SUSTA I N ABLE DEVELOPMENT

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GFL is a company operating in the plastics and cosmetics industries. Established in 1998, it is a young SME that has seen tremendous growth over its first 8 years of operation.

Young entrepreneurs have wholeheartedly embraced the need to integrate environmental and social aspects into their business operations, such as the pioneering introduction of PET by GFL, to the range of complimentary products.

If the desire to pursue responsible economic development has until today been a symptom of heightened awareness of environmental issues, it is now a long term plan, where sustainable development underlies all aspects of the decision-making process.

I M P L E M E N TA -T I O N O F D E -V E LO P M E N T

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The implementation of development, which abides by the rules of CRS (Corporate Social Responsibility), consists of the following three phases: -Study of general issues in the industry and GFL-specific issues and verification of the current situation. -Setting out of objectives for improvement and creation of indicators. Awareness-raising about sustainable development issues among collaborators. -Evaluation of results and implementation of a correction plan. Redefinition of objectives. In 2005 GFL made a diagnosis of the current situation and of the environmental and social impacts. It also set out its objectives for improvement. GFL has chosen to concentrate its efforts on the following: -Protection of the environment -Equality-oriented social management

D E F I N I T I O N O F D E V E LO P -M E N T

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GFL has carried out an environmental impact assessment of its operations and products.1-Environmental impact arising from production: -Raw materials -Energy consumption -Water consumption -Transport -Treatment of waste materials from production2- Environmental impact arising from products: -Used products -Scraps

E N V I R O N -M E N TA L I M PA C T

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Energy and water consumption GFL uses new high performance, low-energy, and low-water consumption machines. The production/energy consumption ratio is one of the best in the industry.Energy: 100% of GFL’s energy needs are met by electricity, one of the least polluting energy sources. Specifically, 779,100 Kwh in 2004 for 205,000,000 products, or about 0.0038 Kw per product.Water: water consumption: 426 m3 in 2004 for 205,000,000 products, i.e. 0.000002 m3 per product. Water is only used for washing machines and in the offices. The washing waters are then sent to a recycling company to be treated. The water used for refrigeration is in a closed circuit.GFL’s production emits no gases and no dispersion into the atmosphere.

E N V I R O N -M E N TA L I M PA C T

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Waste treatmentGFL uses homogeneous materials, which can be easily sorted and recycled. Waste is sorted at the company, both in the offices and on the production premises.

Some products, such as bottles in PET, with quality defects, are recycled directly during the production process thanks to a special cavity fitted to the injection machine for bottles, which recycles recyclable materials and discards others.Our bottles in PET are composed of 70% “superior quality” PET and 30% recycled PET (second- hand).There is no ink waste in the serigraphy process since the ink used by GFL is dried by U.V. rays. Unused ink is therefore kept for future use.

E N V I R O N -M E N TA L I M PA C T

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Waste disposal There are two types of waste produced: Ordinary industrial waste from industrial operations which do not pose any danger to man or to the environment (wood, cardboard, glass, etc.) -Cardboard packaging, ‘non-offensive’ -Plastic packaging, ‘non-offensive’ -Mixed packagingSpecial industrial waste, which may be harmful to the environment and therefore requires that special precautions be taken at the time of collection, stocking, carriage and disposal: -Non-marketable damaged products (full sachets, full bottles, soaps) -Watery solutions (dangerous)

E N V I R O N -M E N TA L I M PA C T

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Waste treatment: Ordinary waste:Paper and cardboard packaging (CER 150101) -In 2004: 12,730 Kg from the factory and 7,920 Kg from the warehouse Plastic packaging (CER 150102) -In 2004: 1,790 kg from the factory and 1,230 Kg from the warehouse Like materials are sorted, grouped, crushed and recycled in their entirety to obtain new products.

E N V I R O N -M E N TA L I M PA C T

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Our products are composed of recyclable materials: -PET: packaging of fossil origin, to which an additive is added which facilitates biodegradability. PET can be recycled and transformed into a high value product which represents a 60% saving in energy, compared to its production from raw materials.

