on increasing importance as it allows us to provide information that consumers need but that due to limited space or time cannot be conveyed through traditional advertising or packaging alone. We gathered data on 9 of our 12 brands: Barilla, Voiello, Mulino Bianco, Harry’s, Alixir, Misko, Filiz, Pavesi and Wasa. These websites may be accessed through www.barillagroup.com. 8 out of 9 brands have at least one website. 6 of these provide links to detailed nutritional tables, 7 provide suggestions on healthy lifestyles and balanced diets, 3 recommend maximum serving sizes and 5 give instructions on how to prepare the product. Barilla believes one of the fundamental rights of a consumer is the right to be listened to. Through Internet we are trying to create interactive areas in which people can express themselves, ask questions, bring important subjects to light or make suggestions. We experimented with the first truly interactive site in 2008, asking consumers to take part in the “Biscuit seeks a name” project aimed at choosing the name for a new biscuit: the Girotondi. This continued with the “Mulino Diaries”, where 10 consumers became bloggers and made comments and suggestions on the Girotondi. These examples represent the first steps beyond the experimental stages and we are continuing to develop these further. In order to identify as quickly as possible any potential problems or deal with requests made by individuals or families, continuous monitoring tools have been set up on Internet which record comments and suggestions on our products, brands, activities and initiatives.

Alixir “Food Lounge” 2008 This was a temporary experiential, interactive exhibit (in Rome and Milan) aimed at educating people on the benefits of following a diet based on high quality, innovative products. The visitors embarked on a multi-medial journey centered on the rules of healthy eating. They were then invited to answer questions on their own eating habits to find out the general state of their health (heart, immune system, cellular ageing and intestinal function) and receive suggestions. They could try personalized dishes prepared by Barilla chefs using Alixir products. Conferences and seminars were organized to raise awareness of the affect of our diet on our psychophysical wellbeing.

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The Alixir case Alixir is a functional food line consisting of 10 products across 4 benefit categories. The products in each of these categories contain active ingredients that support the claimed benefits. The benefits are communicated through “health claims”: • help control cholesterol; • improve intestinal function; • help slow down the cellular ageing process, fighting excess free radicals; • help boost the immune system. Under Regulation 1924 issued in 2006, these claims may only be used in Italy where scientific evidence exists to support the advertised benefits. European regulation has not yet issued a definition of acceptable claims: an official list of health claims is being drawn up by the European Commission in conjunction with the EFSA. Prior to the launch of Alixir, all scientific data based on the most recent international publications was collated and clinical trials were carried out on each benefit category in the laboratories of 4 of the country’s leading universities. A highly scientific approach was adopted for this project. The Italian Competition Commission (AGCM) commenced procedures in February 2008 to ascertain whether some of the advertising messages conveyed on the packaging of Alixir products were misleading. Elements of this advertising were censured in August 2008 despite the existence of documentation to support the 4 health claims. An appeal has been filed against this decision with the Lazio Regional Administrative Court. The Court issued a ruling upholding the sentence of the Commission but declared the penalties to be excessive (2009). We still consider the accusations made by the Commission to be unfounded. Subsequent to findings by the Minister of Health, a number of inaccuracies in the advertising content were corrected immediately. This demonstrates that we would never willingly mislead our consumers. Final investigations showed that these related to minor imperfections that were corrected on the new packaging.

People


Timeline of key events

Safety and quality

Communication

2008 2007 2003 2000 1998 1997 1996 1995 1993 1993 1985 1984

Commenced integration of Harry’s France and Harry’s Russia to the Quality System Food Safety Supply Chain project launched Commenced integration of Wasa to the Quality System First certification of Quality System awarded (ISO9001) First edition of GDP introduced (Good Distribution Practices) Planning commenced on current Food Quality and Safety System First edition of GMP introduced (Good Manufacturing Practices) Methyl bromide no longer used to disinfest the factories (10 years ahead of legislation) and ethological methods introduced for pest control First edition of the HACCP model introduced (5 years ahead of legislation) Free phone number installed for consumers in Italy Supplier assessment and approval process implemented Changeover from control system to prevention and control system with Quality Assurance department set-up, headed by factory quality control functions

2008 2002 1996 1993 1992 1992 1991 1991 1990 1985 1985 1983 1976 1957 1952 1910

Interactive advertising campaign “Biscuit seeks a name” Advert commemorating 125 years of Barilla in collaboration with Wim Wenders First advert broadcast in the United States French advertising campaign: Gerard Depardieu First advert broadcast in Sweden with Stefan Edberg The “Healthy Eating Pyramid” campaign launched First Barilla advert in Germany: Steffi Graf The “Italian breakfast” campaign launched Advert by Giuseppe Tornatore: the family goes to live in the Mill “Rigatoni” advertising spot by Federico Fellini The campaign “Where there’s Barilla there’s home” commenced First Barilla advertising spot in France First Mulino Bianco advertising spot and the “Eat well, return to nature” campaign launched First advertising film on Barilla Erberto Carboni creates the new Barilla logo First Barilla logo

Objectives to be achieved by 2014 Safety and quality

1

Expand the Barilla control standards for raw materials and finished products to the Harry’s France and Harry’s Russia factories and proceed towards full integration. Develop plans that guarantee a 10% annual increase in conformance rates.

Communication

2

Significantly improve the completeness and quality of nutritional information provided on packaging and on the Barilla and individual brand websites, ensuring for all products on a worldwide scale that: • they are accompanied by a detailed nutritional label; • they contain recommendations for a balanced diet and healthy lifestyle; • there are suggestions regarding consumption (in particular, ideal portion sizes and ideas on how to combine products).

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Community Current society is complex and diverse. A change in the various forms of social welfare has strengthened the position of a multitude of entities in their role as subsidy providers. At the same time companies have become part of people’s everyday life not only through products but their ability to influence institutions. Society looks increasingly to the support of companies in providing services to the community that are not part of their normal business. Furthermore they are expected to act as a spokeperson in institutional debates. For these reasons, companies that operate across international markets must find strategies and actions that are consistent with their corporate values and distinctive skills and create occasions to interact with local communities wherever these may be located, while taking into account the specific needs and characteristics of each individual situation. Moreover, enterprises must not ignore the co-existence of a two-layer system of relationships between people. The first consists of social interaction, emotional and rational intensity and real meetings in traditional places. Companies that manufacture consumer products that are widely used by families and individuals must take this phenomenon into account, as it is in line with their specific mission. At the same time social networking has experienced exponential growth. These new interconnections create not only group satisfaction but a desire for individual and independent growth. On the whole, communities today seek to use local entities and organizations (whether public or private, institutions, companies or associations) in order to access resources that are useful to sustainable development. Companies play a leading role in society and for some time now have been expected to act in an open and transparent way and are required to make available their specialist skills to complement and integrate those of public enterprises and associations.

The sustainability of an enterprise also means being able to foster its relationship with the local community, defining a common strategy for the future. Furio Brighenti Professor of human diet and nutrition, Department of Public Health, University of Parma First stakeholder forum

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Development Participate in the development processes of all communities in which the company operates, either by direct intervention or through dialogue and cooperation with institutions.

Although Barilla provides people with products for everyday use that are inextricably linked to their wellbeing, the biggest impact on the community is noted where its production plants or offices are located. Barilla owns 25 production plants and 9 wheat grinding mills across 10 countries. It also has 8 logistic facilities in Italy.

1

1

1

1

2

1

8

2

LOGISTIC PLATFORMS IN ITALY

1

6 Pasta Bakery products

6 3

8 1

Mills Warehouses and depots

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1

1

1

1

Mutual effects Working in the local area, using resources and offering goods and services constitutes being an integral part of the local community. We are well aware of the value that these communities confer to the company every day. For the purpose of our first Sustainability Report, we have decided to try and measure the impact that we have on them. Jobs To quantify the effect we must first consider the jobs created by our local presence. The number of direct group employees in our production facilities, mills and distribution activities was more than 7,450 in 2008. People involved indirectly in production amounted to more than 750. The sales force in Italy consisted of 225 employees and 399 indirect sales

