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Main non-financial risk factors of the SEA Group

The main risk factors linked to environmental, social and employee-related issues come under the risk category defined in the Risk Model as "Operational and Business Risks", particularly in the risk areas of Safety and Security, Infrastructure Investments and the Interruption of Activities/Services, with a focus on the first area.

Risk description Prevention/mitigation measures
A potential terrorist attack in one of the Group airports could have serious consequences for passengers and airport operators.   SEA invests enormous effort in the management of this risk. Similar to all Italian airport managers, safety procedures applied by the company are based on the National Security Programme (PNS) measures. In order to ensure compliance with the provisions in the PNS, the airport operators draft, implement and keep an updated Security Programme which outlines the processes and procedures followed to apply the aspects of the National Security civil aviation programme for which they are responsible. To this end, SEA carries out periodic drills involving all the competent entities and provides ongoing support to the Security Forces in defending the air-side/land-side borders and the land-side area. The perimeters of both airports are equipped with a video surveillance and access control system.
Risk description Prevention/mitigation measures
A ground accident between two aircrafts, due, for example, to human error, may cause casualties or damage to airport infrastructures.   In terms of aviation safety, the Group’s Safety Management System, which is also validated and controlled by the Italian Civil Aviation Authority (ENAC), maintains the highest levels of safety and service quality, acting in line with the fundamental principles of the SEA Airport safety policy. Through the Ground Safety Report and its related indicators, SEA constantly monitors daily operations carried out in aircraft-related areas, to detect any potential incidents which might cause an air incident (e.g. failed right of way, technical problems). For further information, reference should be made to the "Aviation safety" section.
Risk description Prevention/mitigation measures
A large fire could spread from a localized source and if not dealt with in a timely manner by employees and/or by the relevant infrastructure systems, could damage assets, structures and people.   The system handling this risk event is maintained in optimum condition and is monitored, whilst we strive for continuous improvement. In terms of procedures, we use joint emergency and evacuation plans with third parties (operators and entities within the airports), fire prevention regulations, VVFF (Fire Brigade) fire prevention certificates, as well as periodic system maintenance. On an organizational level, in addition to periodic evacuation drills, there is continuous awareness-raising and training of operators and audits are conducted on commercial operators regarding Fire Prevention Regulations: audit results are checked by the external Certification Body and transmitted to SEA's Auditing Department.
Risk description Prevention/mitigation measures
A fuel depot fire at Malpensa Airport may cause the closing of airport areas and air traffic suspension due to damage to airport infrastructures, facilities, neighbouring civilian areas, as well as to the environment due to subsoil fuel absorption. A shared emergency management plan is in place between SEA and the depot manager, DISMA.  
Risk description Prevention/mitigation measures
Injuries at work with generally moderate repercussions for the health of workers.   The Group has heavily focused on prevention and now submits low accident IF (frequency) and IG (severity) indices. Internal policies and procedures are in place to avoid such events arising, in addition to conducting regular audits. Every incident undergoes a process-analysis of the causes and where necessary the procedures, the training process and the infrastructures are revised. The management system is certified by external accredited bodies in accordance with OHSAS 18001 standards.
Risk description Prevention/mitigation measures
In 2017, the new Malpensa Airport Master Plan was submitted to ENAC (National Civil Aviation Authority), whose approval process is underway.   The Master Plan envisages a 60-hectare expansion south of the current airport structure. As this plan involves part of the Ticino Park area, whose transformation may have potential environmental and economic impacts on the surrounding municipalities, the Group has focused strongly on the local communities in designing the project, currently in the approval stages.
Risk description Prevention/mitigation measures
The vulnerability of airport systems may increase with increasingly aggressive cyber-attack strategies and new Digital Transformation technologies. Computer attacks or unauthorized system access may compromise business-critical processes or result in data loss. Safeguards against such criticalities include the implemented measures relating to the new EU GDPR Regulation, and ongoing activities to obtain ISO 27001 certification. Environmental risks include both internal risks generated by Group activities with potential environmental effects, and external risks that may significantly affect Group operations.  
Risk description Prevention/mitigation measures
Ordinary activities and a potential future increase in night flights may cause noise pollution in areas adjacent to the airport grounds. Other risks are the consumption of natural resources such as energy and fuels, with consequent impacts on the atmosphere in terms of the production of dangerous waste and spillages affecting the territory. Planned infrastructure interventions involve waste recovery and disposal activities. These risks are managed and constantly monitored by the Environmental Management System. For further information, refer to our “Environmental and Energy policy” section.  
Risk description Prevention/mitigation measures
Higher frequency of extreme weather events (cloud bursts, snow) which could interrupt airport activities. Processes, systems and structures which the Group has already set up in the past, enable the better management of these events.  
Risk description Prevention/mitigation measures
The Japanese Beetle (Popillia japonica), present along the banks of the river Ticino for some years now, is an invasive species harmful to the local ecosystem. The Lombardy Region has imposed onerous pest control requirements, which may be intensified in the future and have significant impacts on flight operations. To counter the spread of this insect, SEA carries out specific annual pest control activities.  
Risk description Prevention/mitigation measures
The ageing of the company workforce (the current average age is 49) is also due to the extension of the working age introduced under recent pension reforms and could impact operations (particularly in relation to the use of new technologies, higher absenteeism and/or health and safety problems). SEA constantly addresses this issue through the implementation of a variety of initiatives, aimed, on the one hand, at recruiting younger staff (including the drafting of a recruitment plan for persons under 35) and, on the other, of developing and maintaining skills (including specific talent management initiatives) and employee physical and psychological wellbeing (supporting employees with elderly parents).  
Risk description Prevention/mitigation measures
A potential significant risk across the airport sector is the possibility that a single supplier may become bankrupt or might encounter operational difficulties, or even potentially monopolize the market segment where they operate. In this case, the Group may not be in a position to ensure the continuity of services instrumental to conducting its business. To mitigate this, the Group has paid great attention to monitoring its suppliers through specific actions both during the Supplier Register selection phase, formalised in the "SEA Supplier Selection and Assessment" Procedure, subject to a supplier risk assessment, as well as during supplier operations where the company business lines provide periodic feedback to the purchasing management team.  

Other considerations

Considering the nature and the geographic location of the activities carried out by the Group, as well as the preparatory controls for obtaining mandatory airport passes for anyone working in the airport, we do not indicate any human rights breach risks regarding the supply chain.

The potential risks of corruption offences are managed by the Group through the adoption of its 231 Model and ISO 37001. For further information, please see the “Internal control system” paragraph.