Recycled PET is used in textiles or in the packaging industry. There is one-third recycled material in our bottles. -Paper: 100% recyclable and biodegradable

E N V I R O N -M E N TA L I M PA C T

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t Waste disposal: Ordinary waste:Packing in miscellaneous materials (CER 150106) -In 2004: 870 kg from the factory and 1,990 kg from the warehouseInoperative electrical equipment (CER 160214) -In 2004: 210 kg from the factoryMixed materials are sorted by recyclable material (wood, plastic, glass, paper): these materials are recycled immediately. The rest is sent to the dump for decomposition. Special waste (0706): Cosmetics (CER 070699): -In 2004: 7,310 kg from the factory Cosmetics, 98% biodegradable, are disposed of by a specialist company.

E N V I R O N M E N TA L I M PA C T

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Waters containing cosmetics (070601): -in 2004: 7,310 kg from the factoryTreated by a company which, using a chemical process, separates the water from the cosmetics so as to re-use the active ingredients in subsequent production processes.

Analysis of the 2005 data will enable us to check the evolution of the rate of waste by the amounts produced.

In 2004, 58% of waste was 100% recyclable upon its first treatment, 23% of waste was recyclable after its first treatment, and 19% of waste required special treatment for recycling.

Separation based on type of waste:

18%

16%

51%

7% 7% 1%

water containingsolvents

cosmetics

cardboard packaging

plastic packaging

mixed materials

electrical materials

E N V I R O N M E N TA L I M PA C T

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Transport70% of suppliers (mould making, materials, logistics, waste management etc.) are based within a 60 km radius. Delivery/collection rounds have been organized so that maximum savings are achieved. The proximity of commercial partners helps to reduce pollution from transport.

GFL has introduced a system of reduced height pallets that can be placed one on top of the other, thereby saving space in the lorry and reducing the number of delivery rounds.

E N V I R O N M E N TA L I M PA C T

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SuppliersGFL is also seriously committed to protecting biodiversity, keeping checks on the impact of its purchases. To this end, GFL chooses suppliers who take ecology and the environment seriously, and works in partnership to develop increasingly environmentally friendly products. Our suppliers are certified to international standards:Suppliers of Palm Oil, a compound used for soaps and in bulk, are members of the “Roundtable of sustainable palm oil”, a round table active since 2003 and groups all the key players in the palm oil industry in order to foster practices that respect biodiversity and the rights of workers.Our bulk suppliers are among the key industry players most committed to environmental protection. Pro-Actif, which has been operating in the industry since 1988, as well as having certifications for the environment and quality certifications, received the “Friend of the Environment” award in 2001 and in 2002; they are members of EMAS and are in the process of being certified for SA800.

E N V I R O N M E N TA L I M PA C T

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Production process: improvement objectives Production processes at GFL have a low impact on the environment.

Objectives: to further reduce this impact -reduce consumption of energy and water -seek packaging in recycled cardboard for overall internal maintenance (semi-finished products) -reduce the impact of internal transport thanks to the building of a new factory, which will incorporate the logistics centre of semi-finished and finished products -further the involvement of suppliers in sustainable development processes

E N V I R O N M E N TA L I M PA C T

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Finished productsEnvironmental impact of our finished products: Our cosmetics are disposable products. They have been conceived and developed to meet hotels’ daily cosmetics needs, and to prevent product waste. Our products start from a minimum dose of 7 ml (sufficient for a shower) or 12-gram bars of soap in paper wrapping, and we also offer a broader range of products that goes beyond the cosmetic needs that are part of a complimentary service. It is our customers who decide the type of product they wish to offer in their hotels.

There is a range of different packaging available for our mono-dose products. GFL is committed to researching ways in which to develop new packaging to replace PET (the most environmentally-friendly plastic currently available). Our objective is to offer complimentary products of high quality, standing and service level, but for which the environmental impact will be increasingly reduced.