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agents across the whole country. 1,375 people work indirectly for us in the logistic sector. To put this data into context it is worth emphasizing that we are the largest company in the locations where we own facilities, which is due more to our impact on each local economy rather than the number of total employees. Product donations As a food manufacturer the easiest way for us to contribute to promoting local activities is through product donations. Almost all of our production facilities donated part of their production to support organizations or initiatives amounting to a total of 359 tons in 2008. Part of these donations was managed by the headquarters in Parma. We provided support through donations to the Feeding America (United States) and Banco Alimentare (Italy) projects, totaling 334 and 1,414 tons of products respectively in 2008. Other activities that support local development If we want to earn the title of members of the community, it is fundamental that we contribute to the development and growth of the communities in which we have a local presence. We are aware however that each community has different and specific needs. Our factories have a fair degree of autonomy in choosing the projects to promote in favor of local communities. These initiatives are chosen after listening to local needs. The majority of our factories supported, sponsored or financed a series of extremely varied activities (sports events, cultural and social initiatives, etc.) throughout 2008. In America we offer our employees the possibility to use one working day each year to support charity events organized by third party enterprises and organizations. All these initiatives have the same common theme: creating social value by supporting efforts that foster aggregation and solidarity. Health of local communities It has become common practice in Italy that each year on a rotation basis, one of our production sites, located in different parts of the country, donates infrastructures or medical-sanitary equipment to its local community. This is financed by a fund setup jointly between Barilla and its employees. In addition to this initiative, in 2008 the company decided, together with public and private enterprises in the area, to support the construction of the Children’s Hospital in Parma, a scientific and care centre of excellence. The total contribution will amount to approximately Euro 8 million over a five year period. We wish to strengthen our commitment and support for the local community in future and aim to represent for each of these a reference point where dialogue may take place between companies, public authorities and civil society. An example of collaboration with the territory Barilla owns the largest bakery products production site in Europe located in Castiglione delle Stiviere (Mantova). It is cutting edge in terms of technology, product quality and professionalism. In the 90’s work commenced on construction of a quarry in the area surrounding the factory. The site remained unused for years until a company presented a plan to transform the site into a landfill. Following a series of heated discussions that saw local committees, environmental associations and enterprises taking a firm stance on the matter, the project was abandoned. The project was totally incompatible from an environmental prospect. The landfill would have been built on land where the hydrogeological factors are extremely vulnerable. This would have risked contaminating a large expanse of groundwater in the province of Mantova. Despite these issues the project was resubmitted in 2008 but faced strong reaction from the local communities. This created a team effort between the local councils, farming and commercial associations, citizens committees, environmental associations and companies. Barilla provided a significant contribution in scientific terms thanks to its team of environmental experts. The pool of public and private enterprises worked successfully to enforce new legislation regarding the location of landfills that is effective for the whole of the Province of Mantova. Regional Resolution 8/890 of 20/01/2009 prohibits landfills from being built at the old quarry site.

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Community


Education Encourage and support educational efforts to promote a responsible lifestyle among young people and adults (health, exercise, nutrition, protecting the environment) and to contribute to the health of the communities in which the company operates.

3 educational community projects were devised in 2008 in partnership with local institutions that were aimed at encouraging people to adopt healthy lifestyles. giocampus In order to promote physical exercise and healthy living amongst young people, the Giocampus initiative was organized for the seventh year running in collaboration with CUS Parma and the University of Parma.

15,000 CHILDREN INVOLVED OVER 7 YEARS

2,800 CHILDREN BETWEEN THE AGES OF 5 AND 14 TOOK PART > IN GIOCAMPUS IN 2008 The project was based on a study of the area carried out in 2001 that highlighted the lack of authoritative sources and training experience in the areas of physical, nutritional and environmental education. Our aim is to provide a multidisciplinary experience based around an intense program of sports, play and educational activities. Giocampus provides the youngest of children and their families the opportunity to learn the fundamental principles of well-being. The program promotes regular physical activity and correct eating habits that reflect recommendations made and supported by the international scientific community. 150 professionals and qualified trainers (ISEF qualified and/or graduates in Physical Education, pediatricians, psychologists, naturalists and experts in environmental education) took part in the launch of the project. The number of children that attend the summer camp has continued to grow, and has welcomed 15,000 participants over 7 years and been awarded satisfaction ratings ranging from excellent to good (expressed by the families based on various parameters including Organization 98%, Sports Education 98%, Nutritional Education 94%). The results of Giocampus In previous years a study was carried out during Giocampus on children’s eating habits. It emerged that 22% of children do not eat breakfast 5 days a week. Throughout the course of the day we monitored the balance between calories consumed and expended by the children. This showed that in the morning at Giocampus, the children suffered a drop in energy levels that was due to eating a light breakfast or none at all. As a consequence we changed the menu and organized educational activities for both the children and their

Barilla Sustainability Report

Future steps Based on experienced gained to date the Giocampus project will become a permanent fixture. Commencing with the 2009-2010 school year the project will be extended to primary schools in Parma and will supplement normal educational activities. The aim of this joint initiative with our partners (Parma Town Council, the University of Parma, Emilia Romagna Regional School Office and Parma University Sports Centre) is to promote Giocampus as a national educational reference model. The project objectives are shared by all of its partners taking into account the evidence gathered each year that is monitored using qualitative/quantitative questionnaires, focus groups formed with the parents and children who took part in the initiative and specific scientific studies carried out by the University of Parma.

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parents to help them adopt healthy eating habits starting with breakfast. This initiative encouraged children to achieve a balance between available energy levels and the amount expended during the day.

Difficulty in measuring results The results measured so far are mainly qualitative in nature. Although physiological and growth data can be easily measured in quantitative terms, the effects on the children’s awareness and behavior throughout the day are not so easily quantifiable. Up until now, monitoring changes in habits has only been possible in relation to behavior during project related activities. The family circle has the greatest influence on children’s eating habits and the educational insight offered at school and Giocampus may not be embraced within this environment. In order to maximize the educational efforts we have organized sessions on specific topics with both parents and teachers.

“Barilla 1…2…3…Via!” “Barilla 1…2…3…Via!”, which celebrated its second edition in 2008, is a project founded on the concept of continuity and synergies between physical exercise and healthy eating principles, aimed at enhancing the work of educational institutions in collaboration with local and national authorities and the sports world. The Puglia Olympic Committee, the Department of Sport, the Department of Education of Bari, the National Association of Dieticians (ANDID) in Puglia and the Provincial School Offices of Bari have collaborated on the project. “Barilla 1…2…3…Via!” provides educational courses based on activity and healthy eating to children from 8 to 11 years of age. Teachers are also involved in the initiative through training sessions on correct eating habits, and parents are invited to workshops focused on diet and exercise. Assistance was provided to the teachers by a team of specialists: 20 physical education consultants and 9 dieticians from ANDID Puglia. “Barilla 1…2…3…Via!” has been operated in Parma since 2002. The project’s main goal is to improve physical exercise in primary schools, providing schoolchildren two hours a week of physical education in the school gym between October and May. Local institutions also participated in this initiative: Parma Town Council, the Olympic Committee for the province and the University of Parma. 7,000 children between 6 and 11 years of age have been able to take advantage of 60 hours of physical education. The 680 regular teachers are assisted in the gym by 70 experts, either ISEF qualified or Physical Education graduates.

8,600 PRIMARY SCHOOL CHILDREN IN BARI TOOK ADVANTAGE > OF 15 HOURS EACH OF PHYSICAL EDUCATION IN 2008 The results of “Barilla 1…2…3…Via!” In order to monitor whether the initiatives implemented as part of the project have had a positive impact on the children’s health, the following measurements are taken at the beginning and end of the school year: height/weight ratio, running speed, flexibility, body coordination. The data for the 2007-2008 school year are not yet available. The 2006-2007 results were published in the Scandinavian Journal of Medicine & Science in Sports. Evidence showed significant improvements in running speed, body coordination and height/ weight ratio (only in respect of boys; no significant changes were recorded in respect of girls). With regard to flexibility no improvements were noted in schoolgirls, while that of schoolboys actually worsened. This is attributed to the type of exercises that require different skills to be used at the same time: movement and coordination. This parameter will be analyzed in more detail in future.

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Community


Timeline of key events 2007-2008 2006 2002 2002 1999 1996-1999 1996 1994-1995 1994-1995 1993 1992-1995 1992 1989-1995 1989 1987-2000

Publication of diet and exercise educational guides “Choose to be Fit and Healthy” program launched in conjunction with the Italian Sports-Doctors Federation Giocampus project starts “Barilla 1...2...3... Via!” launched Collaborated on the Italian environmentalist association Legambiente’s project “Forget-me-not” (civic education in Italian high schools) The “Quality of Life” primary and secondary school health education program launched in conjunction with Legambiente The first step of the “Quality of Life” program, the “Educational Guide” published “Nature in the City”, initiative established in conjunction with council authorities and Legambiente Healthy Eating Pyramid posters printed for teachers “The Green Urban Manual” published in conjunction with Legambiente The “Healthy Diet, Nature’s Friend” nutrition and environmental education project, directed at junior school students and teachers, launched in partnership with Legambiente Publication of the “Paths to Diet and Environmental Education” book, the first step in the “Healthy Diet, Nature’s Friend” project Giunti - Barilla project: “The Healthy Eating Culture” project launched in Italian primary schools “The cereals era: from the myth, to history, to your table”, was published to provide support to teachers on the subject of healthy eating Barilla Sport School: a summer school for physical and dietary education for young people of between 7 and 17 years of age

Objectives to be achieved by 2014 Development

1

Implement a long-term project that supports development of the communities in which Barilla operates, both in Italy and abroad. Dedicate suitable resources to this project, working closely with the stakeholders to meet the priorities identified by them, and be a key player in the development of the communities in which the factories are located.

Education Ensure that the Giocampus project is recognized as an excellent educational project model and make it available to local and national enterprises and any other socially active parties.

