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Business continuity, therefore, can only be
managed through a close and ongoing partnership
with the local community: there is no time
to build that relationship once the need arises.

How does Hera engage with local communities?
We have a team of Area Managers who act as the interface between Hera and local authorities. This team effectively embodies the ‘G’ in our ESG policies, serving as the link between the expectations of the local community and our role as a multi-utility operator backed by ten thousand people who share a single culture. Ours is, in effect, a neural organisation with many nodes.
We currently have six Area Managers covering the Emilia-Romagna region and an additional four in the north-east: these are the people who are in daily contact with the technical departments of Municipalities to discuss upcoming and ongoing projects.
Our Area Managers also need to build a relationship of trust within Hera, to ensure they have the support from the Group’s operational structure that is essential for an effective direct-drive chain to run smoothly.

Does this organisational system meet the needs of all the Municipalities you serve, regardless of their size?
Local needs always have specific characteristics that must be listened to and addressed: this means that, when a new need arises, mayors and councillors – even in a small Municipality – must be able to communicate directly with us, rather than having their request passed through multiple layers of bureaucracy before reaching our desk.
The feedback we received from a survey we recently conducted among 180 municipalities we serve indicated a high level of satisfaction with the way we manage our relationship with them. Even in the most critical situations, the Municipalities stated that they never felt left behind by Hera. For us, this is not only a source of pride, but also a solid foundation on which to develop even more effective actions that deliver benefits for everyone. On the other hand, the survey also indicated that our local stakeholders – and in particular smaller Municipalities – would like even more support from Hera.

What decisions did you put into action following this survey?

Given that most of our customers live in
smaller towns, we decided to expand our
network further, thereby shortening the chain
of transmission even more.

Let's keep in mind that the larger Municipalities are Hera's key shareholders: therefore, they already have the opportunity to express their issues directly to our Board of Directors. However, Hera must provide its services to all citizens in the areas it serves, maintaining a consistent standard of quality. Hence our desire to ramp up our efforts to foster even more direct relationships everywhere.

What happens when you expand your presence into new geographical areas?
This model of engagement with the local community ensures a consistent approach even in the event of new M&A transactions that lead us to operate in new markets. There, we begin to build new relationships, explore the priorities of the local community and the opportunities available to us, implement initiatives and investments in line with our commitments, and seek to strengthen the relationship over time.

How do you handle potential changes in local councils?
Our approach is neutral.

We work to ensure that the local community is
served as well as possible, and that it can grow
and thrive, because this is also directly in our own interests.

Regardless of the political coalitions we may face following new elections, interpreting local needs is key for us.

How does this process of listening then translate into action at Hera?
The insights we gain from engaging with local authorities are what primarily guide the investments outlined in our Business Plan.
These local contacts also enable us to analyse the sentiment of the local community: another essential factor in ensuring we take the right course of action.

When we take part in discussions to draw up
development plans for a local authority’s
public works and infrastructure, we can
anticipate solutions to future needs or provide
innovative responses as part of the service itself.

ESCos, for example, proved to be a very powerful tool in engaging with local communities during the most acute phases of the energy crisis following the outbreak of the war in Ukraine: in our dialogue with Municipalities, which were facing serious difficulties due to soaring electricity costs, we managed to find customised technological solutions – for example, in public lighting systems – which ultimately helped to reduce energy expenditure whilst maintaining the same level of safety for citizens.

What are the situations that are typically the most challenging to manage when dealing with local authorities?
The most challenging projects to get approved are typically those involving waste-to-energy plants. Having direct experience of four revamping projects I have overseen – one of which involved the addition of a new line – I can confirm that intensive dialogue with the Residential Advisory Boards and representatives of the Guarantee Committee is essential. We must capitalise on our reputation as an operator capable of honouring commitments, open the doors of our plants so that local decision-makers can form their own opinions with their own eyes, demonstrate a willingness to adhere to environmental standards stricter than the norm, and offer to carry out compensatory works within the municipality: it is a complex process, which can take various paths but is always based on the credibility built up over time that is essential for establishing and continuing a dialogue.

How do you share the experience gained in a Municipality across the entire organisation?
At Hera, we are committed to continuous improvement: an approach that requires a careful analysis of setbacks or mistakes, as well as the widespread adoption of best practices.
To this end, we have created a repository that records successful cases and describes in detail every single action taken by Area Managers. This information is available not only to the team who interfaces with the territory but also to colleagues working in operational roles. Furthermore, all Area Managers meet once a week to analyse the results and any critical issues encountered in recent experiences.

How do you measure the performance of your activities?

Some of what we do has an intangible value
that is hard to quantify.

Let’s consider the case of a concession renewal: if we have built a strong relationship and our actions have met expectations, decision-makers will have fully appreciated the quality standards offered in the services that Hera provided; these quality standards will consequently become the benchmark for designing tender specifications that are highly challenging for our competitors. Appreciation for the proactive role Hera played during the previous concession period also raises the bar even higher for the requirements set out in the tender.

I often tell my team that a significant portion of
the value Hera generates each year comes
from the relationship-building work we do
every day to fully showcase both the benefits
of what we do and the alignment of our actions
with our customers’ requests and expectations
– even for the most demanding ones.

When measuring our actual impact and returns, there is also a complex aspect to consider: if we were a single-utility provider, it would be easier to establish a limited set of KPIs. We are currently implementing a ‘what-if analysis’ that will enable us to assess the costs avoided and the benefits – for example, in terms of speeding up the permitting process – that can be attributed to our role.

In some cases, our analysis clearly shows that,
without the kind of partnership we have with
our local communities, certain projects would
not only have taken much longer to complete
but might never have been carried out at all.

Today, those assets make up part of RAB and generate revenue.
I would like to give one final example: Hera is preparing its networks to accommodate new gases, which will enable a transition towards increasingly green forms of energy. The trial we carried out, involving the injection of a 5% mixture of gas and hydrogen into the network, was made possible thanks to the arrangements we were able to put in place on a section of our distribution infrastructure within the municipality of Castelfranco Emilia, in the province of Modena: by relying on close collaboration with local authorities, we were able to test the project in a residential area covering around 40,000 households. Thus, we verified not only the compatibility of our network with the new mixture but also that of domestic appliances. Only by repeating these testing operations, carried out with robust contingency plans in place, will we be able to achieve a blend with a hydrogen content of up to 10% in the future. We are talking about research in which Hera conducts the most advanced trials at a national level and which, regardless of the value this ‘option’ will have, certainly gives our Group the first-mover advantage.
Returning to the metrics, the data on Shared Value from the 2025 Sustainability Report will serve as a benchmark for developing an even more precise measurement of the returns that my department is able to generate, using the new analytical methodology we are implementing.
I was the CEO of two multi-utility companies acquired by Hera Group. I had the task of integrating them into the Group right after their acquisition: my approach has always been focused on identifying the right metrics for value creation with the aim of leveraging management tools in an increasingly effective way. We hope to be able to present and discuss the results emerging from the new methodology mentioned above very soon, including in this investor-focused newsletter.