We have drafted the 2024 Sustainability Report in accordance with the new European CSRD (Corporate Sustainability Reporting Directive) standards, integrating elements of the GRI standard where appropriate.

In particular, the CSRD introduces the double materiality approach, which allows us to evaluate each ESG topic from two complementary perspectives:

• Inside-out: The company’s impact on people and the environment.

• Outside-in: The risks and opportunities that external socio-environmental factors pose to the business.

Regarding governance, we underwent a significant renewal in 2024. A Co-CEO role was introduced to support CEO Franco Tartaglino in the Group’s strategic leadership, ensuring shared leadership during the generational transition.

Concurrently, the Board of Directors was expanded with new external members possessing complementary expertise (digital innovation, corporate law, M&A, HR, automotive, and railway sectors) to enrich multidisciplinary perspectives.

We have also invested in a digital platform for ESG data management, enabling us to collect and process all sustainability information in a structured and transparent manner.

Furthermore, we have begun internal calculations of the most relevant Scope 3 (indirect) emissions, ensuring accurate monitoring of key categories across the value chain.

Based on the double materiality analysis, three strategic priorities have emerged:

1. People’s Safety: Creating a safe working environment through continuous training and the monitoring of accidents and “near misses.”

2. Climate Change Adaptation: Protecting production sites and operational continuity from extreme weather events (as experienced during the 2024 flood at the MPV plant in North Carolina).

3. Respect for Labor Rights in the Value Chain: Responding to the growing focus on ethical supply chains through due diligence, transparent practices, and collaboration with partners and suppliers on human and labor rights issues.

2024 Performance: Baglioni Group Challenges and Solutions

Key highlights of 2024 include the completion of a new facility dedicated to stainless steel products in San Pietro Mosezzo (Novara), designed to serve the emerging hydrogen and biogas markets.

Another noteworthy figure is that our Energy & Power (Oil & Gas) division recorded a 20% growth in production value, accompanied by improved margins. This intense expansion of the order book and client base put the entire organization under pressure; the team responded with great competence and determination to meet the demand.

Environmental Balance: 2024 Consumption and Emissions Trends

Compared to 2023, we reduced the share of electricity purchased from fossil fuels by 13.6%, offsetting this with a nearly 19% increase in renewable energy purchases.

In parallel, total energy consumption increased by approximately 8.5%, despite an 8.3% decrease in revenue within the most energy-intensive industrial sectors. This combination of factors led to a 15.9% increase in our energy intensity index.

On the climate and emissions reduction front, we are reporting significant progress. As mentioned, we have begun systematically monitoring specific Scope 3 emission categories to measure indirect impacts along the supply chain.

In 2024, total generated CO₂eq emissions were approximately 6,231 tons, a 6.4% decrease compared to the previous year. Of these, 2,478 t (approx. 40%) are direct emissions (Scope 1), generated from sources owned or controlled by the company, while 3,752 t (approx. 60%) are indirect emissions from purchased energy (Scope 2).

Generally, we have implemented several initiatives regarding the “environmental impact reduction” goal. We are progressively electrifying the corporate fleet: the number of electric or plug-in hybrid vehicles assigned to employees is increasing, and we have installed new charging infrastructure at various locations.

Furthermore, at our Aircom facility in China, which is already equipped with emission filtration systems, we will evaluate the installation of a photovoltaic system for renewable energy self-production in the coming years (pending local authority approval).

Water management also shows significant progress: in 2024, total water withdrawal decreased by approximately 21% compared to 2023. This result stems from targeted interventions, such as using harvested rainwater to fully cover the needs for tank testing in certain plants and the introduction of pneumatic air-testing systems that reduce water usage.

People and Safety: The Value of Welfare and Protection

At the heart of our success are our people. The Group employs 759 people across Italy, China, and the United States, and we offer stable, high-quality employment contracts.

As of December 31, 2024, nearly 97% of our collaborators are on permanent contracts, and over 97% work on a full-time basis.

Professional Training

We invest heavily in professional growth: we have intensified internal training activities, providing specialist courses followed by exams to certify acquired skills.

In 2024, each employee completed an average of 13.5 hours of training (peaking at nearly 30 hours per capita in our Chinese offices, where technical training is highly valued). These programs improve technical expertise and foster the development of hard and soft skills (leadership, communication, etc.), strengthening our team from within.

Corporate Welfare

Regarding corporate welfare, we have consolidated and expanded various initiatives to support employee well-being. Remote working, introduced during the pandemic, has been maintained as a flexible work arrangement: our current policy requires a minimum of one day per week on-site, allowing significant freedom in organizing the remaining time and hours to promote a healthy work-life balance.