2

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Stakeholders For a long time we believed that corporate social responsibility was demonstrated through initiatives of community use, chosen in complete autonomy (often self-justified), which compensated the damaging effects of any irresponsible actions by some enterprises. The economic crisis that exploded in 2008 and prior to that the financial scandals and emergency waste situation, showed us how superficial it is to talk about responsibility without first considering whether companies are truly aware that they are part of a bigger picture and that they are willing to cooperate in this on an equal level. Without this awareness it is unlikely that corporate strategies and the resulting actions will have a social impact and bear witness to their commitment. This revolutionary change in perspective, which takes the focus away from companies onto that of a more complex system, does not only lead to a radical review of various corporate processes and structures but also the profound evolution of management culture. An effort of this magnitude must be founded on an exchange and mutual support between companies and all parties with which it interacts (stakeholders); without dialogue based on listening it is impossible to identify optimum solutions and find the right motivation to implement them. This represents a huge commitment and requires significant investment on the part of organizations, but there is no other way to cross the fine line between traditional company practices and attaining long-term objectives that reconcile the interests of the company with sustainable development. For this purpose, identifying stakeholders and creating more effective communication channels that are conducive to the exchange of information are prerequisites for social responsibility.

This report should illustrate wide-ranging objectives not only in relation to the environment but also regarding nutrition, innovation and the supply chain and in future the outcome of this commitment. Andrea Poggio Deputy General Manager of Legambiente First stakeholder forum

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Map of Barilla’s stakeholders

GOVERNANCE SYSTEM

EMPLOYEES

SUPPLIERS

PROFESSIONAL ASSOCIATIONS

SCIENTIFIC COMMUNITY

CUSTOMERS

OPINION MAKERS, NGO’S, ASSOCIATIONS

Chairman Board of Directors Supervisory Board Majority shareholders

Executive (Italian and foreign employees) Middle manager (Italian and foreign employees) Worker (Italian and foreign employees) New employees (in the company for 3 years) Disabled

Raw materials’ suppliers Farming businesses Packaging suppliers Plant suppliers Energy suppliers Finished products’ suppliers Co-packers Sales agents Legal consultants Service suppliers Advertising, packaging and communication agencies

Confindustria (Italian manufacturing and services federation) Traditional distribution associations

Conference of Italian University Rectors (CRUI) Scientific companies involved in nutrition and diet Medical associations

Modern trade Traditional trade New distribution channels Commercial and service restaurant trade

Consumer associations

Minority shareholders

Employees at the end of their career (5 years to pension) Trade union representatives Associations within the company

Consultants Insurance brokers Press, TV, internet media buying

AIDI (confectionary industry-IT) CAOBISCO (confectionary industry-EU) UNIPI (pasta makers-IT) UNAFPA (pasta makers-EU) Cross-sectional (Europe and Italy) ITALMOPA (milling industry-IT) Semouliers (milling industry-EU) Association of agricultural producers Inter-professional associations Employer associations Associations that promote Product of the Year Trade associations, professional committees National associations representing the transport industry Trade unions

Universities with faculties relevant to Barilla’s business (national and international) Scientific foundations Public research centers Private research centers

Important but infrequent relationship

Important and frequent relationship

Very important and continuous relationship

The map below is the outcome of a joint exercise across all corporate areas. Specific groups of stakeholders were identified in order to allow a strategic, systematic and informed approach to managing relations with them through involvement, dialogue and shared information. Moreover, all types of relations with individual groups of stakeholders were identified and classified into three types

Board of Statutory Auditors

Materials and equipment suppliers Property owners

Children’s rights associations Educational and sporting associations Websites dedicated to consumers and the environment / Blog Critical consumption (Responsible consumption, fair trade)

Other universities (national and international)

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in order to implement suitable relationship activities and initiatives to be implemented. Starting from the top, the table below illustrates the groups of stakeholders with which the company has relations and the relevant category in which they have been divided considering their relations with the company: very important and continuous, important and frequent, important but infrequent. MEDIA

NATIONAL, EUROPEAN AND INTERNATIONAL INSTITUTIONS

Children Adults Seniors People interested in health and well-being People with specific health problems

Investors (US PP noteholders) Banks Internal Revenue Service Employees (social welfare authorities and insurance companies)

Trade representatives (Confindustria, Confcommercio, and Unioncamere) ASL NAS

Press - National daily newspapers Television Internet Media relations (press, daily newspapers, TV, Internet) Specialized trade journals

Ministry of Agricultural, Food and Forestry Policies Ministry of Employment and Social Policy Ministry of Health Competition Commission EFSA

Independent auditors

Councils Provinces Fire Departments Employment Offices Regions

Press - Local newspapers Press - Economic journals International press Specialist press

Ministry of Education, University and Research and educational associations Ministry of Infrastructure and Transport Ministry of the Environment Data Protection Agency European Commission FAO, ONU, UNICEF EFFAT

Schools Other local enterprises Charitable organizations

Press - other

The Cabinet Ministry of Economic Development (overseas exports) / Italian Institute for Foreign Trade European Environment Agency European Agency for Safety and Health at Work

Allergy sufferers People who choose certain diets for religious or other reasons

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Stakeholders

ENVIRONMENT AND FUTURE GENERATIONS

COMPETITORS

Direct competition (pasta, bakery, sauces) Direct competition in food industry

Environmentalists

Indirect competition (food but not in modern distribution)

Important but infrequent relationship

LOCAL COMMUNITIES

Important and frequent relationship

FINANCIAL ENTERPRISES AND FISCAL/ FINANCIAL AUDITORS

Very important and continuous relationship

CONSUMERS


Relations with stakeholders Involve stakeholders as far as possible in company practices, by establishing a dialectical relationship that produces maximum value both for them and for Barilla.

Barilla is aware that continued growth and its economic sustainability depend on the strong link between the company’s interests and those of society. This awareness has been at the basis of the attention and collaboration that the company has always dedicated to the local communities, the academic world, consumer associations, trade unions, other enterprises etc. This tendency pushed Barilla towards a further commitment: to consolidate stakeholder relations practices that will foresee their involvement in defining the company’s courses of action, opportunities to enter into dialogue and the provision of transparent information. This new approach could not be adopted without identifying those parties where a relationship of mutual influence exists between them and the company, which led us to begin mapping our stakeholders. The map In order to create a map that was not the usual list of 7 or 8 general categories but a tool to define, evaluate and continuously improve stakeholder relations, all areas of management and corporate functions were asked to contribute to this process. They were asked to identify small, like groups of stakeholders that have direct contact with the company in order to avoid the identification of such generic categories that they would then prove to be useless. To prepare a map that facilitated the definition of a detailed relationship strategy for these groups, the heads of the various corporate functions were asked to group the stakeholders by type of relationship: very important and continuous, important and frequent, important but infrequent. The outcome of this process was a map that identifies 116 specific stakeholder categories classified according to the relevance of their relationship with the company. This stakeholder map is illustrated in the pages above. Involvement As already mentioned, the mapping process involved the entire organization area by area. This was a time consuming exercise that was impossible to complete prior to commencing the reporting process. In order to involve the stakeholders from the very first steps in the reporting process, representatives of the key stakeholder groups were invited to attend two forums and eventually a representative panel will be set up based on the final outcome of the mapping analysis.

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SPECIFIC STAKEHOLDER CATEGORIES CLASSIFIED

GRI guideline Application Level GRI international standards, in addition to defining the indicators and parameters to be used for reporting purposes, also require disclosure of the guideline application level. There are three self-declared application levels (in descending order: A, B and C). The application level of our first report is C. We are committed to achieving a higher application level in our next report.

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The first forum was held at the factory in Pedrignano (Parma) in July 2008. The participants (representing consumers, the scientific community, associations, suppliers and employees) were asked to assess the areas that define Barilla’s scope of responsibility and say how this model meets their priorities. The second forum took place in the factory in Castiglione delle Stiviere (Mantova) in November 2008. On this occasion the participants also included representatives from trade unions, distribution, media, trade associations and the local community. The objective this time was to validate the challenges identified for each area of responsibility and contribute to defining the required commitments.

our COMMITMENT TO INVOLVE STAKEHOLDERS RELATES > NOT ONLY TO THE REPORTING PROCESS BUT ALSO ALL OTHER

COMPANY PRACTICES

Case: Cartel accusation On 25 February 2009, the Italian Competition Commission fined the Italian Union of Pasta Makers and 26 of the major pasta manufacturers, including Barilla, accusing them of forming a cartel in respect of pasta prices. The total fine amounted to Euro 12,496,333 allocated according to the degree of responsibility assigned to the various entities by the Antitrust authority. We have declared our absolute noninvolvement in any cartel activity aimed at inflating pasta prices. Our commercial policy has been determined, as always, in full autonomy. The pasta market has always been competitive and remained so during the period in which the probe was carried out. The price increases implemented by pasta makers were fully justified and allowed the pasta industry to recover only a part of the cost increases linked to rising costs in the key elements of production, starting with raw materials. In order to inform our stakeholders of our stance on the Authority’s decision, statements were issued to our suppliers, the press, distributors and all employees were updated through internal communications. Barilla is currently contesting the fine issued by the Authority and at present the appeal is in the second stage.

