Control of social and environmental risks - Intesa Sanpaolo
Control of social and environmental risks in financing
Considering environmental and social risk in loan management is required not only for large-scale projects screened using Equator Principles, but also for the transactions of some types of Bank customers, most exposed to these risks. To identify the most effective procedures to assess social/environmental risks associated with the activities of business customers, the rating assessment model already includes a specific questionnaire on company exposure to these risks.
During 2016, activities already adopted in 2015 to assess environmental risk were completed. In particular: the query on environmental risks to give to customers was revised and simplified, without prejudice to the fundamental questions, in order to ensure fluidity and effectiveness in customer relationship; the target group of business customers was analysed, using criteria relating to their relative economic segments and size, in order to define a more effective scope from the point of view of risk exposure.
In the first quarter of 2017 a test phase lasting four months will start on a defined sample of customers that will be requested to compile and sign this questionnaire. The data obtained will be used by the Bank, along with the other qualitative and quantitative information, in the overall assessment of the credit worthiness rating of the customer/applicant and included in the loan granting process. Based on test results, procedures for adopting the process on a larger scale will be evaluated.
A careful assessment of these potential risks also mitigates the risk of involvement in environmental crimes. Intesa Sanpaolo's 231/2001 Model has since long included environmental crimes as a sensitive area, acknowledging that the illegal acts governed by criminal law to protect the environment imply administrative liability of the relative entities and, consequently, indirect liability of the Bank with regard to the activities of its customers.