E N V I R O N M E N TA L I M PA C T

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The products consist of the cosmetics and their packaging:

Soaps Bottles Sachets Tissues

Vegetable paste Cosmetics Cosmetics

CardboardCardboardCardboard Cardboard

Lotion

.CA

.CA-PE

.PE

.PP.PET.PETG

PET-AL-PECA-AL-PEPET-PE

PET-AL-PECA-AL-PE

E N V I R O N M E N TA L I M PA C T

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Finished productsThe products consist of the cosmetics and their packaging:Cosmetics: 100% vegetable-based soaps: 100% biodegradableCosmetics: 98% biodegradablePackaging: PET: recyclable PE: recyclable AL: recyclable PP: recyclableCardboard: Tray: in recycled cardboard, biodegradable and 100% recyclable Cardboard: Biodegradable and 100% recyclable These cardboard products are certified Punto Verde/Der Grüne Punkt.

E N V I R O N M E N TA L I M PA C T

E N V I R O N M E N TA L I M PA C T

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t Finished productsReduction of packaging: Development of a dispenser version. Research of “bio” cosmetics – vegetable-based bulk.Setting up of a research team for increasingly environmentally-friendly packaging: -New composting materials -Mater-Bi -Vegetable polyethylene -Recycled paper -Vegetable ink This research will consistently be carried out alongside impact evaluation assessments on biodiversity. It should be borne in mind that a number of synthetic compounds in some cases consume fewer natural resources and are less polluting than 100% natural extracts.

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GFL, an SME in full bloom, is constantly adding to its collaborator base and broadening its team.Fully aware that a company’s greatest asset is its people, GFL aims to develop and enhance the professional skills of its young collaborators. This development is achieved by an increase in staff motivation, by offering favourable working conditions, by adhering to values and by encouraging involvement in a common purpose. Gel’s management ensures it transmits a wide and long-term outlook of professional work and commitment to its staff. It is based on values such as respect, progress, personal development and sense of responsibility.The four priorities of GFL are: -Safety -Skills development -Dialogue -Supplier involvement

S O C I A LA S P E C T S

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Health and safety68 % of collaborators work in production and in the logistics area. They work with the production machinery, transplants and hoists. Safety is at the top of GFL’s priority list. Regulations: health and safety procedures are rigorously applied and the company also strictly abides by obligations pertaining to protective clothing (safety boots). There are strict procedures where protection of machinery is concerned: only the senior shift engineers have access to exclusive protection. Microbiological tests: microbiological tests in production are run every year Yearly medical check-ups: obligatory medical check-ups involving a blood test for everyone involved in production processes. Accidents at work: 0 hospital days in 2004

S O C I A LA S P E C T S

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Training GFL is a young enterprise. 70% of its staff is under 35 years of age. This youthful spirit brings a dynamic and flexible richness, but it also means that GFL has a responsibility to train its collaborators: -Training program for younger staff:GFL offers an “apprenticeship” contract for young school leavers which enables them to start their working lives without a degree. There are currently three young members of staff who have started working with the company under this type of contract. They have a tutor to supervise them and the regional association of apprentices also evaluates their progress in training and offers theory-based resources which are complementary to the world of work. -Life-long learning:GFL offers its employees training courses in the course of the year on various subjects. Organized by associations such as “Assolombarda” and “Apimilano”, these courses are open to everyone in the company and are available upon request.

S O C I A LA S P E C T S

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DialogueAs well as pursuing relations with unions at institutional level, GFL is also working on setting up a more flexible and time-efficient internal forum for discussion. To encourage dialogue and satisfy the expectations of collaborators as far as possible, the management meets twice a month with two representatives appointed from among the workers. 100% of staff participated in the voting and these regular meetings have proved successful in addressing issues and requests, preventing a climate of conflict.

S O C I A LA S P E C T S

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SuppliersGFL’s suppliers are selected on the basis of the quality and reliability offered.All our suppliers are regularly checked and they are required to give guarantees in different areas: -Regular and decent working conditions for workers -No employment of minors -Application of health and safety proceduresFor the social sphere, our suppliers are also certified to the following international standards: -Roundtable of sustainable palm oil -SA8000 -ISO9001 : 2000

S O C I A LA S P E C T S

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Objectives for improvement Development of an obligatory training program for all employees Certifications in progress over the following six months: -ISO 9000: management system certification -BRC (98): -Quality management -Management responsibility and involvement -Human resources management -Production system -Measures and analyses (concerning products and processes)

S O C I A LA S P E C T S

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http:/ /www.gf l . i t