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We adopt a strategic approach to dealing with these spokespeople but also implement practices that allow us to deal with demands and expectations that impact the business. Collaborating with the Customer (Distribution) tends to increase the efficiency of the supply chain and the service provided to families and individuals. We aim to increase their involvement in all of those initiatives in which they are fundamental players in the process, to pursue together an ever increasing degree of sustainability; to this end, it is imperative that a specific, continuous communication channel be created (Stakeholder Forum) that is always open to them. Dialogue will also take place through traditional channels. Our Customer service team will promote the assessment and development of discussion areas on the subject of sustainability. We consider the Scientific Community to be a reference point in the planning, development and control of all of our products and processes. We have established strong relationships over the years with numerous research centers working on wide-ranging projects across all fields of knowledge. We are firm believers that scientific knowledge is an effective vehicle to promote changes in and the sustainable development of the agro-food sector, which is one of the factors that led to the foundation of the Barilla Center for Food & Nutrition. With regard to its Suppliers, Barilla pursues a policy of creating an integrated system that links all of the partners in the supply chain. In future we intend to consolidate controls over the agricultural raw material supply chain focusing on key critical factors: arable land, water requirements and carbon footprint. This will also be achieved through focusing genetic improvement programs and cultivation activities on specific improvement objectives in terms of environmental impact the outcome of which will be measured using the relevant ecological footprint. Overseeing the surrounding territory however will not simply involve raw material planning and procurement or the management of production cycles. Thanks to our extensive knowledge of the areas in which we operate, we will intensify Community relations, fostering constant dialogue with the various representatives in order to create and exploit synergies in resources and intellectual skills and provide exhaustive solutions to current needs and anticipate future and potential ones. Barilla recognizes the importance of working with entities involved in the development of civil society in order to participate in community development programs and pursue its own sustainability agenda. Barilla will continue to implement projects aimed at contributing to society’s well-being, forming partnerships with NGO’s and Associations that will work alongside us in pursuing these aims.

Stakeholders


Dialogue and information A number of events were organized in 2008, although not part of our strategic plan, which allowed us to enter into direct discussions with our stakeholders. Following implementation of new European regulations on good manufacturing practices, we organized training and discussion sessions with our packaging suppliers at our offices in Pedrignano (Parma) between 6 and 20 June; also in Pedrignano, on occasion of the annual event that wraps up the Emilia Romagna agricultural campaign, on 10 October we gathered all of our partners (wheat suppliers, seed suppliers and the Emilia Romagna Region) to discuss the agronomic and commercial data of the recently concluded campaign and estimate those for the following year; the annual meeting with finished products suppliers was held in December; we welcomed a group of consumers who won the competition organized by the weekly magazine Oggi to Pedrignano between 2021 May. On this occasion the winners were given the opportunity to visit the factory and pose questions to Paolo Barilla, the company Deputy Chairman. We contributed to the organization of and attended discussion forums such as the International Durum Wheat Symposium that took place in Bologna between 30 June and 3 July; Expo Senior (6 to 7 November 2008), a forum dedicated to the health of over 50’s at which our experts gave talks on nutrition related topics; the International Conference of Mediterranean Produce held in Parma on 14 and 15 November. Finally, we attended two events in the United States in order to exchange opinions with the international scientific community: the American Dietetic Association Food & Nutrition Conference Expo, held in Chicago from 26 to 28 October, and the International Conference on the Mediterranean Diet that took place in Boston between 16 and 18 November. It has become common practice to offer groups the chance to visit our factories in order to provide them with as much information as possible regarding the safety of the production processes adopted by us. The table below illustrates the number of visits to our factories in 2008. Number of factory visits in 2008 120

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Ca sti gli on e Bo lu (T ur ke y) Te be (G re ec e) Am es (U SA ) Av on (U SA ) Ha rry ’s Fr an ce Ha rry ’s Ru ss ia

Cr em on a

M elfi

Pe dr (P igna ar n m o a)

Fo gg ia

Ru (P bbia ar n m o a)

No va ra

40

In the course of 2008, activities aimed at managing stakeholder relationships involved 66% of the total groups identified in the map. More specifically, 25% were involved in defining corporate plans and activities, 32% took part in discussion sessions and 65% received direct information regarding the business.

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Innovative approach to reporting Put in place a permanent, innovative reporting model that ensures full and transparent communication of information to our stakeholders.

We consider this Sustainability Report a strategic tool that is fundamental for changing our approach to business. On this basis we decided to develop an innovative model and identify challenges, tasks and objectives that apply also to reporting. The involvement of the entire organization One of the most important elements introduced lies in using the report as an instrument of corporate change: to this end it was decided that the entire company should be involved throughout the whole process. Working directly on the project, each area came face to face with the subjects linked to corporate citizenship, integrating them into their daily work. Three teams were set up: the first is formed by the CEO and the directors of each area, who have the task of providing strategic direction; the second is composed of the Director of Communications and External Relations, the project leader and the staff of FONDACA, who provides scientific-methodological support to the process and a third group comprises managers of  all areas within the company who were invited to provide their own active contribution.

2

Stakeholder involvement Another fundamental innovative element is the involvement of stakeholders from the very first stages of the reporting process. The idea behind this is to allow stakeholders to provide their effective contribution in the decision making stages of the process. To avoid issues relating to circularity and deductive approach and obtain results comparable with those of other companies, we decided to adopt international standards and the principles that form the basis of GRI (Global Reporting Initiatives) guidelines. Moreover, we analyzed the indicators used by our competitors; identifying those we considered good examples of reporting. Our commitment will progress with a report on the company’s entire supply chain and the inclusion of social and environmental effects in the income statement.

STAKEHOLDER FORUMS CONVENED

Involvement of all areas of the company

Responsibility model Challenges-commitments matrix “The path toward sustainability” document Identification of relevant KPIs Collation of data and information for KPIs Identification of objectives Sustainability Report, issue zero

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Stakeholders

Stakeholder involvement: first forum Stakeholder involvement: second forum


The process executed The first step was to prepare the responsibility model: a document which reported a list of all Barilla’s areas of responsibility and all the indicators, in as much detail as possible, which assess the related activities. Each operating unit contributed, calculating the indicators most suited to evaluating the activities performed by them. Having identified a list of 450 KPIs (Key Performance Indicator), the next step was to involve the stakeholders. 27 stakeholders across 5 categories (employees, suppliers, consumers, scientific community, associations) attended the first forum; 35 recommendations arose from this meeting that were taken into consideration and 25 of these were incorporated in the indicator calculations (set out in the Appendix “Table of stakeholder recommendations - first forum”). Our aim was to ensure that the report was not just a description of activities relating to corporate sustainability but that it facilitated the identification and pursuit of improvement objectives. To this end we decided to reduce the number of indicators maintaining those we considered to provide key information. To carry out this selection we identified global challenges for sustainable growth and the commitments that must be undertaken to face these challenges. Once again all areas of the organization were involved together with a panel of stakeholders. 35 stakeholders across 9 categories (associations, trade unions, trade associations, media, the scientific community, local communities, consumers, suppliers and employees) attended the second forum. 29 recommendations were gathered during the forum and 21 of these were incorporated (set out in the Appendix “Table of stakeholder recommendations - second forum”). The challenges and commitments identified were summarized in matrix form and published in the document “Challenges, Commitments and Actions for a Sustainable Growth”. Considering that a certain number of stakeholders attended both forums, the entire process involved 55 stakeholders. Another important element that guided the choice of indicators is the desire to be held accountable for the results and the effects, more than the activities performed or the resources employed. Subsequently the collation of data required to calculate the chosen indicators commenced. By publishing the data in this report we undertake to improve them in future, focusing not only on meeting basic requirements but on optimum solutions applied to the issues identified. To provide concrete evidence of this commitment we have identified one objective for each commitment undertaken. These objectives must be realized over a 5 year period in order to have sufficient time to pursue challenging, but attainable objectives and to incorporate them in the company’s strategy plan. Finally, we are committed to taking on board the feedback relating to the opinion of the stakeholders involved in the process in respect to the quality of the reporting process followed and the end report.

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RECOMMENDATIONS RAISED DURING THE FORUM

Subsidiaries and percentage of indicators used

Strategic areas In identifying the area of reporting our aim was to consider all of the Barilla subsidiaries around the world. Unfortunately this report, which is still in the experimental stages, does not acknowledge some specific items that belong to all markets and all brands within the group, and therefore it was not possible to use the complete list of key indicators in relation to all of our subsidiaries. The table on the right sets out the percentage of indicators used for each subsidiary compared to the complete list. The table of indicators attached in Appendices, illustrates the area of reporting for each indicator. It was not possible to include the subsidiary Lieken in the area of reporting as it is currently undergoing a change and reorganization process. Furthermore, its activities differ significantly from Barilla’s core business. Our short-term aim is to unify all Barilla’s subsidiaries in a single reporting model. For the purpose of providing readers with the most transparent information possible, details are provided of the area of reporting for all data that does not include all of the subsidiaries.

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Harry’s (France)

52%

Harry’s (Russia)

29%

Barilla (USA)

56%

Yemina e Vesta (Mexico)

38%

Wasa (Germany and Scandinavia)

56%

Wasa (Norway)

40%

Filiz (Turkey)

56%

Misko (Greece)

56%

Number 1 (Italy)

60%


Timeline of key events 2008 2008 2007 2004 2003

Second forum involving stakeholders in reporting process First forum involving stakeholders in reporting process Assessment of activities linked to corporate sustainability carried out by FONDACA AFIS (Agri-Food Industry Sustainability) project executed, first approach to reporting which analyzed the framework of sustainability of the pasta and ready made sauces businesses “Green book�, document laying down the foundations of Barilla’s approach to sustainability

Objectives to be achieved by 2014 Relations with stakeholders

1

consolidate practices that allow the effective involvement of all stakeholders in the processes to which they pertain. For this purpose at least two panels relating to the reporting process should be organized each year alongside other meetings relating to facts, projects, activities, which bearing direct or indirect consequences for one or more stakeholder categories require their prior intervention to secure their valuable participation in the process.