Team Building

In 2024, we organized numerous social and team-building events to strengthen the sense of belonging and internal cohesion.

Highlights include the traditional Group Christmas dinner, a dedicated management team-building session, and an informal event for office employees under 37—the latter promoted directly by the Chairwoman and Co-CEO to foster a direct dialogue with younger colleagues. We are convinced that a cohesive and dynamic work environment is essential for motivating people and tackling professional challenges together.

Additionally, from a social and environmental perspective, every new hire receives a welcome kit containing an aluminum water bottle and a reusable canvas tote bag to spread a culture of waste reduction from day one (e.g., eliminating single-use plastic bottles in the office).

Workplace Accident Prevention

Accident prevention has always been an absolute priority. We constantly monitor safety indicators and implement rigorous prevention programs.

In 2024, the accident frequency rate decreased by 15% compared to the previous year. This decline confirms the effectiveness of our awareness and prevention initiatives.

We have introduced near-miss reporting systems and dedicated dashboards that help us identify potential risk situations and act before they result in injuries.

During 2024, we also launched a cross-functional team coaching program for department heads and supervisors in our workshops, involving them in group sessions on responsibility, conflict management, and leadership.

Quality and Supply Chain: Pollution and Sustainability

In our vision, quality and supply chain sustainability go hand in hand.

All our plants hold ISO 9001 certification for quality management.

Furthermore, the Galliate site is certified ISO 14001 (environmental management system) and ISO 45001 (occupational health and safety), with annual renewal audits complying with the stringent procedures of the Oil & Gas sector.

Other plants, both in Italy and abroad, comply with applicable standards and have obtained additional specific certifications (e.g., ASME, PED, etc., where required).

A Sustainable Supply Chain

Regarding the supply chain, we select suppliers based on clear criteria:

• Competitiveness

• Cost-effectiveness

• Product/service quality

• Ethical-environmental sustainability

Our goal is to establish long-term partnerships, growing alongside our partners and mutually improving quality standards to offer excellent products that meet customer needs.

We favor local suppliers wherever possible: in Italy, for instance, we source directly and predominantly from companies located near our offices. This not only supports local economies but also reduces the environmental impact associated with material transport.

The Circular Economy

A fundamental chapter of our commitment to tangible sustainability is linked to the circular economy and material management.

In 2024, we launched tests to increase the use of scrap (recycled) steel in our production processes, partially replacing virgin steel.

Analyses to date have been positive, making it highly likely that a portion of our raw materials will come from recycled sources in the future. This will allow us to reduce dependence on traditional steel suppliers and, crucially, lower the carbon footprint associated with purchasing virgin steel.

We have also implemented initiatives to reuse packaging and reduce waste: for example, wooden pallets received from suppliers (if in good condition) are reused to ship goods to our customers, covering approximately 15-20% of our annual pallet needs.

To further reduce waste, we have encouraged staff across all plants to reuse boxes, pallets, and internal packaging materials whenever possible before resorting to recycling.

Regarding waste production, 2024 data shows that out of a total of ~3,385 tons of waste generated, only 0.9% is classified as hazardous. Over 76% of total waste was sent for recovery operations.

Digitalization of Waste Management

To further improve waste management, we have implemented digital loading/unloading registers in all plants. The digitalization of these records will merge into an integrated Power BI dashboard by 2025, making it even easier to visualize data and monitor waste disposal processes and related costs. This tool will provide full awareness of the quantities and types of waste generated, helping us identify areas for improvement to progressively reduce waste production at the source.

The “Zero Paper” Project

Continuing with digitalization and streamlining, we launched the “Zero Paper” project: we archive all invoices and documents electronically to avoid unnecessary printing, and we provide customers with declarations of conformity and operating manuals for our tanks exclusively in digital format, printing them only when strictly necessary.

This approach allows us to save a significant amount of paper each year and accelerates communication, aligning with our goal to innovate operational processes while reducing environmental impact.

Quality and Supply Chain: A Concrete Commitment to Sustainability

We look to the future with determination, strengthened by the results achieved and mindful of the challenges that lie ahead.

Our strategic vision for the coming years is to continue integrating ESG criteria into every aspect of the business, from growth strategy to daily operations, making sustainability a driver for innovation and the creation of shared value.

We will continue to report our progress transparently, actively involving all stakeholders in this journey of continuous improvement.

We thank everyone—employees, partners, and customers—who has contributed to the results achieved so far and who accompanies us toward an increasingly sustainable future.

Together, we can make a difference and create lasting value for people and the environment.

Download our 2024 Sustainability Report.

Contact us for more information.