2

Subsequent to each meeting, demonstrate the way in which each contribution was tackled and any resulting actions.

Innovative approach to reporting

Adopt a single reporting model for the whole Barilla group (including the foreign subsidiaries) that makes reference to the same KPIs and that systematically involves all stakeholders and encompasses the largest number possible of constructive comments.

3

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Stakeholders


Work continues This Report summarizes and records the actions undertaken in 2008 in the area of sustainability. The company takes a solid, determined approach to its present activities and in 2009 it applied consistent principles and achieved a series of important results along its continuing path towards sustainability. In order to take on real and credible proportions, sustainability must also have a strong element of practicability. For Barilla above all else this means doing our job well, providing wholesome, safe products at great value. We do wish to underline also the other experiences that represent a part of the collective activities performed by us that relate to our characteristic and unique sustainability model. Barilla cultivates a strong sense of “getting things done� and the need to promote sustainability practices that produce concrete, tangible results that communities and individuals may benefit from immediately. We aim to prove that strategies and concrete activities can coexist. A number of these are illustrated on the following pages.

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Work continues


Barilla Center for Food & Nutrition The Barilla Center for Food & Nutrition (BCFN) is a think tank and change vehicle that serves to gather and analyze the best knowledge from all over the world on the topics of diet and nutrition in relation to people, the environment, science and the economy and present solutions to help deal with the food challenges of the near future. There are four areas of interest and work: • Food for Sustainable Growth, implications of the environmental impact on the agroindustrial sector; • Food for All, implications associated with food supply chain management to promote access to food across the world; • Food for Health, implications that link diet to people’s state of health and wellbeing; • Food for Culture, implications that link food to the traditions, eating habits and religions of different populations. The objectives The Barilla Center for Food & Nutrition adopts a rigorous, multidisciplinary approach to all its activities, the aim being to: • listen to current and emerging needs of society in the world of nutrition and diet; • pinpoint the fundamental issues regarding people, the environment, science and the economy; • collate and analyze experiences and the most advanced knowledge skills available throughout the world today; • develop proposals and recommendations in the world of diet and nutrition and present them to major opinion and decision makers. Advisory Board An Advisory Board was set up to guarantee the work performed by BCFN. This board is composed of experts from different professional backgrounds (economics, medicine, nutrition, sociology and environment) who, through a multidisciplinary approach, identify topics of interest, elaborate distinct and scientifically proven data and issue recommendations and proposals observing the principles of independence, sharing and excellence. The members of the current Advisory Board are: Barbara Buchner (International Energy Agency), Mario Monti (Bocconi University), Gabriele Riccardi (Italian Diabetology Society), Camillo Ricordi (Miami University), Joseph Sassoon (Alphabet Research) and Umberto Veronesi (European Institute of Oncology). The results of our work In its first year the BCFN published and circulated five position papers: • water management; • climate change, agriculture and food; • food and health; • the challenges of food safety; • the cultural dimension of food. The First International Forum on Food and Nutrition took place in Rome on 3 December 2009, at which numerous internationally acclaimed speakers (Vandana Shiva, Lester Brown, Martin Bloem, Alexander Sarris, William Haseltine, and Shimon Peres) gave talks on Barilla Center for Food & Nutrition’s four research areas. Information and news on the subject of food, numerous expert interviews (including Amartya Sen, Jeremy Rifkin, Luc Montagner, Kathleen Kennedy) and the full recording of the Forum held in Rome may be found on the website www.barillacfn.it.

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Work continues


The joy of spending time together and gestures of love Communicating to people, where the aim is to create some form of direct interaction, must integrate and enrich the traditional formats favored by classic advertising. New forms of involvement We believe an innovative approach is required in relation to the communication of products for everyday use. The true value of the products must be conveyed as reassurance and confirmation of the trust that people and families place in us at the time of purchase. New forms of involvement were experimented in 2009, embarking on initiatives in the breakfast and first course product ranges. Breakfast Italian Style and the “Wake-up Tour” “Breakfast Italian style: a gesture of love” is a project that Mulino Bianco dedicated to the first and most important meal of the day not only to explain its nutritional value but also its social and psychological importance. A multidisciplinary group of experts, both internal and external, designed a “Model of Italian breakfast” that took inspiration from the food pyramid expanding on the symbolic and psychological elements that make this moment unique and precious to all of us. It represents for us a way to reaffirm the nutritional importance of breakfast and its implications on our affections and relationships. The model is based on a group of rules relating to: • energy content (20% of daily total); • variety (bakery products, milk or yogurt, coffee or tea and fruit); • the time dedicated; • a method of interacting with the people this moment is shared with. A real tour stopping at 30 cities from the north to the south of Italy was used to communicate the model. These events involved a total of more than 150,000 people including 30,000 children. During this “Wake-up Tour” an ideal surrounding in which to enjoy breakfast was set-up in town squares: a small mill that housed activities to inform, educate and involve the visitors. Pasta Parties Pasta Parties were held in Italy, Germany and the United States to celebrate “World Pasta Day” which is a long-standing tradition commemorated every year throughout different countries. Tens of thousands of people participated in these events held in city squares and streets, where lovers of the Italian first course par excellence were given the opportunity to try a wide number of recipes. These events marked an innovative moment in Barilla’s communication strategy. The fundamental aim is to strengthen the brand’s key values - family, conviviality, sharing creating a hands-on experience model in direct contact with people, which supplements the customary communication methods of traditional media such as television and newspapers. In this way the sacred ritual of Sunday lunch took on a public dimension, which underlined the values that have always accompanied the joy of eating together. Pasta Parties in Italy provided direct information to the public regarding the new types of pasta and provided an opportunity to demonstrate the whole range. In Germany and the United States, the pasta and sauces allowed people to enjoy an authentic Italian experience, making them appreciate the colors, flavors and smells of Italian cooking, which also guarantees a balanced diet and nutrition model that fits into modern life and people’s wellbeing requirements.

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Work continues


Barilla for Abruzzo Twelve months after the earthquake that took numerous lives and caused extensive damage, the Province of L’Aquila is returning to normal daily life thanks also to the contribution made by Barilla, which stepped in to bring help and assistance to the people affected. At the scene of the earthquake To understand in full what really happened and decide what could be done to help, in August we sent a delegation headed by our Deputy Chairman, Paolo Barilla, to visit the towns worst hit by the earthquake. This visit was fundamentally important as it allowed us to meet with local institutions and fully understand the needs and expectations of the communities and the local area, identifying any projects that had already been initiated and areas that still required planning and support. The planning phase In this first phase we sought to analyze and understand the needs and requirements by listening to the heads of local and national Civil Protection, the first to intervene in this emergency and able to provide in-depth information on the situation. They suggested we assist in the reconstruction of the school complex located in the town of San Demetrio Ne’ Vestini. We immediately understood the urgency and importance of this project: giving back the school complex to the community would have been a symbolic gesture for the whole population. Through this school we would have contributed to rebuilding the daily lives of the children of L’Aquila. The reconstruction phase The project officially commenced on 5 August with Barilla and the San Demetrio Ne’ Vestini municipality signing the protocol agreement, and thus the project became reality thanks to the active collaboration of public and private entities. The desire to involve different responsibilities, roles and skills in this common project prevailed over individual priorities and breathed life into a fast process of renewal. Thanks to approximately Euro 1 million in financial support, Barilla contributed to the reconstruction of the school complex in San Demetrio, allowing, in conjunction with School management, the 300 students to return to school at the beginning of the new school year. This was the first school complex in Abruzzo to be completed in less than 100 days. The project involved the restructuring work on the primary and middle schools and the total reconstruction of the infant school. The inauguration of the new school town On 19 September, on occasion of the new school year and only three months after the project started, the unveiling of the new school area was shared with the communities in Abruzzo and the fruit of this complex and detailed coordination work was enjoyed together. Future projects The construction of the school complex marked the first, important goal but, within a wider context, the project does not end here. The play and sports elements of this educational project will be completed with the construction of a play area and gym in 2010.

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Work continues


Appendix: table of challenges and commitments The table below records the challenges and commitments to secure our company’s sustainability.

STAKEHOLDERS

COMMUNITY

PEOPLE

HUMAN RESOURCES

ENVIRONMENT

SUPPLY CHAIN

NUTRITION

CHALLENGES

COMMITMENTS

The situation in developed countries is complex: - people are living longer and average age has increased - there has been a significant increase in obesity cases and metabolic syndromes starting from an early age in the latest generations - there is growing pressure from institutions to launch initiatives to prevent illnesses caused by unhealthy eating. Food companies are called upon to produce food and nutritional models that are designed to improve people’s health.

Daily well-being

Contribute to people’s health and well-being every day with our products by transforming high-quality ingredients into safe, wholesome products that meet both basic and specific nutritional requirements and offer people everyday solutions that aspire to the Mediterranean diet.

Products for specific dietary needs

Contribute to people’s well-being by offering products that meet specific dietary needs.

Consumers look to companies, especially food companies, to guarantee the quality and safety of the products sold and the economic, social and environmental sustainability of the supply chains in which they operate, which are becoming increasingly more complex due to the global nature of markets.

Supplier partnerships

Encourage partnerships, or at least close cooperation, with suppliers in strategic networks.

STANDARDS

Continuously improve the safety and quality of supplies and finalise sustainability standards to form the basis of all supplier relationships.

We live in difficult times: - atmospheric emissions produced by human activity are causing climate change - the exhaustion of non-renewable natural resources, including fossil fuels, is expected - agricultural crops grown to feed humans and animals and to create energy, are competing for increasingly limited resources such as arable land and water - human demand for fresh water has more than doubled in the last century. It is essential that companies adopt sustainable practices, in particular to secure the survival of their own businesses.

Reducing our ecological footprint

The Ecological Footprint will be reduced through two priority commitments: cut greenhouse gas emissions (GHG) generated in the industry in line with the Kyoto Protocol targets and minimise the other environmental impacts along the supply chain, with particular attention to packaging materials in terms of reduction and recycling.

Energy efficiency

Develop products and processes as energetically efficient as possible along the whole supply chain, reducing, where opportunity arises, the dependence on fossil fuels such as oil and coal.

Management of water resources

Rationalise the use of water supplies used in the supply chain.

As a result of globalization, companies are operating in a multicultural environment and their values need to be adapted accordingly.

Care for and development of individuals

Promote employees’ integration and their skills and competencies, by developing national and international programs that find the best ways to advance their welfare and ensure their health and safety.

Individual and widespread responsibility

Promote and strengthen a culture of individual responsibility in which individuals take charge of their own role.

In a fast-moving, complex world: - people live in a climate of great insecurity - consumers are overwhelmed by a wave of products, advertising and messages - contradictory information makes consumers wary of companies’ products and advertising. Foods manufacturers must reconcile the legitimate aim to sustain growth with a dutiful and proactive respect for the rules of healthy eating, adopting a form of communication that is unequivocal and promotes a healthy lifestyle.

Safety and quality

Produce healthier and greater quality foods, providing the consumer with information about the safety of raw materials used and the manufacturing systems adopted.

Communication

Communicate fully and transparently, being careful to avoid encouraging excess or inappropriate use of our products compared to basic dietary needs dictated by healthy eating principles, especially where advertising is directed at children.

International companies are required by the numerous communities in which they operate to assume the role of active partners, and therefore be jointly responsible for the community’s general welfare.

Development

Participate in the development processes of all communities in which we operate, either by direct intervention or through dialogue and cooperation with institutions.

Education

Encourage and support educational efforts to promote a responsible lifestyle among young people and adults (health, exercise, nutrition, protecting the environment) and to contribute to the health of the communities in which the company operates.

RELATIONS WITH STAKEHOLDERS

Involve stakeholders as far as possible in company practices, by establishing a dialectical relationship that produces maximum value both for them and for Barilla.

Innovative approach to reporting

Put in place a permanent, innovative reporting model that ensures full and transparent communication of information for our stakeholders.

Companies have: - in the past failed their stakeholders (financial scandals, bankruptcy fraud, environmental disasters, accidents at work) - as a result bred mistrust among civil society. Companies must now take up the challenge they have been putting off for a long time, for which they need the support of their stakeholders.


Appendix: stakeholder recommendations - 2nd forum The table below lists the stakeholder recommendations that came to light during the second forum and how they were used in identifying the challenges and commitments.

Stakeholder recommendations

How were these recommendations taken on board? a. The proposal was integrated into the “Daily well-being” commitment. b. Following discussion it was decided that it not currently possible to include this proposal.

a. Guarantee the traceability and methods of sustainable production along the whole supply chain commencing with farmers. b. Report on the quality, sustainability and safety of the supply chain. c. Obtain the SA8000 certification for the supply chain. d. Report on the sustainability of the whole supply chain with particular emphasis on the key supply chain workers’ rights issues.

a. The proposal was integrated into the “Partnership” commitment. b. The proposal was integrated into the “Partnership” and “Safety and quality” commitments. c. We consider achieving the first results that demonstrate the sustainability of the supply chain to take priority over obtaining a certification. d. The proposal was integrated into the “Partnership” commitment.

a. Improve management of production waste and unsold products. b. Make emissions control a top priority. c. Invest in renewable energy sources. d. Consider the subject of biodiversity. e. Minimize negative environmental impacts and the costs of the company’s waste disposal.

a. It was not possible to include this in the commitments but the company is active in improving management of production waste and of unsold products. b. The proposal was integrated into the “Reducing our Ecological Footprint” commitment. c. The proposal was integrated into the “Energy efficiency” commitment. d. It was not possible to include this in the commitments however the company values biodiversity and in particular protects the survival of numerous wheat species. e. The proposal was integrated into the “Reducing our ecological footprint” commitment.

a. Develop wellbeing programs for employees. b. Guarantee health and safety in the workplace. c. Bear in mind the importance of investing in sustainability in particular regarding human resources as these could be transformed into a competitive advantage. d. Develop the ability to integrate differences and turn them into strengths.

a. The proposal was integrated into the “Care for and development of individuals” commitment. b. The proposal was integrated into the “Care for and development of individuals” commitment. c. The proposal was integrated into the “Care for and development of individuals” commitment. d. The proposal was integrated into the “Care for and development of individuals” commitment.

HUMAN RESOURCES

a. Provide information on the point of origin of materials. b. Communicate as transparently as possible to illustrate to consumers how and if the costs relating to sustainability projects reflect on prices. c. Offer accessible prices and carry out promotions for “weaker” consumer categories (elderly). d. Cleanliness and sterilization of the production lines. e. Eliminate the risk of contamination in the plants.

a. It was not possible to integrate this proposal in the commitments but the report will comprise some of the information requested. b. In the “Communication” commitment we are challenged to communicate transparently. We believe that the activities relating to sustainability represent an integral part of normal company management: it is not possible to separate the cost structure to identify those assigned to sustainability activities. c. It was not possible to integrate the proposal into the commitments, however Barilla undertakes and has always strived to offer the best relationship between quality/price. d. The proposal was integrated in the “Safety and quality” commitment. e. The proposal was integrated in the “Safety and quality” commitment.

PEOPLE

a. Consider the policy of decentralizing production activities as a benefit to the single communities. b. Undertake educational activities to promote healthy lifestyles not only aimed at children but adults also. c. Develop projects to encourage physical exercise. d. Change the title of the commitment relating to local development to “Participation in processes of decentralized co-operation”. e. Promote initiatives to increase the well-being of individuals. f. Undertake initiatives relating to consumer food education. g. Support informative and cultural initiatives to disseminate wider knowledge and better nutrition. h. Use the company’s skills in areas hit by famine.

a. The proposal was integrated into the “Development” commitment. b. The proposal was integrated into the “Education” commitment. c. The proposal was integrated into the “Education” commitment. d. Following discussion it was decided that the title “Development” should be maintained as it is clearer. e. The proposal was integrated into the “Education” commitment. f. The proposal was integrated into the “Education” commitment. g. The proposal was integrated into the “Education” commitment. h. The proposal was integrated into the “Development” commitment.

a. Pay particular attention to the “Consumer” stakeholder group as it represents the largest category.

a. The proposal was integrated into the “Relations with stakeholders” commitment, further information on commitments undertaken is provided in the relevant section.

NUTRITION

a. Barilla should present itself as an ambassador of Italian gastronomic culture abroad. b. Include organic products in the list of commitments.

SUPPLY CHAIN ENVIRONMENT COMMUNITY STAKEHOLDERS


Appendix: stakeholder recommendations - 1st forum

NUTRITION

The table below lists the stakeholder recommendations that came to light during the first stakeholder forum and for each one how, and if, it was incorporated in the calculation of the indicators.

Stakeholder recommendations

How stakeholder recommendations were used

Include indicators that measure a products’ degree of nutritional optimization.

The proposal was integrated into the indicators reported in the following tables.

Explain in detail if the reporting relating to nutrition relates to company policy or actions agreed with the Ministry of Health.

Specific indicators could not be developed but the answers to the questions raised are dealt with in the section on nutrition.

SUPPLY CHAIN

Stakeholder recommendations

How stakeholder recommendations were used

Recognize the company’s own responsibility towards the supply chain.

The proposal was accepted and reflected in the preparation of the indicators and the commitments.

Include a rating incator that measures value added distributed and reinforcement of the supply chain.

Specific indicators could not be developed but the proposal was reflected in the commitments.

The company must collaborate in order to understand how to improve the processes of all the companies in the supply chain.

Specific indicators could not be developed but the proposal was reflected in the commitments.

Consider the importance of transparency, creating bonds of mutual trust and attributing the appropriate level of added value.

Specific indicators could not be developed but the proposal was reflected in the commitments.

Include sustainability indicators in the supply chain relating to the environment and quality.

The proposal was accepted and integrated into the indicators reported in the following tables.

Include energy consumption indicators linked to the production of raw materials.

The proposal was accepted and integrated into the indicators reported in the following tables.

Continue to exercise unassertive contractual power on suppliers and establish relationships with them.

The proposal was integrated into the commitments.

Consider the importance of the consistent management of supply chain relations and the definition of precise, written rules.

The proposal was integrated into the commitments.

Include indicators relating to the continuity and stability of supplier relationships over time.

Specific indicators could not be developed but the proposal was reflected in the commitments.

Include indicators that measure Barilla’s efforts to improve supplier relationships: certifications, production safety and waste disposal.

The proposal was integrated into the commitments.

Include indicators on raw materials prior to the production process.

The proposal was accepted and integrated into the indicators reported in the following tables.

ENVIRONMENT

Stakeholder recommendations

How stakeholder recommendations were used

Define more precisely Barilla’s objectives and challenges relating to the environment, in particular those concerning the efficiency of production processes in terms of energy and water consumption.

The proposal was accepted and integrated into the “Challenges, commitments and actions” matrix and the identified objectives.

Introduce environmental claims relating to carbon dioxide emissions on Barilla’s products.

The proposal was accepted and integrated into the indicators reported in the following tables.

Include in the model indicators relating to the environmental impact of packaging disposal.

The proposal was accepted and integrated into the indicators reported in the following tables.

Concentrate efforts on sustainable packaging and seek to increase the cultural element that leads to recycling; provide information to the consumer regarding the waste recycling category of the packaging.

Specific indicators could not be developed but our product packaging does provide information on how it should be disposed of.

The website should be used to inform consumers on how to recycle packaging.

The possibility of including in the website an area dedicated to providing all relevant information to the consumer is being assessed.

Place more importance on the subject of packaging.

The proposal was accepted and integrated into the indicators reported in the following tables.

Assess the environmental impact along the whole of the packaging life cycle, comprising the transport phase.

The proposal was accepted and integrated into the indicators reported in the following tables.

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HUMAN RESOURCES

Stakeholder recommendations Place more emphasis on headings relating to the actions in safety at work.

The proposal was accepted and integrated into the indicators reported in the tables below.

Include indicators that measure Barilla’s social impact within the company.

The proposal was accepted and integrated into the indicators reported in the tables below.

Underline the importance of employee unions as a tool that fosters a sense of belonging and shared values.

Specific indicators could not be developed but we acknowledge the value to the company of employee unions.

People (employees and consumers) should be considered the number one priority as they represent the most important element of corporate responsibility.

The proposal was accepted and integrated into the indicators reported in the tables below.

COMMUNITY

PEOPLE

Stakeholder recommendations

STAKEHOLDERS

How stakeholder recommendations were used

How stakeholder recommendations were used

Place more emphasis on the virtual community made up of opinion leaders.

Specific indicators could not be developed but the report will comprise some of the related actions.

Blogs involving Barilla should be taken into consideration.

Specific indicators could not be developed but the report will comprise some of the related actions

Information on price increases and the underlying reasons should be provided.

An indicator could not be developed but we are committed to providing all information required to guarantee transparency to our consumers where price increases are applied.

Consumer care should cover all areas. Critical areas also comprise product safety and supply chain transparency.

The proposal was integrated into the “Challenges, commitments and actions” matrix.

Provide people with more advice on how to find the information they require.

With regard to information on the subject of nutrition, the proposal was integrated into the indicators reported in the following tables; the other topics are adequately dealt with in our websites.

Increase people’s perception of price paid compared to product value, and encourage the purchase of food that helps guarantee healthy eating.

The proposal was accepted and integrated into the “Challenges, commitments and actions” matrix.

People should be provided a style of information that allows their cultural growth and puts them in a position to consume less but better.

The proposal was accepted and integrated into the “Challenges, commitments and actions” matrix.

Stakeholder recommendations

How stakeholder recommendations were used

Foster the company’s relationship with the surrounding territory, assessing a common strategy for the future.

The proposal was accepted and integrated into the “Challenges, commitments and actions” matrix and in the identified objectives

Barilla should aim to develop a new way of thinking that is useful to the community in both educational and cultural terms.

The proposal was accepted and integrated into the “Challenges, commitments and actions” matrix and in the identified objectives

Stakeholder recommendations

How stakeholder recommendations were used

A future objective could be a comparison and collaboration with diabetes associations.

The proposal was not directly included in the definition of the commitments. It will however be reflected in initiatives relating to nutrition and education.

The key topics on which the report should focus are the environment, nutrition, safety and information.

The topics proposed were considered to be the key factors in the preparation of this report.

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Appendix


Appendix: table of performance indicators

NUTRITION

Daily well-being

Products for specific dietary needs

PERFORMANCE INDICATORS

REF.

BOUNDARY

PERFORMANCE INDICATORS

REF.

BOUNDARY

Number of initiatives for healthy eating

Pg 13

Barilla GeR Fratelli excluding Harry’s Russia

GRI

Economic resources dedicated to nutritional research, nutritional scientific studies and conventions and the spread of scientific results

Pg 15

Barilla GeR Fratelli excluding Harry’s Russia

Number of products reformulated to improve nutritional value

Pg 13

Barilla GeR Fratelli excluding Harry’s Russia

Number of new products launched that are designed to satisfy specific dietary needs

Pg 14

Barilla GeR Fratelli excluding Harry’s Russia

% of products that do not contain artificial colorants, chemical preservatives

Pg 13

Barilla GeR Fratelli excluding Harry’s Russia

SUPPLY CHAIN

Supplier partnerships

Standards

PERFORMANCE INDICATORS

REF.

BOUNDARY

GRI

PERFORMANCE INDICATORS

REF.

BOUNDARY

GRI

Number of raw material with CSR issues

Pg 21

Barilla GeR Fratelli

HR5 HR6 HR7

% of audits performed on raw material with CSR issues

Pg 21

Barilla GeR Fratelli

HR2

List of raw material with CSR issues

Pg 21

Barilla GeR Fratelli

HR5 HR6 HR7

% of raw materials defined “sustainable” out of total of supply chain with CSR issues

Pg 21

Barilla GeR Fratelli

HR2

% of strategic raw materials acquired from partnership supply chain out of total by country

Pg 20

Barilla GeR Fratelli

Reason why supply chain considered critical on CSR issues

Pg 21

Barilla GeR Fratelli

HR5 HR6 HR7

Reducing our ecological footprint

ENVIRONMENT

GRI

Water resources management

PERFORMANCE INDICATORS

REF.

BOUNDARY

GRI

PERFORMANCE INDICATORS

REF.

BOUNDARY

Ecological Footprint (analyzed by Crop Land, Energy Land and Forest)

Pg 29

Only Semolina wheat pasta supply chain (Italy)

EN26 EN29 p.a.

Total water consumption

Pg 32

Barilla GeR Fratelli EN8 excluding Wasa (N), Harry’s Russia, Yemina and Vesta, mills and Number 1

Factories certified under ISO 14001: % of factories certified out of total

Pg 29

Barilla GeR Fratelli excluding Wasa (N), Harry’s Russia, Yemina and Vesta, mills and Number 1

Decrease in total water consumption

Pg 32

Barilla GeR Fratelli excluding Wasa (N), Harry’s Russia, Yemina and Vesta, mills and Number 1

Water consumption per ton of finished product

Pg 32

Barilla GeR Fratelli excluding Wasa (N), Harry’s Russia, Yemina and Vesta, mills and Number 1

Decrease in total water consumption by finished product

Pg 32

Barilla GeR Fratelli excluding Wasa (N), Harry’s Russia, Yemina and Vesta, mills and Number 1

Consumption of water resources along the whole supply chain (Water Footprint)

Pg 33

Only Semolina wheat pasta supply chain (Italy)

Energy Efficiency PERFORMANCE INDICATORS

REF.

BOUNDARY

GRI

Total energy consumption (EE + TE)

Pg 30 Pg 31

Barilla GeR Fratelli excluding Wasa (N), Harry’s Russia, Yemina and Vesta, mills and Number 1

EN3 p.a. EN4 p.a. EN5 EN6 p.a.

Energy consumption by ton of finished product

Pg 30

Barilla GeR Fratelli excluding Wasa (N), Harry’s Russia, Yemina and Vesta, mills and Number 1

CO² emissions in GWP - Global Warming Potential

Pg 31

Barilla GeR Fratelli EN7 excluding Wasa EN16 (N), Harry’s EN18 Russia, Yemina and Vesta, mills and Number 1

GRI


The tables from p. 84 to p. 87 report the indicators adopted. Reference is made to the pages on which the related data, area of reporting and corresponding GRI indicator may be found.

HUMAN RESOURCES

Care for and development of individuals

Individual and widespread responsibility

PERFORMANCE INDICATORS

REF.

BOUNDARY

Incidence of cost of people care on total employee costs

Pg 40

Italy

Number of employees and geographical distribution by country

Pg 38

Barilla Holding

Category and application of innovative contracts currently in force

Pg 40

Italy

Number of employee legal claims reported

Pg 41

Italy

Transformation rate of internship contracts

Pg 39

Italy

% of female managers out of total

Pg 40

Italy

% of individuals covered by supplementary welfare policy

Pg 40

Italy

Number of individuals covered by supplementary health policy

Pg 40

Italy

Distribution of training activities

Pg 40

Italy

Investments in training

Pg 40

Italy

% of employees that are members of trade union

Pg 41

Italy

Factories with certified management systems OHSAS 18001

Pg 41

Barilla GeR Fratelli excluding Wasa (N), Harry’s Russia, Yemina and Vesta and Number 1

Accident frequency rate

Pg 41

Barilla GeR LA7 Fratelli excluding p.a. Wasa (N), Harry’s Russia, Yemina and Vesta and Number 1

Accident severity rates

Pg 41

Barilla GeR LA7 Fratelli excluding p.a. Wasa (N), Harry’s Russia, Yemina and Vesta and Number 1

Training programs aimed at safety at work

Pg 41

Barilla GeR LA8 Fratelli excluding p.a. Wasa (N), Harry’s Russia, Yemina and Vesta and Number 1

Percentage of employees involved in annual performance management system

Pg 39

Barilla GeR LA12 Fratelli excluding Wasa (N), Harry’s Russia, Yemina and Vesta

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Appendix

GRI

LA1 p.a.

LA13 p.a.

LA10 p.a.

PERFORMANCE INDICATORS

REF.

BOUNDARY

Number of breaches of Code of Ethics

Pg 42

Barilla GeR Fratelli

Number of conflicts of interest

Pg 42

Barilla GeR Fratelli

GRI


PEOPLE

Safety and quality

Communication

PERFORMANCE INDICATORS

REF.

BOUNDARY

GRI

PERFORMANCE INDICATORS

REF.

BOUNDARY

GRI

Number of batches of raw materials analyzed and % of incoming batches that conformed in full

Pg 48

Barilla GeR Fratelli excluding Harry’s Russia and Harry’s France

PR1 p.a. PR2 p.a.

Number of legal claims and/or fines against the company following cases of: incorrect information, breach of communication and product labeling regulations

Pg 51

Barilla GeR Fratelli

PR4 PR7

Number of batches of products analyzed and % of batches that conformed in full

Pg 49

Barilla GeR Fratelli excluding Harry’s Russia and Harry’s France

PR1 p.a. PR2 p.a.

Number of products with detailed nutritional information (on packaging and website in compliance with current regulations) and % of total products sold

Pg 50 Pg 51

Barilla GeR Fratelli

PR3

Percentage analysis of reasons for consumer contact (requests for info on promotions, nutritional requests, product information, reasons for dissatisfied customers)

Pg 49

Italy

PR5

Number of products containing advice on healthy lifestyle/ balanced diet, on packaging and website

Pg 50 Pg 51

Barilla GeR Fratelli

PR3

Economic resources invested on product quality and safety (including cleaning, sanitization and Integrated Pest Management - IPM)

Pg 49

Barilla GeR Fratelli

Number of products that provide consumption recommendations (ideal or maximum portion size), on packaging and website

Pg 50 Pg 51

Barilla GeR Fratelli

PR3

GRI

COMMUNITY

Development

Education

PERFORMANCE INDICATORS

REF.

BOUNDARY

GRI

PERFORMANCE INDICATORS

REF.

BOUNDARY

Number of employees, plants and their location

Pg 56

Barilla GeR Fratelli

EC7 p.a. SO1

Educational projects oriented at adopting correct lifestyles (educating correct eating and physical exercise) implemented in partnership with local institutions

Pg 58 Pg 59

Italy

Analysis and description of main indirect impacts considering external conditions generated (indirect employment and local suppliers in respect of major operating facilities)

Pg 56

Barilla GeR Fratelli

EC6 p.a. EC9 SO1

Annual qualitative surveys on degree of satisfaction of users of educational projects and other stakeholders located in the country

Pg 58 Pg 59

Italy

Impact of the business on infrastructure and services

N.R.

Italy

SO1

Results of epidemiological studies and/or other studies on scientific protocols of implemented projects

Pg 58 Pg 59

Italy

Impact on the community of projects to create dialogue, collaboration and partnerships (type, number, resources dedicated, effects) including donations

Pg 57

Barilla GeR Fratelli

EC1 p.a. EC8 p.a.

Key results or behavioral improvements that projects have had on users

Pg 59

Italy

Disputes against decisions made by the company

N.R.

Barilla GeR Fratelli

HR9 p.a.

Number of people involved in educational programs

Pg 58 Pg 59

Italy

Publications and evidence provided at scientific conventions on epidemiological studies and/or other studies and surveys

Pg 59

Italy

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STAKEHOLDERS

Relations with stakeholders

Innovative approach to reporting

PERFORMANCE INDICATORS

REF.

BOUNDARY

GRI

PERFORMANCE INDICATORS

REF.

BOUNDARY

Analysis criteria and procedures used to identify stakeholders and the results (tools defined)

Pg 66

Italy

4.15

Number and % of constructive recommendations arising from stakeholder involvement that have been addressed /total recommendations

Pg 70

Italy

Presence of a formal, tested method for stakeholder management

Pg 66 Pg 67 Pg 68

Italy

4.16

Reporting system adopted

Pg 69

Barilla GeR Fratelli

Number, content (topics, argument, strategic content), type (information, dialogue, involvement) of stakeholder management activities and groups of stakeholder that this has involved

Pg 66 Pg 67 Pg 68

Italy

4.16

Number and description of stakeholder categories involved in the process

Pg 70

Italy

Actions undertaken following their involvement

Pg 80 Pg 81 Pg 82 Pg 83

Italy

4.17

Number and description of occasions in which stakeholders participated in the reporting process

Pg 70

Italy

Groups of stakeholders that are a subject of the activities /total identified stakeholder groups

Pg 66 Pg 67 Pg 68

Italy

4.14

Number of subsidiaries (boundary of reporting) included in the report /total subsidiaries

Pg 70

Barilla GeR Fratelli

Number and type of conflicts (attacks by opinion leaders, boycott campaigns, conflicting information, etc.)

Pg 67 Pg 51

Italy

Percentage of indicators used by the subsidiaries (for each subsidiary) /total indicators selected for the reporting

Pg 70

Barilla GeR Fratelli

Tools used and number of actions executed to resolve conflicts and the related outcome

Pg 67 Pg 51

Italy

Percentage of positive feedback from stakeholders relating to reporting process adopted and the published report

N.A.

Italy

Number of unresolved conflicts / total conflicts

Pg 67 Pg 51

Italy

GRI

GRI indicators not tailored and pages in which information provided: 1.1 - pag 4, 5; 1.2 - pag 9, 80; 2.1 - cover; 2.2 - pag 6; 2.3 - pag 43, 87; 2.4 - pag 2; 2.5 - pag 7, 56; 2.6 - pag 2, 43; 2.7 - pag 7; 2.8 - pag 7; 3.1 - this report relates to 2008 (calendar year); 3.3 - yearly frequency starting from 2012; 3.4 - pag 2; 3.5 - pag 64, 65, 69, 70; 3.6 - pag 9, 70, 84, 85, 86, 87; 3.7 - pag 9, 70, 84, 85, 86; 3.8 - pag 70, 86; 3.9 - pag 69, 70; 3.12 - pag 84, 85, 86; 4.1 - pag 43; 4.3 - pag 43; 4.4 - pag 43; 4.6 - pag 43; 4.7 - pag 43; 4.8 - pag 5, 43, 80, 81; 4.9 - pag 43; 4.11 - pag 13; 4.12 - pag 21, 22, 28, 29, 31, 33; 4.17 - pag 80, 81, 82, 83; LA11 - pag 39; SO7, SO8 - pag 51, 67. N.R. Indicators: 2.10, 3.2, 3.10, 3.11, 4.2, EC4, SO6, EN11, EN12, EN24, SO3, HR4, PR6, PR8, PR9. N.A. Indicators: 2.9, 3.13, 4.5, 4.10, 4.13, EC2, EC3, EC5, EN1, EN2, EN9, EN10, EN13, EN14, EN15, EN17, EN19, EN20, EN21, EN22, EN23, EN25, EN27, EN28, EN30, HR1, HR3, HR8, SO2, SO4, SO5, PR9, LA3, LA4, LA5, LA6, LA9, LA14. Glossary Barilla Holding - Group holding company that controls Barilla GeR Fratelli and Lieken (Germany). Barilla GeR Fratelli - groups the following companies and brands: Mulino Bianco (Italy), Pavesi (Italy), Voiello (Italy), Academia Barilla (Italy), Alixir (Italy), Harry’s (France), Harry’s (Russia), Barilla (USA), Yemina and Vesta (Mexico), Wasa (Scandinavia, Germany), Number 1 (Italy), Filiz (Turkey), Misko (Greece). Italy - Barilla GeR Fratelli excluding Harry’s, Barilla (USA), Yemina and Vesta, Wasa, Filiz, Misko. N.R. - Indicator did not produce significant results. N.A. - Not Available: data relating to this indicator are not available. p.a. - partial application: only a part of the indicator was applied. Notes The 2008 Report does not include the Lieken Group. With regard to the Nutrition, Supply Chain and Communication areas of sustainability, the boundary of reporting does not comprise Number 1 as the indicators are not relevant to the business of this company (Distribution logistics). Number 1 has been included in Quality and Safety area in respect of its client Barilla.

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Appendix


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Sustainability Report 2008